Wickes Reports Strong H1 2025 Growth with 16.7% Rise in Adjusted Profit

Solar is an interesting growth option. Wickes Solar is now promoted across the entire estate and Wickes-generated leads account for over 80% of solar installations. Around 100 Design Consultants are trained to sell solar in store and in-home. The UK domestic solar market is estimated to be worth £1.5bn per annum by 2028, and Wickes holds an option to acquire the remaining 49% of Solar Fast by May 2029 at 6x last twelve months EBITDA. That gives the group a clear route to scale if customer demand continues to build.

Margins, cash and shareholder returns

Adjusted gross profit increased 7.9% to £312.0m, with margin up 79 basis points to 36.8%. Management flags volume growth, category mix and lower consumer credit costs as the main levers. Adjusted operating margin ticked up to 4.7% from 4.4% thanks to operational leverage and productivity savings.

Cash generation remained robust. Cash on the balance sheet was £158.0m at the half-year, with operating cash flows of £94.3m and a seasonal working capital inflow of £80.5m. Wickes returned £24.8m to shareholders in the period – £16.7m in dividends and £8.1m of buybacks before costs – and declared an interim dividend of 3.6p, in line with last year.

It is worth noting the IFRS 16 lease angle. On a lease-adjusted basis, net debt is £561.4m due to long store leases. This is normal for retailers running a large estate, but it is a reminder that lease commitments are material, even with a healthy cash balance. Liquidity looks comfortable with an undrawn £80m revolving credit facility that runs to March 2029.

Digital spend is rising – and expensed

Wickes continues to invest in digital capability to keep the flywheel turning. The Mission Motivation Engine serves up tailored content, predictive stock forecasting is cutting storage needs and improving availability, and new handheld tools help colleagues accelerate fulfilment times – the backbone of that 15-minute Click & Collect promise.

A practical accounting point: the company is leaning into software-as-a-service projects (SaaS – cloud software where costs are expensed rather than capitalised). These will increase the P&L charge by around £10m on a full-year basis. Capex guidance for 2025 remains £30-35m, with a separate c.£15m of SaaS IT project spend that runs through the income statement.

Outlook and guidance: steady hands despite H2 cost headwinds

Management says Q3 trading so far is in line with expectations and it remains comfortable with current consensus for full-year adjusted PBT of £48.2m, within a range of £46.8m to £51.5m. Cost phasing will bite harder in H2 – increased people costs and openings of new stores will be more evident, and the SaaS charge builds through the year – but the team is backing productivity initiatives to offset this.

On the estate, Wickes finished the half with 228 stores. One new store opened in H1 on a former Homebase site, three further stores have opened since period-end, and the plan for 2025 stays at 5-7 new stores plus 10-15 refits or refreshes. Medium-term, the target is around 250 stores with 82% of the network already in the new format.

My take: a solid first half with self-help doing the heavy lifting

This is a clean, volume-led improvement. Retail share gains, a growing TradePro base and faster fulfilment are doing exactly what they should – pushing through more baskets at better economics. The early D&I stabilisation is particularly welcome given the soft big-ticket market. Margin progress and strong cash generation are the proof points that the strategy is working.

There are still watch-outs. H2 carries more cost, D&I needs to convert ordered growth into sustained delivered growth, and UK consumer confidence remains subdued. Lease-adjusted net debt is structurally high, as in most retailers, so maintaining cash discipline matters. But with guidance intact, a maintained interim dividend of 3.6p and a buyback in flight, the balance of news is positive.

What to watch next

• Q3 trading update in late October – LFL momentum in Retail and the D&I delivered sales trajectory.
• Impact of H2 cost phasing – wages, store openings and the c.£10m full-year SaaS expense.
• TradePro activity – can active members push materially beyond 615,000 and keep baskets resilient.
• Solar growth – the proportion of Wickes-generated leads and any step-up in installations.
• Capital allocation – progress on the £20m buyback and confirmation of the expected full-year dividend of 10.9p based on current expectations.

Bottom line

Wickes is executing well against its growth levers – trade, faster digital journeys and a cleaner D&I proposition. Profits are up strongly, cash is healthy and guidance is steady despite known cost headwinds. For retail investors, this reads as a well-managed, market-share-gaining operator that is still investing for the future while returning cash today.