Equity Analysis /
United Kingdom

GB : Wickes - Upgrade cycle continues; improved outlook; FY results strong on all fronts

    Adam Tomlinson
    Adam Tomlinson

    Analyst - Consumer Discretionary

    Wayne Brown
    Wayne Brown

    Analyst - Consumer

    CGS-CIMB
    26 March 2022
    Published by

    These results are very strong; PBT guidance has risen by c.5% for FY22; dividends are up with payout ratio now 40% vs. 30% expectations; capital allocation is exciting split between cash deployed for faster growth targeting further market share gains and excess cash to be returned; and confidence in DIFM means the company is now providing discrete guidance for this division. The balance sheet is very strong with c.£120m of cash and with the shares trading on 9% FCF yield pre today’s upgrades and c.5% dividend yield is ridiculously too cheap at sub 5x EV/EBITDA