Rush to beat VAT rise boosts Wickes

By This Is Money
Updated:

 

The owner of DIY chain Wickes today hailed improving sales in recent weeks as shoppers rushed to beat January's increase in VAT.

woman climbing a ladder

Travis Perkins said like-for-sales per trading day at Wickes were up 4.2% in the eight weeks to November 27, compared with a 0.1% decrease in the first nine months of the year.

The Northampton-based company reported some evidence that shoppers have brought forward purchases of DIY products before VAT increases from 17.5% to 20% on January 4.

Sales of products for kitchens and bathrooms were up 12.5% in the first 11 months of 2010, Travis added amid signs in the industry that people are improving their homes rather than moving.

Its Travis Perkins builders merchant yards also showed an improving trend in recent weeks.

Like-for-like sales per trading day increased by 10.5% in the two months to the end of November, compared with 7.1% in the first nine months of the year. While the company increased its sales and market share in October and November, it warned that sales in December were impacted by heavy snowfall.

Travis, which employs more than 14,000 people and has around 1,200 outlets in the UK, said its outlook for 2010 remained unchanged. It expects to see modest growth in its builders merchant business in 2010 but consumer worries will produce a small fall in sales at Wickes.

Shares in Travis were up 3% today after the update, which was described as solid by analysts at Panmure Gordon.

Meanwhile, Travis said it had completed the takeover of plumbing supplies specialist BSS in a deal worth £558 million. The move will make it the leading player in the trade and retail distribution of plumbing and heating products.

BSS, which started life as British Steam Specialities in 1899 and currently operates from 439 branches in the UK, generated revenues of £1.35 billion and profits of £49.6 million in the year to March 31. The deal is the largest undertaken by Travis since the £950 million takeover of the Wickes DIY chain in 2005.

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