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.

Good morning, and thank you for taking the time to join us today. And I'd also like to welcome everyone who is watching via the webcast. I'm here with our CFO, Mark George, and we're delighted to share with you our first half results for 2025.

We'll spend the next 20 minutes or so taking you through the performance of the business, broader market trends and highlighting the great progress we are making on executing our strategic plans. I'm pleased to report that both our retail and our Design & Installation business has had a strong first half. Our retail business has continued its volume-led sales recovery trajectory, resulting in record market share. And the self-help actions we took last year and earlier this year to transform our Design & Installation business, are resulting in increased project volumes, a return to like-for-like sales growth and driving market outperformance. This sales growth plus our productivity plans are driving operational leverage, a 5.6% increase in group revenue, combined with our productivity savings, which has helped to offset inflation has resulted in a 17% increase in adjusted profit before tax of GBP 27.3 million.

We continue to pursue growth through targeted investments. When it comes to our store estate in the first half, we opened 1 of the 5 to 7 new stores planned for the year and refitted a further 4 stores with more refits to come in the second half. And this year, we have stepped up our investment in tech to underpin and advance our growth and productivity plans. And Mark and I will share more on this later. And of course, we continue to invest in product innovation with new ranges in retail and some great stylish kitchen and bathroom ranges that are proving very popular with customers.

We are delivering attractive returns to shareholders and have announced today an interim dividend of 3.6p, whilst the GBP 20 million share buyback that we announced in March is ongoing.

Before I hand over to Mark, I'm pleased to say that we remain comfortable with market expectations and our overall outlook for adjusted PBT remains unchanged. And finally, I'd like to take this opportunity to thank all of my colleagues for their incredible work in delivering these results and providing great customer service. I'll now hand over to Mark to take you through the numbers in a little more detail.

Thank you, David, and good morning, everyone. So as David mentioned, we've had a strong first half with good growth in sales and profits. On this page, we have some of the headlines. So revenue for the half was GBP 848 million, up 5.6% versus H1 2024. Within that, retail was up 6.8%, and Design & Installation delivered sales up 2.1%. We've had strong profit flow-through with gross margin up 79 basis points and a 17% increase in PBT to GBP 27.3 million.

We continue to operate with a strong balance sheet, ending the half with GBP 158 million of cash. This performance and strong balance sheet have enabled us to continue delivering good returns to shareholders. As David mentioned, we're announcing this morning an interim dividend of 3.6p per share, and we continue to buy shares back in our GBP 20 million buyback program.

We'll break out more detail in the next few slides, but here, we have a summary of our P&L. As I mentioned, we grew sales in both retail and Design & Installation, in total, increasing revenue by GBP 45 million versus the first half last year. Gross margin rate increased by 79 basis points as a result of volume growth, category mix and lower consumer credit costs in our D&I business. Which, when combined with the sales growth, resulted in the pounds gross profit increasing 7.9% year-on-year.

Operating costs increased by 7%. A good productivity program enabled us to mitigate some but not all of the significant cost headwinds that are facing us, in particular, the increase in National Living Wage and National Insurance. More on this in a moment. Overall, this enabled us to deliver a 14% increase in operating profit and a 16.7% increase in adjusted PBT, demonstrating the healthy operational leverage of the business winning growth.

So let's look at the P&L drivers in more detail, starting with sales. In the retail side of the business, we continue to deliver really well most clearly demonstrated in our market share position, which continued to strengthen, and David will touch on this more a little later. Within retail, we saw good positive like-for-like growth driven by both TradePro and DIY. The number of active TradePro members increased to 615,000 and TradePro sales grew by 10%. 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 driven by volume with negligible inflation in the business. In Design & Installation, our sales performance has continued to improve. The order book has been growing consistently since Q4 2024. And with the usual time lag, we are now delivering that revenue with Q2 being the first quarter of delivered sales growth since Q2 2023. For the first half as a whole, like-for-like growth in Design & Installation was minus 1% with total revenue growing 2.1%, supported by new store openings and Solar Fast, which only went like-for-like in June.

The profit bridge on this slide helps highlight the key drivers of the 17% growth in PBT. The strong performance in retail margin came from an increase in both sales and margin rate. In Design & Installation, the progression into delivered sales growth in Q2 meant there was a small increase in gross profit in the half. And clearly, the trend for D&I is positive and encouraging for the rest of the year. On costs, we've shown here the impact that the strong volume growth has had on our cost base with around GBP 7 million of volume-related costs. We can then see the impact of inflation, GBP 8.7 million in the half, which is quite a bit higher than on the same chart last year, which showed about GBP 5.5 million of inflation in the first half, reflecting the increasing pressures of National Living Wage and National Insurance coming in the business.

Our productivity program delivered GBP 5.5 million of savings, slightly higher than H1 last year, which is encouraging, but clearly, as the chart shows, not enough to completely offset the cost inflation. We continue to invest in our business and investment initiatives that hit the P&L resulted in GBP 5.4 million of incremental costs year-on-year. In addition to costs relating to new stores and refits, we've also increased the investment in technology. This IT investment is set to increase further in the second half, and David will talk more about this in a moment.

Turning to cash. We are a strongly cash-generative business. And even in a challenging economic environment, we can generate cash to reinvest in the business, pay a healthy dividend and buy back shares. We ended the half with GBP 158 million of cash. Now as you'll recall, we have seasonality in our working capital cycle in which we have a significant improvement in working capital in the first half of the year, which then unwinds in the second half. Now the working capital position will normalize in the second half of this year in the usual way, but it will leave us with an average cash position across the year well ahead of our December low point. The strong cash flow from our growing profit and our healthy balance sheet gives us flexibility to invest further in growth initiatives as well as to accelerate the returns to shareholders.

On growth, our CapEx plan, which is predominantly invested in new stores and refits, was GBP 9.5 million in the first half and will be between GBP 30 million and GBP 35 million for the year as a whole, with the program clearly back weighted to the second half. In H1, we returned GBP 25 million to shareholders in the form of dividends and buybacks and we also spent GBP 11.9 million buying shares for our employee share scheme. So overall, a very healthy cash position.

I'll end with some comments on outlook and guidance. So far in Q3, trading has been in line with our expectations with all three parts of the business, TradePro, DIY and Design & Installation remaining in growth. We expect costs to increase in the second half with the full effect of the increase in National Living Wage and National Insurance, which only came in, in April, plus the back-end weighting of our new store opening program. We'll also be stepping up our investment in technology. For the year as a whole, we'll be spending around GBP 10 million more on SaaS projects with the cost going through the P&L than we did in 2024.

Despite these increases in operating costs, our strong trading performance means that we remain comfortable with consensus expectations for PBT for the year. Now there's also some technical guidance provided on the slide there. I won't read it out, but it remains unchanged from what we gave at the beginning of the year. So to summarize our position at the half year point, the business continues to deliver really well with all three parts of the business delivering good sales growth. Despite significant cost inflation, we're delivering good operational leverage from that strong sales performance with PBT growing significantly faster than sales. And this is enabling us to continue investing in the business and at the same time, deliver good returns to shareholders. With that, I'll hand back to David.

Thank you, Mark. Now of course, it wouldn't be a Wickes presentation if I didn't share with you this slide, our growth lever framework. Our sustained market outperformance is a clear demonstration that our uniquely balanced business model and strategic growth levers continue to deliver results and achieve our very simple purpose, which is to help the nation feel house proud. I'll take a few minutes to share how we are investing in these growth levers to continue to win in this market. But before I do that, I thought it would be helpful to look at some of the current consumer trends we are witnessing as we put our strategy into action.

As you are aware, we keep a close eye on trends for our monthly Mood of the Nation survey. Our local trade customers tell us they continue to be busy with healthy pipelines of work and 1 in 4 of them telling us that they're booked up for a year in advance. For customers in the market for a new kitchen or bathroom, we are seeing that planned spend remains stable, although still below historical norms. It's worth noting that as people have been holding off buying a new kitchen or bathroom, they are getting older and simply more worn. So inevitably, there is a backlog of volume building up.

And turning to DIY. People still want to improve their homes and continue to prioritize DIY projects in the home and garden. And as ever, speed and convenience is important to them. In our most recent survey, 60% of them saying faster deliveries and that they are happy to pay for more for the same-day service.

We are particularly pleased that sales growth is volume led, and this is all down to more customers coming through our doors or shopping online. In our retail business, the TradePro engine is truly motoring ahead with sales up 10% and active membership, as Mark said, growing to 615,000. We are driving up DIY customer numbers through purposely broadening our appeal, attracting new customers by innovating in strategic categories and engaging communications. Our Proud as a Peacock advertising campaign is working very well for us. And in case you haven't seen it yet, here's one of our latest TV ads.

[Presentation]

Now we know that customers value choice, convenience and speed and with our digitally led service-enabled business model, it allows us to provide all of this quite seamlessly. We are achieving incredibly strong customer satisfaction scores, particularly in Click & Collect and home delivery, arguably, those service touch points where the customer judges us most critically. We are continuously innovating in this space. In the first half, we are seeing further -- we have further enhanced our proposition to offer customers greater choice and even faster, more convenient service through a number of new initiatives. We have repositioned our assisted selling offer under the new name, Wickes Extra, which offers customers who are shopping in-store easy access to our extended range online. We've launched a new 15-minute Click & Collect service, halving the time they can now order online and pick up from their nearby store. As we pick it quicker, customers are collecting it quicker, so we know they value it and it works.

And I'm delighted to share with you an exciting industry-leading service that we're launching called Wickes Rapid. In a nutshell, it means that customers will be able to receive a same-day home delivery of products weighing up to 800 kilos in under 3 hours. No one in the market is offering this. With a specialist partner on board, we can now deliver to your door or site within 3 hours, 7 days a week. There are over 10,000 SKUs available and a delivery cost from just GBP 9. As you can imagine, for a local trader, this is a game changer, giving them the ability to make bulk orders at speed so they can just get the job done. We've launched this in the last 2 weeks following a very successful customer trial.

The result of all of the above, a clear strategy of proven growth levers executed brilliantly is delivering record levels of market share. As you can see from this chart, particularly impressive growth in the past year as more customers choose to shop with Wickes.

Now turning now to our Design & Installation side of the business. We are very pleased that the transformational actions we took as we exited last year and into this are bearing real fruit, and translating into growth in ordered and delivered sales. A quick reminder of what those actions were. In response to customer feedback, we simplified the customer journey and now present a unified Wickes Kitchens offering with our bespoke and lifestyle ranges presented together across all marketing assets, brochures, the website, advertising and promotions. We also simplified the start of the customer journey by developing new tech that puts the customer in control of that all-important first design consultant meeting. Customers can now book either online or in-store directly into an individual design consultants diary by store nationwide, and we've increased the availability of our design consultants, making it easier for customers to find a time that truly suits them to start the imagining of a new kitchen or bathroom. Think open table for design consultants. Our field service management tool provides a technical solution for scheduling installers to make the overall experience as seamless as possible.

We've launched a number of strategic initiatives for '25 and are innovating across all levels of spend and choice. At the more value-led end, we've added 8 new colorways to our lifestyle kitchens, whilst at the higher end, we'll be launching paint to order in October and have introduced branded kitchen appliances like Smeg. And all of this will be available to customers via a fabulous new design software program that we'll be rolling out in the second half and will transform the way a customer can visualize and design their dream kitchen and bathroom.

And in our solar business, leads now generated through Wickes channels account for more than 80% of the total Wickes solar installations.

I thought I'd take this opportunity just to show you how great our kitchens and bathrooms look. It's all about innovating with color and style and here are a couple of great examples. From the more traditional style bathroom on the left to our more contemporary styles, which reflect customer preference for pastel colors. And that trend for pastel colors is also reflected in our kitchen designs, as you can see here with the lifestyle kitchen in pink. You'll be able to see these and more kitchen and bathrooms and hear all about our exciting plans for our design installations business at our Capital Markets event on the 14th of October in our Staines store. So get that in the diary.

Now given the vital role that tech plays to underpin the initiatives I've spoken about so far, I wanted to highlight some of the key investments we are making, along with the benefits they bring. So back in 2021, when we demerged the business, we said we're going to put increasing investment into our tech platforms and services. We knew we had to address the legacy systems that needed upgrading, and we also had a clear vision to improve the customer experience through tech and digital advancements. In line with our plan, we are increasing our investment in this area and building a compelling track record of both enhancing the customer experience and improving productivity and efficiency through our tech investment.

I've already talked about the ongoing drivers of growth listed here on this slide, so I don't propose to go over these again, but I will tell you about some of the strategic tech initiatives coming down the track in the coming months and years. The new design software tool will be a game changer for our D&I customers when we launch it for the winter sale. It will transform the customer journey by unlocking new capabilities to provide seamless inspiration and design experience and it will also deliver cost saving benefits, helping reduce any potential errors that can sometimes occur between measurement and installation.

In the second half of 2026, we will roll out our new TILL systems and store inventory management into a unified commerce platform, thereby giving customers a more seamless shopping experience and our store teams the ability to truly digitize the store operation. And last but not least, we'll be implementing a new order management system to simplify our ordering and fulfillment capabilities and improve customer order accuracy. That's going to happen in two phases, the first taking place in the first half of '26, followed up by the second in 2027. So as you can see, there is a solid plan of investment and activity going into advancing our technological capabilities this year.

Turning now to investment in our store estate. In the first half, we have refitted or refreshed 4 stores and now 82% of the estate is in the new format. We opened 1 new store at Leeds Moor Allerton, a former Homebase store, and since the period end, we've opened new stores in further 2 Homebase locations, Bury St Edmunds and Dunfermline in Scotland. Our property plans for the second half are on track with a total of 10 to 15 refits and 5 to 7 new stores for the year, which does include those 4 Homebase stores. And to give you an idea of what an ex Homebase store transformed into a brand-new Wickes store looks like, here's a short video.

[Presentation]

Now as you will know, our Built to Last responsible business strategy is incredibly important to us and embedded deeply within our business. In the first half, we had a number of highlights, including being ranked as the U.K.'s #1 retailer in the Financial Times Europe's Best Employers survey. Our community program continues to support local charities and community groups up and down the country with over 1,200 projects benefiting from free Wickes products and volunteer support already this year. We have a new charity partner, CALM, which is a suicide prevention charity, and we're committed to raising GBP 2 million to them over the next 2 years. We're already well on our way to hitting that target.

And in our homes pillar, which is focused on helping customers use less energy and reduce their carbon footprint, we have now trained 100 of our design consultants to be able to offer Wickes Solar in store and in the home. This is proving popular in a market where customers particularly value face-to-face advice, and it's a unique differentiator for us as no other national retailer or solar installation business is offering this service.

So to conclude, we've had a strong first half, growing sales, profits and delivering record market share in what continues to be a challenging market, really demonstrating the customer appeal and distinctiveness of our business model. And whilst we are at record levels of market share, there is still so much more to go for. We are still just 6% of the GBP 27 billion U.K. home improvement market. So we see tremendous headroom for growth. And that's not including the potential opportunity in the emerging and fast-growing home energy solutions market.

Our strong cash flow means we're able to invest in our proven growth levers to deliver further growth and market outperformance, and most critically to continue to deliver attractive returns to shareholders through our dividend and share buyback program. Thank you for listening. Mark and I are now very happy to take any questions you have.

Kate Calvert from Investec. Two for me. First on Design & Installation. What have you seen in terms of leads over the last couple of months? So is there any change in sort of conversion from the design consultation to ordering? And then the second question is on the step-up in IT of GBP 10 million through the P&L. Should we expect any other sort of step-ups going forward? Or is that now sort of in the base?

Yes. Kate, in response to the Design & Installation question, as I sort of like touched on there, I mean, some of the benefits of the investment in tech, particularly giving the customer the ability on their terms to access the design consultant really swiftly and seamlessly is really helping continue to grow leads. So we are still seeing leads in growth in our business. And as those leads come into the journey, likewise, we're seeing conversion in growth as well. So the underpin for our Design & Installation business is we are growing this business through volume, which is great to see. And the volume is there because we've got more customers coming in and we're converting more of them.

Yes. And on IT, just taking us back to where we were a couple of years ago when we did our capital allocation update, and we talked about the IT and the move to SaaS accounting and everything, we did talk at that point about increasing our overall spend on CapEx and SaaS and IT from around GBP 15 million a year to GBP 25 million a year. And we're close to that level now. Most of that is coming through in SaaS and therefore, hitting the P&L. There will be another increase next year, probably low single-digit millions next year, and then it will feel like we're at the sort of run rate. But what this isn't a, is a spike in investment that then is going to go down again. This is about getting to the right level of investment that we need for a business of our size that is digitally led. And as we've seen, a lot of the initiatives that we've been investing in are at the heart of what some of our success has been, and we see that as the future as well. .

Shane Carberry from Goodbody. Just two from me. Just to follow up on that Design & Installation question. Can you give us a bit of a sense of -- you've moved into the kind of lower-priced kitchen market as well. Just how much has that got to do with the pretty encouraging like-for-likes in Q2 on Design & Installation? And then secondly, if you could just give us an update now on kind of Solar Fast, how the integration has gone and kind of just over a year on how you think it's performing versus expectations?

I'll do the first, you do the second. So as I just touched on that, Shane, in the presentation, we're continuing to innovate across the offer in terms of Design & Installation in good, better and best, but lifestyle and bespoke being how we sort of like cluster those. Lifestyle is in growth, which is great to see. But interestingly, it's a faster-growing bespoke business that is really helping drive the performance of our overall Design & Installation business. So we're delighted to see that, that the bigger ticket and the higher average order value projects are in greater volume growth.

Yes. And on solar, very pleased with the progress on solar. When we bought the business, it was -- what attracted to us was the very strong customer focused operational execution of doing brilliant projects and looking after customers really well. From a sales perspective, they relied on a lot of third-party dealers and salespeople to bring in their sales. What we have been doing is building on the great operational execution, but then adding Wickes as the key sales channel, which is going to be much stronger for us and much more differentiated in the long term. So what we have not seen is a growth in total sales. What we're seeing is a switch away from the sales that were generated in third parties now to Wickes being the real engine. And as David mentioned, we've trained hundred of our design consultants to be able to sell. And this is a real differentiator because in the market, typically at the moment, it's either -- the journey is very digital. You may speak to somebody on the phone. The opportunity to go in and talk to someone in person, either in the store or indeed have the design consultant come to your home and talk to you about solar is a real differentiator for us. And that's only just happened. So we're expecting that to really build over the coming months.

Yes. I think it's fair to say we're organized in a proposition that will compete for the future. So it's not about the last 5 months. It's about building a business of scale for 5 years out is how we think about this.

David Hughes from Shore Capital. A couple from me, please. Firstly, in terms of categories, you talked about kind of expanding into or building in categories where you perhaps underserved. Are there any key ones that you're looking at where you think there's a big opportunity to grow Wickes' share? And then secondly, on the store rollout program, not necessarily a specific number, but do you have kind of a rough idea of how much more white space there is for you? How much more kind of store rollout you think you can get after before you feel like you're at the right level of Wickes penetration?

Yes. So I'll take both of those, Mark. If I start with your last question and work back to categories. So in terms of the property opportunity, I mean, we've always said, look, we're around about 230-odd stores at the moment. We can see a pathway to somewhere between 250 and 260 in terms of network build with the broad cadence of sort of like at the moment of around about 4 to 5 a year. But they will be in much larger towns or conurbations where we feel we're underrepresented where we can build more of a network in those larger populous areas. That isn't to say in time, though, that there isn't more opportunity for the business as we get beyond that. So I think our Phase I thinking, David, at the moment is let's have a marker in around that 250, 260. And as we move through, there may be more opportunity. But we're definitely underrepresented in the U.K. We have national coverage, but there's ample white space for our business. I think in the categories, it's really about some of the innovation we're putting into decorating. It's sort of the innovation in the product lines. We're putting into garden and so forth. I always cite and we're doing more of this as well, there are -- we're quite a generalist as a retailer. So we serve, particularly for our trade customer, our most strategically valuable customer, where we serve the general one man and a van. The opportunity for further category innovation is definitely having greater presence in the specialist area. How do we attract more specialist plumbers, more specialist electricians. So that's sort of like the glide path that we remain on. And we're doing some good stuff in that area, but there's definitely more to go. But really doubling down and innovating and appealing to a much broader audience, as you can see through the communication there, I mean we're growing our DIY audience really quite successfully at the moment, and that is coming through younger shoppers, female shoppers consistently in recent years, and we continue on that focus and strategy.

It's Ben from Deutsche Bank. I just wanted to ask about the gross margin drivers in the first half Out of that 80 bps uplift, can you talk about the uplift from the retail sales that you've had, but also the category mix and credit as well?

Yes. I'm not going to break 80 into exact numbers, but those are the three we mentioned. They all contributed part of that 80 bps increase. Just to explain a little bit more on the Design & Installation side, there were two of the elements, consumer credit, which is something we subsidize for our customers. The cost of that has come down for two reasons. One is interest rates are coming down. So if we're offering interest-free credit, clearly, that cost comes down to us a little bit. Plus we've tweaked our offer a little bit. On the category mix with of the sales growth we've had in design and installation has been stronger in kitchens than in bathrooms and kitchens tends to be slightly higher margin. And then on the retail side, it's really about volume-driven growth, and that gives us good momentum, the ability to really drive good deals with suppliers, get support from them because they really want to back the winners and the retailers that are giving them growth. So it's less about category mix on the retail side and more about volume benefits.

Matthew's got a question at the front here.

Matthew McEachran from Singer. It's actually a follow-up on the gross margin point as well. I mean it's been a while since you recall such a decent sized margin uplift in the business. You've been through the moving parts. If we strip out the mix effect, do you think those levers, the other 2 levers are -- you've got further runway on that?

I think the year as a whole will be less of an increase than the 79 bps that we had in the first half, partly because we annualize some of the effects that we talked about. So this is not a sort of a change in strategy of trying to push up margin. The other thing that's really important to say is our price position remains very good. We don't have any inflation in the business. This is not a gross margin as a result of us increasing prices. Inflation has been 0-point-something either plus or minus every month of the year. And so this is about really trading volume hard, getting the best deals that we can, a little bit of category mix and the consumer credit. So please be reassured that the #1 priority for us is to be absolutely in the right place on price.

Great. The second question, just on trade. I mean you gave a really good investor event, I think, probably about maybe a year ago, I can't remember the exact date. And there were quite a few levers in there in terms of targeting certain groups, increasing average spend, actually retaining or reactivating some lost trade customers. Do you want to talk -- within the 10%, do you want to talk a little bit more about which parts of that strategy are really yielding some benefits and whether or not you would see the momentum from some of those initiatives that you talked about as potentially increasing from here?

Yes. So all aspects of that are in play, Matthew, and all aspects are working to greater or lesser degrees just because of the size of the pools you're fitting sort of thing in terms of a pool of those that have lapsed versus those you need to reactivate. The primary driver, though, which is really important just to focus on, it is penetration of new customers, it is growth of new customers. So this business is underpinned by more people coming over the door into Wickes. As I always say, what we don't see in Wickes, we do track this, we don't see customers trading down within Wickes. We see customers trading in for the great value we provide. And the cornerstone of that in the first instance is more than half a century with trade is building the brilliant brand that is Wickes, it still needs 2/3 of our sales. So value and service and things like Rapid and 15-minute Click & Collect and all of that good stuff are just together, continuing to prove very sticky in terms of attracting customers to the business. But everything is in play without dissecting any further, I think. And the interesting thing, though, on AOV, what do we see is that at the moment, average order value, so the average basket for a trade customer remains quite stable. So penetration is critical to drive that volume growth, and that is where we're winning in this marketplace. They're still quite thoughtful and considered around the amount they're spending. As any one of us would be as we're shopping, whether we're shopping groceries or any other sort of like services, we're thoughtful and a bit more considered.

Great. The final question, just in terms of current headlines in the press, the Employee Rights Bill is obviously getting a lot of attention at the moment. I mean you're a good employer.

We're the #1.

Number 1 indeed. Well reminded. And I think from previous conversations we've had, you weren't expecting much in the way of incremental cost pressures as a result of the bill. But do you want to just -- can you just remind us exactly if that's the case? And why you think that's the case, that would be very helpful.

Yes. I think the main reason is because we are ahead of the curve on a lot of these things anyway, whether that's sort of flexible working or any of the other initiatives. I think we have always looked at what is the right thing to do for our colleagues. We measure colleague engagement frequently, and we really have a focus on it. And so actually, we're quite ahead on these things. So there was nothing really new in terms of bringing in either new initiatives or cost for us.

I think we are one of the few retailers nationally that offers flexible working for our store leadership teams. So you can work a 4-day week as a store manager.

Sam Cullen from Peel Hunt. I've got a few also, a couple, I guess, reminders. On the kitchen ranges, can you remind us how many you offer, and the cadence of the refresh cycle, I mean you pointed out. You've refreshed the ranges this year. And then the second one on the kind of catch-up. The 1 in 4 of your trades is going to have an order book over 12 months, where would that have sat, say, in 2019, pre-COVID then during the peak, the trading boom during the immediately after COVID, is that a normalized level, 1 in 4 or is it 40% more normalized? .

Yes. I'll take both of those actually, Mark. So from a kitchen range point of view, as you know in our business, curation of offer is quite critical. So when we think about our broader retail business, I will get to the question, Sam, if you're not. It's around 9,000 SKUs versus a market that could be anywhere between 30,000, 40,000 SKUs in a physical location. So it's a highly curated range. We take the same approach with our kitchens and bathrooms business. So broadly, in our kitchens business, you're probably looking at around about 35 or so sort of like range options. I'm really excited, though, really excited is what sort of like paint to order can do to very flexibly expand that, by the way, because we can then offer you access to sort of so many more colors in a bespoke way. So that's just another way of providing almost extension of choice in a really simple, agile way out there in the marketplace. But it does follow our philosophy of curation. In terms of innovation, typically, in any 1 year within those ranges, you're probably changing 3 to 5. So again, in terms of range counts, it's probably going to be somewhere around 10%. The great thing is we get this right. And when you're going to make change in a business like ours and you're going to sort of rip out showrooms and replace them with new products, it needs to be right. And they always overperform in terms of their contribution to sales. So we're really thoughtful about the curation in the first instance. We're super thoughtful around the innovation as we bring it into the marketplace because we need to be disciplined with that investment in terms of making that change, and it works really well. So we get a multiple uplift in terms of the sort of like range change count to sales performance within the business. So innovation works well.

Now part of your question I simply can't answer on the Mood of the Nation monthly reporting because we didn't start it in 2019. It's something we started slightly later than that. But what I can say it does remain very stable. That 1 in 4 around 12 months for our TradePro customers remains pretty stable and it has done. It oscillates a little. It might be 27% of saying this, it might be 24% in but it tends to sort of like converge around about 1 in 4, and that's been stable for a number of years now.

And important to add to that, that we're not expecting that to go to 40, 50 because a lot of the trades people that we have as customers don't want long pipelines. They're operating on their own. They enjoy working 2, 3 months ahead. Some of them are what we call business builders are planning ahead. They're thinking about taking on new people on their team and they want to. And that's why we always quote the people with 3 months or more, and people with 12 months or more just different types of businesses.

The last one was on market share. You're at 6% now. If you get to 250 stores, and I think you've talked about a goal of GBP 10 million revenue per store. Is that where we should be thinking on a 5, 7-year view getting sort of 10% of that market at the GBP 27 billion?

Gosh, I will have a view on that, but I'm going to be guided by my CFO because you're not going to happen next, Sam. I'm going to get very ambitious...

You'll say 3, and he'll say so.

Would you like to take that one, Mark.

I think very happy to give a number. The date will be more for further discussion. But absolutely, we see the opportunity of GBP 2.5 billion across 250 stores. As David says, we're also looking at how do we expand beyond that 250, 260 stores. But we absolutely see the opportunity to do, on average, GBP 10 million a store. We have some stores, of course, sort of already doing that. The headroom for growth in each of trade DIY and Design & Installation is substantial. So it's very realistic to do that. The stores, of course, are the nucleus around where we base the sales, but a lot of the sales growth will be in online and the initiatives around faster Click & Collect, Rapid delivery, that's opening up new either actual customers or customer share of wallet. So those emergency purchases, if you're a trades person on site and you need it now, now we can do that with Rapid, whereas perhaps before they might have done something else. So I think the opportunities are there, the strategy is there. We've got the funds to invest in the tech that we need. And so the plans are pretty well laid out.

And related to that, I guess, that's where you're going in terms of specialist categories that if you do go deeper into plumbing or electrical that won't be cannibalizing store space. It will be virtual online? I mean next day delivery or...

It's far easier as we do. When we're testing new categories, you put them into the Wickes Extra range in the first instance and to see what works. And then we will think about how we bring them into the physical estate thereafter. And that's exactly what we do. That's how we model it and work it. But I mean your start point that question is, look, this is a big market, GBP 27 billion, GBP 28 billion, where GBP 1.6 billion [indiscernible] share. There's just so much more headroom for growth in this market.

Just a couple of technical ones and maybe a more general one. But on the working capital, obviously, there's a seasonal inflow in H1. But year-on-year, it's up quite nicely too. Is there any reason to believe that the year-on-year uplift will unwind in the second half? I mean the stock looks in a fairly good position. And then secondly, obviously, the headwinds get a little bit more intense in terms of the cost in the second half with inflation and the tech investment seems more H2 weighted. Productivity gains were obviously that a little bit below the inflation. But I guess the question is, what might you have up your sleeve sort of to meet this sort of second half profit. I think you've got to be flat in order to make the guidance, as you've suggested today or reiterated today. Just any sort of thoughts on those two points?

Yes, should I take both of those? Yes. So first of all, on working capital, I mean, part of the -- a big chunk of the year-on-year uplift in that normal seasonal swing is the growth in the order book in Design & Installation. And we will be getting through that and delivering quite a lot of that in the second half. So that will normalize at least most of it, if not all of it. And then the trading in terms of the stock position also as we get into more sort of normal levels of trading, I would expect the retail side of working capital to normalize. So I think it would be reasonable to expect that to normalize to a large degree. The cost headwinds coming in, in H2, they are stepping up our productivity plan will also add again. And if you think about that profit bridge for the half year, we just showed you what that might look like at the full year. I think that gap between the cost inflation bucket, which is a negative, obviously, and the mitigation through productivity will be similar in terms -- it will be bigger, of course, but it will be similar in proportion that we won't quite offset all of the cost inflation but we're doing a really good job on that. And then the strong sales growth is obviously -- we're able to capitalize on most of that growth and overcome most of the operating cost increases with productivity. So it's -- we're very happy with consensus despite all of that and also the increase in tech investment that we talked about. So we said that in the year '25, it will be about GBP 10 million more than in 2024. That will be slightly back half-weighted as well. So with all of those things considered, there's quite a lot to come on the cost side, but we're comfortable that the performance of the top line is going to be strong enough to carry it.

If you're probably not going to do this, but if you could spell out, is there a minimum kind of top level growth you need in order to bridge that?

There probably is in your model. So you can back solve for that. But this is -- we're comfortable. We said that Q3 has started in line with our expectations. So we're comfortable with how we're trading at the moment. .

And the shape of that start in Q3 is what we've seen in the first half, which is this is volume driven. There's no inflation in this, it's volume driven, and we'll continue to benefit from the leverage of that.

Okay. And then finally just a more general question. I mean that market share step up year-on-year looks obviously very impressive, and we kind of know the answer to it, but if you could just spell out where you think you're getting it and who's the full guys, and anything you can elaborate on that would be useful.

It's -- I mean the trend in terms of where it's coming from remains reasonably stable as we've discussed and answered this question before, which is broadly across all aspects of the market, whether it's through other retailers or the more trade-centric like merchant in operations, particularly when you think of our TradePro growth in particular. We don't over or under still from anyone. There's no over under trade in terms of how we're switching those customers. It's quite a simple [indiscernible] in the market. It is a question that we do ask because the benefit of bringing in so many to like 3,000 to 4,000 new TradePro customers every week, if you can talk to a decent sort of like slug of customers and work out if you're shopping with me now, where are you shopping less. That's a standard question that we ask. So we've got a good sort of insight on where that switching is coming from, but it's just across the market at large basically. And as I said, it's a large market always opportunity.

Grace Gilberg from Jefferies. Just one question for me. It's around Click & Collect 15 minutes. Is that across all the stores in the estate now or is it...

It is indeed, Grace, yes. Yes. So our colleagues are working very hard. And as I said in my presentation, what's really interesting is you innovate on the things that the customers are seeking. So as we pick it quicker, the customers are actually picking it up even quicker as well. So there's a lovely correlation there. I mean, that's why we know that the proposition is of value. But the difference there is 15 minutes, we could be moving in some instances, tons of plasterboard in under 15 minutes and getting on to a back of a wagon. So it's not like we're picking small things up from remote -- a close location. We're having to move some big stuff to deliver on that promise. And we are delivering on spectacularly. Our colleagues do an amazing job, and the customer satisfaction and feedback has been brilliant as well. So we're delighted.

Perfect. That answered my other question as well. Great.

Our customers like it. Was that your other question? Thank you, Grace.

Any more questions? Anything online team?

There are no webcast questions at the moment. I'll hand back for some closing remarks.

Super. Well, I'll finish where I started, it's with a thank you. Thank you for coming along today. I know it's been a little awkward to get into the City Day. So we really -- we greatly appreciate it. And also thank you for those listening on the webcast. Hopefully, you've got a sense this morning that we are really pleased with these results. It's been a super first half for the business. We remain very, very confident in our strategy that it will continue to deliver outperformance and growth for the business. I can't reemphasize enough that we are a 6 share player in a large market. We almost ignore what happens at a market level. If you innovate and provide the greatest value on the things that customers value most, you will grow your business, and that is where our strategy is centered and we will continue to grow this business. It is a great business. It's got tremendous potential. And Mike and I look forward to coming back and sharing further progress at the year-end. Thank you very much for listening.