DIY retailer Wickes experienced a 2.4% decline in like-for-likes in the seven weeks to February 20, but full year profits soared as the chain grew its market share.
Core products declined 8% on a like-for-like basis in the 7 week period while kitchen and bathrooms soared 23.3%.
Travis Perkins’ retail division – which is largely made up of Wickes, but also includes Tile Giant – saw pre-tax profits rocket from £10.2m to £57m in the year to December 31 as it benefited from the demise of MFI at the end of 2008.
Like-for-like sales increased by 3.2% in the period.
Revenue across the retail arm grew from £940.7m to £980.7m while operating margin increased from 5.1% to 5.8%.
Travis Perkins said Wickes’ “successful marketing campaign” and “refreshed commercial strategy” led to market share gains, profit growth, and operating margin expansion.
It added that the retail market “performed more strongly” thanks to its builders’ merchants business as it was “boosted by good weather and surviving operators benefited from the exit of a competitor from the showroom market”.
The retail division benefited from consumers finding their “discretionary spending power increasing materially following reductions in mortgage costs”, according to Travis Perkins.
However Travis Perkins remained cautious: “We are concerned in particular about weak consumer spending trends in 2010 as inflation rises and the cushion of falling mortgage costs annualises out. We expect the home improvement market to contract further in 2010, but with only limited benefit from competitors going out of business in contrast to the large capacity reductions seen in 2009.”