Wickes Group Stock

Good morning, everyone. It's great to have you here with us today, whether in the room or joining us online. Welcome. Over the next 20 minutes or so, myself and our CFO, Mark, will walk you through our first half results for 2026, breaking down our business performance, exploring broader market trends and sharing how our proven growth levers continue to drive market outperformance.

Overall, this has been a strong period for the business. I'm pleased to report that in retail, we have continued a strong volume-led sales growth trajectory despite a deflationary pricing environment as more customers turn to Wickes more often. Within design and installation, customers continue to react positively to the enhancements made to our kitchen and bathroom proposition, resulting in our fifth consecutive quarter of positive like-for-like growth.

Together, group revenue increased 2.1%. The benefits of delivering sustained volume growth alongside our productivity plan resulted in a 1.1% increase in adjusted profit before tax to GBP 27.6 million, all delivered in the absence of any market tailwinds, a clear demonstration of the strength of our self-help growth levers. Looking ahead, continued sales growth and our productivity program will further support profitability in the second half.

Our proven growth investment in our store estate continues. In the first half, we refitted and refreshed 8 stores with a further 4 planned in the second half. We also remain on track for 4 to 5 new stores within the year to go, whilst building a strong pipeline to support our accelerated ambition of 300 stores.

We are delivering attractive returns to shareholders and have announced today an increased interim dividend of 2.8% to 3.7p, signaling our intention to grow dividend and dividend cover as profits increase. We have completed the GBP 10 million share buyback and also funded a further GBP 9 million worth of share purchases for the Employee Benefit Trust.

As anticipated, trading so far in Q3 has shown a significant step-up with mid-single-digit like-for-like revenue growth in retail as we remain on track to meet market expectations for adjusted PBT this year. Before I hand over to Mark, I'd like to take this opportunity to thank all of my brilliant colleagues for their incredible work in delivering these results. Thank you.

Thank you, David, and good morning, everyone. As David mentioned, we had a good first half with growth in both sales and profits. This slide has a summary of the highlights. But as we cover all of these points in other slides, I'm going to skip over this one.

So on the next slide, we have a summary of the P&L. We grew sales in the first half by 2.1%. In retail, this was 0.8% growth and design and installation, 5.7% as we work through the healthy order book built up during 2025. Gross margin rate was broadly flat with just 0.1 percentage point movement. Operating costs grew by 1.9%, with productivity helping to offset some of the cost inflation we've experienced.

A couple of examples of productivity initiatives that we've delivered in the first half. In design and installation, a new online journey for booking appointments has improved the customer experience and lowered our customer call center costs. Also in design and installation, a big focus on right first time from design to delivery is reducing costs and improving customer satisfaction.

Also within operating costs is a step-up in investment in tech and in property, and a bit more detail on this in a moment. Overall, the PBT margin in the first half is flat year-on-year. With an uplift in both sales growth and productivity in the second half, we expect H2 to show a good step-up in profit year-on-year and as a result, deliver an increase in PBT margin for the full year.

So let's look at the P&L drivers in a bit more detail, starting with sales. In retail, we've seen an improving trend across the year so far. In Q1, adverse weather meant sales were in slight decline, but this improved in Q2. And as David has mentioned, we've seen this step up significantly in Q3 so far. In all quarters, we've seen good volume growth with deflation in the business of between 2% and 3% in the first half, as you can see on the table there.

Now we expect to see inflation turn positive in Q4. It's also worth reflecting on the 2-year like-for-likes because we were lapping a good H1 last year. As you can see in the table, even with very tough trading conditions in Q1, the 2-year like-for-like for the half was still 6%.

In design and installation, we've now had 5 consecutive quarters of delivered sales growth following a strong performance in ordered sales last year. In the first half of this year, we've seen an increase in the number of new projects sold. However, with a shift in mix towards lower AOV projects, bespoke bathrooms and lifestyle kitchens in particular, overall ordered sales have been slightly down. This will result in a flatter profile for delivered sales growth in H2.

So now turning to the profit bridge, which helps highlight the key drivers of our H1 performance. The 2.1% sales growth gave us GBP 10 million of margin upside, offset by GBP 5 million of volume-related costs. In terms of other operating costs, you can see here that inflation remains a headwind. And whilst we've continued to deliver some good productivity savings, they have not fully offset the cost inflation.

A further cost saving shown separately here is that we've saved about GBP 1 million in business rates in the first half, and this will be about GBP 2 million in the second half. We continue to invest in the business to drive future growth and productivity. And as you can see here, in aggregate, this has stepped up by around GBP 5 million year-on-year. This is mainly investment in technology and the OpEx cost of our property development plan. So a good performance on profit given the challenging trading conditions and the inflationary headwinds.

So turning to cash. We are a cash-generative business. And even in a challenging economic environment, we can generate cash to reinvest in the business and deliver good returns to shareholders. We ended the period with GBP 152 million of cash. Now as you know, the half year is a high point for our annual cycle and the significant improvement in working capital in the first half will unwind in the second half.

A couple of other things to note on this bridge. CapEx this year will be H2 weighted with much of our property program happening in the second half. In H1, we had GBP 11 million of cash out for CapEx, and we expect around GBP 14 million for the year as a whole. Also in the first half, we've returned GBP 26 million to shareholders, GBP 16 million in dividends and GBP 10 million in share buybacks. We've also funded the EBT by a further GBP 9 million. So overall, a very healthy cash position, enabling us to fund our growth strategy whilst also delivering good returns to shareholders.

I'll end with some comments on outlook and guidance. So far in Q3, as anticipated, we've seen a significant step-up in performance with retail sales in mid-single-digit like-for-like growth. This strong sales growth plus the additional cost savings expected in H2 mean we are on track to meet market expectations of around 10% growth in PBT for the year.

Now we've also provided here the usual guidance on tax and CapEx, et cetera. And just as a reminder on dividend, we plan to grow the dividend and the cover as profits increase. And as David said, we started today that process by announcing a 2.8% increase in our interim dividend from 3.6p to 3.7p.

So in summary, the business has had a good first half. And as we move into the second half with improving sales in Q3, we are well placed to deliver another good year of profit growth in 2026. With that, I'll hand back to David.

Thank you, Mark. This slide simply illustrates the clarity and consistency of our strategy that is working so successfully, enabling us to drive growth and market outperformance while supporting our purpose to simply help the nation feel house proud. Over the next few slides, I'll share how we're investing in these growth levers to continue to win in the market. But before I do that, let me share some headline insight into current consumer trends that we are seeing from our monthly Mood of the Nation survey.

Encouragingly, we see a high degree of stability of where the customer is right now. Local trades still tell us they are busy with around 30% having a healthy 12-month plus pipeline of work. One in 5 customers in the market plan to take on a new kitchen or bathroom project, and spending plans have remained stable over the last few months. We can see in our own performance data that customers are looking for more affordable solutions for bigger projects.

And in DIY, people remain keen to improve their homes with 1 in 2 consumers planning to decorate a room over the course of the next 12 months. Speed and convenience continues to be important to them as seen in the growth of our 15-minute Click & Collect, Home Delivery and Wickes Rapid propositions.

We are particularly pleased that sales growth in retail is purely volume-driven, and this is all down to more customers shopping with us in-store or online. Our TradePro membership scheme goes from strength to strength with sales up 5%, driven by a record level of 671,000 active members. Our market share in retail has increased again year-on-year with a number of key range reviews driving outperformance, in particular, in decorative, which is an all-time market share high, and gardening and timber, all supporting growth in our DIY customer base.

We continue to focus on what matters most to our customers, certainty of value, clarity of choice, speed and convenience. Our digitally led service-enabled model delivers that promise seamlessly, driving 7% growth across Click & Collect and Home Delivery. We know that customers value the products and services we offer, and we see this very clearly in our customer satisfaction metrics. For example, 86% of customers rate our 15-minute Click & Collect service as excellent or good, and that rises to 90% for our Home Delivery service, which we uniquely operate from all stores.

As we turn to design and installation, delivered sales in this part of the business have been strong for the last 5 consecutive quarters as customers react positively to our breadth of offering across good, better and best ranges. We have achieved volume growth across the total number of projects served, a result not just of great innovation in the more affordable segment of the market, where we now offer 23 ranges of lifestyle kitchens, but also encouraging customer engagement in our top-end hand-painted paint-to-order range.

And in bespoke bathrooms, we've seen success with the new Bayswater collection, which you can see on the right and a host of new fitted and modular furniture. Crucially, our customers are telling us that we're hitting the mark. 96% rate us excellent or good from lead to order. We have successfully rebased the Wickes Solar business and are now back in growth through high-quality lead generation and customer journey with strong conversion. In addition, we will install solar on a further 5 Wickes stores this year and have some interesting B2B opportunities in the pipeline.

Turning now to investment in our store estate. The strong performance of our existing and new stores alongside our proven ability to operate successfully in smaller footprint stores led us to announce earlier this year our scale-up ambition to reach a network of 300. Our plans are on track. And in the first half, we have refitted or refreshed 8 stores, with 84% of the estate now in the new format, with a further 4 to come in the year.

We also plan to open 4 to 5 new stores in the second half, with Saffron Walden opening this week. We continue to strengthen our future property pipeline, focusing on white space opportunities and underserved larger towns and cities. For 2027, we plan to open between 7 to 9 new stores, and we would accelerate to 10 plus per year from 2028.

Moving on to our responsible business strategy, which is embedded deeply within our business. When some of you join us on store tours, you can often meet leaders who started at Wickes straight out of school and now run GBP 10 million stores. We are incredibly proud to be a destination for early talent with around 30% of our store colleagues aged 16 to 24. Through our dedicated training programs, we are actively equipping the next generation of retail leaders.

Tool theft affects over 1/3 of U.K. tradespeople, costing them 2,500 on average, impacting their ability to work and in some cases, really affecting their mental well-being. In the first half, we stepped up for our trade community, pledging to protect well over 0.25 million power tools across the U.K. this year by providing free tool marking kits in stores.

And we are well on our way to hitting our GBP 2 million fundraising target for our charity partner, CALM, having already raised an incredible GBP 1.3 million to date. And it is fantastic to be recognized for all of the work we do as part of our responsible business strategy with highly positive ESG ratings. We maintained our AAA rating in MSCI, and we continue to be included in the FTSE4Good Index, having improved our latest score from 4.2 to 4.4 out of 5.

So to conclude, we have made great progress in the first half, growing volume, sales and profits through the strength of our own self-help levers, really demonstrating our value-led and highly differentiated business model. Our growth momentum through the first half has continued to build in Q3. And whilst we are winning market share and growing volume, there is still so much more to go for.

Today, we hold just 5% of the GBP 35 billion addressable U.K. home improvement market. The headroom for growth is tremendous. That is why we are accelerating our property ambition going further and faster to expand our store footprint by 30%. This is all underpinned by our strong cash flow generation, enabling us to invest in our proven growth levers and deliver attractive shareholder returns.

Thank you for listening. Mark and I will now be happy to take any questions.

Ben Hunt from Panmure. Do you think you could just flesh out a little bit more about those cost savings you're expecting in the second half and maybe that inflation headwind? Do you see it easing with the wage inflation coming down? Or any color really on the H2 bridge as it were?

Yes. So firstly, on the cost savings, we've got a continuation of initiatives that have started earlier in the year. So we've got a good line of sight as to how that's going to evolve, in some cases, getting more of a 6-month benefit rather than a partial benefit in the first half. So we're now really starting to focus on the initiatives that are going to be our productivity plan for 2027. So I think we're very confident in what's coming in the second half of 2026.

In terms of the inflationary headwinds, the wages and general employment cost headwinds have slowed down a bit. Obviously, the big increase that came in national insurance and the higher levels of increase in National Living Wage are behind us. So hopefully, now we'll see more normal levels of wage inflation, which will be good.

Obviously, we don't yet know what the government will agree on the November increase in National Living Wage, but we're expecting that to be a lot lower than in recent years. So the one to watch out for, of course, is energy costs. As you know, we've got about 50% of our energy costs hedged into 2027. So fairly well protected there. But obviously, that's a moving thing in the market at the moment.

Okay. And second, I was delighted to hear your opening of Wickes in Saffron Walden. I was just wondering if you could just tell us a little bit how the smaller format stores are performing, whether they're in line with the usual opening maturity -- how the maturity is, when they start to break even and any sort of details around that?

I think -- I mean, if we step back from it, we've had a number of small stores in our network for a while. So it's probably sort of somewhere between 20 and 25 of our store counts like fit that smaller 15,000 to 20,000 square feet. As we sort of illustrated at the full year when we're talking about our ambition, what you can see is although the revenue on average is slightly lower, as is the cost of running those stores. So the EBITDA net-net is actually equivalized across the estate. So we know we can still deliver great value creation from a smaller store footprint.

Saffron Walden, interestingly, will be the first of those new ones. So as I say, Friday, if you're around by all means, come and join me, we're quite excited. And then Harrogate, as we look forward, between now and Christmas will be even smaller as a store with a mezzanine as well.

So we'll learn more about the new stores as we move into next year, but our confidence in finding the ability to get greater depth and reach of the network through a smaller store footprint is predicated on the fact that sort of like 10% of our estate is already like this, and we can see how that performs, which, on balance, creates a similar value to the estate at large. The mic is over there, Matthew. Matthew, we're going to lead with the mic.

Lewis Roxburgh from Goodbody. Just one, please. Just how generally should we think about pricing? Obviously, we've seen some deflation over the period. Costs are increasing. So how do we interpret that? Is there a lag effect happening? Are you struggling to sort of pass through inflation? Or are you sort of happy remaining cost leader and gaining market share, really?

So through the year so far, as we said, we've seen deflation, but we're now, as we come towards the end of Q3, starting to move into inflation. So we expect positive inflation in Q4. Our priority, really, is that we're a price leader in the business in the market. We aim to be 2% to 3% cheaper on a basket than our key competitors, and we monitor that every week.

And we want to deliver great value to customers and drive profit in the business, not by increasing gross margin, but actually getting the flywheel of volume going and getting operating leverage through the business. So you've seen that the margin is flat.

However, all of the pressures coming through our sector are starting to come through, and we are going to see some inflation in Q4. And that will just make it a little bit easier, obviously, when you've got 2% to 3% deflation in the product that you're selling, but you've got cost inflation of 3% or more in your operating cost, that's clearly very challenging. So that's going to be more balanced as we go forward.

Matthew McEachran from Singer Capital Markets. Can we just ask for a little bit more information on the D&I side? I mean it's clearly you've got a lot of initiatives working through. You showed us the design tools improvement on that site visit. The product range has improved, and the service element is also improving.

Could you just remind us as to what you've done so far in the first half? And how much is still pending as you go through to the next peak? And related to that question, will there be a kind of step-up in marketing once you've embedded the suite of changes, if you like?

Gosh. There's a lot of questions in there. I'm going to do my best to take all of them on board in one go. Look, in the first instance, there's been some really good broad-based innovation in our design and installation business. And it's interesting because it's -- when you look through the kitchen business, that innovation has been much more predicated at the more affordable end.

And we spied that coming a couple of years ago. We started to develop the lifestyle range, integrate it into the showrooms, make it a more prominent and equal part of the overall customer journey, and then subsequently expanded that business to 23 ranges, which we market through all of our communication channels, and we're seeing great volume growth there.

So what we're seeing in the kitchens business is overall great volume growth in our lifestyle business, a more muted performance in sort of like the higher end at the moment. But interestingly, we are innovating right now for the return to growth in the sort of like the better and the best part of the portfolio. So we're extending our paint-to-order, hand-painted ranges.

So in the same way, we anticipated the more affordable requirement in the market, we're also anticipating as the economy recovers that we'll be well placed to capitalize on that as well. So we're very happy with that performance, but the AOV is down because of that.

It's interesting on the bathroom side of the business because the innovation focus actually has been about adding greater value, adding more premium brands. So on the bathroom side of the business, we are growing volume very strongly, and we are actually growing AOV. But in the round, that mix gets washed out a little bit when you look at design and installation in the first instance.

But I guess the really important point here is, as a business, we are taking more orders. We are serving more customers. The blended AOV is down on traditional sort of like numbers where we can feel, hence, a more muted sort of like performance in terms of the ordered sales line. But we're winning where we can, which I think is a great outturn, and we're well placed to win again as the market recovers for the more high-end stuff in the first instance.

And in relation to marketing?

No particular step-up. It's just a continuous process throughout the year of our campaigns.

Ben from Deutsche Bank. Just one question on that Q2 acceleration in retail like-for-like. Are you able to talk a bit more on the drivers of that? Obviously, you've mentioned inflation, which is helpful. But any indication on which kind of categories have been performing well would be really helpful.

Probably just a point of correction. We're not seeing actual inflation in Q3. We're just about to exit Q3. That's a more modest to slightly declining inflationary period. We expect it to come through as we move through Q4. And again, at a more modest level, I think it's fair to say in the first instance. So there isn't an inflationary benefit in Q3.

Look, Q3's performance is much as we had anticipated, and we're keen to point that out. We could see where we were going from Q1 into Q2 and expected that to start to flow through as we got into Q3 because we're always pretty confident that the projects needed to get done. The growth of that -- so we are mid-single-digit like-for-like performance so far Q3, we're 11 weeks in. So that's a really solid performance. And it is simply doing what we always do, which is growing our customer base.

So this is a volume-led performance. There's no inflation in there and it's growth of customers across both trade and DIY. So it's continuing to execute the strategy we have and just do it brilliantly. There's no seismic change in there, Ben. We had fully anticipated this profile as we were coming through the year.

Some of the drivers we could call out, particularly on the digital side of the business has been going very well. So as David mentioned, the popularity of Click & Collect, our Home Delivery service, Wickes Rapid, which is the same-day delivery service. All of those areas are in good growth. And that sort of desire for convenience from the customer is really strong, and we're delivering on that really well. So that's been a good standout as part of that retail step-up.

And importantly, as you would have seen in the Mood of the Nation survey, our trade customers, in particular, our most strategically valuable customers are busy. 30% of them have a pipeline for the next year plus. That's slightly up versus the average to be fair.

Sam Cullen from Peel Hunt. I've got 1.5, I guess. Firstly...

Sam, you can call it two amongst friends. It is fine.

Kind of interrelated. Any comments on -- I know seasonal is not a huge category for you guys, but the trends you've seen in that category in the first half and, indeed, in Q3? And then related to that, obviously, extremely hot summer, the trends you've seen in the solar business.

Shall I do the first, you do the second? Firstly, Sam, you're right. We're not massively exposed in terms of any seasonal -- in terms of seasonal play. What we have seen as we've come through the year, and particularly just relating to the weather patterns, is really you just oscillate when it's very wet, you see a lot more internal projects being done.

As the weather starts to dry up a little bit, you see the benefit of internal and external. As it gets a bit hotter, you might see that emphasis move out to more external in terms of the balance. But broadly, nothing dramatic or unanticipated in terms of the shape of that in terms of the weather play and how that might have affected the seasons. But it's not a big exposure for us as a business. We don't really play in big seasonal categories.

Of course, garden and growing media and compost and fencing and that good stuff is in there. But on balance, the business is performing well as we come through Q3, we're seeing all categories performing really well.

And then on solar, since March, actually, we've seen a good pickup in solar volumes, a combination of some very good weather, of course, which gets people thinking about sunshine, but also the news flow around cost of energy and people trying to find ways to save money and solar is a fantastic way of doing that.

So that in combination with our innovation and how we're going to market, I think, is in combination driving a better performance in solar since around March time. But still obviously quite small in comparison to the rest of the business. So it's yet to make its mark on the numbers.

Kate Calvert from Investec. Just 2 questions. The first one is on tech investment. Could you comment on the outlook for tech investment going into next year from a P&L perspective? Is it likely to be sort of similar year-on-year? And could you sort of flesh out some of the details about the benefits you're going to get from the new till system as that rolls out next year?

And the second question is just on TradePro because obviously, it's a very valuable database. Could you just talk about any sort of potential development opportunities there and potential to sort of start monetizing the data? And I suppose you can tie that in with retail media developments as well.

I'll do the first one and you take other one. So we have been stepping up our tech investment. And as you know, now most of our investment in tech is going through the P&L, a small amount of CapEx on things like till hardware and that sort of thing, but most of the development work is through the P&L.

We are reaching the stage where we're close to what we think would be a steady state level of investment per year. But next year, there will be a small increase versus 2026. It's been a bigger step-up this year, but there will be another small increase next year, with around sort of GBP 20 million of project development costs in tech that are going through the P&L.

Super. And in terms of the new till system, we are currently still testing in a handful of stores. We will build that test out further. And then by the end of the year, we hope to have covered the estate at large. There will be inherent efficiency, just the speed and the ability and capability of the new system. And when we are running on the system currently, it's probably 3 decades old or something. So you can just understand that.

But also the experience of both the colleague and the customer, not just the ease of use, but how we're serving up opportunities. So these are sort of iPad-based tills. The iPad also faces the customer. If somebody buys a tin of paint, the AI will automatically serve up and recommend that you might need a few other things in the basket. So you will be able to project build at till point and really help the customer get all that they need to do that project in a way that we haven't been to today.

And then generally, just the data we have on the customer and the ability to recognize a customer and actually just build that sort of empathy and engagement. I mean there will be a host of benefits, and I'm sure we'll learn more as we do roll out, for sure. But efficiency, engagement, the ability to upsell will be the key things on my mind right now.

On TradePro, I think there are always 2 things to think about on trade, or probably 3. I mean, one, there still remains a lot of headroom for penetration growth. So if we look at our active member base, it's sort of like heading towards 700,000 in a population of an addressable market of 2.3 million. So the first thing says there's still a penetration opportunity.

One of the ways we'll go after that, Kate, is as we build the network because location does matter. And although we have a brilliant service like Rapid and we are a great fulfillment business, there's only so far you can fulfill. So as we build out and we appear in new towns, we will access that ability to get brand-new penetration in terms of trade.

The next thing that we continue to work on, and it is through data, but monetizing it for our benefits is building out the relationship, building that greater share of wallet with our existing trade customers as well because there's still a huge opportunity there when you pare it back where arguably, whilst it's one of our fastest growth drivers through penetration, we're still used at quite a convenient level, and we can build a bigger relationship and get more share of wallet with that customer.

And then probably the third thing on my mind is how we continue our efforts in the B2B side of things. So moving beyond one man and a van working in his local community to perhaps more organized businesses and providing that value and service as well. So there will be some key thoughts for me as we look forward into next year and the remainder of this.

Arthur, Berenberg. Just 2 from me. Just on product costs, is there anything to call out yet at all? I know timber has been one in the past that sort of caused a couple of issues. I don't know whether there's anything to call out there. And then just on Wickes Solar and the B2B opportunity, I know you just sort of mentioned it, but is that a sizable opportunity going forward?

Should I do the first and you do the second? I think the product inflationary environment, yes, there is inflation in the product. It's not at a high level. It's at a more moderate and expected level in terms of inflation that we're seeing coming in across the business. But of course, we negotiate well, we buy well.

One of the strengths of having a tight curated range is you're buying a lot of volume over a few SKUs. So we buy very well in that environment, mitigate as best as we can and pass value on where we can to the customers to generate more volume and get the leverage effect of doing that. But nothing to report at the moment, Arthur, that is stratospheric in terms of sort of like cost inflation.

And then B2B solar, we think there is really good opportunity here. Obviously, we're a customer of Wickes Solar, as Wickes, and we'll be putting solar on a number of our stores over the next few years. But also, there's an opportunity to do that with companies that we already have relationships with. We have suppliers that have manufacturing plants and warehouses. We deal a lot with landlords who have lots of properties around the country.

And as you can imagine, therefore, we've got a really good entry point to talk to people about what Wickes Solar can offer. We're scaling the team there, so we're in a better position to deliver bigger projects because obviously, it's a different type of project to domestic premises. But we're building the pipeline nicely, and we think we can do well in that part of the market.

It's Mark Photiades from Canaccord. Just a quick one on the pipeline for 2027. Any additional color on phasing of opening between H1, H2, the 7 to 9, and then the split between sort of the smaller format and the larger format, your expectations at this stage?

I'd start to expect over time a more balanced lay down in terms of the new store opening program. But we are still -- we want the right sites, so we'll be patient for those. This is not a space race for us. This is 70 locations that are broadly identified. So we'll be patient for those.

It's been very back weighted this year just because these are the sites we want. And as I say, you have to be patient. But in time, I expect a more balanced profile, Mark, I think it's fair to say. But it may have -- as we look into next year, it could still be slightly second half weighted as we push through.

In terms of the size of the store, I would encourage you not to think of it as a small format versus a larger format. We have one format. It's just that on average, we're now going to open smaller stores. So across the estate at the moment, 27,000 square feet is the average. Going forward, we'll probably open more like 20,000 is the average.

There'll be some below, 1 or 2 above, but they will be the same format. And when you walk into a Wickes, Saffron Walden, for example, on Friday, it will feel very similar. It's not like it's a convenience version or a local version of a Wickes. It's just ever so slightly smaller.

Do I need a bus for Friday? Is there any more people that want to come on Friday? All are welcome.

Just one more from me, just come back to trade growth, if that's okay. I mean in that first half, the differential between your average customer growth and the revenue growth is probably the biggest we've seen for quite a long time. Do you want to just go into the detail? Is that driven by the deflation and the earlier weather conditions and such like? And to that point, in more recent current trading, has that gap now closed back? Or would you expect that to close back up again?

I think the relationship with the 2 is probably 2 things. One, the ability to get after the work, as you say, the volume of projects combined with the deflation. There is deflation in there, and we see that they would be the 2 drivers. We would expect things to improve as we move through the year.

Is that everything, team? Anything on -- no? All quiet on the Western Front. Super. Look, just a few final thoughts from me. Look, this has been a great first half. Sales are up, volumes are up, profit is up, share is up. Dividend is increasing. And as anticipated, performance has really strengthened in Q3, particularly through the lens of retail. And that leads me to only conclude one thing, that the strategy is working, and we'll continue to execute it brilliantly and deliver attractive returns.

So thank you very much for turning out this morning. Thank you very much for watching online, and all have a super day.

Good morning, everyone, and thank you for joining us here today and also for those of you who are joining by webcast. I'm here with our CFO, Mark George, and together, we would like to take you through the performance of the business for the year ending 27th of December 2025, sharing how our proven growth levers are continuing to drive strong market outperformance. We will also share with you our plans to accelerate our store rollout as we see an exciting opportunity to bring the Wickes brand to even more customers across the U.K.

First, turning to last year's business performance. This was a stellar year for Wickes with both retail and Design & Installation showing strong volume outperformance. More customers shopping with us has resulted in volume-driven sales growth in our retail business as we have grown market share to record levels. In Design & Installation, the momentum from the transformational actions we took at the end of 2024 and into 2025 has continued, and we have seen a fifth consecutive quarter of ordered sales growth.

And at a group level, our sales growth of 5.9% is driving operational leverage, resulting in an increase in adjusted profit before tax of 14.4% to GBP 49.9 million. So it really has been a great year for Wickes, and I'd like to take this opportunity to thank all of my fantastic colleagues for their incredible work in delivering these results. We have continued to invest in our store network with the opening of 5 new stores and 11 refits. This investment in our store estate delivers consistently good returns. And shortly, I will share with you why we believe we accelerate this investment as we have the opportunity to go faster and further to a revised target of 300 stores versus the 250 we had previously announced.

We continue to deliver attractive returns to shareholders, and I'm pleased to announce that we've maintained our final dividend at 7.3p and have announced today a further GBP 10 million share buyback. Trading in the first 11 weeks of this year reflects the strength of our balanced business model with outdoor product demand having been impacted by the weather, we've experienced continued volume growth across indoor projects and Design & Installation.

I'll now hand over to Mark to take you through the numbers in more detail.

Thank you, David, and good morning, everyone. As David mentioned, 2025 was a strong year for the business with good growth in sales and profits. Revenue for the half was GBP 1.64 billion, up 5.9% versus 2024. Within that, Retail was up 6.5% and Design & Installation delivered sales were up 4.4%. We had a strong profit flow-through with gross margin up 44 basis points and a 14% increase in PBT to GBP 49.9 million. We continue to operate with a strong balance sheet, ending the year ahead of expectations with GBP 92 million of cash and averaging GBP 153 million of cash across the year. So this profit performance and the strong balance sheet have enabled us to continue delivering good returns to shareholders. As David said, we have announced our full year dividend of 10.9p per share. We've completed the GBP 20 million share buyback for 2025 and today announced a further GBP 10 million buyback.

So we'll break out more detail in the next few slides. But here, we have a summary of the P&L. As I just mentioned, we grew sales in both Retail and Design & Installation, in total, increasing sales by GBP 92 million across the year. Gross margin rate increased by 44 basis points as a result of volume growth, category mix and lower consumer credit costs for design and installation, which when combined with the sales growth, resulted in the pound gross profit of the business increasing 7.2% year-on-year.

Operating costs increased by 6.7%. A good productivity program enabled us to mitigate some but not all of the significant cost headwinds facing us, in particular, the increases in national living wage and national insurance. In addition, as previously guided, we stepped up our investment in tech this year by around GBP 8 million, building the foundations for future growth. Even with this significant step-up in investment, we delivered an 11% increase in operating profit and a 14.4% increase in adjusted PBT, demonstrating healthy operational leverage of the business as it grows.

So let's look at the P&L drivers in more detail, starting with sales. In retail, we delivered a consistently strong performance with sales growth above 6% in both H1 and H2. We saw good positive like-for-like growth driven by both TradePro and DIY. The number of TradePro members -- active members increased to 643,000 and TradePro sales grew by 9%. DIY sales were in mid-single-digit growth. As you can see from the table on the right, this growth in retail like-for-like has once again been exclusively driven by volume with mild deflation for most of the year.

So turning now to Design & Installation. Our sales performance has continued to improve following the initiatives that were launched in the second half of 2024. The order book has now grown for 5 consecutive quarters and with the usual time lag, delivered revenue has now had 3 quarters of consecutive growth. The dark blue blocks on this chart show the non-like-for-like sales growth, which comes from a combination of new stores plus sales from Wickes Solar prior to the anniversary of the acquisition, which happened towards the end of H1. The profit bridge on this slide helps to highlight the key drivers of our 14% growth in PBT in the year. The strong performance in retail margin came from an increase in both sales and margin rate.

And on the equivalent chart last year, design and installation was actually a drag to profit. But as you can see here, the progression we've made into delivered sales growth has meant that D&I profit was in growth, adding to the overall profitability of the business. On costs, we've shown here first the impact that the strong volume growth has had on our cost base with around GBP 17 million of costs directly linked to the additional volume going through the business. We can also see GBP 17 million of inflation in costs, which is quite a bit higher than on the same chart last year, which was around GBP 13 million, reflecting the increasing pressures of national living wage and national insurance, among other cost headwinds.

Our productivity program delivered GBP 12.4 million of savings in the year, in line with last year, but not quite enough to completely offset the cost inflation. We continue to invest in the business for the future, and investment initiatives that hit the P&L resulted in GBP 12.9 million increase in costs. The biggest component of this was the GBP 8 million step-up in tech that I mentioned earlier. We also had around GBP 3 million of net P&L impact from new stores in terms of preopening costs and losses in the first few months of trading. This will, of course, become increasingly a factor as we roll out the estate further. So overall, this shows a very healthy performance across the year. We increased PBT by 14%, whilst absorbing around GBP 16 million in costs for initiatives that will benefit growth in sales and profits in future years.

So turning to cash. We are a cash-generative business. And even in a challenging economic environment, we can generate enough cash to reinvest in the business, pay a healthy dividend and buy back shares. We ended the period with GBP 92 million of cash. But as you know, December is a low point for us in our seasonal working capital cycle. We averaged GBP 153 million of cash throughout the year. A couple of things to draw out from this bridge. The first is the strong working capital contribution of GBP 25 million, which last year was flat. This was driven by strong growth in the Design & Installation order book, improvements in payment terms with some suppliers and the timing of certain projects where the cash will go out in '26 rather than '25. We expect some of these benefits to unwind in '26 and result in a GBP 5 million to GBP 10 million drag on working capital this year.

The strong cash flow from our growing profit and our healthy balance sheet give us flexibility to invest further in growth initiatives. Our CapEx plan, which is predominantly invested in new stores and refits was GBP 28.7 million of spend in the year, a little lower than our guidance of GBP 30 million to GBP 35 million as 1 or 2 projects have taken longer to come to fruition and will now be launched in 2026. Also in 2025, we returned GBP 45 million to shareholders in the form of dividends and buybacks. We spent a further GBP 12.5 million buying shares for our employee share schemes. So overall, a very healthy cash position, and this is the foundation on which we can now accelerate investment in our business, which David will talk you through in a moment.

I'll end with some comments on outlook and guidance. So far in Q1, we've seen the benefit of our balanced business model, as David said. Whilst outdoor categories have been impacted by the wet weather, we've seen good growth in our indoor categories, and we've continued to grow market share. We remain comfortable with market expectations for growth in PBT in 2026. And in terms of our other guidance, I wanted to call out a few from the list here. Firstly, on tax. After a lower-than-normal effective tax rate in 2025 due to a successful capital allowances claim, we'll return to a more normal level of ETR slightly above the standard 25% tax rate. Our CapEx will step up to between GBP 40 million and GBP 45 million, partly as a result of some of the projects that were left over from 2025 and partly as the planned step up as we look to accelerate our investment.

As I mentioned earlier, we anticipate a partial unwind in working capital. Today, we've announced a GBP 10 million share buyback, which, as David will explain, will be the last one for the time being as we look to step up CapEx investment in the business over the next few years. In addition to the buyback, we will also be buying shares for our employee share plans rather than issuing new shares. And finally, on dividends, we plan over time to increase the dividend and the dividend cover so that we are operating within the cover range of our capital allocation framework of 1.5x to 2.5x. So in summary, the business has had a very good 2025. We delivered good growth in sales and profit whilst increasing the levels of investment in the business. We now plan to build on this with a new bolder ambition for future growth, which David will talk you through now.

Thank you, Mark. Now it wouldn't be a Wickes presentation without our strategic framework for growth. The very fact that I presented as every results announcement demonstrates just how the consistency and clarity of our strategy is working so successfully, enabling us to drive growth and market outperformance. Over the next couple of slides, I'll share the actions we've taken across our growth levers and the results we've achieved in the past year. But before I do that, let me touch on some consumer trends that we are seeing across the U.K. home improvement market.

As you are aware, we keep a close eye on trends through our monthly Mood of the Nation survey. Our local trade customers tell us they continue to be busy with over 30% having a 12-month plus healthy pipeline of work. For customers in the market for a new kitchen or bathroom, we are seeing that planned spend has been stable over the last few months, whilst remaining below historical norms. And turning to DIY. People are still keen to improve their homes and with 1 in 2 consumers planning to decorate a room this year. And speed and convenience is increasingly important to them. In a recent survey, almost 60% said they expect faster deliveries and that they are happy to pay more for same-day service.

Our TradePro membership scheme goes from strength to strength with sales up 9% on the back of an increase in active members to 643,000. I'm sure I don't need to remind you that these are our most strategically valuable customers, spending on average 10x more in a year than the typical DIY. In DIY, we continue to broaden the Wickes brand appeal through our range reviews, innovation and communication. Once again, this has resulted in growth in this customer base. We know that customers value the products and services we offer as we see this coming through strongly in our customer satisfaction metrics. For example, 85% of customers rate our Click & Collect service as excellent or good, and that rises to 89% for our home delivery service, which we operate from all stores.

Value, convenience and speed really matter to our customers. Our digitally led service-enabled business model enables us to provide all 3 seamlessly. We continue to maintain a market-leading price position and during the year, added a number of new initiatives to offer customers even faster, more convenient service, including a new 15-minute Click & Collect and the launch of Wickes Rapid, whereby customers can have home delivery of products weighing up to 800 kilos same day in under 3 hours. This is proving a game changer for local traders, saving them time and money when they're on a job. And although it's still early days, the customer satisfaction scores have been very positive, generating a healthy number of repeat customers for this service.

I mentioned earlier that last year has seen us reach record levels of market share. And you can see from this graph, the impressive step-up we've seen over the past 12 months, a clear output of the outstanding execution of our consistent strategy. This year has been pivotal for our Design & Installation business as the transformational actions we took at the end of '24 and last year have yielded results. As this chart shows, the performance of delivered sales has been strongly positive for the last 3 quarters with momentum continuing into Q1 this year. Many of you came to our D&I Investor Insights event at our Staines store last October and all the exciting new initiatives we shared with you then are having a positive effect on the customer experience and translating into sales.

Founded on a deep understanding of what matters most to our customers, we continue to innovate our ranges. For example, we've added paint to order to our bespoke kitchens offer and extended our furniture colors in our value-led Wickes Lifestyle range. We have also made significant digital and physical enhancements to simplify the customer journey, including our new design tool. While its full benefits are still to come, it is set to really transform how customers will be able to visualize and create their new kitchen and bathroom in the future. Crucially, our customers are telling us that we're hitting the mark, giving us a 4.4 excellent score on Trustpilot.

Turning to our solar installations business. Solar Fast is now fully integrated in the Wickes Solar brand, and we are focused on building the foundations for future growth. Wickes Solar is on prominent display in all our stores, and we are also growing our digital presence to build brand awareness. We have been delighted to welcome customers into 5 new stores in the year at Leeds Moor Allerton, Bury St Edmunds, Dunfermline, Southport and Northampton, all of which have got off to a great start and are performing well. We have refitted and refreshed a further 11 stores with 83% of the estate now in the new format. And our property plans for '26 include another 4 to 5 new store openings along with 15 to 20 refits and refreshes.

Shortly, I'll talk more about our property ambitions. But before that, let me just conclude with the key highlights from across our responsible business strategy. In 2025, we had a number of highlights, including being ranked as the U.K.'s #1 retailer in the Financial Times Best Employers survey. Our community program continues to support local charities, and community groups up and down the country with over 2,500 projects benefiting from free Wickes products and volunteer support.

In April, we launched a new 2-year partnership with CALM, the suicide prevention charity. We are well on our way to hitting our GBP 2 million fundraising target, having already raised an incredible GBP 1 million to date. And it's fantastic to be recognized for all the work we do as part of our responsible business strategy with highly positive ESG ratings, achieving a strong A- rating in CDP climate change and maintaining a AAA rating in MSCI.

Now I'd like to take a few minutes to outline our future growth ambitions for our store network. As you know, we operate in a large market with strong fundamentals. If we take both product and installation services across the U.K.'s home improvement, kitchens, bathrooms and solar markets, we calculate our addressable market is around about GBP 35 billion. Within this market, we see a significant opportunity for long-term growth with a relatively small share of around 5%, there's plenty of headroom for growth through taking more share, which is why on the back of another year of successful growth and market outperformance, we are reframing our expectations about our opportunity to materially grow share by expediting our property ambition.

Our proven operating model and strength of our balance sheet means that we now see the opportunity to dial up the growth drivers within the business, working within our capital allocation framework. The store performance of existing and new stores, together with our proven ability to operate successfully in smaller footprints provides a body of evidence that gives us the confidence to go faster and further with our new store rollout program. And as a result, we're increasing our ambition, as I've said, to 300 stores across the U.K. Back in '22, we said we had plans to open around 20 new stores over the next 4 to 5 years. We're on track with that program. And in the past 3.5 years, we've opened 13 stores, which are performing well.

The store sales and margins are maturing as planned and on track to meet our ROCE target of 25%. And just to give you a sense of how a store typically builds up to maturity, the Design & Installation element of the store will be the first to grow sales, followed by DIY, then local trade as that customer base strengthens over time. Our new store opening strategy is focused on identifying white space opportunities and building our brand presence in underserved larger towns and cities up and down the U.K. Our proven ability to operate successfully in a smaller footprint store opens up a greater volume of potential sites that we can consider.

And just to be really clear, I'm not talking about a new format, but our ability to execute Wickes in a smaller footprint than the current group average. These stores will have a full and compelling retail offer and a kitchen and bathroom showroom similar to any existing Wickes store. Our efficient 4C operating model and fantastic colleagues enable us to deliver the same customer proposition just from a smaller footprint of 15,000 to 20,000 square feet rather than the 27,000 square feet average that we have across the estate. You can also see from the table, we deliver a similar EBITDA to the group average from a smaller store.

We are trading a number of these smaller footprint stores already, including our Staines store, which many of you would have visited recently, which generates in excess of GBP 10 million revenue a year from a 20,000 square foot footprint. So we've proven our capability to successfully deliver the Wickes customer proposition and make the financials work in a smaller store, and it's a critical component of our property strategy, giving us access to a greater number of economically viable sites, typically in catchments with a lower population and also infill of major urban areas.

Of course, the key to a successful property strategy is picking winning sites, and we are very mindful that as we look to accelerate our network growth, we do so in a focused, disciplined and highly selective manner. Over the next couple of years, our property team will be identifying locations, undertaking commercial negotiations with landlords, seeking planning permissions and managing construction to secure a healthy long-term pipeline. And it's worth mentioning that Wickes is viewed as a very good tenant. We have the highest 5A1 covenant rating. We add to the diversity of a retail park as a specialty home improvement brand, plus we are a growing business, all of which is very attractive to a landlord.

Once we have secured the pipeline, we will then be in a position for our rollout program to accelerate from '28 onwards with around 10-plus new store openings per year. At the same time, we'd expect to increase our refresh and refit program to around 20 stores per year. The majority of these will be refreshes as 83% of our store estate is already now in the new format. This means that over the next few years, the refit program will evolve into an ongoing maintenance capital refresh program.

And as you can see here, how we expect to effectively double our investment in store CapEx in '28 from the GBP 20 million to GBP 25 million we will spend this year. So we are very excited by the growth opportunity that presents itself, and we are equally confident in our ability to realize our 300-store ambition. We have a well-versed and proven approach to picking winning sites. We have the capacity and resources in our property function to effectively manage the accelerated rollout. And most importantly, we have a model that works. Wickes deserves to be in more locations across the U.K., giving our customers the chance to experience the Wickes brand. Our ambition for 300 stores will create over 2,000 new jobs supporting communities nationwide.

Our capital allocation framework is well established. Within that framework, we are now focusing more on growth investment. We continue to maintain a strong balance sheet and a revised store rollout program increases property CapEx by GBP 20 million per annum in the medium term. The strength of the business' cash flow generation will enable our plan to increase both dividend and cover as profits grow. And as always, any surplus cash will be returned to shareholders through share buybacks.

So in summary, it's been a super year for Wickes. Our highly differentiated business model has served us well as we continue to win market share and grow volume. We see significant headroom to increase our market share in the U.K.'s GBP 35 billion home improvement market, and we are scaling up our property ambition to go further and faster with our new store opening program. This is underpinned by our strong cash flow generation, enabling us to increase investment in our proven growth levers in addition to delivering attractive returns to shareholders through our dividend and share buybacks.

Thank you for listening. Now Mark and I will be very happy to take any questions you have.

Matthew McEechran from Singer. A couple of questions just on the store expansion ambitions. In terms of the -- it would be useful to just get a little bit of a flavor around how much of the extra target has come from infills rather than white space. If you just -- I mean, even just a flavor would be very helpful. And I think you've indicated an approximate EBITDA, which is very comparable to the existing estate, but from a small footprint. I mean, is there anything that would lead to or would prevent your return on capital on this new phase of growth being ahead of the most recent one. It feels like the capital spend probably will be slightly lower.

So Matthew, thank you for that. I think on balance, if we look at the sites and the opportunity, more will be found in pure white space versus sort of like those connovations where we feel we're underrepresented. Yes, there are a handful of connovations where we're definitely underrepresented. I always use Glasgow and Bristol as 2 good examples. We still only have 1 store in Glasgow, but who knows at this moment in time. So I think the balance, I would be thinking at least like 70% pure white space, maybe 30% deepening our presence and penetration in larger towns and connovations.

Yes. And on returns, I think we'll be aiming for the same level of return and being able to have a smaller site enables us to take something with a smaller rent that would typically have a smaller revenue than a bigger catchment, but gives us a balance of returns. So that's the equation. That's why we're now able to stretch into more sites where previously the returns might have been a bit too low if we tried to put in perhaps a 30,000 square foot box, but a 15,000 to 20,000 just gets it into our returns threshold.

Grace Gil from Jefferies. A few questions from me also on the store estate on the new rollout. First being, you've obviously made such a big headway around the design and installation component of your business. Given that the stores going forward will be on more of the smaller side, how do you expect to continue to have D&I still be the main focus when you might just have less space in those stores? Or is the focus now to be more on the tradesperson and having that be kind of a -- I don't want to say a screw fix model by any stretch, but something along those lines because that came to mind. That's the first, and I'll go on the next one.

I'll take that one, Mark. I think it's firstly, Grace. It's really important to underscore this is not a new format. This is us just rolling out the capability that we've demonstrated to run the entire Wickes proposition in a smaller store footprint. And I'd say Staines is a great example that many have seen more recently. The way it principally works is if we're in a store as small as maybe 15,000 square feet, you will definitely have a mezzanine and you're putting 4,000 to 5,000 square feet in the showroom in the sky. And that's probably the optimum model actually. Having the showroom in the sky is the best thing to do in a store. But if the store is 20,000 to 22,000 square feet, we can actually accommodate the showroom downstairs. So we have a way of flexing. But the smaller the footprint, the most likely the showroom will be in the sky. The bigger the footprint, you can actually accommodate that downstairs.

Okay. And then kind of on that same vein, you've obviously done loads of work around refits and refreshes of the current estate already. Is there -- are you open to the fact that any of the new learnings that you have in this new store rollout, you might have to make some changes for the old estate as well? Or are you more confident that the refreshes that you've done are...

I think that's where the refresh program comes into play versus refit. So refit is a more meaningful intervention at a store level to get it up to the Wickes model. We will continue to go back on some of those earlier refit stores and refresh them as we move through. So as I said, really, there's an important part of our property capital that now just becomes maintenance. It's just keeping the estate that we spent a number of years getting to a really sharp condition in that sharp condition. And then as I say, the emphasis the much more into the new network.

David Hughes from Shore Capital. A couple of questions from me. First of all, in terms of cash generation, obviously, cash has gone up year-on-year kind of despite the share buybacks and the dividends that you've paid out. Do you have a view of the right level of net cash that you're looking to in terms of us taking that forward and thinking about future returns to shareholders?

And then secondly, just on the kind of more macroeconomic side of things. Obviously, recent turbulence on the geopolitical scale is having a knock-on effect already. How do you view the kind of sensitivity to Wickes on that? Is it more on the cost side of things with things like freight and energy? Or is it more towards the impact on consumer demand where you're kind of more cautious, should we say?

Yes. I'll pick up the question on cash. So the capital allocation framework that we have, the first pillar of that is that we will always want to have at least GBP 50 million of cash. That gives us flexibility for a sudden downturn in the economy or a small acquisition or something like that. And that comes at December in our working capital cycle, as you know. So we always aim to have at least GBP 50 million at the year-end. It's not an absolute, but it's a guide. Clearly, at the moment, we have more than that, and that's why we've been paying a dividend that's been higher than our cover range, and we've been buying back shares.

As we now pivot more towards using our cash for investment, we'll continue with the dividend in the range, but actually the buybacks will slow down. What we will judge over the coming years is the speed of rollout of our estate. And so our CapEx level is a little bit uncertain because we really want to go after this opportunity. But as David explained, building the pipeline can take some time. So if we are as fast as we would like to be, we will find that there won't really be much excess cash versus that GBP 50 million at the year-end, if you look forward a year or 2. If it's a little bit slower to build out, then maybe there will be. But for now, we're going to keep the cash that we've got because we have ambitions to go as fast as we can.

And just on the current sort of like geopolitical or macroeconomic backdrop, I mean, one of the benefits of Wickes, not only the fact that we run a very curated range and we're not seasonal, is we have a high sourcing sort of focus in the U.K. So around about 70% to 75% of our cost of goods are domestic in the U.K. Only about 7% of our money do we spend with Asia. So we don't have much product moving around in terms of shipping, some, but we're reasonably insulated. We're not completely immune, but we're reasonably insulated to that stuff. And likewise, when we think more immediately about the ability to run our network in our stores, we're hedged until at least well into next year, aren't we?

Yes. So we've hedged our energy for 100% in 2026 and 50% of 2027. So we're well protected for any kind of short or medium-term crisis.

And then where it plays out in terms of the consumer sentiment at the moment, we're not seeing any change right now. We'll see how we move through the rest of the year. But I think it's always worth reminding it's a GBP 35 billion market. We're a property owning democracy and our homes are still the oldest in Europe. So there's always a demand for repair and maintenance on that big asset that we own as a nation. So in that market, given our share, there's always opportunity for growth.

Kate Calvert from Investec. A couple of questions from me. First of all, could I ask you about your thoughts on gross margin going forward and the sort of main drivers because obviously, you saw quite a good improvement in '25. My second question is on your Click & Collect. You said that 85% rated you good, excellent. What do the other 15% not like about your Click & Collect? And my final question, I'm just interested in your thoughts on the market growth of these energy-efficient solutions. It sort of hasn't really taken off, obviously, as yet. What can you see coming down the pipeline? And when do you think it might start to develop?

Yes. So starting with gross margin, yes, this year, it was a good year. Part of that was actually a change in our consumer credit costs coming down as interest rates came down. And so that was more of a onetime shift. As we expect in 2026 now, interest rates probably won't move too much. If there is a decline, it will be very gradual. So it will be harder to spot that. But the business has traded well. When you trade well on volume, that makes you very popular with suppliers. So that's helpful in terms of negotiations and volume-based rebates and things like that.

But broadly, the way to plan for our business is assume a flat gross margin. Our route to growing our profit is to grow the top line, keep gross margin flat and then get into a virtuous cycle where if we can get better buying terms, we can invest that in price and get the flywheel going again.

On Click & Collect, been in retail for a while now, Kate, as you know, I've got to be honest, nearly 9 out of 10 customers rating as excellent or good in a service where you're packing and dispatching tons of products in under 15 minutes is no short order at all. So it's a phenomenal job done by my colleagues to hit those milestones. And I think it's worth remembering that only 18 months ago, our Click & Collect service was 60 minutes. We reduced it to 30 minutes, and now we're doing it in 15. And on the same glide path, the customer satisfaction has gone up because speed matters, but speed, accuracy and availability really, really matter.

Where you might get the people that are less than happy is if it isn't quick enough or maybe not the complete orders there. But I'm very, very delighted to see 9 out of 10 almost of orders are in the excellent and good. That's a really job well done.

Then on home energy, which is your third question, I mean, we see this as a very good long-term opportunity where if you were to combine [ SLC ] pumps, solar and everything that goes with solar, including batteries and inverters plus EV charging points for homes, that market will be GBP 10 billion to GBP 12 billion annually within 5 to 6 years. So a really big opportunity. It's driven by short- and long-term trends. Obviously, the longer-term trend for us to reduce the carbon footprint of our homes, and the government is clearly making that a priority. The recent announcement hasn't got all of the detail yet of exactly how consumers will be supported. But certainly, the direction of travel is that the government wants to support this.

But then short-term news flow can also affect it. So when we were in the energy crisis of autumn 2023, it was solar, for example, saw a big spike in interest. And it will be interesting to see how the current crisis unfolds, whether that gets people thinking again about energy security for their own home, trying to reduce the cost of energy. So we're very confident that this is going to be a big market. As David said, the U.K. housing stock is the least efficient of any in Western Europe. If we are going to reduce the carbon footprint in the country, we've got to do something about retrofitting our homes.

Andy Wade from Jefferies. A few questions on the store target plan. Obviously, big news today. So no surprises, a lot of questions on it, I suppose. The first one, what sort of changed in your thinking? I think you did talk to performance in the smaller format stores. Are those the main things, how well the business is trading overall and the success of the smaller format stores? Have you changed your hurdle rate expectations or recut the analysis at all? Or is that what it is? So that was the first one.

Second one, just to touch back on Matthew's line of questioning on the smaller stores, but same EBITDA. Is that you've got a lower rent -- sorry, lower revenue, lower rent, same EBITDA? Or is it that they're in locations that have got a higher sales intensity despite the smaller footprint? So just sort of working through how that works. And is there any element that because you will have picked obviously decent sites first to trial it? Is there a risk that later sites aren't quite as productive as the sites that you've picked, first of all? And then on the same theme, you talked to the new store preopening sort of drag of GBP 3 million presumably, and you did hint at this during the presentation, we should be expecting that to increase from, say, GBP 3 million to maybe GBP 6 million.

So 2, 2 questions. It would be sections within, which is always good, Andy, to follow, not least when you're writing it down. So firstly, on why the shift in the emphasis and the speed. I think it's fair to say over the last sort of 5 years, our priority has exclusively been getting the estate we've got, which are brilliant stores in super locations to the best they can be for the Wickes format. So it's all been about the refit, and we've been less focused on the expansion because most importantly, we want to drive those incremental like-for-like returns from the assets we've got and keep in a really healthy condition.

Having almost completed that journey, not complete, but almost completed that journey and moving more into a refresh and maintenance model for the existing estate, now is the time to step forward. And we can step forward with confidence because we've demonstrated over the last 4, 5 years, the performance of this business. So we see it as an opportunity. And we've always said, and Mark and I've always operated by the mantra, in tough economic climate, strong businesses get stronger because they got the clarity and the confidence to invest and they know the returns they're going to get. So it's much more about that play from our perspective now. We've done the refit. We're moving into new stores, but we feel really confident now given the batch of stores we have around that size and how they're performing that we can really kick on and take that opportunity sooner rather than later. So I think we've demonstrated our capability of doing that.

Site selection, by the way, just -- this is -- we're not in a space race. As I said sort of like when I was standing here earlier, this is absolutely about disciplined laydown of capital. So site selection will be really, really important that we're picking sites that will work for the next 20, 30, sort of like 40 years. So we're not picking anything. We're being really, really quite sort of like highly selective, highly prudent in terms of where we do go because it's the right thing to do when you're laying down capital. This is not a race for us. This is a proven model that we believe will prove out in more and more towns as we move around the U.K. There are 2 other bits to those 4 questions, which I didn't cover. So I can help me on the bits. I don't know that I missed.

On the EBITDA question, you're exactly right. Yes, it's a lower rent bill, which means that we can take a site and have a slightly lower revenue and still achieve a similar level of profitability, it's as simple as that, which is why David is describing us to be able to move into slightly smaller catchments. And then in terms of whether the sites will be less productive in the future? No, we don't think so at all. We're learning all of the time and we're refining the model all of the time. And the sites that we've opened in the last 3 years, of course, have been opened in a period that hasn't been great for the economy, and yet still, we're confident about it. So I think that's a good sign.

Preopening costs and losses in early months, yes, that will -- as we ramp up the network expansion, that will become a bigger factor, and we can help guide you to that as it comes. So it will be a factor we have to build in. So as you imagine, a 5-year plan going where you're building and building the rate of opening, actually, the sort of the profitability is always a little bit delayed because you've got those growing opening -- preopening costs as well. But I think we'll provide the confidence of the performance of the new stores. And so we're very confident that it will come.

Just to sort of add on Andy's question to push you a bit harder on the sort of profile of the maturity of those stores. When do they actually break even? And what's the sort of shape of that maturity to get to that 25% in 5 years? Question number one.

Yes, they will be breaking even probably after about 12 months, and some stores are profitable almost immediately. But as David says, it's different for the different parts of our business. Design & Installation takes off very quickly. Actually, the opening of a new showroom in an area really seems to create a buzz and attract a lot of people. And then on the Retail side, DIY comes first. But the trade have their habits of where they've been shopping, and it just takes a little bit longer to build the TradePro base in each store. And we've seen that pattern in pretty much every store we've opened in the last few years.

So actually, the drag on profit is -- doesn't last very long, I'd say, 12 months on average. But still the point to reach maximum profitability from that point is probably another 3 to 4 years. So we aim for 4 to 5 years, at which point we think it's going to be mature.

All right. And then I guess you've held -- you're comfortable with consensus, I guess, this year and some might argue that it's looking quite ambitious or stretching. What sort of levers have you got in case things do get a bit volatile with volumes and et cetera, et cetera?

So yes, it's another sort of mid-teens growth in PBT if you were to look at consensus. But we're a business that is -- has operational leverage as we've proven this year, if we grow sales, profits will grow faster than sales typically. And we're confident in our model. As David said, this is a very big market, GBP 35 billion. The economy didn't give us any help in 2025, and we managed to grow the business nicely. Our aim will be to do so again in 2026.

A bit of a follow-up on Ben's question. You did very well to come close to mitigating the inflation, the cost inflationary pressures last year. I presume there is some annualization effect of the actions you took last year to feed through this year. So could you quantify that? And then just in terms of what additional because I think you've been confident about there being further opportunity. Do you want to talk about some of the projects that might come through in the course of the current year and what that might amount to?

Yes. So I mean, first of all, cost inflation in '26 probably won't be as high as '25 on a percentage basis because what -- we had the big impact last year of the national insurance uplift and also a pretty high national living wage. But that living wage, as you know, has come down as an increase. Energy, we are locked in for the whole of 2026 and half of 2027, as I mentioned. So I think inflation itself will be a bit lower. And as you say, we've got some benefit of the annualization of the full year effect of the measures we put in, in '25. We haven't quantified that externally. But every year, we have a bit of a starting rolling sort of benefit, and then we build on that with new initiatives.

And I think I'm not dodging the question here, Matthew, in terms of citing stuff. But the reality is the big rocks we've landed in recent years. So when it comes to productivity, it really is the sharpening of what you're doing in terms of the value chain. There's nothing meaningful that I would call out outside of the fact that now it does demand that you do a number of small things brilliantly to build up a productivity bucket, which we do every year. And we're always challenging ourselves how efficiently and effectively we're running the organization. But I wouldn't cite any major opportunities. It's lots of...

And to reiterate what we said in the past, which is productivity for us is not about making the customer experience worse. It's about finding things more efficiently that make the customer experience better and the operating cost lower for Wickes.

Any questions online, Scott? No?

We covered in the room. Back to David for closing remarks.

Wonderful. Well, as ever, thank you very much for attending this morning's presentation. Really appreciate the questions. I mean, hopefully, you got a real sense today that this is a strong business doing very, very well. It was a super year last year, critically all underpinned by volume growth and growth of customers, us appealing to more people in the market. We plan to continue to do that with confidence. And as I say, the big news today is the announcement of us accelerating the new store opening program. So we continue to look forward to a bright future for of growth as we step forward. Thank you. Thank you.