Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

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November 3, 2023

WIX, SFE | Fortnight ahead

Company news

Wickes Group (WIX, 132p, £338m mkt cap)

UK DIY retail chain.  Q3 (Sep) trading update.

Guidance: “Based on trading to the end of October, we remain comfortable with current market consensus for FY 23 adjusted PBT of £45.3 – 49.0m”.

Trading: Q3 LFL sales, -0.2% Y/Y (Q1 -1.8%; Q2 +3.0%; YTD +0.4%). Core business – LFL sales +1.1%, with growth in volume for the first time since the second quarter of 2021. “TradePro sales continue to show double digit growth, with the customer base continuing to grow strongly. DIY sales remain moderately down on the prior year. Core market share improved in Q3, with particularly strong performances in decorative, tiling and insulation. Selling price inflation in the period was broadly flat, a position which we expect to continue for the remainder of the year and into 2024. Our relative price position remains strong”. Do It For Me (DIFM) – delivered sales in Q3 -4.4%, “partially driven by a more normalised order book compared with the first half. We have also experienced some delays to delivered sales as a result of the transition to a new software solution fulfilling customer orders. Actions are being taken to enable this to be resolved, although there will be some impact on Q4 delivered sales which will now fall into FY2024. DIFM orders were down modestly in the third quarter, with some pressure on conversion rates, particularly in September, as customers are taking longer to commit to big ticket purchases”.

Safestyle UK (SFE, shares suspended)

UK manufacturer, recycler and distributor of window, door and roofline PVC products. Fundamental Change of Business and AIM Rule 15 Cash Shell. “On 30 October 2023, Safestyle announced that administrators had been appointed to its subsidiaries H.P.A.S. Limited, Style Group Holdings Limited and Style Group UK Limited. Upon the appointment of the administrators, Safestyle ceased to control and/or conduct substantially all of its business activities and assets and, as a consequence, Safestyle is now regarded as an AIM Rule 15 cash shell.  In light of such developments, the Directors are now taking legal advice and are likely to be required to place Safestyle into liquidation in due course. As an AIM Rule 15 Cash Shell, Safestyle is required to make an acquisition, or acquisitions, which constitutes a reverse takeover under AIM Rule 14 or seek to become an investing company pursuant to AIM Rule 8 within six months from 30 October 2023, failing which its shares will remain suspended.  Given the liquidation process which is now expected to commence, Safestyle is not currently pursuing such a transaction and it is therefore anticipated that once liquidators have been appointed, the admission to trading on AIM of the Company’s ordinary shares will be cancelled.”

In other news …

Energy saving. Data centres waste heat to warm thousands of homes, The Government is injecting £65m into funding five big district heating schemes, including constructing the UK’s first heat network using waste heat from data centres to heat over 10,000 London homes. Grants from the Green Heat Network Fund will allow the big district heating projects in London, Watford, Suffolk and Lancaster to proceed. London’s Old Oak and Park Royal Development Corporation scheme in west London will get just over half the funding for its ambitious scheme to recycle waste heat from large computer systems storing internet data.

Fortnight ahead

Construction and Property - company and economic news

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