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Annual Report and Accounts 2023
Wickes Group Plc
INVESTING TO WIN
INVESTING TO WIN
For over 50 years, Wickes has
beenproud to have played
apartinthe history of home
improvement in the UK.
Our uniquely balanced business,
across the three different customer
propositions of Local Trade, Design
&Installation and Do-it-yourself (DIY),
means we are perfectly placed to
helpall customers, whatever their
home improvement project might be.
As a digitally-led, service-enabled
retailer, we offer customers choice,
convenience, value and best-in-class
service, and we fulfil all of this
through a low-cost, efficient and
integrated operating model.
We continue to invest in our strategic
growth levers to ensure we win
inthe UK’s home improvement
market and to achieve our purpose,
to help the nation feel house proud.
What’s inside this report Contents
P6
CHAIR’S STATEMENT
Committed to
growingresponsibly
P34
RESPONSIBLE BUSINESS
Making progress across
ourBuiltto Last Strategy
P 21
STRATEGY IN ACTION
A Wickes project in every home
P12
OUR INVESTMENT CASE
Sustainable competitive
advantage driving
investmentreturns
P8
CEO’S REVIEW
Helping the nation
feelhouseproud
STRATEGIC REPORT
2 At a glance
4 Financial and strategic highlights
5 Responsible business summary
6 Chair statement
8 CEO statement
12 Investment case
13 Capital allocation policy
14 Market review
18 Business model
21 Strategy in action
28 Key performance indicators
30 Financial review
34 Responsible business
57 Climate-related financial disclosures (TCFD)
67 Non-financial and sustainability information statement
68 Section 172 statement
72 Risk management overview
75 Principal risks and uncertainties
82 Viability statement
GOVERNANCE
84 Governance report
86 Board of Directors
93 Nominations Committee report
100 Audit and Risk Committee report
107 Responsible Business Committee report
111 Directors’ Remuneration report
128 Directors’ report
131 Statement of Directors’ Responsibilities
FINANCIAL STATEMENTS
132 Independent Auditor’s report to the members of Wickes Group Plc
140 Consolidated income statement and other comprehensive income
141 Consolidated balance sheet
142 Consolidated statement of changes in equity
143 Consolidated cash flow statement
144 Notes to the consolidated financial statements
170 Company balance sheet
171 Company statement of changes in equity
172 Notes to the Company financial statements
OTHER INFORMATION
175 Shareholder information
176 Glossary
Wickes Group Plc Annual Report and Accounts 2023 1
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Other information
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OUR
WINNING
BEHAVIOURS
W
I
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I
L
I
T
Y
At a glance
Overview
OUR VISION
A Wickes project in every home
OUR MISSION
To be the partner of choice for
Home Improvers and Local Trade
OUR PURPOSE
To help the nation feel house proud
OUR VALUES
We are proud of our special culture
whereeveryone is welcome and
giventheopportunity to thrive.
Weareguidedby a set of values
wecallour Winning Behaviours
A UNIQUELY BALANCED BUSINESS SUPPORTING 3 CUSTOMER PROPOSITIONS
LOCAL TRADE
We are trusted by local tradespeople to provide the
quality products they need at great value, saving
them time and money.
Our digital TradePro membership scheme offers
astandard 10% discount across the store and our
Wickes own brand has built a strong reputation
withLocal Trade over the past 50 years.
DESIGN & INSTALLATION
For customers who are looking to buy a new
bathroom, kitchen or home office, we offer a
fullservice from concept design to installation.
Our team of design consultants and nationwide
network of Wickes-approved installers are on hand
to support the customer with their project.
DIY
We provide a highly curated range of branded and
own brand products in store, and further products
online, to help customers undertake their DIY
project. We pride ourselves on great value, simple,
clear pricing and good stock availability.
Our store teams and online guides are there
toprovide customers with expert advice and
knowledge to support them.
881,000
TradePro members
>3,000
installer teams
c.60%
of sales are Wickes
own brand
Wickes Group Plc Annual Report and Accounts 20232
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Other information
Strategic report
S
A
F
E
T
Y
&
W
E
L
L
B
E
I
N
G
S
T
R
O
N
G
G
O
V
E
R
N
A
N
C
E
S
U
P
P
L
Y
C
H
A
I
N
&
R
E
S
P
O
N
S
I
B
L
E
S
O
U
R
C
I
N
G
PEOPLE
HOMES ENVIRONMENT
79%
colleague
engagement
As a leading UK home improvement retailer and
employer, we have stores across England, Scotland and
Wales andareproud to support our local communities
As we grow, we are committed to doing so sustainably.
Our Built to Last Responsible Business programme
focuses on People, Environment and Homes
See page 34
2/3rds
of sales are digitally enabled
16%
digital visits market
share*
DIGITALLY-LED,
SERVICE-ENABLED
7,9 0 0
colleagues
11
store
refits
NEW STORE
BRISTOL
MANCHESTER
WIDNES
NEW STORE
PRIDE
STORE
OF THE
YEAR
(heritage format)
STORE
OF THE
YEAR
(new store format)
6
‘FEEL AT HOME’
Inclusion & Diversity
networks
NEW STORE
BRIGHTON
TORQUAY
BICESTER
NORTHAMPTON
DUMFRIES
SCOTLAND
GLASGOW
CHELMSFORD
WATFORD
SUPPORT
CENTRE
Wickes
Lifestyle
Kitchens Virtual
Design Hub
TOTAL
229
stores
1,468
community
projects
Customer
Experience
Centre
43,000m
3
of timber sourced
from Scotland
2
Distribution
Centres
* Source SimilarWeb.
Supporting
PRIDE
Wickes Group Plc Annual Report and Accounts 2023 3
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Strategic report
Adjusted revenue (£m)
1
2022: £1,559.0m
£1,553.8m
2020
1,346.9
2021
1,534.9
1,559.0
2022
2023
1,553.8
Adjusted PBT (£m)
2
2022: £75.4m
£52.0m
49.5
85.0
75.4
52.0
2020
2021 2022
2023
Statutory PBT (£m)
2022: £40.3m
£41.1m
28.9
65.4
40.3
41.1
2020
2021 2022
2023
Cash (£m)
2022: £99.5m
£97.5m
6.5
123.4
99.5
97.5
2020
2021 2022
2023
Adjusted basic earnings per share (p)
3
2022: 23.8p
15.1p
16.1
27.2
23.8
15.1
2020
2021 2022
2023
Statutory basic earnings per share (p)
2022: 12.6p
11.8p
10.4
23.3
12.6
11.8
2020
2021 2022
2023
LFL sales growth
(%)
1
2022: 3.5%
(0.3)%
5.0
13.0
3.5
(0.3)
2020
2021 2022
2023
Dividend per share (p)
2022: 10.9p
10.9p
10.9
10.9
10.9
2021 2022
2023
Free cash flow (£m)
4
2022: £29.0m
£46.1m
16.6
29.0
46.1
2021 2022
2023
Financial highlights
Strategic highlights
New store openings
2023 has been an exciting
year for growing our store
estate. Across our three new
stores in Chelmsford, Widnes
and Torquay, we’ve created
around 90 new jobs, and
brought the Wickes
experience to thousands
more customers.
Enhancing our digital
TradePro scheme
Local Trade are our most
strategically valuable
customers, spending on
average ten times more than
aDIY customer. We have
grown membership of our
digital TradePro scheme by
18%, developing new benefits
and rewards for members.
Wickes Lifestyle
Kitchens
We have seen a step change
inthe growth of Wickes
Lifestyle Kitchens range,
withsales up 24% since it
was relaunched, successfully
accessing the value end of
the kitchens market.
Financial and strategic highlights
1 Refer to note 5 on page 150; 2 Refer to note 9 on page 152; 3 Refer to note 11 on page 154; 4 Refer to note 32 on page 168.
Wickes Group Plc Annual Report and Accounts 20234
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Data subject to independent limited assurance by DNV.
DNV’s limited assurance statement isavailable on our website at
www.wickesplc.co.uk/company/responsible-business/policies-and-reporting/
Built to Last Strategy: progress update
Responsible Business summary
Focus area Our targets Progress in 2023 Further information
Alignment with UN Sustainable
Development Goals (SDG) and Targets
PEOPLE
Inclusion
and diversity
By the end of 2023, progress gender diversity
inleadershiproles:
1. 33.75% females in store leadership; and
2. 45% females in Support Centre leadership
1. 33.98% females in store leadership
(3.72%
increasecomparedwith 2022: 30.26%)
2. 43.54% females in Support Centre leadership
(slight
decreaseinperformance compared with 2022: 44.31%)
See page 37
SDG 10 Reduced Inequalities
Target 10.2
Learning and
development
Offer and support 200 Early Career places
eachyearfrom 2022 to 2024
280 Early Career places were provided in 2023; 248
ofthesewerevia an apprenticeship programme
See page 38
SDG 4 Quality Education
Target 4.4
Charity and
community
Raise £2 million for our charity partner, The Brain
Tumour Charity, between April 2023 and April 2025
In the first 9 months of the partnership, we raised £718,060
andmade an additional corporate donation of £10,000
See page 43
SDG 3 Good Health & Wellbeing
Target 3.4
Support 1,500 projects across our local
communitiesin 2023
We supported 1,468 projects across our local
communities,reaching an estimated 500,000 people
See page 42
SDG 9 Industry, Innovation
&Infrastructure
Target 9.1
ENVIRONMENT
Climate
change
Reduce absolute Scope 1 and 2 greenhouse gas
(GHG) emissions 42% by 2030 from a 2021 base year
36.9% reduction in Scope 1 and 2 GHG emissions
comparedwith2021 baseline
See page 44-45
SDG 7 Affordable & Clean Energy
Target 7.3
45% of our suppliers by emissions covering
purchasedgoods and services will have
science-based targets by2027
23 of our suppliers havesetSBTi-validated science-based
targets,which equates to 23.8% of our Scope 3 GHG emissions
See page 44-45
SDG 7 Affordable & Clean Energy
Target 7.3
Reduce absolute Scope 3 GHG emissions
fromtheuseof sold products 42% by 2030
froma2021 base year
14% reduction in absolute Scope 3 GHG emissions from
theuseof sold products compared with 2021 baseline
See page 44-45
SDG 12 Responsible
Consumption& Production
Target 12.2
HOMES
Products
50% (by revenue) of our own brand products
classifiedassupporting sustainability
We are working to define products that support sustainability
inaccordance with the Green Claims Code, establish a baseline
and set a date when we plan to achieve this target.
See page 50-51
SDG 13 Climate Action
Target 13.1
FOUNDATIONS
Safety
Our aim is: Everyone home safe and well,
everysingleday
1.8% reduction in Lost Time Accident Frequency rate
and11%reduction in actual customer accidents
See page 52-53
SDG 8 Decent Work
&EconomicGrowth
Target 8.8
Packaging
Eliminate all unnecessary customer (primary),
secondary and tertiary packaging across our
ownbrand products by 2023
All unnecessary packaging has been removed
fromWickesownbrand products in 2023
See page 55
SDG 12 Responsible
Consumption& Production
Target 12.5
100% (by weight) of customer packaging on
ourownbrand products will be easy to recycle
orreuseby2025
99.5% of packaging (by weight) on Wickes own brand
productswas classified as easy to recycle or reuse
See page 55
SDG 12 Responsible
Consumption& Production
Target 12.5
50% (by weight) of customer plastic and
paperpackaging on our own brand products
willcomefromrecycled materials by 2025
43.6% of our packaging (by weight) used on Wickes own
brandproducts was sourced from recycled materials
(plasticpackaging 42.7%, paper packaging 44.8%)
See page 55
SDG 12 Responsible
Consumption& Production
Target 12.5
Wickes Group Plc Annual Report and Accounts 2023 5
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Financial statements
Other information
Strategic report
Chair of the Board’s statement
INVESTING IN
growing responsibly
Christopher Rogers
Chair of the Board
I am incredibly proud to be part of this great
business, which continues to navigate successfully
these challenging economic times, byputting its
customers and colleagues at theheart of everything.
On behalf of the Board andmyself, I’d like to take
this opportunity tothank our colleagues whodo
such a tremendous job every day, takingcare
ofour customers and each other.
Performance
In 2023, sales were broadly flat with a 0.3% decline
to £1,553.8m, and adjusted profit for the year was
down at £52.0m. In addition to the impact of the
accounting treatment of our investment in IT, this
reduction in profit reflected a more difficult UK
home improvement market as the cost of living
crisis dampened demand, coupled with the steep
“ The management team has executed strongly on these
growth levers in 2023 and continued to invest in them,
within the envelope of a disciplined capital structure.”
rise in energy andother costs. Despite the worsening
economic backdrop, we have continued to invest in
our growthlevers as we wish to keep on strengthening
the business and positioning Wickes as a leader
inthe market.
The cost of living crisis continues to cast a shadow
over people’s lives and is causing people to think
more carefully about how they spend their money.
Yet the desire and need to improve and repair our
homes remains constant and at Wickes we are
well placed to help the nation with their home
improvement projects, whether they are using
alocal tradesperson, our kitchen and bathroom
Design & Installation service or doing it themselves.
This year the Local Trade part of ourbusiness
hasbeen particularly strong, compensating for
asofter market for DIY and Design & Installation.
Investing to win
The Wickes business has a clear strategy,
whichisfocused on our key growth levers
(outlinedinpages 21-27). The management
teamhasexecuted strongly on these growth
leversin2023and continued to invest in them,
within theenvelope of a disciplined capital
structure. InJuly, we outlined a new capital
allocation policy (see more information onpage
13) that reflects the strength of the balance sheet,
our confidence in our future growthstrategy and
our focus on delivering strongShareholder returns.
Enhancing our digital capability is one of these
strategic growth levers and this year the separation
ofour IT systems from Travis Perkins Plc has been
successfully delivered substantially on time and on
budget. With this transition now complete, we are
developing an in-house technology leadership
team, which is focused on implementing and
delivering a ‘cloud-first’ strategy, providing us
withthe capability torapidly utilise emerging
technologies. Whilst recognising that this will take
several years to develop, I’m excited about the
opportunities thatthiswill unlock for the business.
Wickes Group Plc Annual Report and Accounts 20236
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Our culture
At Wickes, we have a very special culture,
whereeveryone is welcome and where people
aregiven the opportunity, encouragement and
support to flourish. This is shown in our colleague
engagement scores, with high levels of ‘overall
engagement’ at 79% and low colleague turnover
rates compared to the retail sector. You can read
more about how we embed and monitor our
culture on pages 36-43
As the cost of living crisis continues to impact
colleagues as well as customers, we have
introduced a number of measures to provide
increased financial and wellbeing support. In
January 2023, we upweighted our annual salary
increase and brought this forward from April.
Wehave also introduced a ‘Salary Advance’
policyto give colleagues more flexibility as to
whenthey can access their pay. Following a
successful pilot, we extended and improved
ourfree breakfast offer, replacing it with a
‘BrunchBox’ that all store colleagues can take
advantage of. We are also mindful to continue
toenhance our comprehensive wider wellbeing
support, and in the year we introduced Digicare,
asuite of wellbeing services for all colleagues
which includes digital GP, home health test kits,
and mental health support, all free of charge.
Dividend
When we announced the new capital allocation
framework in July, we stated our intention to maintain
the dividend in absolute terms for this year, given our
strong balance sheet and confidence in the business.
The Board is therefore pleased to recommend a final
dividend of 7.3 pence per share, taking the full year
ordinary dividend to 10.9 pence per share.
Board
I am pleased to report that LauraHarricks joined the
Board as a Non-executive Director in June 2023.
With a background in e-commerce, marketing and
strategy consulting, aswell as deep experience of
developing omnichannel customer journeys, she
isproving agreat asset to the Board. Diversity of
Board experience was at thefront of our minds
when werecruited Laura, andwe remain on a
journey toincrease diversity inthe broadest sense,
ontheBoard and across the business. You can read
about the progress we are making on pages 37
and97-99.
I believe it is vital that, as a Board, we dedicate
timeto get out and about to see and experience
the great work that is happening right across the
business. This year, we’ve had highly valuable
andenjoyable visits to the Customer Experience
Centre, our digital design hub for Wickes Lifestyle
Kitchens based out of the Bicester store, as well
asa visit to our brand new store which opened
inChelmsford in July.
“ At Wickes, we have a very special culture, where
everyone is welcome and where people are given the
opportunity, encouragement and support to flourish.”
Looking ahead
Economic headwinds have made 2023 a
challenging year and we expect the external
environment to continue to be difficult in 2024.
However, our relentless focus on controlling
costsat the same time as investing significantly
inour growth levers has resulted in market
outperformance, as we help customers with
theirhome improvement projects.
We have exciting growth plans, underpinned by
ourcommitment to grow responsibly. I am pleased
that we have continued to enhance our external
environmental, social and governance (ESG)
disclosures demonstrating our commitment.
Youcanlearn more about our ESG matters in
theResponsible Business section of this report.
I, along with the Board and all my Wickes colleagues,
are looking forward to another year of delivering
our growth plans and helping the nation feel
houseproud.
Christopher Rogers
Chair of the Board
18 March 2024
Wickes Group Plc Annual Report and Accounts 2023 7
Governance
Financial statements
Other information
Strategic report
Chief Executive Officer’s review
INVESTING IN
helping the nation
feel house proud
David Wood
Chief Executive Officer
This has been another year of strong progress
for Wickes. Our robust trading performance,
targeted investment programme and disciplined
cost control have delivered profits ahead of
expectations. In the current economic climate,
our unrivalled focus on providing great value and
outstanding customer service has underpinned
this performance. I would like to thank each of
my colleagues for their continued dedication
andsupport, enabling us to achieve record
levelsof customer satisfaction.
We delivered a robust sales performance in 2023,
benefiting from a great value and service-led
proposition and underpinned by our balanced
business model. We continued to achieve market
share gains
1
in our Retail business, driven by
impressive growth in membership of the
TradeProscheme and volume growth in a
numberof strategically important categories.
OurDesign & Installation delivered sales were
slightly down for the full year with sales declines
inthe second half reflecting the more challenging
market environment for big ticket projects and
thenormalisation of our post-Covid order book.
As expected, overall profitability declined versus
2022, reflecting a market with softer demand and
high cost inflation. Nonetheless our productivity
programme enabled us to offset all cost increases
other than energy and as a result we were able to
deliver adjusted PBT ahead of expectations.
Market
The UK home improvement sector represents
alarge and attractive market of c.£27bn
2
and
wehave a relatively small market share of c.6%
presenting us with a significant opportunity for
long term growth. The market has grown at c.2.5%
on average over the past ten years, driven by the
high average age of the UK’s housing stock, the
rising number of UK households and increasing
home ownership. People are also spending more
time in their homes as a result of the rise of hybrid
working, while there is an increasing trend of
consumers investing in their homes for improved
energy efficiency.
The cost of living crisis has led to pressure on
consumer spending in the UK, due to rising
mortgage rates and rental costs, as well as
continued inflation across energy, food and
fuel.Whilst on average the Wickes customer
basetends to be slightly older and more affluent
than the UK average, these cost of living pressures
have nonetheless had an impact on our business.
High levels of interest rates have suppressed UK
housing transactions, which are often a trigger
toundertake major home improvement projects,
although this is typically partially offset by
renovations to properties in which consumers
decide to stay for longer. Our exposure to new
build housing is very limited.
“ We delivered a robust sales performance in 2023,
benefiting from a great value and service-led proposition
and underpinned by our balanced business model.”
1) Source: GfK GB point of sale data, sourced from GfK DIY Category Reporting December 2023.
2) Source: GfK, Mintel and Wickes estimates.
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The high cost of energy has motivated consumers
to seek out ways to improve the energy efficiency
of their homes. The average household energy
efficiency rating for England and Wales is band D
3
and the UK’s 28.6m homes are among the least
energy efficient in Europe, losing heat up tothree
times faster than in continental Europe
4
. At Wickes
we recognise how important climate change is and
we are committed to helping our customers to
improve the sustainability of their homes, to save
money on their energy bills and toreduce their
carbon footprint.
The February 2024 report from our proprietary
Mood of the Nation survey shows that UK
consumers are increasingly planning to put more
money into savings or to undertake smaller home
improvement projects over the next year, rather
than undertaking large projects like a new kitchen
or bathroom. The survey also shows that local
trade professionals remain very busy, with more
than 50% of tradespeople having a pipeline of work
over three months and 1 in 4 having a pipeline
ofwork of more than 12 months.
Strategic progress
We have continued to build on the strong
operational progress made since demerger,
indeveloping and extending our growth levers.
Thesecontribute to an improvement in our
products and services, saving our customers
timeand money. Continued investment in these
growth levers will drive further market share
growth in the coming years.
In 2023, we have taken a number of actions to
respond to more challenging market conditions
such as investing in new ranges for customers
looking to undertake small home refreshes,
including our paint range, curtain poles and
shelving. We have also seen a step change in
salesof our relaunched Wickes Lifestyle Kitchens
range
5
, which appeals particularly to customers
with a lower budget. This range now includes
afree design service which has proven popular
with both landlords and homeowners.
We have continued to invest in our low-cost,
right-sized stores. We refitted another 11 stores
in2023, showcasing our full offer of kitchens and
bathrooms, and taking the proportion of stores in
the new format to 77%. We continue to see strong
returns and sales uplifts in our refitted stores.
The refit programme also enables us to upgrade
the efficiency of multi-channel order pick and
despatch, which drives sales densities and
underpins our 30-minute Click & Collect promise.
All these initiatives are reflected in our customer
satisfaction metrics, which have risen in all areas
of the business: Self Serve in store, Click & Collect,
Home Delivery and Design & Installation.
We opened three new stores in 2023, in
Chelmsford, Widnes and Torquay. We are pleased
with the initial performance of the new store
opening programme, relative to our expectations
and returns criteria.
LFL sales across the Group were -0.3% compared
to 2022. Within this, Retail saw three consecutive
quarters of positive LFL sales growth, driven by a
positive volume performance from Q2 onwards.
Design & Installation experienced a positive first
half but a weaker second half, as a result of a
softer market environment for large consumer
purchases and the normalisation of our
post-Covidorder book.
Selling price inflation slowed throughout the year,
driven by lower commodity costs such as timber.
Price inflation was slightly negative by year end
and we expect inflation to be broadly flat in 2024.
We continue to work closely with our suppliers to
maintain price leadership and our gross margins
improved slightly year-on-year.
We faced significant cost headwinds this year
withmaterially higher energy costs, an increase
inthe National Minimum Wage of 9.8% and
generalinflationary pressures across the business.
However the successful implementation of our
productivity plan helped to offset these headwinds,
with the exception of energy. Further investment
inenergy saving initiatives, such as LED lighting
and centralised heating controls, has helped
reduce the impact of rising energy costs.
Winning for Trade
Our TradePro membership scheme showed
increasing momentum in 2023 with 135,000 new
customers enrolling, taking our total membership
to 881,000. Local traders continue to switch to
Wickes for its strong value credentials and simple
discount scheme, as well as the convenience ofour
30-minute Click-and-Collect service. Thescheme
saves both time and money for localtraders, who
benefit from our standard 10%discount across the
store, regardless ofspendlevel.
Our TradePro app has been further improved with
new account features including digital receipts,
afilter to show pricing excluding VAT, and
projectplanning functionality. We run regular
communications programmes using our Missions
Motivation Engine (MME) which uses machine
learning to further personalise the customer
experience, driving engagement and incremental
sales. We have launched a new loyalty scheme,
TradePro Rewards, which aims to build deeper
relationships with our most strategically valuable
customers (worth ten times the value of an
equivalent DIY customer) and to increase the
frequency with which they shop and the amount
they spend.
Sales from TradePro members in the year increased
by 11% compared to 2022. A 19% growth in the
number of active customers was partially offset
bya slight decline in average basket size as
tradespeople have been managing their material
quantities more carefully.
3) ONS Energy efficiency of housing in England and Wales 2023.
4) Decarbonising Buildings: Insights from Across Europe, published by the Grantham Institute – Climate Change and the Environment at Imperial College London, December 2022.
5) Sales of Wickes Lifestyle Kitchens which include a design element are classified as Design & Installation revenues, whereas Self Serve purchases of the Wickes Lifestyle Kitchen
range are classified as Retail revenues.
Wickes Group Plc Annual Report and Accounts 2023 9
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Accelerating Design & Installation
Design & Installation delivered sales decreased
by1.7% over the year. The first half saw strong
sales growth as we successfully worked through
the elevated order book from the Covid period.
However in the second half we experienced a more
challenging market environment for larger ticket
purchases, as well as delays in Order Fulfilment
asa result of a new software implementation,
which has since been resolved.
We have seen increased attachment rates of
customers choosing to use Wickes to fit their
kitchen and bathroom products, which leads to
incremental spend on tiling, flooring and joinery,
increasing the overall project value. Targeted
recruitment of installer teams remains strong
andwe now have more than 3,000 installer
teamsoffering nationwide coverage.
We continue to digitise our installation service,
with installers now using our field service
management software (FSM). This software
systemises each of our steps along the installation
process, reducing manual activity and potential
human error. Alongside many other benefits, this
has increased the speed of the customer journey.
Our new Customer Experience Centre is now live
for all new installation customers, giving every
project a named individual who will coordinate and
manage communication between the customers,
installers and product delivery teams. This has
reduced the number of incoming queries as well
asthe average time to installation and this highly
positive outcome for new customers has been
reflected in a Net Promoter Score of 92%.
Wickes Lifestyle Kitchens has performed well
since its relaunch withsales in the second half
+24%. The range is designed to better serve the
high-volume market for lower price point kitchens
and offers significant opportunities for further
growth. Customers are now able to use our free
design service for a Wickes Lifestyle Kitchen and
this hasproven popular with both homeowners
andlandlords.
Whilst leads in our showrooms have slowed
significantly during 2023, as a result of the more
challenging market conditions, our conversion
rates continue to strengthen, underpinned by
ourunique customer proposition.
DIY Category Wins
We continue to strive for the best possible range,
price and availability for our customers. Our
right-sized stores sell a carefully curated range
ofc.9,000 SKUs and we are constantly reviewing
the range to ensure that each product category
ismeeting expectations. This year we have
conducted 17 range reviews across categories
including decorating, flooring, electrical, hardware
and roofing. We have also added innovation for
smaller projects on lower budgets, such as paint
ranges, curtain poles and shelving. Customers
remain interested in making their homes more
energy efficient and we have responded with
newproducts, in the lighting category in particular.
Categories which have seen strong volume
growththis year include shelving & storage,
powertools and paint.
We have successfully broadened our brand
proposition, from our heritage in trade and
heavy-end DIY to now address a younger and
morefemale customer base. The proportion
ofWickes’ DIY customers who are female has
increased from just 16% in 2019 to 27% in 2023
6
,
following our proactive marketing to women,
including developing rich online and social media
content to help develop DIY skills and bring DIY
tolife in a relevant way.
Digital capability
We are investing further in our digital capabilities
to deliver an integrated multi-channel shopping
experience for our customers.
We use our predictive MME to deliver tailored
content to customers to help them complete their
home improvement missions and this is driving
significant revenues. We have a comprehensive
suite of MME-led programmes of marketing emails
and app notifications, all of which are optimised
fortiming, audience and content for our different
customer profiles, with incrementality measured
against control groups.
Store investment
Investment in our store network continues, to
modernise the stores, increase our showroom
space and create additional fulfilment space for
Click & Collect and Home Delivery. 11 store refits
were successfully completed during 2023.
Ourrefitprogramme continues to deliver c.25%
ROCE with strong sales uplifts, in particular in
Design & Installation. The programme continues,
with 77% of the network now in our new format.
Our new store opening programme is gathering
momentum, with three new stores opened during
2023 in Chelmsford, Widnes and Torquay. We have
“ We have an exciting pipeline of new stores planned
forthe coming years, as we target an overall estate
of250 stores over the medium term.”
Chief Executive Officer’s review continued
We have also used technology to improve our
fulfilment capability and modernise our order
management solutions. This has enabled the
roll-out of our very popular 30-minute Click &
Collect service, which has resulted in a 6.7%
growth in Click & Collect sales this year and
recordcustomer satisfaction levels.
In 2023, we increased our range of digital payment
options by implementing both Apple Pay and
Google Pay for online transactions (already in
usein stores). This has increased our conversion
rates by speeding up the check-out process for
customers. We have also accessed the growing
Buy Now Pay Later (‘BNPL’) market by adding
Klarna to our online payment options, which has
brought incremental revenue opportunities and
access to a younger customer demographic.
an exciting pipeline of new stores planned for
thecoming years, as we target an overall estate
of250stores over the medium term.
During 2023, we closed four stores (Wigan,
Loughborough, Paignton K&B and Darlington)
which were not meeting our returns criteria.
Wetherefore ended the year with 229 stores.
Enhanced store service model
Our ‘4C’ model aims to meet our customers’ needs
through all four of our store network journeys: Self
Serve, Assisted Selling, Order Fulfilment and the
Design & Installation showrooms. Our approach
offers a seamless shopping experience for customers
and ensures that our store estate works hard for
us. We have made changes to the store estate to
increase back of house capacity for Click & Collect
and Home Delivery Order Fulfilment, while reducing
5) Sales of Wickes Lifestyle Kitchens which include a design element are classified as Design & Installation revenues, whereas Self Serve purchases of the Wickes Lifestyle Kitchen range are classified as Retail revenues.
6) Wickes proprietary customer data 2023.
Wickes Group Plc Annual Report and Accounts 202310
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In2023, we opened three new stores (Chelmsford,
Widnes, and Torquay) and closed four (Wigan,
Loughborough, Paignton K&B and Darlington). When
we need toclose stores, we take all reasonable steps
to support our colleagues who are affected with
securing alternative employment with Wickes.
We launched a new two-year charity partnership
with The Brain Tumour Charity and in 2023,
withthe generosity of our colleagues, customers
and suppliers, we raised £728,000 towards our
£2 million target. All of our stores participated
inthe Wickes Community programme during
theyear, supporting around 1,500 projects
acrossour local communities.
Environment
After receiving validation from the SBTi for our
near term science-based targets (‘SBT’) in 2022,
we have made significant progress towards
achieving our Scope 1 and 2 SBTs by switching to
a 100% renewable electricity contract from April
2023 onwards. During 2023, we achieved a 36.9%
reduction in Scope 1 and 2 emissions compared to
2021. We are collaborating closely with our strategic
suppliers to work towards achieving our two
Scope3 SBTs, and a meaningful proportion of our
suppliers now have their own SBTi-validated targets.
For our second CDP (Carbon Disclosure Project)
Climate submission we successfully increased
ourrating from a B- to a B, and for our first-ever
CDP Forests submission, we were pleased to
achieve a rating of C. We are continuing to work
tounderstand our nature impacts and by the end
of 2023 we stopped sourcing compost containing
peat. Timber remains a significant part of our
business and in 2023 we once again achieved
alevel of 99.8% of the timber sold having either
anFSC or PEFC Chain of Custody certificate,
confirming that it had been responsibly sourced.
Homes
In line with our purpose to make the nation feel
house proud, and supporting our customers with
the increased cost of living, we want to help our
customers save energy and reduce the carbon
footprint of their homes. We launched new product
ranges to expand our offer, and we now offer solar
PV products, air source heat pumps and charging
kits for electric vehicles. We also provide information
and guidance on our customer website and in-store
to help our customers make informed choices on
how to save energy, with a particular focus on the
significant benefits of good insulation.
The acquisition of Solar Fast gives us a majority
stake in a leading, nationwide operator in the
emerging and exciting market for energy saving
solutions. The market for domestic solar
installations in the UK is growing from an
estimated c.£1.1bn in 2024 to c.£1.5bn per year
by2028
9
and is a fragmented market with no clear
brand leader. This acquisition enables us to rapidly
accelerate our Design & Installation growth lever,
capitalising on our expertise in installing major
home improvement projects. The Wickes brand
has been trusted by home improvers for over 50
years and with Solar Fast as part of our proposition
we will be perfectly placed to support them with
their energy saving plans and to help them feel
house proud.
Wickes’ balanced business model and proven
growth strategy affords the Group resilience in
thecurrent uncertain environment, leaving us
wellpositioned to win in the UK’s large and
growinghome improvement market, and
tocontinue to deliver for our colleagues,
customers and shareholders.
David Wood
Chief Executive Officer
18 March 2024
the impact on customers in the store. We have
also transitioned to a new delivery partner which
has helped to improve customer satisfaction.
This continued focus on how best to serve our
customers has resulted in record customer
satisfaction scores (‘CSAT’) in 2023. Self Serve
customers who rate Wickes as ‘excellent’ or
‘good’has increased by 4 percentage points
(‘ppts’) year-on-year to 85%, whilst CSAT for our
Click & Collect and Home Delivery
7
services has
improved by 1ppt and 2ppts respectively. CSAT
also continues to trend upwards in Design &
Installation, with the key Lead to Order part of
theprocess up 1ppt this year to a record 86%.
A winning culture
The Wickes culture has evolved over the past fifty
years to become a modern, inclusive workplace
where all colleagues can feel at home and have the
opportunity to grow their skills and develop their
career. We continue to engage with colleagues so
that they are informed, inspired and motivated to
play their part in delivering our strategy through
exceptional levels of customer service. This year
we have enabled all store managers to work
flexibly and have introduced a number of cost
ofliving initiatives to help colleagues.
Our annual colleague engagement survey seeks
both quantitative and qualitative feedback from
colleagues on a range of subjects and assesses
overall colleague engagement. In 2023,
ourcolleague engagement score was 79%
8
,
whichindicates a strong level of colleague
engagement with the business.
Responsible Business Strategy update
2023 was the first full year of delivering our
Responsible Business Strategy, Built to Last.
Thishas been a year of integrating the strategy
across our business and our supply chain, with
continued progress made across all three pillars
ofthe strategy and our foundation topics.
The health and safety of our colleagues and
customers remains our number one priority
andisone of the key foundations of our
Responsible Business Strategy. In 2023, we
demonstrated a continued reduction in injury
numbers across the business and an improved
performance in our Accident Frequency rate and
number of lost time incidents, following a number
of very strong years of pleasing performance.
We are committed to reduce the impact of the
packaging we use in our own brand products, and
we have removed 115 tonnes (annually) of plastic
packaging, which is a reduction of 7% like-for-like
volume compared with 2022.
People
Inclusion and diversity remains central to our people
strategy through our ‘Feel at Home’ colleague-led
inclusion and diversity programme. Following a
successful trial, we are launching a new flexible
working approach to all store management roles.
Our 2023 Gender and Ethnicity Pay Gap report
shows continued improvement in our gender
paygap, and a favourable ethnicity pay gap result.
Our Early Careers offering continues to focus on
attracting and developing the skills our business
needs for the future. In the year, we supported 280
individuals into Early Career placements, with 248
of these enrolled on an apprenticeship programme.
We employed on average 7,919 people in 2023,
compared to an average headcount of 8,340 in 2022.
As a result of the new supply chain logistics contract
which went live in January, 339 colleagues transferred
to the logistics supplier under the TUPE regulations.
7) Home Delivery refers to customer deliveries fulfilled from stores.
8) The colleague engagement score is an average score in response to the main engagement questions covering respondents’ likelihood to recommend Wickes as a place to work, likelihood
torecommend Wickes’ products or services, likelihood to remain at Wickes and overall job satisfaction. These engagement questions form part of a wider annual colleague survey.
9) Source: Wood Mackenzie UK PV Capacity Forecast.
Wickes Group Plc Annual Report and Accounts 2023 11
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Strategic report
LARGE AND
GROWINGMARKET
The c.£27bn UK home
improvement market
1
has
grownat 2.5% pa over the past
10years
2
, driven byincreasing
home ownership, the rising
number of households, people
spending more time at home due
to hybrid working and consumers
investing to make their homes
more energy efficient.
2.5%
per annum for past 10 years
MID SINGLE-DIGIT
SALES GROWTH
Our balanced business model
enables us to access three
customer propositions of Local
Trade, Design & Installation and
DIY, offering greater resilience
through the economic cycle.
Wickes has just c6%share of
theUK RMI
3
market, offering
significant opportunity for future
growth. Continued market share
gains and underlying market
growth should generate mid
single-digit revenue growth
overthe cycle.
PROFIT GROWTH
GREATER THAN
REVENUE GROWTH
Our proven growth levers are
successfully driving sales
densities, profit contribution and
returns from stores. Our efficient
model keeps operating costs low,
generating operating leverage so
that over the economic cycle we
would expect to grow profit faster
than revenue.
STRONG
CASH FLOW
Our profitable business model
generates strong operational
cash flow. This cash flow
supports future investment
intoproven growth levers such
asstore refits and digital, aswell
asenhancing shareholder returns
through dividends andshare
buybacks. In 2023we unveiled a
revised capital allocation policy
(seenextpage).
c.20
new stores over 4-5 years
7
Growth Levers
£ 37.2 m
returned to Shareholders in 2023
1. Source: GfK, Mintel and Wickes estimates
2. Source: GfK, between 2013-2023
3. Repair, Maintenance & Installation
Sustainable competitive advantage
driving investment returns
Investment case
Wickes Group Plc Annual Report and Accounts 202312
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Operate with net cash at all times
Cash of at least £50m at year end
RCF provides additional liquidity
Capex of c.2% of sales (post IAS38)
Refits, new stores and IT
Target blended ROIC >15%
Strong balance sheet Investing in the business
Target dividend cover
of1.5x – 2.5x EPS in
normaltrading
Excess cash will be
returnedtoshareholders
Ordinary dividend Return of surplus cash
• Maintain strong balance sheet with significant
liquidity at alltimes
• Hold minimum £50m cash at December year end,
the seasonal low point
• Average cash considerably higher in a normal
trading cycle
• RCF provides additional liquidity
• Capital investment to maintain store estate and
invest in high-returning proven growth levers
• Target dividend cover 1.5x – 2.5x EPS. Currently
paying out above thetargetrange but expect cover
to rebuild infutureyears
• Share buyback programme to return excess cash
toshareholders
• Initial £25m programme underway
Strong balance sheet supports
growthand capital returns
Capital allocation policy
Wickes Group Plc Annual Report and Accounts 2023 13
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Strategic report
Market review
UK home improvement remains a large
and attractive market of £27bn, of which
Wickes has a relatively small share. Our
three customer propositions, across
LocalTrade, Design & Installation and DIY,
meanthat we span the entire market
andcan support customers however
theydecide to improve their homes.
We have a long track record of market share
gains as a result of our business model, digital
investment and focus on customer service.
Market share 2023*
2020
106.8
2019
110.1
2021
104.8
100.0
2022 2023
110.4
The home improvement market has seen
significant change over recent years, as it’s been
impacted by major global economic and social
events, most notably climate change, the pandemic
and the cost of living crisis. People have been
forced to change the way they live, whether that’s
spending more time in their homes and gardens,
cutting back on spending or finding ways to save
energy. At Wickes, we seek to understand these
fundamental changes to consumer behaviour
through regular and comprehensive consumer
research, and we use our insight to evolve and
enhance our products and services to meet our
customers’ needs.
We’re customer curious
To find out what our customers are thinking, we conduct regular research in the form of our
monthly ‘Mood of the Nation’ survey (of around 1,000 households and tradespeople), our six-
monthly ‘Barometer’ survey (of around 2,000 households and tradespeople), monthly online
customer focus groups and quarterly face-to-face customer focus groups. We believe it’s
important that all our colleagues, not just management, can get closer to our customers
sowemake all our research available internally and also share some key findings from
ourBarometer research on our corporate website.
Over the following three
pages, we have pulled out
what we see as the key
shortterm and long term
market growth drivers within
the UK’s home improvement
sector and shared our
consumer insights, along
withhow we are adapting
ourpropositions to meet
theneeds of our customers.
The cost of living crisis
The UK housing market
The role of the home
Saving energy
Digitally enabled retail
* Source: GfK GB PoS data, sourced from
GfKDIYCategoryReportingDecember 2023
Wickes Group Plc Annual Report and Accounts 202314
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2014
2015
2016
2017
Source: ONS
2018
2019
2020
2021
2022
2023
0
2
4
6
8
10
In the short term, the UK home improvement market is being impacted by two key
economic factors: the cost of living crisis and a slowdown in the UK housing market.
The cost of living crisis
2023 has been another year of global political
turbulence, with events having an impact on
economies around the world. In the UK, consumers
are experiencing pressures on their disposable income
as a result of rising mortgage rates, rental costs and
continued inflation across energy, food and fuel.
Wickes has a certain degree of resilience in
thefaceof these pressures, given that typically
thecustomers who use our Design & Installation
service or tradespeople to undertake their home
improvement projects tend to be older and have
more disposable income, however we are not
immune to the customer trends.
Annual CPIH inflation rates from 2014 – 2023
Our approach
– As customers find ways to save money, they
aremore discerning on price and are shopping
around more. Our value credentials, the strength
of the Wickes own brand (which is around two
thirds of sales) and our simple and clear pricing
policy stand us in good stead.
– In 2023, we have seen strong demand for our
own brand products as customers trade into
Wickes’ great quality and value, whilst our 10%
flat rate discount for all TradePro members
continues to be popular with tradespeople, and
has helped drive an 18% increase in TradePro
membership in the year.
– We proactively review our ranges to ensure
weare providing customers with good product
choice and maintaining our great value price
proposition. In 2023, we conducted 17 range
reviews and, as part of these reviews, in
response to customer insight we introduced
new ranges aimed at smaller DIY projects,
suchas selling curtain rails for the first time.
– We price check thousands of key stock items
every week and aim to remain 2-3% cheaper
than competitors, to ensure that we are always
offering great value to customers. Our high
stock turn enables us to pass through price
changes quickly, such as the falling price
oftimber in autumn 2023.
– During 2023, we also launched our ‘Seasonal
Savers’ promotions to offer discounted prices ona
targeted number of key products that customers
might need fortheir seasonal projects.
– For customers looking to purchase a new kitchen,
our new Wickes Lifestyle Kitchens range means
we can offer highly competitive, affordable
kitchens (from £1,000 to £4,000), with a free
design service. For customers looking to purchase
a Wickes Bespoke Kitchen or bathroom, we offer
highly competitive finance rates. The launch of the
Klarna credit proposition means that customers
are able to spread out their payments, which has
introduced new customers to Wickes and driven
higher averageonline transaction values.
– To help our DIY and Local Trade customers
withpayment solutions to suit their needs and
preferences, we continue to increase the range
of payment options, with the launch of Apple
Pay and Google Pay, following the successful
launch of Klarna last year.
The UK housing market
The Bank of England increased interest rates
everymonth from December 2021 untilAugust
2023 andmortgage rates haveconsequently risen
to their highest levelinoveradecade. These high
levels of interest rates have suppressed UK housing
transactions, which are often a trigger to undertake
major home improvement projects, although this is
typically partially offset by renovations to properties
in which people decide to stay for longer.
The level of new home sales has also declined,
although our exposure to new build housing is
verylimited.
What our customers are telling us
88%
of home improvers have undertaken
asmany or more home improvement
projects in the past 12 months.
+30%
increase in people doing smaller DIY projects
such as putting up shelves, pictures and
curtain rails (up from 35% to 45% in a year).
1 in 4
tradespeople have work lined up forthenext
12 months or more.
1 in 2
tradespeople are doing more
priceresearchthan normal.
in 2023
we have seen a subdued consumer
environment for larger projects, with
fewernew leads in the market.
* Wickes Barometer survey April 2023.
* Consumer Prices Index including owner occupiers’ housing costs.
Wickes Group Plc Annual Report and Accounts 2023 15
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Other information
Strategic report
Market review continued
Despite the current economic headwinds,
we believe that the long term market
fundamentals for the UK’s home
improvement sector remain strong.
The role of the home
Although the pandemic lockdowns ended
in 2021, they have had a lasting effect on
howweuse our living space. Many businesses
have embraced hybrid working practices and
working from home is now commonplace.
Having spent more time at home, people have
a new appreciation for their homes and gardens,
and want them to reflect the way we are living
and working today, fuelling further desire from
homeowners and tenants to invest in their
properties. Another positive outcome of the
pandemic was that it ushered in a new wave
ofDIYers, encouraging more young people
andwomen to try their hand at DIY, which
isatrend that has continued.
Our approach
– We proactively market to a younger and female
audience. In 2023, we continued our partnership
with celebrity influencer Kimberley Walsh, and
launched Kimberley’s own paint colour – Blue
Haze. We regularly produce short videos with
hints and tips aimed at less experienced DIYers
tohelp them with their home improvement
projects, and across our digital and social
channels we have seen an 88% increase in
TikTok followers in the year aswell as high
levelsof engagement with ourposts.
– We continue to innovate in our kitchen and
bathroom ranges to ensure that we are always
on trend, and in the summer we relaunched
ourshowroom kitchens as ‘Wickes Bespoke
Kitchens’ with eight brand new ranges.
– To appeal to customers on a smaller budget,
ourWickes Lifestyle Kitchens range offers
beautiful kitchens with a free design service
– As gardens and outdoor space play an
increasingly important role in people’s homes,
we continue to enhance our ranges, and have
introduced a number of Wickes own brand
garden power tools and Supagrow products,
including a new peat-free compost.
What our customers are telling us
We recently conducted research into the way
people use their kitchens and how this has
changed. The Wickes Great Kitchen Report found
out some fascinating details about what we want
from our kitchens, including the following:
56%
rated the kitchen as probably the most
important room in their house.
23%
said their experience of the pandemic
changedthe way they use their kitchens.
76%
said it’s important that their kitchen
catersfortheir pet.
According to our Home Improvement
BarometerApril 2023 survey :
7 out of 10
people say gardening DIY is one of the most
popular jobs around the home.
22-34 years
Younger adults (aged 22-34 years) are more
likely to do more home improvement jobs
thanpeople over 55 years old.
8 out of 10
people believe that DIY has made them
enjoy their house and garden more.
Saving energy
The cost of energy continues to be a significant
burden on people’s finances, in spite of a moderate
decline in energy prices from last year’s all-time
highs, and there is an urgent needto make our
homes more energy efficient.
According to the ONS 2023 report*, the average
household energy efficiency rating for England
andWales is band D. A 2022 report, ‘Decarbonising
Buildings: Insights from across Europe’ published
by Imperial College London noted that “the UK’s
28.6 million homes are among the least energy
efficient in Europe and lose heat up to three times
faster than on the continent”.
At Wickes, we recognise how important tackling
climate change is and weare committed to helping
our customers to improve the sustainability of their
homes and, at the same time, save money on their
energy bills.
* ONS Energy efficiency of housing in England and Wales 2023
What our customers are telling us
48%
of people say the main reason for
installing greener options is to save
money on their energy bills. 14% say
it is to cut their carbon emissions.
6 out of 10
people would consider using more
sustainable materials or energy saving
appliances when renovating their kitchens.
3 out of 4
people say that cost is the main barrier
to installing energy saving solutions.
2 out of 3
tradespeople say they have installed
at least one energy saving product
in their customers’ homes.
Wickes Home Improvement Barometer April 2023
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Our approach
– We are investing significantly in our digital
capabilities by moving to a cloud-based
infrastructure, which is being implemented
byour in-house technology team. This enables
usto be agile and swift to implement leading
digital solutions that will further enhance the
customer experience.
– We are already using AI technology, in the form
of our Missions Motivation Engine, to capture
data and insight into customers’ shopping
missions and to tailor our communications to
them accordingly. This is delivering incremental
sales and has won a number of awards, including
theChartered Institute of Marketing’s Best Industry
Campaign Award 2023. We will continue to develop
this in the longer term toenhance the customer
experience and delivercompetitive advantage.
– In 2023, alongside the roll out of the Klarna
credit proposition, which was launched in 2022,
we continued to develop our payment options,
with the introduction of Apple Pay and Google
Pay, as well as digitising our gift card offer.
– We are seeing more customers choosing to
useClick & Collect to shop with us. The roll-out
ofanew digital picking app for colleagues,
combined with reconfiguration of picking and
fulfilment areas within the store, has enabled us
to reduce our Click & Collect service time from
60 to 30 minutes, providing a better customer
experience, encouraging more customers touse
this channel and delivering operating efficiencies.
– In addition to digital investment, we continue
toinvest in our store estate and the in-store
shopping experience. In 2023, we refitted 11
stores and reconfigured a further 17 stores to
create additional fulfilment space for Click &
Collect and Home Delivery. To give even more
customers the opportunity to visit a Wickes
store, we opened three new stores in the year
inChelmsford, Widnes and Torquay.
What our customers are telling us
According to our customer satisfaction surveys (CSAT) all four measures of customer
serviceacrossthe routes they choose to shop have either increased or are flat year on year
Top Two boxes (Good and Excellent ratings):
Click & Collect
82% (2022: 81%)
Home Delivery (direct from suppliers)
84% (2022: 84%)
Self-service
85% (2022: 81%)
Home Delivery (fulfilled by stores)
89% (2022: 87%)
Our approach
– We are taking a number of measures to help
ourcustomers improve the sustainability of their
homes. Our interactive online ‘Energy Efficient
Home’ provides hints and tips on how to make
the home more energy efficient and linking
directly to products to purchase. In November,
we partnered with NatWest to make the Wickes
Energy Efficient Home available to NatWest’s
customers as part of their Home Energy Hub
service. We have also run a number of social
media campaigns to target consumers with
energy saving products, along with promotions
on energy saving products, such as a discount
of 25% on rolls of loft insulation to support
customers as winter approached.
– As part of our ongoing range reviews, we
havealso introduced a number of new energy
products and services in the year, including
solarproducts, electric vehicle chargers and
airsource heat pumps. We have also revamped
the Wickes own brand LED lighting range to
provide customers with even better value on
thiseasy tofit, energy saving product.
– We continue to work on a taxonomy and labelling
strategy to enable customers to make informed
decisions about the products they purchase and
their environmental impact.
Digitally enabled retail
In today’s retail environment, customers
expect to be able to transition seamlessly
frombrowsing on a mobile device to picking
upan item in store.
They use digital channels as a source of inspiration
and information, and have come to expect a
streamlined, personalised shopping experience.
There is also a shift from traditional payment types
todigital wallet payment types, such as Klarna,
ApplePay or PayPal. As a result, businesses are
having to adapt to the changing preferences of
their customers, even more so since the pandemic.
At Wickes, whilst two thirds of our sales are
digitallyenabled, 98% of sales, go through our
stores, which makes it vital that our stores are
designed and managed to meet all the shopping
needs of our customers and maximise operating
efficiencies. Wedo this through our unique ‘4C’
service model, which incorporates four customer
shopping routes – Design & Installation, Self Serve,
Assisted Selling and online Order Fulfilment (Click
&Collect or Home Delivery).
Digital sales as a share of total UK retail market
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
10
15
20
25
30
35
40
Source: ONS
Wickes Group Plc Annual Report and Accounts 2023 17
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O
U
R
D
I
G
I
T
A
L
C
A
P
A
B
I
L
I
T
Y
O
U
R
S
T
O
R
E
S
O
U
R
P
R
O
D
U
C
T
S
O
U
R
B
R
A
N
D
O
U
R
C
U
L
T
U
R
E
O
U
R
P
E
O
P
L
E
Business model
WE CAN SUPPORT ALL CUSTOMERS
WITHTHEIR HOME IMPROVEMENT PLANS
WE DELIVER OUR UNIQUE CUSTOMER PROPOSITION THROUGH
LOCAL TRADE
We are trusted by local
tradespeople to provide
thequality products they
needat great value, saving
them time and money
DESIGN &
INSTALLATION
For customers who are looking
to undertake a major home
improvement project such
asanew bathroom or kitchen
we offer a full service from
concept design to completion
DIY
We provide branded and
own brand products to help
customers undertake their DIY
project, whatever it may be
7,900 highly engaged colleagues
who are passionate about delivering
our purpose – to help the nation feel
house proud
We use our digital strength
to gain insight into our
customers’ shopping
habitsand to optimise
theshopping experience
for all our customers
An inclusive and
diverse modern
workplace where
colleagues can
‘feelat home’ and
perform to the best
oftheir ability
Our 229 stores are located
on quality retail parks across
the UK that are convenient
and easy for customers.
Each stores has a distinctive
4C service model (see page
26) to provide an integrated
and seamless shopping
experience for customers
A highly curated range of
quality products at great value,
with simple clear pricing
For over 50 years, the
trusted Wickes brand
hasbeen synonymous
with home improvement
inthe UK
Wickes Group Plc Annual Report and Accounts 202318
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  See Section 172 on page 68 for further information about how
the success of the Company benefits all our stakeholders
OUR PROVEN GROWTH LEVERS ENABLE US TO GROW MARKET SHARE CONSISTENTLY OUR EFFICIENT OPERATING MODEL ENABLES US TO DELIVER GREAT
VALUE FOR CUSTOMERS AND TO GROW THE BUSINESS PROFITABLY
STRONG
FINANCIAL
PERFORMANCE:
– Profitable
– Cash generative
– Good return on
capital for new
investments
– Healthy dividends
forshareholders
DISTINCTIVE
BUSINESS MODEL:
– Curated range
– Right-sized stores
– Seamless multi-channel experience
– Strong own brand
– Everyday low pricing
– Tech-enabled operating model
MARKET LEADING
OPERATIONAL METRICS:
– High volume/fast stock turn
– Good stock availability
– Low prices
– High sales densities
– Cost effective operating model
WINNING FOR TRADE
TradePro growth
DIGITAL CAPABILITY
Continued development
of a seamless offer
ENHANCED STORE
SERVICE MODEL
Laying the foundations
for future growth
DIY CATEGORY WINS
Getting our fair share in
underweight categories
STORE INVESTMENT
High return on investment
refits, exploit new space
ACCELERATING DESIGN
& INSTALLATION
Natural category extensions,
broadening the proposition
 See pages 21-27 for more details on our growth levers
Wickes Group Plc Annual Report and Accounts 2023 19
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OUR VISION
A Wickes project
in every home
OUR MISSION
To be the partner of choice for
Home Improvers and Local Trade
OUR PURPOSE
To help the nation
feel house proud
GROWTH LEVERS
STORE INVESTMENT
High return on investment
refits,exploitnewspace
A WINNING CULTURE
Delivering exceptional customer experience through engaged colleagues and growing responsibly
DIGITAL CAPABILITY
Continued development
ofa seamless offer
ENHANCED STORE
SERVICE MODEL
Laying the foundations
for future growth
WINNING FOR TRADE
TradePro growth
ACCELERATING DESIGN
&INSTALLATION
Natural category extensions,
broadeningthe proposition
DIY CATEGORY WINS
Getting our fair share in
underweight categories
CUSTOMER PROPOSITION
FOUNDATIONS
Strategy at a glance
Our growth
levers
We have a clear framework
towin,which is guided by our
vision, mission and purpose.
We aim to continue developing our
digitally-led, service-enabled proposition
across Local Trade, Design & Installation
andDIY through focused efforts on
keystrategic levers, which we call
our‘growth levers’.
The distinctiveness of our business
modeland significant investment in
ourgrowth levers will help us to win in
theUK’s home improvement market.
These growth levers remain relatively
immature, with more to go for. In 2023,
wehave made good progress on each
ofthem, as outlined in the following pages.
Wickes Group Plc Annual Report and Accounts 202320
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Strategy in action
GROWTH LEVERS
WINNING
FOR TRADE
Our TradePro membership scheme offers a simple digital scheme for tradespeople,
tradefederationsandbusiness to business (B2B) customers, designed to save them
timeandmoney,offeringaflat10% discount across the store and online.
FOCUS FOR 2024 AND FUTURE OPPORTUNITIES
– In 2024, we will continue to build on the success of our B2B strategy by
increasing our partnerships with trade federations and starting to build
partnerships with organisations which employ larger numbers of tradespeople.
– We will also continue to expand our rewards programme, addingsuch services
as skip hire, insurance and media subscriptions, andwehave plans to develop
additional features on the TradePro app suchas a dedicated ‘buy now, pay
later’ solution and improved visibility ofpricing and fulfilment options.
– Improve our Missions Motivation Engine programmes by expanding our use of
first and third party data to reach our trade customers via new digital channels.
STRATEGIC FOCUS
– Increase our active TradePro customer base through recruiting and
retaining more members to our scheme, at the same time extending the
scheme to larger businesses (B2B) and through partnerships with trade
federations to establish Wickes as the preferred partner for the trade.
– Continue to develop our Missions Motivation Engine to use data and
analytics to gain a greater understanding of our TradePro customers
andtheir shopping ‘missions’ so that we can further personalise the
customer experience, increase the relevance of our communications
anddrive engagement, loyalty, sales and incremental margin.
– Enhance our TradePro Rewards scheme to build deeper relationships
withour most strategically valuable customers and increase the frequency
with which they shop with us and the amount they spend.
WHAT WE ACHIEVED
– Increased TradePro membership, enrolling over 137,500 new customers in
2023, bringing total membership to 881,000 and growing sign-ups by 18%
andsales by 11%.
– Onboarded eight trade federations to our TradePro scheme.
– Launched ‘TradePro Rewards’, offering a range ofmembership benefits
from wellbeing offers and discounted offers through to prize competitions
and discounts on business-related services.
– Improved our digital offer for TradePro members with new account
featuresincluding digital receipts, the ability to view prices without
VATandproject planning functionality.
– Ran four communications programmes targeting Local Trade customers
using our Missions Motivation Engine.
CASE STUDY
Growing TradePro members through
partnering with industry federations
In August, we successfully launched our B2B programme for TradePro
with the goal of increasing the reach of our scheme into larger
organisations and trade networks through federation partnerships.
In 2023, we entered into partnerships with eight federations including
Alcumus SafeContractor, Napit and Trustmark, which between them
have over 80,000 registered tradespeople. As a result, an additional
2,000 tradespeople have already signed up to our TradePro scheme.
Byworking with various federations, we are also able to negotiate
discounted federation memberships that we can then offer to our
existing TradePro customers as an added-value benefit.
“ Extending the reach of TradePro into trade
federations is a win-win. Not only does it
increasemembership but, importantly, it enables
ustoestablish new partnerships with key trade-
focused organisations, thereby helping deliver
futurecustomer acquisition, grow awareness of
theprogramme and provide discounted offers for
members to drive engagement and build loyalty.”
Gary Kibble – Chief Marketing Officer
18%
growth in TradePro members
881,000
TradePro members
Wickes Group Plc Annual Report and Accounts 2023 21
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Strategy in action continued
GROWTH LEVERS
ACCELERATING DESIGN
& INSTALLATION
Accelerate growth in Design & Installation through digital development and product innovation.
FOCUS FOR 2024 AND FUTURE OPPORTUNITIES
– In 2024, all new Design & Installation customers will automatically be enrolled
within the CEC.
– Continue to innovate with best-in-class product ranges and make it easier
for customers to design and curate their new kitchen or bathroom digitally.
– Continue to grow our Installer Apprenticeship programmes, supporting
people to achieve their apprenticeship and facilitate them becoming
aWickes approved installer.
– Manage our installer base to meet customer demand.
– In this highly fragmented marketplace, there is opportunity to take share
through our national installer proposition and we will continue to build
attachment rates of other installer services, such as tilingand flooring.
STRATEGIC FOCUS
– Grow Design & Installation by enhancing and innovating the existing proposition,
introducing new kitchen and bathroom ranges, and refreshingour showrooms.
– Develop natural extensions into adjacent installation categories toincrease
overall home improvement project spending.
– Maximise our Missions Motivation Engine to create digital communications
that inspire and engage customers with their home improvement projects.
– Capitalise on the volume opportunity in the more affordable kitchenmarket
with our Wickes Lifestyle Kitchens range.
– Secure the strength of our base of Wickes approved installer teams
toincrease competitive advantage.
– Create a unique digitally enabled, high-service installation process.
WHAT WE ACHIEVED
– Rebranded showroom kitchens as ‘Wickes Bespoke Kitchens’ and introduced
eight new ranges.
– Achieved strong growth in bathrooms, with over 300 new product launches.
Wickes is now the most prominent bathroom brand in the UK*.
– 24% sales growth in Wickes Lifestyle Kitchens since relaunch in the second
half, primarily driven by the introduction of a new virtual design service
– Developed and launched the new Wickes Customer Experience Centre (CEC)
to strengthen our Design & Installation service.
– Introduced field service management (FSM) technology, which automates
the booking of installer teams to customers, thereby simplifying the process
between customers and installers.
– Continued to see increasing attachment rates of tiling, flooring and joiner
sales to kitchen and bathroom projects, with trials of new Design &
Installation service propositions ongoing.
– Launched a Bathroom Installer Apprenticeship (alongside our successful
Kitchen Installer Apprenticeship) and welcomed two cohorts on to the
programme in the year (for more information, see page 38.).
CASE STUDY
New Customer Experience Centre
In 2023, we have undertaken a number of measures to build upon our
installation capabilities and resources to deliver an enhanced service
forour Design & Installation customers.
A key initiative has been the development of a new CEC, where customers
are given a personal point of contact to guide and supportthem throughout
their design and installation journey. Wealsointroduced new technology
to automate the booking of installer teams, to provide digital design
plans for our installers and toautomate our quality control procedures
and checks, making the installation process much simpler and more
efficient for both parties.
While it is early days for this new approach, we are seeing strong CSAT
scores, with three quarters of customers using the CEC having an excellent
or good experience and a Net Promoter Score (NPS) of 92%. With improved
overall coordination of activities, we are seeing fewer customer queries
anda reduction in the average length of time from the purchase of a new
kitchen or bathroom to it being fully installed.
“ Wickes provides customers with afull design
toinstallation service for their dream kitchen
orbathroom. With our new resource and
technology, this customer journey has been
enhanced even more.”
Tony Brown – Installations Director
24%
growth in sale of
WickesLifestyle
Kitchenssincerelaunch
>3,000
installer teams
* Source: Salience Search Marketing survey of search and social media rankings
Wickes Group Plc Annual Report and Accounts 202322
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GROWTH LEVERS
DIY CATEGORY
WINS
Provide an in-depth and carefully curated range in store with an extended range
onlineto offer customers the best range, price, availability and convenience.
FOCUS FOR 2024 AND FUTURE OPPORTUNITIES
– Next year and in the longer term, we will continue to target those categories
where we are currently underweight to increase market share.
– Identify new categories to develop, particularly for our extended online-only
ranges, working with key suppliers to ensure we develop non-cannibalising
ranges that broaden our appeal and therefore sales opportunities.
– Help customers understand the environmental benefits of different buying
choices through our product ranges, labelling and promotional activity.
STRATEGIC FOCUS
– Grow our existing proposition and volumes by targeting large markets for
DIY projects to get our fair share in underweight categories.
– Increase our appeal to both younger and more female audiences to broaden
our customer base.
– Conduct a programme of range reviews seeking to innovate and evolve our
product offering.
– Ensure good availability of our highest-demand products in store and use
targeted promotional activity to optimise sales.
– Ensure our highly curated product range supports an efficient operating
model, enabling simpler and more efficient product range changes and
reducing complexity for distribution and in-store stocking activities.
– Utilise our Missions Motivation Engine to target DIY customers to drive
conversion and average spend.
WHAT WE ACHIEVED
– Completed 17 range reviews in a number of key areas including refreshes
togardening, decorating and flooring as well as selected parts of electrical,
hardware and roofing. These reviews further innovated and expanded our
product range in key customer segments, addressing range gaps and
building on successful previous changes.
– Focused on product ranges for smaller home improvement projects,
suchas shelving and decorating, in response to customer insights.
– To help customers decarbonise and improve the energy efficiency of their
homes, we have introduced new energy saving products, including EV
chargers and air source heat pumps.
– Ran two communications programmes targeting DIY customers, ‘DIY
Inspiration’ and ‘HouseMove Heroes’, using our Missions Motivation Engine
CASE STUDY
Enhancing our roofing category range
In 2023, we conducted a review of our roofing range, which includes
such products as flashing, breather membranes and felt. As with all
range reviews, we started by reviewing our poorer performing Stock
Keeping Units (SKUs) and identifying where there was duplication to
create space for new products. We used data from multiple roofing
suppliers to identify top performing product lines, we looked at
competitors’ ranges to see where we had potential range gaps, and
wereviewed and understood customer expectations for this category.
With DIY customers accounting for around two thirds of roofing product
sales, we conducted analysis to see how we could continue to strengthen
this base, at the same time as growing our Local Trade sales by adding
new products to the range aimed specifically at trade professionals.
In stores, we changed the displays so that all roofing-related products
were grouped together to help customers with their roofing ‘mission’.
We updated point of sale (POS) and design displays through the use of
QR codes and imagery, and improved our digital content using lifestyle
imagery and optimised search terms.
“ This was a very comprehensive range review and
it’s driven excellent outcomes, with year-on-year
category growth of 14% and market share for
roofing products up 4%*.”
Mark Cooke – Commercial Director
* Source: GfK.
17
range reviews conducted
Wickes Group Plc Annual Report and Accounts 2023 23
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GROWTH LEVERS
STORE
INVESTMENT
We continually review the footprint of our store network, utilising a ‘right size,
rightplace, right cost’ approach, to ensure our stores are strategically located for
maximum footfall and to act as fulfilment centres for digital sales across the network.
FOCUS FOR 2024 AND FUTURE OPPORTUNITIES
– In 2024, we will introduce the Wickes brand to more customers through
ournew store opening programme, targeting four new stores.
– We will undertake eight store refits next year as part of our accelerated refit
and refresh programme.
– For our stores built to our 2025 specification we will install air source
heatpumps, solar panels and EV chargers as standard.
STRATEGIC FOCUS
– Accelerate our new store opening programme, targeting around
20newstores over five years in new catchments or existing Wickes
conurbations with high demand and high customer density.
– Continue to invest significantly in our store refit programme.
– Improve the efficiency of our operations and create a consistently
welcoming, user-friendly experience for our customers through
theprocessof ‘right-sizing’ stores.
– Target high-volume stores to increase their storage capacity
tofacilitatemore Click & Collect andHome Delivery orders.
– Improve energy efficiency and reduce carbon emissions across
theestatethrough investment in energy saving technologies.
WHAT WE ACHIEVED
– Refitted 11 stores. 175 stores are now in our new store format.
– Refitted stores increased sales by c.20% (c.65% in Design & Installation
andc.10% across DIY and Local Trade), which is sustained in subsequent years.
Refitted stores continue to deliver an increase in ROCE of 25%, onaverage.
– Reconfigured 17 stores (excluding refits) to create additional fulfilment
space for Click & Collect and Home Delivery.
– Opened three new stores in Chelmsford, Widnes and Torquay and closed
four stores which were not meeting our returns criteria.
– In April 2023 we switched to a 100% renewable electricity contract
acrossthe estate, cuttingour Scope 2 carbon emissions (see page 45).
Continued the roll-out of LED lighting and, by the end of 2023, 85% of
storeshave been upgraded.
– Continued the roll-out of heating controls and, by the end of 2023,
48%ofstores have been upgraded.
– Installed air source heat pumps (ASHPs) in our new Torquay and
Chelmsfordstores, resulting in a total of four stores now with ASHPs fitted.
– Continued site assessments to identify opportunities for solar photovoltaic
panels. Seven stores are now fittedwithon-site solar generation.
– Voltage optimisation trialled in one store to inform further implementation in 2024.
CASE STUDY
Opening our new store in Torquay
As part of our programme to open around 20 new stores in five years,
we identified Torquay as a town that would benefit from a Wickes store.
Weworked with a specialist location planning agency to understand the
local catchment and demographics, undertake competitor analysis and
model sales. Our data showed it was a desirable location to position
aWickes store, providing an opportunity toexpand our multi-channel
fulfilment to areas that cannot be served byour existing Exeter store.
Following almost a year of construction and fitting out, with the creation
of30 new jobs, our colleagues welcomed their first customers on
3 November. With a square footage of c.30,000sq ft, the store includes
aDesign & Installation showroom of over 4,000sq ft as well as 5,000sq ft
of outdoor space. As with all new stores, we have incorporated elements
into the build thatsupport our journey to net zero, including two EV
charging bays and94 solar panels – which we expect will produce
around 30% of the store’s energy. As part of the Wickes Community
Programme, Torquay store colleagues are supporting localgood
causesthrough product donations and volunteering.
“ Torquay is a great example of how we are growing
responsibly, supporting the local community through
job creation and charitable giving, and introducing
ways to reduce carbon emissions as we seek to
transition to a net zero economy.”
Sarah Taitt – Property Director
3
new stores in Chelmsford,
Widnes and Torquay
>75%
of stores in new store format
Strategy in action continued
Wickes Group Plc Annual Report and Accounts 202324
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GROWTH LEVERS
DIGITAL
CAPABILITY
We are investing significantly in our digital capabilities to integrate our online and in-store
offeringsto deliver a seamless and inspiring shopping experience for our customers.
FOCUS FOR 2024 AND FUTURE OPPORTUNITIES
– In 2024, we will continue to expand our digital payment options.
– 2024 will also see the introduction of new digital tools to help customers
understand, select and visualise paint colours before buying them, with
paint being our most common DIY purchase.
– Continue to improve our Design & Installation digital proposition,
makingiteasier for customers to design and curate their new
kitchenorbathroom online.
– Continue to invest in our DIY, TradePro and colleague apps to improve
functionality for customers and colleagues.
– Further develop our Missions Motivation Engine to deliver greater
customisation and personalisation of content to help customers
withtheirhome improvement projects.
STRATEGIC FOCUS
– Develop our digital ecosystem to modernise our technology, creating
afuture platform for growth and more agile change capability.
– Leverage digital marketing channels and our machine-learning
MissionsMotivation Engine to engage and support customers bycreating
tailored inspirational and helpful content to help them complete their home
improvement projects.
– Continuation of our payment strategy to provide Local Trade and DIY
customers with payment platforms to suit their needs and preferences.
– Further improvements to our fulfilment capability and customer
offerbymodernising our order management solutions and carrier
management capability.
– Continued development of digital solutions to make it easier for colleagues
topick products for Click & Collectand Home Delivery orders.
WHAT WE ACHIEVED
– Grown our digital visit market share to 16%, as measured by SimilarWeb.
– Increased our participation of Click & Collect orders through improved
digital signposting of the 30-minute service, new digital picking solutions
for colleagues and more accurate stock visibility. This has led torecord
CSAT scores for Click & Collect of 82% (see page 17).
– Increased the range of payment options for customers with the launch of
Apple Pay and Google Pay, following the successful launch of Klarna last year.
– Made our Wickes gift cards available in digital format.
– The expansion of our Missions Motivation Engine programmes has
delivered incremental revenues across TradePro, Design &Installation and
DIY marketing campaigns.
– Introduced new functionality across our digital channels, including
improvements to website navigation, producing innovative content through
shoppable video functionality and our interactive Energy Efficient Home,
and the provision of digital receipts for customers in store.
CASE STUDY
House Move Heroes
In 2023, we used our Missions Motivation Engine to launch our ‘House
Move Heroes’ programme, aimed at helping those customers who are in
the process of moving house. Using our data insights, we are able to target
customers with relevant campaigns based on the stage of the house move
journey they are on, whether that’s packing up their existing home or
undertaking DIY projects in their new home.
We teamed up with TV property presenter Phil Spencer and his
property advice platform Move iQ to create the House Move Heroes
hub,which is sited all in one place on www.wickes.co.uk and features
how-to guides, checklists and helpful videos to empower customers
who are moving house.
“ Moving home can be a very stressful and
daunting experience. With our House Move
Heroes programme, we’re able to give simple,
accessible, practical advice to customers to
support all stages of their move. Our campaign
approach, mixed with expert content, is unique
toWickes and the hub is a great destination
forcustomers looking for a bit of help.”
Paul Canavan – Director of Digital
16%
digital visit market share
Wickes Group Plc Annual Report and Accounts 2023 25
Governance
Financial statements
Other information
Strategic report
GROWTH LEVERS
ENHANCED STORE
SERVICE MODEL
Our unique ‘4C’ model is designed to meet all our customers’ needs through our Self Serve,
AssistedSelling, Order Fulfilment and Design & Installation Showroom areas of the store.
FOCUS FOR 2024 AND FUTURE OPPORTUNITIES
– In 2024, we will add further functionality to the app our colleagues
usetohelp them pick items for customers, such as stock management
andpricing information.
– We will continue to optimise space across the estate and maximise
futuredigital innovations in order to deliver efficiencies and enhance
thecustomer experience across all four areas of the store.
– Developing products that support customers with saving energy and
reducing the carbon footprint of their homes.
STRATEGIC FOCUS
– Continue to develop and roll out our 4C model, which is critical to offering
aseamless shopping experience for all our customers.
– Integrate digital capabilities across the four areas of the store to providea
seamless shopping experience, improve efficiency and giveussignificant
competitive advantage.
– Continue to grow our Click & Collect and Home Delivery services
throughincreased storage capacity, introducing service-enabling
technology and securing best-in-class delivery partners, thereby
ensuringoutstanding customer service and a reduced cost to serve.
WHAT WE ACHIEVED
– Made further physical changes to the store estate to increase back of
house capacity in order to improve the fulfilment of Click & Collect and
Home Delivery, resulting in c.28,300 sq ft of additional space. Almost 80%
ofthe estate now has space optimised to deliver across all four areas
ofthe4C model.
– Record levels of customer satisfaction, with customers giving the following
ratings for Top Two boxes (Excellent and Good) – Click & Collect 82%,
Home Delivery 84% and Self Serve 85%, (see page 17).
– Successfully transitioned to new delivery partners after oneof our key
delivery partners,Tuffnells, ceased trading.
– The nature of our 4C service model, which has a dedicated manager
andteam per area, has meant that we have been able to redesign
workingpatterns to make all management roles open to flexible
working.Following a successful pilot, this is being rolled out to all
storemanagers, for more information see page 34.
CASE STUDY
Growing our Assisted Selling
‘OLI’channel
A key component of our 4C store model is the Assisted Selling channel, OLI,
which is short for ‘online in store’. OLI is an online terminal that colleagues
and customers can use to search for products that are not stocked in the
store. There are around 33,000 products available on OLI, and customers
can place an order online and arrange for Click & Collect or Home Delivery.
In 2023, we focused on strengthening OLI customer participation
byupskilling colleagues with customer service training based on our
approachable, curious and resourceful (ACR) customer service behaviours.
We identified Wickes Lifestyle Kitchens as an area of opportunity for driving
OLI participation and sales. This was supported by a number of initiatives
including training for store colleagues, customer services and support
functions, along with regional roadshows, weekly performance reporting
and Local Trade customer events. As a result, around a third of all Wickes
Lifestyle Kitchens were purchased using OLI in 2023.
“ OLI is going from strength to strength, with sales
up21% in the year. It’s popular with customers and
colleagues alike, as it provides a simple, efficient
wayfor colleagues to ensure they can always say
yes to the customer and help them find what they
need for their home improvement project.”
Fraser Longden – Chief Operating Officer
21%
increase in OLI (online in store)
sales
Strategy in action continued
Wickes Group Plc Annual Report and Accounts 202326
Governance
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Strategic report
GROWTH LEVERS
A WINNING
CULTURE
Delivering exceptional customer service through engaged colleagues and growing responsibly.
FOCUS FOR 2024 AND FUTURE OPPORTUNITIES
– In 2024, we will launch our new employer brand, with a clear employee
value proposition and attraction strategy.
– Implement and embed the new flexible working offer as we build a
modernworkplace.
– Longer term, we will continue to improve our data and insight to help
usaccelerate our I&D strategy and create a culture where everyone
canfeelathome.
– Continue to build skills in our communities and drive diverse pipelines
through our Early Careers and apprenticeship programmes.
– Continue to provide colleagues with financial and wellbeing benefits
andsupport.
– Increase awareness of our Built to Last Responsible Business Strategy
withinternal andexternal stakeholders.
STRATEGIC FOCUS
– Build on our strong foundations of inclusion and diversity to maintain
aculture where everyone can feel at home.
– Build a strong and diverse pipeline of talent that focuses on Early Careers.
– Upskill and develop our colleagues through learning and
developmentprogrammes.
– Create a modern workplace, with opportunities for colleagues to
workflexibly and access benefits to support their overall wellbeing.
– Engage with colleagues so they are informed, listened to, inspired
andmotivated to play their part in delivering our strategy and purpose
through providing exceptional levels of customer service.
– Build our leadership capabilities by focusing on internal progression and
increasing internal talent through our leadership development programme.
– Develop and implement our Responsible Business Strategy.
– Living our Winning Behaviours to support our strategy and culture (seepage 36).
WHAT WE ACHIEVED
– Introduced a number of cost of living initiatives to help colleagues, including
a£3.5m investment in bringing forward the annual salary review, extending
the free breakfast provision in stores, and offering a ‘Salary Advance’ scheme
– Achieved national recognition for our Inclusion & Diversity (I&D) work
(seepage 41).
– Introduced ‘DigiCare’, a suite of wellbeing services for allcolleagues.
– Following the success of our flexible working trials for store managers,
operations and duty managers, we rolled this out to all stores in December
– Made significant progress in improving the diversity of our store teams
– Broadened our apprenticeships provision with the launch of a Wickes
Bathroom Installer Apprenticeship and supported 280 colleagues into
EarlyCareers placements. Featured in RateMyApprenticeship’s Best
100Apprenticeship employers list 2023.
– Announced The Brain Tumour Charity as our new charity partner.
– Made significant progress across all areas of our Responsible
BusinessStrategy (see pages 34-66).
CASE STUDY
Making all store management
rolesopen to flexible working
In 2023 we conducted a six month pilot across 14 stores to trial flexible
working for store managers, operations managers and duty managers.
Working with external consultants, Timewise, we undertook research
onthese roles to fully understand the barriers to flexible working and
todesign, trial and evaluate a flexible working model that supported
managers to deliver their roles with greater flexibility, input and control
over their working patterns.
The results were very positive with 96.5% of store managers taking part
either ‘satisfied’ or ‘very satisfied’ with their working hours at the end of
the pilot (up from 66.5% pre-pilot). As a result, we have subsequently
rolled this out to all stores, with all store management roles now open to
flexible working.
“ My team has experienced and led amazing
results in working flexibly. Giving them greater
flexibility over their working patterns has created
a work-life balance that supports the needs of
theirworking time, and gives them time for
otheraspects of their personal or family life.”
Gav Harrison – Regional Leader
79%
colleague engagement
1,468
local community
projectssupported
Wickes Group Plc Annual Report and Accounts 2023 27
Governance
Financial statements
Other information
Strategic report
Key performance indicators
Financial
Group LFL sales (%)
1
2023
(0.3)
2020 2021 2022
3.5
(0.3)
13.0
5.0
Adjusted PBT (£m)
2
2023
52.0
2020 2021 2022
75.4
85.0
49.5
Statutory PBT (£m)
2023
41.1
2020 2021 2022
40.3
65.4
28.9
Adjusted basic EPS (p)
3
2023
15.1
2020 2021 2022
23.8
27.2
16.1
Dividend per share (p)
2023
10.9
2020 2021 2022
10.9
10.9
n/a
Free cash flow (FCF) (£m)
4
2023
46.1
2020 2021 2022
29.0
16.6
n/a
DESCRIPTION
A measure of the underlying sales
growthofproducts to Local Trade, DIY
andDesign & Installation customers
DESCRIPTION
Profit before tax adjusted for items that
arematerial in size or unusual in nature as
presented as part of the incomestatement
DESCRIPTION
Profit before tax in the financial year
onastatutory basis, as reported in
theincome statement
DESCRIPTION
A measure of how much profit after tax
thecompany makes for each share in issue
DESCRIPTION
A measure of how much adjusted
profittheCompany distributes for
eachqualifyingshare in issue
DESCRIPTION
Cash flow available for distribution or
debtrepayment in any given financial
year,after investing in the business
andpaying tax andinterest
DEFINITION
The performance of sales to Local
Trade,DIY and Design & Installation
customers from stores that have
beenopen for more than12 months
DEFINITION
Adjusted PBT is our key profit target to
measure underlying performance and
iscalculated before deducting adjusting
items, such as impairments or demerger /
IT separation costs, although statutory
pre-taxprofit is also important
DEFINITION
Statutory profit before tax
DEFINITION
Post-tax adjusted profit divided by
theaverage number of shares in issue,
before adjusting for share options
DEFINITION
The amount per ordinary share the
Company distributes to shareholders
ofthat financial year’s retained profit.
The Company targets dividend cover
of1.5times to 2.5 times EPS
DEFINITION
Cash generated from operations, before
theimpact of adjusting items, after capex,
interest and tax
LINK TO GROWTH LEVERS
LFL sales is a measure of how
successfulwe have been in
developingourgrowth levers
LINK TO GROWTH LEVERS
Adjusted PBT is a key measure of the
efficiency of the business and the returns
we deliver on our growth investment
LINK TO GROWTH LEVERS
Profit before tax is a key measure of the
efficiency of the business and the returns
we deliver on our growth investment
LINK TO GROWTH LEVERS
EPS growth is closely linked to profit
growth. It also reflects the effects of the
capital allocation policy, in particular the
share buyback programme
LINK TO GROWTH LEVERS
Dividends to shareholders reflect the
company’s success in executing its
growthlevers, and in generating cash
thatit can return to them
LINK TO GROWTH LEVERS
All growth levers are important in driving
sales and profitability, which in turn
support free cash flow
1
2
3
4
5
6
7 1
2
3
4
5
6
1
2
3
4
5
6
1
2
3
4
5
6
1
2
3
4
5
6
1
2
3
4
5
6
REMUNERATION LINKAGE
Linkage is via the impact of
LFLsalesgrowth on Adjusted PBT
REMUNERATION LINKAGE
Adjusted PBT represents 70% of the annual
bonus target for Executives
REMUNERATION LINKAGE
Linked to Adjusted PBT
REMUNERATION LINKAGE
Adjusted basic EPS represents 60% ofthe
Long Term Incentive Plan target
forExecutives
REMUNERATION LINKAGE
Dividends are an important element of
Total Shareholder Return (TSR) and are
also enabled by the achievement of free
cash flow targets
REMUNERATION LINKAGE
Free cash flow represents 20% of
theannual bonus target for Executives
TARGET
We aim to grow market share from the
existing store estate in order to generate
operating leverage
TARGET
We aim to grow adjusted PBT
eachfinancial year, although
thiswillbedependent on market
andcompetitive conditions
TARGET
We aim to grow statutory PBT
eachfinancial year, although
thiswillbedependent on market
andcompetitive conditions
TARGET
We aim to grow adjusted basic EPS each
financial year, although this will be
dependent on market andcompetitive
conditions. Adjusted EPS will also benefit
from delivering the targeted share buyback
TARGET
We target dividend cover of between
1.5times and 2.5 times EPS
TARGET
Under normal conditions, we would expect
to generate positive free cash flow, although
this will be dependent principally on the
level of profitability and investment in
capex and working capital
GROWTH LEVERS KEY:
1
Winning for Trade
3
DIY category wins
5
Digital capability
7
A winning culture
2
Accelerating Design
&Installation
4
Store investment
6
Enhanced store service model
1 Refer to note 5 on page 150; 2 Refer to note 9 on page 152; 3 Refer to note 11 on page 154; 4 Refer to note 32 on page 168.
Wickes Group Plc Annual Report and Accounts 202328
Governance
Financial statements
Other information
Strategic report
Operational Responsible Business
Cash (£m)
2023
97.5
2020 2021 2022
99.5
123.4
6.5
Stock turn
4
2023
4.3
2020 2021 2022
4.4
5.1
4.9
Digital sales progression (%)
2023
66.9
2020 2021 2022
65.5
65.1
61.7
TradePro members (k)
2023
881
2020 2021 2022
746
634
553
Carbon emissions (m tonnes)
2023
1.475
2020 2021 2022
2.081
1.623
n/a
Store leadership diversity (%)
2023
73.4
2020 2021 2022
75.1
67.4
65.4
DESCRIPTION
A measure of year end cash
DESCRIPTION
A measure of how efficient we are
inconverting our stock into sales
DESCRIPTION
This measures how successfully we are
engaging with our increasingly digital
customerbase
DESCRIPTION
TradePro is our digital membership
clubforTrade offering a 10% discount
onall purchases
DESCRIPTION
We are acutely aware of our impact
ontheenvironment and this measure
covers emissions from our own stores,
transportation and our wider supply chain
DESCRIPTION
We want to build a more diverse and
inclusive workforce, for the good of
ourcolleagues andcustomers
DEFINITION
The total value of our year end balance
ofcash andcash equivalents
DEFINITION
Cost of goods sold excluding installation
services divided by the average of financial
year start and financial year end inventory
DEFINITION
The proportion of customer journeys
which start online, plus direct digital
sales such as Local Trade, Click & Collect
and Home Delivery orders
DEFINITION
Total number of TradePro members
DEFINITION
Scope 1, 2, and 3 carbon emissions
DEFINITION
The proportion of stores that have at least
onefemale in every store leadership team
LINK TO GROWTH LEVERS
Cash is not directly linked to growth
leversalone, but will be influenced by
ourperformance across the business
LINK TO GROWTH LEVERS
More rapid stock turn, especially relative
tothe creditor payment cycle, is a key
driver offree cash flow
LINK TO GROWTH LEVERS
Our customer base is increasingly digital,
and ifwe do not serve them well our
marketshare and profitability will suffer
over thelong term
LINK TO GROWTH LEVERS
Servicing trade customers is central to our
offer, and reflects our strengths in digital,
pricing and convenience
LINK TO GROWTH LEVERS
We are committed to being a responsible
business, and emissions reductions are
akey part of this
LINK TO GROWTH LEVERS
We strive to grow an inclusive and diverse
business in order to best support the
needs of our customers and communities
1
2
3
4
5
6
1
2
3 1
2
5
6
1
3
4
5
7 7
REMUNERATION LINKAGE
Linkage is via profit and free
cashflowperformance
REMUNERATION LINKAGE
Linkage is via the impact on FCF
REMUNERATION LINKAGE
Linkage is via the impact on sales and
profit performance, and the returns we
generate fromour digital investments
REMUNERATION LINKAGE
Linkage is via profitable growth
oftradesales
REMUNERATION LINKAGE
Near term science-based targets
represent10% of the Long Term
IncentivePlan for Executives
REMUNERATION LINKAGE
Gender diversity targets represent 10% of
the annual bonus for Executives in 2023
and in 2024 it will also cover ethnicity
TARGET
Our capital allocation policy has a target
minimum cash balance of £50m
TARGET
We aim to maintain stock turn at around
5x, although this is dependent on trading
conditions, product mix, supply chain
issues, and targets for product availability
TARGET
We expect our digital participation to
growover time as we serve our customers’
digital demands
TARGET
We aim to have one million TradePro
accounts which would ensure sales
herecontinue to grow faster than
theCompany average
TARGET
Deliver near term science-based targets
TARGET
Over the long term, the aspiration is to
achieve abalance of males and females
across all our store leadership teams
GROWTH LEVERS KEY:
1
Winning for Trade
3
DIY category wins
5
Digital capability
7
A winning culture
2
Accelerating Design
&Installation
4
Store investment
6
Enhanced store service model
Wickes Group Plc Annual Report and Accounts 2023 29
Governance
Financial statements
Other information
Strategic report
“ Retail LFL revenue
increased by 0.1%,
with three consecutive
quarters of positive LFL
performance from the
second quarter onwards.”
Financial review
Revenue of £1,553.8m reflects flat LFL sales
growth for the year. The first half saw strong
sales growth across the business whereas the
second half was affected by the softer market
environment for Design & Installation in
particular. Gross margin increased by 19 basis
points, reflecting a more stable inflationary
environment, careful management of price
andpromotions, and productivity in
distributioncosts.
Despite a strong productivity programme,
significant increases in operating costs, including
higher energy prices and the 9.7% increase in the
National Minimum Wage, meant that adjusted
profit before tax on a pre-SaaS basis declined by
21.1% to £59.5m (2022: £75.4m). On a post-SaaS
basis, adjusted profit before tax was £52.0m,
which was ahead of market consensus.
Statutoryprofit before tax increased by 2.0%
to£41.1m (2022: £40.3m) reflecting lower
adjusting items as the separation from Travis
Perkins Plc reached its conclusion and lower net
impairment charges.
There was £97.5m of cash on balance sheet at
theyear end (2022: £99.5m), after £10.1m of
sharebuyback activity. Average cash through
theyear was £154.9m (2022: £153.6m).
Revenue
Adjusted revenue for the 52 weeks to
30 December2023 was £1,553.8m
(2022: £1,559.0m), a decrease of 0.3% on the
prioryear. Net selling area was flat year on year
asnew store openings in Chelmsford, Widnes
andTorquay were offset with closures of some
older stores. Full year LFL sales were -0.3%.
Retail revenue – sales from products sold to
DIYcustomers and local trade professionals –
increased by 0.1% to £1,189.1m (2022: £1,187.9m).
Retail LFL revenue increased by 0.1%, with three
consecutive quarters of positive LFL
performancefrom the second quarter onwards.
This performance was driven by positive volume
growth in the second half, with marginal selling
price deflation towards the end of the year.
Our TradePro business continues to perform
strongly, with double digit sales increases in the
year. This is driven by increasing membership
numbers, as local traders continue to choose
Wickes to save them time and save them money.
Sales performance was strongest in the interior
paint, decorative accessories and flooring
categories. The Wickes Lifestyle Kitchens range
also had a strong sales contribution following
itsrelaunch during the year.
Wickes remains highly competitive on price,
withweekly benchmarking of thousands of
itemsto ensure we are competitive on the
linesthat matter most. Our strategy is to
offereveryday low pricing with limited use
oftargeted promotions so that our customers
canrely on consistent and transparent pricing.
Mark George
Chief Financial Officer
“ Our financial results have
demonstrated a robust
performance in challenging
market conditions.”
Wickes Group Plc Annual Report and Accounts 202330
Governance
Financial statements
Other information
Strategic report
LFL sales growth (%)
2020
5.0
2021
13.0
3.5
(0.3)
2022 2023
Design & Installation delivered revenue – sales from
projects sold by our showroom design consultants
– were £364.7m (2022: £371.1m), a decrease of
1.7%. The first half was notable for strong delivered
sales as we successfully worked through the
elevated order book from the pandemic period.
Thesecond half was characterised by a more
challenging market environment for larger ticket
purchases and delays in Order Fulfilment as a
result of a new software implementation, which
has since been resolved. LFL sales for the full year
decreased by 1.7%.
The attachment rate of customers choosing to
useWickes installation continues to be strong,
driving increased average order values.
The order book has continued to normalise from
its pandemic peak and ended the year close to
normal levels. Whilstthe level of new leads in the
market hasbeen subdued throughout the second
half,cancellations remain at normal, low levels.
Statutory revenue decreased by 0.6% to £1,553.8m
(2022: £1,562.4m).
Gross profit
Adjusted gross profit for the full year was £568.1m,
in line with the prior year (2022: £567.1m). Adjusted
gross profit margin increased by 19 basis points,
primarily reflecting the impact of a more stable
inflationary environment (particularly in the
secondhalf) and careful management of range,
price and promotions.
Distribution costs, taken within gross profit,
werelower as a percentage of sales year-on-year
following a number of initiatives to improve
productivity, including the consolidation of
warehouse capacity and the outsourcing
ofsomeof our logistics operations.
Statutory gross profit decreased to £565.0m
(2022: £572.2m) primarily reflecting the revised
presentation for the prioryear of net unrealised
gains and losses on remeasurement of foreign
exchange derivatives held at fair value relating to
economic hedges. In 2022, these net unrealised
gains and losses were presented in net finance
costs, whereas in 2023 these amounts have been
presented in cost of sales, in order to reflect that
these foreign currency derivatives are entered into
to mitigate the foreign exchange volatility arising
from our purchase of inventory. The effect of these
adjustments has been to reduce cost of sales in
2022 by £1.7m and to increase net finance costs
by the same amount, as described in note 6.
“ Our productivity programme enabled us to offset all
cost increases other than energy and as a result we were
able to deliver adjusted PBT ahead of expectations.”
“ Adjusted gross profit margin increased by 19 basis
points, primarily reflecting the impact of a more stable
inflationary environment and careful management of
range, price and promotions.”
Wickes Group Plc Annual Report and Accounts 2023 31
Governance
Financial statements
Other information
Strategic report
Sales density (£ per square foot)
2020
202
2021
238
247
2022 2023
246
TradePro members (k)
2020
553
2021
634
746
881
2022 2023
Financial review continued
Operating profit
Adjusted operating profit of £73.8m decreased
by29.0% year on year (2022: £103.9m) and the
adjusted operating profit margin decreased to
4.7%(2022: 6.7%). The decline in operating margin
reflects the impact of pressure on operating costs
due to wage inflation, rising energy prices and
other inflationary factors as described above,
coinciding with an environment of weaker
consumer demand. These cost increases were
partly mitigated by productivity gains of £22m
which offset inflationary cost increases except
energy costs.
Statutory operating profit decreased by 8.6%
to£62.9m (2022: £68.8m).
Net finance costs
Adjusted net finance costs were £21.8m
(2022: £28.5m). The improvement in net finance
costs relates primarily to the higher interest
income received on our cash deposits, which is an
offset to the IFRS16 interest charges due on store
leases, which were little changed year-on-year.
Adjusted profit before tax
Adjusted profit before tax for the full year, after
theimpact of SaaS, was £52.0m (2022: £75.4m),
adecline of 31.0% year-on-year.
Adjusting items
Pre-tax adjusting item charges were £10.9m
(2022: £35.1m). These comprise a reversal of
non-cash right-of-use asset impairment charges
of£(3.7)m (2022: nil), which partially offset
non-cash right-of-use asset impairment charges
of£2.7m (2022: £15.4m); IT separation project
costs of £8.8m (2022: £24.4m) representing the
final charges in relation to the separation from
ourformer parent company Travis Perkins Plc;
andnetunrealised foreign exchange losses
of£3.1m (2022: £1.7m gain).
Profit before tax
Profit before tax for 2023 increased to £41.1m
(2022: £40.3m) reflecting lower adjusting items
asthe IT separation project concluded and lower
net impairment charges, offset bythe reduction in
adjustedprofit before tax asdescribed above.
Tax
The tax charge for the year was £11.3m compared
to £8.4m in 2022.
The underlying effective tax rate(before adjusting
items) for the full year was 26.7% (2022: 20.2%).
This was driven primarily by the increase in UK
corporation tax rates from 19% to 25%, effective
from 1 April 2023.
Tax credit on adjusting items was £2.6m
(2022: £6.8m).
Capital expenditure
Capital expenditure in 2023 was broadly in line
withour expectations at £38.2m (2022: £40.4m).
The largest component of capex was £20.4m
investment in the store estate (2022: £24.7m), of
which refits were £12.9m, new stores £5.8m and
other store capex across the estate £1.7m. There
was £6.1m investment in our digital capabilities
(2022: £9.3m), as we continue to develop our
multi-channel offer.
The reduction in capex year on year is due
principally to a high proportion of our IT investment
now being directed towards SaaS platforms which,
in line with our accounting policies, must be
expensed (see note on Alternative Performance
Measures for details). SaaS project expenses of
£7.8m were incurred in 2023 (2022: nil).
We expect capital expenditure for 2024 to be
c.£30m driven by continued investment in the
store estate and further IT capital expenditure as
we continue to enhance our operating systems
and customer experience. In addition we expect
toinvest c.£10m in SaaS IT projects, which will
beexpensed through the income statement.
Wickes Group Plc Annual Report and Accounts 202332
Governance
Financial statements
Other information
Strategic report
Cash returned to shareholders (£m)
2020 2021
27.4
27.4
37.2
2022 2023
Cash / net debt
Net cash at year end was £97.5m (2022: £99.5m),
broadly flat year-on-year. This cash balance is
stated after theexecution of £10.1m of share
buybacks. Average cash across the year was
£154.9m(2022: £153.6m).
Operating profit excluding impairment
decreasedyear-on-year, resulting in cash
flowsfrom operations decreasing to £177.0m
(2022: £189.1m). Cash flows related to working
capital movements were £2.6m (2022: £(28.7)m),
with the material cash outflow in 2022 driven by a
large stock build.The increased interest received
of £7.2m (2022: £1.9m) reflected higher prevailing
interest rates available for cash on deposit. Cash
outflows from financing activities of £150.4m
(2022: £141.9m) include £111.7m (2022: £109.7m)
related to lease liabilities, £27.4m dividend
payments (2022: £31.2m) and £10.1m of share
buybacks (2022: nil).
The inventory position of £195.5m
(2022: £201.6m) reflects the planned reduction
ofstock during the year to more normal levels
following the stock build in 2022. Stock turn
remained healthy at 4.3x.
IFRS16 net debt reduced to £578.3m
(2022: £591.8m), reflecting the maturity profile
ofour leasehold store portfolio. IFRS16 leverage
was 3.3x (2022: 2.9x).
Dividend
The Board has recommended a final dividend of
7.3p per share, in line with prior guidance, which
will be paid on 6 June 2024 to Shareholders on the
register at the close of business on 26 April 2024.
This will bring the full year dividend for 2023 to
10.9p. The proposed final dividend is subject to
theapproval of Shareholders at this year’s Annual
General Meeting.
The shares will be quoted ex-dividend on 25 April
2024. Shareholders in the UK may elect to reinvest
their dividend in the Dividend Reinvestment Plan
(DRIP). The last date for receipt of DRIP elections
and revocations will be 15 May 2024.
Mark George
Chief Financial Officer
18 March 2024
“ Net cash at year end
was £97.5m, broadly flat
year-on-year and slightly
ahead of our guidance.”
Dividends declared in respect of the
relevantyear plus share buybacks
Wickes Group Plc Annual Report and Accounts 2023 33
Governance
Financial statements
Other information
Strategic report
Responsible Business
As Chair of the Responsible Business Committee,
Iam pleased to introduce the Responsible
Business section of this annual report.
2023 was the first full year of delivering Built
toLast, the business’s Responsible Business
Strategy. I am proud of the progress made in
2023by the business as it works to integrate
theobjectives and targets of the Responsible
Business Strategy across its operations and
supplychain. The Responsible Business highlights
ofthe year for the Board are as follows:
– Undertaking detailed analysis of colleague
ethnicdiversity mix compared with census
dataand being the first retailer to complete
theFlair Impact race and ethnicity survey.
– Moving to a new energy contract in April 2023,
sothat 100% of the electricity used by the
business is supplied by renewable electricity.
Sonita Alleyne
Chair of the Responsible
Business Committee
Introduction to
Responsible Business
“ We have been impressed with the progress of the Early
Careers programme, and really pleased that the business
hasbeaten its target of providing 200 Early Career places in
2023 by supporting 280 colleagues through the programme.”
– Entering the market for air source heat pumps
and solar products, and expanding our support
and advice for customers to reduce energy costs.
The business made great progress in 2023 with
delivering its Responsible Business Strategy
targets, and an overview is given on page 5.
We have been impressed with the progress of the
Early Careers programme, and really pleased the
business has beaten its target of providing 200
EarlyCareer places, by supporting 280 colleagues
through the programme. The business has also
made significant progress with addressing the
negative impacts of packaging. Working with key
suppliers, the business has worked hard to eliminate
unnecessary packaging on its own brand products,
and is on track to hit the 2025 packaging targets,
increasing recycled content as well as increasing
therecyclability of packaging on own brand products.
Whilst the business made great progress, it
narrowly missed two Responsible Business
targetsit set for 2023.
It met the target for increasing females in store
leadership roles, but the business just missed
itstarget to improve gender balance in Support
Centre leadership teams. Thorough analysis has
been undertaken to understand the reasons behind
this, including the barriers for women to progress
and further interventions we can take to tackle this.
Although we fell just short of our Community
Programme target of 1,500, we did support
1,468community projects during the year –
48%more than 2022 – reaching an estimated
500,000 people. We plan to continue to promote
the scheme to the local communities near our
stores to encourage further uptake in 2024.
The Board and I remain committed to facing
thechallenges that lie ahead for the business
tocontinue to address material social and
environmental impacts, whilst balancing
positivecommercial performance.
Sonita Alleyne
Chair of the Responsible Business Committee
18 March 2024
Wickes Group Plc Annual Report and Accounts 202334
Governance
Financial statements
Other information
Strategic report
S
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Built to Last
Our Responsible Business Strategy
directly supports our purpose of helping
thenation feel house proud.
We are building a business we are proud of:
– where all our colleagues can feel at
homeandare empowered to support
theircommunities and customers;
– by supporting the fight against climate
changeand taking action to protect the
naturalenvironment; and
– by helping our customers to save energy and
reduce the carbon footprint of their homes.
2023 was the first full year of delivering Built to
Last, our Responsible Business Strategy, and we
have focused on integrating it into the business.
In2023, our inclusion and diversity targets were
linked to the Executive annual bonus scheme,
andour near term science-based targets were
linked to the LongTerm Incentive Plan for 2023-2025.
Understanding what’s important
When we developed our Built to Last Strategy
in2021, we engaged with our key stakeholders
toinform our understanding and assessment
ofourmaterial sustainability topics. We address
ourpriority topics through three pillars: People,
Environment and Homes. These are underpinned
by our Foundations – these are topics we measure
andmanage to ensure we continue to operate
responsibly through our business and supply
chainactivities.
Throughout 2023, we have continued to engage with
key stakeholder groups, including our colleagues,
customers and investors to ensure that we continue
to focus on the topics that are ofmost importance
to them. We have updated our strategic framework
to include nature, recognising that this is an area
that we can impact through our supply chain and
the use and disposal of some of our products.
The launch of the UK Green Claims Code in 2021
has provided a helpful framework for us to align
how we talk to our customers about our products
and services. We have revised the terminology in
our Homes pillar to reflect this.
Governance
Our Responsible Business Committee (a sub-
committee of the Plc Board) is responsible for
guiding and overseeing the development and
delivery of our Responsible Business Strategy.
OurResponsible Business Working Group brings
together leaders in the business to work together
to deliver the strategy. Further information on
these governance arrangements in the context
ofclimate-related risks and opportunities is set
outin our Climate-related Financial Risk report
onpages 57-68 and the Responsible Business
Committee report on pages 107-110.
Disclosure
We recognise that disclosing our performance is an
essential part of building trust with our stakeholders
by demonstrating how we are performing with the
delivery of our Responsible Business Strategy. We
disclose our performance on ESG issues through
several external benchmarks. We have aligned our
climate-related disclosures with the UK’s current
requirements (see page 57). In 2023, we submitted
our second response to CDP Climate Change and
improved our overall score from B- to B, keeping us
in the management category, and our Supplier
Engagement Rating from B to A-. ForourInaddition,
we submitted our first full response toCDPForests,
and achieved a score ofC(placingusin the
awareness category).
In this report, we have included how our strategy
maps to the UN Sustainable Development Goals
(SDGs) – in the Responsible Business summary
(page 5) we identify the specific targets of eightof
the 17 SDGs that our strategy aligns with. We have
also aligned with disclosing against the Sustainability
Accounting Standards Board (SASB) standard for
our sector; Multiline and Speciality Retailers &
Distributors. This can befound on page56.
PEOPLE
Where all our colleagues can feel at
homeandare empowered to support
theircommunities and customers.
COLLEAGUES – CUSTOMERS – COMMUNITIES
Overview of
ourResponsible
Business
Strategy
HOMES
Helping our customers save
energyandreduce the carbon
footprintoftheir homes.
PRODUCTS – SERVICES –INSTALLATIONS
Supply chain and responsiblesourcing
From the materials used to make our
products, to how they are manufactured
and transported, everything we dois
built on a responsible supply chain.
Strong governance
Through our Board-level Responsible
Business Committee, we ensure
ourBuilt to Last Strategy is led
andmanaged effectively.
Safety and wellbeing
Our safety culture is centred around
commitment and care and we make
itourpriority to ensure that everyone
whoworks and shops with us goes
homesafeand well every single day.
ENVIRONMENT
Supporting the fight against
climatechange and taking action
toprotect thenatural environment.
CARBON – WASTE – NATURE
Wickes Group Plc Annual Report and Accounts 2023 35
Governance
Financial statements
Other information
Strategic report
W
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WINNING
BEHAVIOURS
People
...where all our colleagues
can feel at home and are
empowered to support their
communities and customers
Communities
Colleagues
C
u
s
t
o
m
e
r
s
We are building a business
we are proud of...
PEOPLE
OUR OBJECTIVE
We are building a business
weareproud of, where all our
colleagues can feel at home and
are empowered to support their
communities and customers.
OUR TARGETS
– A gender balanced team across all roles
andfunctions at Wickes
– A business that reflects the communities
weserve through ethnic diversity and
leadership ethnicity balance
– Offer and support 200 Early Career
placeseach year from 2022 to 2024
– Raise £2 million for our charity partner
overthe 2-year partnership
– Wickes’ Community Programme to
support1,500 projects across our
localcommunities each year
At Wickes, our people are our greatest asset. We’re
building a space where all our colleagues can feel
at home. This means that everyone can bring their
authentic selves to work and are empowered to
support their communities and customers.
Culture
We live by our five Winning Behaviours which
arethe foundations of our culture. Our Winning
Behaviours are underpinned by a strong sense of
personal responsibility. We want all our colleagues
to understand and display these to support us in
achieving our future plans.
1. Winning: we relentlessly pursue our targets,
celebrate and share successes, support all
colleagues and embrace challenges positively.
2. Can do spirit: we say ‘yes’ to challenges, go
theextra mile for customers and take initiative.
3. Being at your best: we approach every day
withfresh enthusiasm, lead by example
andlearn every day.
4. Humility: we acknowledge we don’t have all
theanswers and are honest and accountable.
5. Authentic: we embrace our true selves,
respectour colleagues and have courage
tofacetough conversations.
Key performance indicators
73.4%
stores that have at least one
femaleinleadership team
39.9%
of all our colleagues identify as female
12.8%
of all our colleagues identify as Black,
Asian orother ethnic minority
79%
overall colleague engagement
(calculated from four engagement
questions in colleague survey)
23%
voluntary colleague turnover
280
Early Career placements supported in 2023
£719,060
raised for our new charity partner,
TheBrainTumour Charity
1,468
projects supported across
ourlocalcommunities
Responsible Business continued
Wickes Group Plc Annual Report and Accounts 202336
Governance
Financial statements
Other information
Strategic report
People
...where all our colleagues
can feel at home and are
empowered to support their
communities and customers
Communities
Colleagues
C
u
s
t
o
m
e
r
s
We are building a business
we are proud of...
Reward and ways of working
We continue to be guided by our colleague reward
principles, which include placing colleague wellbeing
at the heart of our proposition and offering competitive
and fair rewards. We offer practical helpthrough our
colleague-led working group, and in2023 we brought
forward the pay review from April to January to
support our lower paid colleagues with the cost of
living, resulting in a £3.5m investment. Wepay the
National Minimum Wage as a minimum. This is
supplemented by ‘Gainshare’, our store profit
shareplan, which incentivises and rewards team
performance whilst also helping us keep our costs
flexible. We do not have any zero hours contracts,
andall our colleagues are on a minimum of 16 hours
aweek (unless the colleague has requested otherwise).
In August, we introduced ‘Salary Advance’ to
givecolleagues more flexibility as to when they
canaccess their pay. We have also enhanced our
comprehensive wider wellbeing support. In May,
weintroduced ‘Digicare’, a market leading suite of
wellbeing services for all colleagues, which includes
digital GP, home health test kits, and mental health
support, all free of charge. We were shortlisted for
the ‘Best Healthcare and Wellbeing Strategy’ at the
Workplace Savings & Benefits Awards to recognise
excellence in employee benefits.
We remain committed to fostering an engaged
andinclusive workplace, with a flexible working
approach that balances the needs of the colleague
with their team and the wider business. Following
the success of our store manager flexible working
trial in 2022, we expanded the trial to Operations
and Duty Managers in 2023. The results continue
to be positive, with satisfaction of work-life balance
of colleagues in trial stores rising from 66.5% to
96.5% (measured by a survey of colleagues from
participating stores). All store colleagues were
given the opportunity to give feedback on and
insight into how stores can prepare for the wider
flexible working roll-out in 2024.
Inclusion and diversity
In 2023, we have continued to focus on driving
inclusivity across the business, and increasing
diversity to reflect the communities we serve.
OurInclusion and Diversity policy sets out how
weare creating an inclusive culture and diverse
workforce through our colleagues’ journeys with
Wickes. We’re proud to have our work on diversity
recognised by being shortlisted in two categories
at the Burberry British Diversity Awards in 2023;
Wickes was shortlisted for Company of the Year
and Fraser Longden, Chief Operating Officer, was
shortlisted for Diversity Champion of the Year.
We continue to publish our gender pay gap reports
on our website, and for 2023 we also included our
ethnicity pay gap following the Government’s
guidance published earlier in the year. For the
12 months to April 2023, our median gender pay
gap improved to 0.07% (2022: 2.57%) and our
median ethnicity pay gap was -0.74%.
We believe that a balance of genders in our
leadership teams will benefit our business and our
colleagues. We set targets for 2023 to increase
gender balance in the leadership teams of our
stores and our Support Centre. To recognise the
importance of these targets, we linked these to
ourExecutive Remuneration 2023 Annual Bonus
Scheme (see pages 120-121). The methodology for
how we measure these targets and the independent
limited assurance statement of our performance
isavailable on our corporate website.
At the end of 2023, 33.98% of our store leadership
teams were female, exceeding our target of 33.75%.
We fell slightly short of our target of 45% of females
in Support Centre leadership roles, achieving
43.54%. 73% of our stores have at least one female
in the management team, just slightly lower than
75% in 2022. As part of our aim to achieve gender
balanced teams, we are continuing to support
women with career development and provide
incentives (such as flexible working) to help
increase this in the future. We partnered with
Encompass Equality to participate in their research to
understand the key drivers of why women leave their
jobs. Weare reviewing the insights to understand
what further interventions we can implement and
help to achieve our 2024 target toincrease female
representation across our management population.
We want to ensure that our business reflects the
communities we serve through ethnic diversity
atboth operational and leadership levels. In 2023,
wemapped each of our store colleagues’ ethnicity
data against the local 2021 census data. Wehave
been pleased to see that we are already reflecting
the local ethnic diversity in some of our regions,
and we are using this data to set targets for
ethnicity leadership, and encourage all
colleaguesto disclose their ethnicity.
Director, senior manager and employee gender and ethnicity breakdown¹
Gender Ethnicity
Male Female White Ethnic minority³ Unknown
Plc Board 5 71.4% 2 28.6% 6 85.7% 1 14.3% 0 0%
Executive Board 6 75.0% 2 25.0% 7 87.5% 1 12.5% 0 0%
Senior managers² 68 65.4% 36 34.6% 82 78.9% 12 11.5% 10 9.6%
All other colleagues 4,613 60.0% 3,082 40.0% 5,368 69.8% 990 12.9% 1,337 17.4%
1 The data for this disclosure is as at 31 December 2023
2 Senior managers: D2 Director level, D1, senior leadership roles, M3 Senior management including technical and Head of Department roles.
3 All ethnic groups except White British and White ethnic minorities.
CASE STUDY
Anti-racism survey
withFlair Impact
Led by the Raising Awareness and Action on
Cultural Ethnicity (RAACE) network, in 2023
webegan a three-year partnership with Flair
Impact, a racial equity technology company,
toundertake an anti-racism survey amongst
our colleagues.
As the first retailer to partner with Flair
Impact,this partnership has allowed us
tobetter understand how race affects our
entire workforce’s experience of work and
develop ameasurable action plan focused on:
– providing training for colleagues tointervene
if witnessing racial microaggressions;
– providing appropriate wellbeing services
to colleagues; and
– implementing a policy and process
toreport racist incidents at work.
“ We’re excited to be working with Flair
Impact to hear directly from our colleagues
about their attitudes and experiences
ofrace in the workplace and to use this
insight to focus on what we need to do
toimprove the retention, progression
andinclusion of our colleagues from
ethnicminority backgrounds.”
David Wood – Chief Executive Officer
Wickes Group Plc Annual Report and Accounts 2023 37
Governance
Financial statements
Other information
Strategic report
Early Careers
Building skills in our local communities through
our Early Careers offering is essential to ensure
wecontinue to attract and develop the skills
required for future growth at Wickes. We have
anopportunity to support social mobility within
our communities by ensuring we offer the skills
and support required for young people to gain
employment and succeed in our business.
CASE STUDY
Fitted Furniture
Apprenticeship
“I am a Bathroom Apprentice based in the
WestMidlands. I started my Level 2 Fitted
Furniture Apprenticeship in July 2023, and
I’mreally enjoyingit.
I’m learning new skills such as plumbing and
tiling,building my knowledge and having fun.
Beinginvolved in the Wickes apprenticeship
scheme hasgiven me a great opportunity to
learnatrade, gaining practical experience
whilststill earning awage.
I would recommend the apprenticeship scheme
toother people who are thinking of starting their
own bathroom fitting business – it is a great way
ofgaining a trade while earning, with knowledgeable
and experienced people to provide support when
you need it.”
Sophia Fearon – Bathroom Apprentice
Colleagues
“ Since its launch in 2019, Wickes’ 17 apprenticeship
programmes have seen 913 people either complete
orcurrently engaged in an apprenticeship.”
In 2023, we supported 280 people into Early
Careers placements (248 people enrolled on an
apprenticeship programme, 27 work experience
placements, and five graduate, intern and business
placements). People in these placements are more
diverse in terms of gender and ethnicity when
compared with our colleague population overall.
Driving growth through this channel will ensure
wecan develop the diverse talent pipelines for
thefuture and reflect the communities we serve.
Since its launch in 2019, Wickes’ 17 apprenticeship
programmes have seen 913 people either complete
or currently engaged in an apprenticeship.
One of our key focuses is developing a skilled
workforce and securing a sustainable installer
workforce for the future. Our Installer Apprenticeship
Programme is an integral part of this and saw
usawarded an Outstanding Achievement by the
British Institute of Kitchen, Bedroom & Bathroom
Installation for our longstanding work on
apprenticeships within the kitchen, bedroom
andbathroom sector. We also featured on
RateMyApprenticeship’s Best 100 Apprenticeship
Employers for 2023-2024.
Looking ahead, our apprentices are poised to
increasingly contribute to our installation work.
Itisalso hugely positive that three of our early
graduates have now taken on apprentices of
theirown, further nurturing talent for the future.
Employment
We employed on average 7,919 people in 2023,
compared to an average headcount of 8,340
in2022. As a result of the new supply chain
logistics contract that went live in January 2023,
339 colleagues transferred to the supplier
pursuant to TUPE Regulations.
In 2023, we opened three new stores (Chelmsford,
Widnes, and Torquay) and closed four (Wigan,
Loughborough, Paignton K&B, and Darlington).
When we need to close stores, we take all reasonable
steps to support our colleagues who are affected
with securing alternative employment with Wickes.
Responsible Business continued
Wickes Group Plc Annual Report and Accounts 202338
Governance
Financial statements
Other information
Strategic report
Colleague feedback and outcomes
Culture
Feedback: Colleagues continue to tell us that
Wickes has a strong culture, with people at the
heart of what makes this a great place to work.
Ahigh level of empathy is demonstrated across
the organisation from leaders to colleagues.
Newmembers joining the team feel our culture
isour best-kept secret. Our Winning Behaviours
are well embedded and demonstrated across
thebusiness, and colleagues indicated that there
were opportunities to provide greater financial
recognition in this area.
Outcome: Feedback inputted into our employer
brand for activation in 2024. Our Instant Reward
Pot has been made more accessible for store
managers to recognise colleagues.
Strategy and purpose
Feedback: Colleagues are confident in the direction
of our strategy and feel that our balanced business
gives us a competitive edge. They are proud of our
Built to Last Strategy and are pleased that it is broader
than just the environment. However, they would like
more regular communications on our progress.
Outcome: Continue to focus on our Built to Last
communication, both internally and externally, with
a particular focus on Homes and Environment.
Inclusion and diversity
Feedback: Colleagues continue to be proud of our
extensive I&D agenda and activity. Our survey in
partnership with Flair Impact showed that while
colleagues not identifying as ‘White’ do not believe
that their ethnicity is a barrier to feeling included at
work, there were areas where we could further develop
colleagues’ understanding of racism and its impact.
Outcome: The action plan from the Flair survey
includes rolling out bystander intervention for
colleagues, introducing appropriate workplace
counselling services and implementing a simple
policy and process to report racist incidents.
Pay and benefits
Feedback: Colleagues value our total package.
They appreciate our colleague discounts, the
Wickes Rewards scheme and the host of other
benefits we offer, but they feel we have a greater
opportunity to advertise these benefits. Colleagues
feel that to have further transparency in pay bandings
could help their progression in the business.
Outcome: The Reward team is working on improving
how we can better communicate both our enhanced
benefit and wellbeing offering and the value of
ouroverall total reward package.
Career development
Feedback: Colleagues recognise that our culture
ofpersonal responsibility encourages them to drive
their own development supported by their manager.
However, they feel that more structure is required in
the Performance Development Plan (PDP) process.
Outcome: The performance management process
is on the People team’s priorities to review and
improve for all areas of the business.
Meaningful work
Feedback: We heard that colleagues (primarily
store and distribution colleagues) felt further
attention on the volume and breadth of the
workthey do would help to give a greater
senseofsatisfaction.
Outcome: We are enhancing the level of support
given to line managers on balancing the volume
ofwork and providing Learning & Development
support. The Operations leadership team has
thisas a priority on its engagement plan.
Our listening channels
We’ve continued our listening initiatives in
2023to support our ‘always on’ approach:
Colleague Voice: Held annually, we invite a
variety of colleagues to meet with independent
Non-executive Director Sonita Alleyne on behalf
of the Plc Board, where they can ask questions
on various topics.
Colleague engagement survey: This annual
survey seeks both quantitative and qualitative
feedback from colleagues on a range of subjects
and assesses overall colleague engagement.
In2023, our colleague engagement was 79%
(2022: 80%), which is calculated from four
engagement questions included in our
colleaguesurvey.
‘Hangout with the Exec’ sessions: These quarterly
virtual roadshows give store, Distribution and
Support Centre managers the opportunity to
askthe Executive questions on any subject.
Inclusion and Diversity network surveys:
Intheyear we undertake a variety of external
surveys to support the objectives and insights of
our I&D colleague networks and wider strategy.
Cost of living working group: Following its
conception in 2022, we have continued to bring
together a cross-section of colleagues quarterly to
share their thoughts, insights and ideas as to how
the business can provide support to colleagues
during the cost of living crisis.
Colleague Voice
At Wickes, we remain committed to fostering transparent communication
with our colleagues. We employ a variety of formal and informal initiatives,
ensuring regular, open and robust two-way dialogue. Each initiative
ischampioned or led by an Executive Board or Plc Board member.
Ourindependent Non-executive Director Sonita Alleyne takes the lead
onensuring colleague views are heard by the Board and taken into
consideration in their decision making.
Wickes Group Plc Annual Report and Accounts 2023 39
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Feel at home
We are building a space where anyone – no matter who they are or where they’re from – can feel at home.
Our inclusion anddiversity programme is spearheaded by our six colleague-led ‘Feel at Home’ networks
to drive awareness and education ofourdiverse communities.
Ability Balance for Better Pride RAACE
Building a workplace that
everyone can access
Building a workplace where
genderbalance is fair
Building a workplace that the
LGBTQ+ community can call home
Building a workplace with
diversity at every level
“ Disabled does not mean less able.
Wewant to give everyone opportunities
tothrive and support colleagues to
make the most of their ability.”
Helen O’Keefe – General Counsel and Company
Secretary and Ability Executive Sponsor
“ Balanced teams are much more
successful than teams that have a
gender bias. We want every colleague
to have the right opportunities to
shineand reach their full potential,
irrespective of gender.”
Gary Kibble – Chief Marketing Officer and
Balancefor Better Executive Sponsor
“ It’s important for us to be visible in
oursupport. Everyone, regardless
ofsexuality or gender identity, is
welcome and supported at Wickes.”
Fraser Longden – Chief Operating Officer and
PrideExecutive Sponsor
“ We believe that when different
backgrounds, cultures, nationalities
andperspectives come together,
wecanbe more creative, more
inclusiveand more productive.”
Mohamed El Fanichi – Chief Information and
Technology Officer and RAACE Executive Sponsor
We want Wickes to be a place that champions each
colleagues’ own ability to ensure they reach their
full potential, enabling them to deliver exceptional
customer service, all the while taking into account
their and their family’s needs.
We’re into the second year of working with Change
100, an internship programme offering paid summer
work placements, professional development and
mentoring for talented university students and
recent graduates with any disability or long term
condition. In the summer of 2023, the Customer
Insight team hosted an intern from the programme
as an Insights Analyst.
The priority areas for the network are creating
amore balanced workforce across all levels,
andempowering all colleagues to reach their
fullpotential by having access to the right
opportunities, allowing us to retain and
attracttalent.
In 2023, the network introduced the Balance
forBetter podcast which saw colleagues speak
about breaking down gender stereotypes and
societal norms. With the Reward team, the
networkexpanded the use of Peppy, a women’s
health, fertility and menopause app, to include
men’s health, empowering our male colleagues
totake control of their health with personalised
care fromexperts.
The Pride network objective is to create a positive
and supportive environment that allows our LGBT+
colleagues to reach their full potential.
We ranked 11th in the top 100 Stonewall Workplace
Equality Index 2023 and were awarded a gold
accreditation for the second year running. We
attended Brighton Pride and Manchester Pride
witha float, supported by our LGBTQ+ colleagues
from across the business. The Pride network
won‘Large Brand or Organisation of the Year’
atthe 2023 Bank of London Rainbow Honours.
The RAACE network works to create more
opportunities and provide support for colleagues
andexternal candidates from ethnically diverse
communities to professionally progress to,
andwithin, the leadership team at Wickes.
Thenetwork also leads activities to increase
awareness, education, and celebration of
diversecultures, religions and races.
2023 marked the first year of our RAACE Ally
Programme, designed to train colleagues and
giveagreater understanding on issues around
race, including privilege and microaggressions.
In2023, we trained over 250 managers across
thebusiness.
Responsible Business continued
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Wellbeing Future Focus
Building a workplace
that prioritises wellbeing
Building a workplace
that embraces tomorrow
“ We want to create a place of wellbeing
where our colleagues can feel good
andfunction well, and are supported
through any challenges they may face.”
Sonia Astill – Chief People Officer
andWellbeingExecutive Sponsor
“ We’re focused on supporting the
nextgeneration of colleagues and
customers, through looking at ways
wecan positively influence business
sustainability, colleague development
and the communities we serve.”
Mark Cooke – Chief Commercial Officer
andFutureFocus Executive Sponsor
We are committed to creating a workplace that
supports our colleagues’ physical, mental and
financial wellbeing.
We appointed broadcaster Jeff Brazier as
ourWellbeing Ambassador for 2023. The
newlycreated position is part of our ongoing
investment and commitment to support colleague
and customer wellbeing. As a trained life coach
and grief counsellor, Jeff has been working with
uson wellbeing content for all colleagues, from
livetalks to bitesize videos accessible to all.
Our Wellbeing network continues to partner with
StJohn Ambulance to provide all our line managers,
including every store manager, with Mental Health
First Aid Training. We have around 565 Mental
Health First Aiders available to all colleagues.
As part of being a responsible business, the Future
Focus network supports our ambitions to create
abusiness that is ready for the future, where
everyone can thrive, regardless of age, experience
and background. The network also looks to support
young people in building a better future for themselves,
their families and their communities.
The network supported our Early Careers initiative
through a dedicated Early Careers group, offering
training and networking opportunities with more
senior members of Wickes. Colleagues from the
Support Centre, Distribution Centre and all stores
were invited to take part in A Big Litter Pick to
collect rubbish in their local areas. As part of
National Recycling Week, the network gave
insightinto how cardboard, plastic and pallets
returned from stores are recycled when they
arereturned to our Distribution Centre.
CASE STUDY
Zee Botchway
Co-lead of RAACE network and
SeniorProcurement Manager
When did you get involved with the network?
I was asked to set up a network to represent
colleagues from an ethnic minority background
in 2018. We named the network Raising
Awareness andAction on Culture and
Ethnicity,or RAACE, in2022.
Why were you attracted to leading the network?
Being the co-lead Chair of the network
isapowerful vehicle for personal and
professional development. For me, it aligns
with my future career aspirations by providing
me with leadership experience, networking
opportunities, and a platform to make a
positive impact on workplace culture.
What was your best RAACE moment of 2023?
I developed and delivered Allyship workshops
for our Wickes colleagues. Connecting directly
with over 189 store managers, 13 regional
leaders, and key leaders across the business
has resulted in some great conversations.
Overall, how would you summarise
yourexperience?
Dynamic, impactful and collaborative.
External recognition for our work
oninclusion and diversity
We are proud of the external recognition
theCompany and individual colleagues have
received during 2023 for our work to address
inclusion and diversity in our business:
– Wickes: shortlisted for Company of the Year
at the Burberry British Diversity Awards.
– Wickes: ranked 11th in the top 100
Stonewall Workplace Equality Index
2023 and awarded a gold accreditation
for the second year running.
– Wickes Pride network: won the award
for Large Brand or Organisation of the
Year at the 2023 Bank of London
Rainbow Honours Awards.
– Chloe Howe, co-lead of Balance for Better:
nominated for ‘INvolve – The Inclusion
People 2023 Heroes Woman’s Role Model
list’ for the second year in a row.
– Fraser Longden, Chief Operating
Officer:shortlisted for Diversity
Champion of the Year at the
BurberryBritish Diversity Awards.
– Lauren Cross, co-lead of Wellbeing:
shortlisted for two awards at the Great
British Workplace Wellbeing Awards for
‘Most Inspiring Employee of the Year’
and ‘Breaking the Silence’.
– Lee Burrows, co-lead of Pride network:
nominated for ‘Top 10 Future Leader’
atthe British LGBT Awards.
– Zee Botchway, co-lead of RAACE:
nominated finalist in the ‘FMCG,
Retail,Hospitality & Tourism’ category
ofthe 2023 Black Talent Awards.
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Customers and community
Our customers
Understanding our customers’ views and needs
isa cornerstone of our approach to stakeholder
engagement, and is covered in detail in our Market
review (pages 14-17) and Section172 statement
(pages 68-71).
We continue to seek to mirror the values and
diversity of our communities so we can best
support our customers. We want everyone to feel
athome in a Wickes store and everyone is welcome.
For those customers shopping online, we ensure
that all our digital content is easily accessible and
incorporate best-practice accessibility standards on
our website. We have recently added subtitles to all
150+ of our inspirational ‘how to’ videos to support
hearing impaired customers and added those
subtitles as the default setting for video content.
We have extended the support of our Wellbeing
Ambassador, Jeff Brazier, to our TradePro
members, who are now able to access his
coaching content to help with their wellbeing.
We know that, for many of our customers, financial
wellbeing and cost efficiencies continue to be top
ofmind. In store, we have provided energy saving
advice to help mitigate rising energy bills against
thebackdrop of the cost of living. For more information
on this, please see the ‘Homes’ section.
Our ‘Let’s care for each other’ ethos is not just an
internal principle but also extends to the communities
we serve; we have a zero tolerance stance on physical,
verbal or racial abuse against colleagues or
customers. We stand in solidarity with fellow retailers
by participating in Shop Kind, an initiative designed to
tackle violence and abuse against shopworkers.
“ I’m looking forward
toworking closely
withWickes colleagues
and customers, and
exploring their own
stories around wellness
and mental health.”
Jeff Brazier – Wellbeing Ambassador
Our local communities
We empower and support our colleagues to give
back to their communities. The Wickes Community
Programme allows and encourages our colleagues
to support good causes in their local communities
by donating Wickes products. Stores have access
toa dedicated product fund of £300,000 per year
tosupport local initiatives to maintain and renovate
their local communities. In 2023, the Wickes
Community Programme supported 1,468 projects,
an increase of 48% on last year, across England,
Scotland and Wales, and reached an estimated
500,000 people.
We are proud to announce Crown Paints as the
Wickes Community Programme’s official paint
partner. They have pledged to donate 34,000 litres
ofpaint each year to local communities through our
Community Programme, which will enable our stores
to support even more good causes around the UK.
In 2023, we launched a five-month volunteering trial
to colleagues in 40 stores, our Distribution Centre
and Support Centre. Colleagues were connected to
local projects using a platform called Neighbourly,
togive them the opportunity to donate some of
theirwork time and make a difference in their local
communities. 155 colleagues took part across the
Company, volunteering 772 hours of their time to
support community projects with gardening and
painting. In 2024, we will review the outcomes of
thetrial and plan to produce a volunteering policy
andexpand the opportunity for workplace
volunteering to all our colleagues.
CASE STUDY
Community Programme
winners
Last year, the ROC Garden, a Blackpool-based charity
empowering unemployed people back into work by
training them to become gardeners, was the winner
of a £10,000 grant in the National Wickes Community
Programme Competition. Its proposal was to develop
a repurposing site to handle green waste for the
benefit of the local community in Blackpool. The
sitewas officially opened in October 2023.
The aim of the site is to reuse, recycle and repurpose
green waste collected from the day-to-day work
carried out by ROC Garden teams in Blackpool.
Thegreen waste collected will be ‘repurposed’
tocreate compost, mulch, wood chips or other
repurposed natural products useful for people’s
gardens, and the local community will be invited
tocome and collect it for free.
“ We were delighted to be the
winners of the Wickes Community
Programme competition.”
James Baker – ROC Garden Development Manager
Wickes Wellbeing Ambassador
Jeff Brazier talking to a colleague
Responsible Business continued
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Charitable giving
Our partnership with YoungMinds, the UK’s leading
charity fighting for children and young people’s
mental health, came to an end in March 2023 after
an mutually rewarding three years. Inthe final
three months of our partnership, our colleagues’
and customers’ incredible fundraising efforts
propelled us beyond our £2 million target and we
raised £2,335,255 for YoungMinds overthe length
of the partnership (of which £88,078 wasraised in
2023).
This year we announced The Brain Tumour Charity,
the UK’s largest dedicated brain tumour charity, as our
new charity partner. It was chosen through a rigorous
three-month process involving colleague nominations
and voting. Starting in April 2023 and continuing until
April 2025, our mission is to raise £2 million to support
The Brain Tumour Charity’s vital work in fighting brain
tumours on all fronts.
In the first nine months of our partnership, we directly
donated £10,000, and we leveraged funds totalling
£718,060 to The Brain Tumour Charity from colleague
fundraising, plastic bag sales, customer donations
anddonations from our suppliers.
All 230 of our stores took part in four ‘50p-ask’
customer fundraising events supported by bake
salesand other in store activities. In total, we raised
£488,266 from customer donations. Our suppliers
also helped raise an incredible £170,000 at our annual
Charity Dinner. These are just some of the amazing
activities organised by our charity champions.
Amidst the economic challenges of 2023, our
colleagues have generously given to a variety of
charities through our ‘Give As You Earn’ partnership,
over the past 12 months. This allows colleagues to
make regular, tax-free donations to a charity of their
choice. Over 680 colleagues have donated £43,456 to
more than 110 different charities, including The Brain
Tumour Charity.
“ This partnership with Wickes is
transformational for us, and Wickes
colleagues have been tremendous
inboth their fundraising efforts and
raising awareness of the Charity,
which will enable us to reach more
people affected by a brain tumour
diagnosis and support them to live
longer and better lives.”
Dr Michele Afif – CEO of The Brain TumourCharity
LOOKING FORWARD
We want all of our colleagues and customers
tofeel at home. In 2024, we plan to:
– align our policy and practices to deliver ourgoals;
– connect young people with careers and skills
inretail and DIY; and
– improve the quality of our data to enable us
tomeasure progress against targets that bring
thegreatest shift around gender and ethnicity.
CASE STUDY
Better Safe Than
TumourCampaign
We have used our reach to promote The Brain
Tumour Charity’s Better Safe Than Tumour
Campaign to colleagues and customers. Knowing
the signs and symptoms of a brain tumour can lead
to a faster diagnosis, which could reduce the impact
of a brain tumour. The primary symptoms in all
people facing a brain tumour are vision changes,
balance issues and a persistent headache, but these
vary by age and circumstances. Please visit https://
bettersafethantumour.com if you are facing any of
these symptoms or are concerned about a loved one.
Wickes colleagues fundraising
for The Brain Tumour Charity
Wickes Group Plc Annual Report and Accounts 2023 4343Wickes Group Plc Annual Report and Accounts 2023
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We are building a business
we are proud of...
G
Environment
...supporting the fight
against climate change and
taking action to protect the
natural environment
Waste
W
a
t
e
r
Carbon
ENVIRONMENT
OUR OBJECTIVE
We are building a business we
areproud of, by supporting the
fight against climate change
andtaking action to protect
thenatural environment.
OUR TARGETS
– Operations: Reduce absolute Scope 1
and2GHG emissions by 42% by 2030
froma2021 base year
– Supply chain: 45% of our suppliers by emissions
covering purchased goods and services will
have science-based targets by 2027
– Products: Reduce absolute Scope 3 GHG
emissions from the use of sold products
by42%by 2030 from a 2021 base year
Our approach
In 2023, we reviewed and updated our Environment
Policy to reflect the commitments set out in our
Responsible Business Strategy. The updated
policyis available on our website, and has been
communicated to all our colleagues.
The Company’s environmental management controls
are designed with the international environmental
management system (EMS) standard ISO 14001
inmind. We are continuing to establish our EMS,
ensuring that environmental controls are integrated
into key business decision making processes.
Weintend to commission an independent audit of
ourEMS against ISO 14001 in 2024, after which we
expectto develop a timeline to achieve certification.
Climate change
We recognise the substantial risk that climate
change poses to humanity and the environment,
and we continue to focus on mitigating our
impact and preparing our business for a future
with a changing climate. As is common with
other businesses in the retail sector, 98% of our
emissions arise from our value chain (Scope 3).
This is due to the large volume and range of
products we sell. Our greenhouse gas footprint
can be found on page 48.
Wickes is committed to playing our part to
achieve the UK’s 2050 net zero target, and also
tohelp our colleagues and customers transition
to a low-carbon economy in a fair and equitable
way. We pledged our support to the British Retail
Consortium’s (BRC) Climate Action Roadmap
when it was first launched in 2021, and we are
collaborating with our sector peers to fully
decarbonise the retail industry and achieve
netzero by 2040.
We received validation in 2022 from the Science
Based Targets initiative (SBTi) for our near term
science-based targets that cover our Scope 1, 2
and most material Scope 3 emissions.
A significant proportion of our products are
timber derived. Therefore, we assessed if we
metthe SBTi’s threshold to set an additional
target where emissions related to Forest,
Landand Agriculture (FLAG) exceed 20% of
ouroverall emissions. In2023, total emissions
from products with FLAG-related emissions
represented 16.7% of ourfootprint. We intend
tocontinue to review ourfootprint against this
criterion each year.
Throughout 2023, we have been developing
detailed delivery plans towards achieving our
near term targets and we will continue to refine
these as well as improving our methodology
forcalculating our footprint.
Responsible Business continued
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CASE STUDY
BRITISH RETAIL CONSORTIUM’S
Climate Action Roadmap
As a signatory to the BRC’s Climate Action Roadmap since 2021, we have
beenusing the five Pathways for Decarbonisation as a framework to guide our
approach. We are making good progress with the roadmap’s 2025 milestones
1. Placing GHG data at the core of business decisions – we publicly report
ourfull GHG emissions, and we are engaging with our suppliers on setting SBTs.
2. Operating efficient sites powered by renewable energy – our estate is
powered by renewable electricity and we install 100% LEDs in new stores.
3. Moving to low carbon logistics – we collect GHG performance data from
ourlogistics providers.
4. Sourcing sustainably – we achieved a C in our 2023 Forest response to CDP.
5. Helping our colleagues and customers love low carbon lifestyles –
wesupport our customers with information to help them choose products
thatareenergy efficient or can reduce household carbon emissions.
Find out more online www.brc.org.uk/climate-roadmap
Emissions from our direct operations (Scope 1 and
2 market-based) decreased by 36.9% compared
with our baseline of 2021 (2022: 11% decrease
compared with 2021). In April 2023, we moved the
procurement of the electricity for all of our stores,
Distribution Centres and Support Centre to a
renewable electricity contract. This has contributed
to a significant reduction of GHG emissions arising
from our Scope 2 activities. We have also continued
to focus on improving the energy efficiency of our
estate and our fleet (further information on this
can be found on page 49).
Following the introduction of our EV policy for
company cars in 2022, we now have 34% electric
vehicles and 44% hybrid and plug-in hybrids in our
corporate car fleet. From 2025, all new corporate
cars ordered will be electric. In June 2023, we
launched a low-emissions car salary sacrifice
scheme for our colleagues provided by Tusker,
and2.15% of the eligible population had ordered
acar through the scheme by the end of 2023.
By the end of 2023, 23 of our suppliers that
contribute most significantly to our supply
chaincarbon emissions have set a science-
basedtarget (SBT), all validated by the SBTi.
Thisrepresents 23.8% of our Scope 3 emissions.
In2023, we focused our engagement on our
top20suppliers (by emissions) to understand
where they are on their journey towards achieving
netzero, and weare really pleased with the
engagement andcommitment of our strategic
suppliers. We will beexpanding our proactive
engagement throughout our supplier network.
In 2023, emissions from the use of products we
sold in the year decreased by 14.1% compared
withour 2021 baseline (2022: 18% decrease
compared with 2021). These emissions are
basedon internationally recognised estimates
ofgreenhouse gas emissions produced whilst
aproduct is being used across its lifetime. The
reason for this change compared to 2022 is due
toupdates in emissions factors and the mix of
products sold in the year.
“ Throughout 2023, we have been developing detailed
delivery plans towards achieving our near term targets
and we will continue to refine these as well as improving
our methodology for calculating our footprint.”
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Energy and resource efficiency
Improving the energy efficiency of our estate has
continued to be a focus for the business in 2023.
This year, we reduced the energy consumption of
our property estate by 0.48% and stores by 0.41%
compared with 2022. We incorporate energy
efficiency into the design of our new store and refit
programmes, as well as rolling out improvements
across the estate. A list of energy efficiency
measures we have implemented in 2023 can
befound on page 49 in our SECR update.
Managing our fuel consumption by our fleet
operations is also important. With upgrades in our
tractor units, we have seen a 5.2% improvement
inour fleet fuel efficiency compared to 2022. In
December, we conducted tests and reviews for
theroll-out of a wagon and drag outbase truck
solution for our kitchen and bathroom delivery
network, which is expected to reduce road journeys,
fuel consumption and carbon emissions, whilst
maintaining service delivery. A full launch is
planned for 2024, following the roll-out of training.
In 2023, we have completed energy audits
asrequired by the mandatory Energy Savings
Opportunity Scheme (ESOS) Phase 3, and weare
on track to submit our notification of compliance
to the Environment Agency in 2024. The audits will
identify further energy efficiency opportunities to
implement in future years.
Our direct use of water is limited to colleague
catering and welfare, and cleaning our stores
andfleet vehicles. We consumed 57,821m
3
ofwater in 2023 (an improvement compared
with66,388m
3
consumed in 2022).
Waste and recycling
We produce a lot of waste from our business
activities. The majority (around 90%) is generated
from our kitchen and bathroom installations, with
therest (around 10%) from our store operations.
We are working with our waste contractors
whosupport our installer network to better
understand current waste disposal routes
andidentify opportunities to reduce waste that
issent tolandfill and increase recycling rates.
Waste from our stores that is easily recyclable
(e.g.card, wood, plastic wrapping) is returned
toour Distribution Centre for consolidation and
segregation before being collected by specialist
recycling contractors. With the majority of the
highly recyclable store waste returned to the
Distribution Centre, we recycled 11.6% of the
remaining in-store waste in 2023; including
wastereturned to the Distribution Centre, we
recycled 39% of the store generated waste.
This year, we started collaborating with some of
oursuppliers to discuss opportunities to capture
ourwaste packaging material, recycle it and use it
insome of our own brand products and packaging.
We will continue to work on opportunities to increase
the amount of waste which is recirculated back into
our products and packaging.
Ultimately our goal is to do more to reduce and
reuse waste from our stores, Distribution Centres
and offices. In 2024, we will be reviewing our waste
streams, developing more robust data reporting
processes, and reassess future waste and recycling
targets in line with UK Government policy.
CASE STUDY
Low-carbon stores
In November, we opened our new 2,400sq m store
in Torquay. We have incorporated energy efficient
and low-carbon features into the design and build,
including an air source heat pump and electric
vehicle chargers.
The site is 100% powered via our renewable
electricity contract, and we will be fitting solar panels
in 2024. These features have resulted in the store
achieving an A-rated Energy Performance Certificate.
“ With our estate of 229 stores and two distribution
centres, we’re actively exploring ways to maximise
energy efficiency and decarbonise our existing
estate. When developing new stores, we collaborate
with developers to incorporate low-carbon
features, prioritising the long term sustainability
of our estate.
We aim to strike a balance between our journey
toward a low-carbon footprint andensuring
comfort for our valued colleagues and customers,
all while makingsound strategic financial
investmentsfor asustainable future.”
Sarah Taitt – Property Director
CASE STUDY
Tackling packaging
Collaborating with our suppliers to look at alternative
packaging solutions for our own brand products has
been critical to us achieving our target to eliminate
unnecessary packaging.
It is vital that any alternative material meets its
primary purpose of protecting the product, and
remains commercially competitive. Our suppliers
rose to the challenge, and our customers can now
see the improvements on our shelves and we can
see the impact in our packaging data.
Now that we have removed unnecessary packaging
on our own brand products, we are working to ensure
PVC and polystyrene packaging components are
replaced by lower environmental impact alternatives.
In September, we started diverting cardboard
packaging, collected at our Northampton Stores
Distribution Centre, to nearby Smurfit Kappa sites
in Tamworth and Birmingham, where it is recycled
into new cardboard packaging. We expect to send
over 2,000 tonnes of card packaging waste each
year to Smurfit Kappa. Some of our UK suppliers
will use this 100% recycled content card for our
own brand packaging.
Responsible Business continued
Wickes Group Plc Annual Report and Accounts 202346
Governance
Financial statements
Other information
Strategic report
Nature
Our business is both reliant upon nature and
impacts nature (through product sourcing and
ournew store programme). We welcome the
launch of the Taskforce on Nature-related
FinancialDisclosures (TNFD) recommendations
in2023, which provides a framework to identify
andassess our business’s current and potential
nature-related risks and opportunities in the short,
medium and long term. We also welcome the
commencement of the UK’s biodiversity net
gainpolicy in 2024 and we will meet these new
requirements when constructing our new stores.
We acknowledge the scientific evidence that global
nature is deteriorating and biodiversity is declining.
Of particular relevance to the retail sector is the
link between product sourcing and forest risk
commodities (such as wood and palm oil) and
theconnection with illegal deforestation.
We estimate that, in 2023, 35% of our revenue
wasfrom timber-based products. We have strict
supplier requirements to ensure that the timber
used in our products is sourced responsibly (see
pages 51-54), and in 2023 we updated our Timber
Sourcing Policy. We only purchase material which
complies with the UK Timber Regulations and, in
2023, 99.8% of our timber had a Chain of Custody
certified by either the Forest Stewardship Council
(FSC) or the Programme for the Endorsement
ofForest Certification (PEFC) (2022: 99.8%).
Wecompleted our first CDP Forests submission
in2023, achieving a score of C. Completing this
hashelped us to understand in more detail where
our timber is sourced from.
By the end of 2023, we stopped sourcing compost
containing peat. We are selling our existing stock
inline with the UK Government’s plan to stop the
retail sale of all bagged peat compost in England
and Wales by the end of 2024.
We plan to work to understand our nature-related
risks and opportunities in the coming years as the
framework continues to mature.
Engagement and collaboration
The Future Focus colleague network has delivered
engagement activities in 2023, driving engagement
on environmental activities across the business,
including a Company wide litter-picking competition
and ‘no disposable coffee cups’ campaign in the
Support Centre.
We continue to learn from and collaborate with our
peers in the retail sector through our membership
of the British Retail Consortium and the Retail
Energy Forum, and with our global peers through
our membership of the European DIY Retail
Association and the Global Home Improvement
Network (EDRA/GHIN).
LOOKING FORWARD
We will continue to play our part in the fight
against climate change and take action to
protect the natural environment. In 2024,
weplanto:
– develop more detailed plans on how we will
deliver our near-term science based targets;
– continue to collaborate with suppliers
and others in our industry to collectively
deliver net zero;
– identify further opportunities to reduce
wasteand increase recycling; and
– further our understanding of our
nature-related risks and opportunities.
In 2023, 99.8% of
timber we sold had
aChain of Custody
certificate issued
byeither the Forest
Stewardship Council
(FSC) or the
Programme for
theEndorsement of
Forest Certification
(PEFC) (2022: 99.8%).
Wickes Group Plc Annual Report and Accounts 2023 4747Wickes Group Plc Annual Report and Accounts 2023
“ By the end of 2023, we stopped sourcing compost
containing peat and we welcome the UK Government’s
plan to stop the retail sale of all bagged peat compost
in England and Wales by the end of 2024.”
Governance
Financial statements
Other information
Strategic report
Greenhouse gas emissions
2021
Emissions
(tCO
2
e)
2022
Emissions
(tCO
2
e)
2023
Emissions
(tCO
2
e)
Scope 1 23,087 17,484 19,806
Scope 2 (market) 14,541 15,722 3,938
Scope 2 (location) 9,687 8,585 9,212
Total Scope 1 and 2 (market) 37,628 33,206 23,744
Scope 1 and 2 carbon intensity (tCO
2
e/1,000sq ft) 5 5 3.15¹
Scope 3 Category 1 – Purchased goods and services² 1,075,463 1,590,648 1,011,287
Scope 3 Category 11 – Use of sold products 362,655 294,996 311,436
Scope 3 Category 12 – End of life treatment 120,951 119,973 88,401
Scope 3 Other (categories 3, 5, 6, 7, 9 and 13)³ 26,351 42,940 40,995
Total Scope 3³ 1,585,420 2,048,557 1,452,119¹
Total greenhouse gas emissions³ 1,623,048 2,081,763 1,475,862¹
1 Scope 1 and 2 carbon intensity, Total Scope 3 and Total Greenhouse Gas Emissions were not included in the scope of assurance for 2023.
2 For 2023, we have included emissions from Scope 3 Category 2 Capital Goods with Category 1 Purchased Goods and Services as we have identified opportunities to align with the capitalisation process of purchased goods and services. We will incorporate this methodology change
intoour 2021 rebaselining exercise that we will carry out in 2024, when we will also recalculate 2022 and 2023 in line with the improvements.
3 For 2023, we have excluded all emissions in Scope 3 Category 4 Upstream Transportation and Distribution as we have identified opportunities to significantly improve on the previous assumptions made in 2021 and 2022. We will incorporate this methodology change into our 2021
rebaselining exercise that we will carry out in 2024, when we will also recalculate 2022 and 2023 in line with the improvements.
Greenhouse gas emissions overview
We measure our GHG footprint across all three scopes, in line with the Greenhouse Gas Protocol Corporate
Standard. We have identified further opportunities to improve our methodology and key exclusions are
included in the footnotes to the table, with key assumptions included in our method statement.
The majority of our emissions (98%) continue to arise from our Scope 3 activities, specifically from these
categories: purchased goods and services (68%), use of sold products (21%), and end of life treatment of
products (6%). We have reported a decrease in overall emissions compared with 2022. This can be mainly
attributed to the reduction in emissions from Scope 2 (market-based) and improvements in our methodology.
Our emissions across Scope 1 and 2 have reduced by 28.5% compared with 2022, and by 36.9% compared
with our 2021 baseline. This is primarily as a result of the introduction of a renewable electricity contract in
April 2023 for all our purchased electricity. Therefore, we are making encouraging progress to meeting our
near term target to reduce Scope 1 and 2 by 42% by 2030. Through improvements in how we deliver our
distribution by outsourcing some of the operations to our logistics partner Wincanton, this has resulted in
some Scope 1 emissions moving to Scope 3. This has triggered our SBTi recalculation policy, and we will
rebaseline our 2021 GHG footprint in 2024.
Our Scope 3 emissions have decreased by 29.1% compared with 2022, this can be partly attributed
toimprovements in our methodology and our temporary exclusion of emissions from transportation
anddistribution. We will factor this into our rebaselining exercise in 2024. Emissions for our purchased
goods and services reduced by 6% compared with our 2021 baseline. We have focused on improving
thematerials and weight data of the Goods for Resale products we sold in 2023. We are currently using
standard emissions factors for key materials. We will explore with our suppliers when we will be able
tounderstand more specific emissions for the products we sell. Although emissions for use of sold
products reduced by 14% compared with 2021 baseline, we saw a 5.6% increase compared to 2022.
Thiscan largely be attributed to changes in product mix.
For more information about how we are identifying and mitigating our financial risks and opportunities
associated with these emissions, please see our TCFD response on pages 57-66 . For more detail on our
emissions calculations and methodology, our method statement is available to view on the Responsible
Business pages of our website www.wickesplc.co.uk.
Greenhouse gas and Streamlined Energy and Carbon Reporting (SECR)
Selected KPIs have been subject to independent limited assurance by DNV. DNV’s limited assurance statement
isavailable on our website: https://www.wickesplc.co.uk/company/responsible-business/policies-and-reporting/
Responsible Business continued
Wickes Group Plc Annual Report and Accounts 202348
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Assurance
Independent limited assurance was carried out on selected KPIs by DNV, in accordance with DNV’s
assurance methodology Verisustain
TM
and the ISAE 3000 revised standard. For more details on
theengagement and the methodology, please refer to the Assurance Statement available on the
Responsible Business pages of our website www.wickesplc.co.uk.
Streamlined Energy and Carbon Reporting
Group/UK
2021¹
Group/UK
2022¹
Group/UK
2023¹
Annual GHG emissions
(Scope 1 and 2 market tCO
2
e) 37,628 33,206 23,744
Annual energy use (MWh) 114,515 170,003² 159,994
Emissions intensity (tCO
2
e/1,000sq ft) 5 5 3.15
1 The Group does not conduct any activities in the offshore area.
2 Following a review annual energy use for 2022 has been restated (originally stated as 98,141 MWh).
Methodology
We have reported our GHG emissions and energy consumption in accordance with the Large and
Medium-Sized Companies and Groups (Accounts and Reports) Regulations. To calculate our SECR
emissions, we have followed the GHG Reporting Protocol – Corporate Standard, using an operational
control approach, and the emissions factors used were from the UK Department for Energy Security
&Net Zero 2023 Government Greenhouse Gas Conversion Factors for Company Reporting, and CEDA
emissions database.
Our Scope 1 emissions were calculated from monthly invoice data for stationary emissions, fuel consumption
and mileage data for mobile emissions, and heating and cooling asset registries for fugitive emissions.
Our Scope 2 emissions were calculated from monthly electricity invoice data, using market- and location-
based emissions factors to reflect our current operational energy contracts. Market-based emissions
were also used for our Scope 1 and 2 intensity metric.
For more detail on our emissions calculations and methodology, our method statement is available
toview on our website www.wickesplc.co.uk.
Energy efficiency action
In 2023, we reduced the energy consumption of our property estate by 0.48% and store energy consumption
by 0.41% compared with 2022. This was delivered through the work of our store colleagues to monitor
and manage their consumption, the roll-out of energy efficiency technology, and upgrades as part of
ourstore refit programme.
We implemented the following energy efficiency measures in 2023 to address our electricity, gas and
diesel consumption:
– With upgrades in our tractor units, we have seen a 5.2% improvement in our fleet fuel efficiency
compared to 2022.
– Continued roll-out of LED lighting and, by the end of 2023, 85% of stores have been upgraded.
– Continued roll-out of heating controls and, by the end of 2023, 48% of stores have been upgraded.
– Continued replacement of diesel forklift trucks with electric powered ones, and, by the end of 2023,
83.6% of stores have electric powered forklift trucks only.
– Air source heat pumps (ASHPs) installed in our new Torquay and Chelmsford stores, resulting in
atotalof four stores now with ASHPs fitted.
– Continued site assessments to identify opportunities for solar photovoltaic panels, and, by the end
of2023, seven stores are fitted with on-site solar generation.
– Voltage optimisation trialled in one store to inform further implementation in 2024.
– Improved reporting to store managers on energy performance.
Wickes Group Plc Annual Report and Accounts 2023 49
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Financial statements
Other information
Strategic report
Homes
...by helping our customers
save energy and reduce the
carbon footprint of their home
A
B
C
Services
I
n
s
t
a
l
l
a
t
i
o
n
s
Products
We are building a business
we are proud of...
HOMES
OUR OBJECTIVE
We are building a business we are
proud of, by helping our customers
save energy and reduce the carbon
footprint oftheir homes.
OUR TARGETS
50% (by revenue) of our own brand products
classified as supporting sustainability.
A key market driver for our business is the drive to
make the UK’s homes more energy efficient and
promoting products and services that support
sustainability is a potential area of growth for
ourDIY and Design and Installation customers.
In our 2022 Annual Report, we published an
ambition to help the nation make their homes
more sustainable, with a supporting target
toachieve 50% of our own brand products
classifiedas supporting sustainability.
Throughout 2023, we have undertaken further
workto ensure that our strategic focus is aligned
withour customer proposition and the ways in
whichwe communicate this meet the Competition
and Markets Authority’s Green Claims Code. We
havereframed our objective tofocus on helping
ourcustomers save energy andreduce the carbon
footprint of their homes.
To provide further clarity we have defined the product
groups that we highlight to customers that support
sustainability. We use three labels to explain how
these products support this objective: supports
energy efficiency; supports water efficiency;
andgenerates renewable energy and/or reduces
carbon footprints. Products that fall into these
groups contribute to the UK meeting its net zero
goal by 2050, therefore this is the main strategic
focus areas of our Homes pillar.
We also currently highlight products that contain
recycled materials or that contain
responsiblysourced timber.
We are developing criteria for our colleagues and
our suppliers to provide clear guidance on how
wedefine products that support sustainability.
Wehave also provided an overview of our approach
to our customers on our customer website.
We are continuing to classify our products according
to our guidance. This will allow us to establish
abaseline and report in future years how the sale
of products classified as supporting sustainability
contributes to our business.
Understanding what is important
toourcustomers
We regularly check in with our key customer
groups to ensure that we understand how
thegrowing awareness of sustainability may
beinfluencing buying decisions. In the home
improvement retail sector, our DIY customers
have told us that value for money is key when
making product choices and that the cost
ofliving continues to be driving interest in
productsthat can reduce their energy bills.
We are also seeing a small but growing
numberofcustomers who want to be less
relianton energycompanies, and are looking
atlocal energygeneration and renewables.
Withour trade customers, we have seen a
growthin demand forinstalling more energy
saving solutions and products that will help
tosave money.
Our customers are seeking information, advice
and reassurance on measures that will help to
reduce their energy bills. To this end, we have
been mindful to ensure we are using clear,
informative product information which helps
reduce the risk of using terms that could be
ambiguous and therefore misleading.
Responsible Business continued
Wickes Group Plc Annual Report and Accounts 202350
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Helping our customers save energy and
reducethe carbon footprint of their homes
Products included within this category support
ourcustomers with: energy efficiency (such as
insulation, energy efficient lights and appliances);
water efficiency (e.g. water flow restrictors); moving
away from fossil fuels (e.g. air source heat pumps,
electric vehicle charging equipment); or generating
renewable electricity (e.g. solar PV panels).
Improving insulation in homes is the key first step
to reducing energy costs. Throughout the year,
wecontinued to promote the benefit of insulation;
for example highlighting that the ideal minimum
thickness for loft insulation is 270mm.
We also launched new product ranges to expand
our offer to help our customers reduce the carbon
footprint of their homes. We now offer solar PV
products, air source heat pumps and charging
kitsfor electric vehicles.
We provide information and guidance on
ourcustomer website and in store to help our
customers make informed choices on how to
saveenergy and reduce the carbon footprint of
homes. In store, we provide prompts in the form
of‘wobblers’ positioned next to key products
(suchas insulation) as part of our Assisted Selling
model. On our website, we provide an interactive
guide to an ‘Energy Efficient Home’, product
information and installation guidance for key products.
We have continued our partnership with the
EnergySaving Trust to provide our customers with
impartial and independent energy saving advice.
Offering products that have a lower
environmental impact
Reducing the environmental impact of the products
and services that we provide is a key focus area
ofthe environmental pillar of our Responsible
Business Strategy. Specifically, we are improving
our understanding of the carbon impact of the
products and services in the supply chain, when
they are in use and at the end of their life. Two of
ourscience-based targets focus on these areas.
We currently highlight products to our customers
that contain recycled materials. With the advance
of product eco-labels and product carbon
footprinting, we expect to be able to expand the
types of products we include inthis category in
future years.
We are continuing to explore with our suppliers
opportunities to bring to market products in
ourstandard ranges which provide value to our
customers, meet our quality standards and have
asubstantiated reduced environmental impact
compared with alternatives on the market.
Products that are certified
asresponsiblysourced
Responsibly sourced means that environmental
and ethical issues associated with the raw material
sourcing and manufacture of a product have been
addressed. There are organisations that have
established responsible sourcing certification
schemes for specific materials (e.g. wood, copper,
cotton) and suppliers can apply for certification
toconfirm that specific environmental and ethical
standards have been met.
Timber-based products remain a significant
partofour business (estimated that 35% revenue
in2023 was based on timber-based products).
Wehave continued to focus on ensuring that,
where possible, products made of wood or
materials derived from wood have received
chainof custody certification from one of
thetwoprimary global schemes:
– FSC chain of custody certification
– PEFC chain of custody certification
In 2023, 99.79% of our own brand products made
ofwood or material derived from wood received
chain of custody certification (78.44% certified
bythe FSC, and 21.35% by the PEFC). For the
remaining 0.21% ofproducts, whilst these are
notfully certified theyare still subject to our
strictresponsibly sourcing requirements.
LOOKING FORWARD
Whilst developing our product ranges that
incorporate sustainability attributes, we will
continue to closely follow evolving customer
trends and understand market developments
and Government policy and how that influences
behaviour changes and lifestyle choices.
We plan to:
– continue to build our product offer to
enableour customers to be more energy
efficient and reduce the carbon footprint
oftheir homes;
– explore the role we want to play in the
installation of energy efficient products
andtechnologies; and
– expand our information and advice, helping
to educate and upskill all of our customer
groups on improving the energy efficiency
improvement projects and reducing the
carbon footprint of their homes.
SCAN ME
OUR ENERGY EFFICIENT
HOME GUIDE
Our energy saving advice
for customers can be
found on www.wickes.
co.uk/ideas-advice/
energy-saving-advice
Wickes Group Plc Annual Report and Accounts 2023 5151Wickes Group Plc Annual Report and Accounts 2023
Governance
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Other information
Strategic report
OUR THREE LINES OF DEFENCE
Operation
Accountability
Stay Safe Team
Oversight
Internal/Independent Audit
Assurance
Responsible for the implementation of
our Safety Policy and standards, and
the development of safe procedures
Responsible for the development of our safety
management framework and the provision of
risk assurance to the Wickes Board
Responsible for the independent validation
of our Safety Policy and its implementation
OUR FOUNDATIONS
SAFETY AND WELLBEING
Everyone home safe and well, every single day.
At Wickes, we believe that nothing is more important than making
sure that everyone goes home safe and well every single day. Our aim
is to develop and maintain an embedded safety culture, where safety
and wellbeing are paramount, led by strong and active safety leaders
across our business.
Our safety management framework
Our operations have accountability for ensuring
that any risk of harm is identified and controlled,
and they are supported by an expert Safety
teamwhich oversees our safety management
framework and provides safety assurance. Our
third line of defence involves assurance activities
by both the Safety team and Group Internal Audit.
Our model issupported by strong governance,
withmonthly reporting to the Executive Board
onsafety performance and reporting to every
meeting alongwith six-monthly deep dives
onsafety to thePlc Board.
Our Safety policies are supported by operational
procedures that ensure that those managing risks
understand how to manage them properly, supported
by job specific training and reference material on our
Safety Management System. We continually seek to
reduce the risk of harm in our operations and have a
robust reporting and accident investigation process.
We take pride in our learning culture, and actively
seek to understand how we can do better when
things go wrong. Executive Board-led incident review
meetings are held for more serious incidents to show
our commitment to getting it right and learning from
when things go wrong. Through this process, we
have led significant improvements in a number
ofareas, including how we manage workplace
transport risks and risks to visitors in all our sites.
Responsible Business continued
Wickes Group Plc Annual Report and Accounts 202352
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Our performance
In 2023, we expected a levelling out of our
safety performance figures following a
number of very strong years of pleasing
performance on injury reduction. We have
seen this in our Accident Frequency rate
and our number of lost time incidents, but
continue to show strong performance in
our reduction of injury numbers across
the business. This year we unfortunately
saw an increase in the impact of injuries
on our colleagues with a significant
increase in lost work days (from 845 in
2022 to 1,255 in 2023). Supporting our
colleagues back to work safely and with
their wellbeing will be a focus for 2024.
14%
reduction of total injuries reported
1.8%
reduction in Lost Time
Accident Frequency rate
2%
increase in hours worked
before a Lost Time Incident
11%
reduction in actual customer accidents
12%
reduction in Reportable incidents
LOOKING FORWARD
We will continue to actively support colleague
wellbeing and ensure that our risks are
effectively managed, listening to both our
colleagues’ needs and external requirements.
Our focus will be on our operational risk
improvement plans, and the development
andmaintenance of an embedded safety
culture that all our team can be proud of.
In 2024, our focus will be to:
– embed our business wide Risk Registers
andsafety improvement plans;
– launch a new injury reporting system to
enable improved capture of safety data;
– implement the recommendations of our
safety culture measurement survey through
business wide risk improvement plans;
– deliver a simplified risk assessment schedule
to support effective communication of risk
management to front line colleagues;
– continue our successful relationship with
West Northamptonshire Council to gain
assurance on key elements of our safety
management framework; and
– deliver four Wellbeing campaigns with
thesupport of our Wellbeing Ambassador,
Jeff Brazier.
Our progress
In 2023, as well as delivering continuous
improvement in the management of our safety
risks, we focused on enhancing key parts of our
safety management framework. This included
establishing managed Risk Registers across
thebusiness, improving how we capture safety
insights and ensuring a consistent means of
safetyconsultation across our business. Here
aresome examples of our progress:
– Safety Risk Registers established across our retail,
distribution, property and installation teams,
enabling the development of risk prioritised
improvement plans across our operations.
– A review of our safety consultation processes
led to the creation of new safety committees
ininstallation and retail, supported by a safety
champion network. These committees promote
the engagement of colleagues through
consultation and feedback, and will be
fundamental to our future safety culture.
– We developed and launched a safety leadership
workshop for all our central managers and
leaders. This has been rolled out across our
operations to ensure all leaders have a consistent
message and learning experience, no matter
where they work. Over 160 of our leaders were
trained in 2023.
– To understand what we need to achieve – an
embedded safety culture – we developed an
in-house safety culture measurement survey.
Using insight from our colleague engagement
survey and focus groups across the business,
question sets were aligned with industry guides
and our own safety culture pillars to produce
bespoke operational recommendations to improve
our culture. In 2024, these recommendations
will be built into our safetyimprovement plans.
– We embedded a more detailed risk-based Safety
Review Programme (audit) that provides more
robust assurance on our processes and
identifies trends to enable safety improvements
both locally and nationally. Where sites have not
achieved a satisfactory result, we encourage
investigations to identify ways to support
managers in improving their standards.
– To ensure the safety of colleagues working
around forklift trucks, we delivered a project to
identify potential safety solutions and rolled out
new controls. All stores have been provided with
fixed, extendable barriers, enabling the closing
off of work zones to pedestrians. This practice
was reviewed by our Safety team across a
sample of stores in July and is checked annually
as part of safety assurance visits.
– Our Wellbeing network continued to focus on
thefinancial, mental and physical wellbeing of
our colleagues. A full programme of planned
awareness days was marked with content
drawing attention to the many tools and
resources that the organisation has to support
the wellbeing of colleagues. A partnership was
forged with broadcaster Jeff Brazier, supporting
the delivery of campaigns during Mental Health
Awareness Week and Suicide Prevention Day.
– External recognition of wellbeing excellence
continues to grow, with Wickes Store
Distribution Centre as a finalist in the category
of health, safety and wellbeing at the
Northamptonshire Logistics Awards. Wickes
was also named as a finalist in two categories
inthe Great British Wellbeing Awards 2023.
Wickes Group Plc Annual Report and Accounts 2023 53
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Governance
Business ethics
Wickes is committed to conducting our operations
honestly, responsibly and with integrity. We have
aCode of Business Ethics (the ‘Code’) that applies
to all our colleagues, which we updated in 2023.
Allour colleagues receive e-learning training on
our Code, which is at the heart of how we run
ourbusiness. In addition, we have policies which
support the Code for all key regulatory areas,
including Competition Law, Advertising, Anti-
Bribery and Corruption, Anti-Money Laundering,
Corporate Criminal Offence, Consumer Duty,
Market Abuse and Anti-Fraud. Colleagues working
in relevant areas of the business or in higher risk
roles also complete bespoke e-learning on these
key regulatory subjects.
We are committed to engaging colleagues on
business ethics and regulatory matters in a
practical and relevant way, and have a calendar
ofcommunication activity in place to ensure
colleagues are both clear on the standards we
expect and know what to do if they are concerned
something is wrong. We operate a confidential and
independent whistleblowing service with update
reports provided to the Executive team and the Plc
Board on a regular basis.
Anti-Bribery and Corruption Policy
We are committed to the highest standards of ethics
and have a zero-tolerance approach to anyform of
bribery and corruption in our business and supply
chain. We operate an anti-bribery programme which
is built around a clear understanding of how and
where bribery risks affect our business and
comprises key controls of: policies (including
anti-bribery and corruption, gifts and hospitality, and
conflicts of interest); procedures (such as conducting
due diligence on suppliers); training all colleagues on
bribery risks; andongoing assurance programmes to
monitor the effectiveness of controls. We encourage
any instances of alleged bribery and corruption to
bereported either through line management or
through the anonymous whistleblowing service.
Allreports are thoroughly investigated and the Plc
Board receives reports at least annually on any
breaches of policy.
Anti-Fraud Policy
We have an anti-fraud policy in place and take
azero-tolerance approach to any activity which
either amounts to fraud or is dishonest. All
colleagues are required to complete an annual
training module on fraud and due diligence is
completed on third parties before contracting
withthem. We encourage colleagues to report
anysuspected incidents of fraud or dishonest
behaviour either through line management or
through our independent, anonymous whistleblowing
service. We will continue to review and develop
ouranti-fraud policy, processes and monitoring
tomeet legislative requirements.
Human rights and modern slavery
Wickes is committed to respecting all internationally
recognised human rights, standards and legislation
relevant to our operations. Our Human Rights
Policy sets out how we uphold human rights by
identifying our areas of responsibility and taking
relevant action.
We recognise the harmful impact that modern
slavery has on individuals and society, and we are
committed to help prevent these illegal practices.
Our Modern Slavery and Human Trafficking Policy
sets out our zero tolerance approach to any form
offorced, bonded or involuntary labour, human
trafficking, child labour, and other kinds of slavery
and servitude within our own operations or within
our supply chain.
Our biggest risk of modern slavery is in our supply
chain. We are committed to upholding human
rights and promoting positive working conditions
and practices throughout our supply chain, and
wecommit to meet the principles of the Ethical
Trade Initiative (ETI) Base Code. We aim to work
collaboratively, and to create an environment
thatenables transparency throughout the supply
chain. We promote our Whistleblowing Helpline
toour suppliers for them to report concerns.
Weare a member of SEDEX, a leading platform
that supports the management and improvement
of working conditions in supply chains, and we
require all suppliers providing Wickes own branded
products to undertake and deliver an acceptable
ethical audit before we begin trading.
Data security and privacy
We recognise that the availability and security
ofour systems and the safeguarding of data are
critical for Wickes to operate successfully. Across
the year, we have continued to improve our security
controls to prevent, detect and mitigate unauthorised
activity, and have invested in both our privacy and
information security teams to achieve this.
We have a clear governance framework in respect
of data security and privacy, which is overseen by a
dedicated data and information security committee,
which meets regularly throughout the year.
During the year, new cyber security training was
rolled out to all colleagues to sit alongside existing
data privacy training. This training was supported
byan ongoing awareness and communication
programme, including phishing tests, to keep
colleagues informed and aware of data privacy and
cyber security risks in a practical and relevant way.
As we continue to invest in new technology going
forward and decommission old systems, we are
adopting a ‘Privacy by Design’ approach to ensure
data security and privacy are appropriately
embedded into the design at the outset and
throughout the life cycle. We comply with PCI-DSS
(independently audited annually by Blackfoot
Cyber Security) and as part of our Cyber Security
Strategy, we are working towards alignment with
ISO 27001 and we plan to consider seeking
certification in the future.
Responsible Sourcing,
Products and Packaging
Responsible sourcing and supplier engagement
Our Responsible Sourcing Policy ensures that
wesource products and partners responsibly and
setminimum standards across our supply chain.
Thisapproach is intended to meet all relevant
legislative requirements, as well as to provide
confidence for our customers and stakeholders
that Wickes is a trusted partner and retailer.
We ensure that our suppliers demonstrate and
share similar values to our own, especially in
theareas of labour standards, health and safety,
environment, business ethics and product quality.
These values make up the five pillars of our
Supplier Manual, and we have made a series
ofcommitments to establish these principles
throughout our supply chain. Our Supplier Manual
forGoods for Resale (GFR) and Our Commitments
for Goods Not for Resale (GNFR) can be found on
ourwww.wickesplc.co.uk website.
We have continued to enhance and deliver
ourSupplier Online Risk Assessment (SORA)
programme throughout 2023 with significant
ITdevelopment for all current GFR suppliers. This
activity will continue as a priority into2024 when
GNFR will alsobe assessed. This process helps
usto better understand the risks within our supply
chain andeducate and improve our supplier base.
We regularly review the outcomes of the SORAs and
report these to the Executive Board annually. We
review our minimum standards each year to make
sure that our policy remains fit for purpose. In 2023,
we completed 25 in-person verification visits with
key suppliers in India, South Africa and China.
Responsible Business continued
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Product quality and safety
Wickes aims to source only products that are
safeand fit for purpose, and meet or exceed our
customers’ expectations. We require each product
that enters our supply chain to comply with all
applicable legislation.
We recognise the concerns of safe use, content
and labelling of chemicals. We actively abide by all
UK legislation to reduce the impact of substances
of concern and, where possible, use a suitable
alternative. Wickes has committed to identifying
any products that are supplied to us that contain
any substances of very high concern (SVHCs),
explosives precursors or poisons, and we take steps
to replace any products that contain restricted
substances or SVHCs with suitable alternatives.
We require our suppliers to ensure that products
supplied to Wickes are free of any banned
substances and compliant with any restrictions
detailed by the UK Registration, Evaluation,
Authorisation and Restriction of Chemicals
(REACH) regulations. We also ensure that all paint
and varnish products that we sell are compliant
with volatile organic compound (VOC) regulations.
When Chromium 6 is used to chrome-plate steel
products, it can be responsible for negative health
effects during the production process. We are
behind with our target to remove Chromium 6 in
the production of Wickes own brand products by
the end of 2023. We expect tobecome Chromium
6 free in the production ofallour own brand
products in 2024.
Packaging
In 2023, we published our first Packaging
MaterialsPolicy. This sets out our requirements
that will enable us to meet our targets to improve
the recycled content and recyclability of packaging
used on Wickes branded products. We are
members of the On-Pack Recycling Label (OPRL)
scheme, and we encourage all suppliers to sign up
to the scheme and use the labels on their products.
We committed to eliminate all unnecessary
packaging across our business by 2023. In
practice, this has meant reducing, removing
andreplacing plastic where possible. We have
assessed all packaging on our Wickes branded
products and we have removed all unnecessary
plastic packaging. We have eliminated all other
plastics in our own brand packaging, resulting in
the removal of 115 tonnes (annually) of plastic
packaging, which is a reduction of 7% like-for-like
volume compared with 2022. Any new packaging
introduced is as minimal as possible.
We are on track to meet our two packaging
improvement targets by the target date:
– 100% of our own brand packaging to be reusable
or recyclable by 2025. To achieve this, we are
removing and replacing polystyrene and PVC
packaging. PVC has been reduced by 67% in
2023 compared with 2022 total weight, and
wecontinued to proactively remove polystyrene
throughout 2023.
– 50% of our customer plastic and paper
packaging to come from recycled materials by
2025. In 2023, 42.7% of our plastic packaging
was sourced from recycled plastics
(2022: 36.4%) and 44.8% of our paper-based
packaging was sourced from recycled paper
(2022: 40.9%).
Wickes Group Plc Annual Report and Accounts 2023 5555Wickes Group Plc Annual Report and Accounts 2023
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Strategic report
Sustainability Accounting Standards Board disclosure
Multiline and Specialty Retailers & Distributors Sustainability Accounting Standard (version 2023-12)
Accounting metric Category Unit of measure Code 2023 response
Energy Management in Retail & Distribution
(1) Total energy consumed Quantitative Gigajoules (GJ) CG-MR-130a.1 575,978
(2) Percentage grid electricity Percentage (%) 27%
* 2022 SASB disclosure updated – 44.5% grid electricity for 2022
(3) Percentage renewable Percentage (%) 83%
Data Security
Description of approach to identifying and addressing data security risks Discussion
and analysis
n/a CG-MR-230a.1 Refer to ‘Data security and privacy’ section on page 54.
(1) Number of data breaches
(2) Percentage involving personally identifiable information (PII)
(3) Number of customers affected
Quantitative Number
Percentage (%)
Number
CG-MR-230a.2 We report breaches where appropriate to the relevant regulatory
authorities but we do not currently include this in our public reporting.
Labour Practices
(1) Average hourly wage Quantitative Reporting currency CG-MR-310a.1 We use this internally, but we do not currently include this in our public reporting.
(2) Percentage of in-store employees earning minimum wage, by region Percentage (%) We use this internally, but we do not currently include this in our public reporting.
(1) Voluntary turnover rate for in-store employees Quantitative Rate CG-MR-310a.2 We use this internally, but we do not currently include this in our public reporting.
We report voluntary turnover rate for all employees: 23%
(2) Involuntary turnover rate for in-store employees Rate We use this internally, but we do not currently include this in our public reporting.
Total amount of monetary losses as a result of legal proceedings associated with labour law violations Quantitative Reporting currency CG-MR-310a.3 We use this internally, but we do not currently include this in our public reporting.
Workforce Diversity & Inclusion
Percentage of gender representation for: (1) management; and (2) all other employees Quantitative Percentage (%) CG-MR-330a.1 % of females: (1) 34.62% (management levels M3+); (2) 40.05%
Percentage of racial/ethnic group representation for: (1) management; and (2) all other employees Percentage (%) % of ethnic group representation: (1) 11.54% (management levels M3+); (2) 12.87%
Total amount of monetary losses as a result of legal proceedings associated
with employment discrimination
Quantitative Reporting currency CG-MR-330a.2 We use this internally, but we do not currently include this in our public reporting.
Product Sourcing, Packaging & Marketing
Revenue from products third party certified to environmental and/or social sustainability standards Quantitative Reporting currency CG-MR-410a.1 We use this internally, but we do not currently include this in our public reporting.
Discussion of processes to assess and manage risks and/or hazards associated
with chemicals in products
Discussion
andanalysis
n/a CG-MR-410a.2 Refer to ‘Product quality and safety’ section on page 55.
Discussion of strategies to reduce the environmental impact of packaging Discussion
andanalysis
n/a CG-MR-410a.3 Refer to ‘Packaging’ section on page 55.
Activity metrics
Number of: (1) retail locations; and (2) distribution centres Quantitative Number CG-MR-000.A (1) 229 stores; (2) 2 Distribution Centres
Total area of: (1) retail space; and (2) distribution centres Quantitative Square metres (sq m) CG-MR-000.B (1) 706,964sq m (7,635,067sq ft); (2) 86,759sq m (933,873sq ft)
Response to TCFD recommended disclosures
Wickes Group Plc Annual Report and Accounts 202356
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Climate-related financial disclosures
Compliance Statement
We have set out below our climate-related financial disclosures as required by the Companies Act 2006. This also constitutes our response to the recommendations and recommended disclosures of the
TaskForceon Climate-related Financial Disclosures (TCFD).
TCFD Consistency Index
This index table signposts to where disclosures are included in the 2023 Annual Report and Accounts. Our disclosures are consistent with the TCFD’s 4 recommendations and 11 recommended disclosures.
TCFD recommended disclosures Companies Act 2006 Pages
1. Governance
(a) Describe the Board’s oversight of climate-related risks and opportunities. (a) A description of the company’s governance arrangements in relation to assessing
andmanaging climate-related risks and opportunities.
58-59
(b) Describe management’s role in assessing and managing climate-related risks
andopportunities.
2. Strategy
(a) Describe the climate-related risks and opportunities the organisation
has identified over the short, medium, and long term.
(d) a description of:
(i) the principal climate-related risks and opportunities arising in connection with
thecompany’soperations; and
(ii) the time periods by reference to which those risks and opportunities are assessed.
60-61
(b) Describe the impact of climate-related risks and opportunities on the organisation’s
business strategy, and financial planning.
(e) A description of the actual and potential impacts of the principal climate-related risks
andopportunities on the company’s business model and strategy.
62
(c) Describe the resilience of the organisation’s strategy, taking into consideration different
climate related scenarios, including a 2°C or lower scenario.
(f) An analysis of the resilience of the company’s business model and strategy, taking into
consideration different climate-related scenarios.
63
3. Risk management
(a) Describe the organisation’s processes for identifying and assessing climate-related risks. (b) A description of how the company identifies, assesses, and manages climate-related
risksand opportunities.
63-64
(b) Describe the organisation’s processes for managing climate-related risks.
(c) Describe how processes for identifying, assessing, and managing climate-related risks are
integrated into the organisation’s overall risk management.
(c) A description of how processes for identifying, assessing, and managing climate-related
risksare integrated into the company’s overall risk management process.
64
4. Metrics and targets
(a) Disclose the metrics used by the organisation to assess climate-related risks and
opportunities in line with its strategy and risk management process.
(h) A description of the key performance indicators used to assess progress against targets
used to manage climate-related risks and realise climate-related opportunities and of
thecalculations on which those key performance indicators are based.
64-65
(b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks. No additional requirements in the Companies Act. Covered by existing SECR disclosures. 66
(c) Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets.
(g) A description of the targets used by the company to manage climate-related risks
andtorealise climate-related opportunities and of performance against those targets.
66
Wickes Group Plc Annual Report and Accounts 2023 57
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Summary overview of progress in FY2023
In our last Annual Report, we recognised that we
needed to undertake further work to demonstrate
how we are assessing and integrating climate risks
into business strategy and financial planning. To
strengthen our approach, we have done the following:
Governance:
– Provided more detailed updates to the Board via
the relevant Board Committees and formalised
the relative responsibilities of the Responsible
Business Committee and the Audit and Risk
Committee in relation to climate-related matters.
Strategy:
– Considered the risks and opportunities of energy
efficient and low carbon products and services
as part of the Board Strategy Meeting.
– Demonstrated how achieving the near-term
science-based targets has been factored into
the five year (2024-2028) business plan.
Risk management:
– Evolved our approach to assessing climate-
related risks from an indicative assessment of
risk to integrating climate-related risks into the
Company’s wider risk management process,
including aligning the assessment of financial
materiality with other, non-climate-related risks.
– Engaged with key stakeholders in the
businessto review existing and identify
potentialclimate-related risks and
opportunitiesprior to assessing materiality.
Metrics and targets:
– Included climate-related targets in the 2023-25
Long-Term Incentive Plan.
– Developed a wider range of metrics to monitor
climate-related risks and opportunities.
Agreed areas of focus in FY2024
The Board has agreed with the Responsible
Business Committee’s recommendations
thatmanagement focus on these areas
inthenextyear:
Governance:
– Quarterly reporting to the Executive team and
the Responsible Business Committee with progress
delivering our near term science-based targets.
Strategy:
– Further modelling of significant climate-related
risks and opportunities to further understand the
existing and future materiality for the business.
– Develop a Climate Transition Plan, to provide
more detail on how we intend to achieve the
netzero targets, how we plan to respond to
climate-related risks and opportunities, and
howwe expect to position ourselves to
supportthe UK economy wide transition.
Risk management:
– Review our disclosures against the International
Sustainability Standards Board’s (ISSB)
International Financial Reporting Standards
(IFRS) S1 and S2 in anticipation of these
standards forming the basis of the reporting
framework for mandatory climate-related
financial disclosures in the UK.
Metrics and targets:
– Expand our internal monitoring to include
moreclimate-related metrics and integration
ofthese metrics into relevant decision making.
1. Governance
1a) Board oversight
The Board has ultimate responsibility for
settingthe Group’s strategy, including how
thestrategy addresses ESG matters, including
climate-related issues.
The Board has delegated responsibility for ESG
matters, including climate-related matters, to
theResponsible Business Committee (RBC)
andreceives updates from the Committee on
itswork following each meeting. The Board
considers climate-related issues when reviewing
and guiding strategy, budgets and business plans
– for example, at the Board Strategy Meeting
heldduring the year, the Board considered
climate-related risks and opportunities when
reviewing and guiding the business strategy,
inparticular in the context of the Group’s market
driver to make UK homes more energy efficient.
The RBC is a formal committee of the Board
chaired by a Non-executive Director. Its primary
purpose is to oversee the development of Wickes’
Responsible Business Strategy and monitor the
Company’s performance in relation to material
ESG matters (including climate-related issues).
The CFO, General Counsel and Company Secretary,
and Head of Sustainability attend all RBC meetings
to provide regular updates on climate-related issues
and alignment with climate-related financial disclosure
requirements. More information on the RBC can
befound in the Responsible Business Committee
Report on pages 107-110.
The RBC’s duties include overseeing the Group’s
ESG conduct, and this includes climate-related
issues, which are a regular agenda item for the
Committee. The RBC monitors and oversees
progress against the Group’s carbon reduction
goals and targets and for addressing climate-
related risks and opportunities by reviewing
anddiscussing the reports presented by roles in
the business who are responsible for overseeing
delivery of the science-based targets (e.g. Head
ofSustainability), and for delivering specific
carbonreductions (e.g. roles within property
anddistribution teams). The reports also cover
progress against targets and plans, highlighting
any operational or financial impacts.
In 2023, the RBC met four times. The agenda
forthe year is planned in advance to ensure that
appropriate attention is paid to climate-related
matters. One Committee meeting during the year
was dedicated to understanding the evolving
reporting landscape for climate-related financial
disclosures, reviewing the Company’s plans to
meet the mandatory disclosures and reviewing
significant climate-related risks and opportunities.
During the year, the RBC monitored progress
against the near term science-based targets
through detailed updates, and updated the Board
on discussions after each Committee meeting
viathe meeting minutes. Going forward, the RBC
will be updated each meeting on progress via a
quarterly dashboard, and the RBC will feed back
tothe Board progress against targets on a regular
basis by tabling the RBC minutes.
In 2023, we formalised the relationship between
the RBC and the Audit and Risk Committee (ARC)
in relation to their respective climate-related duties,
and updated the respective Terms of Reference to
reflect this. The RBC is responsible for reviewing
the Company’s climate-related risks and opportunities,
and content included in the Annual Report that
meets the TCFD recommendations and
Response to TCFD recommended disclosures continued
Wickes Group Plc Annual Report and Accounts 202358
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BOARD
PLC BOARD
Audit & Risk
Committee
Nominations
Committee
1
Remuneration
Committee
Responsible Business
Committee
Disclosure
Committee
1
EXECUTIVE BOARD
General Counsel &
CompanySecretary
Head of Sustainability
Responsible Business
WorkingGroup
Sustainable Stores
WorkingGroup
Sustainability
CustomerStrategy
MANAGEMENT
Customer Plans
SteeringMeeting
Property and
StoreDevelopment
recommended disclosures. The RBC makes
recommendations to the ARC in relation to the
inclusion of climate-related risks in the Company’s
principal and emerging risk disclosures, including
the assessment of financial materiality. The ARC
isresponsible for reviewing the recommended
climate-related disclosures, as well as (at least
annually) carrying out a robust assessment of
theCompany’s emerging and principal climate-
related risks, taking into account
recommendations from the RBC.
The Remuneration Committee also approves
andmonitors performance against the near
termscience-based targets, including using key
performance indicators relating to the targets,
which form part of the Long Term Incentive Plan.
More information on these targets is provided
inthe Metrics and Targets section on pages 64-66.
Noother climate-related targets have been set
bythe Board during the year.
The Board Committees that have formal responsibilities
related to climate issues are highlighted in the
diagram, along with the reporting relationship
between the Committees and the Plc Board, as
well as management.
1b) Management’s role
The CEO reports directly to the Board and has
overall responsibility for ESG and the Company’s
response to climate-related issues. The General
Counsel and Company Secretary is the nominated
Executive Board sponsor, reporting into the CEO
and supporting him to oversee the Company’s
approach to ESG matters. The Head of Sustainability
reports directly to the General Counsel and Company
Secretary, and is responsible for coordinating the
Company’s approach to assessing, monitoring and
managing climate-related matters. The Head of
Sustainability also supports our Group Finance
team to integrate climate-related financial
information into financial and risk business
processes where appropriate.
Responsibility for achieving the SBTi validated
science-based targets sits with the appropriate
Executive functional lead; the Chief Operating
Officer is responsible for the delivery of the
Scope1 and 2 science-based target; and the
ChiefCommercial Officer is responsible for the
delivery of the Scope 3-related science-based
targets. Inaddition, the Executive Board monitors
store electricity and gas performance, reported
through the Company’s balanced scorecard
eachmonth. Department specific initiatives
areoverseen by the Executive Board, ensuring
climate-related decision making is integrated
across the business.
The Executive Board is regularly updated by the
Head of Sustainability and operational leads (who
are members of the Responsible Business Working
Group, RBWG) on progress towards achieving the
near term science-based targets and progress of
the workstreams to assess and manage climate-
related risks and opportunities.
The refit and new store programme is an important
part of delivering the Company’s Scope 1 and 2
targets to decarbonise its estate. Improvements
such as installing solar panels, as well as utility
andenergy costs and contracts are overseen by
theProperty & Store Development Board, which
ischaired by the Chief Operating Officer.
The RBWG has members from key roles across
thebusiness who are responsible for delivering the
Company’s sustainability targets, and is chaired by
the Head of Sustainability. The RBWG tracks the
delivery of climate-related targets and initiatives,
along with the other sustainability targets, across
the business, through monthly meetings. The Head
of Sustainability reports on progress of the overall
Responsible Business strategy, and the delivery of
the targets to the Executive Board and the RBC on
a regular basis.
Governance of climate-related issues
1. The Wickes Plc Board Committees, and management groups and
roles shaded in blue provide governance on climate-related matters.
Wickes Group Plc Annual Report and Accounts 2023 59
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2. Strategy
2a) Climate-related risks and opportunities identified
In 2023, we updated the time horizons we use to
reflect rolling time periods.
– Short term: 1-5 years. This time horizon was
selected because it aligns with the Company’s
five-year business planning cycle.
– Medium term: 5-15 years. This time horizon
wasselected because the typical length of lease
for the Company’s property estate falls within
thetime period of up to 15 years.
– Long term: 15-30 years. This time horizon was
selected because it aligns with the UK Government’s
net-zero by 2050 target, and also includes the
British Retail Consortium’s net zero by 2040
goalwhich the Company has aligned with.
Following the identification and assessment
process set out in the Risk management section
on pages 63-64, we identified seven thematic
categories of potentially significant climate-related
risks and opportunities:
– Two physical risks that could significantly
impact the business in a High Physical
ImpactScenario (4°C) emissions scenario,
where the business and its value chain is
operating in chronic changes to local climates,
and an increase in the frequency and severity
ofextreme weather events.
– Four transitional risks and one transitional
opportunity that could significantly impact the
business in a Rapid Transition Scenario (1.5°C),
where the business is operating in a rapid
transition to achieve net zero by 2050 resulting
in progressive government policies, market
pressures from competitors and landlords,
reputational impacts from investors, and
impacts where technology is not keeping pace
with the decarbonisation changes required.
The scenarios we have used are discussed further
in Section 2c Resilience of the business’s strategy.
A description of how each thematic risk category
could materialise is provided here. For consistency,
risks and opportunities that were included in our
FY2022 disclosures as potentially significant have
been reviewed and incorporated into these
high-level categories.
Potentially significant physical
risksandopportunities
We have explored chronic risks to our business
and supply chain operations, such as sea level
rises, temperature changes, and water stress.
Wehave also explored acute physical risks
suchaswhich of our properties are in long term
flood risk areas, and how heatwaves impact our
operations. Potential risks to the business from
aHigh Physical Impact Scenario (4°C) can be
splitinto risks to the operation of the business
andrisks to our supply chain.
PR1 – Acute physical risk: Operations
Our distribution network is reliant on: the operation
of our two main Distribution Centres which are
located in Northampton, and an outbase in Crawley;
and our road-based logistics operation that delivers
products to stores and customers’ homes.
An increase in the severity and frequency of
extreme weather events could disrupt the
operation of our Distribution Centres and result
inanegative impact on our ability to serve our
customers and stores, potentially significantly
impacting our business. The most likely weather
event that increases with frequency and severity in
a High Physical Impact Scenario (4°C) is localised
surface water flooding as a result of a storm or
heavy rainfall. Our Distribution Centres are not
located in an area at risk of rising sea levels.
The risks to individual stores from a climate-
related incident, such as a storm, or from rising
sea levels are not deemed to have a significant
business impact. This is because it is unlikely that
a significant number of stores would be impacted
at the same time to the extent of having to cease
trading over a prolonged period. On the one
occasion in 2023 where we had to close a store
due to a severe weather-related event, we were
able to reopen the store within a week. In addition,
we are predominantly leaseholders, and so over
the medium to long term time horizon we can
assess how to reduce our risk further by store
relocations at lease renewal time, if necessary.
PR2 – Chronic and acute physical risk: Supply chain
Chronic and acute climate changes could impact
our supply chain, most notably the impact of water
stress and climatic changes on our timber supply
chain. We commissioned a scenario analysis in
2022 looking at the risks to our supply chain from
water availability, which suggested that key parts
of our supply chain are dependent on industries
which are vulnerable to water availability (e.g.
paper and forest, chemicals). The supply chain
andstrategic impacts to the business are
uncertain over the long term, and require
additionaldata to assess.
We have regular discussions with our strategic
timber suppliers on how they are assessing and
managing the risk of the changing climate in their
locations. We understand that they are looking at
adaptation measures to chronic risks, which might
involve switching tree species, as well as acute
risks by relocating plantations to areas with lower
risk. As a retailer, we are agile in being able to
switch to alternative suppliers and work with our
suppliers to identify materials (including different
timber species) which are more reliant.
Potentially significant transition
risksandopportunities
We have explored potential transition risks for our
business in a Rapid Transition Scenario (1.5°C),
including policy and legal, technology, market, and
reputational risks. The risks that we have identified
are broadly applicable to the home improvement
retail sector operating in the UK with a global
supply chain, and not unique to Wickes.
TR1 – Policy and legal transition risk: Carbon
pricing and broader policy requirements
In 2022, we commissioned a scenario analysis
ofthe business’s potential exposure to future
carbon pricing mechanisms. This concluded that
under a Rapid Transition Scenario our suppliers
incarbon intensive industries could be subject
tohigh carbon prices by 2030. Whilst we don’t
underestimate the potential impact of carbon
pricing on the products we sell, we recognise
theimpact will be across our entire sector and,
whilst we would look to mitigate the impact on
ourcustomers, where this is not possible sector
pricing would adjust accordingly. We will continue
to maintain a watching brief on future carbon
pricing forecasts as well as the UK’s forthcoming
consultation on a Carbon Border Adjustment
Mechanism, and update our modelling when
theseforecasts are more certain.
The risk of policy changes that could impact the
products and services for the low-carbon transition
is covered in TO1 – Market transition risk: Products
and services for the low-carbon transition. Looking
across all of the products we sell, there is a risk
toour suppliers from other policies in a net zero
scenario that aim to reduce emissions from carbon
intensive sectors. Greenhouse gas emissions
produced during the manufacture of the products
that we sell currently represent around 65% of our
footprint. Decarbonising our supply chain, and
moving away from fossil fuels as an ingredient in
carbon-based products, is a significant challenge
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tous meeting our long term net zero goal. We will
continue to monitor policy developments which could
impact the production or sale of these products, as
well as changing market and consumer expectations
for increased transparency on product specific
carbonlabelling.
TR2 – Technology transition risk:
Decarbonisingthe fleet
The Wickes fleet is made up of mostly heavy
goods vehicles. The direct replacement of
dieselwith hydrotreated vegetable oil (HVO)
wasdiscussed in the FY2022 Annual Report as a
technologically feasible option to decarbonise our
fleet. Throughout the year, we have maintained a
watching brief on the cost and availability of the
HVO in the UK, and we have seen that costs of
HVO have on average been 20-30% higher than
diesel costs, and availability of responsibly sourced
HVO has not been consistent. In the roadmap to
achieve net zero, we will continue to improve the
efficiency of our fleet, and work with our logistics
partners to identify technologies that result in
lower emissions, but that also ensure reliability.
The route to decarbonising our fleet remains high
riskas the technology for HGVs remains uncertain
and is currently cost prohibitive. As a retailer,
weare transparent with our customers on the
delivery costs, and switching to a significantly
more costly alternative could negatively impact
thebusiness commercially.
Installing electric vehicle charging across the
estate will be required to support the switch of
thecompany car and grey fleets to low- and
zero-carbon emissions vehicles. The same
chargers could also provide destination electric
vehicle charging for customers to encourage
footfall at stores, as well as support the wider
transition ofthe UK economy to electric vehicles.
The associated increased electricity demand is
arisktothe roadmap to decarbonise the estate
andin some cases may require additional
electricity generation to be installed.
TR3 – Market transition risk:
Decarbonisingtheestate
The roadmap to decarbonise our property estate
iscentred around transitioning away from gas
heating, improving energy efficiency and switching
to the supply of renewable electricity (grid and
on-site generation). In April 2023, the Company
switched to a renewable electricity contract for
allgrid-sourced electricity used across the estate.
Tomitigate the risk of increasing costs from
renewable sources, the business is also installing
on-site solar power generation where this has
beenassessed as structurally feasible, and has
acommercially favourable purchase power
agreement with the respective landlord.
Installing new or replacement assets that are more
energy efficient or enable the transition away from
gas heating (such as air source heat pumps) is
technically feasible and relatively low operational
risk. The forecast capital expenditure to progressively
deliver the asset replacements is afforded within
the Company’s strategic five-year plan. The risk to
the business is increasing costs of new equipment
due to inflation and increased demand.
TR4 – Reputational transition risk: Increased
scrutiny from Shareholders on delivering net zero
We recognise that it is important to our current and
future Shareholders that we contribute to meeting
the global transition to net zero, and specifically
that we play our part to achieve the UK
Government’s net zero goal. We are committed to
continuing to improve our disclosures over time in
line with reporting standards in order to build trust
through increased transparency, and we recognise
that failure to meet Shareholders’ (and other
stakeholders’) expectations could impact our
access to capital.
Feedback from our current investors through the
year confirms that the home improvement retail
sector is not considered to be a highly exposed
sector to climate-related risks. Furthermore, our
SBTi-validated near term science-based targets
giveassurance that we are aligned to a 1.5°C
pathway. We will continue to review this potentially
significant risk each year, to ensure that we are
maximising our ability to access capital.
TO1 – Market transition opportunity: Products
and services for the low-carbon transition
In our last Annual Report, we discussed the market
opportunity to supply products and services that
are required for the UK to meet its net zero target.
In 2022 and 2023, we commissioned indicative
analyses to look at the potential market opportunity
ina Rapid Transition Scenario (1.5°C), which
concluded that there is a significant opportunity
for our business to expand our product ranges to
include heat pumps, electric vehicle chargers and
solar panels. The UK Government policy that
supports the transition of decarbonising the UK’s
homes was revised in autumn 2023. The change in
timescales to phase out certain types of products
(e.g. gas boilers) has created uncertainty with our
customers, our suppliers and the business on the
future policy direction of the Government.
Alongside expanding our product ranges, there is
atransition risk from the potential phase-out of a
small number of ranges that we currently sell. In
aRapid Transition Scenario, this assumes no new
gas boilers sold after 2025. In the UK, the policy to
phase out gas boilers entirely has been revised to
reduce installations in domestic properties by 80%
by 2035.
We do not stock significant numbers of product
ranges that could be at risk of being phased out
inthe journey to decarbonise homes (for example
gas boilers). Therefore, we consider overall that
products and services for the low-carbon transition
represents a net opportunity to the business.
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2b) Impact of climate-related risks and opportunities
Recognising the impact of climate change on
ourbusiness, in the near, medium and long term,
resulting in the potential of rising costs, the
Grouprobustly considers the actual and potential
financial impacts on our business, our strategy
and our financial planning. Where possible, the
Group looks to mitigate cost pressures through
procurement efficiencies or, in the case of operational
costs, to reduce consumption where possible.
Given our budgets and strategic financial plans
areunderpinned by two significant focus areas –
namely (a) going concern/viability and (b) store
and investment impairment – we have considered
these factors carefully and set out in the table
below our assessment of the potential business
and financial impact of potentially material
climate-related risks. We have not assessed
thefinancial impact related to TR4 – increased
scrutiny from Shareholders (current andfuture)
ondelivering net zero, as we consider itto be an
unlikely event that the business does notmeet its
near term science-based targets. Wewill continue
to keep this under review.
In addition to the short summary below of our
strategic response, management controls and
mitigation measures, further information on
howthese risks and opportunities have informed
ourfinancial planning process can be found in
section2a).
Potential impact of principal climate-related risks
Thematic
climate-related risk
categories Risk or opportunity
Potential
business impact
Potential
financial
impact
Scale of financial impact
(high/medium/low/uncertain)¹
Climate
scenario Strategic response Management controls and mitigation measures
Short term
1-5 years
2024-2028
Medium
term
5-15 years
2029-2038
Long term
15-30 years
2039-2053
PR1 – Extreme
weather-related events
impacting operations
Acute physical risk Operations Expenditure
Revenue
Low Uncertain Uncertain High Physical
Impact
Scenario (4°C)
– Continue leasehold model for property estate
with 10- to 15-year lease agreements.
– Continue distribution strategic approach to work with
expert logistics providers to prepare for and respond
toany potential disruption in distribution network.
– Commission long term flood risk assessment of
Distribution Centres in High Physical Impact Scenario.
– Business continuity plans for distribution and stores
– Leasehold model, and long-term flood risk assessed
when reviewing new sites and regears.
– Distribution strategy is developed, implemented and
monitored by the Distribution team in Operations.
PR2 – Chronic climatic
changes and acute
weather events
impacting supply chain
Acute and chronic
physical risks
Products and
services
Value chain
Expenditure
Revenue
Low Low Uncertain High Physical
Impact
Scenario (4°C)
– Continue to partner with strategic suppliers to understand
risks in operating regions and discuss mitigating actions.
– Impacts to higher risk and strategic suppliers are monitored
by key teams within Commercial, including the Responsible
Sourcing and Quality team, and Category teams.
TR1 – Carbon pricing
and broader policy
requirements
Policy and legal
transition risk
Products and
services
Value chain
Expenditure
Revenue
Uncertain Uncertain Uncertain Rapid
Transition
Scenario
(1.5°C)
– Monitoring relevant policy developments.
– Focusing on delivering decarbonisation targets.
– Climate-related policy developments (including carbon
pricing) monitored by the Head of Sustainability through
theEnvironmental Management System legal horizon
scanning process.
TR2 – Decarbonising
the fleet
Technology transition
risk
Operations Expenditure Low Low Low Rapid
Transition
Scenario
(1.5°C)
– Engaging on long term decarbonisation strategy of main
transportproviders.
– Defining business case for potential low and zero-carbon
emissions fleet options.
– Plan to decarbonise the fleet is developed, implemented
and monitored by the Distribution team in Operations.
TR3 – Decarbonising
the estate
Market transition risk Operations Expenditure Low Low Low Rapid
Transition
Scenario
(1.5°C)
– Monitoring energy usage and GHG emissions of stores.
– Exploring emission reduction opportunities in stores.
– Monitoring relevant policy discussions on Minimum Energy
Efficiency Standards and green leases.
– Plan to decarbonise the estate is developed, implemented
and monitored by the Property team in Operations,
governed by the Property and Store Development Board,
and supported by the Sustainable Store Working Group.
1 Refer to section 3a) for definitions.
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2c) Resilience of the business strategy
We have used two extreme scenarios to stress test
our business model and strategy. These are set
out below. By choosing these scenarios, we have
sought to identify and understand the risks and
opportunities that could arise for our business and
strategy, supply chain and wider economy that we
operate in, to ensure that we anticipate and prepare
for these extremes. We believe that it is likely that
the future will fall somewhere between these two
scenarios. These are the same scenarios that we
used to inform our 2022 disclosures and are
commonly used by industry.
Rapid Transition Scenario (1.5°C)
The International Energy Agency’s Net Zero
Emissions by 2050 Scenario (NZE). This scenario
is a normative (or prescriptive) demand-led transition
scenario that shows a pathway for the global
energy sector to achieve net zero CO
2
emissions
by 2050. It is consistent with limiting the global
temperature rise to 1.5°C and achieving the Paris
Agreement. In this scenario, businesses will be
impacted by significant policy changes and the
scenario assumes stringent climate policies and
carbon pricing, rapid technological innovation
andchanging consumer expectations.
High Physical Impact Scenario (4°C)
The Intergovernmental Panel on Climate Change
(IPCC) Representative Concentration Pathway
(RCP) 8.5 scenario projects the most likely climate
outcomes associated with a trajectory where
global emissions continue rising at current rates,
leading to a potential temperature increase of 4°C
by 2100. In this scenario, businesses will be
impacted by extreme climate change, and the
scenario assumes severe impacts of extreme
weather events worldwide, and shifting weather
and climate patterns.
In 2023, we explored how these potentially
significant climate-related risks and opportunities
might influence our business strategy and financial
planning at a high level. (See ‘Potential financial
impact’ column in the table on page 62). Based
onour latest assessment of the potential financial
impacts of the significant risks and opportunities
following the process we set out in Section 3, Risk
management, we consider our current business
strategy to be resilient to these two extreme
climate-related scenarios.
Our market-led strategy means that we identify
what customers want and adapt quickly with
shortlead times and product holding times.
Wehave established partnerships with strategic
suppliers that allow us to understand their risks
and mitigation plans, and we can also adapt where
appropriate through a global agile and flexible
supply chain model. Although a few of our key
home improvement product ranges are currently
emissions intensive during the manufacturing
phase (e.g. cement, paint), we are not dependent
on these and we are encouraged by the commitments
from these sectors to meet net zero. Any inflationary
effects of carbon pricing will impact all home
improvement retailers, and therefore our business
will remain competitive, whilst we continue to work
with our suppliers to reduce carbon emissions
across the life cycle of the products we sell.
We do not have a major reliance on products
whichare powered by fossil fuels (such as gas
boilers) and therefore we are not significantly
exposed to planned Government phase-outs.
Wesell a relatively small proportion of electric
powered products. Using the most conservative
updated pathway for UK grid decarbonisation
fromNational Grid (FES – Falling short), we are
ontrack to meet our near term targets to reduce
these emissions.
Our property strategy is leasehold, with an average
length of 11 years. This gives us flexibility with our
property estate to locate in areas which are lower
risk from extreme weather, for example surface
water flooding. In a rapid transition scenario, as
aDIY retailer we are not significantly energy
intensive, and technology is readily available
tosupport the decarbonisation of our estate.
Ourfleet strategy is also leasehold and we
areworking with our partners to understand
thefuture of low-emissions road logistics,
whichisnot a unique challenge to our business.
3. Risk management
3a) Processes for identifying and assessing
climate-related risks
Identification
Risks and opportunities are identified at the Group
level and apply to the activities of the main trading
subsidiary of the Group; Wickes Building Supplies
Ltd. There are no operational activities undertaken
by any other subsidiary of the Group.
Each year, we undertake an exercise with key
internal stakeholders to review the list of existing
climate-related risks and opportunities as well as
identifying any potentially new risks and opportunities
arising due to changes in the business, or external
changes. This creates a longlist of climate-related
risks and opportunities. This identification exercise
also considers existing and emerging regulatory
requirements related to climate change in the UK,
where the business operates.
Assessment
We then screen the longlist of climate-related
risksand opportunities, across each time period
asset out in section 2a), to assess the potential
significance to the business. For each risk and
opportunity, we looked through the lens of two
extreme future climate scenarios: a High Physical
Impact Scenario (4°C); and a Rapid Transition
Scenario (1.5°C) (covered in more detail in section2c).
Climate-related risks and opportunities have been
prioritised on the basis of:
– indicative potential financial or strategic impact
on the business, using the business impact
framework in the Wickes Risk Management Policy;
– the strength of the climate change signal for a
specific risk driver or physical risk hazard; and
– the magnitude of projected change from the
baseline in a future climate scenario.
Those risks and opportunities that exceed an
internally agreed threshold are identified as
potentially significant, prioritised for further
assessment, and logged on our Climate Risk
Register. We have grouped these potentially
significant risks and opportunities into seven
thematic categories (as discussed in section
2a)for ease of assessment and discussion
withthe business and the Board.
Further scenario and sensitivity analysis is
undertaken on these high-level categories on a
two-to three-year frequency depending on updates
and changes from external factors, such as policy
and legislation changes, as well as business
changes (such as new product category ranges).
To assess the impact to the business arising from
climate-related risks, we align with the business’s
Risk Management Policy for all Group risks. For
thepurposes of this assessment, how weassess
materiality in relation to climate-related matters
isoutlined in the table on page 64.
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Threshold of materiality in relation to climate-related matters – adjusted profit before tax (PBT)
average of last 3 financial years
High level of materiality >50% adjusted PBT
Medium level of materiality 10-50% adjusted PBT
Low level of materiality and not
deemedmaterialinthis time horizon <10% adjusted PBT
Uncertain Insufficient data to assess at this time
In those cases where there is currently not adequate
information to undertake an assessment of
financial materiality and therefore financial
impact,these have been identified as ‘uncertain’.
The business impact of such risks is discussed
inthe Strategy section on pages 60-63.
3b) Processes for managing
climate-relatedrisks
We manage our climate-related risks in the same
way as other risks that the business faces (refer
tothe Risk Management section of this report
forfurther explanation on our overall approach
onpages 72-74). Following our risk management
framework, we identify measures to mitigate
theimpact of significant climate-related risks
inaccordance with our risk appetite. We monitor
the risks and integrate any key changes into the
twice-yearly review of the climate change principal
risks. This is undertaken by the Head of Sustainability,
and the General Counsel and Company Secretary
discusses and agrees changes with the Executive
Risk Committee. Any changes are then included in
the updates to the Executive Board, Audit and Risk
Committee and the Plc Board.
We have summarised management controls and
mitigation measures we have in place to manage
the potentially significant climate-related risks in
the table set out in section 2b).
To respond to the transition risk ‘Increased scrutiny
from Shareholders on delivering net zero’ (TR4), our
Investor Relations team will continue open dialogue
with Shareholders and maintain a watching brief
onthe evolving responsible investment landscape.
We also intend to continue active management of
key ESG rating assessments and to participate
annually in CDP.
3c) Integration into overall risk management
The Company’s approach to risk management is
set out in the Company’s Risk Management Policy.
This explains how the Company identifies, assesses
and mitigates risks, as well as how the Company
reports and monitors the Corporate Risk Register
and principal risks to the Executive Board, Audit and
Risk Committee and the Plc Board. A more detailed
explanation of the Company’s approach to risk
management is provided in the Risk management
overview section on pages 72-74.
Through the Company’s risk management
approach, climate change was identified and
assessed as a principal risk for the business at
itsdemerger in 2021. The topic has continued to
be considered as a principal risk for the business
throughout 2022 and 2023, with the relative
exposure remaining stable over this time period.
The mitigations put in place and progress of
managing significant climate-related risks and
opportunities are summarised in the Principal
risksand uncertainties section on pages 75-81.
On the Company’s Corporate Risk Register, there
are 20 identified risk categories – climate change
is considered within the ‘ESG’ risk category. During
2023, the Audit and Risk Committee reviewed the
Company’s risk appetite for all risk categories. The
risk appetite for the ESG risk category remained
stable, and the gross risk was increased to reflect
the growing mandatory reporting landscape on
ESG and climate-related financial disclosures.
The Climate Risk Register sits separately to the
Corporate Risk Register, and the outputs of the
Climate Risk Register feed into the Climate Change
Principal Risk on the Corporate Risk Register.
We are monitoring developments with the ESG and
climate-related reporting landscape and will review
our approach to integrating climate-related risk into
the corporate risk approach, as and when required.
4. Metrics and targets
4a) Metrics used to assess climate-related
risksand opportunities
Management regularly reviews metrics associated
with the Company’s near term science-based targets
to track progress on our goal to achieve net zero. Our
key metrics for measuring and managing climate-
related risks are therefore as follows:
– Scope 1 and 2 emissions: The Executive Board
monitors store energy consumption on a monthly
basis via the Company’s balanced scorecard.
Management reports to the Responsible Business
Committee on high-level performance against
the Scope 1 and 2 emissions targets at mid-year
and end of the year.
– Scope 3 emissions: For our most material
Scope 3 emissions categories, namely Category
1 (purchased goods and services) and Category
11 (use of sold products), we have been tracking
the number of our Goods for Resale suppliers
who have set a validated science-based target.
Each year, we measure the Company’s full
carbon footprint, including all relevant Scope 3
categories, in accordance with the Greenhouse
Gas Corporate Protocol – the full methodology
is available on our website.
– We report against the SASB Multiline and
Speciality Retailers and Distributors industry
standard, which is the standard most
appropriate to our business. We previously
reported against the Building Products and
Furnishings industry standard and continue
todisclose some of the most relevant metrics,
such as percentage of wood sourced from
thirdparty certified forests (see Responsible
Business section, page 51).
For more information on how these metrics are
incorporated into performance measures within
remuneration policies, refer to the Directors’
Remuneration Report on pages 111-127.
Within the reporting period, we have taken time
toidentify other additional appropriate metrics
which relate to our material climate-related risks
and opportunities. We will begin to monitor and,
going forward, will report these to the Responsible
Business Committee on a six-monthly basis in the
Responsible Business dashboard.
Response to TCFD recommended disclosures continued
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TCFD recommended cross-industry metric Metric used by Wickes and commentary Link to thematic climate-related risk or opportunity category
GHG emissions
Absolute Scope 1, 2, and 3
Emissions intensity
Within the reporting period, we have been tracking the following metrics:
– Tonnes of CO
2
e for Scope 1 and 2 (six monthly)
– % of GFR suppliers that have set science-based targets (six monthly)
– Tonnes of CO
2
e for Scope 3 (annually)
– Tonnes of Scope 1 and 2 CO2
e / sq ft (annually)
– Tonnes of Scope 1 and 2 CO2
e / sq m (annually)
– Store energy consumption (monthly)
– TR2 Decarbonising the fleet
– TR3 Decarbonising the estate
– TR4 Increased scrutiny from Shareholders on delivering net zero
Transition risks
Amount and extent of assets or business activities vulnerable to transition risks
In 2023, we have developed our taxonomy and classification methodology of products
that we sell to be able to monitor the following metric:
– % revenue from products that UK Government has announced will be phased out
as part of transition to netzero
– TO1 Products and services for the low-carbon transition
Physical risks
Amount and extent of assets or business activities vulnerable to physical risks
In 2023, we have been reviewing our property estate and defined appropriate measures
to monitor physical risks which we will begin to monitor:
– % property portfolio located in an area subject to flooding, heat stress or water stress
– Expenditure on property remediation required due to severe weather-related events
– PR1 Extreme weather-related events impacting operations
Climate-related opportunities
Proportion of revenue, assets, or other business
activities aligned with climate-related opportunities
In 2023, we have developed our taxonomy and classification methodology of products that we sell to be able
to monitor the following metric. We will begin to monitor the following metrics to track these opportunities:
– Revenue from products or services that support the transition to a low-carbon economy
– TO1 Products and services for the low-carbon transition
Capital deployment
Amount of capital expenditure, financing, or investment
deployed toward climate-related risks and opportunities
We will begin to monitor the following metrics to track this expenditure:
– Investment in physical climate adaptation measures (flood resilience installation and planned maintenance)
– Investment in capital required to decarbonise the estate and fleet
– PR1 Extreme weather-related events impacting operations
– TR2 Decarbonising the fleet
– TR3 Decarbonising the estate
Internal carbon prices
Price on each tonne of GHG emissions used internally by an organisation
We have not yet developed an internal carbon price, and we are considering using one in the future. – TR2 Decarbonising the fleet
– TR3 Decarbonising the estate
– TR4 Increased scrutiny from Shareholders on delivering net zero
Remuneration
Proportion of executive management remuneration linked to climate considerations
The 2023-2025 Long Term Incentive Plan (LTIP) incorporated an additional ESG measure based
on our approved near term science-based targets, weighted at 10% (3.33% equally split per target).
The 2024-2026 LTIP will continue to incorporate this measure, weighted at 10% of the LTIP.
Referto the Annual Report on Remuneration section, page 124 for further information.
– TR2 Decarbonising the fleet
– TR3 Decarbonising the estate
– TR4 Increased scrutiny from Shareholders on delivering net zero
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4b) GHG emissions and related risks
Our Scope 1, 2 and 3 GHG emissions are key
metrics in monitoring our climate impact over
time. We have calculated our full 2023 GHG
footprint for our business, covering absolute
Scope1, 2 (market and location) and 3 emissions
and carbon intensity. Our methodology for calculating
our footprint is aligned to international best-practice
guidance from the World Business Council for
Sustainable Development (WBCSD) and World
Resources Institute (WRI)’s Greenhouse Gas
Protocol Corporate Standard.
The 2023 GHG footprint for the business is
reportedon pages 48-49 and includes historical
periods since 2021 (when the Group was formed)
toallow for trend analysis. The data has been
independently verified to SAE3000. Our methodology,
the external verification statement and full GHG
footprint is available on our corporate website:
www.wickesplc.co.uk. An emissions intensity ratio
is also reported on comparing emissions against
floor area of property estate.
Due to structural changes in our business resulting
in outsourcing of some distribution activities, and
improvements in the accuracy of activity data,
wehave triggered the SBTi’s 5% threshold for
recalculating our base year footprint. In 2024,
wewill recalculate our 2021 base year and use
thisto assess if target recalculation and/or
targetrevalidation by SBTi is required.
In 2023, when calculating emissions from Goods
forResale, we have continued to use estimated
emissions for key materials from global databases
(e.g. Ecoinvent for Scope 3, Category 1, Purchased
goods and services). In the near and medium term,
we will be working with our strategic suppliers,
aswell as collaborating with the global home
improvement retail sector, to move towards
improved accuracy of emissions from suppliers,
and ultimately emissions directly associated with
the manufacture and transport of products. This
process will result in a continuous improvement
ofour methodology and may require further
rebaselining of our footprint in future years.
4c) Climate-related targets and performance
Wickes is a signatory to the British Retail
Consortium’s Climate Action Roadmap, which
commits to collectively achieving net zero across
the UK retail sector by 2040. We have reported
ourprogress against the roadmap’s 2020-2025
pathways for decarbonisation milestones on
page45.
In 2022, our three near term Science Based
Targets received validation from the SBTi.
Thisvalidation confirms that our targets have
beenset following the SBTi’s Net Zero Standard
and are aligned with the scale of reduction required
to keep global temperature increase by the end of
this century to 1.5°C compared to pre-industrial
levels. We have set milestone targets as part of
ourLTIP (more detail on the LTIP isprovided on
page 113).
Response to TCFD recommended disclosures continued
A detailed discussion of our performance with our near term targets is provided in the Responsible
Business section on pages 44-45. Section 4b) explains that the 2021 base year will be recalculated
during2024 and therefore the baseline which we assess against may change in future years.
Progress with SBTi validated near term science-based carbon reduction targets
Aligned LTIP
milestone targets
2023-2025
FY2023
progress
Operations:
Reduce absolute Scope 1 and 2 greenhouse gas
emissions 42% by 2030 (from a 2021 base year) 25% 36.9%
Suppliers:
45% of our suppliers by emissions covering purchased
goods andservices, will have science-based targets by 2027 30% 23.8%
Products:
Reduce absolute Scope 3 greenhouse gas emissions from
the use of sold products 42% by 2030 (from a 2021 base year) 16% 14%
We have reviewed our GHG emissions that relate to land use change and land management (also called
FLAG emissions). We have concluded that, in 2023, 16.7% of emissions were FLAG-related emissions
andtherefore we have not exceeded the SBTi’s threshold of 20% and are not required to set an additional
FLAG reduction target.
We remain on track to achieve our near term
science-based targets:
– Operations: Achievement of our Scope 1 and 2
reduction target will be largely met by the
switching of our electricity supply to a
renewableelectricity contract in April 2023.
– Suppliers: We are making good progress with
our strategic suppliers committing to set
science-based targets.
– Products: The reduction in emissions from the
products that we sell whilst they are in use is
largely dependent on the decarbonisation of the
UK electricity grid. We periodically review Future
Energy Scenarios from ESO to understand the
latest timelines for decarbonising the grid, to
beable to identify what direct actions may be
required by the business to meet the near term
target by2030.
Wickes Group Plc Annual Report and Accounts 202366
Governance
Financial statements
Other information
Strategic report
Non-financial and sustainability information statement
The following table
setsout where the key
content requirements
ofthe Non-financial
information statement
(asrequired by sections
414CA and 414CB of the
Companies Act 2006) can
be found in this document
or onour website.
Non-financial matter Disclosures of policies and standards Page
Employees Section 172 statement: colleagues
Board leadership and company purpose
Strategic report: People, Inclusion and diversity, Colleague voice
Strategic report: Safety and wellbeing, Safety Policy
Nominations Committee report: Inclusion and diversity
Directors’ Remuneration report
69
88-90
36-41
52-53
97-99
111-127
Human rights Code of Business Ethics
Human Rights Policy, Modern Slavery and Human Trafficking Policy
Our Modern Slavery statement can be found on our website
54
54
Social matters Section 172 statement
Strategic report: People, Environment, Homes
68
36-51
Anti-corruption and anti-bribery Board leadership and company purpose
Modern Slavery Statement
Anti-bribery Policy
Anti-Fraud Policy
Whistleblowing Policy
88
54
54
54
89
Environmental matters Response to Task Force on Climate-related Financial Disclosures (TCFD) recommended disclosures
Principal risks and uncertainties: Climate change
Strategic report: Environment
Responsible Business Committee report
Environment Policy
Responsible Sourcing Policy
Timber Sourcing Policy
56-66
79
44-49
107-110
44
54
47
Climate related
financialdisclosures
Response to TCFD recommended disclosures 56-66
Principal risks and impact
ofbusiness activity
Principal risks and uncertainties, in particular People and Safety
Audit and Risk Committee report
79
100-106
Business model Business model 18-20
Non-financial
key performance indicators
Key Performance Indicators:
Carbon emissions; Store leadership diversity 29
Wickes Group Plc Annual Report and Accounts 2023 67
Governance
Financial statements
Other information
Strategic report
Promoting the success of the Company
Section 172 statement
Section 172 of the Companies Act 2006
requires the Directors to promote the
longterm success of the Company for the
benefit of its members as a whole, having
strong regard to our stakeholders when
making decisions, and seeking to conduct
business responsibly, including reducing
ourenvironmental impact. The differing
interests of stakeholders are considered in
the business decisions we make at all levels
across the business and these decisions are
guided by our culture and purpose and by
the Board setting the right tone from the top.
Our stakeholders have an important role
toplay in the success of our business and
throughout our Strategic report you can
seehow our decisions and actions have
beeninfluenced by our stakeholders.
In this section we describe how the Board
hasfactored section 172 considerations
intodecision making.
During the year, the Board continued to act in an
agile way in responding to the uncertain economic
environment, continued cost of living challenges
and significant inflation, and considering the effects
these have on our stakeholders.
Board decision making is supported by our structured
governance framework, which includes regular Board
meetings, as well as having clear policies and authority
levels in place for management. The Board ensures
that it receives quality information, including views
from stakeholders, to inform decision making. The
Board has approved a suite of policies which establish
a robust system of control and oversight. The main
activities of the Board during the year are set out on
page 91.
Engaging with stakeholders
Engagement with stakeholders plays an important
role in ensuring that the Board fully understands
stakeholder views and makes well-informed
decisions that consider different priorities and
arefair and consistent. The Board recognises
thatnot every decision will benefit all stakeholders,
and inevitably tradeoffs may have to be made
between stakeholder groups from time to time.
Such considerations ensure the business is making
decisions with a longer term view in mind and with
the long term success of the business at its core.
Given the increasing importance of installers
tothedelivery of the Company’s strategy, it
wasdecided that they should now be considered
separate from suppliers and reported as a key
stakeholder group in their own right. In order to
have a manageable number of key stakeholders
tofocus on, landlords have been consolidated into
the supplier stakeholder group and Government
andregulators have been removed as a key
stakeholder in relation to engagement, reflecting
that our relationship is oneof compliance and
reporting which doesn’t requireengagement.
The needs and views of our stakeholders are also
considered by colleagues and leaders throughout
the business, which helps us make good decisions
at all levels. By understanding each stakeholder
group and what they care about, and considering
their perspectives, it enables more meaningful
relationships to be built so the Company and the
Board can ensure that all views are taken into
account in reaching conclusions that will benefit
the Company as a whole and create value for the
long term.
Where possible and relevant, decisions are carefully
discussed with affected groups to ensure they
arefully understood and supported when taken.
Details of our key stakeholders, how they link with
our strategy and how we engage with them is set
out in the following pages.
COLLEAGUES
79%
colleague engagement
CUSTOMERS
>80%
customer satisfaction
INSTALLERS
>3,000
installer teams
We provide a great place to work with
aspecial culture where colleagues
feelathome and can bring their true
authentic self to work.
We value the different perspectives that
ourinclusive and diverse workforce brings.
We prioritise the health and wellbeing of
ourcolleagues and provide development
opportunities to enable colleagues to build
their skills and careers.
We create an environment where colleagues
feel recognised and rewarded for the work
they do.
We help our customers create their
perfecthome and feel house proud
however they choose to undertake
theirhome improvement project.
We prioritise providing excellent
customerservice.
We are committed to sourcing good
qualityand competitively priced products
inan ethical way.
We recognise that customers trust us with
their personal data and we work hard to
ensure we have safeguards in place.
We recognise the important role that our
installers play as a key partner in differentiating
our customer proposition and delivering for
our customers.
We work closely with our installers and give
them opportunities to grow their business.
We provide high quality kitchen and bathroom
products and designs and the infrastructure
to enable installers to focus on the installation.
We provide around 50 installation
apprenticeship places to support
development of key installation skills.
SUPPLIERS
80%
of top* suppliers with a
relationship of 10+ years
COMMUNITIES
1,468
community projects
supported
SHAREHOLDERS
£ 37. 2 m
returned to Shareholders
We treat our suppliers fairly and with
respect, and we pay them on time.
Our suppliers welcome our collaborative
approach and together we develop long
term partnerships based on trust to build
capability together and create value that
can be shared.
Our track record of market share gains
gives our supply partners confidence to
invest and we work together to grow our
businesses responsibly.
We work with our supply partners to
sharelearnings and accelerate our
decarbonisation journeys.
* refers to our top 50 suppliers by spend
We feel strongly about giving something
back and supporting the causes that
matterto our colleagues and customers.
We raised over £2million for YoungMinds
over our two year partnership that ended
in2023. We are now supporting The Brain
Tumour Charity and by the end of 2023,
wehad already raised £0.7m.
Our Community Programme encourages
colleagues to support causes in their local
communities and in 2023 we supported
1,468 projects.
We have approved near term science
-based targetsto reduce our absolute
Scope 1 and2 emissions by 42% and
reduce the most impactful sources
ofourScope 3 emissions.
We create long term and sustainable value
bygrowing the business responsibly.
We focus on increasing our market share,
driving profitable growth with strong cash
generation enabling strong returns.
We build Shareholders’ trust through proactive
and relevant engagement to secure their
ongoing investment and support.
Our capital allocation policy reflects our
confidence in the Company’s strategy
andbusiness model.
Wickes Group Plc Annual Report and Accounts 202368
Governance
Financial statements
Other information
Strategic report
Stakeholder
BUSINESS MODEL & STRATEGY LINK
Our passionate colleagues along with our winning culture
arean enabler at the foundation of our strategy to deliver our
purpose – to help the nation feel house proud. The business
ensures that colleagues feel supported and valued, and have
the tools to succeed.
HOW WE ENGAGE & OUTCOMES
DAY-TO - DAY ENGAGEMENT
– Annual colleague engagement survey
– Subject specific colleague surveys
– Inclusion & Diversity network surveys
– Support Centre monthly briefings
– Listening groups
– ‘Ask the Exec’ meetings
– Internal communities
– Newsletters
– Face-to-face briefings (‘team 5’)
– Networks
– Anonymous whistleblowing service
BOARD ENGAGEMENT
– Site visits
– Designated Non-executive Director champion for
workforceengagement attends listening groups
andreports to the Board
– People updates at each Board Meeting via the CEO report
– Reviewing outcomes and actions from engagement surveys
– Reviewing gender and ethnicity pay gap disclosures
– Reviewing talent plans
– Reviewing reward and benefit reports
– Reviewing monthly and deep dive safety reports
OUTCOMES
– 79% engagement score on our recent colleague feedback
survey, which was completed by 84% of colleagues
– Flexible working in stores trialled and being rolled out
– Held cost of living webinars
– Introduction of Salary Advance in response to feedback
from the cost of living working group
– Introduced salary exchange car scheme
– Introduced Digicare and digital GP services
– Invested in new learning and development programmes
forcolleagues
– Updated Early Years opportunities, including apprenticeships
BUSINESS MODEL & STRATEGY LINK
With our vision of a Wickes project in every home and our
mission to be the partner of choice for Home Improvers
andLocal Trade, customers are at the heart of our business.
Having a compelling customer proposition and delivering
exceptional customer experience is key to achieving our
growth levers.
HOW WE ENGAGE & OUTCOMES
DAY-TO - DAY ENGAGEMENT
– Customer satisfaction monitoring across all channels
– Customer focus groups
– Customer surveys
– Product reviews
– Mood of the Nation surveys
– Customer feedback and complaints
BOARD ENGAGEMENT
– Store visits
– Customer service centre visit
– Receiving customer insights reporting
– Monitoring customer satisfaction reports
OUTCOMES
– Investment in Customer Experience Centre
– New payments options introduced online, including
ApplePay, to provide further choice to customers
– Development of customer offer, including TradePro
rewardsand launching the B2B proposition
BUSINESS MODEL & STRATEGY LINK
Having strong relationships with our suppliers to ensure that
we offer quality products and services at a competitive price
with good availability underpins our three customer propositions.
HOW WE ENGAGE & OUTCOMES
DAY-TO - DAY ENGAGEMENT
– Twice-yearly supplier conference for goods supplies
– Regular supplier meetings
– Monitoring of ethical standards
– Supplier charity dinner
– Contracts negotiations and renewals
BOARD ENGAGEMENT
– Supplier visits
– Ethical trading updates
– Reviewing material supplier contracts
OUTCOMES
– Resumed physical audits after the pandemic
– Collaborated on opportunities to improve sustainability and
23 suppliers now have SBTi validated science-based targets.
BUSINESS MODEL & STRATEGY LINK
A specialist installation model differentiates our offer and
iskey to the success of our Design & Installation proposition.
HOW WE ENGAGE & OUTCOMES
DAY TO DAY ENGAGEMENT
– Regional and Divisional Wickes management team
– Customer Experience Centre liaising between customers
and installers
BOARD ENGAGEMENT
– Reviewing updates on installations performance
– Reviewing feedback from Installer Apprentices
OUTCOMES
– Implementation of a new Field Services Management System
BUSINESS MODEL & STRATEGY LINK
We aim to deliver long term sustainable growth and returns
toShareholders through the delivery of our strategy.
HOW WE ENGAGE & OUTCOMES
DAY-TO - DAY ENGAGEMENT
– CEO/CFO meetings with Shareholders during the year
– Guided store visits for Shareholders
– Corporate website
– Market announcements and presentations
– Annual General Meeting (AGM)
– Responding to Shareholder queries
BOARD ENGAGEMENT
– Board Chair engagement with major Shareholders
ongovernance and strategy
– Remuneration Chair engagement with major
Shareholderson Remuneration Policy
– Attending AGM
– Non-executive Directors available to discuss any
matterrequested by a Shareholder on request
– Reviewing Shareholder feedback
– Reviewing AGM voting and proxy reports
OUTCOMES
– Updated Capital Allocation Policy, leading to introduction
ofa share buyback programme
– Maintenance of dividend
– Held Shareholder meetings and roadshows
– Considered Shareholder feedback from Remuneration
Policy consultation
BUSINESS MODEL & STRATEGY LINK
Our Responsible Business Strategy is embedded into
ourstrategy and supports our corporate purpose. We have
three pillars to our Responsible Business Strategy which
reflect ourfocus on People, the Environment and Homes.
HOW WE ENGAGE & OUTCOMES
DAY TO DAY ENGAGEMENT
– In-house community and Charity team interacting with
ourcorporate charity and coordinating fundraising events
– Individual stores liaising with local community projects
– Colleague volunteering
BOARD ENGAGEMENT
– Reviewing updates on charity and community initiatives
OUTCOMES
– Raised over £2 million for YoungMinds
– Supported 1,468 community projects through product
donations and colleague volunteering
– Trialled a colleague volunteering platform
Colleagues* Customers Suppliers
Installers
Shareholders
Communities
* More information on colleague engagement can be
foundinthe Strategic report on pages 27,36,39,53,68
Wickes Group Plc Annual Report and Accounts 2023 69
Governance
Financial statements
Other information
Strategic report
Stakeholder case studies
KEY STAKEHOLDER
GROUPS CONSIDERED
COLLEAGUES
CUSTOMERS
SUPPLIERS
INSTALLERS
COMMUNITIES
SHAREHOLDERS
BACKGROUND
As part of a strategic review of
customer experience, an opportunity
was identified to reshape the way in
which we serviced Design & Installation
customers throughout their post-order
journey to provide a better service.
STAKEHOLDER CONSIDERATIONS
Colleagues
The Board considered the positive
impact for colleagues, particularly
Design Consultants, who would be
able to focus on the design and sale
process, and other store colleagues,
who would be freed up from dealing
with customer queries arising post-order.
Customers
The Board recognised that this
provided an opportunity to improve
customer service and differentiate
theWickes offer. In particular, it was
identified that having a single point of
contact would be valued by customers
during their Design & Installation
project and would reduce the number
of customer issues and complaints.
Suppliers
The Board considered the
longstanding and collaborative
relationship that had been
establishedwith the outsourced
customer service supplier and
recognised the opportunity to grow
this, creating value for both parties.
The growth in market share that
couldbe achieved would also
createmore volume and scale
forother key product suppliers.
BACKGROUND
Having completed two financial years
since demerging from Travis Perkins
Plc and, with the benefit of greater
experience in the cash flows and
requirements of the business, the
Board considered that it was the right
time to review the Company’s Capital
Allocation Policy and opportunities
toreturn value to Shareholders.
STAKEHOLDER CONSIDERATIONS
Colleagues
The Board noted that all full-
timeandpart-time colleagues
inemployment at demerger from
itsprevious parent company were
allocated free Wickes Shares and
would therefore benefit from the
opportunity for future dividends
andany increase in shareprice.
Installers
The Board noted the potential benefit
to installers in having a more proactive
customer service model, which provides
both installers and customers with a
single point of contact for each individual
project to resolve any issues during the
installation process.
Communities
The Board recognised that the new
Customer Experience Centre would
create additional job opportunities
inthe communities in which the
supplier operated.
Shareholders
The Board considered the importance
of making investment decisions that
support long term growth and provide
new opportunities to increase market
share and reduce remedial costs,
therefore making it a more cost
efficient proposition providing
agoodreturn on the investment.
OUTCOME
The Board concluded that the
implementation of the Customer
Experience Centre would benefit all
key stakeholders and would elevate
the post-order customer experience,
which would support the growth and
profitability of the Design & Installation
proposition. Following implementation,
the performance of the Customer
Experience Centre is being closely
monitored and stakeholder feedback
has been positive.
Shareholders
The Board considered that the
proposed Capital Allocation Policy
would benefit Shareholders through
the opportunity for increased future
dividends per share and increased
earnings per share. The Board also
noted that it would be helpful to
giveShareholders clarity over the
Capital Allocation Policy, which
woulddemonstrate management’s
confidence in the strength of the
business strategy. The Board carefully
considered the appropriate level of
cash that the business would need
toretain to operate effectively and
deliver its strategy, and determined
the level above which cash would
beconsidered surplus. The Board
sought and considered feedback
fromShareholders and took this
intoaccount when reviewing the
CapitalAllocation Policy.
OUTCOME
The Board approved the new
CapitalAllocation Policy, which
wasannounced to the market
inJuly2023. A £25m share
buy-backprogramme to return
excesscash to Shareholders
commenced shortly thereafter.
Customer Experience Centre
1
Capital Allocation Policy
2
Section 172 continued
Wickes Group Plc Annual Report and Accounts 202370
Governance
Financial statements
Other information
Strategic report
BACKGROUND
As a key strategic growth driver, the
Board keeps the property strategy
under review throughout the year and
an opportunity was identified to both
increase the number of store refits and
implement measures to improve energy
efficiency and decarbonise our estate.
STAKEHOLDER CONSIDERATIONS
Colleagues
The Board considered that refitting
stores and reducing theenergy usage
of our estate would have a positive
impact for colleagues by providing
improved working environments
(better heating, lighting and colleague
areas) and also improving colleague
engagement by including colleagues
in the design process.
Customers
The Board recognised that refitting
stores would provide a better
customer proposition and an
improved customer experience.
Suppliers
The Board considered that the
property strategy would deepen
relationships with landlords and
alsohelp landlords meet their
decarbonisation targets through
theuse of heating controls, solar
panels and the switch to LED lighting.
Communities
The Board noted that communities
would expect us to provide good
working environments for our
colleagues and take steps to
reduceour environmental impact.
Shareholders
The Board noted that growing the
estate would increase sales and that
both refitted and new stores would
provide a strong return on investment,
as would the improvement to heating
and lighting controls.
OUTCOME
The Board considered that accelerating
the refit programme and rolling out LED
lighting and heating controls across the
estate was beneficial for all affected
stakeholders and represented a sound
investment case.
Property strategy
3
s.172 duties
Examples of how the Directors have undertaken their section 172 duties and have had regard for
thesematters when making decisions is included through this Annual Report:
s.172 factor More information Page
a) The likely consequences of
anydecision in the long term
Strategy and business model 18-27
Principal risks and uncertainties 75-81,106
Performance review 8-11
Stakeholder case studies 70-71
b) The interests of the
company’semployees
People strategy 36-43
Responsible Business Strategy 34-43
Principal risks and uncertainties 75-81
Stakeholder case studies 70-71
Directors’ report 128-130
Directors’ Remuneration report 111-127
c) The need to foster the company’s
business relationships with
suppliers, customers and others
Strategy 18-27
Responsible Business Strategy 34-66
Principal risks and uncertainties 75-81
Stakeholder case studies 70-71
d) The impact of the company’s
operations on the community
and the environment
Responsible Business Strategy 34-66
TCFD disclosure 56-66
Responsible Business Committee report 107-110
e) The desirability of the company
maintaining a reputation for high
standards of business conduct
Strategy and business model 18-27
Responsible Business Strategy 34-66
Responsible Business Committee report 107-110
Board leadership and Company purpose 88-90
Whistleblowing 89
f) The need to act fairly as between
members of the company
Strategy and business model 18-27
Board activities 91
1 s172 paragraphs (a), (b), (c), (d), (e) and(f).
2 s172 paragraphs (a) (b) (e) and (f)
3 s172 paragraphs (a), (b), (c), (d), (e) and (f)
Wickes Group Plc Annual Report and Accounts 2023 71
Governance
Financial statements
Other information
Strategic report
Risk management overview
BACKGROUND
Our approach to risk management at Wickes
remains focused and practical in the context of
thebusiness and its needs. We recognise that
effective risk management is a key part in enabling
usto meet and exceed the expectations of our
stakeholders and, through this understanding,
create the environment which will help us achieve
ourshort, medium and long term goals.
During 2023, we continued to build on and
strengthen our understanding of the context
inwhich we operate and our internal operating
environment. With these changing perspectives, we
have reassessed our risk management processes
toensure that our view of risk remains appropriate.
Understanding risk remains a cornerstone of our
decision making, underpinning how we have
operated our business throughout the year.
2023 remained a year of high inflationary pressures,
with the cost of living crisis deepening as many of
our customers experienced financial burden caused
by high inflation coupled with higher interest rates.
Although inflation rates eased in the latter part of
the year, largely due to a reduction in fuel costs, the
impact of a prolonged spell of high inflation has the
potential to require a period of readjustment before
consumer confidence and consumer spending
regain some of the ground lost.
Conflict between nations remains a threat to global
stability, with ongoing war in Ukraine together with
instability in the Middle East having the potential to
disrupt global supply chains. Fortunately, Wickes
has minimal direct supply chain exposure from
these conflicts and, through close relationships
withour suppliers, we have maintained a clear view
of upstream operations to ensure that, if required,
effective mitigations can be quickly introduced.
EMERGING RISKS
The Board has continued to operate effective
processes to help identify and assess potential
risks that may impact the business in the medium
and long term. New risks, as well as the evolution
of existing risks, are reflected within Wickes’ risk
profile, and regularly evaluated by the Board and
management teams. These processes support a
detailed and up to date view of risk, ensuring that
risk management continues to support effective
decision making.
The impact of climate change on weather patterns,
and the disruption caused by extreme weather
events, both in the UK and globally, underlines the
need for us all to make definitive changes to the way
we operate. Wickes continues to focus on reducing
its carbon emissions through, for example, working
with our suppliers and landlords to ensure we meet
our decarbonisation commitments. We remain
committed to supporting customers to save energy
and reduce the carbon footprint of their homes.
Further details of our approach to managing the
risks and opportunities from climate change are
provided on page 79.
Following the buoyancy experienced in the home
improvement market as a result of the pandemic
and the resulting changes in working practices
aspeople were encouraged to work from home,
2023 has seen a rebalancing in demand for home
improvement which is being felt across the sector.
We continue to adapt our service offering and
evolve our strategy to meet the needs of our
customers. Our approach of focusing on innovation,
our supply chain, and our ability to scale solutions
that take advantage of emerging trends in the
home improvement sector, has proved effective
and remains a core part of ourstrategy.
Initially highlighted as a crystallising risk in 2022, high
inflation has continued to be a key feature during
2023. The impacts of higher prices and increasing
interest rates have been felt across theeconomy,
impacting the consumer’s ability to spend as people
face the challenge of mitigating higher prices for
energy, mortgages and day-to-day living expenses.
Throughout the period, by working closely with our
suppliers, we have sought to preserve the value
wedeliver to customers and, bydoing so, have
consolidated our positionwithin the market.
RISK APPETITE
A clear and well-defined risk appetite supports
management in making appropriate decisions in
pursuit of the Company’s strategy. The Board has
established the Company’s risk appetite level for
each principal risk, regularly reviewing the suitability
of appetite levels with reference to the strategy and
the external operating environment. In parallel to the
revision of the Company’s principal risks, a revision
of the Company’s appetite for risk took place during
2023 to ensure that it remains at a level which
safeguards value within the organisation, while
providing sufficient scope to pursue opportunities
where it is appropriate to do so.
As in prior years, greater focus is applied by the
Board on those risks which currently fall outside of
appetite. Assessments on these risks are provided
to the Board regularly and are designed to provide
assurance that mitigating activity is sufficiently
focused to either reduce the level of risk exposure
to an acceptable level in an appropriate timeframe
or, where appetite has been purposefully set low,
ensure ongoing mitigations are in place to manage
the risk as far as practicable.
Risk management overview
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2ND LINE1ST LINE 3RD LINE
LINES OF DEFENCE
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RISK
MANAGEMENT
PROCESS
BOARD OVERSIGHT
RISK MANAGEMENT PROCESS
EXECUTIVE
BOARD
AUDIT AND RISK
COMMITTEE
INTERNAL
AUDIT
Represents all key functions
andteams of Wickes.
Maintains policies and
programmes, monitors risk
exposure, mitigation and internal
controls, and manages business
risk on a day-to-day basis
Reviews the design and
implementation of Wickes’
riskmanagement and internal
controlprogrammes
Supports the Board in monitoring
exposure against risk appetite
Supports Wickes to identify risks
and gaps in compliance, and
recommends mitigating actions
Facilitates the maintenance
oftheCorporate Risk Register
andmonitors progress in the
mitigationof each risk
Reviews and tests the
effectivenessof internal controls
and provides assurance
Identification,
assessment
and mitigation
of risk across
key functional
areas
Develops vision
and strategy
Defines organisational
Code of Business
Ethics
Sets risk appetite
and tolerance
Monitors the nature
andextent of principal
risk exposure
RISK
IDENTIFICATION
AND ASSESSMENT
RISK
MITIGATION
RISK MONITORING
AND REPORTING
CONTINUOUS
IMPROVEMENT
Identifies and owns
relevant risks assigning
responsibilities at
operational/
functional level
Ensures internal
control systems are
embedded across
thebusiness
Ensures mitigating
actions are monitored
and implemented.
Escalates risk identified
atoperational or grass
roots level to Executive,
Audit and Risk Committee
and the Board
Reviews the outputs of
the risk management
process, identifies
improvements and
supports the further
embedding of effective
risk management
processes within
thebusiness
BOTTOM UP
TOP DOWN
Oversight,
identification,
assessment
and mitigation
of risk across
the Company
RISK MANAGEMENT
FRAMEWORK
Our risk management framework is constructed
around a five-point model integrated across
thethree lines of defence. It has been designed
toensure that suitable oversight is applied
throughout the risk management cycle, while
ensuring that assurance is provided to those
tasked with oversight responsibility. Risk
identification, assessment, mitigation,
monitoringand reporting processes, take
placefrom both a top-down and a bottom-up
perspective. This is to make sure that a
comprehensive view of organisational risk
iscaptured, managed, and monitored. Each
ofthefive points in our risk framework is
furtherexplained across the following pages.
RISK
GOVERNANCE
We have a formal risk management process, part
ofwhich evaluates and prioritises the Company’s
principal risks (highlighted on page 75). The Board
hasoverall responsibility for risk management and
oversight of the system of internal controls. Risks are
reviewed by risk owners on an ongoing basis and are
assessed to identify and document corresponding
mitigating actions. Risk updates form an integral part
of periodic management reviews and are reviewed by
other members of the Company’s senior leadership
team, during Executive Board meetings and regular,
bi-annual meetings of the Executive Risk Committee
as well as meetings of the Audit and Risk Committee.
The Board sets the risk appetite and monitors and
reviews its application and ongoing relevance.
The three lines of defence model was designed to provide a
blueprint of how effective governance, risk management and
internal control processes work together.
The first line of defence is responsible for operating systems ofrisk
management and control, the second line oversees the activities of
the first line, with the third line providing independent assurance that
the first and second lines are operating as intended. Together, the
three lines provide assurance to governance structures that risks
are being managed effectively.
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RISK IDENTIFICATION
AND ASSESSMENT
Formal risk identification and re-evaluation
exercises are completed twice yearly with individual
members of the Executive Board, functional leads
and through the Risk Committee. In addition, regular
touch points with the Executive Board both formally
through the monthly Executive Board meeting and
as part of regular liaison activities help to ensure
that our view and assessment of risks remains
current and accurate.
RISK
MITIGATION
As the primary means by which we can
influenceprobability of risks crystallising and
theirimpact, review and assessment of our
mitigation strategies forms a crucial aspect
ofourrisk management framework.
As an independent and objective assurance provider,
Internal Audit, by delivering its annual audit plan and
regular reporting to the Audit and Risk Committee,
provides a thorough assessment of the design
andoperation of our internal control environment.
Whereapplicable, second line functions (such
ascompliance teams) continuously assess the
application of controls, providing assurance that
appropriate mitigation is being maintained.
RISK REPORTING
AND MONITORING
The Board, Audit and Risk Committee and
theExecutive Board remain the three principal
governance groups where the Corporate Risk
Register and principal risk view is regularly reported
to.The Audit and Risk Committee and Executive
Board regularly reviews risks outside current risk
appetite levels challenging management on the
extent and efficacy of mitigating actions.
RISK CONTINUOUS
IMPROVEMENT
Regular risk assessment and reporting activities
enable a more refined evaluation of risks. As past
understanding is built upon, this helps to create
abetter view of risk and a greater level of self-
challenge towards recorded mitigations. Through
the risk management cycle, the quality of risk
management improves.
To be considered truly effective, risk management
should enhance, support and enable the achievement
of strategy. Building and operating a framework to
do this is challenging, and requires a good level of
commitment and engagement from risk owners
and the wider business. From the base understanding
of risks relating to our strategic priorities, we
haveworked to include a more operational
viewofrisk management.
Risk management overview continued
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K
J
I
H
F E
C
Principal risks and uncertainties
PRINCIPAL RISKS
Wickes’ approach to risk management is built
around a sound understanding of our principal
risks.Detailed analysis of the individual causes and
consequences of our principal risks has supported
the development of our Corporate Risk Register and,
as such, the Corporate Risk Register is the primary
mechanism through which our principal risks and
related themes are assessed. Regular review of the
risks captured within the Corporate Risk Register
ensures that an appropriate and up to date view
ofour principal risks is maintained.
Updates in-year
Prior to its demerger in April 2021, Wickes was reliant
on back-office systems designed and managed by
its then parent company. The Autonomy programme,
to transition to standalone systems, was completed
during 2023 and therefore the Board, through the
Audit and Risk Committee, approved the removal
ofthe Autonomy programme from the Group’s
principal risks.
During the year, the principal risks and risks themes
were reviewed and updated to reflect the changes
inoperations and the external risk environment.
Theupdated set of principal risks was approved
bythe Board following a recommendation from
theAudit and Risk Committee.
RISK MAP
Principal risk themes
The risk map shows the relative exposure of
each principal risk theme on a net basis rather
than the absolute level ofimpact and likelihood
for each risk. The assessment on whether the
risk has increased, decreased or remains stable
has been made onthe basis of the net risk
exposure to Wickes.
PRINCIPAL RISK THEMES
A
Cyber and Data Security
B
Business Change
C
Brand Integrity & Reputation
D
Legal and Regulatory Compliance
E
IT Operations
F
Growth Strategy
G
Climate Change
H
People and Safety
I
Commercial and Supply Chain
J
Financial Management
K
Customer Experience
L
Stores, Distribution and Installations
The Board, supported by the Audit and
RiskCommittee, hasconfirmed that it has
undertaken a robust assessment ofthe
emerging and principal risks facing the Group,
including those that would threaten its business
model, future performance, solvency or liquidity.
The riskmap above, shows the relative likelihood
andimpact for Wickes’ principal risks, and the
movement of risks across the period under review.
A more detailed assessment of each principal risk
is provided over the next few pages.
Low
Low
Likelihood
Impact
High
High
Risk key
Risk stable
Risk decreasing
Risk increasing
Wickes Group Plc Annual Report and Accounts 2023 75
L
D
B
A
G
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Growth levers Stakeholder groups Risk trend
1
Winning for Trade
2
Accelerating Design
& Installation
3
DIY category wins
4
Store investment
5
Digital capability Colleagues Customers Suppliers Decreasing Increasing Stable
6
Enhanced
storemodel
7
A winning culture Installers Communities Shareholders
RISK – CYBER AND DATA SECURITY
Executive responsibility: CEO, General Counsel and Company Secretary, and Chief Information Technology Officer
Description of risk
The availability and security of our IT systems andaccurate data is critical for us to operate successfully
whilst maintaining the security ofcolleague, customer and company confidentialdata.
A key system being unavailable or suffering asecurity breach could lead to operational difficulties, loss of
sales, increased costs, legaland regulatory penalties, reputational damage and loss of stakeholder trust.
Stakeholder groups
Risk trend
Link to strategy
5
MITIGATIONS
– Continued investment in technology development
and security including roadmap to decommission
outdated systems.
– ‘Privacy by Design’ approach to new systems.
– Data protection and information security policies
and procedures in place and regularly reviewed.
– Mandatory training and ongoing awareness
programme, including phishing tests, to keep
colleagues informed and aware of data
protection and cyber security risks.
– Restricted access to sensitive data.
– Security controls to prevent, detect and mitigate
unauthorised activity which are regularly tested.
– Vendor assurance process to assess the
robustness of suppliers’ security and data
protection controls as part of onboarding
orcontract renewal.
– Data and security provisions are included
inthird party contracts.
– Crisis management plans and business
continuity plans in place.
– Investigation process including a feedback
loopto ensure learning from mistakes
– Dedicated management data and information
security committee
– Monitoring and reporting to the Executive
Boardquarterly and Plc Board twice a year.
PROGRESS
We continue to improve our security to minimise
the likelihood of and increase the ability of the
business to identify and respond to a cyber attack.
During the year, new cyber training was rolled out
to all colleagues.
There were no material cyber incidents or data
breaches during the year.
Going forwards, we expect to see cyber attacks
continue to grow in frequency and complexity,
andwewill continue to develop our cyber and
datasecurity risk management.
RISK – BUSINESS CHANGE
Executive responsibility: Executive Board
Description of risk
The nature and pace of change can have a significant influence our business. Keeping pace with and,
wherepossible, being ahead of change is a business imperative without which we will be unable to achieve
our strategic goals and aspirations.
Stakeholder groups
Risk trend
Link to strategy
1
2
3
4
5
6
7
MITIGATIONS
Although the demerger presented one of the more
significant episodes ofchange in Wickes’ recent
history, business change has become an embedded
factor acrosseverything that we do as a business.
A key focus, however, is ensuring that we can
manage the change which occurs, to maximise
opportunities and minimise risk so that we are
able to change and adapt to continue to work
towards our strategic goals.
A key mitigation to business change is our
forward-looking investment plans; defined
changeprogrammes have been identified,
budgeted, and are being delivered to support
ourstrategy. We have also worked to embed
change within business-as-usual processes,
recognising that change is not confined to
projects, but forms the foundation of an
adaptableand resilient business.
PROGRESS
A significant part of our ability to respond to change
was built into the autonomy programme in2022;
aproportionate level of funding has beenallocated
to business change programmes in 2023 to ensure
that our business continues toevolve and is best
placed to meet the future demands of customers
and the sector as itchanges.
It is recognised that there is an imperative to
adapt and evolve which means that business
change is no longer a discrete activity but
anongoing process.
Principal risks and uncertainties continued
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RISK – BRAND INTEGRITY AND REPUTATION
Executive responsibility: Executive Board
Description of risk
Maintaining and growing our brand integrity andbrand reputation underpins our long term strategic
aims, allowing us to maintain and grow our position in the home improvement market.
Failure to do so may prevent us from achievingour strategic objectives.
Stakeholder groups
Risk trend
Link to strategy
1
2
3
4
5
6
7
MITIGATIONS
Maintaining our brand integrity and brand
reputation is woven into the fabric of everything
that Wickes does.
Our approach in this area includes significant
investment in training our colleagues to ensure
the highest levels of consistent customer service
are maintained in whichever channel our customers
choose to engage with us.
In addition, we work closely with our suppliers to
deliver high-quality products that provide value for
money, with extensive product testing protocols to
ensure our quality expectations are met, together
with a customer alert and recall process through
the Wickes website, if required.
PROGRESS
The Company has continued to focus on its
distinctive customer proposition, uniquely
balanced business and curated product range
delivered through a low-cost and efficient
operating model which are key underpins
foritsbrand integrity and reputation.
Our brand monitoring programme has provided
assurance that we maintain a healthy brand and
reputation, but we are aware that a level of focus
is required to ensure that this trend continues.
Thehighest levels of probity and integrity remain
cornerstones of the way Wickes operates and
afoundation of our culture.
RISK – LEGAL AND REGULATORY COMPLIANCE
Executive responsibility: General Counsel and Company Secretary, and the Executive Board
Description of risk
We operate in an increasingly regulated environment, and we must comply with a broadrange of laws,
regulations and standards.
Failure to comply with or to take appropriate steps to prevent a breach of these requirements could result
informal investigations, legal and financial penalties, reputational damage and other consequences for
thebusiness, its colleagues and Directors.
Stakeholder groups
Risk trend
Link to strategy
7
MITIGATIONS
– Code of Business Ethics in place, supported
bylegal and regulatory compliance policies
which are regularly reviewed.
– Mandatory training based on risk for all
keyareas, including health and safety, data
protection, consumer credit, competition
law,pricing and promotions, modern slavery,
anti-bribery, anti-money laundering, anti-tax
evasion, market abuse and age restricted sales.
– In depth training for high-risk roles.
– Dedicated teams of subject matter experts
across the business, including health and
safety,responsible sourcing and quality and
sustainability, supported by the in-house
legalteam.
– Supplier commitment to comply with all
applicable laws and regulations is incorporated
into contractual terms of business and monitored
through the ethical audit programme.
– Anonymous whistleblowing service for
colleagues, suppliers and other third parties to
enable concerns to be reported in confidence.
– Investigation process including a feedback loop
to ensure learning from mistakes or incidents.
– Monitoring of key risks through dedicated
management committees (consumer credit
and data and security governance).
– Monitoring and reporting to the Executive
Board quarterly and Plc Board twice a year
withhigher-risk/low-risk appetite areas such
ashealth and safety reporting to every meeting.
– Active monitoring of legal and regulatory
developments by in-house legal team.
PROGRESS
We continue to monitor legal and regulatory
developments relevant to the business and
takeappropriate action.
During the year, training was reviewed and updated
to make it more tailored to the business, and new
policies, processes and training were put in place to
meet the requirements of the new Consumer Duty.
No material breaches of laws or regulations
wereidentified during the year.
Going forwards, we expect to see significant
strengthening of UK consumer laws and regulations
and increasingly demanding environmental
regulation, and will continue tomonitor developments
and respond appropriately to ensure continued
compliance withapplicable laws and regulations.
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RISK – IT OPERATIONS
Executive responsibility: Chief Information Technology Officer
Description of risk
As a digitally enabled business, reliable, available and appropriate back-office and customer facing
IToperations underpin the delivery of every aspect of our strategy.
Separate from cyber security, the maintenance ofour IT estate is a critical success factor to our
short,medium and long term success. Failure to manage our IT operations effectively may impact
sales and our ability to operate as a business.
Stakeholder groups
Risk trend
Link to strategy
5
MITIGATIONS
Reflecting our business’s need to be supported
byinformation technology, the ongoing effective
operation of information technology forms the
basis for everything that we do and helps to
mitigate associated risks.
The completion of the autonomy programme
improved our ability to identify and respond to
issues directly, and also enabled a full assessment
of our IT system needs against our strategic plans
and priorities. A significant investment programme
to develop future fit IT solutions was initiated as
part of the demerger, gathering pace through
2023.This programme, together with an effective
approach to identifying and resolving day-to-day
issues with minimal impact on systems availability,
have been key components in managing this risk
throughout the year.
PROGRESS
The completion of the autonomy programme has
ensured our systems continue to be effectively
managed and able to support the business.
Thestrategic and operational approach taken by
the business has ensured that system availability
has been maintained, and work continues to
identify and remedy known issues.
Further investment to support the development
ofback-office systems will continue through 2024
andbeyond to strengthen our ability to manage
ourITestate effectively and efficiently.
RISK – GROWTH STRATEGY
Executive responsibility: CEO and the Executive Board
Description of risk
Our aspiration to grow market share in the competitive home improvement sector is a fundamental
driver for our investment in stores, technology, products and our people.
Sustainable growth enables us to make this investment. Failure to achieve our growth strategy
maylimit the level of investment we are able to make towards realising the future of Wickes.
Stakeholder groups
Risk trend
Link to strategy
1
2
3
4
5
6
7
MITIGATIONS
Progress towards the achievement of our
strategic goals forms a key focus for all areas
ofthe business, underpinning the creation and
maintenance of Shareholder value. To support
ourfocus, a five-year (rolling) plan details how
ourstrategy will be operationalised in the
shortand medium term. The five-year plan is
approved by the Board and forms the basis of
departmental business plans which together
drivethe achievement of our strategy.
Regular, monthly reporting of target defined key
performance metrics provides a clear view on
progress and helps to ensure that the Executive
Board maintains strong visibility over progress
and can identify areas where additional focus
orchanges to approach may be required.
PROGRESS
Our results for 2023 provide confidence that
we’veadopted appropriate responses to manage
the risks associated with our growth strategy.
Encouraging progress has been made throughout
theyear against our objectives where, despite the
inherent challenges that our customers have faced
during the ongoing cost of living crisis, our unique
market proposition and value focus have seen a
growth in Wickes’ market share across theyear.
Principal risks and uncertainties continued
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RISK – CLIMATE CHANGE
Executive responsibility: Executive Board
Description of risk
Our stakeholders need to be assured that weareacting responsibly across our operationsand supply chains.
Physical risks from extreme weather events and transition risks from potential stringent regulation, or
failuretoefficiently decarbonise our value chain, could increase costs and impact operational flexibility.
Failure to positively change our impact on the environment would fall short of stakeholder
expectations, which could lead to reputational damage and impact our financial performance.
Stakeholder groups
Risk trend
Link to strategy
4
6
7
MITIGATIONS
– Assessment of physical and transitional climate
change-related risks (see TCFD statement on
page57).
– Allocation of capital across the five-year business
plan to enable the delivery of further operational
carbon reductions.
– Approved near term science-based targets in place
to reduce our Scope 1 and 2 and most material
Scope 3 emissions.
– Carbon reduction targets built into the Executive
Board’s long term incentives.
– Active collaboration with strategic suppliers
todecarbonise our supply chain.
– Dedicated sustainability team.
– Monitoring of policy and regulatory developments,
future carbon pricing and stakeholder views.
– Assessment of the physical risk to property
estate from long term climate change.
– Aligning climate change-related disclosures with
developing standards (e.g. IFRS) and frameworks
(e.g. CDP).
PROGRESS
We continue to make good progress on reducing
ourenvironmental impact in line with our
EnvironmentPolicy.
During the year, we have reduced energy usage
through the roll-out of LED lighting and improved
heating controls, and we switched to a renewable
electricity contract. We have also worked closely
withkey suppliers to set science-based targets
toreduce the emissions of our supply chain.
New product ranges were launched during the year
tosupport our customers with improving energy
efficiency and decarbonising their homes, particularly
considering the ongoing cost of living challenges.
We are on track to meet our near term science-
based targets and support the British Retail
Consortium’s Climate Action Roadmap to
achievenet zero by 2040.
Going forwards, we expect to see increasing
disclosure requirements and a focus on
greenwashing claims. We will continue to
developour Responsible Business Strategy
andour climate transition plan to respond to
theevolving situation and stakeholder needs.
RISK – PEOPLE AND SAFETY
Executive responsibility: Chief People Officer, Chief Operating Officer and Executive Board
Description of risk
Our people are our biggest asset; together we are allresponsible for making Wickes successful and providing
thebest service possible to our customers. Failure to support our colleagues effectively and in the right way may
impact theirability to bring ‘their best selves to work’ andtherefore our ability to meet our strategic objectives.
Maintaining the safety of our colleagues and customers in store and during installations intheirhomes
is a key priority.
Stakeholder groups
Risk trend
Link to strategy
6
7
MITIGATIONS
At Wickes, we recognise that our people sit at the
very core of everything that we do. We maintain
apositive, supporting culture and our motto of
‘let’s do it right’ runs throughout everything that
we do, including how we engage with customers,
suppliers and colleagues.
We have continued to liaise closely with colleagues
to understand their views and challenges and have
continued to provide support to promote good
mental health and financial wellbeing where needed.
These approaches are embedded within our people
strategy, which has been built around the four
pillars of awareness, education, policy and practice.
Health and safety
Health and safety training is provided to new
colleagues during their induction, and regular
refresher training is provided to ensure that
awareness of this key topic remains high.
Regular store health and safety audits and incident
reviews, where required, are conducted and lessons
applied to ensure that our operations remain as safe
as possible, and wider monitoring of health and
safety KPIs provide management with an accurate
view of health and safety risk within the business.
PROGRESS
Our colleagues are vital to the current and ongoing
success of the business. Throughout 2022 and
2023, the cost of living crisis has impacted our
colleagues, and we have recognised that additional
support has continued to be needed to help reduce
some of the external pressures that are being
experienced and support our colleagues to bring
their best self to work.
Health and safety incidents have continued their
downward trend throughout 2023, and maintaining
our good record remains a key area of focus for
thebusiness in managing the health and safety risks
that we are able to control. We remain aware and
proactive in reducing risks posed by violence towards
our colleagues including violence resulting from an
increase in ‘professional’ shoplifting activity.
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RISK – COMMERCIAL AND SUPPLY CHAIN
Executive responsibility: CEO, Chief Operating Officer and Chief Commercial Officer
Description of risk
Effective management of our commercial relationships with suppliers and our wider supplychains
helps provide a platform which enables the business to provide an excellent levelof customer experience.
Working in partnership with our suppliers, we are able to support sustainable, long term relationships
based on fairness and trust. Failure to do so mayimpact our ability to manage our product costs and
ensure the availability of products.
Stakeholder groups
Risk trend
Link to strategy
1
2
3
MITIGATIONS
The transition to a standalone business
enabledWickes to re-establish and reaffirm
relationships with all suppliers, including the
renegotiation of contracts.
Regular contract performance reviews are held
with our key suppliers, which include assessments
on both price and fulfilment performance against
as set of established performance indicators.
We work closely with our suppliers to ensure that
weare able to meet the needs of our customers,
while supporting our suppliers to maintain viable
businesses. Regular supplier conferences are held
throughout the year to maintain positive relationships
with our supplier base and help maintain a focus on
the delivery of our commercial strategy.
PROGRESS
Throughout 2023, commercial teams have
maintained regular interaction with our suppliers,
working with our suppliers to promote sustainability
within the supply chain. Our commercial approach
has enabled margin retention while offering our
customers the level of value expected of the
Wickes’brand.
The proactive management of our supply chain
hasresulted in the maintenance of product
qualityand ensured excellent product availability
throughout the year.
RISK – FINANCIAL MANAGEMENT
Executive responsibility: CFO
Description of risk
Managing finances, including understanding andmanaging the impact of external influences onour costs,
revenue and cash flows is key to ourlong term success.
It helps to ensure that we are able to continue investing inour growth levers, operational capability,and
digital and IT innovation.
Failure to effectively manage our financial position sustainably may result intheinability toinvest
inthefuture of Wickes and meet our short and long term liabilities
Stakeholder groups
Risk trend
Link to strategy
1
2
3
4
5
6
7
MITIGATIONS
The Company has well-established financial
processes and controls which allow it to
monitortrading and to actively manage its
costsand cash flows, as well as to develop
longerterm financial plans.
Cash flow models are maintained which monitor
short term cash movements, as well as medium
term cash and working capital. These underpin our
going concern and financial viability assessments
(see page 82).
The Company’s treasury activities are low risk;
they are managed using clearly defined and
documented policies, ensuring surplus cash
iseffectively deposited and short term cash
needs are satisfied.
PROGRESS
During 2023, the Company has invested across
finance, in both people and processes, to improve
the quality of its internal financial reporting, as
well as to continue its investment to document
and streamline its financial controls.
These investments have helped to reduce the net risk
score in this area. However, we recognise the need to
continue to invest and adapt, mindful of the revisions
to the UK Corporate Governance Code published by
the FRC.
Principal risks and uncertainties continued
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RISK – CUSTOMER EXPERIENCE
Executive responsibility: CEO, Chief Operating Officer, Chief Marketing and Digital Officer
Description of risk
Our success is dependent on providing our customers with the highest levels of customer service and a
positive customer experience that results in customers coming back to Wickes. Failure to maintain high
standards of customer service and experience may impact sales and brand reputation.
Stakeholder groups
Risk trend
Link to strategy
1
2
3
4
5
6
7
MITIGATIONS
2023 has seen the continuation of programmes to
capture customer views on their experiences which
includes initiatives such as the Customer Closeness
programme, our customer satisfaction programme
(run by 3rd party partner Maru) and our rich
understanding of data which fuels our Mission
Motivation Engine.
Regular and frequent customer surveys and feedback
received through our digital platform, store channels
and through our Click & Collect and Home Delivery
services provide Wickes with a unique and rich view
of how our customers feel about our services. All
customer contact is captured and profiled to increase
our understanding of why customers contact us;
through this process, we can identify and fix the root
cause of issues rather than addressing symptoms.
The customer contact satisfaction process
androot cause approach has helped us achieve
high levels of Customer Satisfaction across all our
channels and all channels have grown consistently
since 2018. In the event of an escalated complaint,
these are managed by our team of expert Customer
Complaint handlers, based in Northampton.
Werun a quality programme so we can monitor
customer satisfaction at the point of complaint
resolution and have an 80% ‘Good or Excellent’
satisfaction rating. We also measure and report
customer satisfaction at every stage of the Do-it-for-
me customer journey, helping us to drive continuous
improvement by targeting those parts of the
process which receive lower satisfaction scores.
PROGRESS
Our continuing focus on our customers has,
onceagain, resulted in excellent levels of
customer satisfaction. Our ongoing programme
ofinvestment in technology and our continuing
focus on measurement, root cause analysis
andappropriate corrective action have
contributedto these results. In addition,
focusingon the ‘inputs’ as opposed to the
‘outputs’ has underpinned our consistent
growth,and CSAT excellent results in 2023.
As our back-office systems improve through the
business change programme, we envisage that
further improvements to customer satisfaction
willberealised through increased efficiency and
dataavailability. In addition, in 2024 we launch our
Customer Satisfaction programme with a new
partner, InMoment, which will provide even richer
feedback through rich data. We will then take
thisdatato insight, then to action to ensure
animprovedoutcome.
RISK – STORES, DISTRIBUTION AND INSTALLATIONS
Executive responsibility: CEO and Chief Operating Officer
Description of risk
Effective operations support us in our drive to be thehome improvement partner of choice, whether
acustomer opts to do it themselves, hireslocal tradespeople or works with Wickes directly to achieve
theirhome improvementdreams.
Failure to manage our operations effectively willimpact our ability to provide the right level ofcustomer help,
the right volume of stock to supporttheir needs or a timely connection to ourinstallation teams, reducing
the high quality ofcustomer experience we strive to deliver.
Stakeholder groups
Risk trend
Link to strategy
6
MITIGATIONS
The effective running of our stores distribution
andinstallation process is a fundamental aspect
ofour day-to-day operations.
Training and support for these teams ensure that
agood level of awareness of our standards and
expectations is maintained.
Our store compliance programme, driven by our
inspection regime, ensures that all our stores
continue to maintain the standards that our
customers expect.
Well-controlled Distribution Centres and
associated logistics provide a means to
ensurethat we have the right product in
therightplaces to fulfil customer needs.
The application of continuous improvement
approaches helps to keep performance levels high
and helps to identify where action may be required.
Customer feedback and satisfaction measures
ensure that our installations meet and exceed
theexpectations of our customers.
PROGRESS
In recent years, responses applied to mitigate
risks which impact stores, distribution and
installations have helped to build a robust
andeffective environment to manage internal
operations. Through maintaining a ‘customer
first’mindset, we have continued to build on
thesemitigations through 2023.
The further strengthening of internal processes and
IT systems through the year, investment in which is
set to be maintained in 2024, continues to contribute
to improved performance in this area.
Wickes Group Plc Annual Report and Accounts 2023 81
Governance
Financial statements
Other information
Strategic report
Viability statement
Viability statement and goingconcern
Introduction
The UK Corporate Governance Code requires
companies to state whether they have a reasonable
expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due
over the period of assessment. Several scenarios
have been modelled to support our viability statement,
which assess the impact of our principal risks on
the solvency and liquidity of the Company.
Assessment period
The Directors’ assessment of viability has been
made over a five-year period. This is considered
appropriate as it is consistent with the period over
which the Group considers its principal risks and
aligns with the Company’s Five-Year Plan, which
isregularly presented to the Board, and covers
theperiod up to December 2028.
Assessment of prospects
This viability statement should be read in
conjunction with the description of the Group’s
business model and strategy, which are set out
onpages 18-19 and 21-27, respectively.
TheDirectors assess the Group’s prospects on
aregular basis and in particular progress against
the strategic objectives set out in its Five-Year
Plan. ThePlan delivers forecasts of the Group’s
financial performance including cash flows, and
allows the Directors to assess the Group’s liquidity
position and adequacy of funding. Sensitivity
analysis of the main assumptions underlying the
plans is alsocarried out. The plans are approved
by the Directors and financial budgets and KPIs
aresubsequently used to monitor performance in
theBoard’s monthly review of the Group’s results.
In its assessment of the Group’s prospects,
theBoard has taken into account:
– Uncertain trading conditions and expectations
ofthe future economic environment, as well as
the potential influence of climate change on our
business. The continuing macroeconomic
uncertainty brought about by therecessionary
environment in the UK, inflation risks, and global
supply chain disruption; despite the impact of
these uncertainties in 2023, the Group has
maintained revenue levels and continued to be
profitable, although at a slightlyreduced level.
– The Group’s financial position: despite the
ongoing and increasing challenges of the
widereconomic environment, the Company
hasreported a strong set of results and positive
operating cash flows, offset by our continuing
commitment to invest in our business and
deliver the capital allocation policy announced
during the year. We have continued to demonstrate
that Wickes is resilient as a standalone entity
and we remain confident thatour Five-Year Plan
shows strong sustainablegrowth.
Assessment of viability
The scenarios for assessing the viability of the
Company were identified by considering the
potential impact of individual principal risks
andpotential combinations (as shown in the
tableon page 75).
All twelve principal risks have been considered
when completing the modelling. These risks
combine to represent severe but plausible scenarios
covering a range of different operationaland
financial impacts on the business.In total, six
individual scenarios havebeen created, with a
seventh ‘collective’ scenario, which combines
anumber of the individual scenarios to model a
worst-case hypothetical situation (as these could
theoretically run together, with different impacts
onour business).
None of the individual scenarios modelled were
found to have an impact on the long term viability
ofthe Company over the assessment period.
Themodelling showed we are in a strong position
towithstand each of the individual scenarios.
Thecollective scenario (see page 83 for more
detail) is more extreme and whilstthe scenario is
plausible, it exceeds the impact of principal risks
which the Company has encountered in its trading
experience to date. Under this scenario, which
assumes dividends continue to be paid in line with
the capital allocation policy (2.5x cover), the Group
would remain cash positive. If required, further
mitigation would be possible to improve the cash
position, for example reducing or delaying our
investment plans or to target cost savings. The
modeldoes not assume use of the bank facility.
Additionally, reverse stress tests were performed
oneach scenario to identify what level of sensitivity
on each scenario would cause the business to no
longer be viable, and the likelihood of these reverse
stress tests was considered and found to be remote.
Viability statement
Having assessed the current position, principal
risksand prospects of the Company, and taking
intoaccount the assumptions above, the Directors
confirm they have a reasonable expectation that
the Company will be able to continue in operation
and meet its liabilities as they fall due over the
five-year assessment period.
Wickes Group Plc Annual Report and Accounts 202382
Governance
Financial statements
Other information
Strategic report
Going concern
The Group’s business activities, together with
thefactors likely to affect its future development,
performance and position are set out in the Strategic
report, including the principal risks of theGroup set
out on pages 75-81. The financial position of the
Group, its cash flows, liquidity position and borrowing
facilities are described in the Financial review on
pages 30-33. The Directors have considered the
above and how they may impact going concern.
They have also completed modelling for scenarios 1
to 4 opposite, as well as a severe but plausible
scenario which assesses the impact on the Group’s
liquidity headroom when combining these risks
together. When considering scenarios 1 and 6, the
Directors do not consider risks 5 or 6, based on the
mitigating controls in place, will impact in the next
12 months and are therefore not included in their
going concern assessment.
As a result of this review, the Directors have
areasonable expectation that the Group has
adequate resources to continue in operational
existence for a period of at least 12 months from
the date of approval of the financial statements
andtherefore consider itappropriate for the
Groupto continue to adopt the going concern
basisof accounting in preparing the annual
financial statements.
Furthermore, based on the Group’s strong
performance, prospects and liquidity position,
theDirectors do not consider going concern to be
acritical accounting judgement. Further detail in
relation to the use of the going concern assumption
and the scenarios modelled by the Directors are
detailed in note 1 of the Group financial statements.
Scenario modelled Link to principal risks
Scenario 1
REDUCED CUSTOMER CONFIDENCE AND LOWER SPENDING
Reduced customer confidence and lower spending, either through external economic factors or through loss of customer confidence in Wickes as a brand.
The budgeted sales increases are not delivered: sales decline in 2024 and return to growth in 2025.
ASSUMPTIONS
Sales decline by 6% in 2024, followed by growth percentages in line with the Five-Year Plan but from a lower starting point.
No change to margin and administrative costs.
Customer Experience
Growth Strategy
Brand Integrity
andReputation
Scenario 2
SUPPLY CHAIN AND COST MANAGEMENT DIFFICULTY
Costs to obtain and distribute goods are impacted by internal factors (operational efficiency, people factors, IT operations) or external factors (macroeconomic factors
such as inflation, the cost implications of ESG, and the availability of goods and the costs of delivery). The business is able to maintain revenue levels but is required to
increase the cost base to do so.
ASSUMPTIONS
No change to sales.
Margin rate reduced by 1%.
Customer delivery costs increased by 5%.
Commercial and supply chain
IT Operations
Stores, distribution
andinstallations
Climate change
Legal and regulatory
compliance
Scenario 3
FURTHER INCREASES IN ENERGY COSTS
Energy cost increases beyond the level currently budgeted. The business is able to maintain revenue levels but is required to increase the cost base to do so.
ASSUMPTIONS
Energy costs are £5m above those budgeted in each year of the plan.
Financial management
Climate change
Scenario 4
INCREASE IN PAYROLL COSTS
The cost of living crisis and potential future increases in minimum wage results in salary increases in excess of those budgeted. The business is able to maintain revenue
levels but is required to increase the cost base to do so.
ASSUMPTIONS
No change to sales.
Payroll costs in relation to store and warehouse colleagues increased by 5%.
People and safety
Financial management
Scenario 5
INABILITY TO DELIVER BUSINESS CHANGE PROGRAMME TO BUDGET OR TO TIME
The Company’s change programme to be delivered over the coming years is expected to be a key underpin for future growth. It includes significant investment in the
company’s core operational IT platforms, which will need to be carefully delivered to maximise business value, and minimise disruption. IT change programmes are
inherently risky and it is possible that it cannot be delivered to time or to budget.
ASSUMPTIONS
Anticipated annual spend on business change programme is over budget in later years of the plan by 20% due to unforeseen impacts of technology or scope.
No changes to sales or margin.
Business Change
Scenario 6
OPERATIONAL SHOCK
A significant external disruption (e.g. a cyber attack or a disease outbreak) requires the business to shut down fully for a short period of time, returning to budget
withintwo months as soon as the effects of the disruption have been addressed.
ASSUMPTIONS
Zero revenue for two weeks, returning to budget within one month.
No change to gross margin percentage: all costs other than direct cost of stock assumed to remain in line with budget, as it is anticipated that any potential cost
reductions during a shutdown would be offset by increased costs required to mitigate the potential losses.
Cyber and data security
Scenario 7
A COMBINATION OF SCENARIOS SET OUT ABOVE
This is seen as a worst-case scenario and whilst the scenario is plausible, it exceeds the impact of principal risks which the Company has encountered in its trading
experience to date. The combined scenario does not include Scenario 5, Business Change, on the basis that an operational shock would likely trigger a reconsideration
ofthe timing and scope of the current change programme.
As above (Excluding
Business Change)
The Strategic report has been approved
bytheBoard of Directors and is signed
onitsbehalfby:
David Wood
Chief Executive Officer
18 March 2024
Mark George
Chief Financial Officer
18 March 2024
Wickes Group Plc Annual Report and Accounts 2023 83
Governance
Financial statements
Other information
Strategic report
Introduction to governance
Christopher Rogers
Chair of the Board
Dear Shareholder,
On behalf of the Board, I am pleased to present
ourGovernance report for the period ended
30 December 2023. This report details our
approach to effective corporate governance,
including the controls and oversight the Board
hasestablished to ensure we are effective in
ourdecision making, and that we have an
appropriate diversity of skills, knowledge and
experience tomanage risk and successfully
deliveragainst ourstrategy.
This year, we have had one change to the Board
with the appointment of Laura Harricks. Laura
brings a fresh and different perspective to Board
discussion and her appointment has increased
thediversity of the Board. We recognise that there
remains opportunity to further increase diversity
inthe broadest sense and this will continue to be
an area of focus for the Board over coming years.
Monitoring the performance of the business
duringthese challenging economic times, whilst
considering the impact on our colleagues and
other stakeholders of the continuing cost of living
challenge, was a key focus for the Board during
2023. We have had open and honest discussions
about the impact of cost inflation on the business
and have been able to respond strategically in an
agile way, looking for opportunities to support
ourgrowth levers and build the business.
Wickes has an important role to play in society,
fromthe products it sells to the stores it runs and
theinfrastructure it uses to service its customers
andsupport its communities. In addition, Wickes
hasaunique and special culture, which the Board
recognises the business needs to protect and utilise
to attract and retain high-performing talent from all
backgrounds. The Company’s approach to inclusion
and diversity leads to a culture where all colleagues
feel at home at Wickes and this is an important
foundation for the business.
My personal highlight has been the Board visits
tostores and toour outsourced customer service
supplier, which enabled us to get closer to Wickes
customers and spend time withour colleagues and
partners tobetter understand their perspectives.
The Board Committees have supported the work
of the Board during the year, providing assurance
and helping to deepen the Non-executives’
understanding of the key areas ofthe business.
The Board remains aware of the value of good
governance and I am confident that our governance
framework is effective. The commitment demonstrated
by our colleagues to help the nation feel house proud
has been admirable and I would like to take this
opportunity to say thank you to our colleagues on
behalf of the Board. Looking forward to 2024, the
Board believes the business has a clear strategy
andis confident that the business has the right
teamto deliver this.
Christopher Rogers
Chair of the Board
18 March 2024
Governance
Wickes Group Plc Annual Report and Accounts 202384
Governance
Financial statements
Other information
Strategic report
Compliance with the UK Corporate
Governance Code2018
Governance underpins every aspect of the
Board’s considerations and decision making.
The Company has applied the Financial Reporting
Council’s (FRC) UK Corporate Governance Code
2018 (the ‘Code’) Principles and complied with all
the Code’s Provisions throughout the year ended
30 December 2023. The Code is available on the
FRC’s website at www.frc.org.uk.
Signposts to where key content showing how the
Company has applied the Principles of the Code
are shown on this page.
Board
Leadership
and Company
Purpose
1.
5.
4.
3.
2.
– Information on the work of the Board and its role in setting
the Company’s strategy, creating an inclusive culture and
engagement with stakeholders, as well as details on the
Board’s leadership in these activities and the findings from
the annual Board evaluation can be found in the Governance
report on pages 88-90. (Code Principles A, B & D)
– We acknowledge our impact as a business on the environment
and communities that we operate in, and are committed to
creating long term sustainable success and contributing
positively to wider society. More information on our activities
in these areas is set out in the Responsible Business report
and Responsible Business Committee report on pages
34-55 and 107-110 (Code Principle A)
– The Board has set a clear purpose, to ‘Help the nation feel
house proud’ which is supported by our business model,
culture and values. More information can be found in the
Strategic report on pages 18-27 (Code Principle B)
– We’re proud of the Wickes culture and values and strive to
make sure that everyone feels at home. The Board set the
tone from the top, demonstrating our Winning Behaviours
and always acting with integrity. More information on our
Winning Behaviours and workforce can be found on pages
36 and 39. (Code Principle B)
– Our approach to risk management and internal controls
isset out on pages 72-74. The Audit and Risk Committee
supports the Board with oversight of risk and controls,
further details of which can be found on page 106. (Code
Principle C)
– The Board values engagement with all of our
stakeholdersand information on our engagement
activitiesis contained within our Section 172 statement
onpages 68-71. (Code Principle D)
– Information on our Whistleblowing policy is set out on page
89 anddetails on our employment policies and practices
and their alignment with our values and strategyis set out
on page 114. (CodePrinciple E)
Remuneration
Audit, risk
and internal
control
Composition,
succession
and evaluation
Division of
responsibilities
– Information on our remuneration
policies and practices is set out in the
Directors’ Remuneration report on
pages 111-127. Principles P, Q & R)
– The work of the Audit and Risk Committee is set out on
pages 100-106. This includes a description of the
oversight and effectiveness of the internal and external
audit functions. (Code Principle M)
– The Directors consider that the Annual Report and
Accounts, taken as a whole, isfair, balanced and
understandable and provides the information necessary
– Board succession planning and the appointment process
for Board members is set out in the Nominations
Committee report on page 96 and 97. (Code Principle J)
– The composition of the Board, along with biographies and
details of the skills, experience and contribution of each
Director can be found on pages 86-87 and 94. (Code
Principle K)
– Our governance framework and the division of Board
responsibilities, as well as therole of the Company
Secretary, is shown in the diagram on page 92 and
information on Directors’ timecommitments and
independence are detailed onpages 89 and 95.
(CodePrinciples F, G, H & I)
forShareholders to access the Company’s position
andperformance, business modeland strategy.
(CodePrinciple N)
– The principal risks and uncertainties and the procedures
in place to manage risks and internal controls are
regularly reviewed by the Audit and Risk Committee as
set out on pages 75-81. (Code Principle O)
– The conclusions and recommendations from
thisyear’s internal board evaluation can be
found on page 99. (Code Principle L)
– The skills and capabilities andother significant
commitments of the Board are detailed in the Board
biographies on page 86-87. (Code Principles G & H)
– The work of the Nominations Committee is set out
onpages 93-99. (Code Principles F, G & H)
Wickes Group Plc Annual Report and Accounts 2023 85
Governance
Financial statements
Other information
Strategic report
BOARD OF
DIRECTORS
Christopher Rogers
Non-executive Chair of the Board
N
R
RB
D
PRONOUN He/Him
APPOINTMENT DATE 23 March 2021
SKILLS AND EXPERIENCE
Christopher has significant board, retail and finance
experience gained during his extensive executive career,
having held a number of senior roles in and directorships
ofpublic companies. From 2005 to 2016, he was an
Executive Director of Whitbread plc, serving as Group
Finance Director from 2005 to 2012 and as Global
Managing Director of Costa Coffee from 2012 to 2016.
Christopher previously held senior roles in both the
financeand commercial functions of Woolworths
Groupplc, Comet Group plc and Kingfisher plc.
He wasaNon-executive Director and Audit Committee
Chair of Vivo Energy plc from April 2018 to July 2022.
Christopher served as a Non-executive Director of
TravisPerkins Plc from September 2013 to April 2021.
CONTRIBUTION
Christopher brings many strengths to his role as Chair of
the Board, in particular his leadership; strategy, commercial
and financial acumen; his deep grounding and understanding
of corporate governance, risk management, compliance
and regulatory issues; his experience in M&A and corporate
transactions; and experience both internationally and in
retailing and operations.
EXTERNAL APPOINTMENTS
– Non-executive Director of Sanderson Design Group plc
– Non-executive Director of Kerry Group plc
David Wood
Chief Executive Officer
D
PRONOUN He/Him
APPOINTMENT DATE 23 March 2021
SKILLS AND EXPERIENCE
David is a highly experienced executive and CEO with
almost 30 years in the retail and consumer sector and
extensive board level experience in the UK, Europe and
North America, having spent the majority of his career
withTesco, Unilever and Mondelez.
David served as Commercial Director on the Board of
Tesco Hungary from 2010 to 2012 and between 2012 and
2015 he served on the UK Operating Board of Tesco plc
asChief Marketing Officer and Group Managing Director.
David was Group President of Kmart Holding Corp from
2015 to 2017, followed by a brief tenure as CEO of
Mothercare plc in 2018. David joined Wickes as CEO on
28 May 2019 when Wickes was part of Travis Perkins Plc
inanticipation of the demerger.
CONTRIBUTION
David is an engaging leader with extensive and
international experience in retailing and operations.
Hehassignificant experience in change management,
strong strategic and commercial acumen, and a proven
record in brand building and marketing. David’s strong
leadership and passion for home improvement drive the
effective delivery of the business strategy.
EXTERNAL APPOINTMENTS
– Non-executive Chair of the Board of Green Sheep
GroupLtd
Mark George
Chief Financial Officer
D
PRONOUN He/Him
APPOINTMENT DATE 29 July 2022
SKILLS AND EXPERIENCE
Mark has significant experience in finance and strategy.
He has held senior roles in finance, strategy and general
management in a number of public listed consumer
businesses including Tesco, ASOS and Auto Trader.
Most recently, Mark was Chief Financial Officer and a
member of the Board of The Gym Group plc from 2018
to2022.
Mark started his career as a management consultant with
McKinsey & Co. and holds a degree in Philosophy, Politics
and Economics from Oxford University.
CONTRIBUTION
Mark has sound commercial acumen, as well as extensive
retailing experience. His financial, risk management,
strategic and leadership skills are key strengths for the
roleof CFO. He is also experienced in M&A and corporate
transactions. Mark’s financial and strategic strengths will
ensure continued focus and development of the long term
strategy for the business.
EXTERNAL APPOINTMENTS
– None
COMMITTEE
MEMBERSHIP KEY:
Chair of Committee
R
Remuneration Committee
RB
Responsible Business Committee
N
Nominations Committee
A
Audit and Risk Committee
D
Disclosure Committee
Governance
Wickes Group Plc Annual Report and Accounts 202386
Governance
Financial statements
Other information
Strategic report
Mark Clare
Senior Independent Non-executive Director
N
R
A
RB
D
PRONOUN He/Him
APPOINTMENT DATE 23 March 2021
SKILLS AND EXPERIENCE
Mark has extensive public listed company experience in
theconsumer service, property and construction sectors,
particularly in customer facing businesses and has served
on a number remuneration committees. Mark was Senior
Independent Director at United Utilities Group plc from 2013
to 2022, Senior Independent Director at Ladbroke’s Coral
Group plc from 2016 until 2018, and Non-executive Director
and Audit Committee Chair at BAA plc from 2001 until 2006.
Mark’s executive career included Chief Executive for Barratt
Developments plc from 2006 until 2015; Managing Director
of Centrica’s retail subsidiary British Gas from 2002 to 2006;
and CFO of Centrica plc from 1997 to 2002. He also served
as a trustee of the Energy Savings Trust, the Green Building
Council and BRE. Mark is a qualified accountant.
CONTRIBUTION
Mark’s wealth of knowledge in governance, compliance
and regulatory matters gained from his public listed
company experience, as well his leadership skills, enhance
his ability to undertake his duties as Senior Independent
Non-executive Director. His financial acumen and
commercial experience are particularly beneficial in
hisrole as Chair of the Remuneration Committee.
EXTERNAL APPOINTMENTS
– Chair of Grainger plc
– Chair of Ricardo plc
– Non-executive Director at Premier Marinas Holdings Ltd
Sonita Alleyne OBE
Independent Non-executive Director
N
R
A
RB
PRONOUN She/Her
APPOINTMENT DATE 23 March 2021
SKILLS AND EXPERIENCE
Sonita has extensive experience as a Non-executive
Director on both private and public sector boards.
She wasa Non-executive Director of the British Board
ofFilm Classification from 2009 to 2019, including Chair
ofthe Council of Management in 2019 and Chair of the
Remuneration Committee from 2016 to 2019. She was
Chair of the Radio Sector Skills Council from 2008 to 2012;
Non-executive Director of Archant from 2012 to 2016; and
a trustee of the BBC Trust from 2012 to 2017.
Sonita was a Non-executive Director of the Department for
Digital, Culture, Media and Sport, the National Employment
Panel and the London Skills and Employment Board. In her
earlier media career, Sonita was the co-founder and former
CEO of the production company Somethin’ Else and
worked as a journalist and broadcaster.
CONTRIBUTION
Sonita’s background in communications and journalism
brings a different perspective to the Board. She has strong
leadership, commercial and strategic skills. Her public
sector roles have contributed to her sound governance,
compliance and regulatory skills. This and her ESG
experience enables her to effectively Chair the
ResponsibleBusiness Committee. Sonita also fulfils the
role of designated non-executive for colleague matters.
EXTERNAL APPOINTMENTS
– Master of Jesus College, Cambridge
Laura Harricks
Independent Non-executive Director
N
R
A
RB
PRONOUN She/Her
APPOINTMENT DATE 1 June 2023
SKILLS AND EXPERIENCE
Laura brings a deep experience of developing omnichannel
customer journeys that drive engagement and commercial
return, with a background in e-commerce, marketing, and
strategy consulting.
Laura is currently the Chief Customer Officer for Ocado
Retail and previously held roles as Digital Director at
Monsoon Accessorize and a number of roles at Dixons
Carphone, most latterly Online Trading and Marketing
Director for Carphone Warehouse.
She started her career at L.E.K. Consulting and holds a
Bachelor of Engineering and Bachelor of Arts from the
University of Sydney
CONTRIBUTION
Being recently appointed, Laura brings a fresh
perspective.Her customer focus combined with
strategic,ecommerce, commercial, and marketing
acumenbrings valuable insight to the board. Laura
alsofulfils the role of Consumer Duty Champion.
EXTERNAL APPOINTMENTS
– Chief Customer Officer, Ocado Retail Ltd
Mike Iddon
Independent Non-executive Director
N
R
A
RB
PRONOUN He/Him
APPOINTMENT DATE 23 March 2021
SKILLS AND EXPERIENCE
Mike has extensive public listed company experience, having
held a number of senior finance roles throughout his career,
and has been the Chief Financial Officer of Pets at Home
Group plc since 2016.
Mike was previously the Chief Financial Officer of New
Lookfrom 2014 to 2016, and prior to this he held a number
ofsenior finance roles over 13 years for Tesco plc both in
theUKand overseas. These roles included Group Planning,
Taxand Treasury Director, UK Finance Director and Chief
Financial Officer of Tesco Homeplus (South Korea).
Mike has also held senior roles with Kingfisher plc and
Whitbread plc. Mike is a Chartered Accountant and a graduate
of the Harvard Advanced Management Programme.
CONTRIBUTION
Mike’s significant experience as an executive of public
listed companies, along with his strong strategic and
commercial acumen, change management, and current
retail experience are a valuable asset to the Board.
His financial acumen, leadership, risk management,
andgovernance, compliance and regulatory experience
areadvantageous for his role as Chair of the Audit and
RiskCommittee.
EXTERNAL APPOINTMENTS
– Chief Financial Officer, Pets at Home Group plc
COMMITTEE
MEMBERSHIP KEY:
Chair of Committee
R
Remuneration Committee
RB
Responsible Business Committee
N
Nominations Committee
A
Audit and Risk Committee
D
Disclosure Committee
Wickes Group Plc Annual Report and Accounts 2023 87
Governance
Financial statements
Other information
Strategic report
Board leadership and
Company purpose
schedule of matters reserved to it which sets out
the significant matters of focus for the Board due to
their strategic, financial or reputational importance.
The schedule is available on the Company’s website
www.wickesplc.co.uk. You can find more detail on
the activities of the Board on page 91.
In line with the Code, the Board places significant
importance on the appropriate governance of the
Company, discharging its responsibilities not only
through its own activities, but also through Committees
of the Board – the Audit and Risk Committee;
Nominations Committee; Remuneration Committee
and Responsible Business Committee. You can find
more details on these Committees onpages 93-127.
Meetings of the Board and its Committees
The Board normally has eight formal meetings
scheduled each year and an annual strategy day.
Additional meetings are held to consider time-
sensitive matters as required.
The number of scheduled meetings of the Board
and its Committees during the year is set out
below. Directors are expected to attend all Board
and relevant Committee meetings. All meetings
were held in person and there was near full
attendance by all members atall Board and
relevant Committee meetings during the year
thatthey were eligible to attend. One Director
wasabsent from the Board meeting on
23 May2023 due to being unwell.
In the event of a Director being unable to attend a
Board or Committee meeting, a process has been
agreed for the Chair of the respective meeting to
discuss the matters proposed with the Director
concerned in advance, seeking their support and
feedback accordingly. The Chair will subsequently
represent those views at the meeting.
Agenda items are structured to ensure appropriate
time is spent on key areas of focus for the Board
and that it has sufficient time to properly consider
and reach decisions. A programme of work and
priorities is agreed with the Board each year which
forms the basis of the agendas for each meeting,
with topical matters and matters of particular
concern or interest incorporated as required. The
activities carried out by the Board in the year are
set out on page 91.
The Chair of the Board meets with the Non-executive
Directors without the Executive Directors present
after each Board meeting and at other times as
required. The Chair of the Board and the Chairs of
each Committee also meet regularly with the Executive
Directors and members of senior management.
Board attendance at scheduled meetings
1
Plc Board
2
Audit and Risk
Committee
Nominations
Committee
Remuneration
Committee
Responsible
Business
Committee
Christopher Rogers Chair of the Board 8/8 n/a 3/3 4/4 4/4
Sonita Alleyne
3
Non-executive Director 7/8 5/5 3/3 4/4 4/4
Mark Clare Non-executive Director 8/8 5/5 3/3 4/4 4/4
Laura Harricks
4
Non-executive Director 4/4 3/3 2/2 2/2 3/3
Mike Iddon Non-executive Director 8/8 5/5 3/3 4/4 4/4
Mark George Chief Financial Officer 8/8 n/a n/a n/a n/a
David Wood Chief Executive Officer 8/8 n/a n/a n/a n/a
1 The Chair of the Board has a standing invitation to attend the Audit and Risk Committee meetings. The Chief Executive Officer attends
allAudit and Risk and Responsible Business Committee meetings and attends Nomination and Remuneration Committee meetings as
required. The Chief Financial Officer has a standing invitation to attend all Audit and Risk Committee meetings and Responsible Business
Committee meetings and attends Remuneration Committee meetings as required.
2 Scheduled Board meetings not including the strategy day which had 100% attendance.
3 Sonita Alleyne was not able to attend the Board meeting on 23 May 2023 due to being unwell.
4 Laura Harricks was appointed to the Board on 1 June 2023.
Role of the Board
The Board is responsible for promoting the
longterm sustainable success of the Company,
generating value for Shareholders and contributing
to wider society. It has ultimate responsibility for
the direction and governance of the Company,
taking into account the opportunities and risks
tothe future success of the business.
The effective operation of the Board is supported
by the collective skills and experience of the
Directors. The diverse experience and views of
Board members enable the Board to consider
arange of perspectives and make decisions in a
balanced way through independent thought and
constructive debate. The Board dynamic supports
open and honest conversations, which ensures
that decisions are made with full consideration
ofthe impact on all stakeholders. You can find
information about our Directors and the skills
andexperience they bring to the Company on
pages 86-87.
The Board is passionate about ensuring that, as the
business grows, we do so responsibly and in a way
that benefits all our stakeholders. We have a clear
framework to win, which is guided by our purpose
– ‘to help the nation feel house proud’. Our purpose
is at the core of the Board’s discussion, decision
making and strategy.
The Board sets the strategy to align with our
purpose and values. It ensures that the business
isresourced appropriately to deliver the strategy
and does so through a culture that drives the
behaviours we want to see. Elements of the
business strategy are discussed at every meeting
and an annual strategy event is held to review
anddevelop our strategic plans. Responsibility
fordeveloping and implementing strategy
restswiththe Chief Executive Officer, who
issupportedby the Executive Board.
At the strategy event in June 2023, the Executive
Board and key members of the leadership team
presented a range of opportunities to enhance our
strategy. The Board challenged management on,
amongst other things, the prioritisation of capital
investment, what more could be done to improve and
differentiate the customer offer, the opportunities
and risks presented by developing and future trends,
and whether technology could be further leveraged
to drive growth and operational efficiency. The Board
agreed that continued investment in technology
would be key to remaining competitive and to grow
the business. The Board commended the detailed
and insightful presentation of the Five-Year Plan and
the proposed Capital Allocation Policy and, following
arobust discussion, approved the proposals. It was
agreed that updates would be provided by way of
further presentations and deep dives built into the
Board agenda.
The opportunities for and the risks to the future
success of the business are carefully considered.
Key opportunities are set out in the Strategic report
on pages 4-83 and principal risks and uncertainties
can be found on pages 75-81. The Board requires
management to operate a robust control framework,
which enables risk to be assessed and managed and,
with support from the Audit and Risk Committee,
the Board reviews the effectiveness of this on an
annual basis. You can find information about our
internal controls framework and the assessment
ofits effectiveness on page 106.
The Board has implemented a Governance
Framework and Delegation of Authority Policy
toensure that an appropriate level of oversight is
given to material matters. It has adopted a formal
Governance
Wickes Group Plc Annual Report and Accounts 202388
Governance
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Percentage of time spent by the Board
Strategy
42%
Operations
19%
Financial
performance
and risk
25%
Governance including
stakeholder matters
14%
OUR
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The Senior Independent Director and Non-executive
Directors (excluding the Chair of the Board) meet
from time to time and specifically on an annual basis
to assess the Chair of the Board’s performance.
Independence
Over half of the Board’s members, excluding the
Chair of the Board, are independent Non-executive
Directors. The Chair of the Board was assessed
tobe independent on appointment.
Relationships and circumstances which could
affect the independence of any Director are
reviewed annually and the Board remains
satisfiedthat all Non-executive Directors
remainindependent.
External appointments
Before appointment to the Board, all Directors
arerequired to disclose any external roles they
hold along with the estimated associated time
commitment. The competing demands on
candidates’ time are carefully considered in
theselection process. Appointment letters set out
thetime commitment expected of each Director.
The significant external appointments of current
Directors are set out in the biographical details
onpages 86-87.
The Board has an Additional External Appointments
Policy and process in place for theconsideration
and, if appropriate, approval of additional external
appointments to ensure that each Director continues
to have sufficient time toexercise their duties
effectively. Appointments must be approved by
theBoard in advance. Executive Directors are not
permitted to take on more than one Non-executive
Directorship or othersignificant appointment.
The Nominations Committee reviews annually
theexternal time commitments of the Chair of
theBoard and the Non-executive Directors.
Governance support
All Directors have direct access to the General
Counsel and Company Secretary for advice
ongovernance matters. Directors may also
seekindependent professional advice at the
Company’s expense in the furtherance of their
duties and there is an Independent Professional
Advice Policy in place which sets out the procedure.
No such requests were made during the year.
The General Counsel and Company Secretary
supports the Board to ensure that it has the
policies, processes, information, time and
resources it needs in order to function
effectivelyand efficiently.
Our Wickes culture
The Board is responsible for setting the Company’s
culture, values and standards and their ongoing
review, and recognises the importance of having
an engaged workforce where all colleagues,
nomatter who they are or where they are from,
canfeel at home. The special culture at Wickes
isbuilt on a foundation of personal responsibility
and underpinned by our Winning Behaviours.
Key to achieving the desired culture is setting
theright tone from the top. Each of the Directors
undertakes to conduct themselves in a manner
consistent with our Winning Behaviours,
(shownbelow) acting with integrity and leading by
example. Our Winning Behaviours are a simple,
yetdeeply held set of beliefs, that we ask all
colleagues to demonstrate, which underpin
ourbusiness model and support our culture.
The Board actively monitors culture through
regular feedback from management, colleague
listening groups and the results of colleague
surveys. In addition, a number of Board meetings
are held at store and distribution sites during which
time is allocated to allow the Board to hear from
colleagues first hand.
The Board, the Responsible Business Committee
and the Remuneration Committee receive reports
on: colleague engagement; updates covering the
six inclusion and diversity colleague networks;
wellbeing; colleague turnover; reward; recruitment;
and whistleblowing.
In addition to chairing the Responsible Business
Committee, Sonita Alleyne is our designated
Non-executive Director to champion workforce
engagement on behalf of the Board and regularly
provides feedback from colleagues and insights
atthe Board meetings to ensure colleagues’
viewsare fully considered in the Board’s
decisionmaking.
Our Code of Business Ethics sets out the standards
and behaviours expected from colleagues and all
colleagues receive training onthis annually. It sets
the tone for responsible business behaviour and
legal compliance, anddirects colleagues to
Company policies forguidance.
Whistleblowing
The Company’s Whistleblowing Policy is
reviewed and approved annually by the Board.
Colleagues and others are encouraged and
empowered to speak up openly and raise any
concerns through management or directly to
the Board. Should colleagues or third parties
feel the need to raise concerns which cannot
be resolved through the normal routes of line
or executive management, the Company has
implemented a third party anonymous online
whistleblowing platform, telephone line and
mobile phone app through which concerns
canbe raised in confidence. Information about
the whistleblowing service is widely publicised
across all sites, referred to in policies, accessible
on our supplier portal and included in our
monthly colleague communications.
We had a small number of reports made
through the whistleblowing service during
theyear, all of which were fully investigated
toconclusion. Concerns raised relating to
suspected theft, fraud, conflicts of interest,
management issues and breaches of policy.
Appropriate actions were taken following
therelevant investigation.
The Board monitors the operation of the
whistleblowing arrangements and receives
reports twice a year on notable outcomes
andlearnings from reports.
Wickes Group Plc Annual Report and Accounts 2023 89
Governance
Financial statements
Other information
Strategic report
Stakeholder engagement
The Board recognises the importance of
listeningto and understanding the views of
itsstakeholders and receives insights through
engagement with stakeholders which it uses
toinform decision making. The Board and
management have a programme of active
engagement with, and encourage participation
from,the Company’s stakeholders.
The Board places particular importance on
understanding the views of colleagues. Sonita
Alleyne, the designated Non-executive Director
champion for workforce engagement, undertook
anumber of additional activities during the year to
support the Board with this aim, including chairing
colleague listening groups; discussing the results
of colleague surveys with the Chief Executive
Officer and Chief People Officer; and integrating
informal colleague engagement during store visits.
Understanding customers is at the heart of
everything we do. The Board uses customer
listening groups, surveys and data analysis to
understand customer views and act on what
ismost important to deliver the best possible
customer experience. A monthly management
meeting is dedicated to the customer proposition.
The Board values the opportunity to meet
colleagues from across the business and to
interact with customers. During the year, the Board
visited the Chelmsford and Bicester stores where
they engaged with store colleagues and received
presentations from management. The Board also
regularly meets colleagues at the Store Support
Centre where a number of Board and Committee
meetings are held.
The Board places great importance on ensuring
suppliers are treated fairly. This is a key aspect
ofnurturing long term relationships and building
trusted partnerships with our suppliers. These
relationships enable us to provide a great offer
andservice to our customers, and are a great
platform for both us and our suppliers to grow.
Oursuppliers provide feedback through day-to-day
contact with product teams, our risk assessment
surveys and through our twice-,yearly supplier
forums. During the year, the Board visited the
Company’s outsourced Customer Experience
Centre where they met with the team and
experienced customer conversations first hand.
Members of the Board, senior management and
the Investor Relations team hold regular meetings
with existing and potential institutional investors
and analysts to understand their views and
policies, which are reported to the Board.
The Board received reports on Investor Relations
activities, movements on the share register and
feedback from Shareholder engagement at every
Board meeting. Following year end and half year
theBoard receives a detailed presentation covering
Shareholder feedback from the investor roadshows.
The Board noted the questions and issues raised
and ensured that our communications to the market
addressed these.
As part of our annual Governance Review, the
Chairof the Board wrote to major Shareholders in
January 2023 to provide an update on governance
matters and invite those Shareholders to meet
and/or ask questions of himself or the Committee
Chairs. The feedback from this letter was positive,
with Shareholders confirming they were happy
with the Company’s open and constructive
approach to communication and that there
wereno issues requiring further discussion.
During the year the Company held an investor
roadshow following the publication of the 2022
results. Feedback was obtained regarding capital
allocation and this was considered in the Board’s
decision making in revising the Capital Allocation
Policy as detailed on page 70.
The Board encourages Shareholder attendance
and participation at the Company’s Annual General
Meeting, at which all Directors and Committee
Chairs will be available to answer questions.
TheBoard intends the 2024 AGM to be held as
aphysical meeting at the Company’s Support
Centrein Watford, Hertfordshire.
At the 2023 AGM held on 23 May 2023, all
resolutions put to Shareholders were approved,
with in excess of 87% of votes in favour for all
resolutions. Shareholders were invited to submit
questions in advance and could also raise
questions during the AGM.
Policies and procedures
The Board has approved a suite of policies
whichestablish a robust system of control and
oversight in matters of ethics and compliance.
This is supported by mandatory training for all
colleagues, appropriate to their role. The Executive
Board oversees the day-to-day operation of these
policies and related procedures and ensures they
are embedded across the business.
Both the Executive Board and the Board have
oversight and receive reports on compliance
withpolicies and procedures at least twice a year.
Should a breach of any of these policies occur,
there is a robust incident response procedure in
place and any material issues are escalated to the
Executive Board and, if appropriate, the Plc Board.
During the year, the Board reviewed and approved
existing policies including Confidential Information,
Inside Information, Share Dealing, Anti-bribery,
Gifts & Hospitality, Whistleblowing and Safety,
andapproved new policies including Capital
Allocation and Treasury.
Conflicts of interest
The Company has a Conflicts of Interest Policy in
place and all colleagues receive online mandatory
annual training in this area. All Directors are
required to raise any actual or potential conflicts
ofinterest for consideration and, if appropriate,
authorisation. At every meeting, Directors are
asked whether there are any new potential
conflicts of interest to declare in relation to the
matters on the agenda. Where such conflicts
exist,Directors would be excused from related
discussion and decision making. To date, no
suchinstance has occurred.
A register of interests and authorised potential or
actual conflicts is maintained and this is reviewed
annually by the Board, with each Director asked to
confirm that the register is accurate and up to date.
Director concerns
Should a Director have concerns about the
operation of the Board or the management of the
Company, these concerns would be discussed by
the Board. If any concerns remained unresolved,
they would be recorded in the Board minutes.
Nosuch concerns were raised during the year.
Governance
Wickes Group Plc Annual Report and Accounts 202390
Governance
Financial statements
Other information
Strategic report
The Board held eight scheduled
formal meetings and had a
strategy day. During 2023,
anumber of additional Board
meetings and sub-committee
meetings were held to consider
time-sensitive matters including
trading updates for release
tothe market and to approve
matters requiring Board
approval under the Matters
Reserved tothe Board.
The focus of the Board
during2023 has been on
monitoring the performance
ofthe business against the
backdrop of continuing
economic uncertainty and cost
inflation, developing strategy
around our growth levers and
discussing strategic options
forfuture growth.
The information on the following
pages demonstrates some of
theareas of key activity forthe
Board for the financial period
ending 30 December 2023 and
the key stakeholders considered
as part of the Board’s decision
makingprocess.
Board activities
fortheyearended 30 December 2023
Business performance
andstrategy
CEO REPORT
At each Board meeting, the CEO led
discussions covering all aspects of
performance and progress on key
topicsincluding market developments;
colleague feedback and engagement;
customer insight; marketing activity,
commercial and supplier activity and
feedback; supply chain and availability
challenges; store refits; and community
and charity projects.
OPERATIONAL UPDATES
During the year, the Board had a
deepdive session on the customer
proposition, including key insight data
on performance statistics, customer
experience and using data to improve
customer outcomes. The Board also
visited the Company’s outsourced
Customer Experience Centre where
theymet with the team and experienced
customer conversations first hand.
COMMERCIAL AND SUPPLY
CHAIN UPDATES
During the year, the Board had deep dive
sessions covering commercial strategy
and supply chain risk. They also visited
Wickes virtual selling hub for Wickes
Lifestyle Kitchen in the Bicester store.
TECHNOLOGY UPDATES
The Board had a deep dive session
onthe business’s underlying IT
infrastructure and capabilities, as
wellasconsidering proposals for
development over the next five years.
STRATEGY REVIEW
In addition to regular discussions at
each meeting, the Board had a day
dedicated to reviewing strategy.
TheBoard discussed the economic
backdrop, customer and competitor
behaviour and opportunities to growthe
business, including new propositions,
sustainability and development of the
physical estate.
STAKEHOLDERS
Financial performance
CFO REPORT
The CFO led discussions at every
meeting on financial performance
including risks and opportunities,
andthe financial impacts of the
changing macroeconomic
environmentduring the year.
RESULTS AND OUTLOOK
On the recommendation of the
Auditand Risk Committee, the
Boardreviewed and approved the
fullyear 2022 and half year 2023
resultsannouncement, and 2022
Annual Report and Accounts, having
considered that the Annual Report
andAccounts, taken as a whole, was
fair, balanced and understandable.
BUDGET AND
FINANCIALPLANS
At each meeting, the Board considered
performance against the 2023 budget
and updated forecasts. The Board
reviewed and approved the budget for
2024 and reviewed the Five-Year Plan.
INVESTOR RELATIONS
The Board received updates on
InvestorRelations activities and
plansand feedback from investor
engagement atevery meeting.
TREASURY AND TAX
The Board received regular updates on
tax and treasury matters, and approved
the Company’s Tax Strategy, Treasury
Policy and amendments to the Treasury
Delegation of Authority Policy.
DIVIDEND AND CAPITAL
ALLOCATION POLICIES
During the year, the Board reviewed
andapproved a new Capital Allocation
Policy. The Board also recommended
afinal dividend of 7.3 pence per
sharefor the 2022 financial year to
Shareholders, which was approved
atthe 2023 AGM and paid on 7 June
2023, and approved the payment of
aninterim dividend of 3.6 pence per
share on 3 November 2023.
STAKEHOLDERS
Risk
RISK REGISTER
The Board reviewed the Risk Register
during the year and reviewed the
reporting on the principal risks and
uncertainties for the 2022 full year
and2023 half yearresults.
AUTONOMY COMPLETION
As a principal risk, the Board received
regular updates on the separation
programme to set up the Company’s
own systems to replace those previously
provided by the Company’s former
parent company under a Transitional
Services Agreement(TSA). The Board
closely monitored the key milestones to
completion of separation and this
wassuccessfully concluded in 2023.
CYBER RISKS AND MITIGATIONS
The Board received two deep dive
reports on the cyber risks facing
thebusiness and the mitigations in
place, which included an overview
ofthe key controls and progress
against the actions from a cyber
security internal audit.
SAFETY UPDATES
The Board considered reports on
safetyperformance atevery meeting
along with deep dives at two of its
meetings to evaluate progress and
provide insight andchallenge.
TCFD
The Board approved the Group’s
response to the TaskForce on
Climate-related Financial Disclosures,
including theGroup’s approach to
managing climate-related risks.
INSURANCE
The Board reviewed the approach
forinsuring the Group’s risks and
approved the renewal of the Group’s
insurance programme.
STAKEHOLDERS
STAKEHOLDER KEY
COLLEAGUES CUSTOMERS SUPPLIERS INSTALLERS COMMUNITIES SHAREHOLDERS
Governance, regulatory
andcompliance
POLICIES AND STATEMENTS
The Board approved updates to a
number of Group policies, including
Anti-Bribery and Corruption, Health
andSafety and Whistleblowing.
TERMS OF REFERENCE
The Board reviewed and approved
amendments to the Terms of Reference
for each of its Committees.
BOARD EVALUATION
The Board reviewed and discussed
thefindings from its internal Board
evaluation and agreed actions to
improve the effectiveness of the
Boardand its Committees.
PLANNING
The Board reviewed the forward
schedule of activities at every
meetingand discussed options
forfuture operational site visits.
COLLEAGUE VOICE
The Board received an update from
thedesignated Non-executive Director
champion for workforce engagement,
Sonita Alleyne, on the themes arising
from her listening activities and review
of colleague engagement insight.
COMPLIANCE
The Board received reports on legal
andregulatory compliance including
the operation of and reports via
theCompany’s anonymous
whistleblowing service.
CONSUMER DUTY
In compliance with the new
FCAConsumer Duty regulations,
whichapplyto the financial services
offered bythe Group, the Board
received updates on theConsumer
Duty implementation. The Board
alsoapproved the appointment
ofLaura Harricks as the Company’s
Consumer Duty Champion, replacing
Sonita Alleyne.
STAKEHOLDERS
Material contracts
andarrangements
CONTRACT APPROVALS
In line with the Delegation of Authority
policy, the Boardreviewed a proposal
toappoint Novuna as the replacement
consumer credit lender following the
withdrawal of Barclays from the market.
The Board also approved a Goods for
Resale contract which was material due
to its size and strategic importance.
BANKING FACILITIES
The Board is required to approve changes
to or new lending arrangements. During
the year, the Board approved a one-year
extension to the existing £80m revolving
credit facilities.
STAKEHOLDERS
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Governance
Financial statements
Other information
Strategic report
COMMITTEES OF THE BOARD
AUDIT AND RISK
COMMITTEE
Provides independent and objective
oversight of the Company’s financial
reporting, systems of internal control,
risk management and compliance,
and the effectiveness of internal
andexternal audit.
NOMINATIONS
COMMITTEE
Reviews the composition and skills
of the Board and leads the process
for appointments to the Board and
Executive team; oversees the
processes for succession
planningand the development
ofadiversepipeline.
REMUNERATION
COMMITTEE
Determines the Remuneration Policy
and packages for the Chair of the
Board, Executive Directors and
Executive Board members, having
regard to workforce remuneration
and related policies and the
alignment of incentives and
rewardswith culture.
RESPONSIBLE BUSINESS
COMMITTEE
Oversees the development of strategy and
monitorsperformance in relation to environmental,
socialandgovernance matters.
DISCLOSURE
COMMITTEE
*
The Committee is convened only when a full Board meeting
or an authorised sub-committee meeting of the Board is
not possible. The Committee oversees the Company’s
compliance with its disclosure obligations in line with
theUK Market Abuse Regulation and Listing Rules.
This includes consideration of potentially market
sensitiveinformation and the timing and review
ofsuchrelated disclosures.
*There have been no meetings of the Disclosure
Committeeduring 2023 as all disclosure matters
havebeen considered by the Board.
THE CHAIR OF
THE BOARD
The Chair of the Board’s principal
responsibility is the leadership of the
Board and ensuring its effectiveness.
The Chair of the Board encourages
aculture of openness and
communication between members
ofthe Board, ensures all Directors
contribute to discussions and promotes
constructive debate. The Chair of the
Board ensures that Directors receive
accurate and clear information in a
timely manner to enable them to make
informed contributions and to support
good decision making by the Board.
THE CHIEF FINANCIAL
OFFICER (CFO)
The CFO is responsible for managing
the Group’s financial affairs and the
system of internal controls, including
risk management. The CFO supports
the CEO in the implementation and
achievement of the strategic
objectives and oversees the
Company’s relationship with the
investment community.
The CFO is appointed as the FCA
approved person for the purposes of
the Group’s consumer credit activities.
SENIOR INDEPENDENT
NON-EXECUTIVE
DIRECTOR (SID)
The SID provides a sounding board
forthe Chair of the Board and serves
as an intermediary for the other
Directors and Shareholders
shouldthis berequired.
The SID meets with the Non-executive
Directors at least once a year to
appraise the performance of the
Chairof the Board and on other
occasions as appropriate.
INDEPENDENT
NON-EXECUTIVE
DIRECTORS (INEDS)
The Non-executive Directors bring
independent oversight and provide
strategic advice and guidance,
offerconstructive challenge and
holdtheExecutive Directors
toaccounttosupport good
decisionmaking bytheBoard.
One of the INEDs is the Designated
Non-executive Director for colleague
matters, and another INED is the
Designated Non-executive
ConsumerDuty Champion.
THE CHIEF EXECUTIVE
OFFICER (CEO)
The CEO is responsible for the
development and implementation
ofstrategy and for managing the
day-to-day operations of the business.
The CEO ensures appropriate
delegation of responsibilities to the
Executive Board to ensure decisions
of the Board are implemented.
The CEO plays a key role in devising
strategies for review by the Board and
is responsible for updating the Board
on operations of the business.
GENERAL COUNSEL AND
COMPANY SECRETARY
The General Counsel and Company
Secretary is responsible for advising
the Board on all governance,
compliance and legal matters.
The General Counsel and Company
Secretary supports the Chair of
theBoard and the independent
Non-executive Directors to ensure
that they have access to the
necessary resources and
informationto operate
effectivelyandefficiently.
EXECUTIVE BOARD
Oversees the day-to-day management of the business including all matters not contained within the Matters Reserved to the Board and its Committees. The Executive Board is chaired by the CEO.
REPORTS, RECOMMENDS, INFORMS
REVIEWS, CHALLENGES, APPROVES
More information can
be found on pages 100-106
More information can
be found on pages 93-99
More information can
be found on pages 111-127
More information can
be found on pages 107-110
THE BOARD
The Board is responsible for overall leadership of the business, setting its purpose, values and strategy, and providing
a framework of strong governance and effective controls. There is a formal schedule of matters that require Board
approval before any action is taken by the executive management. The schedule of matters is reviewed annually
andupdated by the Board when necessary.
The Company’s strong governance framework is built upon a foundation of clear and effective
division of responsibilities between the Board, its Committees and operational management.
This provides an effective and robust corporate governance structure to enable agile decision
making with robust controls, which promote the long term and sustainable success of the business.
The responsibilities of the Chair of the Board, CEO, Senior Independent Non-executive Director, Board
andits Committees have been approved by the Board, are set out in writing and are available on the
Company’swebsite www.wickesplc.co.uk
Division of
responsibilities
Wickes Group Plc Annual Report and Accounts 202392
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Nominations Committee report
Dear Shareholder,
I am pleased to present the Nominations Committee
report for the year ended 30 December 2023,
which outlines our approach to the composition,
succession and evaluation of the Board.
During the year, the Committee continued its focus
on succession planning and driving improvements
in diversity at all levels. The Board was pleased to
announce the appointment of Laura Harricks as
Non-executive Director, enhancing the skills and
diversity of the Board. Laura joined on 1 June 2023
and is a member of all Board Committees as well
as taking on the role of our Non-executive
Consumer Duty Champion.
The Board strongly supports diversity in its
broadest sense in the boardroom, although it
recognises that being relatively small in size will
make achieving diversity targets more challenging
in the short term. Following Laura’s appointment,
our female representation on the Board has increased
from 17% in 2022 to 29% in 2023. Although we are
yet to meet the targets for female representation
on the Board as set under the Listing Rules, the
Board strongly supports the objective to promote
greater diversity in the broadest sense on listed
company boards and this remains a key focus of
our succession plans. More information on the
diversity of the Board is set out on pages 97-99.
The Committee carried out an assessment of the
Board to confirm that it has the requisite blend of
skills and other attributes to enable it to discharge
itsduties effectively and agree which skills and
attributes should be prioritised when identifying
future candidates for Board positions. We concluded
that theBoard collectively has an appropriate blend
of skills and other attributes to meet the Company’s
requirements. The skills matrix for theBoard, which
can be found on page 95, demonstrates the breadth
of experience thattheBoard has.
Although the Executive team has remained
unchanged over the last year, the Committee
carried out a full review of our talent pipeline
andsuccession plans for the Executive leadership
and wider workforce and was satisfied that there
isa robust pipeline oftalent and that the high-
potential colleagues identified by the process are
being developed and supported to prepare them
forleadership roles.
Although we currently have no long serving Board
members, we also started to consider our options
for the orderly succession of the Non-executives,
taking into account our aspirations to increase
thediversity of the Board whilst retaining its size.
We continue to believe that the optimal size for
ourBoard is between six and seven Directors,
reflecting the lean structure of our wider business
and our operations being retailing only in the UK.
More information on succession planning is set
out on pages 96-97.
Having conducted a full external evaluation process
last year, this year’s Board and Committee evaluation
was undertaken internally. I am pleased toconfirm
the view of the Directors that the Board and each
Committee is operating effectively. Moreinformation
on the Board evaluation is setout on page 99.
Looking ahead to 2024, succession planning and
tracking progress on increasing diversity across
the business will continue to be the key areas of
focus for the Committee.
Christopher Rogers
Chair of the Nominations Committee
18 March 2024
Committee members
Christopher Rogers, Chair of the Committee,
Chair of the Board
Sonita Alleyne, Independent Non-executive Director
Mark Clare, Senior Independent
Non-executive Director
Laura Harricks, Independent
Non-executive Director
Mike Iddon, Independent Non-executive Director
Christopher Rogers
Chair of the Nominations
Committee
Wickes Group Plc Annual Report and Accounts 2023 93
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Nominations Committee report continued
Committee composition
The Committee membership comprises the
Non-executive Directors, all of whom are considered
independent, and the Chair of the Board. Details of
the experience and skills of Directors are set out in
the biographies on pages 86-87.Overall attendance
for Committee meetings was 100%. Further details
about meetings and attendance can be found on
page 88.
Role of the Committee
The role and responsibilities of the Committee
areset out in the Committee Terms of Reference,
which are reviewed annually and are available on
the Company’s website at www.wickesplc.co.uk.
The Committee’s role primarily covers the
following areas:
– To review Board and Committee composition
and recommend improvements to the Board
– To oversee the development of a diverse talent
pipeline and ensure succession plans are in
place for the Board and senior management
– To lead the process for appointments to the Board
Board evaluation is not delegated to the Committee
and this activity is carried out by the Board.
Activities of the Committee
During the year, the Committee held three
scheduled meetings and one unscheduled
meetingat which it decided to recommend to
theBoard the appointment of Laura Harricks
asanindependent Non-executive Director.
The Committee has a structured forward looking
planner to ensure that the responsibilities of the
Committee are discharged during the year. The
planner is regularly reviewed and developed to
meet the changing needs of the Group.
Percentage of time spent by the Committee
in scheduled meetings
Governance
19%
Succession planning
57%
Board composition
and skills
24%
A summary of the key matters considered by the Committee at its scheduled meetings in 2023 is set out below.
Succession planning Composition and skills
March
Review of progress with
NED recruitment
Review and approval of
inclusionanddiversitypolicy
June
Review of Executive Board
successionplans
Review of talent pipeline
throughoutthebusiness
CEO benchmarking and talent map
November
Review of plans to talent
mapotherexecutive roles
Review of skills matrix to ensure
appropriatemix/identify gaps
Review of NED time commitments
Review of plan for NED refreshment
Board composition
The Board comprises seven Directors, two
Executive Directors, four independent Non-
executives and the Non-executive Chair of the
Board. The 2018 UK Corporate Governance Code
(‘the Code’) recommends that, on appointment, the
chair of a company with a premium listing on the
Official List should meet the independence criteria
set out in the Code. The Board considers that
Christopher Rogers met the independence criteria
set out in the Code on his appointment as Chair.
Board composition
Chair
1
Non-executive
4
Executive
2
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Board skills and experience
Chris
Rogers
Sonita
Alleyne
Mark
Clare
Laura
Harricks
Mike
Iddon
Mark
George
David
Wood
Leadership
Strategy
Transformation/change management
Finance
Risk management
Customer experience
Brand, marketing & media
Supply chain & logistics
Data/digital
Organisational design & culture
Climate change
Governance, compliance & regulatory
Online retailing
Retail/consumer industry
Home repair, maintenance
& improvement market
M&A & corporate transactions
Chair of Plc Board
Chair of Plc Committee
Significant external appointments
Director Board of listed plc Other significant appointments
Sonita Alleyne – Jesus College
Mark Clare Chair Grainger plc
Chair Ricardo plc
Premier Marinas Holdings Ltd
Laura Harricks – Ocado Retail
Mike Iddon CFO Pets at Home plc –
Christopher Rogers NED Kerry Group plc
NED Sanderson Design Group plc
–
Mark George – –
David Wood – Green Sheep Group
Board skills and experience
The Board recognises the importance of having
complementary and diverse skills and backgrounds
within its composition, enabling rich and effective
discussions and decision making.
During the year, the Committee reviewed the
Boardcomposition against a skills matrix to
ensure that the Board and its Committees have
theskills needed to provide effective leadership
ofthe Company. More information on the key
strengths and experience ofeach Director can
befound on pages 86-87.
The Committee noted that Board members did
nothave extensive artificial intelligence and cyber
experience. The Board requested additional briefings
on artificial intelligence and cyber security to increase
their knowledge, and it was agreed that specialist
external advice would be sought where appropriate.
Board time commitments
The Code requires that non-executive
directorshave sufficient time to meet their
boardresponsibilities. Attendance at scheduled
Board andCommittee meetings was 99%, with
oneDirector giving apologies for one Board
meeting in 2023. Further details of attendance
canbe found at page 88.
All Non-executive Directors have confirmed that
they have sufficient time and capacity to carry out
their duties and the 2023 Board evaluation found
that the availability, contribution and engagement
of the Non-executive Directors was high.
The Company has a policy for additional appointments
under which Non-executive Directors may undertake
additional external appointments to those disclosed
on appointment with prior approval of the Board.
Executive Directors may take on one non-executive
directorship in a FTSE company or other significant
appointment with prior approval oftheBoard. No
new appointments were taken onby any member
ofthe Board during the year.
After considering all relevant factors, the
Committee concluded that all Non-executive
Directors continue to have sufficient time to
meettheir Board responsibilities.
Wickes Group Plc Annual Report and Accounts 2023 95
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Nominations Committee report continued
Board appointment in 2023
Following the review of Board skills in 2022,
whichidentified that additional customer and
digital experience would be beneficial to support
the Board, Laura Harricks was appointed as an
independent Non-executive Director, effective from
1 June 2023. Laura has considerable experience
indeveloping omnichannel customer journeys
thatdrive engagement and commercial return,
with abackground in e-commerce, marketing
andstrategy consulting.
The process for Laura’s appointment was led
byChristopher Rogers, Chair of the Committee.
Anexternal search firm, Korn Ferry, which has
noconnection to Wickes or any of its Directors,
was appointed to assist the Committee with the
search. Open advertising was not used. The
recruitment process involved setting rigorous
selection criteria, in terms of both technical
capabilities and cultural and style attributes
whichwere used to prepare a role specification
which was approved by the Committee.
A diverse longlist of candidates was presented to
the Committee from which a shortlist of candidates
was agreed. The shortlisted candidates were
interviewed by the Chair and two preferred
candidates also met the Chief Executive Officer.
Laura Harricks was selected as the most suitable
candidate and met with the other Non-executive
Directors and the Chief Financial Officer, all of
whom gave their support. The Committee
considered that Laura had relevant and suitable
experience and would make a valuable contribution
to the Board, and therefore recommended her for
appointment by theBoardas a Non-executive Director.
Board appointment process
We follow a well-established process which is
thorough and inclusive, and is adapted as needed
to reflect the specific circumstances.
1. SEARCH – The Chair of the Board leads a
process to develop a role specification setting
out the skills, experience and background
required. The role specification is placed with
anexecutive search agency (the ‘agency’).
2. LONGLIST – The agency produces a diverse
longlist of candidates from a wide range of
backgrounds and industries.
3. SHORTLIST – The Committee considers a
longlist and agrees a shortlist of candidates.
4. ASSESSMENT – The candidates are assessed
against the specification including by interview
with Board members.
5. APPOINTMENT – The Committee recommends
the preferred candidate to the Board and the
Remuneration Committee considers and
approves a remuneration package.
Induction process
Each new Board Director receives a full and
tailored induction, led by the Chair of the Board
andGeneral Counsel and Company Secretary.
Induction of new Non-executive Director
Laura Harricks joined the Board from 1 June 2023 and her induction included the following:
Meetings with all members of the Board
– Chair of the Board – the Board and its dynamics
– CEO – strategy, business performance
andkeychallenges and opportunities
– Committee Chairs – work and significant
matters relevant to their respective Committees
– CFO – financial performance, forecasts, risk
management and financial control
Meetings with the Executive team
and senior management
– Management structure, operations,
performance,risks and key areas of
focusrelevant to each function
– Governance framework and programme
ofmeetings
– Consumer Duty and the role of the
ConsumerDuty Champion
Meetings with colleagues and site visits
– Visits to stores (and competitor stores)
– Visit to our main Distribution Centre
Meetings with key advisors
– Detailed briefing covering Directors’ duties and
all key listing and regulatory compliance areas
Laura was also provided with key materials including strategy, Board and Committee papers, investor
information and Company policies.
“ My induction gave me a thorough
understanding of thebusiness. As a new
Board member, I have really appreciated
the time that the Board Chair, the other
members of the Board and colleagues
across the businesshave given me.”
Laura Harricks
Independent Non-executive Director
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Training and development
The Chair of the Board discusses specific
development needs with each Director on an
individual basis. Ongoing Board development
takesplace through briefings at Board meetings
and regular store visits. The Board has a programme
of scheduled visits and activities to enhance the
Directors’ knowledge of the business. This year,
the Board visited our customer services outsource
partner, our Wickes Lifestyle Kitchens virtual
showroom in the Bicester Store and a new store in
Chelmsford. Future visits are planned to a strategic
supplier of goods, a strategic logistics partner and
both new and refitted stores. Briefings are provided
to the Board and Committees on relevant legal,
regulatory and governance developments,
emerging risks and specific areas of interest.
Non-executive Director succession
The majority of the Non-executive Directors
havethe same tenure as the business was listed
on the London Stock Exchange in 2021 and the
Committee is mindful of the need to plan an
orderly succession in order to avoid a significant
change to the Board membership in a short
timeframe. During the year, the Committee started
toconsider options for Non-executive Director
succession and intends to explore this further
anddevelop its plans during 2024.
Non-executive Executive
Board tenure
1
4
1
1
0-1 years
1-2 years
2-3 years
3+ years
Executive Director and senior
leadershipsuccession
The Board is committed to recognising and
developing talent within senior management
across the business, creating opportunities
todevelop current and future leaders.
Following the work undertaken in 2022 by the
Committee and the CEO, the Committee has a
clear understanding of the market and potential
successors for the CEO role. The plans for
succession to other key Executive and leadership
roles in the short, medium and long term have
alsobeen reviewed by the Committee in detail.
TheCommittee is focused on ensuring there is
arobust pipeline of talent and that these high-
potential colleagues are developed and supported
to prepare them for leadership roles. This includes
strengthening the leadership development
proposition, supporting mentoring initiatives and
planning role moves to provide more experience
earlier in the careers of potential future successors.
Diversity of gender, social and ethnic backgrounds,
and cognitive and personal strengths were considered
carefully to ensure the pipeline is strengthened with
appropriate skills and perspectives. Areas for
development for succession candidates to
keyleadership roles have been identified and
opportunities for them to present to and engage
with the Board have been identified and planned
for future meetings.
The Board believes that the succession plans in
place will result in a continuously robust leadership
structure that can achieve the Company’s purpose
and ensure its long term sustainable success.
Inclusion and diversity policy and targets
The Board believes an inclusive culture is a key
driver of business success. It is committed to
having inclusive and diverse leadership which
provides a range of perspectives, insights and the
challenge needed to support good decision making.
We have a Board Inclusion and Diversity Policy
which complements our wider colleague inclusion
and diversity policy. Our ambition through both
theBoard and colleague inclusion and diversity
policies is to make everyone ‘Feel At Home’
andable to bring their authentic selves to work:
knowing their safety, happiness and wellbeing
areat the heart of our thinking.
The Board Inclusion and Diversity Policy
statesthat the Board is committed to promoting
inclusionand diversity in the boardroom and on its
Committees, and aims to meet regulatory targets
and industry recommendations while recognising
that there may be periods when this balance is not
achieved. We define diversity in its broadest sense,
encompassing differences in age, gender, ethnicity,
sexual orientation, disability or educational,
professional and socio-economic backgrounds.
The Policy reflects the targets set out in Listing
Rule 9.8.6.R (9) as follows:
(i) female representation on the Board of at
least40%;
(ii) at least one of the roles of Chair, Senior
Independent Director, Chief Executive Officer or
Chief Financial Officer filled by a woman; and
(iii) at least one Director from a minority ethnic
background on the Board.
Board diversity
Board membership reflects a range of skills,
backgrounds and business experiences which
facilitates a broad evaluation of matters considered
bythe Board and contributes to a culture of
collaborative and constructive discussion.
As at 30 December 2023
1
the Board comprises
three male Non-executive Directors (including
theChair of the Board), two female Non-executive
Directors and two male Executive Directors.
Although female representation on the Board has
increased with the appointment of Laura Harricks,
the Board has not yet met the Listing Rules gender
diversity targets. In addition, none of the four
leadership roles specified in the Listing Rules
arecurrently held by a woman.
The Committee has been, and will continue to be,
mindful of the targets when reviewing succession
plans but notes that with a relatively small Board
and the Board’s belief that its optimal size is
between six and seven members given the size
and shape of the business, the fact that many of
the Directors have a similar tenure linked to the
Company’s demerger, and the need to ensure
orderly succession, these targets will likely be met
over the longer term. The Board has one Director
from a minority ethnic background and therefore
meets this Listing Rules diversity target.
In accordance with Listing Rule 9.8.6R(10), the
prescribed numerical data on the ethnic background
and the gender identity of the Board and the
Executive Board is set out in the tables on page 98.
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Nominations Committee report continued
Business diversity
In line with our colleague Inclusion and Diversity
Policy, the Board remains committed to improving
gender diversity at all levels. Members of the
Executive Board comprise two female and six
malemembers, representing a gender split of
25%female and 75% male. The senior leadership
team (direct reports to the Executive Board) have
agender split of 35% female and 65% male. The
gender split for all colleagues is 40% female and
60% male.
The business is committed to building skills in our
local communities to create a diverse and inclusive
talent pipeline and to benefit wider society. A key
part of the People pillar of our Responsible
Business Strategy is the Early Careers proposition,
which includes apprenticeships, traineeships and
graduate placements. Through our Early Careers
programmes, we have created opportunities to
attract a significantly more diverse workforce. In
2023, the business supported 280 individuals on
Early Career placements and was ranked as one
ofthe top 100 Best Apprenticeship employers.
The Board places great importance on fostering
aninclusive and diverse workforce which is
representative of the communities in which we
operate. The Board, Nominations Committee and
the Executive Board receive regular updates on the
progress of inclusion and diversity initiatives and
feedback from colleagues to monitor progress
against our aim of ensuring all colleagues have an
opportunity to get on and feel at home at Wickes.
During the year management continued to work to
improve the quality of the Group’s ethnicity data
and the latest census data was used to identify
sites which were not representative of their
localarea, enabling more targeted analysis and
improvement plans to be developed. Further
details of the Company’s approach to diversity
andinclusion can be found on pages 97-99.
Diversity data
In accordance with Listing Rule 9.8.6R(10), the prescribed numerical data on the ethnic background and the gender identity of the Board and the
ExecutiveBoard is published below. For the purposes of making these disclosures, the Company has collected this data by asking each Director or
officeroftheCompany to confirm their gender identity and ethnic background directly. Each response is recorded on the Company’s HR system.
Board – gender identity
Female
29.0%
Male
71.0%
Board – ethnic diversity
Non-white
14.0%
White
86.0%
Board – age diversity
40-50
years
28.6%
60-70
years
28.6%
50-60
years
42.9%
Executive Board – gender identity
Female
25.0%
Male
75.0%
Executive Board – ethnic diversity
Non-white
12.5%
White
87.5%
Executive Board – age diversity
40-50
years
12.5%
50-60
years
87.5%
Direct reports to Executive Board –
gender identity
Female
45.0%
Male
55.0%
Direct reports to Executive Board –
ethnic diversity
Non-white
10.0%
Unknown/prefer
not to say
15.0%
White
75.0%
Direct reports to the Executive Board –
age diversity
20-30
years
12.5%
30-40
years
45.0%
50-60
years
5.0%
40-50
years
37.5%
All colleagues – gender identity
Female
40.0%
Male
60.0%
All colleagues – ethnic diversity
Non-white
12.8%
White
69.9%
Unknown/prefer
not to say
17.3%
Colleagues – age diversity
<20
years
11.0%
30-40 years
21.0%
20-30
years
25.5%
>70
years
1.0%
60-70
years
9.5%
50-60 years
15.0%
40-50 years
17.0%
31 December 2023 is the Company’s chosen reference date for the purposes of reporting against Listing Rule 9.8.6R(9).
‘Executive Board’ means ‘senior management’ for the purposes of the Code and the requirements of Provision 26 and includes the Company Secretary.
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Reporting table on ethnicity representation as at 31 December 2023
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White (including
minority-white groups) 6 85.7 4 7 87.5
Mixed/Multiple Ethnic Groups – – –
Asian/Asian British – – –
Black/African/Caribbean/Black British 1 14.3 – – –
Other ethnic group, including Arab – – – 1 12.5
Not specified/prefer not to say – – – – –
Reporting table on gender representation as at 31 December 2023
Number of
Board
members
Percentage of
the Board
Number of
senior
positions on
the Board
(CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 5 71.4 4 6 75.0
Women 2 28.6 0 2 25.0
Not specified/prefer not to say – – – – –
Board evaluation
Each year, the Board undertakes a formal and rigorous annual evaluation of its own performance and thatof
its Committees and individual Directors. The evaluation is externally facilitated at least once everythree years.
Progress made against last year’s action plan
Action Progress
Develop a plan for the orderly succession
of the Board and to increase the diversity
of the Board
– An additional Non-executive Director with extensive
customer, marketing and digital experience was
appointed to the Board in June 2023. Planning for
theorderly succession has started and will continue
overthe coming years.
Continue to develop relationships
between Non-executive Directors,
Executives and colleagues
– Management development programmes have been
extended to include what it means to be alisted business
and the role of the Board and Non-executive Directors to
increase business leaders’ understanding.
– More colleagues and leaders have been invited to
presentat Board meetings to develop relationships.
Keep the Board forward schedule under
review to ensure strategic matters are
appropriately scheduled
– The Board’s annual plan was updated to reflect the
development of strategy and is reviewed monthly by the
CEO and Company Secretary, andincluded as a standing
item for discussion atevery Board meeting.
Propose a plan for the future provision
ofinternal audit services
– The decision on internal audit services was deferred to
enable full focus by the Finance teamon the financial
control improvement plan.
Map out key risks to Board agendas and
ensure key risk owners present to the
Board at least once each year
– The risk mapping was reviewed by the Board in March
2023 and it was agreed that the principal risk coverage
was appropriate.
– An annual review of risk mapping is scheduled toensure
risk coverage remains appropriate.
2023 Board evaluation
Following last year’s external evaluation, carried
out by Board Alchemy, the Board decided to carry
out an internal evaluation this year. Each Director
completed a questionnaire in respect of the Board
and its Committees. The General Counsel and
Company Secretary collated the responses and
reported a summary of the key findings to the
Board for discussion.
Overall, there was a high level of satisfaction with
the effectiveness of the Board and its Committees,
with no high priority or urgent matters needing to
be addressed. The high scores reflected a healthy
Board dynamic and a well-managed Board.
Committee effectiveness
The effectiveness of the Committee was considered
as part of this year’s Board evaluation process.
The review concluded that the Committee
continues to operate effectively.
Director performance reviews
The Chair of the Board reviewed the performance
ofindividual Directors, taking into account feedback
from the other members of the Board, and discussed
any identified development opportunities with each
Director. It was confirmed that each Director continues
to make an effective contribution to the Board and
demonstrates commitment to their role.
2024 action plan
The Board considered the findings and agreed an
action plan which will be reviewed by the Board
during 2024 to ensure progress is being made.
The key actions agreed by the Board arising from
the review were as follows:
– Review the resourcing model for internal audit
(carried over from the 2022 evaluation).
– Keep diversity in the broadest sense under review
alongside planning the orderly succession of the
Board over the next few years.
– Continue to evolve management reporting on
performance against the implementation ofstrategy.
– Arrange briefings on developments, risks and
opportunities in artificial intelligence and cyber
security to increase the knowledge of the Board.
The performance review of the Chair of the Board
was conducted by the Senior Independent Director
and included feedback from Board members
gathered from a questionnaire. The Senior
Independent Director discussed the output
ofthereview with the Chair of the Board.
Election and re-election of Directors
The Board has confirmed, following a performance
review, that all Directors continue to perform
effectively and demonstrate commitment to their
roles. All Directors will submit themselves for
election or re-election at the forthcoming AGM.
Directors do not participate in discussions
involving their own reappointment.
Wickes Group Plc Annual Report and Accounts 2023 99
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Audit and Risk Committee Report
Dear Shareholder,
I am pleased to present the Company’s Audit and Risk
Committee report for the year ended 30 December 2023.
I continue to be pleased with the constructive
environment that the Committee has created,
providing supportive challenge, open discussion and
promoting transparent reporting. As Chair of the
Committee, I have fostered good working relationships
with the external and internal auditors through regular
dialogue outside of the Committee meetings.
Building on the work undertaken in 2022 on
implementing the new Finance System and improving
internal financial controls, the Committee continued
toprioritise the development of internal financial
processes and controls. During the year it monitored
progress against management’s improvement plans,
with updates presented to the Committee at every
meeting. These improvement plans reflect the need
fora continued high level of focus to ensure that the
key financial controls are documented and assessed
for effectiveness, and where necessary enhanced
andimproved upon. In the near term the improvement
plans will also consider the opportunity to increase
therobustness and resilience of the manual detective
controls in operation. In the longer term they reflect
that the delivery of the business transformation plan,
which includes upgrades to the Company’s commercial
and operating systems, will give the Company the
opportunity to implement optimised system based
preventative controls, which will reduce the reliance
onthe manual detective controls currently operated.
The Committee spent considerable time during the
year reviewing financial results and assessing the
accounting policies and procedures adopted by
management. In particular, the Committee reflected
onthe uncertain economic backdrop and its impact on
the calculation of impairments on store-related assets
and the carrying value of investments in subsidiaries.
The Committee also focused on reviewing the
recognition of revenue in Design & Installation.
The Committee received updates on the Company’srisk
management approach and reviewedthe principal and
emerging risks and uncertainties with a focus on cyber
security, the ITcontrol framework, the implementation
of the Finance System, Design & Installation, payroll,
data privacy and the regulatory complianceframework.
During the year, the Committee was briefed on
preparations for the anticipated changes in audit
andcorporate governance requirements and the
developing climate change reporting requirements
and discussed how these will impact the Company’s
reporting, particularly in relation to climate-related
financial disclosures.
As the Company is not a constituent of the FTSE350
index, the Competition and Markets Authority’s
Statutory Audit Service for Large Companies Market
Investigation (Mandatory Use of Competitor Tender
Processes and Audit Committee Responsibilities) Order
2014 (the ‘CMA Order’) does not apply. In the2022
Annual Report, the Company disclosed itsintention to
undertake a competitive tender in2025, reflecting the
requirements of the CMA Order.However, after careful
consideration and inaccordance with applicable legal
and regulatory requirements, the Committee decided
that on balance it would be best for the business to
focus its resources on addressing the requirements
ofthe updated UK Corporate Governance Code (the
“Code”), published in January 2024, compliance against
which is required for the December 2026 year end.
Looking ahead to 2024, the Committee’s key focus
will continue to be on overseeing the development
ofthe internal control framework and also the
Company’s approach to climate-related disclosures.
Mike Iddon
Chair of the Audit and Risk Committee
18 March 2024
Committee members
Mike Iddon, Independent Non-executive
Director and Committee Chair
Sonita Alleyne, Independent
Non-executive Director
Mark Clare, Senior Independent
Non-executive Director
Laura Harricks, Independent
Non-executive Director
Mike Iddon
Chair of the Audit and
RiskCommittee
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Committee composition
The Committee is composed solely of independent
Non-executive Directors who collectively have
considerable financial experience and provide a
wide range of insight and expertise necessary to
fulfil the duties and responsibilities of the Committee.
The Chair of the Committee has recent and relevant
financial experience being a current CFO of another
listed business, and the Committee as a whole has
competence relevant to the sector in which the
Group operates. Further details of the Committee
members and their experience can be found on
pages 86-87. Overall attendance for Committee
meetings was 100%. Further details about meetings
and attendance can be found on page 88.
The Chair of the Board is not a member of the
Committee, but was invited to and attended all
meetings in 2023. Members of the Executive Board
and senior managers within the business are invited
to attend meetings as appropriate to ensure that the
Committee maintains a current and well-informed
view of events within the business, and to reinforce
a strong risk management culture.
Role of the Committee
The role and responsibilities of the Committee
areset out in the Committee Terms of Reference,
which are available on the Company’s website at
www.wickesplc.co.uk.
The Committee’s role primarily covers the
followingareas:
– Monitoring the integrity of financial reporting
and narrative reporting
– Reviewing the Company’s internal financial
control and risk management systems
– Monitoring and reviewing the effectiveness
ofinternal audit
– Monitoring and reviewing the effectiveness
ofexternal audit
During 2023, the Committee undertook a review of
the Committee’s Terms of Reference and updated
them to clarify:
– the Committee’s role in reviewing and challenging
the assumptions used to determine the going
concern and viability statements to be made
bythe Board.
– the respective responsibilities of the Committee
and the Responsible Business Committee in
respect of climate-related risks and opportunities.
Activities of the Committee
During the year, the Committee held five
scheduledmeetings.
The Committee has a structured forward looking
meeting planner to ensure that the responsibilities
of the Committee are discharged during the year
and reflects the reporting cycle of the Group.
Theplanner is considered at each meeting
anddeveloped where appropriate to meet
thechanging needs of the Group.
Prior to the start of each Committee meeting, the
Committee meets without the Executive Directors
present to discuss any relevant matters with the
internal and external auditors. Where appropriate,
these matters are then raised during the course of
the meeting. The Committee Chair also meets the
internal auditor and external auditor prior to all meetings
to provide additional opportunity for open dialogue
and feedback without management present.
Percentage of time spent by the Committee
in scheduled meetings
Governance
11%
Internal
audit
10%
Financial reporting
35%
External audit
20%
Risk management
& internal control
24%
Climate reporting
The Committee’s role is to gain assurance that
theeffects and consequences of climate change
are being adequately reflected in our financial
statements and valuations.
Last year we reported on all areas of the TCFD
framework other than under the ‘Strategy’ b) and
c)recommendations. This year, with the support
ofa third-party specialist partner, management
has made further progress and this year we are in
full compliance with the TCFD recommendations.
For more information see pages 56-66.
During the year, the Committee received updates
on progress against forthcoming sustainability related
reporting requirements. The Committee will
continue to monitor developing best practice, and
seek training/professional guidance when required,
to ensure that it continues to effectively oversee the
reporting in this area.
Wickes Group Plc Annual Report and Accounts 2023 101
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Audit and Risk Committee Report continued
The Committee receives reports and updates from management, along with internal and external audit. A summary of the key matters considered by the Committee in 2023 is set out below.
Financial reporting Risk management/internal control Internal audit External audit
January
Review of store related assets and Plc investment
carrying value for potential impairment
Review of implementation of newFinanceSystem Review of Internal Audit Plan for 2023 Review of progress on year end audit
Review of revenue recognition Review of processes and controls
ofgoodsreceived not invoiced
Review of reports on the implementation
ofinternalaudit actions
Approval to recommend the reappointment
ofexternal auditor to the Board
Review of goods received not invoiced Review of principal risks and mitigations Approval of external audit fees
Annual review of findings by the Operations
Auditteam from key control audits on stores
andDistribution Centres
Annual review of findings of work completed
bySecurity and Investigations Department
March
Review of store related asset and Plc investment
carrying value for potential impairment
Review of progress on internal
controls improvement plan
Review of reports on progress
against the InternalAudit Plan for 2023
Review of reports on annual financial statements
Review of revenue recognition Review of the effectiveness of internal controls
Review of goods received not invoiced Review of Corporate Risk Register
Review of FRC letter in relation to the 2021 Annual Report
andproposed disclosure improvements
Review of management’s response to the FRC
letteron the 2021 Annual Report & Accounts
Review of considerations of the Group’s
viability andgoing concern
Review of principal risks for
disclosure intheAnnual Report
Review of final dividend recommendation
and distributable reserves
Review of emerging risks
Review of Annual Report and Accounts,
including the2022 financial statements
June
Review of the Company’s accounting policy
inrelationtoSoftware as a Service (SaaS)
Review of progress on internal
controlsimprovement plan
Review of reports on progress
against theInternalAudit Plan for 2023
Approval of the interim review strategy and plan
Review of Treasury Policy
Review of contractor and consultancy spend
Review of principal risks and mitigations
September
Review of store related assets and Plc
investment carrying value for potential impairment
Review of progress on internal
controls improvement plan
Review of reports on progress
against theInternalAudit Plan for 2023
Review of reports on the interim financialstatements
Review of revenue recognition Review of ESG reporting landscape Review of non-audit fees
Review of goods received not invoiced Review of Corporate Risk Register Briefing on ESG reporting and
corporate governance developments
Review of considerations of the Group’s going concern
Review of interim dividend recommendation
and distributable reserves
Review of interim financial results and statements
November
Review of progress on internal
controlsimprovement plan
Review of reports on progress
against theInternalAudit Plan for 2023
Approval of the external audit strategy and plan
Review of accounting policies Assessment of the effectiveness of internal audit Assessment of the effectiveness of external audit
Review of risk management approach Approval of Internal Audit Plan for 2024 Review of non-audit policy and fees
Wickes Group Plc Annual Report and Accounts 2023102
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Key judgements and financial reporting matters
A key aspect of the Committee’s work is monitoring
the integrity of the annual and interim reports,
including a review of the significant financial
reporting matters and judgements contained
inthem. Key accounting judgements considered,
conclusions reached and their financial impacts for
the year ended 30 December 2023 are set out below.
In reaching its conclusions, the Committee
considered papers and explanations given by
management, discussed each matter in detail,
challenged assumptions and judgements made
and sought clarification where necessary. It
reviewed and discussed reports from the external
auditor on the work undertaken to arrive at the
conclusions set out in its audit report on pages
132-139 and had the opportunity to discuss it with
the external auditor in depth.
The carrying value of right-of-use assets
The Group balance sheet contains £537.1m
(2022: £542.4m) of right-of-use assets. The
Directors are required to determine whether those
assets have suffered any impairment or whether
there has been any reversal of an impairment
previously recorded, taking into account appropriate
indicators, for example store profitability, stores
with recent losses or those with high value assets.
Where there are indicators of impairment or reversal
calculations are performed which compare the
present value of future cash flows for each cash
generating unit (CGU) with the carrying value of
assets. CGUs are determined to be individual
stores: each store’s profitability is reviewed, after
apportioning an appropriate amount of central
costs and IT investment costs (such as SaaS).
Thecalculations undertaken to help arrive at a
conclusion incorporate a consideration of the risks
associated with each CGU and are based upon
forecasts of their cash flows over the remaining
term of the lease, which by their nature require
judgement to be exercised and are subject to
considerable uncertainty. The cash flow forecasts
used for impairment considerations are prepared
taking into consideration the historical financial
performance, the annual budget, the Five-Year
Planpresented to and approved by the Board
ofDirectors, plus an estimate of the long term
growthrate beyond the Five-Year Plan.
Management presented the Committee with papers
setting out the results of the work performed, the
methodology used, the assumptions made and the
conclusions reached. Management explained to
the Committee how thecash flow, central cost
allocation (including ITinvestment) and discount
rate calculations were prepared, how individual
stores were determined to be potentially impaired
or which indicated reversals of prior impairments,
the key assumptions and judgements that were
made and how sensitive the cash flows were to
changes in key assumptions. After reviewing
thesepapers and obtaining further explanation
where necessary, the Committee concluded that
management’s final position, afterappropriate
challenge and review, reached a balanced and
reasonable conclusion regarding the impairment
charges and reversals of prior charges recognised
and included acceptable judgements.
Revenue recognition
The Group recognised £364.7m (2022: £371.1m) of
revenue in the financial year in respect of Design
&Installation revenue and carried forward Design
& Installation revenue of £28.5m (2022: £43.6m)
as aliability on its balance sheet where orders had
beenpaid in advance but either fully or partially
undelivered at the period end. Design & Installation
revenue represents a large number of individual
transactions and recognition is driven from a
number of different systems, including the product
delivery system, the ordering system, as well as
the data automatically posted in the Finance
System, with each system showing some timing
differences on the point of completion of individual
orders. To ensure appropriate revenue recognition
in the accounting records, management therefore
maintains a separate order book to track the revenue
that should actually be recognised in the period.
Management performs a significant amount of
analysis and reconciliation to compare revenue
recognised by each system, determine how the
timing differences arise and ensure revenue is
appropriately recognised in line with its accounting
policies. Management reported to the Committee
on the outcome of this exercise and presented final
papers to the Committee at the year end setting
out how conclusions were reached on the reported
revenue. The Committee reviewed and discussed
the information presented, received a report from
the external auditor on the work undertaken to
arrive at the conclusions set out in its audit report
and discussed the progress with the external
auditor. After reviewing these papers and obtaining
further explanation where necessary, the Committee
concluded that the process of review and controls
operated by management had resulted in an
accurate revenue and deferred revenue number
being reported in the financial statements.
The carrying value of investment
in subsidiaries (Company only)
The Company balance sheet contains £603.4m
(2022: £598.9m) of investments, representing
itsinvestment in Wickes Group Holdings Limited.
The Group contains only one trading entity, Wickes
Building Supplies Limited, and the investment
therefore represents the entire trading business.
The Directors are required to determine whether
this investment has suffered any impairment
whenever there are indicators of possible impairment.
They do this by comparing the net present values
of future cash flows from the investment with the
carrying value of the investment in the balance
sheet. The calculations undertaken to help arrive
ata conclusion incorporate a consideration of the
risks associated with the business and are based
upon forecasts of its long term future cash flows,
which by their nature require judgement to be
exercised and are subject to considerable uncertainty.
The cash flow forecasts used for impairment
considerations are prepared taking into consideration
the historical financial performance, the annual
budget and the Five-Year Plan presented to and
approved by the Board of Directors.
Management presented the Committee with papers
setting out the results of the work performed, the
methodology used, the assumptions made and the
conclusions reached. Management explained to
the Committee how the cash flow and discount
rate calculations were prepared, the key assumptions
and judgements that were made and how sensitive
the cash flows were to changes in key assumptions.
After reviewing these papers and obtaining further
explanation where necessary, the Committee
concluded that management’s final position,
afterappropriate challenge and review, reached
abalanced and reasonable conclusion and
included acceptable judgements.
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Audit and Risk Committee Report continued
External auditor
The Committee is responsible for overseeing the
relationship with the external auditor, including
recommending to the Board its reappointment or
removal, assessing external audit independence
and approving the statutory audit fees.
KPMG LLP (‘KPMG’) continued as the Company’s
external auditor for the financial period ended
30 December 2023, having been reappointed
asauditor of the Company on 23 May 2023 by
Shareholders at the AGM.
KPMG was appointed under a competitive audit
tender in 2015. Wickes became a public interest
entity (PIE) in April 2021 when its shares were
admitted to trading on the London Stock Exchange
and therefore, under the Companies Act 2006, the
next tender will be required no later than in respect
of the 2031 financial year (ten years from the date
of the Company becoming a PIE). Auditor rotation
is required 20 years from the date of the Company
becoming a PIE and therefore this will be due no
later than 2041.
When the Company’s shares were admitted
totrading on the London Stock Exchange, the
Company was in the FTSE 350 and subject to
theCMA Order which would require the next
tenderfor an external auditor for the 2025 year
end(ten years from the last tender). As the
Company is not now in the FTSE 350, the
CMAOrder does not apply and, after careful
consideration and in accordance with applicable
legal and regulatory requirements, the Committee
determined that it would be in the best interests
ofthe Company and its Shareholders to delay
tendering the auditor until after completion
oftheInternal Control Improvement Programme
toallow management to fully focus on the
improvement of controls to meet the new
Coderequirements without having to manage
theconsiderable additional work that an audit
tender would entail atthe same time.
The Committee agreed that KPMG has a detailed
knowledge of the business and an understanding
of the sector, and continues to demonstrate that
ithas the necessary expertise and capability to
undertake the audit. It was further noted that the
audit partner will rotate after the 2024 year end,
which will bring a fresh approach to the audit.
Theaudit will be tendered ahead of the audit
ofthe2031 financial year.
KPMG’s role is to express an opinion on the
financial statements of the Group. It discusses
itsfindings with management and it reported to
the Committee during the year on its audit work
and audit opinion. The Committee reviews any
recommendations made by KPMG and agrees
what actions should be taken with management.
External audit effectiveness
During the year, the Committee considered
thequality, effectiveness, independence and
objectivity of KPMG through the review of all
reports provided and the regular contact with
theauditor both during Committee meetings
andthrough other interactions. In addition,
anannual assessment was conducted in
accordance with a process agreed with the
Committee which involved seeking the views
oftheCommittee, as well as those of colleagues
who have regular interactions with the external
auditor, on the following areas:
– Appropriateness of the scope of the audit
andthe planning process for the delivery
ofaneffective and efficient audit.
– Expertise of the audit team conducting the audit.
– The audit team’s knowledge and understanding
of the business.
– Degree of independence applied by the
externalauditor.
– Robustness of the external audit process and
degree of challenge to matters of significant
audit risk and areas of management subjectivity.
– Quality of audit findings and reporting.
A summary of the responses was presented to
theCommittee at its meeting in November 2023.
The Committee used the feedback to assist its
assessment of whether the external auditor met
the required standards of qualification, independence,
expertise, effectiveness and communication, and
discussed its conclusions and opportunities for
improvement with the external auditor. The overall
feedback was positive and no significant issues
were identified as part of this process. It was
agreed that the audit was robust and professionally
performed, the audit team had a good understanding
of the business and there was a high degree of
constructive challenge from the external audit
team. It was recognised that there continued to be
opportunities for both management and the auditor
for making the audit process more efficient.
The Committee concluded that KPMG had applied
appropriately robust challenge and professional
scepticism throughout the year which demonstrated
KPMG’s independence and that it possessed the
skills and experience required to perform its duties
and, in particular, the audit effectively.
External audit independence
The Committee regards the independence of
theexternal auditor as crucial in safeguarding the
integrity of the audit process and takes responsibility
for ensuring the relationships between the Committee,
the external auditor and management remain
appropriate. The Committee recognises that
independence is also a key focus for the external
auditor, and KPMG has confirmed that it has
complied with its own ethics and independence
policies. KPMG provides confirmation of
independence during the planning stage of the
audit, disclosing matters relating to its independence
and objectivity, and a final independence confirmation
statement at the conclusion of each audit. There
were no independence issues raised in respect
ofthe 2023 audit.
Non-audit services
Additional non-audit services provided by the
auditor may impair its independence or give
risetoa perception that its independence may
beimpaired. The Non-audit Fees Policy was
originally approved by the Committee in 2021
andreviewed in November 2023. The policy is
designed to ensure the ongoing independence and
objectivity of the external auditor. The policy sets
out the permitted and prohibited services for which
the external auditor may not be engaged, and
includes approval limits and a cap on allowable
non-audit fees. Key provisions of the policy:
– Fees for non-audit services provided by the
statutory auditor in any year may not exceed
70% of the average fees for the Group statutory
audit in the three previous years.
– The auditor is prohibited from providing
certainnon-audit services, including almost
alltax work, internal audit, corporate finance,
and involvement in management activities.
– The external auditor may not be engaged to
provide any non-audit services without the
approval of the Committee.
During the year, the Committee reviewed the
non-audit fees at each of its meetings. For the
yearended 30 December 2023, the total fees for
non-audit services provided by the auditor to the
Group did not exceed 70% of the average of the
statutory audit fee for the Group’s consolidated
financial statements and statutory accounts paid
to the auditor in the last three consecutive financial
years*. The fees paid to the auditor are set out on
page 150 of the notes to the financial statements.
The Committee is satisfied that the Non-audit Fees
Policy was complied with throughout the yearand, in
its opinion, the external auditor remains independent.
* Fees paid in previous periods to the auditor in relation to Reporting
Accountant services in respect of the Wickes demerger, which
were agreed by its former parent company prior to separation,
have been excluded from the calculation of the non-audit fee ratio
when assessing the Company’s compliance with the Non-audit
Fees Policy. No such fees were paid in the current period.
Wickes Group Plc Annual Report and Accounts 2023104
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Internal audit
The internal audit function provides the Committee
and management with independent and objective
assurance on the adequacy and effectiveness of
the Group’s internal controls.
The Group’s internal audit function is outsourced
to BDO LLP (‘BDO’). The Committee decided to
outsource internal audit when the Company listed
on the London Stock Exchange, primarily to enable
the business to focus on its core business and
bedding in other new requirements of being a listed
company. It was determined that outsourcing
theinternal audit function would also give the
business access to a wide range of expertise
inacost effective way.
The work of internal audit is set out in an Internal
Audit Charter, which is agreed annually with the
Committee. Internal audit has an independent
reporting line to the Chair of the Committee and a
dotted reporting line to the Chief Financial Officer.
The Committee meets with internal audit without
executive management present before each
Committee meeting and meets with the Chair
ofthe Committee on a quarterly basis or more
frequently if required.
At every Committee meeting, the Committee
received and reviewed reports from internal audit
setting out progress against the agreed Internal
Audit Plan, findings from individual internal audits
undertaken and progress against audit actions
previously identified.
Internal audit also provided the Committee with
thought leadership on sector specific insights,
aswell as more general updates on areas such as
‘Audit Reform’ and corporate governance changes.
Internal Audit Plan
Each year an audit needs assessment (ANA) is carried out. This considers the Group’s principal risks, the
Group’s appetite for risk, any changes to the business and findings from prior audits, along with priorities
andspecific areas of focus highlighted by the Executive Board, senior management and the Committee.
The output from the ANA is used to establish the Internal Audit Plan for the year.
The Internal Audit Plan for 2023 was approved by the Committee and included a combination of
risk-based assurance audits and advisory projects. The following reviews were commenced in 2023:
Internal audit review Overview of scope
HR, Resourcing
&Retention
Recruitment, induction processes, succession planning, performance
development and promotional opportunities.
Estates
Management
Estates Management, including property management strategy, rent reviews,
property costs, maintenance and repairs, compliance with lease conditions
andcomplaints management processes.
Finance System
Implementation
Assessment of the achievement of the original business specification and any
subsequent necessary workarounds put in place.
Senior Accounting
Officer
VAT, corporation tax, employment taxes, customs and excise and stamp duty
land tax.
Customer
Experience
Strategy, policies and procedures, monitoring of the quality of customers’
experience, feedback and lessons learned, responding to customers’ needs,
management information and reporting, refund management and product recalls.
Fraud Management Fraud Management framework used to manage and mitigate organisational
fraud related risks.
Design & Installation The end-to-end Design & Installation operational process from a customer raising
anenquiry through to the order being fulfilled, including quotes, order management,
third party installer management, Order Fulfilment, data quality and reporting.
Regulatory
Compliance
The Group’s overarching regulatory compliance framework, governance and
accountability, policies and procedures, training, compliance requirements, risk
assessments, monitoring compliance, reporting mechanisms and management
information and escalation of compliance issues and instances of non-compliance.
Payroll Processing of data, amendments to standing data, approvals, oversight
andmonitoring, bonuses, pensions, loans, and salary advances and third
partymanagement.
Data Privacy Review of data privacy programme including awareness, joint controllers, processors,
data transfers, lawful basis for processing, transparency, individual rights, breaches,
Data Protection Impact Assessments, governance and accountability.
IT General Controls IT governance and strategy, physical security, user access, change management,
asset management, incident management, patch management, back-up and
recovery and third party management.
National Minimum
Wage
The control framework in place to ensure the Group is compliant with National
Minimum Wage requirements. This review was requested by the Committee
asan addition to the FY2023 Internal Audit Plan.
Any proposed changes to the Internal Audit Plan
are presented to the Committee for approval as
necessary during the year, to take account of any
new internal or external developments. During the
year, a number of minor changes were made to the
Internal Audit Plan to ensure planned assurance
activity focused on the key needs of the business.
Timings of some audits were also adjusted to ensure
that management resources were available to fully
support and engage with the internal audit team.
The high-level scope of each internal audit review is
agreed with the Committee when the Internal Audit
Plan is set, as well as confirming the Executive
sponsor. The sponsor is involved in the planning
stages of each audit, overseeing completion of
thework and supporting BDO to agree conclusions
and agreeing recommendations.
Ongoing visibility of the internal control
environment is provided via internal audit reports
to the Executive Board and the Committee.
Reports are graded to reflect an overall
assessment of the design and operational
effectiveness of the control environment under
review, and the significance of any control
weaknesses identified.
Improvement actions to address findings are
identified and agreed with management. The
Committee regularly reviewed actions arising
frominternal audits. Reports on the progress of
the audit actions are presented to the Executive
Board every month and to the Committee at
everymeeting, with a focus on the status of
anydeferred and overdue actions.
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Internal audit effectiveness
During the year, the Committee assessed
theeffectiveness of internal audit to satisfy
itselfthat the quality, expertise and experience
ofthe function is appropriate for the Group. The
assessment was conducted in accordance with a
process agreed with the Committee and involved
seeking the views of the Committee, as well as the
Executive Board and those of colleagues who have
regular interactions with the internal audit team
onthe following areas:
– The internal audit team’s resources and
knowledge and its understanding of the business
– Quality of internal audit planning and delivery
– Degree of independence applied by the internal
audit team
– Quality of internal audit findings and reporting
A summary of the responses was presented to
theCommittee at its meeting in November 2023.
The Committee used the feedback to assist its
assessment of the effectiveness of the internal
audit function and discussed its conclusions and
opportunities for improvement with the internal
audit team. The overall feedback was positive
andno significant issues were identified as part
ofthis process. It was agreed that the internal
audit function was effective, although there
continued to be opportunities for further
improvement to reporting. It was also concluded
that further consideration should be given to
whether a co-resourced rather than a fully
outsourced model would be more appropriate
forthe business now the Finance team had
beenstrengthened and work on other priorities,
including the control improvement programme,
was progressing well.
Risk management and internal controls
In addition to internal audit services, BDO provides
the Committee with support and advice concerning
the Group’s assurance framework more generally
and during the year provided advice and assistance
with the full year risk management process.
Risks are actively managed on an ongoing basis.
Details of risks faced by the Group are maintained
in the Group Risk Register, with key risks regularly
collated and reviewed by management and the
Executive Board to assess the potential impact
and likelihood of occurrence, after taking into
account key controls, mitigating factors and
interdependencies. Additional focus is given to
anyrisks that fall outside of the Company’s risk
appetite, and further mitigating actions are put
inplace, where appropriate, to manage risks
toanacceptable level. The principal risks and
uncertainties are developed from this Group view
of risk management, and are set out on pages
75-81, together with information on how those
risks are mitigated and how emerging risks
areassessed.
The Committee receives regular reports to provide
assurance over the extent and performance of the
control environment and to assist in its oversight
of the principal risks. These reports include:
– reports from management on progress with
thecontrol improvement plan;
– reports from internal audit providing a status
update on the delivery of control improvement
recommendations;
– reports from internal audit on its audit reviews
and recommendations as part of the Internal
Audit Plan; and
– KPMG’s external audit findings and insight
fromthe external audit process.
Building on the foundations of the new accounting
system delivered at the end of 2022, and in
anticipation of the changes to the Code published
in January 2024, management initiated a programme
to capture and formally document its key financial
controls. With full support from the Committee,
these activities commenced in the second half
ofthe year and focused on the core transactional
processes and, in particular, an assessment of
therobustness and resilience of the related key
financial controls. These activities will continue
during 2024, forming the foundation of the
Company’s response to the Code changes and
ultimately supporting the Directors’ statement
onthe December 2026 financial statements.
During the year, the Committee received updates
on the programme and its key findings from
management, as well as discussing the
effectiveness of the control environment in relation
to the 2023 financial year. The Committee noted
that there had been improvements made to
controls during the year and concluded that, with
the support from the manual detective controls
and reviews in place, the internal control
environment was effective.
The Committee recognises the importance of
continuous improvement in the effectiveness of
the Company’s systems and processes, and that
the improvement of internal financial controls
remains a key priority. In the near term this will be
focused on opportunities to increase the
robustness and resilience of the manual detective
controls in operation. In the longer term, the
delivery of the business transformation plan, which
includes upgrades to the Company’s commercial
and operating systems, will allow the Company
theopportunity to implement optimised system
based preventative controls, which will reduce
thereliance on the manual detective controls
currently operated.
Committee effectiveness
The effectiveness of the Committee was considered
as part of this year’s Board evaluation process,
more details of which can be found on page 99.
The review concluded that the Committee
continues to operate effectively.
Audit and Risk Committee Report continued
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Responsible Business Committee report
Dear Shareholder,
It gives me great pleasure to present the Responsible
Business Committee report, coveringthe year ended
30 December 2023. Following the launch of our
Responsible Business Strategy, ‘Built to Last’, in
2022, we have continued to move at pace this year
to implement our sustainability plans. I have set out
some highlights below. More details can be found
on the following pages and in the Responsible
Business section on pages 34-66.
The business created the new role of Head of
Inclusion and Diversity to further develop our
inclusion and diversity strategy. In the year, the
business continued to receive external recognition
for the great initiatives and work done in this area,
including being placed 11th in the top 100 of the
Stonewall Workplace Equality Index 2023. The list
recognises exceptional employers who are committed
to supporting their LGBTQ+ colleagues and customers.
Further details on this can be found on page 40.
The Committee received updates on the further
steps being taken to improve the ethnic diversity
within Wickes and, in September 2023, we were
the first retailer to partner with Flair Impact
(aracial equity technology company), to undertake
a colleague anti-racism survey. Further detail on
the results of this survey can be found on page 37.
The business completed its partnership
withYoungMinds and I was delighted with
itssuccess, raising £2.3 million and exceeding
itstarget. Anewcorporate partner, The Brain
Tumour Charity, was selected by colleagues from
ashortlist. The business also celebrated the first
full year of its Community Programme which has
helped 1,468 local good causes, just slightly shy of
our ambitious target of 1,500. Further details can
be found on pages 42-43.
I very much enjoyed the colleague listening session
thatI hosted during 2023 on behalf of the Board,
which formed part of a programme of listening
initiatives that supports the Company’s ‘always on’
listeningapproach. Key themes from the insights
gathered across the year have been grouped into
areas of strength and areas that require further
attention. Colleagues are confident in the direction
of the business strategy and are incredibly proud
ofthe culture of inclusion and diversity. Areas that
require attention are: ensuring that colleagues in
store and distribution feel their work is meaningful;
improving dialogue and engagement in day-to-day
communications; and ensuring that we continue
tomonitor pay and reward in the face of external
market changes. Thebusiness’s overall level of
engagement is stable and continues to perform
positively against the external retail benchmark.
TheJune 2023 colleague engagement survey
measured engagement at 79%,with over 84%
ofcolleagues participating.
Committee members
Sonita Alleyne, independent
Non-executive Director, Committee Chair
Mark Clare, Senior Independent
Non-executive Director
Laura Harricks, independent Non-executive Director
Mike Iddon, independent Non-executive Director
Christopher Rogers, Chair of the Board
I am encouraged by the Company’s evolving plans
with meeting its near term science-based targets
for Scopes 1, 2 and 3, and I was pleased to see the
business submitting its first Forests submission to
the Carbon Disclosure Project (CDP). The Committee
reviewed the business’s ongoing progress with
developing its climate-related disclosures in line
with external regulations. With the development
ofthe disclosure landscape, this will be a key
areaof focus for the Committee going forwards.
The Committee was briefed on how the business
isperforming against its plans to deliver against its
strategic objectives for Homes, and is excited about
the new product ranges that were launched during
the year to support our customers with improving
the energy efficiency of their homes, particularly
inlight of the ongoing cost of living challenges.
Looking forward to 2024, the Committee will
continue to closely monitor the implementation
and development of our Responsible Business
Strategy, along with monitoring the Company’s
performance on ESG matters.
Further information on the Responsible Business
Strategy can be found on pages 34-66 or on our
website at www.wickesplc.co.uk.
Sonita Alleyne
Chair of the Responsible Business Committee
18 March 2024
Sonita Alleyne
Chair of the Responsible
Business Committee
Wickes Group Plc Annual Report and Accounts 2023 107
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Responsible Business Committee report continued
Committee composition
The Committee membership comprises the
Non-executive Directors, including the Chair of
theBoard. Details of their experience and skills
areset out in the biographies on pages 86-87.
Overall attendance for Responsible Business
Committee meetings was 100%. Further details
about meetings and attendance can be found
onpage 88.
The CEO and CFO are not members of the
Committee but, along with other key members
ofmanagement, are invited to and attend all
meetings to provide valuable operational and
financial insight and feedback on performance
against the Responsible Business Strategy.
Role of the Committee
The role and responsibilities of the Committee
areset out in the Committee Terms of Reference,
which are available on the Company’s corporate
website at www.wickesplc.co.uk.
The Committee’s role primarily covers the
following areas:
– Review, approve and monitor the strategy
andtargets for managing the Group’s ESG
responsibilities in such a way as to build trust
and confidence
– Review and monitor the Group’s Responsible
Business disclosures, including climate-related
financial disclosures
– Monitor the Group’s Responsible Business
engagement and communications with
itsstakeholders
The Committee reviewed and updated the Terms
of Reference during the year, the main change
being to clarify the respective responsibilities of
the Committee and the Audit and Risk Committee
in respect of climate risks.
Activities of the Committee
The Committee held four scheduled meetings
during the year and received detailed updates
oneach of the three pillars of the Responsible
Business Strategy: People, Environment and
Homes. A summary of the key activities of
theCommittee is set out below.
Percentage of time spent by the Committee
Governance
9%
Remuneration
targets
6%
Reviewing performance
51%
Strategy and
planning
17%
Reporting and
communications
17%
Strategy Performance
Reporting and
communications
January Review of Early Careers progress
Review of products and services progress
Review and approval of ESG
remuneration targets
June Review of
timberpolicy
Review of colleague representation
againstthe census
Review of
creativedesigns
Review of the Community Programme
Review of impact
ofGreen Claims
Review of waste and packaging progress
Review of environmental
management system
September Review of approach to
climate related risks
and opportunities
Review of progress with
decarbonisation plans
Review of climate
reporting landscape,
gap analysis and
actionplan
November Review of strategy
and 2024 programme
Review of
environment and
packaging policies
Review of gender and
ethnicityperformance
Review of stakeholder
feedback and
communications plan
Review of Early Careers progress
Review of charity partnership and
Community Programme progress
Review of climate
related risks and
opportunities
Review of environmental progress
Review of products progress
Review of packaging progress
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People
Inclusion and diversity
The Committee oversaw the introduction of the
Feel at Home vision, based on three drivers, the
Feel at Home Plan, the inclusion and diversity
strategy and the Colleague Experience Programme.
The Feel at Home vision aims to achieve gender
balance and ethnic diversity representative of the
communities we serve across all levels of the
Company, and provide a colleague experience
underpinned by equity and equality. The business
continued to engage with colleagues to improve
the quality of its gender and ethnicity data. The
Committee received updates on the Company’s
gender diversity performance and the progress
against meeting its targets, including bonus targets.
Further details on the gender bonus targets can be
found in the Annual Report on Remuneration on
pages 120-121.
The Committee received updates on the Company’s
ethnicity diversity performance compared with
national census data to understand where its
composition doesn’t reflect the local community
and identify opportunities for improvement.
The Committee commended the external recognition
received by the business. More details on this and
our inclusion and diversity strategy can be found
inthe People section on pages 36-43.
Charitable donations
The business completed its partnership with
YoungMinds in March 2023, raising £2.3 million
intotal through fundraising, exceeding its target
of£2 million. Following this, the business started
anew two year partnership with The Brain Tumour
Charity. Between April to December 2023, the
business donated £10,000 directly and £718,060
was generated from fundraising activities and
customer donations. Throughout the two year
partnership, colleagues at Wickes will complete
aseries of fundraising activities to raise funds
toenable The Brain Tumour Charity to further
itswork in research and increase the number
ofpeople it can support.
Environment
Science-based targets
The Committee reviewed progress against delivering
the three science-based carbon reduction targets,
which received validation by the Science Based
Targets initiative (SBTi) in 2022. The business made
good headway in 2023 on its net zero trajectory. In
particular, the business made significant progress
with delivering the 42% Scope 1 and 2 reduction
target by 2030 (against a 2021 baseline). By the
endof 2023, the Group had reduced Scope 1 and 2
emissions by 36.9% compared to our baseline,
primarily as a result of the switch to a 100%
renewable electricity contract for the entire Group
from April 2023 onwards.
The Committee also received updates
fromthebusiness on plans and progress
withengagingthe supply chain to galvanise
supportwith delivering the Scope 3 targets.
TheCommittee was pleased that, by the end
of2023, 23 suppliers had set ascience-based
target. This equates to 23.8% of Scope 3
emissions compared with the target of 45%
by2027.
Early Careers
During the year, the Committee received updates
onthe evolution of the Early Careers offering.
Although apprenticeships remain the key focus,
thebusiness also offers work experience
placements, and graduate, intern and business
placements. The business has continued to
broaden its apprenticeship offering with a
clearfocus on programmes that support the
development of specialist skills (e.g. installations),
key pipelines for growth (e.g. design consultants),
and building new capabilities for the future (e.g.
data). There has been positive feedback from
colleagues who have successfully completed an
apprenticeship and the business was pleased to
have made the RateMyApprenticeship’s Best 100
Apprenticeship employers for 2023. Further details
about Early Careers can be found on page 38.
Community
An overview of the work undertaken throughout
the year on the Company’s Community Programme
was provided to the Committee. In 2023, the
business supported 1,468 community projects,
which are estimated to have benefited over
500,000 people. Every Wickes store is allocated
anannual budget to support local community
projects through the supply of products. In 2023,
there was a significant increase in the number of
charities and community organisations seeking
support under the Company’s Community
Programme. The Committee is pleased that the
business is able to provide support to these good
causes, particularly during the cost of living crisis.
2023 also saw a trial of a more formal volunteering
programme through the use of the Neighbourly
platform. This platform connects charities and
community organisations with companies offering
volunteering time. Colleagues were encouraged to
take part in this programme and, over the course
of 2023, the business supported ten community
projects with gardening and painting.
Climate-related financial disclosures
The Committee reviewed and discussed the
evolving reporting landscape on climate-related
disclosures, including the Task Force on Climate-
related Disclosures and the new climate-related
financial disclosure requirements under the
Companies Act 2006. A gap analysis was
carriedout to evaluate the performance of
theCompany’s 2022 disclosures against the
mandatory requirements the Company must
meetwith its 2023 disclosures. The Committee
reviewed an action plan put in place to drive
furtherimprovement and meet compliance.
Further details of our climate-related financial
disclosures can be found on pages 57-66.
The Committee conducted a review of the
climate-related risks and opportunities register
todetermine that risks are correctly allocated
andcategorised in line with the Company’s risk
appetite. The Committee reviewed the high-
levelrisks and opportunities proposed by the
business as financially material, and made a
recommendation to the Audit and Risk Committee
that these be disclosed in the Annual Report.
Further information on climate-related risks
canbefound on pages 60-62.
Waste and packaging
The Committee was updated on the Company’s
progress on reducing consumer plastic packaging
waste through range reviews and targeted supplier
activity, with all unnecessary packaging being
removed from Wickes own brand products. The
Company is continuing to work with its suppliers
on increasing the amount of recycled materials
used in packaging.
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Environmental management system
andenvironmental obligations
During the year, the Committee was updated
onwork the business was doing to develop the
Environmental Management System to meet
therequirements of the International standard
ISO14001. Opportunities for improvement
wereidentified and are being implemented
bythebusiness with the aim of achieving
certification during the next two years.
The Committee reviewed the progress of the
business in applying the principles of the Green
Claims Code. Work during the year to improve the
business knowledge of this subject included cross-
departmental training sessions and a roundtable
with external advisors. The Committee was also
informed about the business’s plans to meet the
four-year compliance cycle of the Energy Savings
Opportunities Scheme (ESOS).
Policies
The Committee reviewed the Company’s updated
Environmental Policy, which is in line with the
Responsible Business Strategy and meets the
policy requirements of the ISO14001 international
standard. The Committee also approved the
Company’s new Packaging Policy.
The Committee was briefed on the Company’s
updated Timber Sourcing Policy, which was
published in 2023. The policy outlines the steps
the business is taking to source timber and timber
products from legal and sustainable sources,
andto ensure compliance with the UK Timber
Regulation (UKTR, which replaced EUTR in the
UKfrom 1 January 2021). The policy details
theCompany’s commitment to comply with
allrelevant timber regulations for the countries
inwhich we operate.
These policies can be found on the Company’s
corporate website www.wickesplc.co.uk.
Homes
The Committee was updated on the progress
thatthe Company is making with delivering its
aimto provide products and services that help
ourcustomers save energy and reduce the
carbonfootprint of their homes. This covered
anupdate on how the business is building
customers’ awareness of energy efficiency
instoreand on the website. This included the
‘Wickes Energy Efficient Home’, an online hub
thatprovides an easy-to-follow guide on how
toincrease energy efficiency and reduce energy
bills. An overview was also provided of the new
solar and heat pump range launched in the year.
More information can be found on pages 50-51.
ESG targets
The Committee closely monitors progress
againsttargets for all areas of the Responsible
Business Strategy. It also considers the key
areasof strategy to link to remuneration and
recommends ESG targets for incentive purposes
to the Remuneration Committee. At the end of
each year, the Committee considers performance
against targets and makes a recommendation
onthe level of payout against the targets to the
Remuneration Committee. Further details can
befound in the Directors’ Remuneration report
onpages 111-113.
Committee effectiveness
The effectiveness of the Committee was
considered as part of this year’s Board evaluation
process, more details of which can be found on
page 99. The review concluded that the Committee
continues to operate effectively.
Responsible Business Committee report continued
Wickes Group Plc Annual Report and Accounts 2023110
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Strategic report
Remuneration Committee report
Mark Clare
Chair of the Remuneration Committee
Directors’ Remuneration report
Committee members
Mark Clare, Senior Independent
Non-executive Director and Committee Chair
Sonita Alleyne, Independent Non-executive Director
Laura Harricks, Independent Non-executive Director
Mike Iddon, Independent Non-executive Director
Christopher Rogers, Chair of the Board
Dear Shareholder,
On behalf of the Remuneration Committee,
Iampleased to present the 2023 Directors’
Remuneration report for Wickes. Thereport
coversthree key areas:
– This letter, which provides a summary of the
keyremuneration decisions made in respect
of2023 and our proposed approach for 2024.
– Our new Directors’ Remuneration Policy, which
will be subject to a binding Shareholder vote at
the 2024 AGM.
– The Annual Report on Remuneration, which
describes how the existing Policy has been
applied for 2023 and how we intend to
implement the new Policy for 2024.
Wickes delivered a solid performance
for2023,despite a challenging market.
Pressureonconsumer spending dampened
thedemand forhome improvements, a trend we
observed across the retail sector. Despite these
challenges, management andcolleagues have
worked hard toexecute the strategy and deliver
value to Shareholders and other stakeholders,
asdemonstrated by growth in our market share
andfinancial performance ahead ofconsensus.
The existing Directors’ Remuneration Policy is now
three years old, having been agreed at the time of
the demerger in 2021 (though formally approved
by our Shareholders in 2022). As such, the
Committee agreed that 2023 was the right time
toreview the Policy to make sure that it continues
to reflect Wickes’ business strategy and culture,
and is aligned to UK governance standards.
A summary of the new Directors’ Remuneration
Policy is provided later in this letter, with the
detailed Policy beginning on page 115.
The Committee carefully considered the experience
ofkey stakeholders during the year, including
colleagues and Shareholders, when making
remuneration decisions.
Reward and benefits across the Group in 2023
We continue to support our colleagues with the
cost of living crisis, and offer market leading
benefits that cover direct financial support
combined with comprehensive financial education
and wellbeing resources. Further details of our
approach to colleague reward and wellbeing
canbe found on page 125.
>7%
average salary increase awarded
to the wider workforce for 2024
1,090
colleagues utilised our direct financial support
in2023, in the form ofsalary advance or loans
£422k*
invested in our Company wide
recognition plans during 2023
0.1%
our median gender pay gap in 2023
(down from 2.6% in 2022)
* Comprised of loyal service awards, manager ‘instant awards’, and
recognition events held during the year.
Responsible Business
Building skills in our local communities through
ourEarly Careers offering is essential to ensure
wecontinue to attract and develop the skills required
for future growth at Wickes. In 2023, we supported
280 individuals into Early Careers placements
(248individuals enrolled on an apprenticeship
programme, 27 work experience placements,
andfivegraduate, intern and business placements).
People in these placements are more diverse in terms
of gender and ethnicity when compared with our
colleague population overall.
In 2023, we had our first full year of delivering Built
to Last, our Responsible Business Strategy, which
we have focused on integrating into the business.
Our inclusion and diversity targets were linked
tothe Executive Annual Bonus Scheme, and our
near term Science Based Targets were linked
tothe Long Term Incentive Plan for 2023-2025.
Group performance highlights for 2023
In 2023, despite very challenging operating
conditions, we delivered sales of £1,553.8m.
Ouradjusted profit for the year was £52.0m*.
£1,553.8m
adjusted revenue (2022: £1,559.0m)
£52.0m*
profit before tax (adjusted) (2022: £75.4m)
£46.1m
free cash flow (2022: £29.0m)
15.1p
adjusted basic earnings per share (2022: 23.8p)
* The 2023 PBT (adjusted) outcome for bonus calculation purposes
was £59.5m. This is an adjusted figure before the incremental
impact of SaaS accounting (see note 32 of the financial
statements).
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Remuneration Committee Report continued
Shareholder experience in 2023
The Board is pleased to recommend a final
dividend of 7.3 pence per share, taking our full
yearordinary dividend to 10.9 pence per share.
Werecognise the importance of cash returns to
our Shareholders, and, given the strength of our
balance sheet, we have maintained the full year
dividend per share at the same level as 2022.
In July, we announced a £25m share buyback
programme as a way of further increasing returns
toour Shareholders. The first £12.5m tranche
ofthe programme commenced in July and an
aggregate market value equivalent to £10m
wasbought back during 2023. This first tranche
was subsequently completed in early 2024.
EXECUTIVE REMUNERATION IN2023
Basic salary
From 1 April 2023, the annual salary for David Wood was increased by 4% to £527,670, and the salary
forMark George was also increased by 4% to £390,000. Both increases were below the average
increaseawarded to the wider workforce in 2023 of more than c.8%.
Annual bonus outturn
The 2023 annual bonus paid out at 86.9% of maximum. 63.6% of this related to PBT, 20% related tofree
cash flow, and 3.3% related to ESG.
The Committee considered the formulaic bonus
outcome against the targets which were set at the
beginning of the year. At the time that the targets,
were set, the Committee was comfortable that
they were appropriately stretching in the context
ofthe Group’s ambitions and taking into account
the anticipated headwinds highlighted above in
thisletter. The Committee considers thebonus
outcome to be fair and appropriate, therefore no
discretion has been exercised in relation to the
bonus payout. Further details can be found on
page 120.
Colleagues below the Executive Directors eligible
for annual bonus received a payment of 91.6%
ofmaximum for 2023, in recognition of their
contribution to Group performance.
Transitional Award
As referenced in last year’s Annual Report and
Accounts, the second tranche of the Transitional
Award for David Wood vested in April 2023
following achievement of the performance
hurdles.These awards are subject to a two
yearholding period for executives. Further
detailscan be found on page 121.
2023 LTIP award
LTIP grants were made during the year in line
withthe Remuneration Policy. The LTIP awarded
toDavid Wood was 175% of base salary, and the
award to Mark George was 150% of base salary.
More details on the performance measures and
targets are set out on page 122.
There were no LTIP awards due to vest during
2023.
Changes to the Remuneration Committee
We were pleased to welcome Laura Harricks
totheRemuneration Committee in 2023.
Herexperience and knowledge will prove
valuabletothe Committee.
Measure Weighting Threshold Target Max
%
maximum
achieved
% bonus
achieved
Profit before tax
(adjusted)*
70%
£59.5m
90.9% 63.6%
£52.3m £60.5m
Free cash flow 20%
£46.1m
100% 20.0%
£30.2m £40.2m
% female
representation in
store leadership
5%
33.9%
65.3% 3.3%
33% 34.5%
% female
representation in
Support Centre
management
5%
43.5%
0% 0%
44% 46%
Total 100%
86.9%
86.9%
0% 50% 100%
* PBT outcome shown is an adjusted figure before the incremental impact of SaaS accounting, which was the basis for setting the targets
atthe beginning of the year (see note 32 of the financial statements).
Our approach to
remuneration in 2024
Remuneration policy review
As noted above, the Committee took the opportunity
to review the Remuneration Policyduring 2023.
As part of the review, the Committee undertook an
extensive Shareholder consultation exercise, with
20 major Shareholders representing c.54% of our
issued share capital. In addition, the Committee
consulted with the proxy voting agencies that our
Shareholders subscribe to. The review considered
the Policy in the context ofUK governance standards,
UK general market practice and that of our retail
peers, the views ofour Board and management,
and the business strategy and culture.
The Committee concluded that the overall structure
of the Policy remains appropriate for Wickes and
continues to support the delivery of our strategy
and the generation of Shareholder value.
However, after careful consideration, the Committee is
proposing some changes to the CEO’s remuneration
package. The changes to the CEO’s package and
rationale for these changes, are set out below.
Other minor changes to the policy are also
detailedbelow.
Rationale for the proposed changes
to the CEO’sremuneration
Performance in role
The Board and Committee have been impressed
with the performance of the CEO since his
appointment. Key strategic achievements include:
– The seamless delivery of the demerger from
Travis Perkins despite difficult market conditions.
– Introducing a clear strategy for the business
including growth of trade customers, updating
stores and range reviews, all of which are being
successfully executed.
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– Delivering consistently high and improving
levelsof customer andemployee satisfaction
across the three yearperiod since the demerger.
– Setting a clear environmental strategy
withScience Based Targets, and delivering on
anumber of decarbonisation objectives ahead
of plan.
– Delivering strong levels of profit despite the
difficult backdrop (including energy price
increases and material price inflation) whilst
achieving record levels of revenue and market
share growth.
– Making a compelling investment case for
Wickes, to maximise engagement and build
strong relationships with our Shareholder base.
– Setting a clear Capital Allocation Policy to
deliver an efficient balance sheet and under
which Wickes has been able tocommence a
share buyback programme.
Proven in role
On the demerger in 2021, David was a first time CEO
of a listed entity. His remuneration at the time was
set to reflect that this was a first time appointment
with a clear understanding that he needed to
provehimself in role. After three years, given his
performance as outlined above, the Committee
believes that it isnow appropriate to regard him as
a proven CEO and pay him the appropriate market
rate for a valued and experienced CEO in a similar
sized retail organisation.
Lack of market competitiveness of package
To establish the appropriate market rate for a high
performing proven CEO, the Committee undertook
a market benchmarking exercise during 2023 to
test the competitiveness of the current package
against a custom peer group of retailers selected
based on market capitalisation, revenue, and
colleague headcount. The exercise showed that
the CEO’s current compensation opportunity was
not sufficiently competitive compared to our
peers. The proposed incentive increase (when
taken together with the salary increase for 2024,
asdetailed below) will move the total remuneration
for the CEO towards the median of the peer group.
Given Wickes’ relative size compared to the
benchmarking peers, the Committee were
comfortable that the proposed market positioning
of the total package is appropriate. When reviewing
the market data, the Committee were also mindful
of the Group’s growth in market capitalisation over
the last 12 months, which at the time of writing
positioned Wickes just outside of the FTSE 350.
Change to the CEO’s remuneration
The Committee is proposing a moderate increase
to the incentive opportunity for the CEO:
– Increase in the annual bonus maximum
opportunity to 160% of base salary from 140%.
– Increase in the normal LTIP opportunity to 185%
from 175% of salary (within the current defined
Policy limit of 200%).
Base salary increase
In addition to the Policy changes outlined above,
the Committee intends to increase the CEO’s
basesalary over the next two years to reflect
hisperformance in the role, and to bring it up to
alevel commensurate with an established CEO.
In 2024 it is proposed that the CEO base salary is
increased to £580k, an increase of 9.9%. This
isonly slightly higher than the average increase
awarded to the wider workforce of more than 7%
but the Committee believes this is appropriate
given the level of performance and the relative
position of the CEO’s package against the
comprehensive benchmarking carried out.
The Committee intends to increase the CEO’s
salary further in 2025, dependent on the CEO’s
continued strong performance in the role.
Byintroducing the base salary increase in a phased
manner over two years, this enables the Company
to spread the absolute increase for the CEO over
amore appropriate multi-year period. The level
ofincrease in 2025 is yet to be determined.
Other remuneration policy changes
Minor amendments to bring the Remuneration
Policy in line with market practice / UK
governance standards.
– Strengthened the Committee’s power,
inexceptional circumstances, to exercise
discretion upwards as well as downwards
whendetermining incentive outcomes.
– Clearer wording around leaver provisions,
specifically around ‘bad leaver’ circumstances
and treatment of incentives.
– Strengthened malus and clawback provisions,
inline with the new UK Corporate GovernanceCode.
The Committee agreed that the remuneration
package for the CFO was set at a broadly appropriate
level, having been recently appointedto the Group.
Details of the revised Remuneration Policy can
befound on page 115.
ESG targets for the 2023 and 2024 LTIPs
As disclosed on page 48 we will rebaseline our near
term Science Based Targets (SBTs) in 2024. As a
result, we will restate the ESG targets for the 2023
LTIP and set the 2024 LTIP targets in accordance
with the revised baseline. The Committee will
ensure the revised 2023 targets are no less
challenging than the original targets set. We expect
this process will be completed within 6 months of
the date of this report, and we will communicate the
updated targets under both plans at the same time.
Implementation of remuneration policy in 2024
Mark George will receive a 4% salary increase
inApril 2024, which is below the average increase
of more than 7% awarded to the wider workforce
as part ofthe annual review.
2024 annual bonus measures
The annual bonus for 2024 will continue to be
based 70% on profit before tax (adjusted), 20% on
free cash flow, and 10% on people measures that
form part of our wider ESG strategy. Further details
can be found on page 124.
The Committee will continue to set challenging
butmotivating targets which reflect our internal
projections, the external market which is expected
to remain challenging, and analyst consensus
estimates. Our approach to target setting has
beenconsistent over the last three years where
theaverage payout against bonus was 57%.
2024 LTIP measures
There are no changes proposed to the LTIP
measures and weightings.
While there continues to be real uncertainty
aboutthe speed of recovery of consumer markets,
the Committee will continue to set targets that it
believes are stretching but achievable assuming
some recovery in the retail market over the period
of the award. Further details on the 2024 LTIP
measures and targets can be found on page 124.
We continue to consider colleague pay structures
when implementing our reward strategy for
executives, and further details on colleague
paycan be found on page 125.
The Committee remains focused on maintaining
an open dialogue with Shareholders and welcomes
any comments you may have on this report or our
remuneration arrangements in general.
Mark Clare
Chair of the Remuneration Committee
18 March 2024
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Our remuneration philosophy
The table below sets out how our Remuneration Policy cascades throughout the organisation:
Pay element Approach for Executive Directors Approach for wider workforce
Base salary Base salary is typically set with reference
tothe market, performance and wider
workforce considerations.
Annual increases are typically in line
withorless than those for the wider
colleaguepopulation.
Base salary is typically set with reference
to the market, individual performance and
our internal pay structures.
Annual cost of living salary increases
typically take place in April each year
Benefits A wide range of market competitive
benefits plus contractual carand
privatemedical benefits.
A wide range of market competitive
benefits are available toallcolleagues,
including a cycle towork scheme, health
benefits, andenhanced maternity,
paternity and adoption leave.
Pension Pension comprises a contribution into
theWickes Retirement Savings Plan
oracash allowance in lieu of pension
contributions (oramix of both).
All colleagues are members of the
WickesRetirement Savings Plan
unlessthey have opted out.
Short term
incentives
Annual bonus scheme rewarding
achievement of stretching annual
performance targets linked to delivery
ofthe business strategy. Deferral of
onethird of the bonus into Wickes
Groupshares.
All colleagues have the opportunity
toparticipate in a variable pay plan
normally linked to either Company
orteamperformance.
Long term
incentives
Long term incentive plan with
performance measures over three
yearsincentivising and rewarding
long-term Shareholder value creation.
All colleagues may participate in the
annual Sharesave (SAYE) plan over
threeyears.
Strategic alignment of executive incentive plan metrics with KPIs
Key performance indicator Measure Annual bonus scheme Long term incentive
Profit Profit before tax (adjusted)
Earnings growth Earnings per share (adjusted)
Cash Free cash flow
Share price growth Total Shareholder Return (relative)
ESG objectives People
1
Environment
2
1 Based on our inclusion and diversity targets in relation to our gender mix in management roles, and in 2024 will also cover ethnicity
2 Based on our approved Science Based Targets for carbon reduction
Our remuneration philosophy is aligned to Wickes’ business
strategy and informs pay decisions at and below Board:
Whilst we recognise that, due
tothe nature of the role of our
executives, their remuneration
structure will have a higher
performance-related element
and greater alignment to long
term measures when compared
with colleagues, our reward
principles apply across both
populations to ensure alignment.
We aim to set pay at
a market competitive
level across the
business
We aim to provide
transparent and fair
rewards, recognising
and rewarding
colleagues for their
contribution
We aim to align the
interests of colleagues
and Shareholders
through share
ownership
We aim, through our
incentive arrangements,
to reward achievement of
short and long term
objectives and delivery
of the business
strategy
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Directors’ Remuneration Policy
The existing Directors’ Remuneration Policy is now three years old, having been agreed at the time of the demerger in 2021 (though formally approved by our shareholders in 2022). As such, during 2023
theCommittee carried out a review of the Policy to make sure that it continues to reflect Wickes’ business strategy and culture, and is aligned to UK governance standards. The review included conversations
withkeymanagement and Board members, remuneration benchmarking, and a review of remuneration market practices and governance developments. The Chair of the Committee also wrote to the Company’s
largest Shareholders inrespect of proposed changes and took Shareholders’ feedback into account when finalising the new Policy (more details of which are set out in the Chair’s Letter on page 112).
Further to the review, the Committee concluded that whilst the overall structure of the Policy remained fit for purpose, some changes were desirable, and a summary of the key changes is set out on pages 112-113.
Shareholders are being asked to approve the new Policy, which is intended to apply for three years from the date of approval, at our 2024 AGM due to take place on 24 May 2024.
BASE SALARY
Purpose and alignment to business strategy: Opportunity: Operation: Performance measurement:
– To provide fixed remuneration that will attract and
retain the executive talent required to develop and
execute our strategy. Base salary levels will reflect
theresponsibilities of the role, the business and the
individual incumbent’s performance and expertise.
– There is no maximum salary, or maximum salary
increase level.
– Salary increases will generally be in line with or
lowerthan the average increase awarded to the
widerworkforce. However, as with all employees,
theCommittee may make increases above this level
inspecific circumstances such as (but not limited to):
where a larger increase is considered necessary
toreflect changes in market practice; where the
incumbent’s salary has fallen significantly behind
market levels; stepped or one-off increases to bring
arecently appointed executive up to the desired level;
an increase in the scope or responsibilities of the role;
an increase to the size/complexity of the business.
– Base salary levels are reviewed in the context of the
potential value of the total remuneration package.
– Salary levels are generally reviewed annually with
anyincreases typically taking effect from 1 April.
Basesalary levels are reviewed with reference to the
skills, performance, and experience of the executive,
pay data for other management and employee
populations, and periodic review of the external
marketrate for similar roles in companies of a
similarsize and complexity (including sector peers
andFTSE listed general industry peers).
– Recent business and individual performance will
betaken into consideration when reviewing base
salarylevels.
PENSION
Purpose and alignment to business strategy: Opportunity: Operation: Performance measurement:
– To enable executives to save for their retirement and
toenhance the market competitiveness of the total
remuneration package.
– The maximum pension provision will be in line with the
maximum rate available to the wider workforce,
currently up to 10% of base salary per annum.
– Pension comprises a contribution into the Wickes
Retirement Savings Plan or a cash allowance in lieu
ofpension contributions (or a mix of both).
– n/a
BENEFITS
Purpose and alignment to business strategy: Opportunity: Operation: Performance measurement:
– To enable the executives to perform their role by
providing benefits that enhance their wellbeing.
– There is no maximum benefits value. The value
ofbenefits is equal to the cost to the Company of
providing benefits and may change year on year based
on the cost of the provider. However, the Company will
endeavour to select the best value benefits.
– Benefits include family private medical, life assurance,
income protection, and company car or allowance.
Other benefits, including but not limited to relocation
allowances may be provided as appropriate.
– There is no performance assessment when
determining benefit values.
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Directors’ Remuneration Policy continued
ANNUAL BONUS
Purpose and alignment to business strategy: Opportunity: Operation: Performance measurement:
– To reward achievement of stretching annual
performance targets that are directly linked
todeliveryof the business strategy.
– Deferral of one third of the bonus into Wickes
Groupshares aligns Executive Directors with
Shareholder interests over the long term.
– The maximum opportunity for the Chief Executive
Officer is 160% of salary and 120% of salary for other
Executive Directors. For on target bonus performance
50% of the maximum bonus will be earned. For
achievement of threshold performance 20% of the
maximum will be earned. There is a straight-line
payout between these points.
– A minimum of one third of the bonus earned is deferred
into Wickes Group shares for a period of three years.
The remainder of the bonus is delivered in cash.
– The Committee may use its discretion to amend the
bonus payout level upwards or downwards to override
the formulaic outcomes in exceptional circumstances
(see page 117).
– Malus and clawback terms apply (see page 117)
– Performance measures, weightings and targets are
seteach year with reference to the business strategy.
Measures may include financial and non financial
goals, including personal objectives. The overall
bonuswill be weighted with at least 70% set on
financial performance.
– Details of measures and weightings will typically be
disclosed in advance. Target ranges will be disclosed
on a retrospective basis alongside actual performance.
LONG-TERM INCENTIVES
Purpose and alignment to business strategy: Opportunity: Operation: Performance measurement:
– To incentivise and reward long term stakeholder
valuecreation.
– Enables Executive Directors to build meaningful long
term Wickes Group shareholdings, and further align the
interests of the Executive Directors with Shareholders
and other key stakeholders.
– The maximum annual LTIP opportunity is 200%
ofbase salary.
– The normal LTIP opportunity for the Chief Executive
Officer is 185% of salary and for the Chief Financial
Officer it is 150% of salary. 20% of the maximum
awardwill be earned for achievement of threshold
performance and 100% for maximum. There will be
astraight-line payout between these points.
– Performance is assessed over a minimum of three
years. The vested shares (net of tax and National
Insurance) will be held for a further two years,
duringwhich time they may not ordinarily be sold.
– The Committee may use its discretion to amend the
LTIP vesting level upwards or downwards to override
the formulaic outcomes in exceptional circumstances
(see page 117)
– Malus and clawback terms apply (see page 117).
– Performance measures, weightings and targets are
seteach year with reference to the business strategy.
– Details of measures, weightings and targets will
typically be disclosed in advance.
EMPLOYMENT SHAREHOLDING GUIDELINES AND POST-CESSATION SHAREHOLDING GUIDELINES
Purpose and alignment to business strategy: Opportunity: Operation: Performance measurement:
– To encourage Executive Directors to build meaningful
shareholdings and to align Executive Director interests
with those of Shareholders both during their service
and for a period afterwards.
– During their employment, Executive Directors are
expected to retain at least 50% of post tax shares
acquired from Company share plans to accumulate
ashareholding in Wickes Group shares of 200% of
salary within five full years of this Policy being approved.
– Post-cessation of employment, Executive Directors
arerequired to hold the lower of 100% of their actual
holding at cessation and 200% of salary for two years
after leaving.
– Shares directly owned by the Executive Directors and
their spouses or partners and shares that have vested
and are not subject to further conditions count towards
the guideline.
– Shares held under the Deferred Annual Bonus Plan
(DABP) and shares that have vested under the LTIP
butare held within the two year holding period count
towards the guideline on a net of tax basis.
– We expect Executive Directors, upon the exercise of
options, to retain net of tax shares that are subject to
further holding requirements within the Company’s
nominee account.
– n/a
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Notes to the Executive
Directors’ Remuneration
Policy table
Pre-existing remuneration arrangements
Remuneration entitlements that were in place
priorto this Policy being adopted, or prior to an
Executive Director joining the Board and being
unrelated to Board duties, will be allowed to
continue in line with the terms originally agreed,
notwithstanding that they may not be in line with
the terms of this Remuneration Policy.
Incentive awards granted prior to the introduction
of this Policy will continue to operate in line with the
terms agreed at grant, including the Transitional
Awards granted in relation to the demerger.
Minor changes
The Committee reserves the right to make minor
changes to remuneration policy to reflect changes
to statutory or accounting requirements, or minor
changes to regulation, without obtaining prior
Shareholder approval.
Performance measurement
Performance measures are selected based on their
importance and alignment to the business strategy.
The Committee is also mindful of selecting
straightforward metrics that provide ongoing
lineof sight to participants.
Careful thought is given to selecting an appropriate
balance of measures that motivate the right
behaviours and encourage sustainable growth.
We seek to set realistic yet stretching performance
targets and take into account a range of factors
when setting targets, including our strategic goals,
past performance, analyst forecasts, governance
guidelines and market practice.
Malus and clawback (applies to all awards
madeunder the (DABP and LTIP)
The Committee may decide, at any time prior
tothe third anniversary of share awards vesting,
that all or part of an award may be subject to
malus and clawback if the Committee forms the
view that any of the following occurred, leading
toawards vesting to a greater extent than would
otherwise have been the case:
– A material misstatement of financial results.
– A calculation in the assessment of any
performance condition was based on
inaccurateor misleading information.
– Serious misconduct by the award holder prior
toawards vesting that could have warranted
dismissal from employment.
– Corporate failure resulting in the appointment
ofa liquidator or administrator.
– Serious reputational damage to Wickes Group or
a division of Wickes Group which as determined
by the Committee is at least partly due to the
actions of management.
To satisfy application of malus and clawback,
theCommittee may reduce (including to nil), any
future bonus payments, existing and future share
award grants. The Committee may require the
relevant individual to pay to the Group such an
amount as required for malus and clawback to
besatisfied.
Any application of malus and clawback during
thefinancial year will be disclosed in the Directors’
Remuneration report for that year.
Differences between the policy
forDirectorsandcolleagues
The remuneration provided to Group colleagues
isguided by the same overall philosophy. Details
are set out on page 114.
All employee share plans
The Executive Directors are also eligible to participate in
any all employee share plans operated by the Company
on the same terms as other eligible employees.
Share award terms (applies to all awards
madeunder the DABP and LTIP)
Share awards vesting under any of Wickes
Group’sshare incentive plans may include the
rightto receive dividends accrued between the
grant date and the date of vesting, and this may
assume dividends are reinvested.
Share awards may be granted in the form of nil
cost options or conditional shares.
Performance conditions may be adjusted by the
Committee if an event occurs which causes the
Committee reasonably to consider that it would be
appropriate to amend the performance condition
and the amended conditions will not be materially
less challenging to satisfy.
In the event of a variation of the share capital,
demerger, special dividend or similar event which
affects the market price of shares to a material
extent, the Committee may adjust the number
ofshares comprised in an award.
The Committee may reduce award grant levels in
the event of a material reduction in the share price
in the period prior to the date of grant.
Remuneration Committee discretion
Bonus
The Committee in its absolute discretion will
determine the bonus award outcomes, taking
intoaccount the achievement of performance
conditions and the performance of the incumbent
and Group. In exceptional circumstances, the
Remuneration Committee may reduce or increase
the level of bonus payout, up to the individual
maximum level, to the extent that the overall
performance of the Group over the relevant
performance period is not considered to be
reflective of incentive outcomes. Any use of
discretion will be explained in the relevant
Directors’ Remuneration report.
LTIP
The Committee shall determine the extent to
which the performance conditions have been
met.LTIP awards shall only vest to the extent
thattheCommittee is satisfied with the overall
performance of the Group over the performance
period. Any use of discretion will be explained in
the relevant Directors’ Remuneration report.
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100%
100%
40%
50%
34%
39%
49%
31%
37% 25% 21%
43% 29% 25%
0
£500
Minimum
Remuneration (£,000)
Fixed remuneration Annual bonus LTIP
On-target Maximum Maximum Maximum
with share
price growth
Maximum
with share
price growth
Minimum On target
£660
£1,767
£2,661
£3,197
£458
£1,067
£1,553
£1,857
£1000
£1500
£2000
£2500
£3000
£3500
37%
26%
35%
29%
26%
23%
Chief Executive Officer Chief Financial Officer
Directors’ Remuneration Policy continued
Remuneration on recruitment
The Committee will provide any new Executive
Director with a total remuneration package that
ismarket competitive. Remuneration elements
andtheir operation will be aligned to the ongoing
Remuneration Policy. The overall incentive plan
maximum for new executives is 360% of salary
forthe CEO and 320% of base salary for other
Directors (however, award levels may be set lower
than this). This total comprises of the ongoing
annual bonus maximum for each executive role,
and awards of up to 200% of salary under the LTIP
rules (currently 185% for the CEO and 150% for the
CFO). The Committee is entitled to compensate
new executives for forfeited incentive awards.
Thetreatment of such awards will be determined
on a case-by-case basis, however, the Committee
will seek to make compensatory awards on
asimilar basis to those forfeited, taking into
consideration; the form of award (e.g. cash
orshares); the performance conditions; the
timeframes; and the approximate value based
onabest estimate of likely performance outcome.
Where the existing LTIP plan cannot be used to
satisfy such awards, the Committee may utilise
Listing Rule 9.4.2 to make share awards.
Element Description
Fixed Base salary:
– CEO: £580,000 (salary from 1 April 2024)
– CFO: £405,600 (salary from 1 April 2024)
Benefits: Car allowance or provision of company car,
private medical insurance andfuelallowance*
Pension: 10% of salary
* CEO only
Target 50% of maximum bonus (including deferral)
60% of maximum LTIP
Maximum Maximum bonus: CEO: 160%, CFO: 120%
Maximum LTIP: CEO: 185%, CFO: 150%
Maximum + 50% share price growth As for maximum with 50% increase in share value assumed for LTIP
Director service contracts/
letters ofappointment
The service contracts for Executive Directors
includes 12 months notice of cessation from the
Company and 6 months from the Executive Director.
The policy for remuneration on cessation is set
outelsewhere in this report. The Non-executive
Directors have letters of appointment that include
a three month notice period, from either Company
or Director. Non-executive Directors are not eligible
for any loss of office payments.
All Directors are subject to annual re-election by
Shareholders. Service contracts and Letters of
Appointment are available for inspection at the
Companies’ registered office.
Illustration of application of remuneration policy
The following chart illustrates how much the
Executive Directors could receive in 2024 under
arange of different scenarios:
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Alignment of the Wickes Remuneration Policy tothe UK Corporate Governance Code
Wickes remuneration philosophy and principles are set out on page 114. We will continue to review and evolve
these principles with the growth ofthebusiness and advancement of our business strategy and culture.
The table below summarises how we have considered the UK Code provisions when developing
andimplementing our remuneration strategy:
Clarity
By creating simple incentives
with relevant performance
measures and clear
communication our aim
istomake our variable pay
plans clear to participants
andShareholders.
Predictability
Our approach to target setting
each year considers the same
internal and external factors
toavoid inconsistency.
Fixedpay elements provide
apredictable level of reward
each year.
Simplicity
Our incentive plans and
performance measures
aremarket typical and easy
tounderstand. Financial
performance measures are
used on a day-to-day basis
tomonitor performance and
so provide clear line of sight
toparticipants.
Proportionality
Pay is set at an appropriate
level relative to the market and
this positioning is consistent
throughout the organisation.
Pay is weighted towards
variable remuneration which is
then aligned to performance.
Risk
Our incentives are based
onrealistic but stretching
performance targets –
colleagues are encouraged
toact within the business’
riskappetite.
Alignment to culture
We have sought to design
anincentive plan that aligns
toour culture of simplicity,
fairness and rewarding
highperformance.
Policy on payment for loss of office
Contractual salary and benefits
– The Company is required to give executives
12 months’ notice of employment termination,
6 months for termination by the executive.
– Payments include base salary, benefits
andpension.
Bad Leaver definition
– Any leaver scenario other than the ‘Good Leaver’
circumstances, including if an individual has
been dismissed for cause or potentially
following a malus and/or clawback trigger.
Annual bonus
– Annual bonus is not a contractual entitlement.
– For ‘Good Leavers’, an annual bonus may be
paidfor the period served to cessation, the
valueis dependent on an assessment of
performance and generally pro-rated for time.
Bonus is generally paid at the normal time.
– For ‘Good Leavers’, any unvested deferred
bonusshares would generally continue and
vestat the normal time.
– For ‘Bad Leavers’, ordinarily awards will be forfeited
unless the Committee exercises discretion.
Long term incentives
– Treatment of long term incentive awards
issubject to the rules of the plan as approved
byShareholders.
– For ‘Good Leavers’, unvested awards would
generally be permitted to continue. Awards would
vest subject to an assessment of performance
and generally be pro-rated for time.
– For ‘Good Leavers’, unvested awards would
generally vest at the normal time.
– For ‘Bad Leavers’, ordinarily awards will lapse
unless the Committee exercises discretion.
Post-cessation shareholding
Post-cessation shareholding requirements will
continue to apply, as set out in the remuneration policy
table. In exceptional circumstances, theCommittee
may waive or partially waive thisrequirement.
Statement of consideration of Shareholder views
During 2023 we consulted with Shareholders
(through face-to-face meetings and phone calls) in
relation to the new Policy. We were pleased with the
level of engagement from Shareholders and for the
support shown for our proposed changes, which
following consideration of Shareholder feedback,
the Committee agreed remained appropriate.
Good Leaver definition
– Good Leaver circumstances include death,
ill-health, injury or disability, redundancy,
retirement, the employing entity no longer being
part of the Group and any other circumstances
where the Committee determines ‘Good Leaver’
treatment should apply.
Statement of consideration of employee views
The Committee does not formally consult with
employees specifically about Director remuneration.
However, during the year, the Committee reviewed
in-depth information concerning the broader colleague
reward structure and pay levels/outturns, including
relative market positioning and pay ratios. We also
held a listening group where colleagues were given
theopportunity to share their views onexecutive pay.
Further details in relation to colleague pay and
reward can be found on page 125.
Non-executive Director Remuneration Policy table
Chair of the Board and Non-executive
Directorfees and benefits
Purpose and alignment to business strategy
To pay market competitive fees to attract and retain
non-executive talent.
Operation
Non-executive Directors are paid a basic fee for their
Board membership. The Chairman of the Board is paid
aseparate fee.
Additional fees are paid to the Chair of each Board
Committee and the Senior Independent Director.
The Directors may also be paid expenses incurred in
connection with the discharge of their responsibilities as
Directors of the Company for example, travel, hotel, and
subsistence costs in relation to attendance of Board meetings.
Directors do not participate in any incentive or
pensionarrangements.
Opportunity
Fees are reviewed periodically. Any increases will be
determined in the context of salary increases awarded
tothe wider workforce.
Fees are set within the maximum level approved
byShareholders in the Articles of Association.
Non-executive Director letters of appointment
Non-executive Director letters of appointment
contain a 3 month notice period, from either
Company or Director. Non-executives are
subjectto annual re-election by Shareholders.
Wickes Group Plc Annual Report and Accounts 2023 119
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Strategic report
Single total figure of remuneration (audited)
The table below sets out the remuneration received by the Directors in respect of the year ended 30 December 2023.
Salary/fees
£,000
Benefits
1
£,000
Pension
2
£,000
Bonus
3
£,000
Long term incentives
4
£’000
Other (restated)
5
£’000
Total fixed
remuneration
£’000
Total variable
remuneration
(restated)
£’000
Total
remuneration
(restated)
£’000
Director 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Executive Directors
David Wood 523 504 21 13 52 50 642 33 0 257 0 0 596 567 642 290 1,238 857
Mark George
6
386 183 12 6 35 16 407 10 0 0 0 367 433 205 407 377 840 582
Non-executive Directors
Christopher Rogers 195 188 0 0 0 0 0 0 0 0 0 0 195 188 0 0 195 188
Mark Clare 77 74 0 0 0 0 0 0 0 0 0 0 77 74 0 0 77 74
Sonita Alleyne 69 66 0 0 0 0 0 0 0 0 0 0 69 66 0 0 69 66
Mike Iddon 69 66 0 0 0 0 0 0 0 0 0 0 69 66 0 0 69 66
Laura Harricks
7
34 – 0 – 0 – 0 – 0 – 0 – 34 – 0 – 34 –
Total 1,353 1,081 33 19 87 66 1,049 43 0 257 0 367 1,473 1,166 1,049 667 2,522 1,833
1 Includes the cost to the Company of private medical insurance and company car benefit. David Wood also receives a fuel allowance.
2 Pension contributions equal to 10% of base salary were paid as a combination of pension payments and cash in respect of 2023, in line with the maximum rate available to the wider workforce.
3 One third of bonus earned will be deferred into shares, in line with Policy.
4 Please note that the estimated figures disclosed in the previous Annual Report for David Wood’s 2023 Transitional Award vesting have been restated to reflect the share price on the date of vesting.
The estimated share price used was £1.354 and the actual share price on vesting was £1.314. The difference in value was £7,049.05.
5 For Mark George the amounts included in 2022 have been restated from £183,973 (including a one-off cash buy out award upon joining of £183,973) to £367,337 to now also include the award of 148,114 shares measured at the share price at the date of award which was omitted
fromthetable in 2022. This award was made to replace shares forgone when leaving his previous employer. Of the shares granted in 2022 101,216 shares vested in September 2023 when the share price was £1.375 and 46,898 shares will vest in March 2024.
6 For Mark George, base salary, benefit and pension figures for 2022 relate to the date he became a Director of Wickes Group Plc (6 July 2022).
7 Laura Harricks was appointed to the Board on 1 June 2023.
Annual Report on Remuneration
Base salary
Salary effective
from 1 April 2023
David Wood £527,670
Mark George £390,000
Benefits
For 2023, benefits for Executive Directors included the provision of private medical insurance,
lifeassurance, income protection and a company car or car allowance.
Pension
David Wood and Mark George received pension contributions equal to 10% of base salary, paid as a
combination of pension payments and cash, which is in line with the maximum rate available to the
widerworkforce.
Annual bonus
The table below sets out details of the bonus targets and outturns for 2023:
Measure
Weighting %
of bonus Threshold On-target Maximum Actual
%
achievement
of bonus
Discretion or
adjustment to
targets?
Profit before tax
(adjusted)
1
70% £52.3m £55.0m £60.5m £59.5m 63.6% N
Free cash flow
2
20% £30.2m £33.5m £40.2m £46.1m 20% N
ESG
% female
representation in
store leadership 5% 33.0% 33.8% 34.5% 33.9% 3.3% N
% female
representation in
Support Centre
management 5% 44.0% 45.0% 46.0% 43.5% 0% N
Total outturn 100% 86.9%
1 Excludes adjusting costs such as demerger and IT separation costs. Represents an adjusted figure before the impact of SaaS accounting
(see note 32 of the financial statements).
2 Cash generated from operations, before the impact of adjusting items, after capex, interest and tax.
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Further details on performance against the ESG targets is below:
– % female representation in store leadership: We saw a positive increase of 21 females over 2023
from471 (32.6%) to 492 (33.9%).
– % female representation in Support Centre management: We saw a positive increase of 11 females
over 2023 from 154 (44.1%) to 165 (43.5%), however, the % increase in the number of males was higher.
Long term incentives
The Transitional Awards were intended to address a long term incentive ‘gap’ whereby Wickes executives
and management would not otherwise have had any LTIPs vesting until 2024 as no awards were made
tothe executives from Travis Perkins plc in 2019.
The second tranche vested in full for David Wood on 28 April 2023 following achievement of the
performance conditions outlined in last year’s Annual Report and Accounts.
Payments to past Directors and payments for loss of office (audited)
No payments were made during 2023 for loss of office or to past Directors.
Statement of Director shareholdings and share interests (audited)
A summary of the Directors’ share interests is set out below.
Shares owned
Awards over nil
cost options – 2023
Director 30 Dec 2023 31 Dec 2022 Exercised
Vested but not
exercised
Unvested and
subject to
continued
employment
Unvested and
subject to
performance
Shareholding
requirement DABP
Shareholding as %
of salary
Executive Directors
David Wood 484,814 367,436 222,085 0 0 1,556,973 200% 107,327 146%
Mark George 58,130 0 110,025 0 46,898 886,926 200% 2,534 22%
Non-executive Directors
Christopher Rogers 140,000 71,272 0 0 0 0 – – –
Mark Clare 42,797 42,797 0 0 0 0 – – –
Sonita Alleyne 0 0 0 0 0 0 – – –
Mike Iddon 0 0 0 0 0 0 – – –
Laura Harricks 0 – 0 0 0 0 – – –
Shareholdings include all shares beneficially owned by the Director and their partner and the post-tax value of any awards that have vested but have not been exercised. Unvested awards subject to performance or
continued employment are not counted. The calculation is based on the closing share price at year end of £1.421. There have been no changes in the shareholding of Directors between 30 December 2023 and the
date this report is signed.
The Executive Directors have five years to meet their shareholding guidelines, in line with Policy.
Wickes Group Plc Annual Report and Accounts 2023 121
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Annual Report on Remuneration continued
Share awards made during the financial year (audited)
The below table summarises the terms for the long term incentives and DABP awarded to Directors during 2023.
Director Type of award Plan name Date of grant
Number of
shares/options
Award as %
of salary Face value
Performance
period Vesting date Holding period
David Wood Nil cost option LTIP 31/03/23 682,802 175% £923,421
1/1/23–
31/12/25 31/03/26 2 years
David Wood Nil cost option DABP 31/03/23 8,158 2.09% £11,032 n/a 31/03/26 n/a
Mark George Nil cost option LTIP 31/03/23 432,564 150% £584,999
1/1/23–
31/12/25 31/03/26 2 years
Mark George Nil cost option DABP 31/03/23 2,534 0.88% £3,426 n/a 31/03/26 n/a
The number of shares under award for David Wood and Mark George’s awards was calculated using a share price of £1.352, being the average of the closing market prices of the Company’s shares on the five
dealing days immediately preceding the grant date. The Company’s share plan rules are available from the Company Secretary on request.
2023 LTIP
LTIP grants were made during the year in line with the Remuneration Policy. The LTIP awarded to the
CEOwas 175% of base salary, and the award to the CFO was 150% of base salary.
Performance conditions attached to long term incentive awards granted during 2023
Measure Weighting Threshold Maximum
Vesting at
threshold
Vesting at
maximum
Adjusted basic EPS in FY2025 60% 16.3p 22.1p 20% 100%
Relative TSR vs constituents of the FTSE
250 (excluding investment trusts) 30% Median
Upper
quartile 20% 100%
ESG (Science Based Targets) 10% See below
Note – Vesting is on a straight- line basis between threshold and maximum.
The ESG target was based on Wickes’ approved near term Science Based Targets covering Operations,
Suppliers and Products, as detailed in last year’s Annual Report and Accounts.
– Target 1 (Operations) – Reduction in absolute Scope 1 and 2 emissions by 25% by 2025.
– Target 2 (Suppliers) – 30% of Wickes’ suppliers by emissions will have science-based targets by 2025.
– Target 3 (Products) – Reduce Scope 3 GHG emissions from the use of sold products by 16% by 2025.
Measure Weighting Threshold Maximum
Vesting at
threshold
Vesting at
maximum
Operations 3.33% 22.5% 27.5% 20% 100%
Suppliers 3.33% 27.0% 33.0% 20% 100%
Products 3.33% 14.4% 17.6% 20% 100%
Please note that we will rebaseline our near term Science Based Targets (SBTs) in 2024 (see page 48) and
will restate the ESG targets for the 2023 LTIP to align with the rebaselined SBTs. We expect this process
will be completed within 6 months of the date of this report and we will announce our restated SBTs and
publish these on our website. We will communicate the restated ESG targets for the 2023 LTIP at the
same time.
Adjusted basic EPS has been selected because this is a key performance indicator of the business and is
reported externally. It is also a relevant Shareholder measure of Group profitability. Relative Total Shareholder
Return (TSR) has been selected because it aligns executives to our investors’ experience and helps to
reward outperformance of the market and long term value creation.
CFO remuneration arrangements
As detailed in last year’s Annual Report and Accounts, upon joining Wickes the Remuneration Committee
agreedto buy out some of the Gym Group incentive awards forfeited by Mark George. In September
2022, Mark George was awarded a total of 148,114 Wickes shares to replace his foregone 2020
and2021Gym Group LTIPs. A total of 110,025 shares (including dividend equivalents) vested
on9 September2023.
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Strategic report
TSR performance graph and history of CEO pay
The graph below shows the Group’s performance from the date of listing to the financial year end, measured by
TSR, compared with the FTSE 250 (exc. investment trusts). The Remuneration Committee has chosen the FTSE
250 (exc. investment trusts) as the comparative index as it is also the peer group used for the TSR performance
condition in the 2023 LTIP. The table details the total remuneration for the Chief Executive over this period.
Wickes Total Shareholder Return vs FTSE 250 (exc. investment trusts)
45
55
65
75
85
95
105
115
Dec
2020
Jun
2021
Dec
2021
Jun
2022
Dec
2022
Jun
2023
Dec
2023
Wickes FTSE 250 (exc. investment companies)
Value £
Director Year
Total single
figure of
remuneration
(£,000)
% of annual
bonus paid
out
% of LTIP
vested*
David Wood 2023 1,238 86.9% n/a
David Wood 2022 857 4.66% 100%
David Wood 2021 1,357 79.0% 100%
* There was no LTIP award due for performance testing in 2023.
External appointments
External appointments must be approved by the Board in advance and Executive Directors are restricted
to one Non-executive Directorship or other significant appointment. They are entitled to retain any fees
paid for these services. During the year, David Wood served as Non-executive Chairman, ‘Green Sheep
Group Ltd’
1
and Director, ‘Dremt Consulting Ltd’. David Wood was paid a fee of £60,307 by ‘Green Sheep
Group Ltd’. Mark George served as Director, ‘HMNG Ltd’, Director, ‘The Prentice and Seabright Cups Ltd’
and Director, ‘Fallows Green Ltd’. No fees applied to any of these appointments for Mark George.
1 Fees earned from Green Sheep Group Ltd are paid to Dremt Consulting Ltd.
Dilution limits
Where shares for use in connection with the Company’s share plans are newly issued, the Company
complies with Investment Association dilution guidelines on their issue. These provide that overall
dilution under all plans should not exceed 10% of the Company’s issued share capital over a ten-year
period, with a further limitation of 5% in any ten-year period for executive plans.
Wickes Group Plc Annual Report and Accounts 2023 123
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Strategic report
Summary of remuneration implementation for 2024
The table below summarises the implementation of the Remuneration Policy for 2024. The rationale for the changes to the Policy and CEO’s remuneration package are set out in the letter on pages 112-113.
Element Implementation details
Base salary – Base salary for the CEO will be increased by 9.9% to £580,000 from 1 April 2024 (subject to approval).
– Base salary for the CFO will be increased by 4% to £405,600 from 1 April 2024.
Annual bonus – The annual bonus will operate in line with the framework set out in the Policy table. The maximum opportunity will be 160% of salary for the CEO
(subject to approval of, and in line with, our new Policy) and 120% of salary for the CFO.
– The performance focus areas and weightings will remain broadly the same as for 2023:
– 70% will be based on profit before tax (adjusted).
– 20% will be based on free cash flow.
– 10% will be based on ESG people targets focused on the gender and ethnicity representation of our management population.
– Due to commercial sensitivity, the performance targets will be disclosed retrospectively.
LTIP – The LTIP will continue to operate in line with the framework set out in the policy table. The maximum opportunity will be 185% of salary fortheCEO (subject to approval of, and in line with,
our new Policy) and 150% of salary for the CFO.
– The performance metrics and weightings will remain the same as for 2023: 60% earnings per share (adjusted), 30% relative TSR, 10% ESG.
– We will rebaseline our near term Science Based Targets (SBTs) in 2024 (see page 48). The Remuneration Committee will delay setting the ESG targets for the 2024 LTIP in order reflect the
rebaselined SBTs. We expect this process will be completed within 6 months of the date of this report and we will announce our restated SBTs and publish these on our website.We will
communicate the ESG targets for the 2024 LTIP at the same time.
– The performance targets for the 2024 LTIP awards are as follows:
Measure and weighting Threshold (20% vesting) Maximum (100% vesting)
EPS growth (60%) 21.0p 28.4p
Relative TSR (30%) Median ranking Upper quartile ranking
ESG targets (10%) To be confirmed To be confirmed
Pension and benefits – There are no changes to the benefits provision for Executive Directors and pension will continue to be 10% of base salary in line with the maximum rate available to the wider workforce.
Implementation of Non-executive Director Policy in 2024
Non-executive Director fees will be increased by 4% from 1 April 2024, which is below the average
increase for the wider workforce. Fees as at 1 April 2024 are set out below:
Role Fee level per annum
Basic Non-executive Director £60,976
Board Chair £205,099
Senior Independent Director £8,315
Chair of a Committee £11,087
In line with our Policy, reimbursement of reasonable expenses in relation to Non-executive duties may be paid.
Annual Report on Remuneration continued
Wickes Group Plc Annual Report and Accounts 2023124
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Strategic report
Director remuneration in the context of colleague pay
Remuneration approach for the wider Group
The approach to remuneration for our colleagues
isaligned with the principles that apply to our Policy
for the Executive Directors. Pay and benefits reflect
the nature and contribution of the role and take into
account levels of pay in comparable roles in the
market. Our reward framework is regularly reviewed
to ensure colleague pay is fair and appropriate.
During 2023 we recognised the ongoing impact
ofthe higher cost of living on our lower paid
colleagues. Basic pay was increased by morethan
c.8% on average for the wider workforce, and we
invested over £3.5m in bringing forward the annual
salary review for this population from April 2023 to
January 2023. In 2024, we have increased average
wider workforce pay by more than 7%. With
fairness in mind, we awarded a lower increase of 4% to
our management and headoffice populations.
All colleagues are eligible for a performance bonus,
to support our strategy and to encourage and
reward collaboration. Within our stores in 2023
wepaid £2.7m to colleagues under our monthly
gainshare plan, which allows colleagues to earn
ashare of store profit achieved above target.
The central annual bonus plan for Support
Centreand management colleagues is based on
achievement against Company profit and sales
targets. The plan paid out at 91.6% of maximum
bonus to colleagues for 2023, rewarding their
contribution to business performance.
During the year we further enhanced our
comprehensive wider wellbeing support.
InMayweintroduced ‘Digicare’, a market
leadingsuite ofwellbeing services for all
colleagues which includes digital GP, home
healthtest kits, and mental health support
allfreeof charge.
We continue to work closely with our colleague led
cost of living working group to develop meaningful
support forcolleagues. In 2023 we introduced
‘Advance’, togive colleagues more flexibility as
towhen theycan access their pay, and over 660
ofour colleagues used this service since
introduction in August 2023 to year end. Having
listened to colleague feedback, we extended and
improved the store food provision ‘Brunch Box’,
with over 78k food items ordered during 2023.
Reward and ESG
We continuously review our wider reward offering
toensure it supports our wider ESGpriorities as
abusiness. We recently introduced a ‘Green Car’
scheme, which givescolleagues access to electric
orhybrid vehicles with significant savings via
salaryexchange. For company car drivers,
wehaveintroduced a new policy; from 2025,
allnewcorporate cars ordered will be electric.
Our Winning Behaviours
Personal responsibility lies at the centre of
ourculture and our business is powered by highly
engaged individuals and teams who embody our
winning behaviours.
See more on our Winning Behaviours on page89.
Engagement with Shareholders
In our engagements with Shareholders since
listing, we have had a number of discussions on
key topics relating to the wider workforce, including
the link between ESG and remuneration, fair pay
and colleague wellbeing. We will continue to take
Shareholder feedback on board when developing
our approach to these important topics.
Engagement with colleagues
(UK Code requirement)
When considering remuneration arrangements
forExecutive Directors, the Committee takes
intoaccount, as a matter of course, the pay and
conditions of colleagues at all levels throughout
the Company, to ensure appropriate alignment.
The Committee receives regular updates regarding
any major changes to colleague remuneration
during the year and also reviews information on
internal measures, including details of our gender
pay gap and the ratio of Chief Executive Officer
remuneration to that of our colleagues, and
considers how these compare externally.
The Board continues to place great importance on
listening to the views of our colleagues on a range
of issues including pay and benefits, and Sonita
Alleyne, our designated Non-executive Director
representing colleague views, takes the lead on
ensuring these are heard by the Board (see page
129 for further details). To facilitate more in depth
and open discussion with colleagues on a broad
range of current issues, we held a colleague
listeninggroup in September 2023, with Sonita
inattendance. Oneof the focus areas of this
session was sharing our approach to executive pay,
including how thisaligns with wider Company pay
policy, and colleagues were given the opportunity
toshare their views on this topic.
Gender and ethnicity pay gap
We continue to focus on gender equality at
alllevels of the business, and in 2023 the ESG
element of the executive bonus plan included
specific targets relating to female representation
across our management population.
In February 2024, we published our third gender
paygap report as an independent business.
Wereported that our median gender pay gap
hasimproved from 2.6% to below 0.1%, and our
mean gender pay gap has also reduced to 6.5%.
We also reported our ethnicity pay gap for the
firsttime. We are pleased with our negligible
median and mean ethnicity pay gaps of -0.7%
and0.04% respectively, which we believe reflects
our focus to date on equal treatment in this area.
0.1%
Our gender pay gap (median)
-0.7%
Our ethnicity pay gap (median)
Wickes Group Plc Annual Report and Accounts 2023 125
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Strategic report
CEO to employee pay ratio
The table below sets out the ratio of CEO total remuneration to the 25th, 50th and 75th percentile
colleagues. Approach B has been used in order to identify the relevant colleagues to calculate the ratio.
Thiswas chosen as it utilises data already collected for gender pay gap calculation from April 2023,
providing consistency. The Committee is comfortable this approach provides a realistic assessment
ofthe differential between CEO and colleague pay.
Year Method
25th percentile pay
ratio
50th percentile pay
ratio
75th percentile pay
ratio
2023 Approach B 53:1 52:1 44:1
2022 Approach B 45:1 43:1 31:1
2021 Approach B 97:1 90:1 71:1
The CEO total remuneration has been taken from the single figure table and reflects 2023 remuneration
earned over the full financial year. Colleague remuneration has been calculated on the same basis.
Whererelevant, each colleagues’ pay and benefits were calculated on a full-time equivalent basis,
andnofurther adjustments were made. The values for total remuneration for the 25th, median and
75thpercentiles consist of salary, bonuses and employer contribution to pension. To ensure these
threecolleagues were a suitable representative of their quartile, the total pay figures calculated were
compared against a sample of colleagues either side of the three identified colleagues.
There has been an increase in the CEO pay ratio in 2023 compared with 2022, which is mainly reflective
of the lower executive annual bonus outcome in 2022 compared with 2023.
The Remuneration Committee considers pay ratios as one of a number of reference points when reviewing
executive remuneration and considers that the median pay ratio for 2023 is consistent with the pay and
progression policies for the Company.
P25 P50 P75
Base salary £22,161 £22,254 £24,871
Total remuneration £23,377 £23,964 £28,217
Relative importance of spend on pay
The table below illustrates the total spend on colleague remuneration in 2023 compared with other
financial dispersals.
2023
£m
2022
£m %
Total colleague cost
1
234.3 220.5 6.3%
Total distributions to Shareholders
2
37.2 31.2 20.2%
Total income taxes paid
3
0.3 4.3 (93.0)%
Total capital expenditure
4
38.2 40.4 (5.4%)
1 Includes social security, pensions and share-based payments (see note 8 of the financial statements)
2 (See page 12 of the Annual Report)
3 (See the cash flow statement on page 143)
4 (See the cash flow statement on page 143)
Percentage change in Directors’ and colleague remuneration
The table below summarises the change in each Director’s base salary/fee, benefits and bonus received
for 2023 compared with the prior year. 
Director
% change in remuneration
between 2022 and 2023
% change in remuneration
between 2021 and 2022
Salary/fee
Taxable
benefits Bonus
2
Salary/fee
Taxable
benefits Bonus
Executive Directors
David Wood
1
3.63% 61.52% 1839.35% 3.80% (2.02%) (93.95%)
Mark George
3
111.02% 105.15% 3854.61% n/a n/a n/a
Non-executive Directors
Christopher Rogers 3.63% n/a n/a 2.03% n/a n/a
Mark Clare 3.63% n/a n/a 1.70% n/a n/a
Sonita Alleyne 3.63% n/a n/a 2.49% n/a n/a
Mike Iddon 3.63% n/a n/a 2.49% n/a n/a
Laura Harricks
4
n/a n/a n/a n/a n/a n/a
All employees
5
17.33% n/a 91.18% 3.52% n/a (12.09%)
1 The large percentage change in benefits provision relates to the valuation of David Wood’s company car, having previously been in receipt
ofcash allowance.
2 The large percentage change in bonus provision for the Executive Directors is due to the 2022 bonus paying out at c. 5% of maximum vs c.87%
ofmaximum for 2023. Actual value increases on an absolute basis are more moderate and within the scope of our remuneration policy.
3 For Mark George, base salary, benefit and pension figures for 2022 relate to the date he became a Director of Wickes Group Plc (6 July 2022).
4 Laura Harricks was appointed to the Board on 1 June 2023.
5 The salary, benefit and bonus figures for colleagues are based on the median earning colleagues identified for the CEO pay ratio calculation,
for consistency. Actual annual increases were aligned at c.8% for colleagues and 4% for Executive Directors as part of the 2023 annual pay
review, however due to the timing of the increases in 2023 the % change figures are different in this table.
Annual Report on Remuneration continued
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Strategic report
Remuneration Committee
The Committee is responsible for determining the Remuneration Policy for the Chair of the Board,
Executive Directors and other designated senior management. In doing so, the Committee is required
toconsider all factors which it deems necessary, including:
– relevant legal and regulatory requirements;
– alignment to Company purpose and values;
– the link to the successful delivery of the Company’s long term strategy and long term Shareholder interests;
– workforce remuneration and related policies and the alignment of incentives and rewards with culture; and
– feedback from the engagement process with colleagues.
The Committee comprises all the independent Non-executive Directors and the Chair of the Board
(whowas considered independent on appointment). Prior to appointment, the Chair of the Committee
had served on a Remuneration Committee for at least 12 months in line with the Code. Biographical
details on the Chair of the Committee and members of the Committee can be found on page 87.
The Committee operates in line with its Terms of Reference, which are available on the Company’s
website at www.wickesplc.co.uk
Committee activities
The table below sets out the meetings and key activities undertaken in the year:
Feb 23 March 23 Sept 23 Nov 23
Approved Remuneration Committee Terms of Reference
Discussed 2023 bonus and LTIP targets
Approved 2023 annual salary review
Reviewed progress against shareholding requirements
Approved 2022 annual bonus outcome
Approved 2023 bonus and LTIP targets
Approved Chair of Board fee review
Approved Directors’ Remuneration report
Reviewed trends in remuneration and governance
Reviewed Group wide remuneration and cost of living support
Reviewed progress against bonus targets for the financial
year ended 30 December 2023
Discussed Remuneration Policy Review
Discussed approach for 2023 annual salary review
Reviewed CEO and Chair of the Board expense claims
Discussed the gender and ethnicity pay gap reporting
outcome for 2023
Noted the colleague SAYE plan outcome for 2023
Reviewed Committee forward agenda and meeting schedule
Advice to the Committee
Members of the executive leadership team may attend meetings at the invitation of the Committee,
butare not present when their own remuneration is being discussed. The Committee is supported
bytheChief People Officer, Head of Reward, Chief Financial Officer and General Counsel and
CompanySecretary.
The Committee received external advice during 2023 from Willis Towers Watson, who are members of
the Remuneration Consultants Group and operate under the executive remuneration consulting Code of
Conduct. The Committee is satisfied that no conflict of interest arose in the provision of these services.
The total fees paid to Willis Towers Watson in respect of services to the Committee during the year
were£101,365.
Shareholder voting
The voting outcome from the 2023 AGM showed strong support for our 2022 Directors’ Remuneration
report. The following table sets out the votes cast at the 2023 AGM in respect of the 2022 Directors’
Remuneration report.
Resolution
Votes for
(and % of votes cast)
Votes against
(and % of votes cast)
Proportion
of shares voted
Shares on which
votes were withheld
Directors’
Remuneration
report (2023 AGM) 167,952,389 957,863 65.06% 17,416
99.43% 0.57%
Directors’
Remuneration
Policy (2022 AGM) 161,449,811 3,683,296 63.60% 14,929
97.77% 2.23%
We remain committed to engaging proactively with Shareholders and advisory bodies on
remunerationmatters.
The Directors’ Remuneration report has been approved by the Board of Directors and is signed
onitsbehalf by:
Mark Clare
Chair of the Remuneration Committee
18 March 2024
Remuneration Committee
Wickes Group Plc Annual Report and Accounts 2023 127
Governance
Financial statements
Other information
Strategic report
Directors’ report
The Directors present their report, together
withthe audited financial accounts for the
52weeks ended 30 December 2023. This
reportsets out information required to be
disclosedin the Directors’ report in accordance
withthe Companies Act 2006 (the ‘Act’), the
Financial Conduct Authority’s Listing Rules
(‘Listing Rules’), the Disclosure Guidance and
Transparency Rules (DTRs) and the Code.
Principal activity and areas of operation
The principal activity of the Group is the operation
of retail home improvement stores across the UK.
Articles of Association
The Company’s Articles of Association (‘Articles’)
may only be amended by special resolution
atageneral meeting of the Shareholders. The
Articles are available on the Company’s website
www.wickesplc.co.uk
Directors
Details of the Directors at the date of this report
are set out on pages 86-87, together with their
biographical information including all significant
appointments. Laura Harricks was appointed asa
Non-executive Director of theCompany with effect
from 1 June 2023. All other Directors held office
throughout the year.
The appointment and removal of Directors is
governed by the Articles, the Act, the Code and
related legislation. In accordance with the Code
and to promote good governance, all Directors
shall retire and those wishing to serve again will
put themselves forward for election or re-election
at the AGM.
Powers of Directors
The powers and responsibilities of the Directors
are governed by the Act, the Articles and any
direction given by Shareholders by special
resolution, and subject to these conditions
theBoard may exercise all of the powers of
theCompany.
Directors’ interests
The Company has robust procedures to identify,
authorise and manage actual and potential
conflicts of interest. If any potential conflicts
arisethey are reviewed and, if appropriate,
approved by the Board. At no time during the year
did any Director have a material interest in any
contract of significance to the Group’s business.
Information relating to the Directors’ interests in,
and options over, ordinary shares in the capital
ofthe Company are shown in the Directors’
Remuneration report on pages 121.
Directors’ indemnities
In accordance with the Company’s Articles
ands.234(2) of the Act, a qualifying third party
indemnity is in force to the extent permitted by
lawfor the benefit of each of the Directors in
respect of liabilities incurred as a result of their
office. For those liabilities for which Directors
maynot be indemnified, the Company has
maintained Directors’ and Officers’ Liability
Insurance throughout the financial year.
Share capital and voting rights
The Articles contain provisions governing the
ownership and transfer of shares and voting
rights.As at 30 December 2023, the Company
hadan allotted and fully paid issued share capital
of 252,125,375 ordinary shares of 10 pence each,
with an aggregate nominal value of £25,212,537.
The ordinary shares of the Company are listed
onthe London Stock Exchange and each share
carries the right to one vote at general meetings
ofthe Company. No Shareholder holds securities
having special rights with regard to control of the
Company. There are no restrictions on voting
rights or the transfer of securities in the Company.
The Company is not aware of any agreements
between holders of securities that result in such
restrictions. Details of the Company’s share capital
are set out on page 160.
Employee Benefit Trust
As at 30 December 2023, The Wickes Employee
Benefit Trust held 5,045,663 ordinary shares (2%
of theissued share capital) and the Wickes Share
Incentive Plan (SIP) Trust held 872,435 ordinary
shares (0.35% of the issued share capital) in
theCompany for use in connection with the
Company’s share plans.
Shares held by the trusts rank pari passu with
theshares in issue and have no special rights.
Voting rights and rights of acceptance of any
offerrelating to the shares held in these trusts
rests with the trustees, who may take account
ofany recommendation from the Company.
Itisthe Company’s policy not to give voting
instructions to the trustees.
The trustees of the SIP Trust may vote in
respectofshares held in the SIP Trust, but
onlyasinstructed by participants in the SIP
inrespect of their Free Shares and Dividend
Shares. The trustees will not otherwise vote
inrespect of shares held in the SIP Trust.
Authorities
Allotment of shares: At the AGM on 23 May 2023,
the Directors of the Company were authorised to
allot new shares in the Company or grant rights to
subscribe for, or to convert any security of the
Company in, shares up to a maximum number of
shares representing not more than one third of the
share capital of the Company. The Directors were
also given the authority to allot relevant securities
in connection with an offer by way of a rights issue
up to a further one third of the issued share capital
of the Company. No shares were allotted under
either authority during the financial year.
Purchase of shares: The Company was further
authorised at the same AGM to purchase its own
shares in the market up to a maximum of approximately
10% of the Company’s issued share capital.
The Company commenced a share buy programme
on 31 July 2023 under the authority granted at the
2023 AGM, allowing it to purchase its own shares in
the market up to a maximum of approximately 10%
of the Company’s issued share capital. During the
2023 financial year, 7,512,623 shares with a nominal
value of 10 pence per share representing 2.9% of the
issued share capital were purchased and immediately
cancelled. The aggregate amount paid for the shares
was £10.1m. The reason for the purchase of shares
was to reduce the Company’s share capital.
The Company is seeking to renew these authorities
at the forthcoming AGM, within the limits set out
inthe notice of that meeting and within the limits
specified by the Pre-Emption Group.
Political Donations Policy
The Group’s policy is not to make donations
topolitical parties and no such payments have
been made to either political groups or individual
candidates, nor did it incur any political expenditure
during the year.
The Company is seeking to renew the authority
tomake political donations at the forthcoming
AGM, within the limits set out in the notice of that
meeting. This is on a precautionary basis to avoid
any unintentional breach of the relevant provisions
of the Act.
Wickes Group Plc Annual Report and Accounts 2023128
Governance
Financial statements
Other information
Strategic report
Significant agreements
The Company’s revolving credit facilities require
the Company, in the event of a change of control,
to notify the Facility Agent of such occurrence.
Following a change of control, a lender will not be
obliged to fund a utilisation request and may notify
the Facility Agent that they wish to cancel their
commitment, resulting in their share in all outstanding
loans, together with accrued interest, becoming
due and payable.
The Company does not have agreements with any
Director or officer that would provide compensation
for loss of office or employment resulting from a
takeover, except that provisions of the Company’s
share plans may cause options and awards
granted under such plans to vest on a takeover.
Dividends
The profit for the financial year ended 30 December
2023 after taxation amounts to £29.8 from
continuing operations. The Directors have paid or
declared dividends as follows:
Ordinary shares £m
Paid interim dividend of
3.6 pence pershare
1
9.1
Proposed final dividend of
7.3 pence per share
2
18.0
Total dividend of 10.9 pence per share
in respect of financial year ended
30 December 2023
2
27.1
1 Excludes £0.3m dividends waived.
2 Subject to Shareholder approval at the 2024 AGM, the final
ordinary dividend in respect of the 2023 financial year will be paid
onWednesday 6 June 2024 to all Shareholders on the Register
ofMembers at the close of business on Friday 26 April 2024.
Further information on dividends can be found
innote 26 to the accounts on page 162.
Dividend waivers
The Wickes Employee Benefit Trust (EBT) and the
Wickes SIP Trust hold shares in the Company in
connection with the operation of the Company’s
share plans. An evergreen dividend waiver is in
place on the shares held by the EBT and for shares
held by the SIP Trust that have not been allocated
to employees.
Substantial Shareholders
Information provided to the Company pursuant to
the Disclosure Guidance and Transparency Rules
(DTR) is published via a Regulatory Information
Service and on the Company’s website. As at
30 December 2023, the following substantial
interests (3% or more) in the Company’s issued
share capital had been notified in accordance
withDTR 5. These figures represent the number
ofshares and percentages held as at the date
ofnotification to the Company. No further such
notifications have been received since year end
tothe date of this report.
Ordinary shares Number of shares % of voting rights Date of notification
Jupiter Fund Management Plc 12,801,742 4.93 17 September 2021
Pzena Investment Management , Inc 12,885,980 4.96 22 June 2021
Colleague engagement
We know that our high levels of colleague
engagement and unique culture are what make
ourcolleagues feel at home at Wickes. We
communicate with colleagues regularly through
avariety of channels tailored to each area of the
business to ensure they are informed about the
business direction, including Company performance,
and that they are listened toand inspired to play
their part in delivering our strategy and purpose.
We engage with our colleagues formally and
informally, using weekly newsletters, regular
‘team5s’ (informal team briefings), ‘The Scoop’
intranet communications, Google communities,
and regular Company wide updates via email,
video and monthly business briefings. We also
hostan annual managers’ meeting which brings
together store managers and leadership teams
tocommunicate strategy and priorities for the
coming year and to equip them to brief their
ownteams on the same messaging.
We use varied communication channels to engage
colleagues in the Company’s share schemes,
giving them the opportunity to share in the future
success of the business and a personal
connection to Company performance. More
information on colleague reward and engagement
can be found inthe Directors’ Remuneration report
on page 125 and the Responsible Business section
on pages36-41.
Colleagues have an opportunity to give regular
feedback through our colleague engagement
surveys, topical mini surveys, listening roadshows
with our Executive team and quarterly Colleague
Voice sessions. In September, we held a virtual
Colleague Voice session which was represented
bycolleagues from across the business, and the
Plc Board was represented by our designated
Non-executive Director for employee voice, Sonita
Alleyne. The matters raised were fed back and
discussed by the Board in December 2023.
The Company’s culture and values are critical to
sustaining an engaged workforce, but we know
things can sometimes go wrong. Grievance and
disciplinary policies have been designed to ensure
all colleagues are treated fairly in line with our
values and in a professional and sensitive manner.
Colleagues know where to go for support and
guidance is available to help them every step
oftheway.
Policies are designed to engage and retain talent in
the business and set out the behaviours expected,
what colleagues are entitled to, where they can go
for help and how we will treat all colleagues fairly
and consistently.
Wickes Group Plc Annual Report and Accounts 2023 129
Governance
Financial statements
Other information
Strategic report
Employment of disabled persons
All employment policies and processes are
designed to ensure that anyone with a disability is
treated equitably. We regularly review our facilities
and working practices to ensure we cater for
people with special requirements or disabilities.
Applications for employment by disabled persons
are given full and fair consideration having regard
to their particular aptitudes and abilities. Line
managers are given support and coaching to help
understand mental or physical health and wellbeing
conditions so they can make suitable adjustments
to ensure their colleagues can perform at their
best and feel at home at Wickes, including any
colleagues who may have become disabled
duringemployment.
We do not tolerate any kind of disability discrimination.
We focus on ability and not disability, ensuring that
all colleagues are able to flourish. The Wickes Ability
network is made up of colleagues across the
business who are committed to making a difference
and help the business create an environment where
everyone can be themselves. The Ability network
champions each colleague’s own ability to ensure
they reach their full potential, promotes education
about disabilities and highlights opportunities where
the business can continue to improve accessibility
to colleagues and customers.
Events occurring after the reporting period
Corporate transaction
On 18 March 2024, the Group agreed to acquire
51% of the issued share capital of Gas Fast Limited,
operator of leading solar installations company
Solar Fast. The business comprises a core solar
panels installation business, in addition to a smaller
business installing gas boilers. The acquisition will
enable Wickes to expand its offering into the fast
growing market for home energy solutions, initially
with solar and gas boilers and, in time, air source
heat pumps and other services. The acquisition is
subject to FCA approval.
The initial 51% controlling interest will be for initial
consideration of £5.1m (net of cash acquired),
witha further contingent payment, based on an
earnings based valuation multiple, delivered in
calendar year 2024. The contingent payment is
capped at £13.2m.
The Group has an option to buy the remaining 49%
issued share capital for a period of 5 years
following completion. The purchase price is based
on a pre-agreed earnings based valuation multiple
at that time.
Revolving credit facility
After the year end the Group completed an
‘Amendand Extend’ of its Rolling Credit Facility,
lengthening the term by a further two years to
March 2028, with an option for an additional one
year extension. Total commitments on the facility
remain £80m, as well as retaining the £20m
accordion.
Further details can be found in note 31 to the
financial statements on page 167.
Statement of disclosure to auditor
Each of the persons who is a Director at the
dateofapproval of this report confirms that:
– so far as the Director is aware, there is no
relevant audit information of which the
Company’s auditor is unaware; and
– that the Director has taken all the steps that
theyought to have taken to make themselves
aware of any relevant audit information and to
establish that the Company’s auditor is aware
ofthat information.
This confirmation is given and should be
interpreted in accordance with s.418(2) of the Act.
Branches
The Company does not have any branches outside
of the UK.
Research and development
The Company does not undertake any research
ordevelopment activities.
Additional disclosures
Other information that is relevant to this Directors’
report and which can be incorporated by reference
can be located as follows:
Applicable disclosures required
pursuant to Listing Rule 9.8.4R Page
Long term incentive schemes LR9.8.4(4) 122
Dividend waivers LR9.8.4(12)(13) 129
Sections (1)(2)(5)(6)(7)(8)(9)(10)(11)(14)
arenot applicable.
Disclosures incorporated by
reference into this Directors’ report Page
Business review 8-11
Future likely developments 4-83
Financial review and KPIs 28-33
Directors’ interests in shares 121
Corporate Governance statement 84-127
Going concern and viability statements 82-83
Principal risks and uncertainties 75-81
Financial instruments and financial
riskmanagement 166-167
Colleague engagement 27,36-39
Stakeholder engagement including
customer and suppliers 68-71,90
Streamlined Energy and Carbon
Reporting(SECR) disclosures 48
Cautionary statement regarding
forwardlookinginformation
Where this Annual Report contains forward looking
statements, these are based on current expectations
and assumptions, and speak only as of the date
they are made. These statements should be
treated with caution due to the inherent risks,
uncertainties and assumptions underlying any
such forward looking information.
The Group cautions investors that a number
offactors, including matters referred to in this
document, could cause actual results to differ
materially from those expressed or implied in any
forward looking statement. Such factors include,
but are not limited to, those discussed under
principal risks and uncertainties on pages 75-81.
Forward looking statements can be identified bythe
use of relevant terminology including the words:
‘may’, ‘will’, ‘seek’, ‘aim’, ‘anticipate’, ‘target’, ‘projected’,
‘expect’, ‘estimate’, ‘intend’, ‘plan’, ‘goal’, ‘believe’ or
other words of similar meaning and include all
matters that are not historical facts. They appear in
a number of places throughout this Annual Report
and Accounts and include statements regarding
the intentions, beliefs or current expectations of
our officers, Directors and employees concerning,
among other things, the Group’s results of
operations, financial condition, liquidity, prospects,
growth, strategies and the business.
Neither the Group, nor any of its officers, Directors
or employees, provides any representation, assurance
or guarantee that the occurrence of the events
expressed or implied in any forward looking
statements in this Annual Report and Accounts
willactually occur.
Undue reliance should not be placed on these forward
looking statements. Other than in accordance with our
legal and regulatory obligations, the Group undertakes
no obligation to publicly update or revise any forward
looking statement, whether as a result of new
information, future events or otherwise.
Disclosures in the Strategic Report
The Company has chosen, in accordance with
s.414C(11) of the Act, and as noted in this Directors’
report, to include certain matters in its Strategic
report that would otherwise be required to be
disclosed in the Directors’ report. The Strategic
report can be found on pages 4-83 and includes
anindication of future likely developments in the
Company, details of important events and the
Company’s business model and strategy.
The Directors’ report, which comprises pages
84-110 and pages 128-130, has been approved by a
duly authorised Committee of the Board of Directors
on 18 March 2024 and is signed on their behalf by:
Helen O’Keefe
General Counsel and Company Secretary
18 March 2024
Directors’ report continued
Wickes Group Plc Annual Report and Accounts 2023130
Governance
Financial statements
Other information
Strategic report
Statement of Directors’ Responsibilities in respect
oftheAnnual Report and Financial Statements
Under company law, the Directors are responsible
for preparing the Annual Report and Group and
parent company financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare
Group and parent company financial statements
for each financial year. Under that law, they are
required to prepare the Group financial statements
inaccordance with UK-adopted international
accounting standards and applicable law. The
Directors have elected to prepare the parent
company financial statements in accordance
withUK accounting standards and applicable
law,including FRS 102 ‘The Financial Reporting
Standard applicable in the UK and Republic
ofIreland’.
Under company law, the Directors must not
approve the financial statements unless they are
satisfied that they give a true and fair view of the
state of affairs of the Group and parent company
and of the Group’s profit or loss for that period. In
preparing each of the Group and parent company
financial statements, the Directors are required to:
– select suitable accounting policies and then
apply them consistently;
– make judgements and estimates that are
reasonable, relevant, reliable and prudent;
– for the Group financial statements, state whether
they have been prepared in accordance with
UK-adopted international accounting standards;
– for the parent company financial statements,
state whether applicable UK accounting
standards have been followed, subject to any
material departures disclosed and explained
inthe parent company financial statements;
– assess the Group and parent company’s ability
to continue as a going concern, disclosing, as
applicable, matters related to going concern;
and
– use the going concern basis of accounting
unless they either intend to liquidate the Group
or the parent company or to cease operations,
orhave no realistic alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose
with reasonable accuracy at any time the financial
position of the parent company and enable them to
ensure that its financial statements comply with
the Companies Act 2006. They are responsible for
such internal control as they determine necessary
to enable the preparation of financial statements
that are free from material misstatement, whether
due to fraud or error, and have general responsibility
for taking such steps as are reasonably open to
them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors
are also responsible for preparing the Strategic
report, Directors’ report, Section 172 statement,
Directors’ Remuneration report and Corporate
Governance statement that comply with that law
and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information on
the Company’s website. Legislation in the UK
governing the preparation and dissemination of
financial statements may differ from legislation
inother jurisdictions.
In accordance with Disclosure Guidance and
Transparency Rule (“DTR”) 4.1.16R, the financial
statements will form part of the annual financial
report prepared under DTR 4.1.17R and 4.1.18R. The
auditor’s report on these financial statements
provides no assurance over whether the annual
financial report has been prepared in accordance
with those requirements.
Responsibility Statement of the Directors
inrespect of the annual financial report
We confirm that to the best of our knowledge:
– the financial statements, prepared in accordance
with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities,
financial position and profit or loss of the
Company and the undertakings included
intheconsolidation taken as a whole; and
– the Strategic report includes a fair review of the
development and performance of the business
and the position of the Company and the
undertakings included in the consolidation taken
as a whole, together with a description of the
principal risks and uncertainties that they face.
The Statement of Directors’ Responsibilities has
been approved by the Board of Directors and is
signed on their behalf by:
David Wood
Chief Executive Officer
18 March 2024
Mark George
Chief Financial Officer
18 March 2024
Wickes Group Plc Annual Report and Accounts 2023 131
Governance
Financial statements
Other information
Strategic report
Independent Auditor’s report
To the members of
WickesGroupPlc
1. Our opinion is unmodified
We have audited the financial statements of
Wickes Group Plc (“the Company”) for the 52 week
period ended 30 December 2023 (“2023”) which
comprise the Consolidated income statement and
other comprehensive income, Consolidated and
Company balance sheet, Consolidated and Company
statement of changes in equity, Consolidated cash
flow statement, and the related notes, including the
accounting policies in note 2 to the Group financial
statements and note C2 to the parent Company
financial statements.
In our opinion:
– the financial statements give a true and fair
viewof the state of the Group’s and of the
parentCompany’s affairs as at 30 December
2023 and of the Group’s profit for the 52 week
period then ended;
– the Group financial statements have been
properly prepared in accordance with UK-
adopted international accounting standards;
– the parent Company financial statements have
been properly prepared in accordance with UK
accounting standards, including FRS 102 The
Financial Reporting Standard applicable in the
UK and Republic of Ireland; and
– the financial statements have been prepared
inaccordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence
we have obtained is a sufficient and appropriate
basis for our opinion. Our audit opinion is consistent
with our report to the audit committee.
We were first appointed as auditor by the Directors
on 6 March 2020 prior to the parent Company
becoming a public interest entity. The period of
total uninterrupted engagement is for the three
financial years ended 30 December 2023 as a
Public Interest Entity, and five financial years in
total. Prior to that we were also auditor to the
Group’s main trading subsidiary Wickes Building
Supplies Limited, but which, being unlisted, was
not a Public Interest Entity. We have fulfilled our
ethical responsibilities under, and we remain
independent of the Group in accordance with,
UKethical requirements including the FRC Ethical
Standard as applied to listed Public Interest
Entities. No non-audit services prohibited by
thatstandard were provided.
Overview
Materiality:
Group financial
statements as a whole
£2.4m (2022: £3.5m)
4.6% (2022: 4.6%) of adjusted profit before tax
Coverage 100% (2022: 100%) of adjusted profit before tax
Key audit matters vs 2022
Recurring risk Recoverability of store assets
Design & Installation (previously “DIFM”)
revenue recognition
Parent Company Recoverability of parent Company’s
investment in subsidiary
Wickes Group Plc Annual Report and Accounts 2023132
Governance
Financial statements
Other information
Strategic report
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. We summarise below the key audit matters, unchanged from the 52 week period ended 31 December 2022, in decreasing order of audit significance, in arriving at our audit opinion above, together
withour key audit procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters were addressed, and our results are based on procedures
undertaken, in the context of, and solely for the purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not
provide a separate opinion on these matters.
The risk Our response
Recoverability of store assets
Store assets carrying
values(£666.4 million; 2022
£678.1 million) and net
impairment reversals
(£1.0 million; 2022: charge of
£15.8 million)
Refer to page 103 (Audit
Committee Report), page 149
(accounting policy) and page
157 (financial disclosures).
Forecast based assessment:
Given the current macroeconomic environment, there is an increased
risk of underperforming stores, or other performance related impairment
triggers which would require the Directors to carry out an impairment
assessment. Further, change in forecast store performance for stores that
have previously been impaired may result in a trigger to reverse previous
impairments. Each store is considered a CGU for the purposes of impairment.
Recoverability of store assets relies on a number of assumptions, most
notably forecast future cash flows including the store revenue growth
rate, gross margin, the allocation of central costs and the discount rate,
which all involve a high degree of estimation uncertainty.
We performed an assessment of whether an understatement of the
store impairment charge, and overstatement of store impairment
reversals, identified through these procedures was material.
Auditor judgement is required to assess whether the Directors’ estimate of
an individual store’s recoverable amount falls within an acceptable range.
The effect of these matters is that, as part of our risk assessment, we
determined that the carrying value of store assets has a high degree of
estimation uncertainty, with a potential range of reasonable outcomes
greater than our materiality for the financial statements as a whole,
and possibly many times that amount. The financial statements
(note15) disclose the sensitivity estimated by the Group.
We performed the detailed tests below rather than seeking to rely on any of the Group’s controls because
our knowledge of the design of these controls indicated that we would not be able to obtain the required
evidence to support reliance on controls. Our procedures included:
– Historical comparisons: We assessed the reasonableness of the forecasts used by considering the
historical accuracy of previous forecasts and the results currently being achieved;
– Tests of details: We independently recalculated the impairment outcomes, validated key inputs and
assessed whether the allocation of central costs to individual CGUs is complete and is deemed
appropriate based on the nature of the costs;
– Our sector experience: We assessed whether assumptions used, in particular those relating to forecast
store revenue growth rate and gross margin reflect our knowledge of the business and industry, including
known or probable changes in the business environment;
– Benchmarking assumptions: We challenged the key inputs used in the Group’s calculation of the discount
rate by comparing it to externally derived data, including available sources for comparable companies;
– Sensitivity analysis: We performed our own sensitivity analysis on the forecasts, including a reduction
in assumed growth rates, gross margin, the allocation of central costs, and discount rates; and
– Assessing transparency: We assessed whether the Group’s disclosures regarding the sensitivity of the
outcome of the impairment assessment to changes in key assumptions appropriately reflects the risks
inherent in the recoverable amount of the store assets.
Our results
– We found the store assets carrying values, and the related impairment charges and reversals to be
acceptable (2022: acceptable).
Wickes Group Plc Annual Report and Accounts 2023 133
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Financial statements
Other information
Strategic report
The risk Our response
Design & Installation
(previously “DIFM” revenue
recognition)
Design & Installation
(previously “DIFM”) revenue
(£366.9 million;
2022: £379.7 million)
Refer to page 103 (Audit
Committee Report), page 145
(accounting policy) and page
150 (financial disclosures).
Existence of Design & Installation revenue:
Professional standards require us to presume (unless rebutted)
thatthe fraud risk from revenue recognition is a significant risk.
In our view this risk is most prevalent in Design & Installation revenue,
and judgement exists as to whether performance obligations (delivery
and/or installation) have been satisfied.
We consider the risk to relate to the existence of Design & Installation
revenue recognised in respect of orders received in the final 16 weeks of
the period, based on our risk assessment of the average time taken for the
performance obligations on orders to be satisfied.
The risk is specifically relating to the incentive for management to
manipulate the results in order to achieve performance expectations,
and the fraud risk factors specific to Wickes indicate there may be an
incentive to accelerate income recognition in the current period.
We continue to perform procedures over completeness of Design &
Installation revenues. However, following the current macroeconomic
conditions and related pressures on performance, we have assessed
existence, rather than completeness, of Design & Installation revenues
recognised, to be one of the most significant risks in our current year
audit and, therefore, have not identified completeness of Design &
Installation revenues separately in our report this year.
We performed the detailed tests below rather than seeking to rely on any of the Group’s controls because
our knowledge of the design of these controls indicated that we would not be able to obtain the required
evidence to support reliance on controls. Our procedures included:
– Accounting analysis: We performed an analysis of the order data and compared this to our expectation
(including corroborating any outliers), including:
– the monthly order profile;
– the revenue and deferral profile of orders; and
– the revenue profile by order date;
– Tests of details: We carried out sample testing of revenue recognised on Design & Installation orders
received in theperiod we determined to relate to our significant risk, to assess whether they satisfied the
criteria forrecognising revenue in the financial period, including agreeing to delivery and/or installation
documentation, where applicable.
Our results
– We considered the amount of Design & Installation revenue recognised in the financial year, to be
acceptable (2022: acceptable).
2.Key audit matters: our assessment of risks of material misstatement continued
Independent Auditor’s report continued
Wickes Group Plc Annual Report and Accounts 2023134
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Financial statements
Other information
Strategic report
The risk Our response
Recoverability of parent
Company’s investment
insubsidiary
Investment in subsidiary
carrying value (£603.4 million;
2022: £598.9 million) and
impairment charge
(Nil;2022: £175.6)
Refer to page 103 (accounting
policy) and page 173 (financial
disclosures).
Forecast based assessment:
The carrying amount of the parent Company’s investment in its subsidiary
is significant and at risk of irrecoverability due to the current macroeconomic
environment. The estimated recoverable amount of this balance is
subjective due to the inherent uncertainty in forecasting trading
conditions and cash flows used in the budgets. In addition to this, the
market capitalisation of the group is significantly below the carrying
value of the investment.
The effect of these matters is that, as part of our risk assessment,
wedetermined that the recoverable amount of the cost of investment
in the subsidiary has a high degree of estimation uncertainty, with a
potential range of reasonable outcomes greater than our materiality
forthe financial statements as a whole, and possibly many times that
amount. The financial statements (note C6) disclose the sensitivity
estimated by the Company.
We performed the tests below rather than seeking to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to obtain audit evidence primarily through the detailed
procedures described. Our procedures included:
– Benchmarking assumptions: We challenged the assumptions used in the cash flows included in the
discounted cash flow calculation, including forecast revenue growth rate and gross margin based on our
knowledge of the Group and the markets in which it operates;
– Historical comparisons: We assessed the reasonableness of the cash flow forecasts by considering
the historical accuracy of the previous forecasts;
– Benchmarking assumptions: We challenged the key inputs used in the Group’s calculation of the discount
rate by comparing it to externally derived data, including available sources for comparable companies;
– Sensitivity analysis: We performed our own sensitivity analysis on the forecasts, including a reduction
in assumed revenue growth, gross margin, growth rate in the terminal value, and discount rates;
– Our sector experience: We evaluated the current level of trading, including identifying any indications of
a downturn in activity, by examining the post financial year end management accounts, considering our
knowledge of the Group and the market, and external expectations of future financial performance;
– Comparing valuations: We obtained and corroborated explanations regarding significant differences
between market capitalisation and the carrying value of the investment; and
– Assessing transparency: We assessed whether the Group’s disclosures regarding the sensitivity of the
outcome of the impairment assessment to changes in key assumptions appropriately reflects the risks
inherent in the recoverable amount of investment in subsidiaries.
Our results
– We found the balance of the Company’s investments in its subsidiary to be acceptable (2022: the
Company’s investment in its subsidiary and the related impairment charge to both be acceptable).
3. Our application of materiality and
anoverviewof the scope of our audit
Materiality for the group financial statements as a
whole was set at £2.4m (2022: £3.5m), determined
with reference to a benchmark of group profit
before tax, normalised to exclude adjusting items
of £10.9m (2022: £35.1m) as disclosed in note 9, of
which it represents 4.6% (2022: 4.6%). We adjusted
for these items because they do not represent the
normal, continuing operations of the Group.
Materiality for the parent company financial
statements as a whole was set at £2.3m
(2022: £3.4m), determined with reference to
abenchmark of parent Company total assets,
ofwhich it represents 0.4% (2022: 0.6%).
In line with our audit methodology, our procedures
on individual account balances and disclosures
were performed to a lower threshold, performance
materiality, so as to reduce to an acceptable level
the risk that individually immaterial misstatements
in individual account balances add up to a material
amount across the financial statements as a whole.
Performance materiality was set at 65% (2022: 65%)
of materiality for the financial statements as a whole,
which equates to £1.6m (2022: £2.3m) for the Group
and £1.5m (2022: £2.2m) for the parent Company.
We applied this percentage in our determination
ofperformance materiality based on the level of
identified misstatements and control deficiencies
during the prior period.
We agreed to report to the Audit Committee any
corrected or uncorrected identified misstatements
exceeding £0.12m (2022: £0.17m), in addition to
other identified misstatements that warranted
reporting on qualitative grounds.
Of the Group’s 5 (2022: 5) reporting components,
we subjected 2 (2022: 2) to full scope audits for
group purposes and 1 (2022: 1) to specified
risk-focused audit procedures over treasury related
balances. The latter was not financially significant
enough to require a full scope audit for group
purposes, but did present specific individual risks
that needed to be addressed. The components
within the scope of our work accounted for the
percentages illustrated opposite.
For the residual components, we performed
analysis at an aggregated group level to re-examine
our assessment that there were no significant risks
of material misstatement within these.
2.Key audit matters: our assessment of risks of material misstatement continued
Wickes Group Plc Annual Report and Accounts 2023 135
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Financial statements
Other information
Strategic report
Adjusted profit before tax
£52.0m (2022: £75.4m)
Group materiality
£2.4m (2022: £3.5m)
£2.4m
Whole financial statements materiality (2022: £3.5m)
£1.6m
Whole financial statements
performance materiality (2022: £2.3m)
£2.3m
Range of materiality at 3 components (£1.0m to £2.3m)
(2022: £1.0m to £3.4m at 3 component)
£0.12m
Misstatements reported to the
audit committee (2022: £0.17m)
Group materiality
Normalised PBT
Group revenue Group profit before tax
Specified risk-focused
audit procedures 2023
Full scope for group
audit purposes 2023
Full scope for group
audit purposes 2022
Specified risk-focused
audit procedures 2022
Group total assets
Adjusted profit before tax
100%
(2022: 100%)
100%
100%
100%
100%
100%
91%
9%
100%
100%
100%
(2022: 100%)
100%
(2022: 100%)
100%
(2022: 100%)
3. Our application of materiality and
anoverviewof the scope of our audit continued
The Group team set the component materiality’s,
which ranged from £1.0m to £2.3m (2022: £1.0m
to £3.4m), having regard to the mix of size and risk
profile of the Group across the components.
The audit of all components, including the audit
ofthe parent Company were completed by the
Group engagement team, who also performed
procedures on those items excluded from
adjustedprofit before tax.
The scope of the audit work performed was
predominantly substantive as we placed limited
reliance upon the Group’s internal control over
financial reporting.
4. The impact of climate change on our audit
We considered the impacts of climate change on
the financial statements as part of our planning of
the Group audit, including enquiries of the Directors
to understand the extent of the potential impact
ofclimate change risk on the Group’s financial
statements and the Group’s preparedness for this.
The key areas of our consideration included the
Group’s plan to be a net zero business by 2040, and
todecarbonise various parts of the business.
We did not consider that any specific areas of the
financial statements were materially affected by
assumptions or commitments made in relation
toclimate change.
There was no significant impact of this on our
keyaudit matters.
We also read the disclosure of climate related
information in the front half of the annual report
and considered consistency with the financial
statements and our audit knowledge. We have
notbeen engaged to provide assurance over
theaccuracy of these disclosures.
5. Going concern
The Directors have prepared the financial
statements on the going concern basis as they
donot intend to liquidate the Group or the parent
Company or to cease their operations, and they
have concluded that the Group’s and the parent
Company’s financial position means that this is
realistic. They have also concluded that there are
no material uncertainties that could have cast
significant doubt over their ability to continue
asagoing concern for at least a year from the
dateof approval of the financial statements
(“thegoing concern period”).
We used our knowledge of the Group, its industry,
and the general economic environment to identify
the inherent risks to its business model and analysed
how those risks might affect the Group’s and
parent Company’s financial resources or ability to
continue operations over the going concern period.
The risk that we considered most likely to adversely
affect the Group’s and parent Company’s available
financial resources over this period was the impact
on the demand for the Group’s products which may
impact Group performance for the 2024 period end.
We also considered less predictable but realistic
second order impacts, such as the current
macroeconomic environment and the erosion
ofcustomer confidence, which could result in
arapid reduction of available financial resources.
We considered whether these risks could plausibly
affect the liquidity in the going concern period by
comparing severe, but plausible downside scenarios
that could arise from these risks individually and
collectively against the level of available financial
resources indicated by the Group’s financial forecasts.
Independent Auditor’s report continued
Wickes Group Plc Annual Report and Accounts 2023136
Governance
Financial statements
Other information
Strategic report
5. Going concern continued
We considered whether the going concern disclosure
in note 1 to the financial statements gives a full and
accurate description of the Directors’ assessment of
going concern, including the identified risks, and
related sensitivities. We also assessed the
completeness of the going concern disclosure.
Our conclusions based on this work:
– we consider that the Directors’ use of the going
concern basis of accounting in the preparation
of the financial statements is appropriate;
– we have not identified, and concur with the
Directors’ assessment that there is not, a
material uncertainty related to events or
conditions that, individually or collectively, may
cast significant doubt on the Group’s or parent
Company’s ability to continue as a going
concern for the going concern period;
– we have nothing material to add or draw attention
to in relation to the Directors’ statement in note 1
to the financial statements on the use of the
going concern basis of accounting with no
material uncertainties that may cast significant
doubt over the Group and parent Company’s
useof that basis for the going concern period,
and we found the going concern disclosure in
note 1 to be acceptable; and
– the related statement under the Listing Rules set
out on page 83 is materially consistent with the
financial statements and our audit knowledge.
However, as we cannot predict all future events
orconditions and as subsequent events may result
in outcomes that are inconsistent with judgements
that were reasonable at the time they were made,
the above conclusions are not a guarantee that the
Group or the parent Company will continue in operation.
6. Fraud and breaches of laws and
regulations–ability to detect
Identifying and responding to risks of
materialmisstatement due to fraud
To identify risks of material misstatement due to fraud
(“fraud risks”) we assessed events or conditions that
could indicate an incentive or pressure to commit
fraud or provide an opportunity to commit fraud.
Ourrisk assessment procedures included:
– Enquiring of the Directors and Audit Committee as
to the Group’s high-level policies and procedures to
prevent and detect fraud, including the internal audit
function, as well as whether they have knowledge of
any actual, suspected or alleged fraud.
– Reading Board and Audit Committee minutes.
– Considering remuneration incentive schemes
and performance targets for management
(including Directors) including the profit target
for management remuneration.
– Using analytical procedures to identify any
unusual or unexpected relationships.
We communicated identified fraud risks
throughout the audit team and remained alert
toany indications of fraud throughout the audit.
As required by auditing standards, and taking into
account possible pressures to meet profit targets,
we perform procedures to address the risk of
management override of controls and the risk
offraudulent revenue recognition, in particular:
– the risk that Group management may be in a
position to make inappropriate accounting entries;
– the risk of bias in accounting estimates; and
– the risk that Design & Installation revenue is
overstated through recording revenues in the
wrong period in order to increase the likelihood
of management meeting profit targets for the
period.
We did not identify any additional fraud risks.
Further detail in respect of the Design & Installation
revenue risk isset out in the key audit matter
disclosures in section 2 of this report.
We also performed procedures including:
– Identifying journal entries and other adjustments
to test based on risk criteria and comparing the
identified entries to supporting documentation.
These included those posted by certain Executive
Directors and unusual account pairings.
– Assessing whether the judgements made in
making accounting estimates are indicative of
apotential bias.
Identifying and responding to risks
ofmaterialmisstatement due to
non-compliance with laws and regulations
We identified areas of laws and regulations that
could reasonably be expected to have a material
effect on the financial statements from our general
commercial and sector experience, and through
discussion with the Directors and other management
(as required by auditing standards) and discussed
with the Directors and other management, policies
and procedures regarding compliance with laws
and regulations.
As the Group is regulated, our assessment of risks
involved gaining an understanding of the control
environment including the entity’s procedures for
complying with regulatory requirements.
We communicated identified laws and regulations
throughout our team and remained alert to any
indications of non-compliance throughout the audit.
The potential effect of these laws and regulations
on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations
that directly affect the financial statements
including financial reporting legislation (including
related companies legislation), distributable profits
legislation, and taxation legislation, and we
assessed the extent of compliance with these laws
and regulations as part of our procedures on the
related financial statement items.
Secondly, the Group is subject to many other
lawsand regulations where the consequences
ofnon-compliance could have a material effect
onamounts or disclosures in the financial
statements, for instance through the imposition
offines or litigation or the loss of the Group’s
license to operate. We identified the following
areas as those most likely to have such an effect:
health and safety, data protection laws, anti-
bribery, employment law, consumer credit law, and
certain aspects of company legislation recognising
the financial and regulated nature of the Group’s
activities and its legal form. Auditing standards
limit the required audit procedures to identify
non-compliance with these laws and regulations
toenquiry of the Directors and other management
and inspection of regulatory and legal correspondence,
if any. Therefore if a breach of operational regulations
is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect
fraudor breaches of law or regulation
Owing to the inherent limitations of an audit,
thereis an unavoidable risk that we may not
havedetected some material misstatements in
thefinancial statements, even though we have
properly planned and performed our audit in
accordance with auditing standards. For example,
the further removed non-compliance with laws and
regulations is from the events and transactions
reflected in the financial statements, the less likely
the inherently limited procedures required by
auditing standards would identify it.
Wickes Group Plc Annual Report and Accounts 2023 137
Governance
Financial statements
Other information
Strategic report
6. Fraud and breaches of laws and
regulations–ability to detect continued
In addition, as with any audit, there remained
ahigher risk of non-detection of fraud, as
thesemay involve collusion, forgery, intentional
omissions, misrepresentations, or the override
ofinternal controls. Our audit procedures are
designed to detect material misstatement. We are
not responsible for preventing non-compliance
orfraud and cannot be expected to detect
non-compliance with all laws and regulations.
7. We have nothing to report on the other
information in the Annual Report & Accounts
The Directors are responsible for the other information
presented in the Annual Report together with the
financial statements. Our opinion on the financial
statements does not cover the other information
and, accordingly, we do not express an audit opinion
or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information
and, in doing so, consider whether, based on our
financial statements audit work, the information
therein is materially misstated or inconsistent with
the financial statements or our audit knowledge.
Based solely on that work we have not identified
material misstatements in the other information.
Strategic report and Directors’ report
Based solely on our work on the other information:
– we have not identified material misstatements
inthe strategic report and the Directors’ report;
– in our opinion the information given in those
reports for the financial period is consistent
withthe financial statements; and
– in our opinion those reports have been prepared
in accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Disclosures of emerging and principal
risksandlonger-term viability
We are required to perform procedures to identify
whether there is a material inconsistency between
the Directors’ disclosures in respect of emerging
and principal risks and the viability statement, and
the financial statements and our audit knowledge.
Based on those procedures, we have nothing
material to add or draw attention to in relation to:
– the Directors’ confirmation within the viability
statement that they have carried out a robust
assessment of the emerging and principal risks
facing the Group, including those that would
threaten its business model, future performance,
solvency and liquidity;
– the Principal risks and uncertainties disclosures
describing these risks and how emerging risks
are identified, and explaining how they are being
managed and mitigated; and
– the Directors’ explanation in the viability statement
of how they have assessed the prospects of the
Group, over what period they have done so and
why they considered that period to be appropriate,
and their statement as to whether they have a
reasonable expectation that the Group will be able
to continue in operation and meet its liabilities as
they fall due over the period of their assessment,
including any related disclosures drawing attention
to any necessary qualifications or assumptions.
We are also required to review the viability
statement, set out on page 82 under the Listing
Rules. Based on the above procedures, we have
concluded that the above disclosures are materially
consistent with the financial statements and our
audit knowledge.
Our work is limited to assessing these matters in
the context of only the knowledge acquired during
our financial statements audit. As we cannot predict
all future events or conditions and as subsequent
events may result in outcomes that are inconsistent
with judgements that were reasonable at the time
they were made, the absence of anything to report
on these statements is not a guarantee as to the
Group’s and parent Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify
whether there is a material inconsistency between
the Directors’ corporate governance disclosures
and the financial statements and our audit knowledge.
Based on those procedures, we have concluded
that each of the following is materially consistent
with the financial statements and our audit knowledge:
– the Directors’ statement that they consider that
the annual report and financial statements taken
as a whole is fair, balanced and understandable,
and provides the information necessary for
shareholders to assess the Group’s position
andperformance, business model and strategy;
– the section of the annual report describing the
work of the Audit Committee, including the
significant issues that the audit committee
considered in relation to the financial statements,
and how these issues were addressed; and
– the section of the annual report that describes
the review of the effectiveness of the Group’s
risk management and internal control systems.
We are required to review the part of the Corporate
Governance Statement relating to the Group’s
compliance with the provisions of the UK Corporate
Governance Code specified by the Listing Rules for
our review. We have nothing to report in this respect.
8. We have nothing to report on the other matters
on which we are required to report by exception
Under the Companies Act 2006, we are required
toreport to you if, in our opinion:
– adequate accounting records have not been kept
by the parent Company, or returns adequate for
our audit have not been received from branches
not visited by us; or
– the parent Company financial statements and
the part of the Directors’ Remuneration Report
to be audited are not in agreement with the
accounting records and returns; or
– certain disclosures of Directors’ remuneration
specified by law are not made; or
– we have not received all the information and
explanations we require for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on
page 131, the Directors are responsible for: the
preparation of the financial statements including
being satisfied that they give a true and fair view;
such internal control as they determine is necessary
to enable the preparation of financial statements that
are free from material misstatement, whether due to
fraud or error; assessing the Group and parent
Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern; and using the going concern basis of
accounting unless they either intend to liquidate the
Group or the parent Company or to cease operations,
or have no realistic alternative but to do so.
Independent Auditor’s report continued
Wickes Group Plc Annual Report and Accounts 2023138
Governance
Financial statements
Other information
Strategic report
9. Respective responsibilities continued
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
to fraud or error, and to issue our opinion in an
auditor’s report. Reasonable assurance is a high
level of assurance, but does not guarantee that
anaudit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error
and are considered material if, individually or in
aggregate, they could reasonably be expected to
influence the economic decisions of users taken
on the basis of the financial statements.
A fuller description of our responsibilities
isprovided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial
statements in an annual financial report prepared
under Disclosure Guidance and Transparency Rule
4.1.17R and 4.1.18R. This auditor’s report provides
no assurance over whether the annual financial
report has been prepared in accordance with
thatformat.
10. The purpose of our audit work and
towhomwe owe our responsibilities
This report is made solely to the Company’s
members, as a body, in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit
work has been undertaken so that we might state
to the Company’s members those matters we
arerequired to state to them in an auditor’s report
and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume
responsibility to anyone other than the Company
and the Company’s members, as a body, for our
audit work, for this report, or for the opinions we
have formed.
Andrew Cawthray
(Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
One Snowhill
Snow Hill Queensway
Birmingham
B4 6GH
18 March 2024
Wickes Group Plc Annual Report and Accounts 2023 139
Governance
Financial statements
Other information
Strategic report
Consolidated income statement and other comprehensive income
52 weeks ended 52 weeks ended
30December 202331December 2022
(£m)
Notes
(Re-presented*)
Revenue
5
1,553.8
1,562.4
Cost of sales
(988.8)
(990.2)
Gross profit
565.0
572.2
Selling costs
(341.6)
(347.9)
Administrative expenses
(160.5)
(155.5)
Operating profit
6
62.9
68.8
Net finance costs
7
(21.8)
(28.5)
Profit before tax
41.1
40.3
Tax
10
(11.3)
(8.4)
Profit for the period and total comprehensive income
29.8
31.9
Profit for the period attributable to owners of the parent company
29.8
31.9
Earnings per share
Basic
11
11.8p
12.6p
Diluted
11
11.7p
12.5p
Adjusted results
Adjusted revenue
5
1,553.8
1,559.0
Adjusted gross profit
9
568.1
567.1
Adjusted operating profit
9
73.8
103.9
Adjusted profit before tax
9
52.0
75.4
Adjusted profit after tax
9
38.1
60.2
Adjusted basic earnings per share
11
15.1p
23.8p
Adjusted diluted earnings per share
11
14.9p
23.7p
1
1 Defined in the summary of accounting policies (note 2)
* For details of re-presentation please see note 6.
Wickes Group Plc Annual Report and Accounts 2023140
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Financial statements
Other information
Strategic report
Consolidated balance sheet
As at As at
30 December 31 December
(£m)
Notes
 2023 2022
Assets
Non-current assets
Goodwill
12
8.4
8.4
Other intangible assets
12
14.3
16.6
Property, plant and equipment
13
123.2
114.9
Right-of-use assets
14
537.1
542.4
Deferred tax asset
16
23.0
22.7
Total non-current assets
706.0
705.0
Current assets
Inventories
18
195.5
201.6
Trade and other receivables
19
74.1
87.4
Corporation tax
–
8.4
Derivative financial instruments
29
–
2.6
Cash and cash equivalents
20
97.5
99.5
Total current assets
367.1
399.5
Total assets
1,073.1
1,104.5
As at As at
30 December31 December
(£m)
Notes
 20232022
Equity and Liabilities
Capital and reserves
Issued share capital
21
25.2
26.0
Capital redemption reserve
21
0.8
–
EBT share reserve
21
(0.7)
(0.7)
Other reserves
21
(785.7)
(785.7)
Retained earnings
923.7
924.8
Total equity
163.3
164.4
Non-current liabilities
Lease liabilities
14, 23
596.0
610.4
Long-term provisions
24
2.3
1.8
Total non-current liabilities
598.3
612.2
Current liabilities
Lease liabilities
14, 23
79.8
80.9
Trade and other payables
25
219.1
237.7
Corporation tax
1.6
–
Derivative financial instruments
29
0.7
0.2
Short-term provisions
24
10.3
9.1
Total current liabilities
311.5
327.9
Total liabilities
909.8
940.1
Total equity and liabilities
1,073.1
1,104.5
The consolidated financial statements of Wickes Group Plc, registered number 12189061, were approved
by the Board of Directors on 18 March 2024 and signed on its behalf by:
David Wood Mark George
Chief Executive Officer Chief Financial Officer
Wickes Group Plc Annual Report and Accounts 2023 141
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Strategic report
Consolidated statement of changes in equity
Issued Capital EBT
share redemption Share Other Retained Total
(£m)
Notes
 capitalreservereservereserves earnings equity
At 1 January 2022
26.0
–
(0.8)
(785.7)
921.3
160.8
Profit for the period and other comprehensive income
–
–
–
–
31.9
31.9
Dividends paid
26
–
–
–
–
(31.2)
(31.2)
Equity-settled share-based payments
27
–
–
0.1
–
4.3
4.4
Tax on equity-settled share-based payments
–
–
–
–
(1.5)
(1.5)
At 31 December 2022
26.0
–
(0.7)
(785.7)
924.8
164.4
Profit for the period and other comprehensive income
–
–
–
–
29.8
29.8
Dividends paid
26
–
–
–
–
(27.4)
(27.4)
Share buyback and cancellation
21
(0.8)
0.8
–
–
(10.1)
(10.1)
Purchase of own shares
21
–
–
(0.2)
–
–
(0.2)
Equity-settled share-based payments
27
–
–
0.2
–
5.4
5.6
Tax on equity-settled share-based payments
–
–
–
–
1.2
1.2
At 30 December 2023
25.2
0.8
(0.7)
(785.7)
923.7
163.3
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Strategic report
Consolidated cash flow statement
52 weeks
52 weeks ended
ended 31 December
30 December 2022
(£m)
Notes
2023(Re-presented*)
Cash flows from operating activities
Operating profit
62.9
68.8
Adjustments for:
Amortisation of other intangible assets
12
6.6
5.2
Depreciation of property, plant and equipment
13
21.1
20.1
Depreciation of right-of-use assets
14
74.2
77.7
Impairment of property, plant and equipment
15
–
0.4
Impairment of right-of-use assets
15
2.7
15.4
Reversal of impairment of right-of-use assets
15
(3.7)
–
Losses/(gains) on terminations of leases
6
0.1
(1.8)
Write-off of intangible assets
6
1.5
–
Losses on disposal of other intangible assets
6
0.3
–
Losses on disposal of property, plant and equipment
6
2.6
0.6
Derivative fair value losses/(gains)
9
3.1
(1.7)
Share-based payments
27
5.6
4.4
Operating cash flows
177.0
189.1
Movements in working capital:
Decrease/(increase) in inventories
6.1
(13.4)
Decrease/(increase) in trade and other receivables
13.4
(9.9)
Decrease in trade and other payables
(18.6)
(4.1)
Increase/(decrease) in provisions
1.7
(1.3)
Cash generated from operations
179.6
160.4
Income taxes paid
(0.3)
(4.3)
Net cash inflow from operating activities
179.3
156.1
52 weeks
52 weeks ended
ended 31 December
30 December 2022
(£m)
Notes
 2023(Re-presented*)
Cash flows from investing activities
Purchases of property, plant and equipment
(32.1)
(31.1)
Development costs of computer software
(6.1)
(9.3)
Proceeds on disposal of property, plant and equipment
0.1
0.4
Interest received
7.2
1.9
Net cash outflow from investing activities
(30.9)
(38.1)
Cash flows from financing activities
Interest paid
(1.0)
(1.0)
Interest on lease liabilities
(28.2)
(29.4)
Payment of principal of lease liabilities
(84.3)
(82.4)
Lease incentives received
0.8
2.1
Own shares purchased for share schemes
(0.2)
–
Share buyback
(10.1)
–
Dividends paid to equity holders of the Parent
26
(27.4)
(31.2)
Net cash outflow from financing activities
(150.4)
(141.9)
Net decrease in cash and cash equivalents
(2.0)
(23.9)
Cash and cash equivalents at the beginning of the period
99.5
123.4
Cash and cash equivalents at the end of the period
20
97.5
99.5
Adjusting items
9
Adjusting items paid included in the cash flow
10.4
21.7
Total pre-tax Adjusting items
10.9
35.1
* For details of re-presentation please see note 6. Additionally, the comparative cash flows have been re-presented to include interest paid and interest on lease liabilities as a financing rather than an operating cash flow. The change in presentation
represents a voluntary change in accounting policy in line with IAS 8 and represents a more relevant grouping of cash flows in line with the nature of the business. This re-presentation increases the net cash inflow from operating activities and
increases the net cash outflow from financing activities for the 52 weeks ended 31 December 2022 by £3 0. 4m. No change has been made to the total cash flow for the comparative period.
Wickes Group Plc Annual Report and Accounts 2023 143
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Strategic report
1 General information and accounting policies
Overview
Wickes Group Plc (the ‘Company’) is a limited company incorporated on 4 September 2019 in
the United Kingdom, incorporated under the Companies Act 2006. The registered office of the
Company is 19 Colonial Way, Watford, WD24 4JL.
The consolidated financial statements represent the results of the Company and its subsidiaries
(together referred to as the ‘Group’).
The principal activity of the Group is the operation of retail DIY stores across the United Kingdom.
Basis of accounting
The annual financial statements of the Group for the 52 weeks ending 30 December 2023 have been
prepared in accordance with UK-adopted international accounting standards. The comparative financial
period was 52 weeks to 31 December 2022.
The Company has elected to prepare its Parent Company financial statements in accordance with
Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic
of Ireland’; these are presented on pages 170-174.
Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis, except that
certain financial instruments including derivative instruments, and certain share-based payments
are stated at their fair value.
Going concern
Based on the Group’s liquidity position and cash flow projections, including a forward looking severe but
plausible scenario, the Directors have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the duration of the going concern period,
being the 12 month period following the date of approval of these financial statements, and accordingly
they continue to adopt the going concern basis of accounting in preparing the consolidated financial
statements for the period ended 30 December 2023.
The Group’s business activities, together with the factors likely to affect its future development,
performance and position are set out in the strategic report. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are described in the Financial Review on pages 30-33.
The principal risks and viability statement of the Group are set out on pages 75-83. The Directors have
considered these areas and how they may impact going concern.
The Directors do not consider going concern to be a critical accounting judgement. In determining this
the Directors have taken into account the ongoing profitability and positive operating cash flow in 2023,
despite the impacts of the economic environment in the UK. Although the Group saw some weakening of
sales as a result of the ongoing cost of living crisis, and continuing cost pressures in the second half of
the 2023 financial year, the Group continues to demonstrate the flexibility of Wickes’ operational model,
including a number of actions undertaken to both respond to more challenging market conditions and to
continue to drive efficiencies within the business in 2024.
At 30 December 2023, cash and cash equivalents stood at £97.5m. In addition the Group had available
an undrawn committed Revolving Credit Facility (RCF) of £80m which was extended after the year end,
now expiring in March 2028 with an additional one year extension, and which is not forecast to be utilised
for a period of at least 12 months.
Net debt stood at £578.3m relating to lease liabilities of £675.8m included on the balance sheet under
IFRS 16, with £79.8m due within one year: the Group has no other debt obligations.
Considering whether the Group’s financial statements can be prepared on a going concern basis, the
Directors have undertaken a detailed review which entails assessing the Group’s current and projected
financial performance and position, including current assets and liabilities, debt maturity profile, future
commitments and forecast cash flows. In forming their outlook on the future financial performance,
the Directors considered the risk of higher business volatility arising from the potential negative impact
of the general economic environment driven by the cost of living crisis.
The Directors’ review also included a severe but plausible scenario to assess the impact of a sales
reduction of 6% from 2023, a margin reduction of 1%, together with increases to energy costs and staff
costs, reflecting the current economic uncertainty. Under this severe but plausible scenario the Group
retains a significant cash balance and does not assume utilisation of the RCF.
The Directors remain watchful of ongoing pressures on customers and suppliers given the current
economic environment, and are aware that the Group is exposed to a number of risks and uncertainties,
which could affect the Group’s ability to meet its forecasts. The Directors believe that the Group has
the flexibility to react to changing market conditions and is adequately placed to manage its business
risks successfully.
2 Accounting policies
Functional and presentational currency
The financial information is presented in Pounds Sterling, the currency of the primary economic
environment in which the Group operates. All amounts in the financial statements have been
rounded to the nearest £0.1m except where otherwise noted.
Transactions denominated in foreign currencies are recorded at the rates ruling on the date of
the transaction. At the balance sheet date, monetary assets and liabilities denominated in foreign
currencies are translated at the rate of exchange ruling at that date. Foreign exchange differences
arising on translation are recognised in the income statement.
Business segments
The operating segments are identified on the basis of internal reports about components of the Group
that are regularly reviewed by the Chief Operating Decision Maker (“CODM”), which is considered to
be the Executive Board of Directors, to assess performance and allocate capital. Management considers
there to be one operating segment.
Notes to the consolidated financial statements
Wickes Group Plc Annual Report and Accounts 2023144
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Strategic report
2 Accounting policies continued
Alternative performance measures
The Group presents Alternative Performance Measures (“APMs”) in addition to the statutory results of
the Group. These are presented in accordance with the Guidelines on APMs issued by the European
Securities and Markets Authority (“ESMA”).
APMs used by the Group are set out in note 32 and the reconciling items between statutory and adjusted
results are described in more detail in note 9.
Adjusting items are those items of income and expenditure that, by reference to the Group, are material
in size or unusual in nature or incidence and that in the judgement of the Directors should be disclosed
separately on the face of the consolidated financial statements to ensure both that the reader has an
understanding of the Group’s underlying trading performance and the separate impact of one off or
unusual events in the year, and that there is comparability of financial performance between periods.
Items of income or expense that are considered by the Directors for designation as adjusting items
include, but are not limited to, significant restructurings, incremental costs relating to corporate transactions,
significant write downs or impairments (or impairment reversals) of current and non-current assets, the
associated costs of separating the business from the former parent company Travis Perkins Plc’s IT
systems, net unrealised gains and losses on remeasurement of foreign exchange derivatives held at fair
value, the effect of changes in corporation tax rates on deferred tax balances, and in the comparative
period a reclaim of overpaid VAT relating to prior years.
2.1.  Impact of new standards and interpretations
The following standards and interpretations, which have not yet been applied in these consolidated
financial statements, have been issued by the IASB but not yet adopted by the UK Endorsement Board:
– Amendments to IAS 21 – Lack of exchangeability
The following standards have been adopted by the UK Endorsement Board but are not yet effective
for the Group
– Amendments to IAS 1 – Presentation of Financial Statements
– Amendments to IFRS 16 – Leases
– Amendments to IAS 7 – Statement of Cash Flows
– Amendments to IFRS 7 – Financial Instruments: Disclosures
– Amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates
Adoption of these standards in future periods is not expected to have a material impact on the
financial statements.
2.2. Revenue
Revenue is recognised when the Group has satisfied its performance obligations to the customer and
the customer has obtained control of the goods or services being transferred. Revenue is measured at the
transaction price received or receivable less a deduction for actual and expected returns and represents
amounts receivable for goods and services provided in the normal course of business, net of discounts
and value added tax.
Customers are entitled to return goods for a period after purchase. A right of return is not a separate
performance obligation and the Group is required to recognise revenue net of estimated returns.
A refund liability and a corresponding asset in inventory representing the right to recover products
from the customer are recognised.
Services comprise kitchen and bathroom installations and these are typically completed over a short period
of time. The Group does not sell installation services separately from the sale of kitchen and bathroom
products. Control of installed kitchens and bathrooms passes to the customer when the Group has fulfilled
its obligations under the installation contract and revenue from the installation of kitchens and bathrooms
is recognised at this point.
2.3. Inventories
Inventories, which consist of goods for resale, are stated at the lower of average weighted cost and net
realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those
overheads that have been incurred in bringing the inventories to their present location and condition.
Net realisable value is the estimated selling price less the estimated costs of disposal.
Cost of inventories
In determining the cost of inventories the Directors have to make estimates to arrive at cost and net realisable
value. Determining the net realisable value of the wide range of products held in many locations requires an
assessment to be applied to determine the likely saleability of the product and the potential price that can be
achieved. In arriving at any provisions for net realisable value the Directors take into account the age, condition
and quality of the product stocked and the recent trend in sales. The Group does not consider that there is a
significant risk of material adjustment arising within the next financial period as a result of this estimate.
Wickes Group Plc Annual Report and Accounts 2023 145
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Strategic report
2 Accounting policies continued
2.4. Tax
The tax expense represents the sum of the tax payable and deferred tax.
Current tax
Tax payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income and expense that are taxable or deductible in other
periods and it further excludes items that are never taxable or deductible. The Group’s liability for current tax
is calculated using tax rates that have been enacted or substantially enacted by the balance sheet date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts
of assets and liabilities in the consolidated financial statements and the corresponding tax bases used
in the computation of taxable profit. This is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition of other assets and liabilities in a transaction (other than
in a business combination) that affects neither the taxable profit nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled
or the asset realised based on tax laws and rates that have been enacted or substantially enacted at the
balance sheet date. Deferred tax is charged or credited in the income statement, except when it relates
to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
In respect of the deferred tax on IFRS 16 leases, as Wickes Buildings Supplies Limited prepares its accounts
under FRS 102, tax deductions flow from the payment of rent, effectively the settlement of the lease liability.
This gives rise to a deferred tax asset in respect of that lease liability, including any onerous lease element
that might be required under FRS 102, and a deferred tax liability in respect of the corresponding right-of-
use asset. No initial recognition exception was utilised in respect of these. They are presented as the net
deferred tax asset/liability in the balance sheet and in the Lease section of the deferred tax note.
2.5. Goodwill and other intangible assets
Goodwill
Goodwill arising on acquisition represents the excess of the cost of acquisition over the share of the
aggregate fair value of identifiable net assets (including intangible assets) of a business or a subsidiary
at the date of acquisition. Goodwill is initially recognised as an asset and allocated to cash generating
units or groups of cash generating units that are expected to benefit from the synergies of the combination
and is then reviewed at least annually for impairment. Any impairment is recognised immediately in the
income statement and is not reversed. Goodwill is accordingly stated in the balance sheet at cost less
any provisions for impairment in value.
Software
The directly attributable costs incurred for the development of computer software controlled by and for
use within the Group are capitalised and written off as an expense over their estimated useful lives, which
range from 3 years to 10 years. Software operated under a ‘Software as a Service’ model is not considered
to be controlled by the Group and is expensed directly to the Income Statement. No amortisation is
charged on computer software under construction.
Costs relating to research, maintenance and training are expensed as they are incurred. Licence fees
for using third-party software which is not controlled by the Group are expensed over the period the
software is in use.
2.6. Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any impairment
in value, adjusted for impairment reversals. Assets are depreciated to their estimated residual value
on a straight-line basis over their estimated useful lives as follows:
– Leasehold improvements – term of the lease
– Plant and equipment – 3 to 10 years
– Freehold buildings – over remaining useful life
The residual value and useful life of assets are reviewed annually.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference
between the sale proceeds net of expenses and the carrying amount of the asset in the balance
sheet and is recognised in the income statement.
2.7. Supplier income
Supplier income comprises fixed price discounts and volume rebates.
Fixed price discounts and volume rebates received and receivable in respect of goods which have been sold
are initially deducted from the cost of inventory and therefore reduce cost of sales in the income statement
when the goods are sold. Where goods on which the fixed price discount or volume rebate has been earned
remain in inventory at the period end, the cost of that inventory reflects those discounts and rebates.
Supplier income receivable is netted off against trade payables when there is a legally binding
arrangement in place and it is management’s intention to settle net, otherwise amounts are included
in other receivables in the balance sheet.
2.8. Trade and other receivables
The Group’s trade and other receivables at the balance sheet date comprises principally of amounts receivable
from the sale of goods and related services, amounts due in respect of rebates and sundry prepayments.
Trade receivables, which are held at amortised cost, are subject to the expected credit loss model
in IFRS 9 – Financial Instruments. The Group applies the IFRS 9 – Financial Instruments simplified
approach to measuring expected credit losses. This uses a lifetime expected loss allowance for all
trade receivables. To measure the expected credit losses, trade receivables have been grouped based
on shared credit risk characteristics and the days past due.
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023146
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Strategic report
2 Accounting policies continued
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that
there is no reasonable expectation of recovery include the failure of a debtor to engage in a repayment
plan with the Group and the commencement of legal proceedings.
2.9. Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation
because of a past event, it is probable that an outflow of economic benefits will be required to settle the
obligation, and the amount can be measured reliably. Provisions are measured at the Directors’ best
estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted
to present value if the effect of the time value of money is material.
Should a provision ultimately prove to be unnecessary then it is credited back to the income statement.
Where the provision was originally established as an adjusting item, any release is shown as an
adjusting credit.
The Group’s stores operate from a significant number of leased properties. Where necessary a provision
has been made for the residual commitments for rates, other payments and expected dilapidations
charges after taking into account existing and anticipated subtenant arrangements.
It is Group policy to insure itself using policies with a high excess against claims arising in respect of
damage to assets, or due to employers or public liability claims. The nature of insurance claims means
they may take some time to be settled. The insurance claims provision represents management’s best
estimate, based upon external advice, of the value of outstanding claims against it where the final
settlement date is uncertain.
The Group provides a guarantee on showroom kitchen cabinets, doors, drawer fronts and showroom
bathroom products. The Group provides for future estimated costs of providing this guarantee on
kitchens and bathrooms that have previously been sold. The provision includes future costs for
installation workmanship as well as product cost.
2.10. Trade payables and liabilities
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing
costs and are measured at amortised cost. The Directors consider that the carrying amount of trade
payables approximates to their fair value.
2.11. Employee benefits – pensions
Payments to defined contribution retirement benefit schemes are recognised as an expense when
employees have rendered services entitling them to the contributions.
2.12. Equity
Equity instruments represent the ordinary share capital of the Group and are recorded at the proceeds
received, net of directly attributable incremental issue costs.
A description of the nature and purpose of each reserve is given below:
– The EBT share reserve represents shares held by the Group in connection with the operations of the
Group’s share plans.
– The ‘Other reserves’ was created on the acquisition in March 2020 by Wickes Group Plc of Wickes
Group Holdings Limited and by Wickes Group Holdings Limited of Wickes Building Supplies Limited
and Wickes Finance Limited, via share for share exchanges, and represents the difference between
the carrying value of the assets and liabilities of the acquired companies and the nominal value and
premium of the shares issued.
– The capital redemption reserve represents the amounts transferred from share capital on the
repurchase of issued shares.
– Retained earnings represents cumulative results for the Group.
2.13. Share repurchases
Shares purchased for cancellation are deducted from retained earnings. Share capital is reduced
and credited to the capital redemption reserve once shares are cancelled.
2.14. Leases
IFRS 16 – Leases establishes principles for the recognition, measurement, presentation and disclosure of
leases, with the objective of ensuring that lessees and lessors provide relevant information that faithfully
represents those transactions.
Identifying a lease
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is,
or contains, a lease if it conveys the right to control the use of an identified asset for a period of time
in exchange for consideration. Control is conveyed where the Group has both the right to direct the
identified asset’s use and to obtain substantially all the economic benefits from that use.
At inception or on reassessment of a contract that contains a lease component, the Group allocates
the consideration in the contract to each lease component on the basis of their relative standalone
prices. However, for plant and equipment leases in which it is a lessee, the Group has elected not to
separate non-lease components and account for the lease and non-lease components as a single
lease component.
For each lease or lease component, the Group follows the lease accounting model as per IFRS 16 –
Leases, unless the recognition exceptions can be used.
Recognition exceptions
The Group has elected to account for lease payments as an expense on a straight-line basis over
the lease term or another systematic basis for the following two types of leases:
(i) leases with a lease term of 12 months or less and containing no purchase options – this election
is made by class of underlying asset; and
(ii) leases where the underlying asset has a low value when new – this election can be made on
a lease-by-lease basis.
Wickes Group Plc Annual Report and Accounts 2023 147
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Strategic report
2 Accounting policies continued
For leases where the Group has taken short-term lease recognition exemption and there are any
changes to the lease term or the lease is modified, the Group accounts for the lease as a new lease.
Lessee accounting
Upon lease commencement the Group recognises a right-of-use asset and a lease liability.
Initial measurement
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or before the commencement date, plus any initial
direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or
to restore the underlying asset or the site on which it is located, less any lease incentives received.
The lease liability is initially measured at the present value of the lease payments payable over the lease
term, discounted at the rate implicit in the lease if that can be readily determined. If that rate cannot be
readily determined, the Group uses the incremental borrowing rate.
Variable lease payments that depend on an index or a rate are included in the initial measurement of the
lease liability and are initially measured using the index or rate as at the commencement date. Amounts
expected to be payable by the lessee under residual value guarantees are also included.
Variable lease payments that are not included in the measurement of the lease liability are recognised in
the income statement in the period in which the event or condition that triggers payment occurs, unless
the costs are included in the carrying amount of another asset under another accounting standard.
Subsequent measurement
After lease commencement, the Group measures right-of-use assets using a cost model. Under the cost
model a right-of-use asset is measured at cost less accumulated depreciation and accumulated impairment.
Any impairment reversal reduces accumulated impairment previously recognised to the extent that the
revised net book value does not exceed that which would have been recognised had no impairment occurred
previously and it continued to be depreciated. An impairment reversal excludes any impact resulting from the
passage of time.
The lease liability is subsequently remeasured to reflect changes in:
– the lease term (using a revised discount rate)
– the assessment of a purchase option (using a revised discount rate)
– the amounts expected to be payable under residual value guarantees (using an unchanged discount rate)
– future lease payments resulting from a change in an index or a rate used to determine those payments
(using an unchanged discount rate)
The remeasurements are matched by adjustments to the right-of-use asset. Additionally, direct costs
incurred as part of obtaining an additional lease term are added to the right-of-use asset.
Lease modifications may also prompt remeasurement of the lease liability unless they are determined
to be separate leases.
Depreciation
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The
estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant
and equipment. In addition the right-of-use asset is reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
Lessor accounting
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance or
operating lease. To classify each lease, the Group makes an overall assessment of whether the lease
transfers substantially all the risks and rewards incidental to ownership of an underlying asset. If this is
the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment,
the Group considers certain indicators such as whether the lease is for the major part of the economic
life of the asset.
The Group recognises operating lease payments as income on a straight-line basis over the lease term
as part of ‘other income’. The Group recognises finance income over the lease term of a finance lease,
based on a pattern reflecting a constant periodic rate of return on the net investment.
2.15. Borrowings
Interest bearing bank loans and overdrafts and other loans are recognised in the balance sheet initially at fair
value and subsequently at amortised cost. Finance charges associated with arranging the undrawn revolving
credit facility are recognised in the income statement over the life of the facility. All other borrowing costs are
recognised in the income statement in accordance with the effective interest rate method.
2.16. Net debt
Net debt comprises cash and cash equivalents (being cash balances net of overdrafts) and the carrying
value of lease liabilities. The carrying amount of these assets and liabilities approximates to their fair value.
2.17. Financial instruments
Classification
The Group classifies its financial instruments in the following measurement categories:
– those to be measured subsequently at fair value through profit or loss “FVTPL”; and
– those to be measured at amortised cost.
The classification depends on the business model for managing the financial instruments and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income (FVOCI). For investments in equity instruments that are not held for trading,
this will depend on whether the Group has made an irrevocable election at the time of initial recognition
to account for the equity investment at FVTPL or at FVOCI.
The Group reclassifies debt investments when and only when its business model for managing those
assets changes.
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023148
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Strategic report
2 Accounting policies continued
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial
asset not at FVTPL, transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVTPL are expensed in profit or loss.
Impairment
The Group assesses on a forward looking basis the expected credit losses associated with debt instruments
carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there
has been a significant increase in credit risk. For trade receivables, the Group applies the simplified
approach permitted by IFRS 9 – Financial Instruments, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
2.18. Impairment
Impairment of tangible and intangible assets
The carrying amounts of the Group’s tangible and intangible assets with a definite useful life are reviewed at each
balance sheet date to determine whether there is any indication of impairment to their value. If such an indication
exists, the asset’s recoverable amount is estimated and compared to its carrying value. Where the asset does
not generate cash flows that are independent from other assets, the Group estimates the recoverable amount
of the cash-generating unit (“CGU”) to which the asset belongs. The Group has determined that each store is
a separate CGU. The recoverable amount of an asset is the greater of its fair value less disposal cost and its
value-in-use (the present value of the future cash flows that the asset is expected to generate). In determining
value in use the present value of future cash flows is discounted using a pre-tax discount rate that reflects current
market assessments of the time value of money in relation to the period of the investment and the risks specific
to the asset concerned. The carrying value of CGUs includes right-of-use assets.
Where the carrying value exceeds the recoverable amount a provision for the impairment loss is established
with a charge being made to the income statement. When the reasons for a write down no longer exist
the write down is reversed in the income statement up to the net book value that the relevant asset would
have had if it had not been written down and if it had been depreciated. An impairment reversal excludes
any impact from the passage of time.
For intangible assets that have an indefinite useful life the recoverable amount is estimated at each
annual balance sheet date.
Measuring recoverable amounts
The Group tests goodwill for impairment annually or more frequently if there are indications that an
impairment may have occurred. The recoverable amount of the goodwill is determined from value
in use calculations.
2.19. Share-based payments
The Group issues equity-settled share-based payments to directors and certain employees. Equity-settled share-
based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the
date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, having been adjusted to reflect an estimate of shares that will
eventually vest and for the effect of non market-based vesting conditions.
Fair value is measured by use of the Black-Scholes pricing model which is considered by management
to be the most appropriate method of valuation. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and
behavioural considerations.
2.20. Post balance sheet events
These accounts reflect events only up to the date on which the relevant underlying consolidated financial
statements were approved.
3 Critical accounting judgements and key sources of estimation uncertainty
The preparation of financial statements requires the Directors to make judgements, estimates and assumptions
concerning the future that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. These judgements are based on historical experience and management’s best
knowledge at the time and the actual results may ultimately differ from these estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis and revisions are recognised in the period in which the
estimates are revised and in any future periods affected. The estimates and assumptions that have significant
risk of causing a material adjustment to the carrying value of assets and liabilities are explained below.
Impairment or impairment reversal of store assets (significant estimate)
Determining whether store assets (right-of-use assets relating primarily to the lease of each individual store, and
any associated property, plant and equipment) are impaired, or indicate an impairment reversal, requires an
estimation of the value in use of the cash-generating units to which such fixed assets have been allocated. The
value in use calculation requires estimation of future cash flows expected to arise from the cash-generating unit
(CGU) discounted at a suitable discount rate in order to calculate the present value. The significant estimates
relate to the discount rate used, the store revenue and gross margin over the 5 Year Plan period, and the
percentage of central costs allocated. Details of CGUs as well as further information about the assumptions
made are disclosed in note 15.
Wickes Group Plc Annual Report and Accounts 2023 149
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4 Auditor’s remuneration
During the period the Group incurred the following costs for services provided by the Company’s auditor:
52 weeks 52 weeks
ended ended
30 December 31 December
(£’000) 2023 2022
Fees payable to the Company’s auditor for audit services:
Audit of the Company’s annual accounts
100
100
Auditor for the audit of the Company’s subsidiaries
710
665
Fees paid to the Company’s auditor for other services:
Review of the interim statement
80
80
890
845
A description of how the Audit & Risk Committee ensures that auditor objectivity and independence
is safeguarded when the auditor provides non-audit services is set out in the report on page 104.
5 Revenue
The Group has one operating segment in accordance with IFRS 8 ‘Operating Segments’, which is the
retail of home improvement products and services, both in stores and online.
The Chief Operating Decision Maker is the Executive Board of Directors. Internal management reports
are reviewed by them on a regular basis. Performance of the segment is assessed based on a number
of financial and non-financial KPIs as well as on profit before taxation.
The Group identifies two distinct revenue streams within its operating segment which are analysed below.
Both revenue streams operate entirely in the United Kingdom. The Group’s revenue is driven by a large
number of individual small value transactions and as a result, Group revenue is not reliant on a major
customer or group of customers.
52 weeks 52 weeks
ended ended
Adjusted Revenue 30 December 31 December
(£m) 2023 2022
Retail (product revenue)
1,189.1
1,187.9
Design & Installation (project revenue)
364.7
371.1
1,553.8
1,559.0
52 weeks 52 weeks
ended ended
Revenue reconciliation and like-for-like adjusted revenue 30 December 31 December
(£m) 2023 2022
Adjusted revenue
1,553.8
1,559.0
Network change
(7.8)
(1.0)
Adjusted revenue (like-for-like basis)
1,546.0
1,558.0
Prior period adjusted revenue
1,559.0
1,534.9
Prior period network change
(8.0)
(5.1)
Prior period other movements
–
(24.5)
Prior period adjusted revenue (like-for-like basis)
1,551.0
1,505.3
(Decrease)/increase arising on a like-for-like basis
(5.0)
52.7
Like-for-like adjusted revenue (%)
(0.3)%
3.5%
Calculating like-for-like revenue enables management to monitor the performance trend of the business
period-on-period. It also gives management a good indication of the health of the business compared
to competitors.
Like-for-like revenue is a measure of sales performance for two successive periods. Stores contribute
to like-for-like revenue once they have been trading for more than twelve months. Revenue included
in like-for-like revenue is for the equivalent times in both periods being compared. When stores close,
revenue is excluded from the prior period figures for the months equivalent to the post closure period
in the current period. These movements are explained by the Network change amounts. The Network
change number varies year on year as it represents a different number of stores.
The comparative period other movements reflects the impact of the period ended 1 January 2022
being a 53 week period, in comparison to the period ended 31 December 2022, being a 52 week period.
The extra week is presented separately to enable direct comparison.
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023150
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6 Operating profit
Operating profit has been arrived at after charging/(crediting):
52 weeks 52 weeks
ended ended
30 December 31 December
(£m) 2023 2022
Realised net foreign exchange gains recognised in cost of sales
(1.6)
(4.9)
Derivative fair value losses/(gains)
3.1
(1.7)
Depreciation of property, plant and equipment (note 13)
21.1
20.1
Depreciation of right-of-use assets (note 14)
74.2
77.7
Amortisation of internally-generated intangible assets (note 12)
6.6
5.2
Impairment of right-of-use assets (note 14 and 15)
2.7
15.4
Reversal of impairment of right-of-use assets (note 14 and 15)
(3.7)
–
Impairment of property, plant and equipment (note 13 and 15)
–
0.4
Loss/(gain) on termination of leases
0.1
(1.8)
Write-off of intangible assets
1.5
–
Loss on disposal of other intangible assets
0.3
–
Loss on disposal of property, plant and equipment
2.6
0.6
Income from subleasing right-of-use assets (note 14)
(3.2)
(2.6)
Staff costs (note 8)
234.3
220.5
Income statement presentation
In the period ending 31 December 2022, to separately disclose measures of financial performance that,
in the opinion of the Directors, provided the reader of the financial statements with an understanding of
the Group’s underlying trading performance and the separate impact of one off or unusual events in the
financial year, the Group’s Income Statement included a separate column to present adjusting items.
To simplify the presentation of the Income Statement, provide prominence to the IFRS results and to adopt
the principles of ESMA guidelines on presenting alternative measures of financial performance, the Group now
presents a single column Income Statement that reports performance measured under IFRS. The Directors
continue to consider that the presentation of Alternative Performance Measures provides additional and
useful information to readers of the financial statements and accordingly continues to present Alternative
Performance Measures of performance, as set out in Note 9. This voluntary change in presentation has
been applied consistently in both periods ending 31 December 2022 and 30 December 2023.
Prior period re-presentation
In the year ended 30 December 2023 the Directors have reconsidered the presentation of net
unrealised gains and losses on remeasurement of foreign exchange derivatives held at fair value
relating to economic hedges.
Previously, in the Income Statement for the period ended 31 December 2022, the net unrealised gains
and losses on remeasurement of foreign exchange derivatives held at fair value were presented in net
finance costs. In the current period, these amounts have been presented in cost of sales to reflect that
these foreign currency derivatives are entered into to mitigate the foreign exchange volatility arising from
the Group’s purchase of inventory. As a result, the prior period income statement has been re-presented
to report the net unrealised gains and losses on remeasurement of foreign currency derivatives within
cost of sales.
The effect of these adjustments is that the reported cost of sales for the period ending 31 December
2022 has decreased by £1.7 million and the reported net finance costs have increased by £1.7 million.
The revised presentation has no effect on reported profit before tax, cash flows, net assets, or adjusted
measures of performance for any period presented (see note 9 for a reconciliation of adjusted measures).
7 Net finance costs
52 weeks
52 weeks ended
ended 31 December
30 December 2022
2023 (Re-presentation*)
Finance income
Interest receivable
7.5
1.9
7.5
1.9
Finance costs
Interest on lease liabilities (note 14)
(28.2)
(29.4)
Amortisation of loan arrangement fees
(0.3)
(0.3)
Commitment fee on revolving credit facilities
(0.7)
(0.7)
Other interest
(0.1)
–
(29.3)
(30.4)
Net finance costs
(21.8)
(28.5)
* For details of re-presentation please see note 6.
Wickes Group Plc Annual Report and Accounts 2023 151
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8 Staff costs
Average number of persons employed by the Group (including directors) during the period:
(No.)
52 weeks 52 weeks
ended ended
30 December 31 December
2023 2022
Administration
555
513
Stores and distribution
7,364
7,827
7,919
8,340
Average number of full-time equivalent persons employed by the Group during the period:
(No.)
52 weeks 52 weeks
ended ended
30 December 31 December
2023 2022
Administration
547
505
Stores and distribution
5,659
6,068
6,206
6,573
Aggregate payroll costs of these persons were as follows:
52 weeks 52 weeks
ended ended
30 December 31 December
(£m) 2023 2022
Wages and salaries
204.9
194.3
Social security costs
18.3
16.6
Other pension costs (defined contribution plans)
5.2
4.6
Share-based payments (equity-settled)
5.9
5.0
234.3
220.5
There are wages and salaries and social security costs for the 52 weeks ended 30 December 2023
of £0.5m in Adjusting items (52 weeks ended 31 December 2022: £0.2m).
The average number of stores and distribution persons employed by the Group during the period was
impacted by a new supply chain logistics contract that went live in 2023, whereby 339 colleagues were
transferred to the supplier, pursuant to TUPE regulations.
All qualifying employees are able to contribute to the Wickes Group Pension Plan, a defined contribution
pension scheme. A defined contribution plan is a pension plan under which fixed contributions are paid
into a pension fund and the Company has no legal or constructive obligation to pay further contributions.
The pension costs represent contributions payable by the Group.
The amounts charged to the Income Statement in respect of pension costs and other post-retirement
benefits are the contributions payable in the period. Differences between the contributions payable in
the period and those actually paid are shown as either accruals or prepayments in the balance sheet.
9 Reconciliation of alternative profit measures
As described in note 2, adjusted profit measures are an alternative performance measure used by the
Board to monitor the operating performance of the Group. Adjusting items are those items of income and
expenditure that, by reference to the Group, are material in size or unusual in nature or incidence and that
in the judgement of the Directors should be disclosed separately on the face of the financial statements to
ensure both that the reader has a proper understanding of the Group’s financial performance and that there is
comparability of financial performance between periods.
Items of income or expense that are considered by the Directors for designation as adjusting items include,
but are not limited to, significant restructurings, incremental costs relating to corporate transactions,
significant write downs or impairments (and reversals) of current and non-current assets, the costs of
separating the business from the former parent company Travis Perkins Plc’s IT systems, the effect of
changes in corporation tax rates on deferred tax balances, net unrealised gains and losses on
remeasurement of foreign exchange derivatives at fair value, and in the previous period a VAT reclaim
relating to overpaid output VAT in prior periods.
52 weeks ended 30 December 2023
(£m)
Revenue
Gross profit
Operating profit
Profit before tax
Profit after tax
Statutory performance
measures
1,553.8
565.0
62.9
41.1
29.8
Derivative fair value losses
–
3.1
3.1
3.1
3.1
Right-of-use asset
impairment charge
–
–
2.7
2.7
2.7
Reversal of impairment of
right-of-use asset recognised
in prior periods
–
–
(3.7)
(3.7)
(3.7)
IT separation project costs
–
–
8.8
8.8
8.8
Tax on adjusting items
–
–
–
–
(2.6)
Total adjustments to statutory
performance measures
–
3.1
10.9
10.9
8.3
Adjusted performance
measures
1,553.8
568.1
73.8
52.0
38.1
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023152
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Strategic report
9 Reconciliation of alternative profit measures continued
(£m)
52 weeks ended 31 December 2022 (Re-presented*)
Revenue
Gross profit
Operating profit
Profit before tax
Profit after tax
Statutory performance
measures
1,562.4
572.2
68.8
40.3
31.9
Output VAT reclaim
(3.4)
(3.4)
(3.4)
(3.4)
(3.4)
Derivative fair value gains
–
(1.7)
(1.7)
(1.7)
(1.7)
Property, plant and equipment
impairment charge
–
–
0.4
0.4
0.4
Right-of-use asset
impairment charge
–
–
15.4
15.4
15.4
IT separation project costs
–
–
24.4
24.4
24.4
Tax on adjusting items
–
–
–
–
(6.8)
Total adjustments to statutory
performance measures
(3.4)
(5.1)
35.1
35.1
28.3
Adjusted performance
measures
1,559.0
567.1
103.9
75.4
60.2
* For details of re-presentation please see note 6
Right-of-use asset and property, plant and equipment impairment charges and reversals
In the period ended 30 December 2023, 5 stores were identified as impaired with a resulting impairment
charge of £2.7m, and 5 were identified as having an impairment reversal of £3.7m, both to right-of-use
assets. Given the size of gross store impairment charge and reversal, this impairment charge and reversal
are included within adjusting items. Future revisions to these impairments will also be recognised within
adjusting items.
In the period ended 31 December 2022, 20 stores were identified as impaired with a resulting impairment
charge of £15.4m to right-of-use assets and £0.4m to property, plant and equipment.
Impairment charges are discussed in further detail in note 15.
IT separation project costs
IT separation project costs are the costs incurred to enable the Wickes Group to operate an IT environment
independent of Travis Perkins Plc. These include the following; the cost of creating standalone versions of
existing systems, the cost of transferring data from Travis Perkins Plc to standalone systems, the cost of
upgrading legacy systems including moving to ‘Software as a Service’ solutions and the costs of transitioning
the IT and support function into the Wickes environment including the project management costs of all the
above. Costs related to the maintenance and licensing of existing systems are included in adjusted profit
as these costs will continue after the separation project is concluded. Where costs meet the definition of
an intangible asset they have been capitalised, and future amortisation will be included in adjusted profit.
Derivative fair value movements
The Group recognises the potential for high levels of foreign exchange rate volatility and looks to mitigate
its economic impact on financial performance by hedging planned future foreign currency purchases
using foreign currency derivatives. The Group does not take advantage of the hedge accounting rules
provided for in IFRS 9 since that standard requires certain stringent criteria to be met to hedge account,
which, in the circumstances of the Group, are considered by the Board to not bring any significant
economic benefit. As a result, IFRS requires that fair value gains or losses on these derivatives be
recognised in the Income Statement.
In order to reflect the economic outcome of the forward contracts (derivatives), the impact of fair value
movement on the derivatives has been removed in the underlying results. During the 52 weeks ended
30 December 2023 this adjustment was a net loss of £3.1m (52 weeks ended 31 December 2022: gain
of £1.7m).
Output VAT reclaim
A claim for output VAT overpaid during the period from Q3 2018 to Q4 2021 was lodged with HMRC in
August 2022. The claim arose due to output VAT being paid in error on zero and reduced rate products.
Given the claim related to the three years prior to the comparative period, the £3.4m credit was reflected
in adjusting items. There was no such claim in the 52 weeks ended 30 December 2023.
10 Taxation
52 weeks 52 weeks
ended ended
30 December 31 December
(£m) 2023 2022
Current tax
UK corporation tax expense
10.4
6.2
UK corporation tax adjustment in respect of prior periods
0.1
(3.7)
Total current tax charge
10.5
2.5
Deferred tax
Deferred tax movement in period
(0.4)
0.6
Effect of change in tax rate
–
0.2
Adjustments in respect of prior periods
1.2
5.1
Total deferred tax charge
0.8
5.9
Total tax charge
11.3
8.4
The differences between the total tax charge and the amount calculated by applying the standard rate
of UK corporation tax of 23.5% (52 weeks ended 31 December 2022: 19.0%) to the profit before tax for
the Group are as follows:
Wickes Group Plc Annual Report and Accounts 2023 153
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Strategic report
10 Taxation continued
52 weeks 52 weeks
ended ended
30 December 31 December
(£m) 2023 2022
Profit before taxation
41.1
40.3
Tax at the standard corporation tax rate
9.7
7.7
Effects of:
Depreciation of non-qualifying property
0.9
1.0
Tax effect of non-taxable income and non-deductible expenses
(1.2)
(0.3)
Adjustment to prior period
1.3
1.4
Effect of share based payments
1.1
(0.2)
Other
(0.4)
0.2
Impact of super-deduction
(0.1)
(1.4)
Total tax charge
11.3
8.4
The effective tax rate for the period is 27.5% (52 weeks ended 31 December 2022: 20.8%). The effective
tax rate for the period was higher than the standard rate primarily due to an adjustment in respect of prior
periods relating to leases, and is expected to reverse in future periods. This adjustment and its tax effect
do not provide a guide to the Group’s future tax charge.
The underlying effective tax rate (before adjusting items) for the 52 weeks ended 30 December 2023
is 26.7% (52 weeks ended 31 December 2022: 20.2%). The underlying effective tax rate can be calculated
directly from the income statement.
11 Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company
by the weighted average number of ordinary shares outstanding during the 52 week period ended
30 December 2023.
52 weeks 52 weeks
ended ended
30 December 31 December
(£m) 2023 2022
Profit attributable to the owners of the Parent
29.8
31.9
(No.)
Weighted average number of ordinary shares
258,667,102
259,637,998
Adjustment for weighted average number of ordinary shares held
in EBT
(6,163,934)
(6,941,807)
Weighted average number of ordinary shares in issue
252,503,168
252,696,191
Basic earnings per share (in pence per share)
11.8p
12.6p
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to
include all dilutive potential ordinary shares arising from share options.
52 weeks 52 weeks
ended ended
30 December 31 December
(£m) 2023 2022
Profit attributable to the owners of the Parent
29.8
31.9
(No.)
Weighted average number of ordinary shares in issue
252,503,168
252,696,191
Diluted effect of share options on potential ordinary shares
2,804,387
1,698,226
Diluted weighted average number of ordinary shares in issue
255,307,555
254,394,417
Diluted earnings per share (in pence per share)
11.7p
12.5p
The Directors believe that EPS excluding Adjusting items (‘Adjusted EPS’) reflects the underlying performance
of the business before the impact of unusual or one off events and assists in providing the reader with a
consistent view of the trading performance of the Group.
Reconciliation of profit after taxation to profit after taxation excluding Adjusting items
(‘Adjusted profit’):
52 weeks 52 weeks
ended ended
30 December 31 December
(£m) 2023 2022
Profit attributable to the owners of the parent from continuing
operations
29.8
31.9
Adjusting items before tax
10.9
35.1
Tax on adjusting items
(2.6)
(6.8)
Adjusting items after tax (note 9)
8.3
28.3
Adjusted profit
38.1
60.2
Weighted average number of ordinary shares in issue
252,503,168
252,696,191
Weighted average number of dilutive ordinary shares in issue
255,307,555
254,394,417
Adjusted basic earnings per share (in pence per share)
15.1
23.8p
Adjusted diluted earnings per share (in pence per share)
14.9
23.7p
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023154
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Strategic report
12 Goodwill and other intangible assets
(£m)
Goodwill
Software
Total
Cost or valuation
At 1 January 2022
8.4
28.4
36.8
Additions
–
9.3
9.3
Disposals
–
(0.4)
(0.4)
At 31 December 2022
8.4
37.3
45.7
Additions
–
6.1
6.1
Write-offs
–
(1.5)
(1.5)
Disposals
–
(0.6)
(0.6)
At 30 December 2023
8.4
41.3
49.7
Amortisation
At 1 January 2022
–
15.9
15.9
Charged in the period
–
5.2
5.2
Disposals
–
(0.4)
(0.4)
31 December 2022
–
20.7
20.7
Charged in the period
–
6.6
6.6
Disposals
–
(0.3)
(0.3)
At 30 December 2023
–
27.0
27.0
Net book value
At 30 December 2023
8.4
14.3
22.7
At 31 December 2022
8.4
16.6
25.0
The goodwill held by the Group arose on the acquisition of Focus DIY stores in 2007 and 2011.
At the beginning and end of the financial periods the recoverable amount of CGUs to which the goodwill,
with indefinite useful life, is allocated was in excess of its book value. In the absence of a binding
agreement to sell the assets and active reference market on which fair value can be determined, the
recoverable amount of the CGU was determined according to value in use. The Directors’ calculations
have shown that no impairments have occurred. Details of impairment tests are shown in note 15.
13 Property, plant and equipment
Land and Leasehold Plant and
(£m) buildings improvements
equipment
Total
Cost
At 1 January 2022
–
135.8
231.4
367.2
Additions
6.1
16.9
8.1
31.1
Disposals
–
(18.9)
(52.6)
(71.5)
Impairments
–
(0.4)
–
(0.4)
At 31 December 2022
6.1
133.4
186.9
326.4
Additions
–
17.2
14.9
32.1
Disposals
–
(3.0)
(6.2)
(9.2)
Impairments
–
–
–
–
At 30 December 2023
6.1
147.6
195.6
349.3
Accumulated depreciation
At 1 January 2022
–
73.5
188.7
262.2
Charged in the period
0.1
7.4
12.6
20.1
Disposals
–
(18.3)
(52.5)
(70.8)
At 31 December 2022
0.1
62.6
148.8
211.5
Charged in the period
0.1
8.0
13.0
21.1
Disposals
–
(1.4)
(5.1)
(6.5)
At 30 December 2023
0.2
69.2
156.7
226.1
Net book value
At 30 December 2023
5.9
78.4
38.9
123.2
At 31 December 2022
6.0
70.8
38.1
114.9
No impairment was recognised in the period on stores (52 weeks ended 31 December 2022: £0.4m)
where the remaining cash flows from the store are not expected to support the carrying value of the asset.
Wickes Group Plc Annual Report and Accounts 2023 155
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Strategic report
14 Right-of-use assets
The Group leases many assets including land and buildings and vehicles, the weighted average remaining
lease term of all leases is nine years (31 December 2022: ten years). Information about leases for which
the Group is a lessee is presented below.
At 30 December 2023, the Group had no material leases committed to but not yet commenced
(31 December 2022: nil). The Group, which does not enter into turnover rent agreements, does not have
material variable payments in its leases and does not have significant exposure to extension options
that are not reflected in the lease liability.
Net carrying value
Land and Plant and
(£m) buildings
equipment
Total
At 1 January 2022
596.4
8.2
604.6
Additions
–
8.2
8.2
Modifications
30.0
4.8
34.8
Terminations
(10.9)
(1.2)
(12.1)
Depreciation
(69.9)
(7.8)
(77.7)
Impairments
(15.4)
–
(15.4)
At 31 December 2022
530.2
12.2
542.4
Additions
11.6
10.6
22.2
Modifications
45.9
0.1
46.0
Terminations
(0.2)
(0.1)
(0.3)
Depreciation
(67.8)
(6.4)
(74.2)
Impairments
(2.7)
–
(2.7)
Reversal of previous impairments
3.7
–
3.7
At 30 December 2023
520.7
16.4
537.1
Lease liabilities
(£m)
As at As at
30 December 31 December
2023 2022
Maturity analysis – contractual undiscounted cash flow
Less than one year
109.7
107.3
One to two years
107.4
102.9
Two to five years
406.1
275.7
Five to ten years
155.3
260.4
More than ten years
49.0
89.7
Total undiscounted lease liabilities
827.5
836.0
Lease liabilities included in the balance sheet
Current
79.8
80.9
Non-current
596.0
610.4
675.8
691.3
52 weeks 52 weeks
ended ended
Amounts recognised in the income statement 30 December 31 December
(£m) 2023 2022
Interest expense on lease liabilities
28.2
29.4
Expenses related to short-term leases
0.1
0.5
Depreciation
74.2
77.7
(Net reversal of previous impairments)/impairments
(1.0)
15.4
The weighted average incremental borrowing rate applied to property leases is 4.3% (31 December
2022: 4.1%), and for fleet leases is 4.9% (31 December 2022: 3.0%). Incremental borrowing rates for
property leases are calculated from Group debt costs modified for retail property yields across the UK.
Incremental borrowing rates for fleet leases are calculated from hire-purchase rates.
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023156
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Financial statements
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Strategic report
14 Right-of-use assets continued
Sublet income
The Group leases space in some of its stores to third parties. Property rental income earned during
the period in respect of these properties is disclosed in note 6.
At the balance sheet date, the Group had contracts with lessees for the following undiscounted future
minimum lease payments:
As at As at
30 December 31 December
(£m) 2023 2022
Within one year
2.3
2.0
One to five years
5.9
6.1
After five years
2.4
3.2
Total
10.6
11.3
15 Impairment testing
Measuring recoverable amounts
For impairment testing purposes, the Group has determined that each store is a separate CGU. ‘Click
and collect’ sales and an allocation of delivered online sales are included in store cash flows to reflect
the contributions stores make to fulfilling such orders and marketing the Group’s products.
CGUs are reviewed for indicators of impairment at each reporting date to determine if an impairment
review is required; initially this requires a review of each store’s performance to identify loss making or
low profitability stores, after taking account of an appropriate proportion of central costs, over the period
of the Board approved 5 Year Plan. In some particular cases, other factors are also considered including
stores with recent losses or proportionately higher asset values, as well as assessing whether any stores
are exposed to risks, including specifically those related to climate change, that could indicate that it will
not be able to remain open to the end of its lease, or result in any non-property assets having reduced
useful lives.
The Group’s goodwill balance, which arose in relation to the acquisition of certain stores formerly
operating under the Focus brand in 2007 and 2011, is allocated and monitored for impairment testing
purposes to groups of individual CGUs. The Group tests goodwill for impairment annually, as well as for
interim reporting if there are indications that an impairment may have occurred.
In accordance with accounting standards, the recoverable amount of an asset is the greater of its value in
use and its fair value less costs to sell. Recognising that a value in use approach will reflect the valuation
premium arising from both the Group’s store network and fulfilment model, as well as the significant
investment made centrally to support its key growth drivers, which should be excluded when calculating
fair value, value in use has been used when calculating recoverable amount.
The recoverable amount of each CGU is determined from value-in-use calculations, derived from the
Group’s approved 5 Year Plan. The carrying value represents each store’s specific assets, as well as the
IFRS 16 right-of-use asset, plus an allocation of corporate assets (and related cash flows) where these
assets can be allocated on a reasonable and consistent basis. The total value of these assets attributable
to stores is £666.4m (31 December 2022: £678.1m).
Key assumptions
The estimation of future cash flows is derived from the Board approved 5 Year Plan, which is developed
from a variety of sources including store performance, competitor activity, and consumer and market
outlook. The key assumptions underpinning the value in use model include revenue growth and gross
margin in the Board approved 5 Year Plan, and an allocation of a percentage of central costs.
2023
2022
Pre-tax discount rate
13.7%
11.2%
Revenue growth rate
2% – 7%
1% – 6%
Gross margin
36% – 48%
39% – 47%
Central cost allocation
61.1%
60.5%
Management determined the values assigned to these financial assumptions as follows:
– The pre-tax discount rate is derived from the Group’s weighted average cost of capital, which has been
calculated using the capital asset pricing model, the inputs of which include a UK risk-free rate, equity
risk premium, Group size premium and a risk adjustment (“beta”).
– Revenue growth rates and gross margin in the 5 Year Plan period are after removing the impact of new
stores, re-fits, and cost saving programmes that are yet to be enacted at the period end, but include the
impact of all known ESG commitments and risks. These rates change each year based on both
external and internal factors: the lower revenue growth rates in the near term, arising from the current
economic uncertainty, are forecast to improve in the later years, reflecting the anticipated recovery in
the UK economy and the continuing successful execution of the Group’s growth strategy.
– Central costs are reviewed to identify amounts which are necessarily incurred to generate the CGU cash
flows. Costs are allocated by category using appropriate volumetrics. A proportion of stewardship costs
are allocated to CGUs, excluding those costs which are incurred solely due to the listed nature of the Group.
– Cash flows beyond the 5 Year Plan period (2029 and beyond) have been determined using a long-term
nominal growth rate.
Whilst the Directors consider their impairment assumptions to be realistic, including those for market
changes, the estimated future cash flows derived from the Board approved 5 Year Plan require the
achievement of company specific growth initiatives. Should actual results be different from expectations,
for instance due to a worsening of the UK economy, then it is possible that the value of non-current
assets included in the balance sheet could be further impaired .
Wickes Group Plc Annual Report and Accounts 2023 157
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Strategic report
15 Impairment testing continued
Impairment of goodwill
At 30 December 2023 the recoverable amount of CGUs to which the goodwill is allocated was in excess
of its book value and therefore no impairment has been recognised. Of the impairments noted on
right-of-use assets below, £nil relates to right-of-use assets for stores associated with some goodwill.
The impairment review was not sensitive to changes in the assumptions used in the value-in-use model.
Impairment of store related right-of-use assets and fixed assets
The impairment trigger review noted above identified 26 stores for which an impairment review was
required. The number of stores with an indicator of impairment in the period is comparable to the prior
period (31 December 2022: 31 stores) reflecting the continued softer UK macro-economic environment
and economic outlook in 2023.
The impairment reviews were carried out using the assumptions and methodology disclosed in this note.
Any impairments have been recognised against the right-of-use assets associated with these stores, and in
some cases where the impairment charge calculated is greater than the right-of-use asset, also against the
other plant and equipment associated with the stores.
The impairment review identified 5 stores that should be impaired resulting in £2.7m (31 December
2022: £15.8m) of impairment charge, split as £2.7m (31 December 2022: £15.4m) relating to right-of-
use assets and £nil (31 December 2022: £0.4m) relating to property, plant and equipment. A £3.7m
reversal of previous impairments relating to 5 stores has been recognised (31 December 2022: £nil) as
an impairment reversal. The impairment charge and reversal are both recognised within selling costs.
Given the size of the total store impairment charge, and that fact a key contributory to the existence of
the charge is the broader UK macro-economic events impacting many retail businesses, and not solely
the underlying performance of the Group’s individual stores, this impairment charge is included within
adjusting items as disclosed in note 9.
The carrying amount of non-current assets attributable to the stores that have been impaired, after this
impairment, is £13.7m (31 December 2022: £69.7m). The impairment sensitivities set out below are
calculated with reference to those stores that have been subject to an impairment review.
Impairment sensitivities
It is possible that a materially different impairment would have been identified if the key assumptions were
changed significantly in the value-in-use calculations. The impact on the net impairment recognised from
reasonably possible changes in assumptions, all other assumptions remaining the same, are shown in the
table below.
Assumption
(£m)
Change in net impairment
Store revenue increases/(decreases) by 2%
£1.4m – £(1.0)m
Gross margin increases/(decreases) by 1%
£4.6m – £(5.0)m
Percentage of central costs allocated (increases)/decreases by 10%
£2.6m – £(2.6)m
Discount rate (increases)/decreases by 100 basis points
£2.4m – £(2.5)m
Reasonably possible changes of the other assumptions, including halving the growth rate past the 5 Year
Plan period, would not result in a material increase to the impairment charge.
16 Deferred tax
The following are the major deferred tax assets and (liabilities) recognised by the Group and movements
thereon during the current and prior reporting periods.
Capital Share-based
Tax losses
Provisions
allowance
payments
Leases
Total
At 1 January 2022
–
–
(0.7)
1.1
29.7
30.1
(Charge)/credit to
the income statement
–
(0.2)
(4.7)
0.8
3.3
(0.8)
Charge to equity
–
–
–
(1.5)
–
(1.5)
Prior period adjustment
–
0.2
(3.1)
(0.2)
(2.0)
(5.1)
At 31 December 2022
–
–
(8.5)
0.2
31.0
22.7
(Charge)/credit to
the income statement
(0.4)
–
(1.4)
1.1
1.0
0.3
Credit to equity
–
–
–
1.2
–
1.2
Prior period adjustment
0.4
1.5
(0.2)
–
(2.9)
(1.2)
Change in tax rates
–
–
(0.1)
–
0.1
–
At 30 December 2023
–
1.5
(10.2)
2.5
29.2
23.0
Disclosed within
non-current assets
–
1.5
(10.2)
2.5
29.2
23.0
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when
the asset is realised or the liability settled, based on tax rates that have been enacted, or substantively enacted,
at the balance sheet date. The Group has separately calculated the tax rates applicable in respect of Adjusting
items for the period as well as the tax rate change as a result of the increase in the rate of UK corporation tax
effective from 1 April 2023 from 19% to 25%. The legislation enacting this rate increase was substantively
enacted on 24 May 2021.
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023158
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Financial statements
Other information
Strategic report
16 Deferred tax continued
At 30 December 2023 the Group had unused capital losses of £37.6m (31 December 2022: £37.6m)
available for offset against future capital profits. No deferred tax asset has been recognised because
it is unlikely that future taxable profits will be available against which the Group can utilise the losses.
17 Investments
As at 30 December 2023, these consolidated financial statements of the Group comprise the Company,
Wickes Group Plc, and the following companies which are all incorporated in the United Kingdom.
All subsidiaries are 100% owned.
Incorporated in England and Wales and registered at
Vision House, 19 Colonial Way, Watford, WD24 4JL
Principal activity
Class of share
Wickes Group Holdings Limited
Holding company
Ordinary
Wickes Building Supplies Limited*
Home improvement retailer
Ordinary
Wickes Finance Limited*
Dormant
Ordinary
Wickes Holdings Limited*
Dormant
Ordinary
* indirect shareholding
18 Inventories
As at As at
30 December 31 December
(£m) 2023 2022
Inventories
195.5
201.6
Inventories consist of goods for resale. Inventories are stated after provisions for impairment of £3.7m
(2022: £5.0m) and includes a deduction to account for rebates earned on purchases and held in inventory
at year end of £7.3m (31 December 2022: £8.1m).
Cost of sales for the 52 weeks ended 30 December 2023 includes inventory recognised as an expense
amounting to £857.8m (31 December 2022: £856.2m).
Period ended Period ended
30 December 2023 31 December 2022
Movement in stock provisions
Opening provision
5.0
4.4
Provision utilised
(14.1)
(13.2)
Provision increased
12.8
13.8
Closing provision
3.7
5.0
19 Trade and other receivables
As at As at
30 December 31 December
(£m) 2023 2022
Trade receivables
33.4
38.7
Allowance for expected credit losses
(1.0)
(1.3)
32.4
37.4
Other receivables
26.4
32.8
Prepayments and accrued income
15.3
17.2
Total current trade and other receivables
74.1
87.4
Trade receivables primarily represent amounts receivable following the delivery of goods purchased through
finance agreements or the completion of a Design & Installation project installation and electronic payment
transactions with customers that were not received into the bank at the year end. Cash received from third parties
providing finance to the Group’s customers is recognised in the Cash Flow Statement as an operating cash flow.
The ageing of trade receivables is shown below. A provision for expected credit losses has been recognised at
the reporting date through consideration of the ageing profile and the risk of non-recovery. The carrying amount
of trade receivables, net of expected credit losses, is considered to be an approximation to its fair value.
Trade receivables on financed sales are ordinarily settled by financing providers; the Group does not
retain consumer credit risk in respect of these sales. In a small number of cases, despite the Group
having fulfilled its obligations under the installation contract, there may be a technical delay in receiving
final settlement from the finance partner. The Group assesses whether these delays may result in
amounts ultimately not being received and establishes a credit loss accordingly. Credit risk on credit
card transactions is retained by the card issuer.
The loss allowance for trade receivables was determined as follows:
1-30 31-60 61-120 More than
30 December 2023
Current
days days days
120 days
Total
Expected loss rate
1.5%
–
–
100%
80%
3.0%
Carrying amount of trade
receivables (£m)
32.5
0.1
0.2
0.1
0.5
33.4
Loss allowance (£m)
(0.5)
–
–
(0.1)
(0.4)
(1.0)
1-30 31-60 61-120 More than
31 December 2022
Current
days days days
120 days
Total
Expected loss rate
0.8%
–
–
–
83.3%
3.4%
Carrying amount of trade
receivables (£m)
36.8
0.5
–
0.2
1.2
38.7
Loss allowance (£m)
(0.3)
–
–
–
(1.0)
(1.3)
The Group assesses expected credit losses associated with the trade receivables on a forward looking basis
by considering actual credit loss experience and whether there has been a significant increase in credit risk.
Wickes Group Plc Annual Report and Accounts 2023 159
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Financial statements
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Strategic report
19 Trade and other receivables continued
The movement in the allowance for impairment in respect of trade receivables during the period was
as follows:
As at As at
30 December 31 December
(£m) 2023 2022
At the beginning of the period
1.3
1.6
Provided in the period
0.2
0.2
Released during the period
(0.5)
(0.5)
At the end of the period
1.0
1.3
Trade receivables are written off when there is no longer a reasonable expectation of recovery. This is
primarily where settlement is not received from the finance partners and an alternative payment plan
cannot be agreed with the customer directly, or where a payment plan exists and the customer has
failed to make contractual payments for a period greater than one year past due.
When assessing credit losses, trade receivables are grouped according to shared characteristics
(payor/payor type) and the days past due. Given the primary settlors of trade receivables are consumer
credit providers that have stable credit ratings, the Group has concluded that historical debt performance
of the portfolio during the last three reporting periods provides a reasonable approximation of the future
expected loss rates for each payor age category.
Other receivables primarily represent amounts due from suppliers to the Group for rebates of £24.1m
(31 December 2022: £23.4m).
20 Cash and cash equivalents
As at As at
30 December 31 December
(£m) 2023 2022
Cash at bank
6.0
29.5
Short-term deposits
91.5
70.0
97.5
99.5
Cash and cash equivalents comprise cash balances, short-term deposits and other short term highly
liquid investments (including money market funds) with maturities not exceeding three months from the
date of acquisition placed with investment grade counterparties which are subject to an insignificant risk
of change in value.
21 Capital and reserves
10 pence ordinary shares
The Group and Company
Shares
£m
Authorised, issued and fully paid
At 1 January 2022 and 31 December 2022
259,637,998
26.0
Shares cancelled
(7,512,623)
(0.8)
At 30 December 2023
252,125,375
25.2
At the end of the period, the Group and Company had 252,125,375 allotted and fully paid ordinary shares
of 10 pence each. There is a single class of ordinary shares and all shares rank equally with regard to the
Company’s residual asset. The holders of ordinary shares are entitled to receive dividends as declared
and are entitled to one vote per share at meetings of the Company. No shares were issued during the
current financial year in relation to share options.
During the 52 weeks ended 30 December 2023, 7.5 million shares were purchased and then cancelled
by the Group as part of a share buyback programme. The total consideration of £10.1m was recognised
as a charge to retained earnings. The aggregate nominal value of shares cancelled and transferred to the
capital redemption reserve was £0.8m. There was no share buyback programme in the comparative period.
EBT share reserves
The Wickes Employee Benefit Trust and Equiniti Share Plan Trustees Limited (together “the Trusts”)
have been put in place to further the interests of the Company by benefiting employees of the Group.
The Trusts are treated as an extension of the Group and the Company.
Where the Trusts purchase the Company’s equity share capital the consideration paid, including any
directly attributable incremental costs, is deducted from equity attributable to the Company’s equity
holders until the shares are cancelled or reissued. As at 30 December 2023, 5,918,098 shares
(31 December 2022: 6,818,863 shares) were held by the Trusts in relation to the Company’s employee
share plans. The EBT share reserves balance as at 30 December 2023 was £0.7m (31 December
2022: £0.7m).
As at As at
30 December 31 December
(number of shares) 2023 2022
At the beginning of the period
6,818,863
7,489,514
Own shares purchased for share schemes
170,000
–
Shares released to participants
(1,070,765)
(670,651)
At the end of the period
5,918,098
6,818,863
Other reserves
The ‘Other reserves’ balance as at 30 December 2023 of £785.7m (31 December 2022 £785.7m)
was created on the acquisition in March 2020 by Wickes Group Plc of Wickes Group Holdings Limited
and by Wickes Group Holdings Limited of Wickes Building Supplies Limited and Wickes Finance Limited,
via share for share exchanges, and represents the difference between the carrying value of the assets
and liabilities of the acquired companies and the nominal value and premium of the shares issued.
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023160
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Financial statements
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Strategic report
22 Borrowings
Bank borrowings
On 23 March 2021, the Group entered into a three-year £80.0m committed Revolving Credit Facility
(RCF) with a syndicate of banks. The Revolving Credit Facility is intended to be used for general corporate
purposes and was undrawn as at 30 December 2023 (31 December 2022: undrawn). In March 2022, a
one year extension was obtained, extending the expiry date to March 2025, and in March 2023, a one
year extension was obtained, extending the expiry date to March 2026. After the year end, the Group
completed an Amend and Extend of its Rolling Credit Facility, extending the maturity to March 2028 with
an option for a one year extension. Further details are provided in note 31.
The Group does not have an overdraft facility as at 30 December 2023 (31 December 2022: no facility).
At the period end, the Group had the following borrowing facility available:
As at As at
30 December 31 December
(£m) 2023 2022
Undrawn facilities:
3-year committed revolving credit facility (expires March 2026)
80.0
80.0
80.0
80.0
Lease liabilities
Obligations under finance leases
The Group has entered into lease agreements in respect of retail stores, warehouses, vehicles and office
equipment. The leases are secured on floating charges over the assets of material subsidiaries in the
Group. Leases, with a present value liability of £675.8m (31 December 2022: £691.3m), expire in various
years to 2043 and carry a weighted average incremental borrowing rate of 4.3% (31 December 2022: 4.1%).
Rent in respect of retail stores leases are reviewed by the landlord periodically, subject to assorted floors
and caps. Except for these reviews, cash flows and charges are expected to remain in line with the current
period.
The discount rates used are calculated at inception of the lease on a lease by lease basis, and are based
on estimates of incremental borrowing rates.
Changes in lease liabilities arising from financing activities are detailed in Movement in Net Debt note 23.
In the period, the Group recognised charges of £0.1m (31 December 2022: £0.5m) of lease expenses
relating to short term and low value leases for which the exemption under IFRS 16 has been taken.
See note 14 for more detail on the depreciation of the right-of-use assets and note 7 for more detail on
the interest expense relating to leases.
23 Movement in net debt
Cash and cash Lease
(£m) equivalents
liability
Total
At 1 January 2022
123.4
(742.1)
(618.7)
Decrease in cash and cash equivalents
(23.9)
–
(23.9)
Repayment of lease liabilities
–
111.8
111.8
Discount unwind on lease liability
–
(29.4)
(29.4)
Lease additions
–
(34.8)
(34.8)
Lease modifications
–
(8.2)
(8.2)
Lease incentives received
–
(2.1)
(2.1)
Lease terminations
–
13.5
13.5
At 31 December 2022
99.5
(691.3)
(591.8)
Decrease in cash and cash equivalents
(2.0)
–
(2.0)
Repayment of lease liabilities
–
112.5
112.5
Discount unwind on lease liability
–
(28.2)
(28.2)
Lease additions
–
(22.2)
(22.2)
Lease modifications
–
(46.0)
(46.0)
Lease incentives received
–
(0.8)
(0.8)
Lease terminations
–
0.2
0.2
At 30 December 2023
97.5
(675.8)
(578.3)
As at As at
Balances 30 December 31 December
(£m) 2023 2022
Cash and cash equivalents
97.5
99.5
Current lease liabilities
(79.8)
(80.9)
Non-current lease liabilities
(596.0)
(610.4)
Net debt
(578.3)
(591.8)
Wickes Group Plc Annual Report and Accounts 2023 161
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Strategic report
24 Provisions
(£m)
Property
Warranty
Insurance
Total
At 1 January 2022
3.7
2.2
6.3
12.2
Charge to income statement
0.9
2.5
–
3.4
Utilisation
(2.5)
(1.8)
(0.4)
(4.7)
At 31 December 2022
2.1
2.9
5.9
10.9
Charge to income statement
1.7
2.8
1.0
5.5
Utilisation
–
(2.4)
(1.4)
(3.8)
At 30 December 2023
3.8
3.3
5.5
12.6
As at As at
30 December 31 December
(£m) 2023 2022
Current
10.3
9.1
Non-current
2.3
1.8
12.6
10.9
Property provisions primarily arise where there is an expectation that a store will close and where there
is an obligation to fulfil rate, insurance and dilapidation payments under the lease contract, or if there is
other evidence that enables a dilapidation provision to be reliably estimated. The provision will be revised
in future periods should the lease be terminated early or a subtenant found.
The insurance claims provision represents management’s best estimate of the value of outstanding
claims against the Group, using an expected value approach in line with IAS 37. There are no individually
material claims and the potential settlement dates and amounts vary widely based on the portfolio of
insurance claims provided for. The Group has no material self insured claims.
All provisions as at 30 December 2023 other than £2.3m of property provisions (31 December
2022: £1.8m of property provisions) are considered to be current and expected to be utilised within
the next twelve months.
25 Trade and other payables
As at As at
30 December 31 December
(£m) 2023 2022
Trade payables
119.4
119.9
Social security and other taxes
11.6
15.9
Other payables
17.0
12.4
Deferred income
33.2
48.1
Accrued expenses
37.9
41.4
Trade and other payables
219.1
237.7
The trade payables balance includes a deduction to account for amounts due from suppliers to the Group
for associated rebates of £8.9m (31 December 2022: £8.6m).
The deferred income balance represents amounts received directly from customers for goods and services
where the Group has not fulfilled its performance obligations, including upfront deposits received. Under the
terms of the relevant contracts, sales made where third parties have provided finance to the customer (not
including the upfront deposit) do not give rise to deferred income. Of the total deferred income balance,
£28.5m (31 December 2022: £43.6m) related to Design & Installation deferred income.
Revenue of £44.4m was recognised in the 52 weeks ended 30 December 2023 which had been included
in the deferred income balance at the beginning of the period (52 weeks ended 31 December 2022: £56.8m).
26 Dividends
As at As at
30 December 31 December
(£m) 2023 2022
Amounts recognised in the financial statements as distributions to
equity shareholders are shown below:
– final dividend for the 52 weeks ended 31 December 2022 of 7.3
pence (53 weeks ended 1 January 2022: 8.8 pence)
18.3
22.1
– interim dividend for the 52 weeks ended 30 December 2023 of 3.6
pence (52 weeks ended 31 December 2022: 3.6 pence)
9.1
9.1
Total dividend
27.4
31.2
A final dividend of 7 .3p is proposed in respect of the 52 weeks ending 30 December 2023. It will be paid
on 6 June 2024 to shareholders on the register at the close of business on 26 April 2024 (the Record
Date). The shares will be quoted ex-dividend on 25 April 2024.
Shareholders may elect to reinvest their dividend in the Dividend Reinvestment Plan (DRIP). The last date
for receipt of DRIP elections and revocations will be 15 May 2024.
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023162
Governance
Financial statements
Other information
Strategic report
27 Share-based payments
The Group operates a number of share-based payment schemes for Executive Directors and other
employees, all of which are classified as equity settled. The Group has no legal or constructive obligation
to repurchase or settle any of the options in cash.
The total cost in respect of LTIPs, Transition Awards, SAYE and Free Shares recognised in the income
statement was £5.9m in the period ended 30 December 2023 (period ended 31 December 2022: £5.0m).
Of this charge, £5.6m (period ended 30 December 2022: £4.4m), which is the amount net of Employer’s
National Insurance, is credited to equity. Employer’s National Insurance (including Apprenticeship Levy) is
being accrued on the balance sheet, where applicable, at the rate of 14.3%, which management expects
to be the prevailing rate at the time the options are exercised, based on the share price at the reporting
date. The total National Insurance charge for the period was £0.3m (period ended 31 December
2022: £0.6m).
The total cost between each of the relevant schemes, together with the number of options outstanding
are shown below:
Charge (£m)
52 weeks 52 weeks
ended ended
30 December 31 December
2023 2022
Long Term Incentive Plan
3.8
0.4
Transition Awards
0.3
2.1
Save As You Earn (SAYE)
1.2
2.2
Free Shares
0.6
0.3
5.9
5.0
As at As at
30 December 31 December
Number of options (thousands) 2023 2022
Long Term Incentive Plan
6,359
4,371
Transition Awards
100
862
Save As You Earn (SAYE)
10,768
10,727
Free Shares
488
612
17,715
16,572
A summary of the main features of the schemes are shown below:
Number of
Scheme
Scheme name
Grant date
Vesting date
options granted
Vesting criteria
Eligibility
Scheme type
RSP 31/03/2023 31/03/2025 827,045 A performance
31/03/2023 31/03/2024 711,237 underpin Executive
25/09/2023 25/09/2026 29,735 EPS (60%), TSR Directors,
LTIP 23 31/03/2023 31/03/2026 3,448,605 (30%) & ESG designated
Long Term (10%) targets senior Nil-cost
Incentive LTIP 22 28/09/2022 28/09/2025 666,396 EPS (70%) & managers options
Plan (LTIP) 31/03/2022 31/03/2025 1,998,542 TSR (30%)
LTIP 21
28/09/2021
28/09/2024
1,795,194
targets
Buyout 09/09/2023 Mark
Award 28/09/2022 &
148,114
n/a
George,
25/03/2024 CFO
A performance Executive
Transition 28/04/2022 underpin for Directors, Nil-cost
Awards 28/09/2021 & 1,616,863 Executive designated options
28/04/2023 Directors senior
managers
Save As SAYE 23 17/10/2023 17/10/2026 2,543,884 Continued All SAYE
You Earn SAYE 22 18/10/2022 18/10/2025 9,475,353 saving for Employees options
(SAYE) SAYE 21 19/10/2021 19/10/2024 5,433,646 3 years
Free Shares
28/06/2021
28/06/2024
881,940
n/a
All Nil-cost
Employees options
In addition to the scheme specific vesting criteria detailed above, for each scheme vesting is ordinarily
dependent on the continued employment of recipients. Further features of the individual schemes are
detailed below:
Long Term Incentive Plan
The Long Term Incentive Plan (‘LTIP’) 21, LTIP 22 and LTIP 23 awards are made at the discretion of the
Remuneration Committee, with vesting subject to market and non-market performance criteria measured
over a period of three years. The criteria are set by the Remuneration Committee, and are aligned with the
long-term strategic objectives of the Group and shareholder value creation.
Wickes Group Plc Annual Report and Accounts 2023 163
Governance
Financial statements
Other information
Strategic report
27 Share-based payments continued
The Buy-out award is in respect of an award granted to Mark George on his appointment as CFO,
following the decision to buy-out some of the incentive awards forfeited by him from his previous
employer, The Gym Group.
The Group granted RSP options with the intention of replacing the majority of the existing LTIP 21
and LTIP 22 awards.
In accordance with IFRS 2, if an award is granted as a replacement for a pre-existing award then
modification accounting is applied, whereby the incremental fair value of the RSP over the LTIP,
determined at the date of RSP grant, is spread over the vesting period of the RSP.
The charge in the period for LTIP includes an accrual of £0.8m (period ended 31 December 2022: £nil)
for the Group’s Deferred Share Bonus plan in respect of the bonus payable in shares for the period ended
30 December 2023.
Save As You Earn
The Save As You Earn (“SAYE”) scheme is open to all Wickes Group employees. A maximum monthly
contribution of £500 is permitted under the option scheme. Upon vesting, the options will remain
exercisable for 6 months.
Free Shares
Free Shares are free Wickes Shares which have been allocated to all full-time and part-time employees
at demerger and had a market value of £300 or £150 respectively.
Fair value of options
The Black-Scholes option-pricing model is used to calculate the fair value of the options and the amount
to be expensed. Judgements including the probability of the performance conditions being achieved,
the number of employees who may leave the Group or the scheme, and dividend yields, are included
in the fair value calculations.
The following information is relevant to the determination of the fair value of the awards granted under
the schemes for the 52 weeks ended 30 December 2023 and the 52 weeks ended 31 December 2022
The information is expressed as weighted averages where relevant:
52 weeks ended 30 December
2023
LTIP (nil cost
The Group and Company:
options)
SAYE
Share price at grant date (pence)
135.3
133.6
Option exercise price (pence)
–
116.0
Option life (years)
2.6
3.0
Expected dividends as a dividend yield (%)
n/a
8.0%
Risk free interest rate (%)
n/a
4.6%
Volatility (%)
n/a
33.3%
52 weeks ended 31 December
2022
LTIP (nil cost
options)
SAYE
Share price at grant date (pence)
166.6
124.8
Option exercise price (pence)
–
104.0
Option life (years)
2.9
3.0
Expected dividends as a dividend yield (%)
n/a
5.4%
Risk free interest rate (%)
2.2%
3.7%
Volatility (%)
30.4%
35.1%
As the LTIP awards have a nil exercise price the risk free rate of return does not have any effect on the
estimated fair value.
If the LTIP options remain unexercised after a period of 10 years from the date of grant, these options
expire. SAYE options vest after 3 and expire 3½ years after the date of grant.
The risk-free interest rate of return is the yield on zero-coupon UK Government bonds on a term
consistent with the vesting period. Dividends used are based on actual dividends where data is known
and future dividends using the Group’s 5 year plan.
Volatility is based on historic share prices over the period since the demerger date, when Wickes Group Plc
joined the London Stock Exchange. Option life used in the model has been based on the option vesting period.
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023164
Governance
Financial statements
Other information
Strategic report
27 Share-based payments continued
Income statement charge, shares granted and outstanding at the end of the period
A description of the share schemes operated by the Group is contained in the Remuneration report on
pages 111-127. The number of share options granted and the estimated fair values of the shares under
option granted under the Group’s share schemes in both 2023 and 2022 are shown below:
Exercise price Share options Fair value for the
Grant date – scheme
Expiry date
(pence) (thousands) Group (£m)
31/03/2023 – Long Term Incentive Plan
31/03/2033
–
3,449
2.4
25/09/2023 – Long Term Incentive Plan
25/09/2033
–
30
–
31/03/2023 – Restricted Stock Plan
31/03/2033
–
1,538
2.1
17/10/2023 – Save As You Earn Plan
17/04/2027
116.0
2,544
0.5
31/03/2022 – Long Term Incentive Plan
31/03/2032
–
1,999
0.6
28/09/2022 – Long Term Incentive Plan
28/09/2032
–
666
0.1
28/09/2022 – Long Term Incentive Plan
Buy-Out
31/03/2032
–
148
0.2
18/10/2022 – Save As You Earn Plan
18/04/2026
104.0
9,475
1.9
The aggregate number of share awards outstanding for the Group and their weighted average exercise
price is shown below:
52 weeks ended 30 December 2023
52 weeks ended 31 December 2022
Weighted Weighted
average Number of Number of nil average Number of Number of nil
exercise price options price options exercise price options price options
(pence) (thousands) (thousands) (pence) (thousands) (thousands)
Outstanding at the beginning
of the period
75
10,727
5,845
110
5,182
4,294
Granted during the period
39
2,544
5,017
80
9,475
2,813
Exercised during the period
8
(67)
(855)
–
–
(636)
Forfeited during the period
111
(2,435)
(246)
192
(3,930)
(626)
Cancelled during the period
–
–
(2,813)
–
–
–
Outstanding at the end
of the period
70
10,769
6,948
75
10,727
5,845
Exercisable at the end
of the period
–
–
100
–
–
126
Details of the share options outstanding at 30 December 2023 are shown below:
52 weeks ended 30 December 2023
52 weeks ended 31 December 2022
Transition SAYE and Transition SAYE and
LTIP Awards
Free Shares
LTIP
Awards Free Shares
Range of exercise price (pence)
–
–
nil-196
–
–
nil–196
Weighted average exercise
price (pence)
–
–
110
–
–
110
Number of shares (thousands)
6,359
100
11,256
4,371
862
11,339
Weighted average expected
remaining life (years)
1.7
–
1.9
2.1
0.3
2.6
Weighted average contractual
remaining life (years)
9.0
7.8
2.4
9.2
8.8
3.1
28 Commitments
Consignment stock
At 30 December 2023, the Group held consignment stock on sale or return of £6.6m (31 December 2022: £8.0m).
The Group is only required to pay for the goods it chooses to sell and therefore this stock is not recognised
as an asset.
Capital commitments
Capital commitments comprise amounts payable under capital contracts which are duly authorised
and in progress at the consolidated balance sheet date. They include the full cost of goods and services
to be provided under the contracts through to completion. The Group has rights within its contracts to
terminate at short notice and, therefore, cancellation payments are minimal.
Capital commitments at the end of the period are shown below:
As at As at
30 December 31 December
(£m) 2023 2022
Contracted but not provided for in the accounts
12.6
11.2
Wickes Group Plc Annual Report and Accounts 2023 165
Governance
Financial statements
Other information
Strategic report
29 Financial instruments
As at As at
The carrying value of categories of financial instruments 30 December 31 December
(£m)
Note
2023 2022
Financial assets:
Cash and cash equivalents
20
97.5
99.5
Trade and other receivables at amortised cost
19
58.8
70.2
156.3
169.7
Financial liabilities:
Trade and other payables at amortised cost
25
136.4
132.3
Lease liabilities
23
675.8
691.3
812.2
823.6
Credit risk and impairment
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Group’s receivables from
customers and financing institutions.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The Group’s exposure to credit risk from trade receivables is considered to be low because of the nature of
its customers and policies. The carrying amount of financial assets recorded in the financial statements,
which is net of impairment losses, represents the Group’s maximum exposure to credit risk.
Amounts due are mainly financed by large reputable financing institutions, which have high credit worthiness.
Where the Group is exposed to potential credit loss, an impairment allowance is made for individual
exposures as well as for an Expected Credit Loss (ECL) component established using rates reflecting
historic information for payor groups, and forward looking information. The total provision as at
30 December 2023 is £1.0m (31 December 2022: £1.3m).
Trade and other receivables exclude prepayments of £15.3m (31 December 2022: £17.2m).
Trade and other payables
Trade and other payables excludes taxation, social security, accruals and deferred income amounts
totalling £82.7m (31 December 2022: £105.4m).
Fair value of financial instruments
Financial assets/liabilities designated at fair value through profit and loss comprise foreign currency
forward contracts, where the fair value of the contracts is measured by comparing the contract value
using quoted forward exchange rates with the value using the exchange rates prevailing at the period end.
The following table provides an analysis of financial instruments that are measured subsequent to initial
recognition at fair value, grouped into levels 1 to 3 based on the degree to which the fair value is observable:
– Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets
for identical assets or liabilities
– Level 2 fair value measurements are those derived from inputs other than quoted prices included
within Level 1 that are observable for the asset or liability either directly (i.e. as prices) or indirectly
(i.e. derived from prices)
– Level 3 fair value measurements are those derived from valuation techniques that include inputs
for the asset or liability that are not based on observable market data (unobservable inputs)
There were no transfers between levels during the period. There are no non-recurring fair value measurements.
The Group held financial instruments measured at fair value as shown in the table below:
As at As at
30 December 31 December
(£m) 2023 2022
Included in assets
Level 2
Foreign currency forward contracts at fair value through profit
and loss
–
2.6
Included in liabilities
Level 2
Foreign currency forward contracts at fair value through profit
and loss
(0.7)
(0.2)
(0.7)
2.4
Market risk
Market risk is the risk that changes in market prices, such as interest rates, will affect the Group’s income
or the value of its holdings of financial instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters, while optimising the return on risk.
Interest rate risk
The Group is exposed to interest rate risk arising from fluctuations in market rates. This affects future
cash flows from money market investments and the cost of variable rate borrowings such as the Revolving
Credit Facility which is currently undrawn. The Group did not have any loans or overdrafts facility during
the 52 weeks ended 30 December 2023 (52 weeks ended 31 December 2022: none) .
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023166
Governance
Financial statements
Other information
Strategic report
29 Financial instruments continued
Currency forward contracts
The Group acquires goods for sale from overseas, which when not denominated in sterling, are paid for
principally in US dollars. The Group has entered into forward foreign exchange contracts (all of which are
less than eighteen months in duration) to buy US dollars to manage the exchange rate risk arising from
these anticipated future purchases. At the balance sheet date the total notional value of contracts to
which the Group was committed was US$47.6m (31 December 2022: US$58.8m). The fair value of these
derivatives was a £nil asset and a £0.7m liability (31 December 2022: £2.6m asset and £0.2m liability).
These contracts are not designated as cash flow hedges, however given fair value accounting for these
forward contracts does not reflect the intended economic outcome (i.e. to provide a level of certainty
over future foreign currency purchases), the net unrealised gains and losses on remeasurement of the
contracts are treated as adjusting items in the Group’s adjusted profit measures (see notes 2 and 9 for
further detail).
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.
Liquidity analysis
The following table details the Group’s liquidity analysis for its other financial liabilities. The Group’s
contractual maturities, as at the balance sheet date, of financial liabilities are as follows:
Maturity analysis
Between
Carrying Contractual Within one and five More than
(£m)
Note
amount cash flows 1 year years five years
As at 30 December 2023
Trade and other payables at
amortised cost
25
136.4
136.4
136.4
–
–
Lease liabilities
14
675.8
827.5
109.7
513.5
204.3
812.2
963.9
246.1
513.5
204.3
As at 31 December 2022
Trade and other payables at
amortised cost
25
132.3
132.3
132.3
–
–
Lease liabilities
14
691.3
836.0
107.3
378.6
350.1
823.6
968.3
239.6
378.6
350.1
30 Related party transactions
Key management personnel
Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the Group, directly or indirectly. They include the Board, as identified on pages 86-87.
Key management compensation
52 weeks 52 weeks
ended ended
30 December 31 December
(£m) 2023 2022
Salaries and other short-term employee benefits
2.2
1.5
Post-employment benefits
0.1
0.1
Share based payments
1.1
0.8
3.4
2.4
Further information about the remuneration of individual Directors is provided in the audited section
of the Directors’ Remuneration Report on page 120.
The Group has a related party relationship with its subsidiaries and with its Directors. There have been
no related party transactions with Directors other than in respect of remuneration.
31 Events after the reporting period
Corporate transaction
On 18 March 2024, the Group agreed to acquire 51% of the issued share capital of Gas Fast Limited,
operator of leading solar installations company Solar Fast. The business comprises a core solar panels
installation business, in addition to a smaller business installing gas boilers. The acquisition will enable
the Group to expand its offering into the fast-growing market for home energy solutions, initially with
solar and gas boilers and, in time, air source heat pumps and other services. The acquisition is subject to
FCA approval. The revenue will be reported within Design & Installation revenue.
The initial 51% controlling interest will be for initial consideration of £5.1m (net of cash acquired), with a
further contingent payment, based on an earnings based valuation multiple, delivered in calendar year
2024. The contingent payment is capped at £13.2m.
The Group has an option to buy the remaining 49% issued share capital for a period of 5 years following
completion. The purchase price is based on a pre-agreed earnings based valuation multiple at that time.
Revolving credit facility
After the year end the Group completed an “Amend and Extend” of its Rolling Credit Facility, lengthening
the term by a further two years to March 2028, with an option for an additional one year extension. Total
commitments on the facility remain at £80m, as well as retaining the £20m accordion.
Wickes Group Plc Annual Report and Accounts 2023 167
Governance
Financial statements
Other information
Strategic report
32 Alternative performance measures
Adjusted profit before tax and before incremental impact of SAAS accounting
(£m)
52 weeks ended
30 December
2023
Adjusted profit before tax
52.0
SAAS IT investment costs charged to the income statement that were previously
expected to be capitalised
7.8
Amortisation that would have been charged to the income statement if such costs
had been capitalised
(0.3)
Adjusted profit before tax and before incremental impact of SAAS accounting
59.5
Software as a service (‘SAAS’) IT costs are amounts invested to improve the Group’s IT systems and
which are delivered using SAAS solutions. These costs are expensed immediately under IAS38 on the
premise that the Company does not ‘control’ the asset and therefore does not qualify for capitalisation
as an intangible asset. From a strategic perspective investment in technology, and specifically SAAS
expenditure, is one of the Company’s core growth levers and represents a long term investment in the
business, with an expectation of generating future returns.
In the current period, in order to present a performance measure that aligns with original market
expectations of performance, the directors have presented an adjusted profit before tax and before
incremental impact of SAAS accounting as an alternative performance measure. This alternative
performance measure reinstates the expenditure as an intangible asset, and then amortises it over
its expected economic useful life.
The amounts reflected in the APM, which cannot be derived directly from the disclosures in the Financial
Statements, represent the SAAS IT investment costs charged to the Income Statement during the period,
against which a notional amortisation charge has been calculated. The notional amortisation charge has
been calculated by applying the Company’s amortisation policy for intangible fixed assets (see note 2.5).
The APM set out above is therefore intended to enable users to understand the impact of our latest
expectation of the nature of IT costs, and how these will be accounted for, on guidance previously issued.
Future forecasts will be prepared based on our latest expectation of the nature of IT costs, meaning that
this APM will not be provided after this year.
The comparative adjusted profit before tax and before incremental impact of SAAS accounting figure for
the prior period would equal adjusted profit before tax as the incremental impact of SAAS accounting
was nil in the prior period.
Stock turn
Stock turn is defined as the cost of goods sold divided by the average of year start and year end
inventory. It is a measure of how effective we are in converting our stock into sales.
Stock turn is calculated as follows:
30 December 31 December
(£m) 2023 2022
Cost of goods sold
857.8
856.2
Opening stock
201.6
188.2
Closing stock
195.5
201.6
Average stock
198.6
194.9
Cost of goods sold divided by average stock
4.3
4.4
Like-for-like sales
The use of like-for-like (LFL) sales and why they are useful is discussed in detail in note 5. Additionally,
further LFL calculations, which are useful for the same reason, are calculated as follows:
Like-for-like sales – Retail and Design & Installation
Like-for-like sales are further broken down into Retail and Design & Installation related sales to enable
further visibility of the relative performance of the two areas.
Like-for-like sales – Retail
(£m)
52 weeks ended
30 December
2023
Revenue
1,189.1
Network change
(4.5)
Revenue (like-for-like basis)
1,184.6
Prior period adjusted revenue
1,187.9
Prior period network change
(4.7)
Prior period adjusted revenue (like-for-like basis)
1,183.2
Increase arising on a like-for-like basis
1.4
Like-for-like revenue (%)
0.1%
Notes to the consolidated financial statements continued
Wickes Group Plc Annual Report and Accounts 2023168
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Financial statements
Other information
Strategic report
32 Alternative performance measures continued
Like-for-like sales – Design & Installation
(£m)
52 weeks ended
30 December
2023
Revenue
364.7
Network change
(3.3)
Revenue (like-for-like basis)
361.4
Prior period adjusted revenue
371.1
Prior period network change
(3.3)
Prior period adjusted revenue (like-for-like basis)
367.8
Decrease arising on a like-for-like basis
(6.4)
Like-for-like adjusted revenue (%)
(1.7)%
Free cash flow
The use of free cash flow and why it is useful is discussed on page 28. It is calculated as follows:
(£m)
52 weeks ended 52 weeks ended
30 December 31 December
2023 2022
Cash generated from operations
179.6
160.4
Add back cash impact of adjusting items
10.4
21.7
Adjusted cash inflow from operating activities
190.0
182.1
Less: payment of principal of lease liabilities, net of lease
incentives received
(83.5)
(80.3)
Less: interest on lease liabilities
(28.2)
(29.4)
Less: purchases of property, plant and equipment, and
development costs of computer software
(38.2)
(40.4)
Less: income taxes paid
(0.3)
(4.3)
Add: proceeds on disposal of property, plant and equipment
0.1
0.4
Add: interest received
7.2
1.9
Less: interest paid
(1.0)
(1.0)
Free cash flow
46.1
29.0
Cost to sales ratio
Cost to sales ratio is the ratio of selling costs plus administrative expenses to total sales. The cost
to sales ratio is used to determine whether revenue increases are matched by increases in profit
(£m)
52 weeks ended 52 weeks ended
30 December 2023 31 December 2022
Adjusted selling costs
342.6
332.1
Adjusted administrative expenses
151.7
131.1
Total adjusted costs
494.3
463.2
Total adjusted sales
1,553.8
1,559.0
Ratio
31.8%
29.7%
IFRS 16 net debt leverage
IFRS 16 net debt leverage is the ratio of our net debt balance to our adjusted EBITDA (as calculated above).
This enables us to assess whether the profit we generate will be sufficient to pay our debt obligations.
52 weeks ended 52 weeks ended
(£m) 30 December 2023 31 December 2022
Adjusted operating profit
73.8
103.9
Add back depreciation of property, plant and equipment
21.1
20.1
Add back depreciation of right-of-use assets
74.2
77.7
Add back amortisation
6.6
5.2
Adjusted EBITDA
175.7
206.9
(£m) 30 December 2023
31 December 2022
Net debt
578.3
591.8
Adjusted EBITDA
175.7
206.9
Leverage ratio
3.3
2.9
Sales density
Sales density is a measure of sales per year per square foot of store space and enables us to monitor
whether increases or decreases in store space are matched by increases or decreases in revenue
52 weeks ended 52 weeks ended
30 December 2023 31 December 2022
Adjusted sales (£m)
1,553.8
1,559.0
Average square footage (million)
6.3
6.3
Sales density
246
247
Return on Capital Employed (ROCE)
ROCE compares the amount spent to refit a store against the increase in gross profit gained in the
following year as a result. This helps us assess whether refits are generating an appropriate amount
of revenue uplift.
Wickes Group Plc Annual Report and Accounts 2023 169
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Financial statements
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Strategic report
Company balance sheet
(£m) Notes
As at
30 December
2023
As at
31 December
2022
Assets
Non-current assets
Investment C6 603.4 598.9
Total non-current assets 603.4 598.9
Current assets
Other receivables C8 15.1 –
Total current assets 15.1 –
Total assets 618.5 598.9
Equity and Liabilities
Capital and reserves
Issued share capital 21 25.2 26.0
Capital redemption reserve 0.8 –
EBT share reserve 21 (0.7) (0.7)
Retained earnings 593.2 571.8
Total equity 618.5 597.1
Current liabilities
Other payables C8 – 1.8
Total current liabilities – 1.8
Total liabilities – 1.8
Total equity and liabilities 618.5 598.9
The profit attributable to the owners of the Company for the period ended 30 December 2023 was £53.5m (31 December 2022: loss of £139.8m).
The company’s financial statements of Wickes Group Plc, registered number 12189061, were approved by the Board of Directors on 18 March 2024 and signed on its behalf by:
David Wood Mark George
Chief Executive Officer Chief Financial Officer
Wickes Group Plc Annual Report and Accounts 2023170
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Company statement of changes in equity
(£m)
Issued share
capital
Capital redemption
reserve
EBT share
reserve
Retained
earnings
Total
equity
At 1 January 2022 26.0 – (0.8) 738.5 763.7
Loss for the period and other comprehensive income – – – (139.8) (139.8)
Dividends paid – – – (31.2) (31.2)
Equity-settled share-based payments – – 0.1 4.3 4.4
At 31 December 2022 26.0 – (0.7) 571.8 597.1
Profit for the period and other comprehensive income – – – 53.5 53.5
Dividends paid – – – (27.4) (27.4)
Share buyback and cancellation (0.8) 0.8 – (10.1) (10.1)
Purchase of own shares – – (0.2) – (0.2)
Equity-settled share-based payments – – 0.2 5.4 5.6
At 30 December 2023 25.2 0.8 (0.7) 593.2 618.5
Wickes Group Plc Annual Report and Accounts 2023 171
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Financial statements
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Strategic report
Notes to the Company financial statements
This section contains the notes to the Company financial statements.
The issued share capital and EBT share reserves are consistent with
the Wickes Group Plc Group Consolidated financial statements.
Refer to note 21 of the Group financial statements.
C1 Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 102
(“FRS102”) in conformity with the Companies Act 2006 and on an historical cost basis. The financial
statements are presented in pounds sterling and all values are rounded to the nearest £0.1m, except
when otherwise indicated.
See note 1 for general information about the Company.
The Company has used the exemption granted under s408 of the Companies Act 2006 that allows
forthenon-disclosure of the income statement of the Parent Company.
As the consolidated financial statements of the Group headed by the Company are prepared in
accordance with International Financial Reporting Standards as adopted by the UK and include the
disclosures equivalent to those required by FRS 102, the Company has also taken the exemptions
available in respect of the following disclosures:
– Cash Flow Statement and related notes
– Key Management Personnel compensation
– Certain disclosures required by FRS 102.26 Share Based Payments
– Certain disclosures required by FRS 102.11 Basic Financial Instruments in respect of financial
instruments not falling within the fair value accounting rules of Paragraph 36(4) of Schedule 1.
The Company did not have items to be reported as other comprehensive income; therefore, no statement
of comprehensive income was prepared.
C2 Significant accounting policies in this section
Financial instruments
Financial instruments and financial liabilities are recognised when the Company becomes a party to
thecontractual provisions of the instrument. Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements entered into. An equity instrument is any
contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Investment in subsidiaries
The Company’s investments in subsidiaries are carried at cost less provisions resulting from impairment.
Investments are assessed for indicators of impairment at each balance sheet date. If there is objective
evidence of impairment, an impairment loss is recognised in operating profit in the income statement as
a charge to administrative expenses.
In testing for impairment, the carrying value of the investment is compared to its recoverable amount,
being its value-in-use.
Where indicators exist for a decrease in a previously recognised impairment loss, the prior impairment
lossis tested to determine whether a reversal is required. An impairment loss is reversed on an individual
impaired asset to the extent that the revised recoverable value does not lead to a revised carrying amount
higher than the carrying value had no impairment been recognised.
Share-based payments
The financial effect of awards by the Company of options over its equity shares to employees of
subsidiary undertakings is recognised by the Company in its individual financial statements as an
increase in its investment in subsidiaries with a credit to equity equivalent to the cost in subsidiary
undertakings. The subsidiary, in turn, will recognise the cost in its income statement with a credit to
equity to reflect the deemed capital contribution from the Company.
C3 Key estimates and assumptions in this section
Impairment testing of investments in subsidiaries
The Company’s investments in subsidiaries have been tested for impairment by comparison against
theunderlying value of the subsidiaries’ assets based on a value in use calculation. The value in use
calculation requires estimation of future cash flows expected to arise from the subsidiary discounted
atasuitable discount rate in order to calculate present value. The significant estimates relate to the
Group’s profitability over the 5 Year Plan period, the longer term growth rate, and the discount rate used.
C4 Staff costs and Directors’ remuneration
The Company had no employees during the period, except for the Directors. The information on
compensation for the Directors, being considered as the key management personnel of the Company,
isdisclosed in note 30.
C5 Auditor’s remuneration
Amounts receivable by the Company’s auditor and its associates in respect of services to the Company
andits associates, other than the audit of the Company’s financial statements, have not been disclosed
asthe information is required instead to be disclosed on a consolidated basis in the consolidated
financialstatements.
Wickes Group Plc Annual Report and Accounts 2023172
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C6 Investment in subsidiaries
(£m)
Subsidiary
undertakings
Cost
At 1 January 2022 889.3
Additions – share based payments 3.7
At 31 December 2022 893.0
Additions – share based payments 4.5
At 30 December 2023 897.5
Impairment
At 1 January 2022 (118.5)
Impairment (175.6)
At 31 December 2022 (294.1)
Impairment –
At 30 December 2023 (294.1)
Net book value
At 30 December 2023 603.4
At 31 December 2022 598.9
Details of the Company’s subsidiaries at the balance sheet date are in note 17 to the Group financial statements.
In accordance with accounting standards the Company’s investments, which have indefinite useful lives,
must have an impairment review at each reporting period. The recoverable amount of an asset is the
greater of its value in use and its fair value less costs to sell: the value in use of the investment is derived
from the Group’s 5 Year Plan on a pre IFRS 16 basis and management believe that this represents a
higher value than a potential fair value valuation.
Key assumptions
The estimation of future cash flows is derived from the Board approved 5 Year Plan, consistent with the
basis discussed in note 15 to the Group financial statements. The key assumptions underpinning the
value in use model include revenue growth, gross margin, discount rate, and long term growth rate.
2023 2022
Pre-tax discount rate 15.8% 17.0%
Revenue growth rate 2% – 7% 0% – 7.7%
Gross margin 42.2% – 42.3% 44.7% – 45.0%
Long term growth rate 3.5% 3.5%
Management determined the values assigned to these financial assumptions consistently with the basis
discussed in note 15 to the Group financial statements.
In light of the challenges of performing Value in Use calculations in respect of an Equity Investment on
apost IFRS 16 basis, the both the FY22 and FY23 impairment reviews were performed on a pre-IFRS 16
basis. The discount ratedisclosed is therefore higher than that disclosed in Note 15 (as a pre IFRS 16
discount rate does not incorporate the cost of debt and lease liabilities).
Impairment
An impairment review was therefore performed, with no impairment indicated in the period ended
30 December 2023 (31 December 2022: impairment charge of £175.6m). The prior period impairment
reflected the deterioration in the UK macro-economic environment and economic outlook in 2022.
Impairment sensitivities
A sensitivity analysis was performed using changes in assumptions applied to the Value in Use
calculation that management consider to be reasonably possible. It is possible that a material movement
in headroom would have been identified in the impairment review if the key assumptions were changed in
the Value in Use calculations. The impact on headroom from these reasonably possible changes in
assumptions, with all other assumptions remaining the same, are shown below. An impairment charge of
£15.7m arises in the scenario where gross margin decreases by 1%. The amount by which the Gross
Margin assumption can decrease before an impairment charge arises is 0.9%.
Assumption Change in headroom
Pre-tax discount rate increases or decreases by 0.5% £(33.0)m – £36.7m
Revenue increases or decreases by 2% £41.4m – £(38.9)m
Gross margin increases or decreases by 1% £147.5m – £(147.5)m
Long term growth rate increases or decreases by 0.5% £26.3m – £(23.7)m
C7 Capital management and financial instruments
The capital structure of the Company comprises issued capital, reserves and retained earnings as
disclosed in the Company statement of changes in equity totalling £618.5m asat 30 December 2023
(31 December 2022: £597.1m).
Credit risk
As at 30 December 2023, the Company had short-term receivables of £15.1m (31 December 2022: £nil)
owed by subsidiary undertakings which are repayable on demand and bear no interest. The Directors do
not perceive that the recovery of this debt poses any significant risk to the Company given its size in
relation to the Company’s net assets.
Liquidity risk
The Company finances its activities through its investments in subsidiary undertakings.
The Company anticipates that its funding sources will be sufficient to meet its anticipated future
administrative expenses and dividend obligations as they become due over the next 12 months.
Wickes Group Plc Annual Report and Accounts 2023 173
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Financial statements
Other information
Strategic report
C7 Capital management and financial instruments continued
Market risk
As at 30 December 2023, the Company had short-term payables of £nil (31 December 2022: £1.7m)
owedtosubsidiary undertakings, which are repayable on demand and bear no interest.
Distributable reserves
The distributable reserves of the Company approximate to the accumulated profits, under Reporting
Standard FRS102, after deducting equity settled share based payments and investments in own shares,
resulting in distributable reserves of £582.5m (31 December 2022: £565.6m). When required the
Company canreceive dividends from its subsidiaries to further increase the distributable reserves.
In the 52 weeks ended 30 December 2023, the Company received £57.0m of dividends from its subsidiaries
(52 weeks ended 31 December 2022: £38.3m) to pay to its equity shareholders of the Parent.
C8 Related party transactions
The Company’s subsidiaries are listed in note 17 to the Group financial statements. The following table
provides the Company’s balances that are outstanding with subsidiary companies at the balance sheet date:
(£m)
As at
30 December
2023
As at
31 December
2022
Amounts owed from/(to) subsidiary undertakings – Wickes
Building SuppliesLimited 15.1 (1.8)
15.1 (1.8)
The amounts outstanding are unsecured and repayable on demand.
The following table provides the Company’s transactions with subsidiary companies recorded in profit
forthe financial year:
(£m)
52 weeks
ended
30 December
2023
52 weeks
ended
31 December
2022
Amounts invoiced by subsidiaries (2.4) (1.7)
Dividend received from subsidiaries 57.0 38.3
54.6 36.6
Amounts invoiced to/by subsidiaries relate to general corporate purposes.
Directors’ remuneration
The remuneration of the Directors of the Company is set out below. Further information about the
remuneration of individual Directors is provided in the audited part of the Directors’ Remuneration
reportonpage 120.
(£m)
52 weeks
ended
30 December
2023
52 weeks
ended
31 December
2022
Salaries and other short-term benefits* 2.2 1.5
Post-employment benefits* 0.1 0.1
Share-based payments* 1.1 0.8
3.4 2.4
* Emoluments and share-based payment charges for the Executive Directors are borne by a subsidiary company, Wickes Building Supplies
Limited, and recharged to Wickes Group Plc. Please refer to note 27 of the Group consolidated financial statements.
Directors’ interests in share-based payment schemes
Refer to note 27 to the Group financial statements for further details of the main features of the schemes
relating to share options held by the Executive Directors and Senior Management Team.
Other transactions
During the period, the Company did not make any purchases in the ordinary course of business from
anentity under common control.
C9 Events after the reporting period
After the year end the Company completed an “Amend and Extend” of its Rolling Credit Facility,
lengthening the term by a further two years to March 2028, with an option for an additional one year
extension. Total commitments on the facility remain at £80m, as well as retaining the £20m accordion.
Notes to the Company financial statements continued
Wickes Group Plc Annual Report and Accounts 2023174
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Financial statements
Other information
Strategic report
Shareholder information
Managing your shares
The Company’s share register is managed by our registrar, Link. Shareholders can manage their
shareholdings online through the Link Shareholder portal at www.signalshares.com. You will need
yourinvestor code to register – this can be found on your share certificate or dividend confirmation.
The benefits ofmanaging your shareholding online include the ability to:
– view your holding balance and get an indicative valuation;
– view movements on your holding;
– view the dividend payments you have received;
– cast your proxy vote online;
– update your address;
– register and change bank mandate instructions for dividends to be paid;
– elect to receive Shareholder communications electronically; and
– access a wide range of Shareholder information including the ability to download Shareholder forms.
Shareholder communications
We encourage our Shareholders to view Shareholder communications, including the Annual Report and
Accounts, electronically in order to minimise our impact on the environment and reduce costs. If you
currently receive communications in paper form and would like to switch to electronic communications,
youcan do this by visiting the Link Shareholder portal at www.signalshares.com or by contacting Link.
Financial calendar
The key events in our financial year will be posted on our website at www.wickesplc.co.uk
Annual General Meeting
The AGM is an important event that gives us an opportunity to engage with our Shareholders. Our 2024
AGM is scheduled to be held on 24 May 2024 at 9.00am. Details about the meeting and how to participate
will be available in the Notice of Meeting which will be posted on our website at www.wickesplc.co.uk
Dividends
An interim dividend of 3.6 pence per ordinary share was paid on 3 November 2023. Shareholders will be
asked to approve a final dividend for the financial year ended 30 December 2023 at the AGM. If approved,
a dividend of 7.3 pence per ordinary share will be paid on 6 June 2024 to Shareholders on the register on
the record date of 26 April 2024.
Dividend Reinvestment Plan
You can choose to have any cash dividends paid reinvested in further Wickes shares through the Dividend
Reinvestment Plan (terms and conditions apply). You can join the Dividend Reinvestment Plan via the Link
Shareholder portal www.signalshares.com or contact Link for details.
Paperless dividends
In line with our ambition to reduce our environmental impact and in line with market practice, we moved
to the payment of cash dividends through direct payment to Shareholder bank accounts in 2022. This
means that you will no longer be able to receive payment of dividends by cheque and a dividend confirmation
for each dividend will be available electronically at www.wickes-shares.com.
If you previously received your dividends by cheque you will need to register your bank details with Link
via the Shareholder portal www.signalshares.com or by contacting Link (contact details under ‘Managing
your shares’). Any unclaimed dividends will automatically be released into your bank account once your
bank details have been registered with Link.
Shareholder security
If you receive any unsolicited phone calls or correspondence concerning investment matters you should
get the name of the person and organisation and check that they are properly authorised by the FCA
– visit https://register.fca.org.uk/s/
If you think something is not right, report it to the FCA by calling the FCA consumer helpline on
08001116768 (freephone) – open Monday to Friday 8.00am-6.00pm and Saturday 9.00am-1.00pm.
More detailed information can be found on the FCA website www.fca.org.uk/scamsmart
Website publication
The Annual Report and Accounts 2023 will be available to view and download on the Company’s website
atwww.wickesplc.co.uk. We also publish on the website a machine-readable version of the annual accounts
using the single electronic reporting format (ESEF) as required under Disclosure Guidance and Transparency Rule
4.1.14R and in accordance with the ESEF Regulation. The ESEF format of the accounts has not been audited.
Useful information
Registered office address:
Wickes Group Plc
Vision House
19 Colonial Way
Watford
WD24 4JL
United Kingdom
Company number
12189061
Registrar
Link Group
Central Square
29 Wellington Street
Leeds LS1 4DL
Tel: +44 (0)371 664 0300*
Email: enquiries@linkgroup.co.uk
Investor Relations
investorrelations@wickes.co.uk
Corporate brokers
Investec
Peel Hunt
Independent auditor
KPMG LLP
* Calls are charged at the standard geographic rate and
willvarybyprovider. Calls outside the UK will be charged
attheapplicable international rate. Lines are open between
9.00am-5.30pm, Monday to Friday excluding public holidays
inEngland and Wales.
Wickes Group Plc Annual Report and Accounts 2023 175
Governance
Financial statements
Other information
Strategic report
Glossary
Adjusted EBITDA Earnings before Interest, Tax, Depreciation and Amortisation and before adjusting items.
AGM Annual General Meeting
BNPL Buy Now Pay Later
BRC British Retail Consortium
CAGR Compound Annual Growth Rate
CDP Carbon Disclosure Project
CEO Chief Executive Officer
CFO Chief Financial Officer
CGU Cash generating unit
CSAT Customer Satisfaction
D&I Design & Installation
Dividend Cover The ratio of dividends paid and proposed in relation to the financial period against
adjustedearnings per share
DIY Do-it-yourself
DRR Directors’ Remuneration report
DTR Disclosure Guidance and Transparency Rules
EBITDA Earnings Before Interest Tax Depreciation and Amortisation
EBT Employee Benefit Trust
ECL Expected credit loss
EMS Environmental Management System
EPS Earnings per share
ESG Environmental, Social, Governance
EV Electric vehicle
FCA Financial Conduct Authority
FCF Free cash flow
FRC Financial Reporting Council
FTE Full-time equivalent
GHG Greenhouse gas
H&S Health and safety
HGV Heavy goods vehicle
I&D Inclusion and diversity
IFRS International Financial Reporting Standards
KPI Key performance indicator
LED Light-emitting diode
LFL Like-for-like
LR Listing Rules
MME Missions Motivation Engine
NED Non-executive Director
Order Book Orders that have been placed but not yet delivered: a measure of secured futurerevenue
PBT Profit before tax
PIE Public Interest Entity
Plc Public limited company
ppts percentage points
RCF Revolving Credit Facility
REACH Registration, Evaluation, Authorisation and Restriction of Chemicals
Returns to
shareholders
Sum of dividends paid and proposed in relation to the financial period, plus
theconsideration paid for shares as part of the share buyback programme
RIDDOR Reporting of Injuries, Diseases and Dangerous Occurrences Regulations
ROCE Return on Capital Employed: a measure of the profit generated by capitalexpenditure
RPI Retail Prices Index
SaaS Software as a Service
Sales density Sales per square foot
SASB Sustainability Accounting Standards Board
SAYE Save As You Earn
SBT Science-based targets
SECR Streamlined Energy and Carbon Reporting
SID Senior Independent Director
SIP Share Incentive Plan
SKU Stock Keeping Unit
SVHC Substance of very high concern
TCFD Task Force on Climate-related Financial Disclosures
TSR Total Shareholder Return
VOC Volatile organic compound
Wickes Group Plc Annual Report and Accounts 2023176
Governance
Financial statements
Other information
Strategic report
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© Wickes Group Plc
Vision House
19 Colonial Way
Watford
United Kingdom
WD24 4JL
wickesplc.co.uk
Annual Report and Accounts 2023