Wickes hammered as households shun DIY

Wickes shares sank to a record low after it warned of weakness in the British DIY market.

The stock tumbled 18pc, or 30.4p, to 138.6p as the firm reported demand for DIY and other home improvements was showing ‘signs of softening’.

Sales in its first half were just 0.8pc ahead of the previous year.

This was dragged by a 0.2pc slide in sales at its core DIY business in the second quarter.

Wickes said customers were reacting to the ‘ uncertain macroeconomic backdrop’.

As a result of the slowdown, Wickes predicted a full-year profit of £72m to £82m, lower than market forecasts of around £87m.

Analysts at Liberum said the profit downgrade was ‘disappointing’ but reflected a ‘tougher’ consumer market.

As a result of the lower forecasts, the broker cut its target price for Wickes to 360p from 425p.

DIY retailers did well during the pandemic as consumers spent more on home improvements.

But with prices soaring, sales are under pressure as the end of restrictions shifts consumer spending away from DIY and towards eating out and travel.

Wickes’s update sent a chill through the sector, with B&Q and Screwfix owner kingfisher sliding 8.5pc, or 22.9p, to 245.2p while kitchen fitter Howden Joinery dropped 3.8pc, or 24.8p, to 629.4p and building materials group Travis Perkins fell 6pc, or 61.9p, to 971.6p.

The slide came amid a wider downturn in retail stocks after a profit warning from US behemoth Walmart sparked renewed fears of slower consumer spending.

JD sports fell 8pc, or 11.2p, to 127.8p while discount retailer

B&M was down 3.8pc, or 15.9p, to 405p, Next lost 2.5pc, or 168p, to 6498p and Primark’s owner AB Foods shed 2.9pc, or 49.5p, to 1646p.

Supermarkets were also on the back foot, with sainsbury’s sliding 3pc, or 6.7p, to 214.5p and Tesco slipping 2.3pc, or 6.1p, to 258.7p. Marks & spencer was off 6.8pc, or 9.9p, to 135.5p.

Meanwhile, inflation weighed heavily on Reach, owner of the Daily Mirror and Daily Express, which tumbled 25.9pc, or 30.3p, to 86.7p after profits in the six months to June 26 dropped by nearly a third to £47.2m.

The firm blamed the profit slide on an unprecedented rise in printing costs, up 65pc year on year.

The FTse 100 was almost unchanged at 7306.3 while the FTse 250 dropped 1.2pc, or 234.2 points, to 19,568.8.

Oil stocks were on the rise as Brent crude crept up above $105 a barrel. BP was up 0.5pc, or 1.85p, at 388.5p and shell added 0.8pc, or 17.5p, to 2086.5p.

Supermarket sandwich maker

Greencore reported 35pc revenue growth to £486m in the three months to July 1 as demand for convenience food recovered.

The group also announced a £10m buyback programme as part of plans to return £50m to shareholders. The shares were down 2.8pc, or 3p, at 104.3p.

Oxford Biomedica rose 0.5pc, or 2.5p, to 459.5p after inking a supply deal with an unnamed US biotech firm for its LentiVector platform, which is used to develop gene-based medicines.

Private equity group Bridgepoint surged 4.9pc or 11.2p, to 239.6p after a strong set of interim results beat expectations.

Profits for the six months to the end of June rose to £51.9m from £42.3m a year ago, boosted by fundraisings and a strong performance from its investments, which include Burger King in the UK and retailer Hobbycraft.

FTSE 250 outsourcer Mitie reported 3pc revenue growth to £945m in the three months to June 30. Mitie shares rose 1.4pc, or 1p, to 74.3p.