The demerger that saw Wickes (WIX) spun out from builders’ merchant Travis Perkins (TPK) four years ago has much in common with a messy divorce.
Tip style
Value
Risk rating
High
Timescale
Medium Term
Bull points
- Sales and earnings forecast to improve from 2025
- Market share gains likely following Homebase collapse
- Buybacks and dividends boosting returns
Bear points
- Design and installation business still contracting
- Employers' NI change will add £6mn to costs
- Brokers' profit forecasts are weak for 2024
This isn’t to suggest that it was acrimonious – more that the split has been costly and neither side has fared well since. Wickes' shares have lost more than 40 per cent of their value since the spin-out, and it will be of scant consolation to investors that Travis Perkins has fared even worse. Its shares are down 57 per cent.