DIY chain Wickes like-for-likes edged up 0.3% in the six months to June 30.
Operating margins in owner Travis Perkin’s retail division declined from 5.2% to 3.5%, “due mainly to organic overhead investment mitigating market volume decline”. EBIT fell by 31% to £18m.
Total sales increased 2%, with core sales up 4.1%, driven in part by a 40% surge in multichannel sales, which represents 6% of Wickes’ business.
Kitchen and bathroom delivered sales were down 13.2% year-on-year “as consumers increasingly elected to pare back expenditure on big ticket items”.
Travis Perkins said core product market share increased due to the impact of its pricing initiatives and also the “successful national delivery service introduced in 2010”.
Current trading has remained tough, with like-for-likes flat in July. Wickes said overheads increased in the first half as a result of increased marketing activity and a growing multi-channel offering.
Travis Perkins said the DIY retail market has “continued to display a similar trait to that established in 2010”.
It said: “In 2011 it has been adversely impacted by a combination of customers purchasing in advance of the January 2011 VAT increase, low consumer confidence and, from April, higher personal taxes further reducing spending power.
“These factors have particularly impacted the market for big ticket items, such as kitchens and bathrooms, sales of which have contracted during the first half despite price inflation.”
Travis Perkins said the “outlook remains fragile”.
The company said the administrations of Focus DIY and Moben, a Homeform brand, have had “a very limited impact on our trading”. However it said it suffered from “some short term loss of volumes and margin during closing down sales”.
During the period Wickes acquired 13 stores from the administrator of Focus for £8.4m, providing the retailer with “the opportunity to further roll out smaller store formats in catchment areas that previously might not have supported a larger store”.
Wickes anticipates the former Focus stores will be up and running by the end of October.
It has continued to roll out the “strongly performing” stand alone Kitchen & Bathroom stores and is now “starting to transfer some of the successful practices from them to our main estate”.
Tile Giant, sister chain of Wickes, saw like-for-likes fall 0.6%, while turnover increased 9.3%.
Travis Perkins’ ToolStation business, which operates 94 branches, experienced a sales surge of 35%. It expects ToolStation to make a profit this year and aims to purchase the remaining 70% of the equity of ToolStation in January.
Travis Perkins group adjusted pretax profit surged 25% to £140m.
Travis Perkins chief executive Geoff Cooper said: “The difficult market backdrop will continue to put pressure on weaker competitors and will lead to further consolidation in our markets.
“We have an excellent track record of outperforming our market and driving financial performance over a sustained period and consequently look forward to the future with confidence.”