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Wickes Group Plc
Annual Report and Accounts
2022
THIS YEAR
WE CELEBRATE
THE 50TH ANNIVERSARY
OF THE BRAND IN THE UK
CEO’s introduction
Over the past 50 years, the way people use and enjoy their
homes has changed dramatically, never more so than in recent
history during the pandemic. At Wickes, we are very proud to
have played our small part in the history of home improvement.
As a digitally-led, service-enabled home improvement 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.
Our uniquely balanced business, across the three different
customer propositions of Local Trade, Do-it-for-me (DIFM)
andDo-it-yourself (DIY), means we are perfectly placed to help
all customers, whatever their home improvement project might
be. We look forward to many more decades of helping the
nation feel house proud.
DAVID WOOD
Chief Executive Officer
Strategic report Governance Financial statements Other information
WHAT’S INSIDE THIS REPORT CONTENTS
Strategic report
2 Financial and strategic highlights
3 Responsible Business highlights
4 Overview
5 A sound investment case
6 Chair of the Board’s statement
8 Chief Executive Officer’s review
12 50 years and a bright future
16 Market review
20 Business model
24 Strategy in action
31 Key performance indicators
33 Responsible business
54 Non-financial information statement
55 Section 172
60 Financial review
63 Risk management overview
66 Principal risks and uncertainties
71 Viability statement
Governance
73 Governance at a glance
74 Introduction to governance
76 Board of Directors
79 Governance report
86 Nominations Committee report
93 Audit and Risk Committee report
98 Responsible Business Committee report
101 Directors’ Remuneration report
115 Directors’ report
118 Statement of responsibilities
Financial statements
119 Independent Auditor’s report to the members of Wickes Group Plc
127 Consolidated income statement and other comprehensive income
128 Consolidated balance sheet
129 Consolidated statement of changes in equity
130 Consolidated cash flow statement
131 Notes to the consolidated financial statements
155 Company balance sheet
156 Company statement of changes in equity
157 Notes to the Company financial statements
Other information
160 Shareholder information
162 Glossary
163 Alternative performance measures
CEO’S
REVIEW
RESPONSIBLE
BUSINESS
OUR INVESTMENT
CASE
OUR BUSINESS
MODEL
STRATEGY IN ACTION 50 YEARS OF
HELPING THE NATION
FEEL HOUSE PROUD
CHAIR OF THE BOARD’S
INTRODUCTION
TO GOVERNANCE
08
24
74
2033
12
05
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 1
Adjusted revenue (£m)
2
021: £1,534.9m
£1,559.0
m
2022
2021
2020
2019
1,559.0
1,534.9
1,346.9
1,292.4
Net debt (£m)
2
021: £618.7m
£
591.8m
2022
2021
2020
2019
591.8
618.7
783.5
829.6
LFL sales growth
3
2
021: 13.0%
3.5%
2022
2021
2020
2019
3.5
13.0
5.0
8.7
Adjusted PBT (£m)
1
2
021: £85.0m
£75.4
m
2022
2021
2020
2019
75.4
85.0
49.5
62.3
Adjusted basic earnings per share (p)
2
2
021: 27.2p
23.8p
2022
2021
2020
2019
23.8
27.2
16.1
20.0
TradePro accounts (k)
2
021: 634k
746
k
2022
2021
2020
2019
746
634
553
509
Statutory PBT (£m)
2
021: £65.4m
£40.3m
2022
2021
2020
2019
40.3
65.4
28.9
22.7
Statutory basic earnings per share (p)
2
2
021: 23.3p
12.6p
2022
2021
2020
2019
12.6
23.3
10.4
5.1
Stores in new format (%)
2
021: 65%
70
%
2022
2021
2020
2019
70
65
61
57
FINANCIAL HIGHLIGHTS
1 Refer to the Income Statement on page 127
2 Refer to note 11 on page 141
3 Refer to note 5 on page 137
STRATEGIC
HIGHLIGHTS
Financial and strategic highlights
DIGITAL INNOVATION
Building on our strong digital foundations,
2022sawsome exciting innovations in
customerservice and insight. Using handheld
digital technology, our colleagues have been
ableto speed up the product picking process
socustomers can now Click & Collect in just
30 minutes. We have also put into action our
Missions Motivation Engine tool, which uses
data and analytics to better understand our
customers, and have rolled out ten programmes
to inspire and support customers with their
home improvement projects.
INVESTING IN OUR STORES
In 2022, we welcomed customers to our new
Bolton store, our first new store to open in three
years and the first of around 20 new stores to
open over the next five years. 2022 was also a
successful year for our refit programme with the
refitting of 12 stores, typically delivering sales
growth and ROCE over 25%.
LAUNCHED NEW ‘WICKES
LIFESTYLE KITCHEN’ RANGE
We repositioned and expanded our ready-to-fit
kitchen ranges as ‘Wickes Lifestyle Kitchens’,
which is aimed at the lower budget kitchen market.
The range, which includes eight new ready-to-fit
kitchens, has a digital design element to it, which
ismanaged through a virtual sales hub in our
Bicester store.
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Wickes Group Plc Annual Report and Accounts 20222
Responsible Business highlights
RESPONSIBLE BUSINESS
HIGHLIGHTS
SUSTAINABLE
HOUSEGUIDE
We have launched our online
SustainableHouse where customers
canfind out how they can make their
homes more sustainable with hints
andtipsto save energy and
reduce costs
SCIENCE BASED TARGETS
We have announced our near-term Science
BasedTargetstoreduceour absolute emissions
acrossourbusinessand supply chain by 2030
PRODUCT
CATEGORISATION
We have categorised every single
product we sell, which will help our
colleagues and customers
understand their
environmental impact
COMMUNITY
PROGRAMME
ORGANISATIONS
We have supported over
800organisations across the UK,
withover 200 of our stores
participatingin the programme
tosupport their local communities
£2m+
SUPPORTING YOUNGMINDS
We have raised over £2 million for our charity partner, YoungMinds
I&D LEADERSHIP
AWARDS
Our I&D employee network leads
havebeenrecognised within the
nationalEMpower, HERoes
andOUTstanding lists 2022
PERIOD POSITIVE
We launched a Period Positive
campaign which offers free sanitary
products for all colleagues across
allstores, distribution centres
andsupport centres
We have been recognised in the
Financial Times Diversity Leaders
report 2023
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 3
8100
colleagues
230
stores
WICKES
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
A uniquely balanced
business supporting
threecustomer
propositions:
LOCAL TRADE
From trade-trusted brands and a
flat 10% discount, we can save
you time and money when you
shop with TradePro:
 Extension
 Loft conversion
 Driveway
DO-IT-FOR-ME
From concept to completion,
plus all the finishing touches,
we can help you with your
project every step of the way:
 Kitchen
 Bathroom
 Tiling
DIY
From our curated range to bringing
you the right quality products at the
right prices, we can help you to
tackle your project, providing
advice, guidance and knowledge:
 Painting
 Hang a shelf
 Gardening
Supported by an efficient
and integrated model:
Curated
product ranges
Digitally-led
Distinctive
service model
Low-cost,
physical estate
Simple,
clear pricing
OUR COMMITMENT TO
GROWING RESPONSIBLY
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; we’re supporting the fight against climate change and taking
action to protect the natural environment; and we’re helping the nation
make their homes more sustainable.
ENVIRONMENT
S
a
f
e
t
y
a
n
d
w
e
l
l
b
e
i
n
g
S
t
r
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r
n
a
n
c
e
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p
p
l
y
c
h
a
i
n
a
n
d
r
e
s
p
o
n
s
i
b
l
e
s
o
u
r
c
i
n
g
HOMES
PEOPLE
BUILT
TO
LAST
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Wickes Group Plc Annual Report and Accounts 20224
WE ARE A SUCCESSFUL, GROWING AND
PROFITABLE HOME IMPROVEMENT BUSINESS,
WITH A COMPELLING INVESTMENT CASE
A sound investment case
25%
ROCE from store refits
2/3rds
of sales digitally-enabled
98%
of sales are touched
by our stores
WE OPERATE IN A MARKET WITH
LONG TERM STRUCTURAL GROWTH
The UK home improvement market has
been growing at an average 2.5% per
annum for the last ten years (source
GfK) and this is expected to continue,
with growth being driven by:
– a rising number of UK households;
– increasing UK home ownership;
– more time spent in the home and
garden as a result of hybrid
workingpractices;
– investment by consumers to reduce
energy costs and make their homes
more energy efficient.
Rising mortgage rates may have some
impact on housing market activity and
disposable income in the short term,
although unemployment remains low
and a largeproportion of expenditure
across the market is carried out by older,
wealthier homeowners.
BALANCED BUSINESS MODEL
The business is split across three
distinct customer propositions – Local
Trade, Do-it-for-me (DIFM), and DIY
Retail. This balanced business model
gives us greater exposure to the fastest
growing sectors in the market, and
provides us with greater resilience to
consumer trends. In addition, our range
of proven growth levers across our
customer three propositions has driven
additional market share gains. These
growth levers, particularly digital
development, TradePro and store refits,
are relatively immature, and should,
along with the white space catchments
we have identified, continue to drive
revenue growth and share gains over the
next few years. Any capacity reduction
from weaker competitors could enhance
these likely share gains.
ABILITY TO BENEFIT FROM
OPERATING LEVERAGE AS
BUSINESS GROWS
A combination of market growth and
share gains should generate mid single
digit revenue growth over the cycle. Our
growth levers have successfully driven
sales densities, and, looking ahead, this
will be supplemented by the contribution
from new stores. At the same time, our
occupancy costs are stable, and our
three customer propositions allow us to
schedule colleagues efficiently across
the trading week. As a result of this
efficient model, we would expect to
growprofit at least as fast asrevenue
over the economic cycle.
STRONG OPERATIONAL
CASHFLOW SUPPORTING
FUTUREGROWTH AND DIVIDENDS
FOR SHAREHOLDERS
Our profitable business model generates
strong operational cash flow. The cash
generated funds new capital investment
into our proven growth levers – store refits,
new stores, digital – which deliver revenue
and profit growth with a good return on
capital. In addition to re-investing for
growth the business is able to deliver
healthy dividends to shareholders from
itsoperational cash flow.
BALANCE SHEET STRENGTH
ANDPOTENTIAL ADDITIONAL
CAPITAL RETURNS
At demerger, we outlined the rationale
for a strong balance sheet to give us
flexibility for future investments or to
trade through periods of uncertainty.
InMarch 2022, we outlined a target
toreduce lease-adjusted net debt /
adjusted EBITDA to below 2.75x; when
the ratio consistently falls below this,
wewould expect to return surplus cash
to Shareholders in the form of special
dividends or share buy-backs.
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Wickes Group Plc Annual Report and Accounts 2022 5
INVESTING IN GROWTH AND
DOING SO RESPONSIBLY
Chair of the Board’s statement
Supporting customers and colleagues
2022 stands out as a year of considerable
geopolitical and economic disruption following
theRussian invasion of Ukraine. The resulting
energy insecurity, supply chain disruption and rising
inflation have put significant pressure on household
finances. We are very conscious of the environment
we are now living in and are focused on supporting
our customers and colleagues during this cost of
livingcrisis.
As consumers keep a watchful eye on their
household expenditure, we are attracting customers
with great-value products and services they can
trustand are well placed to help people tackle their
rising energy costs. The recent launch of our online
interactive Sustainable House guide provides a
plethora ofhints and tips to help customers make
their homes more energy efficient and bring down
their utility bills.
Equally important is how we can support our
c.8,100 colleagues through these challenging times.
In addition to bringing forward and upweighting
2023 annual salary increases, we have set up a
costof living colleague working group which has
produced acomprehensive resource to help with
budgeting, financial planning, savings, debt support
and the provision of accessible short term loans
through payroll. We also recognise the toll that the
cost of living crisis and pandemic are taking on
people’s mental health and wellbeing, and we are
working hard to ensure we offer colleagues the
support they need.
2022 was a milestone year for Wickes as we
celebrated our 50th anniversary. On pages 12-15
wereflect on some of the trends and changes
within the home improvement sector and our
business over the past five decades, and look
ahead to a bright future as we continue to help
thenation feel house proud.
Performance
In 2022 we delivered sales of £1.6bn and an
adjustedprofit of £75.4m, and whilst this represented
a decline in profits year on year we nevertheless
continued to strengthen the business and grow
market share in an uncertain environment. This
isonly possible thanks to our fantastic team of
colleagues who come to work every day to provide
outstanding service and care for each other and their
customers. On behalf of the Board and myself, I’d like
to extend our sincerest thanks for everything that
they do to make Wickes the great business it is.
This has been a pivotal year for the home
improvement market as two years of pandemic
disruption have receded and we’ve returned to more
normal business patterns. Thanks to our balanced
business model, we have been able to successfully
navigate volatile trading conditions. At the
beginning of the year, we benefited from carrying
over a strong DIFM order book and passing the
anniversary of the showroom closures in the first
four months of 2021. Throughout 2022, Local Trade
has seen a strong performance as tradespeople
were allowed back intopeople’s homes. And in DIY,
whilst sales have come offtheir pandemic heights,
they remain significantly ahead of 2019 levels.
CHRISTOPHER
ROGERS
Chair of the Board
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Wickes Group Plc Annual Report and Accounts 20226
Investing in a bright future
Looking ahead to 2023, we face significant
costheadwinds with material increases to our
energy bill and wages. Wecontinue to run our
business as efficiently and effectively as possible
and, whilst we areoperating in an uncertain
economic environment, we remain confident in
ourstrategic growth levers (see pages 23-30)
andarecommitted to continuing to invest in them.
In our Preliminary results last March, we announced
plans to accelerate our store refits programme and
to open around 20 new stores over the next five
years, and I was delighted when our first new store
inthree years opened in Bolton in October. Innovation
is key to a bright future, and across our three
customer propositions we are developing exciting
new products and services. A great example is the
recent launch of our Wickes Lifestyle Kitchens range,
where we identified an opportunity to reposition and
innovate our ready-to-fit range to grow our market
share of the lower-budget kitchen market.
We remain confident in our
strategicgrowth levers.
Dividend
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 2021.
Board
In January 2022, we announced the retirement of
ourChief Financial Officer, Julie Wirth. Julie played
a pivotal role in the successful demerger and listing
of the Company, and on behalf of the Board I
wouldlike to thank Julie for her huge contribution,
particularly as we demerged from Travis Perkins
Plc. Julie stepped down from the Board on 29 July
andwas succeeded by Mark George, who joined
Wickesfrom The Gym Group PLC, where he was
Chief Financial Officer.
With a strong track record in a listed company
environment, Mark brings extensive financial
leadership, strategy and investor experience
combined with a passion for the customer.
Asaresult of this change, the gender diversity
ofthe Board was reduced. We believe that having a
diverse Board is in the best interests of the business
and we are currently in the process of recruiting
another Non-executive Director and will keep
diversity at the front of our minds during this
recruitment process.
2022 has been a year of evolution and
transformation for Wickes. We have made great
progress with the separation from Travis Perkins
Plc and we remain on track to complete the
separation in 2023, as planned.
We havefirmly positioned ourselves as a market
leading business that is investing in growth and
doing soresponsibly. You can learn more about our
progress on environmental, social and governance
matters in the Responsible Business section of this
report. Whilst the external environment continues to
be challenging, Wickes has the tools and resources
to emerge as a stronger and more focused business,
and we look forward to an even brighter future.
Christopher Rogers
Chair of the Board
22 March 2023
The Wickes culture is stronger than
ever and I’m tremendously proud of
our colleagueswho work tirelessly
everyday to help our customers feel
house proud.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 7
WE’RE HERE TO HELP
THE NATION FEEL HOUSE PROUD
Chief Executive Officer’s review
We continue to believe that behavioural changes post
Covid remain supportive. Many businesses have
retained hybrid working practices, increasing time
spent at home, fuelling further desire for homeowners
and tenants to invest in their properties. While some
DIY activities were brought forward into the early
phases of the pandemic, some larger projects –
involving our Local Trade and DIFM segments – may
have been deferred. The growth of our TradePro
customer base showed continued momentum and
accelerated in 2022, reflecting strong order books
across the trade and the increasing importance of
value for money in an inflationary environment.
More recently, the sharp rise in energy prices has
seen increased focus on the energy efficiency of UK
housing. Wickes is well-placed to help with the drive
for energy efficiency through the products and
services we sell, such as insulation, lighting and
smart meters, and through the advice we offer.
In 2022 we launched our interactive Sustainable
House Guide, highlighting the measures that can
betaken in each room of the house (or garden),
witha click through to the relevant products.
Thiscomplements our online Energy Saving
adviceguide, and our work with the Energy Saving
Trust (EST) to verify the financial benefits from
each product.
The UK also has the oldest housing stock in northern
Europe, with an average age of 65 years. One third
were built before 1945. This is supportive in itself for
structural growth in the RMI (Repair, Maintenance
and Improvement) market, but ongoing government
measures taken to improve energy efficiency are
likely to require a multi-year investment in the UK
housing stock. For example, it is estimated that
around half of UK housing requires some form of
investment to meet an EPC rating of C or better.
In our 50th year I’m delighted to report we achieved
record sales and made further market share gains.
While profit declined, the outcome is still ahead
ofthe pre-Covid period. Our performance was
underpinned by our uniquely balanced business
model, our digital leadership and our ability to
offerthe best value and service proposition
acrossTrade, DIFM and DIY. I’d like to thank
allourfantastic colleagues for their hard work,
passion and commitment to giving our customers
outstanding service and helping create our unique
Wickes’ culture.
DAVID WOOD
Chief Executive Officer
We are encouraged by how 2023 has started, with
performance in line with our expectations. Whilst
we are mindful of the macroeconomic backdrop,
weremain confident in our ability to drive further
market share gains, given the strength of our
proposition and improvements we have made to the
offer. Inflationary pressures will affect our cost base
in 2023, although we have efficiency plans in place,
which will offset all these increases, except for
energy. Like all businesses we remain watchful
ofthe external consumer environment. However,
wehave the right strategy and a strong and
compelling offer. We will continue to invest across
our distinctive growth levers, and are well-placed
toachieve further market share gains.
Market
2022 proved to be a challenging year for the market,
driven by well-documented challenges facing the
consumer. The need to combat rising inflation has
seen UK and global interest rates rise, and, as a
result, house price inflation and transaction
volumes are now starting to moderate.
Despite this softer economic environment, which we
expect to continue in 2023, UK home improvement
remains a large and attractive market. The structural
drivers remain intact, which will continue to support
market growth over the medium term. These include
behavioural changes brought about by the pandemic,
the need to improve energy efficiency to reduce
heating costs and emissions, and the age and
composition of the UK housing stock. Importantly,
atthe same time it is worth noting that most
homeowners either remain in work, choose not to
be,or are retired. Our exposure to new build, which
may be more cyclical, is very limited.
Strategic report Governance Financial statements Other information
8 Wickes Group Plc Annual Report and Accounts 2022
Under current proposals, all UK homes will need to
achieve this by 2030, and rental properties by 2025.
Add in an element of likely population growth, and
atrend towards more single person dwellings, and
the outlook for the home improvement market
remains bright.
The homeowning demographic into which our
LocalTrade and DIFM end propositions face also
leave us well placed to continue to take share, as do
our credentials for value, quality and convenience.
Although as yet we have seen little sign of trading
down or rising own label participation, our surveys
tell us that customers are becoming more discerning
on price and are shopping around more. We believe
that our value credentials, the strength of the Wickes
brand, our simple and clear pricing policy, alongside
our 10% flat rate discount to all TradePro members,
stand us in good stead if market conditions become
more challenging.
Operational progress
We are pleased to have made strong operational
progress since demerger, reflected in continued
growth in Core market share and a strong recovery
in delivered DIFM sales.
During the year, we demonstrated the flexibility of
Wickes’ operating model, including a number of
actions undertaken to respond to more challenging
market conditions, and to drive further efficiencies
within the business to offset increases in our cost
base. Our balanced model gives us the agility to
respond to changes in customer demand, leading
toefficiencies across both store and distribution
centre fulfilment costs.
We have continued to invest in the customer
proposition. We refitted another 12 stores in
2022,showcasing our full offer of kitchens and
bathrooms, and taking the number in the new
format to 162. We continue to see strong returns
and sales uplifts in our refitted stores.
Our store refresh programme also continues, with
particular focus on the efficiency of multi-channel
order pick and despatch, which drives selling
densities and underpins our 30-minute click &
collect promise. We have added Klarna to our
onlinepayment options, and continue to have a
verycompetitive APR of 4.9% in our DIFM business
despite rising base rates. All these initiatives are
reflected in our customer satisfaction metrics,
which have risen in all areas of the business
(in-store, click & collect and home delivery).
Our balanced model gives us the
agility to respond to changes in
customer demand, leading to
efficiencies across both store and
distribution centre fulfilment costs.
LFL sales across the Group were up 3.5% despite
very tough comparatives in our Core business. Core
LFL revenue declined by 2.0%, with the second half
stronger as comparatives eased and as sales of
energy-saving products helped our DIY category
towards the end of the year. During the year we
continued to prioritise our price leadership by
working closely with our suppliers. We remained
committed to managing supply chain inflation
responsibly and our selling price inflation hasbeen
significantly less than our cost price inflation.
The estimated level of selling price inflation for
thefull year was 13% (first half 15%, second half
10%), driven mainly by categories such as timber
and cement. Inflationary pressures eased in the
second half, withthe timber price declining year
onyear, and wewould expect this trend to
continueinto 2023.
Despite the well documented industry
shortagesincertain categories in the first half,
ourstrong supplier relationships, curated range
andoperational agility served us well to continue
toprovide customers with the products they
need.Together with our price leadership and own
brandcredentials, we believe our strong focus
onavailability helped to drive increased revenues
andawareness of Wickes, as reflected in our Core
market share gains and the strong performance
ofTradePro, where both membership and sales
increased by almost 20%.
We entered FY 2022 with an elevated pipeline
ofDIFM orders due to the impact of Covid on the
ability of our installation teams to deliver projects in
the final quarter of 2021. Despite moderately lower
orders over the course of the year, the successful
work through of the order book resulted in LFL
delivered sales increasing by 26.1%. Although
therewas some disruption inthefirst half relating
toCovid and the supply ofappliances, these issues
faded as the yearprogressed.
There was another strong performance in
bathrooms, where new ranges in sanitaryware and
accessories, and a wider range of pricing options,
have helped to broaden our appeal. Refitted stores
also continue to perform strongly in DIFM due to
the welcoming nature of new showroom displays.
We noted in our July trading update that DIFM
ordershad slowed in early summer, as customers
were taking longer to commit to big ticket purchases.
However, the pace of order decline moderated into Q4,
and in the first 11 weeks of 2023 ordered sales are in
line with the same period last year.
Despite the impact of heightened
build costs during the year, store
investments continue to deliver sales
uplifts of 25% and ROCE of over 25%.
At the end of 2022, the order book was below
theprior year, although still ahead of pre-Covid
levels. Given improvements in product availability
and labour scheduling, we would expect the order
book to return to more normal levels by the end
of2023. This will result in delivered sales being
above ordered sales for the year, although this
isexpected to stabilise in 2024 and beyond.
Winning for Trade
Our TradePro membership scheme showed
increasing momentum in the period. We enrolled
112,000 customers in the year, taking its total
membership to 746,000 as we continued to grow
theawareness and appeal of the scheme through
itscompelling proposition. Our local trade customers
indicate that they are increasingly conscious of rising
material costs and are switching to Wickes for its
strong value credentials and simple discount scheme.
We also believe the recent addition of 30 minute
click-and-collect to our offering has increased the
attraction of the scheme during a period where
tradespeople are finding ways to most efficiently
usetheir time whilst balancing full order books.
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Wickes Group Plc Annual Report and Accounts 2022 9
We are encouraged that the TradePro members
joining the platform during the year have adopted
characteristics in line with previous cohorts using
the platform. Sales from TradePro customers in
theyear increased by 19% compared to 2021. Our
TradePro customers continue to represent strong
strategic value to Wickes in terms of average order
value and frequency of visit, and we have plans to
evolve our offering in 2023 to drive further loyalty
and engagement.
To this end, we are encouraged that the results of
our February Mood of the Nation survey showed
that 45% of tradespeople have a pipeline of work
forover three months. Although this is moderately
down on the prior year, it remains healthy by
historical standards.
Accelerating DIFM
Developing our digital expertise and continuous
innovation of our product range continues to
beakeyfocus within DIFM. During the year we
completed the major refresh of our kitchen ranges
initiated in Autumn 2021, introducing a number
ofnew ranges and trending colourways during
theperiod.
Following the introduction of a completely new
bathroom range during the second half of 2021,
wecontinued to introduce new products to our
showroom displays. We have also further improved
our end-to-end bathroom service by driving greater
engagement with our design consultants, supported
by focused recruitment of installers withbathroom
capabilities. Across kitchens and bathrooms our
installer network continues to grow and now stands
at 3,000 teams of independent contractors (March
2021: 2,600), enabling Wickes to continue to offer
market-leading lead times whilst retaining a flexible
approach to capacity.
We continue to see encouraging attachment rates
of tiling, flooring and joinery sales to kitchen and
bathroom projects, confirming the opportunity to
increase overall project spend within the home.
DIY Category Wins
As communicated in our July trading update,
following the Jubilee weekend in June, we
experienced signs of the DIY market softening from
the very high levels of demand experienced during
the pandemic. DIY sales continued to underperform
Local Trade for most of the second half, although
towards the end of the fourth quarter DIY sales
started to recover with strong growth in sales of
energy-related products such as insulation, smart
meters, lighting and draught excluders.
We have made it easier for customers to access
these products with the launch of our Sustainable
House Guide on our website, with advice on
sustainable living and energy reduction for all
rooms in the house with a click to purchase
optionfor the most important products.
In line with our strategy to capture share in
underweight categories, we have grown market
share in key segments such as garden and décor
following recent range reviews. This has included
the roll out of our new Crown colour emulsion paint
range to support greater customer choice across
different price points. The continued growth of our
extended online range continues to support range
depth whilst our curated range in store lends itself
to high stock turn and limited exposure to highly
seasonal lines and markdown activity across the
wider sector.
Within our ready-to-fit kitchen offer, we have
launched six new ranges as part of a rebranding
ofthis offer to Wickes Lifestyle Kitchens. This range
isnow offered with an online design option, which
enables us to provide an excellent design service for
projects with lower price points than our showroom
ranges, thus allowing us to operate over a broader
section of the market.
Digital developments
Despite the unwinding of Covid influences we have
continued to grow the proportion of our digitally-
enabled sales on a year-on-year basis. We completed
a number of enhancements to our digital capabilities
in the year, including greater use of push messaging,
personalisation and targeted campaigns across
ourdigital channels. Underpinned by our predictive
Missions Motivation Engine, which is generating
identifiable incremental sales, we have also stepped
up the digital experience for our trade customers,
increasing the levels of engagement throughout the
project journey. Increased use of social campaigns
and display marketing has also grown the awareness
of the TradePro mobile app.
We launched our Wickes eBay store during the
yearwith 4,000 lines, extending our customer reach
to a younger audience. We are currently looking at
opportunities with marketplace platforms, including
eBay, to extend our range accessibility to a wider
audience of home improvers. We also now offer
Klarna as an online payment solution.
Chief Executive Officer’s review continued
IT SEPARATION
Following initial mobilisation during
the previous financial year, 2022 saw
good progress with the transition of
technology and processes from our
previous parent Travis Perkins plc.
The second half of the year saw
newFinance and HR systems go
live, plus a successful migration
ofour office collaboration platform.
Weremain focused on delivery of the
separation of the IT infrastructure in
2023 as planned. All aspects of the
programme continue to be overseen
by the Wickes Executive and PLC
Boards who monitor delivery and
any operational risk arising.
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Our digital marketing campaigns have been
recognised across the industry with Wickes
receiving a number of prestigious awards. At the
recent Marketing Week Awards Wickes claimed the
coveted Grand Prix award, a large part of which was
based on the success of the Mission Motivation
Engine. Wickes also received the awards for Retail
and Ecommerce and Best Use of Segmentation,
making it the most decorated brand at the
2022awards.
Growing our estate of new format stores
12 store refits were completed during the year,
including the downsize and refit of our Maidstone
store. In addition to a new format showroom, our
refitted stores also benefit from an improved
orderfulfilment layout which increases our
homedelivery capacity.
Despite the impact of heightened build costs
duringthe year, store investments continue to
deliver sales uplifts of 25% and ROCE of over 25%.
Sales increases by category are very consistent,
with over 50% uplift in DIFM sales and around 10%
in Core. We will continue our refit programme in
2023, where possible tied to lease renewals.
Our property team is continuing to review and stress
test a number of white space catchments and we
remain confident on the opportunity to expand into
20 new locations over the next five years. Our first
new store for some time opened in Bolton in October,
and further openings are planned in 2023.
IT separation
Following initial mobilisation during the previous
financial year, 2022 saw good progress with the
transition of technology and processes from our
previous parent Travis Perkins plc. The second
halfof the year saw new Finance and HR systems
go live, plus a successful migration of our office
collaboration platform. We remain focused on
delivery of the separation of the IT infrastructure
in2023 as planned. All aspects of the programme
continue to be overseen by the Wickes Executive
and PLC Boards who monitor delivery and any
operational risk arising.
Responsible Business Strategy update
In 2022, we launched our new Responsible
Business Strategy, Built to Last and this has been
ayear of strategy development, target setting and
action planning, with significant progress made
across all three pillars of the strategy.
People
Inclusion and Diversity remains central to our
peoplestrategy. Our ‘Feel at Home’ Inclusion &
Diversity programme continues to go from strength
to strength and receive national recognition and
awards. We were recently recognised as the no.1
retailer in Stonewall’s Top 100 UK Employers List
2023, ranking no. 11 in the overall list of public,
private and third sector employers. We have also
been included again within the Financial Times
Diversity Leaders report, ranking as a top fiveretailer.
As our charity partnership comes to an end in
March 2023 we’re proud to have achieved our
£2 million fundraising goal for YoungMinds,
thanksto the generosity of our customers, suppliers
and colleagues who have been so committed to
supporting young people’s mental health. In the
year we have rolled out the Wickes Community
programme to all stores, and to date over 200
stores have supported 800 projects in their
localcommunities.
Environment
We have worked hard over the last year to embed
climate change and sustainability across the business.
For our first-ever CDP (Carbon Disclosure Project)
Climate submission we were pleased to achieve a
rating of B-, placing us in the ‘Management’ category.
We also submitted a basic response for the Timber
category survey ahead of our full response next year.
Towards the end of last year we launched our
near-term Science Based Targets, which are: to
reduce absolute scope 1 and 2 emissions by 42%
by2030 (from a 2021 base year); for 45% of our
suppliers by emissions covering purchased goods
and services to have science-based targets by
2027; and to reduce scope 3 Greenhouse Gas
(GHG) emissions from the use of sold products
by42% by 2030 (from a 2021 base year).
Homes
In line with our purpose to make the nation feel
house proud, we want to help customers feel
proudof their homes for saving energy and
protecting the environment. To that end, we are
focused on providing customers with a broad range
of sustainable and energy efficient products and
services to achieve long term decarbonisation
targets and short term relief on the cost of living.
InFY2022 we introduced our ‘Energy Saving Advice’
pages on our customer website, in conjunction
withthe Energy Saving Trust, supported by our
interactive Sustainable House Guide. During the
year we undertook a comprehensive programme to
taxonomise and label our products into a new set of
categories in order to understand the environmental
performance of those products and assess any
gaps in our ranges to support energy efficiency.
Whilst we are mindful of the macroeconomic
backdrop, we are confident in our ability to continue
to grow ahead of the market, due to our distinctive
customer proposition, balanced business model
and proven growth levers.
David Wood
Chief Executive Officer
22 March 2023
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Wickes Group Plc Annual Report and Accounts 2022 11
FROM SMALL
BEGINNINGS
50 years and a bright future
The Wickes brand was born in 1854 in the United
States, when Henry Dunn Wickes and his brother
started a modest operation in the local timber
business in Michigan. Fast forward to the mid 1950s
and an American property boom saw the brand
develop into a one-stop shop selling construction
materials to builders. It wasn’t until 1972 that
Wickes crossed the Atlantic to set up shop in the
UK, at its first store in Whitefield, Manchester.
Over the following years, Wickes steadily grew its
store network in the UK and underwent a change
ofownership in 2000, and again in 2005 when it
wasacquired by Travis Perkins Plc. In 2021, Wickes
demerged from Travis Perkins Plc to become
astandalone company listed on the London Stock
Exchange. Fifty years on from its first store in
Manchester, Wickes has grown to 230 stores, with
the most recent addition in Bolton, which opened
itsdoors to customers in October 2022.
It’s our Wickes culture that makes this business
sospecial. Over 50 years, the business has evolved
from a traditional, male-dominated builders’
merchant to a modern retail business, where
everyone, regardless of their gender, ethnicity,
sexual orientation, disability or age, can feel
athome and has the opportunity to grow their
skillsand their career.
I was lucky enough to join Wickes
in1990 and have great memories
ofunloading lorries, stocking timber
andpicking customer deliveries in
theCoventry store. Thisled to lots of
different opportunities in what, back
then, was a relatively small business.
One thing that has stayed true is the
brilliant culture and people in our
business. The opportunity for anyone
to build a career and help others still
remains strong, if not stronger,
andweare now a much more
inclusivebusiness.
KEITH ASH
Director of Store Operations (32 years’ service)
BOLTON STORE OPENING
Bolton colleagues celebrate the
storeopening on 7 October 2022
FEEL AT HOME
Wickes’ first I&D network was set up
by colleagues in 2016, therearenow
six networks helping all colleagues
tofeel at home
Wickes has grown from its
first store in the UK in 1972
to 230stores today
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Wickes Group Plc Annual Report and Accounts 202212
2006
2017
2020 2021
launched TradePro, a
digital app for our Local
Trade customer base
launched our
virtual showroom
Launched our
DIY app
launched
wickes.co.uk
The UK has always been a nation of homeowners
and in recent decades people have grown to lavish
more attention, love and money on their homes.
Interior design and home improvement became
popular as products became more varied, creative
and affordable, with interior design magazines,
TVshows and social media channels inspiring,
encouraging and enabling people to create living
spaces they can enjoy and be proud of.
Over the past five decades, Wickes has helped
DIYers with useful hints, tips and ideas to improve
their homes. Long before social media, we
published a hardback book called ‘Winning Ideas
from Wickes’; it cost 99p in 1984 and had over 240
pages of customer projects and good ideas.
It showed customers standing proudly in front of
their projects and provided detailed accounts as
tohow others could create the same thing.
Fast forward almost 40 years and these images of
finishedprojects and how to achieve them can be
found online: we’re focusing digital content across
our website and YouTube, and creating short hacks
and tips on Instagram and TikTok. The way that
customers shop hasradically changed and Wickes
has been at the forefront of digital developments in
the home improvement market. Our continued
focus and investment in our digital capability has
led to two thirds of our sales being generated online,
with 98% of orders touched byourstores.
50 YEARS
OF HELPING THE NATION
FEEL HOUSE PROUD
I remember pampas green and pink
bathrooms were allthe rage back in
the ’70s and’80s, and everyone had
‘chicken’ tiles which were textured vein
tiles, so called because if you looked
closely at the pattern you could
seetheoutline of a chicken!
KEVIN GREENLEY
Store Manager, York (44 years’ service)
Wickes has always
been there to help
thenation improve
their homes
Customers are increasingly turning to our virtual showroom
experience and design process to create their dream kitchen
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Wickes Group Plc Annual Report and Accounts 2022 13
The Covid-19 pandemic has left its own legacy
onhome improvement, ushering in a new wave
ofDIYers who have come to enjoy the wellbeing
benefits it offers.
At Wickes, we have conducted our own research to
better understand these shifts in consumer trends
and have learned that DIY is no longer the preserve
of older men. To be at the forefront of these
changes and create further momentum, Wickes
isembracing these new audiences, targeting them
through social media and influencer campaigns.
In a study of over 2,000 respondents, we found that
almost half of women (47%) are now taking on more
DIY in the home than men, and over half (59%) take
on far more DIY tasks around the home than their
mothers and grandmothers ever did 50 years ago.
We have also learned that almost half of Brits (46%)
are turning to social media platforms such as
TikTok, YouTube or Instagram when taking on
aDIYproject instead of asking for help from
aprofessional tradesman or family member.
THE CHANGING
FACE OF DIY
The biggest stumbling block has been the lack of
visibility of women in senior roles. In the first 15 years
of my career, I had no role models to show me what
Icould do. This is now changing. It’s so important
tohave role models in senior positions.
CLAIRE SKINNER
Store Manager, Ashford (15 years’ service)
50 years and a bright future continued
i
ncrease in Wickes’
f
emale customer
b
ase since 2019
38%
of followers on
Wicke
s’ Instagram
are women
70%
f
eel carrying out a DIY task gives
t
hem a sense of accomplishment
72%
say doing some form of DIY such as upcycling, putting up a shelf or
laying tiles, has been beneficial to their wellbeing and eased anxieties
86% DIY IS GOOD FOR YOU
1
said DIY is the best outlet for
helping to improve wellbeing
51%
say it helps them step away from
their phone or laptop
52%
We have teamed upwith celebrities and influencers
such as Kimberley Walsh (shown above) to appeal
toyounger and female consumers
1 Source: Wickes Prospectus Global survey August 2022
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Wickes Group Plc Annual Report and Accounts 202214
People Environment Homes
A BRIGHT
FUTURE
WHAT’S NEXT?
We have ambitious plans to grow our business
with around 20 new stores over the next five
years, creating new jobs and welcoming more
customers as we increase our customer base
both online and in store.
We are determined that, as we grow, we do so
responsibly and give back to our colleagues,
customers and communities. Our near-term
Science Based Targets will ensure that we are
watchful of our impact on the environment and
wewant to help our customers become more
sustainable too. We believe we can play a valuable
role in helping customers transform their homes to
use less energy. In the future, we will be even more
focused on providing products and services that
can do just that, giving customers the information
and advice they need to make decisions that will
help in the fight against climate change.
Digital will continue to shape how customers shop,
and at Wickes we are excited to further explore the
opportunities of machine learning and virtual reality
to anticipate our customers’ shopping missions and
give them inspiration, ideas and practical advice to
help them with their home improvement projects.
Our culture has come a long way over the last
fivedecades and we are passionate about making
Wickes a place where absolutely everyone feels at
home, and empowered and enabled to be at their
best. We know we’ve got lots more to do to build
adiverse and balanced team at all levels of the
organisation and we want to play our part in
connecting young people with careers and
skills,creating future generations of talent.
45%
42%
42%
Wickes commits that 45% of its suppliers by
emissions will have Science Based Targets
Wickes commits to reduce Scope 3 emissions
from the use of sold products by 42%*
Wickes commits to reduce absolute Scope 1
and2 emissions by 42%*
* from a 2021 base year.
BY
2027
BY
2030
BY
2030
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Wickes Group Plc Annual Report and Accounts 2022 15
UNDERSTANDING
OUR CUSTOMERS
We want all our colleagues to get closer
toour customers, to be curious about
whatour customers are thinking, feeling
anddoing, and to make sure customer
insight is not just the preserve of the
marketing department. We run monthly
consumer research of over 1,000 UK
households and tradespeople, which we
callour ‘Mood of the Nation’ survey, and
wealso hold monthly customer focus
groups, whichare conducted online and
areavailable for all colleagues to watch
either in real time or playback on demand.
This gives us a finger on the pulse of
immediate consumer sentiment and
shorttomedium term trends. In 2022, our
research highlighted a number of key trends,
the mostsignificant of which is how the cost
ofliving crisis is impacting the home
improvement market.
Over
1,000
householdsand tradespeople surveyed
inour monthly consumer research
WICKES IS WELL PLACED TO WIN IN THE
UK’S LARGE HOME IMPROVEMENT MARKET
Market review
We support customers however they decide to
undertake their home improvement plans through
our three customer propositions of Local Trade,
Do-it-for-me and DIY. This balanced business model
stands us in good stead as consumer trends shift.
This has never been more apparent than during the
past three years, which has been a period of
unprecedented change for business.
During the height of the pandemic, DIY experienced
aboom as people were locked down in their homes.
They had more time on their hands to undertake DIY
tasks and wanted to improve their living spaces as
they were spending so much time there. However,
the pandemic also meant that tradespeople were
prevented from entering people’s homes and our
DIFM showrooms were closed to the public. As a
consequence, the DIY side of our business grew
rapidly, compensating for a reduction in Local Trade
and DIFM sales. These trends reversed as society
returned to normal and restrictions were lifted,
resulting in strong growth in Local Trade, DIFM sales
moving closer to pre-pandemic levels and DIY sales
moderating, albeit still ahead of 2019.
Key market growth drivers...
UK HOUSING MARKET
HOUSEHOLD ENERGY EFFICIENCY
BROADENING DIY MARKET
DIGITAL AND OMNICHANNEL
RETAILING
ROLE OF THE HOME
At Wickes, we keep a close eye on both short term and long term
market trends and,whilst the home improvement market has
experienced challenges in 2022, thestructural fundamentals
ofthis market remain strong.
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Wickes Group Plc Annual Report and Accounts 2022
MARKET DRIVER
HOUSING TRANSACTIONS
The housing market is an important indicator and
driver of spending on home improvement projects,
inparticular the bigger ticket items such as kitchens
and bathrooms, as homeowners tend to undertake a
major renovation within 12 months of buying a new
house. The UK has seen record housing market sales
between 2010 and 2022, buoyed by the temporary
suspension of stamp duty in 2021. Whilst housing
transactions began to moderate in late 2022 due to
rising mortgage interest rates, during the year they
were still ahead of the ten-year average.
OUR APPROACH
– When choosing to undertake a major home
improvement project, customers turn to our DIFM
service, which offers inspiration, trustworthy support
across the design and installation process, and
post-completion assurance on the quality of the work.
– We continue to see encouraging attachment rates
of tiling, flooring and joinery sales to kitchen and
bathroom projects, and trials for new service
propositions are confirming the opportunity to
extend our DIFM offering to increase overall
project spend within the home.
– In 2022, we extended and innovated our
ready-to-fit kitchen offer with the launch of
Wickes Lifestyle Kitchens, appealing to a broader
demographic, including first time buyers and
younger, less affluent customers.
– We continue to grow our strong base of trusted,
Wickes approved installers and in 2022 we added
a further c.400 installer teams to our network.
– Through our lending partner, we offer a highly
competitive finance rate of 4.9% APR to make it
more affordable for customers to have their dream
kitchen or bathroom.
MARKET DRIVER
THE NEED TO MAKE OUR HOMES
MORE ENERGY EFFICIENT
40%
1
of the UK’s carbon emissions come from the
residential sector and, to achieve the Government’s
net zero target by 2050, there will be increasing
pressure to decarbonise our homes through
retrofitting energy saving solutions. According to
the latest English Housing Survey, 50% of the UK’s
homes are graded EPC band D or lower. Under
current proposals, all UK homes will need to achieve
an EPC rating of C or better by 2030. As energy
costs rise, it is even more imperative for consumers
to reduce their energy consumption and we are
seeing increasing demand for more sustainable
andenergy efficient products.
OUR APPROACH
– This presents a tremendous opportunity for
Wickes. We are well placed to help consumers
reduce their energy consumption as we sell
numerous energy saving products, from LED
lightbulbs to draught excluders and insulation.
– We are focusing our trading and pricing plans
onmaking energy efficient products more
affordable to help customers lower their
household energy consumption.
– We have introduced Energy Saving Advice pages
and launched a Sustainable House Guide on our
website that customers can explore to find great
tips on how to make their homes more energy
efficient and reduce their utility bills.
– We continue to look at ways that we can help
customers make sustainable choices and are
working on a taxonomy and labelling strategy to
enable customers to make informed decisions
about the products they purchase and their
environmental impact.
We have seen strong demand for energy
saving products such as loftinsulation
65%
of the UK’s housing stock is
owner occupied and the lion’s
share is well over 50 years old,
generating an ongoing need
forrepair and maintenance
1 Source: Committee on Climate Change.
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18 Wickes Group Plc Annual Report and Accounts 2022
c.90%
of households engaged in a
home improvement project
Market review continued
MARKET DRIVER
THE CHANGING ROLE OF THE HOME
Perhaps one of the most significant shifts in
consumer behaviour has been how people are
spending more time at home. The pandemic
lockdowns forced people to fundamentally
rethinkhow they used their homes. They became
multi-purpose, serving as an office, a classroom,
agym and, for those with outdoor space, a place
tosocialise with friends and family. Many of these
trends have continued with a long term shift to hybrid
working patterns and the increased use of outdoor
space. We want our homes and gardens to better
reflect the way we’re living and working today,
andthis is encouraging people to invest in their
livingspace.
OUR APPROACH
– Typically, a customer has three possible routes
toundertake their home improvement project –
Local Trade, DIFM or DIY. We ensure that however
a customer wants to improve their home, they are
able to get everything they needfrom Wickes.
– We continue to invest in our growth levers
(seepages 23-30) to provide our customers with
greatvalue, innovative products and services,
andabest-in-class in-store and digital shopping
experience to help them improve their homes
andgardens.
– We successfully use digital and social channels
to give our customers inspiration, ideas and
information as to how they can improve and
repurpose their homes.
MARKET DRIVER
A NEW WAVE OF DIYERS
The pandemic has introduced a new wave of
younger DIYers, many of whom are women.
Whilstinthe past, DIY tended to be undertaken by
homeowners looking to improve their homes, rental
tenants are now increasingly doing so too. We have
seen a 38% increase in female DIY customers on
our database since 2019 and 70% of followers
onWickes’ Instagram feed are women.
OUR APPROACH
– As part of our customer research programme,
wecontinue to explore DIY’s appeal to these new
audiences and are proactively marketing to them.
– To address their desire for content rich
environments and to help them develop their
DIYskills, we are creating hints and tips, delivered
to them online and through social media, to help
bring DIY to life in a relevant way.
– We have been working with key female influencers
such as Kimberley Walsh and Rochelle Humes to
front our social media campaigns, and we are
increasing investment in female orientated
publications and channels such as TikTok.
MARKET DRIVER
THE CONTINUED GROWTH OF DIGITAL
AND OMNICHANNEL RETAILING
Another legacy of the pandemic has been the rapid
acceleration in online shopping and the use of digital
channels as a source of inspiration and information
for customers embarking on a home improvement
project. Customers are more digitally savvy and will
conduct their entire shopping mission online, from
searching social media for ideas, to comparing prices,
to buying online and getting their product through
Home Delivery and Click & Collect services.
OUR APPROACH
– During the pandemic, we doubled our customer
base from 2.5 million to around 5 million. This has
strengthened our understanding of the customer,
and we use machine learning and artificial
intelligence to tailor our proposition. We call this
ourMissions Motivation Engine, which uses data
and analytics of customers’ interactions with social
and digital channels to better understand their
shopping missions and to tailor and personalise
ourcommunications and services to them.
– We are focused on integrating digital capabilities with
our physical store network and in 2022 we increased
the fulfilment areas of 28 stores, adding a further
25,000 sq ft, to better fulfil our customer Click &
Collect and Home Delivery orders. The roll-out of
handheld technology to help our colleagues pick
andpack orders has meant that we have been
ableto reduce our Click & Collect delivery times
to30 minutes.
– We continue to make enhancements to our virtual
showroom journey and 360º virtual tour to provide
our DIFM customers with innovative new tools to
help them design their dream kitchen orbathroom.
38%
increase in female customer base since 2019
Strategic report Governance Financial statements Other information
COST OF LIVING CRISIS
2022 has been a turbulent year, defined by economic
and geopolitical uncertainty. The impact of the war
inUkraine has led to growing energy insecurity and
supply chain disruption, which have resulted in rapid
inflation. This, coupled with increasing mortgage
interest rates, has led to a squeeze on household
finances and, as consumers curb their spending,
theyare increasingly looking for affordability and
great value.
In times of difficulty, people look to their homes as
aplace of comfort, safety and security. Our monthly
‘Mood of the Nation’ surveys continue to show that
around 90%
1
of households are engaged in a home
improvement project, and Local Traders tell us that
whilst their pipeline of work is softer than a year ago
it remains strong, with 45% saying they have worked
lined up for over three months.
OUR APPROACH
We are very mindful of the economic hardship
thatpeople are facing and are well placed to support
increasingly value conscious customers. Our market
leading proposition, strong own brand, efficient
low-cost operating model and highly curated product
range mean we can have a laser sharp focus on
providing the lines that matter mostat the best
possible value. We are doing this ina number of
waysacross our three customer propositions.
Wickes Group Plc Annual Report and Accounts 2022
For Local Trade
– Local Trade are increasingly seeking value to be
able to mitigate rising costs for their customers
and they look to Wickes to save them time and
money. Our TradePro scheme offers a flat 10%
discount across the store and we have seen an
18% increase in sign-ups in the year. One in two
local trades are doing more price research than
normal and turning to Wickes products more
frequently as a result.
– As important as saving them money is saving
them time, ensuring good product availability
onthe lines that matter most. As 70% of our
products are sourced domestically we are
relatively protected from global supply chain
disruption and our strong supplier partnerships
mean that Local Trade can trust us to have the
products they need in stock. They can also save
themselves time by placing their order through
the TradePro app and taking advantage of our
Click & Collect and Park & Collect services,
whichoffer collection within 30 minutes.
For DIFM
– Typically, our DIFM customers are older and more
affluent, with a higher degree of resilience to the
cost of living crisis, many of whom will use savings
to purchase their new kitchen or bathroom. That
said, we are responding to thesofter consumer
environment with a highly competitive finance rate
of 4.9%APR through our lending partner. We’re
making it more affordable sothey don’t have
tocompromise on their newdream kitchen
orbathroom.
– In 2022, we extended and innovated our ready-to-
fit kitchen offer with the launch of Wickes Lifestyle
Kitchens, appealing to a broader demographic,
including first time buyers and younger, less
affluent customers.
For DIY
– Our well-regarded own brand, which accounts
fortwo thirds of sales, has strong brand recognition,
having built up half a century of goodwill. As
consumers search for value, we areseeing them
shift to our Wickes own-brand products, testament
to the inherent strength ofthe brand.
– We conduct regular range reviews to ensure we
are providing customers with great product choice
and maintaining our position as market leader
onprice.
– With rising energy costs making up an increasingly
large percentage of household costs, we are
helping customers reduce their utility bills with
hints and tips on how to make their homes more
energy efficient.
We have repositioned our lower-price,
ready-to-fit kitchen range as Wickes
Lifestyle Kitchens, which is targeted
atthe volume kitchen market.
UNDERSTANDING OUR CUSTOMERS
1 Source: Wickes Mood of the Nation survey
Strategic report Governance Financial statements Other information
19
WE HAVE A UNIQUE BUSINESS MODEL TO WIN
IN THE HOME IMPROVEMENT MARKETPLACE
Business model
With our differentiated customer proposition of Local Trade, DIFM and DIY we can support customers
however they decide to undertake their home improvement plans.
Our assets enable us to...
OUR PEOPLE
8,100- highly engaged colleagues who are passionate about
delivering our purpose – to help the nation feel house proud
OUR CULTURE
An inclusive and diverse modern workplace where colleagues
can ‘feel at home’ and perform to the best of their ability
OUR BRAND
For 50 years the Wickes brand has been synonymous with
home improvement in the UK
OUR PHYSICAL ESTATE
230 stores across the UK, working in harmony with our digital
offer to provide an integrated and seamless shopping
experience for thecustomer
OUR DIGITAL CAPABILITY
We maximise our digital capability to gain greater customer
insight and loyalty, drive operational efficiencies and create
aseamless shopping experience
OUR PRODUCT SUPPLY
Strong relationships with our suppliers ensuring we offer quality
products at the right price and industry leading availability.
We arecommitted to protecting the environment and ensure
natural materials such as wood are sourced responsibly
OUR PURPOSE
TO HELP THE NATION
FEEL HOUSE PROUD
LOCAL TRADE
From trade-trusted brands to always
being 10% cheaper, we can save you
time and money when you shop
withTradePro
DO-IT-FOR-ME (DIFM)
From concept to completion, plus all
the finishing touches, we can help you
with your project every step of the way
DIY
From our curated range to bringing
youthe right quality products at the
right prices, we can help you to tackle
your project providing advice,
guidanceand knowledge
Delivering brilliant customer experience through engaged colleagues,
a winning culture and growing responsibly
Curated product
ranges
Digitally-led Distinctive service
model providing
inspiration, service
and fulfilment
Low-cost,
right-sized physical
estate
Simple, clear pricing
offering value to
customers
FOUNDATION
ENABLER CUSTOMER PROPOSITION
Our strong sales densities
and curated ranges result in
rapid stock-turn at 4-5x
Two thirds of sales are
digitally-enabled with 98%
ofsales touching the store
We save customers time
andmoney by offering great
value, excellent service and
availability. Our different
customer propositions shop
instore at different times
ofthe day and week,
helpingdrive sales densities
and service levels
Our stores are located on
retail parks with, on average,
28,000 sq ft of rentable
internal space. This enables
operational efficiencies, and
is convenient and easy for
ourcustomers
We reinvest our buying and
efficiency gains back into the
customer proposition, so we
can sell more, buy for less
and maintain our great
valueoffer
Underpinned by our Winning Behaviours, sound corporate governance and responsible business practices
...offer a unique proposition
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202220
We are focused on creating future value
through our strategic growth levers...
WINNING FOR TRADE
TradePro growth
ACCELERATING DIFM
Natural category extensions, broadening
theproposition
DIY CATEGORY WINS
Getting our fair share in underweight categories
DIGITAL CAPABILITY
Continued development of a seamless offer
STORE INVESTMENT
High return on refits, exploit new space opportunities
ENHANCED STORE SERVICE MODEL
Laying the foundations for future growth
DELIVERING EXCEPTIONAL CUSTOMER
EXPERIENCE THROUGHENGAGED
COLLEAGUES, A WINNING CULTURE
ANDGROWING RESPONSIBLY
Delivering long term value for all our stakeholders
COLLEAGUES CUSTOMERS
COMMUNITIES
80%
employee engagement
3
distinct customer propositions
£2m
raised for YoungMinds
We provide a great place to work where
colleagues are supported to build their
skills and careers
We help our customers create their
perfect home and feel house proud,
however they choose to undertake their
home improvement project
We have met our goal to raise £2 million
bythe end of 2022 for our chosen charity,
YoungMinds, and are supporting hundreds
of local community projects around
theUK
SHAREHOLDERS SUPPLIERS ENVIRONMENT
10.9p
dividend
99.8%
timber FSC or PEFC certified
42%
goal to reduce Scope 1 and 2 emissions
We create long term and sustainable
value by growing the business
responsibly and increasing our
marketshare, driving profitable
growthwith strong cash generation
enabling strong returns
With our track record of market share
gains, we deliver additional volume to
our suppliers and work closely with
them to target areas of product growth,
as well as supporting them to develop
their responsible sourcing practices
We have committed to reduce absolute
Scope 1 and 2 emissions by 42% by
2030 from a 2021 base year
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 21
OUR VISION
Strategy at a glance
A WICKES PROJECT IN
EVERY HOME
We have a clear framework towin, which is guided
by our vision, mission and purpose to help the nation
feel house proud.
We aim to continue developing our digitally-led, service-
enabledproposition across Local Trade, DIFM andDIY
through focused efforts on key strategic levers,
whichwecall our‘growth levers’.
To win in this market, we have a strong portfolio of growth
leversthat are relatively immature, with more to go for.
In 2022, we have made great progress on each of our
growth levers as wecontinue to evolve and enhance
ourproposition through product and service innovation.
Strategic report
Wickes Group Plc Annual Report and Accounts 202222
Other informationFinancial statementsGovernance
GROWTH LEVERS
OUR VISION
A WICKES PROJECT
IN EVERY HOME
OUR MISSION
TO BE THE PARTNER
OF CHOICE FOR HOME
IMPROVERS & LOCAL TRADE
OUR PURPOSE
TO HELP THE NATION
FEEL HOUSE PROUD
WINNING FOR TRADE
TradePro growth
ACCELERATING DIFM
Natural category extensions,
broadeningthe proposition
DIY CATEGORY WINS
Getting our fair share in
underweight categories
DELIVERING EXCEPTIONAL CUSTOMER
EXPERIENCE THROUGH ENGAGED COLLEAGUES,
A WINNING CULTURE AND GROWING RESPONSIBLY
STORE INVESTMENT
High returns on investment refits,
exploit new space
DIGITAL CAPABILITY
Continued development
of a seamless offer
ENHANCED STORE
SERVICE MODEL
Laying the foundations for future growth
Strategic report
Wickes Group Plc Annual Report and Accounts 2022 23
Other informationFinancial statementsGovernance
WINNING FOR TRADE
Our TradePro membership scheme offers a simple, entirely digital
scheme for Local Trade designed tosave them time and money
andoffering a flat 10% discount across the store and online.
Strategy in action
STRATEGIC FOCUS WHAT WE ACHIEVED OPPORTUNITIES
– Expand our most strategically valuable customer base
through growing membership of our TradePro scheme,
engaging in new trade markets and developing a stronger
business to business (B2B) offer.
– Continue to develop our Missions Motivation Engine to use
data and analytics to gain greater understanding of our
LocalTrade customers and their shopping ‘missions’
tofurther personalise the customer experience and
increasethe relevance of our communications.
– Leverage strong media partnerships and expert influencers
toincrease the visibility of the TradePro proposition.
– Create a compelling loyalty offer for all trade customers.
– Increased TradePro membership, enrolling
over 112,000 new customers, bringing total
membership to 746,000 and growing
sign-ups and sales by almost 20%.
– Our Missions Motivation Engine is increasing
engagement and sales. In 2022, we went
livewith three mission-based customer
communication programmes, which are
performing significantly better than our
control communications.
– Continued our sponsorship with Sky
Sportsdarts tournaments, targeting
atradecustomer base, and developed
newpartnerships with ‘On the Tools’ and
‘BaldBuilders’ to increase our presence
insocial channels.
– Grow TradePro membership to over one
million members without diluting the quality
ofour TradePro sign-ups, through extending
our reach into the trade B2B market.
– Increase the frequency tradespeople shop
with us by creating greater loyalty through
arewards programme and improved
digitalexperiences.
– Buoyant pipeline of work for trade
professionals, with almost half of trade
saying they have jobs in the pipeline for
thenext three months.
GROWTH LEVERS
746,000
registered TradePro members
Targeting
1million
TradePro members
RISKS
PRIMARY PRINCIPAL RISK FOCUS:
– Reputation and brand integrity
– Customer service and
experience
OTHER RELATED PRINCIPAL RISKS:
– Operations
– People, culture and safety
– Cyber security and data
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202224
ACCELERATING DIFM
Accelerate growth in DIFM throughdigital development
andproductinnovation.
STRATEGIC FOCUS WHAT WE ACHIEVED OPPORTUNITIES
– Grow DIFM by enhancing and innovating the existing
proposition, introducing new kitchen and bathroom ranges
and refreshing our showrooms.
– Develop natural extensions into adjacent 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.
– Expand our proposition into the lower-budget kitchens
market to appeal to a broader customer base.
– Continue to strengthen our installer base of 3,000 Wickes
approved installer teams to increase competitive advantage.
– Run the Wickes Installer Apprenticeship programme
tosecure a future generation of skilled installers.
– There are now 34 apprentices undertaking
our Installer Apprenticeship scheme, 17 of
whom joined the scheme in 2022.
– Continued to see encouraging attachment
rates of tiling, flooring and joinery sales to
kitchen and bathroom projects, with trials
ofnew DIFM service propositions ongoing.
– Saw continued strong customer demand
forour DIFM virtual showroom journey, with
almost 2 million interactions with the tool.
– Digital development has delivered improved
imaging, video content, features and pricing
illustrations on the website for DIFM projects.
– Highly fragmented marketplace with
opportunity to take share through our
marketleading national proposition.
– Continue to grow installer base.
– Identify additional home improvement
categories to extend installer services.
GROWTH LEVERS
3,000
installer teams
Installer base up
16%
Wickes Group Plc Annual Report and Accounts 2022 25
Strategic report Governance Financial statements Other information
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.
STRATEGIC FOCUS WHAT WE ACHIEVED OPPORTUNITIES
– Grow our existing DIY proposition. Grow volumes by
targetinglarge markets for common DIY projects and
aimtoget our fair share in underweight categories.
– Conduct an active programme of range reviews,
seekingtoinnovate and evolve our product offering.
– Ensure good availability of our highest-demand products
instore, and limit the use of promotional periods and
discounting activity to increase sales.
– Our highly curated product range supports our efficient
operating model, enabling simpler and more efficient
product refreshing, 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.
– Completed range reviews in a number of
keyareas including gardening, decorating,
tools, hardware, mouldings and light bulbs.
– These reviews continued to expand our
product range in key customer segments,
addressing range gaps and building on
successful previous changes. These have
included strengthening our own Wickes
brandin selected areas such as woodcare,
hardware, hand tools and light bulbs, as well
as introducing new brands in key areas,
suchas Crown Paints in decorating.
– Rebranded our ready-to-fit kitchen ranges
asWickes Lifestyle Kitchens, tailored to
thelower budget kitchen market
.
– Ran two communication programmes
targeting DIY customers using our
MissionsMotivation Engine.
– Continue to target further categories where
weare currently underweight to increase
market share.
– Capitalise on our entry into the lower-spend
segment of the ready-to-fit kitchen market.
– 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 sales opportunities.
– Help customers understand and make more
sustainable choices through our product
ranges, labelling and promotional activity.
Strategy in action continued
GROWTH LEVERS
9,500
products in store
17, 50 0+
products online
RISKS
PRIMARY PRINCIPAL RISK FOCUS:
– Reputation and brand integrity
– Customer service andexperience
OTHER RELATED PRINCIPAL RISKS:
– Operations
– People, culture and safety
– Cyber security and data
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202226
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.
STRATEGIC FOCUS WHAT WE ACHIEVED OPPORTUNITIES
– Accelerate our new store opening programme, targeting
around 20 new stores in the next 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 quality of our store estate and right-size certain
stores to support more efficient operations and to offer
amore welcoming, easier-to-use and consistent
customerexperience.
– Target high-volume stores with a lower-investment refit
model to increase their storage capacity to facilitate more
Click & Collect and Home Delivery orders.
– We refitted 12 stores including resizing our
Maidstone store. 162 stores are now in our
new store format.
– Refitted stores increase sales by c.25% (c.60%
in DIFM and c.15% across DIY and Local Trade)
which is sustained in subsequent years and,
on average, continue to exceed their 25%
ROCE target.
– We opened our first new store in three years
inBolton in October 2022.
– We reconfigured 28 stores (excluding refits)
to create an additional 25,000 sq ft of storage
space, thereby increasing capacity to fulfil
online customer orders for Click & Collect
andHome Delivery.
– Introduce the Wickes brand to more customers
through building a pipeline of sites for new
stores across the UK.
– Continue to increase sales per square foot
and improve our existing store estate as a
result of our accelerated refit programme.
GROWTH LEVERS
12
stores refitted
Bolton
opened new store
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Wickes Group Plc Annual Report and Accounts 2022 27
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.
STRATEGIC FOCUS WHAT WE ACHIEVED OPPORTUNITIES
– Deliver an ongoing programme of improved features across
all digital channels.
– Continue to develop our Missions Motivation Engine, using
data and analytics to identify customer ‘missions’ and gauge
the commercial volume and value within them.
– Create targeted personalised communications through our
marketing channels to increase the quality and quantity
ofthemissions customers shop with us.
– Augment our colleague digital picking app to improve
operational efficiency.
– Improve our fulfilment capability and customer offer by
modernising our order management solutions and carrier
management capability.
– Explore how we can profitably deliver the Wickes range
through marketplace solutions and reach more customers.
– Launched our first marketplace store with
eBay with 4,000 product lines, extending
thereach of the Wickes brandto potential
new customers.
– Introduced Klarna as a payment option.
– Introduced new functionality across
ourdigitalchannels, improving website
navigation, the checkout and purchase
journey, new account functionality for
customers and creating content such
asournew online Sustainable House.
– Rolled out our first missions for Local Trade,
DIY and DIFM customers through our MME,
inspiring customers to commence projects
and targeting stronger conversion from
customers already undertaking a project.
– Updated our fulfilment capability to open up
future Home Delivery options and added a
number of new carriers to our network.
– Further develop our digital capabilities
toincrease operational efficiency.
– Improve our DIFM customer experience,
making it easier for customers to design and
curate their new kitchen or bathroom digitally.
– Grow our Click & Collect and Home Delivery
services, with particular focus on leveraging
our new reduced 30-minute Click & Collect
collection window.
– Enhance our Local Trade and DIY customer
apps to improve functionality and features.
– Accelerate our Missions Motivation Engine
development by introducing new
programmes and enhancements to the
machine learning.
– Continue to explore our marketplace offer.
Strategy in action continued
GROWTH LEVERS
2/3
of sales digitally enabled
RISKS
PRIMARY PRINCIPAL RISK FOCUS:
– Cyber security and data
– Customer service and experience
OTHER RELATED PRINCIPAL RISKS:
– Operations
– Reputation and brand integrity
– Autonomy
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Wickes Group Plc Annual Report and Accounts 202228
GROWTH LEVERS
STRATEGIC FOCUS WHAT WE ACHIEVED OPPORTUNITIES
– Continue to develop and roll out our unique 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 improve efficiency and give us significant
competitive advantage.
– Grow Click & Collect and Home Delivery services through
increased storage capacity, introducing service-enabling
technology and securing best-in-class delivery partners.
– Launched a digital picking app which has
helped us to reduce the time to pick our
Click&Collect orders from 60 minutes
to30 minutes.
– Launched a new delivery picking app to
improve service quality and efficiency. 90%
ofour customers rate the delivery service
asExcellent or Good.
– Continue to roll out the enhanced 4C model
across the estate.
– Maximise future digital innovations to
become more efficient and to enhance the
customer experience through the four areas
of the store.
ENHANCED STORE
SERVICE MODEL
Our unique ‘4C’ model is designed to meet all our customers’ needs through
the DIFM, Assisted Selling, Self Serve and Order Fulfilment areas of the store.
New
30
minutes
Click & Collect service
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Wickes Group Plc Annual Report and Accounts 2022 29
GROWTH LEVERS
Strategy in action continued
STRATEGIC FOCUS WHAT WE ACHIEVED OPPORTUNITIES
– 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.
– Develop and implement our Responsible Business Strategy.
– Living our Winning Behaviours to support our strategy and
culture (for more information see page 81).
– Introduced a number of cost of living initiatives
tohelp colleagues, including bringing forward the
2023 annual salary review, breakfast provision
instores and adjusting our store ‘Gainshare’
incentive targets to reflect economic conditions.
– Made significant progress in improving the
diversity of our store teams.
– Achieved national recognition for the great work
of our I&D network leads (see page 35).
– Awarded ‘Best Reward Strategy’ at the 2022
Reward Strategy magazine awards.
– Broadened our Apprenticeships provision,
developed our Early Careers proposition and
started 138 apprenticeship placements
(seepage36).
– Enhanced our learning and development offer
with our ‘Under One Roof ‘ leadership
programmes.
– Made significant progress across all areas
ofourResponsible Business Strategy
(seepages33-53).
– Continue to improve our data and insight to
help us accelerate our I&D strategy.
– Strengthen our employer brand through
aclearemployee value proposition and
attraction strategy.
– Continue to build a modern flexible workplace
with the conclusion of our flexible working
trials and the implementation of the outcomes.
– Continue to build skills in our community and
drive diverse pipelines through our Early
Careers proposition.
– Enhance our learning and development
offering with new tools and a Winning
Behaviours programme for all colleagues.
– Continue to develop future talent and skilled
tradespeople through our apprenticeship
programmes.
– Increase awareness of our Responsible Business
Strategy with internal and external stakeholders.
80%
employee engagement score
210
Early Careers placements
RISKS
PRIMARY PRINCIPAL RISK FOCUS:
– Reputation and brand integrity
– People, culture and safety
– Customer service and experience
OTHER RELATED PRINCIPAL RISKS:
– Operations
– Climate change
DELIVERING EXCEPTIONAL CUSTOMER EXPERIENCE
THROUGH ENGAGED
COLLEAGUES, A
WINNING CULTURE AND
GROWING RESPONSIBLY
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202230
KEY PERFORMANCE INDICATORS
Key performance indicators
GROWTH LEVERS KEY:
1
Winning for Trade
4
Store investment
7
Delivering exceptional customer experience
through engaged colleagues, a winning
culture and growing responsibly
2
Accelerating DIFM
5
Digital capability
3
DIY category wins
6
Enhanced store
service model
FINANCIAL
Overall LFL sales (%)
3.5
13.0
8.7
5.0
2019 2020 20222021
Adjusted PBT (£m)
75.4
85.0
62.3
49.5
2019 2020 20222021
Statutory PBT (£m)
40.3
65.4
22.7
28.9
2019 2020 20222021
Adjusted basis EPS (p)
23.8
27.2
20.0
16.1
2019 2020 20222021
N/A N/A
Free Cash Flow
1
(FCF)
29.0
16.6
2019 2020 20222021
Net Debt (£m)
591.8
618.7
829.6
783.5
2019 2020 20222021
DESCRIPTION
A measure of the underlying sales growth
ofproducts to Core and DIFM customers.
DESCRIPTION
Profit before tax adjusted for one-off
orunusual costs inthefinancial year,
asreported in 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 a
company makes for each 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
DESCRIPTION
A measurement of year end net debt
including lease liabilities
DEFINITION
The performance of sales to Core and DIFM
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 demerger costs and IT
separation costs, although statutory
pretax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
Cash generated from operations, before
theimpact of adjusting items, after capex,
interest and tax
DEFINITION
The total value of our year end lease
liabilities plus year end cash
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 how we
areinvesting in future growth
LINK TO GROWTH LEVERS
Profit before tax is a key measure of the
efficiency of the business and how we are
investing in future growth
LINK TO GROWTH LEVERS
EPS growth is closely linked to profit growth
for businesses that have not issued new
shares during the year
LINK TO GROWTH LEVERS
All growth levers are important in driving sales
and profitability, which in turn support free
cash flow (all six growth levers needed here)
LINK TO GROWTH LEVERS
Net debt is not directly linked to growth
levers but will be influenced by our
performance across the business
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 will be via the impact of LFL sales
growth on Adjusted PBT
REMUNERATION LINKAGE
Adjusted PBT will represent 70% of the
annual bonus target for Executives
REMUNERATION LINKAGE
Linked to Adjusted PBT profit before tax
REMUNERATION LINKAGE
Adjusted basic EPS will represent 60%
ofthe Long Term Incentive Plan target
forExecutives
REMUNERATION LINKAGE
Free cash flow will represent 20% of the
annual bonus target for Executives
REMUNERATION LINKAGE
Linkage is via profit and free cash
flowperformance
TARGET
We aim to grow market share profitably in
our target market, and this is closely linked
to LFL performance against our peer group
TARGET
We aim to grow adjusted PBT each financial
year, although this will be dependent on
market and competitive conditions
TARGET
Not applicable
TARGET
We expect adjusted EPS to grow in line
withadjusted profit before tax, before any
movements in the corporation tax rate
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
TARGET
Our target IFRS 16 net debt leverage is 2.75x
AdjustedEBITDA
1
1 Refer to APMs on page 164
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 31
Key performance indicators continued
OPERATIONAL NON-FINANCIAL
Stock turn
1
4.4
5.1
4.5
4.9
2019 2020 20222021
TradePro accounts (k)
746
634
509
553
2019 2020 20222021
Digital sales progression
65.5%
65.1%
N/A
61.7%
2019 2020 20222021
Proportion of stores in new format
70%
65%
57%
61%
2019 2020 20222021
Carbon emissions
2
(tonnes)
2.081k
1.623k
2019 2020 20222021
N/A N/A
Store leadership diversity
75.1%
67.4%
63.6%
65.4%
2019 2020 20222021
DESCRIPTION
A measure of how efficient we are
inconverting our stock into sales
DESCRIPTION
TradePro is our digital membership club
forLocal Trade, offering a 10% discount
onallpurchases
DESCRIPTION
This measures how successfully we are
engaging with our increasingly digital
customerbase
DESCRIPTION
New format stores are a key driver of
brand image and sales growth, especially
in digital and DIFM
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employees andcustomers
DEFINITION
Cost of goods sold excluding installation
services divided by the average of financial
year start and financial year end inventory
DEFINITION
Year-on-year account growth across the
TradePro membership base
DEFINITION
The proportion of customer journeys
which start online, plus direct digital
sales such as TradePro, Click & Collect
and Home Delivery orders
DEFINITION
The number of stores in the new format
at financial year end, as a percentage of
total stores
DEFINITION
Scope 1, 2, and 3 carbon emissions
as measured by our third party partner,
South Pole
DEFINITION
The proportion of stores that have at least
onefemale in every store leadership team
LINK TO GROWTH LEVERS
More rapid stockturn, especially relative to
the creditor payment cycle, is a key driver
ofFCF
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
Our customer base is increasingly digital,
and ifwe do not serve them well here then
our marketshare and profitability will suffer
over thelong term
LINK TO GROWTH LEVERS
Focus on digital, DIFM and extended range
isakey driver of customer service and
revenuegrowth
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 1
3
4
5
1
2
5
6
4
7
7
REMUNERATION LINKAGE
Linkage is via the impact on FCF
REMUNERATION LINKAGE
Linkage will be via profitable growth of
tradesales
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 stronger short and medium
termrevenue growth, which in turn will
driveprofitability
REMUNERATION LINKAGE
Near-term Science Based Targets will
represent 10% of the Long Term Incentive
Plan for Executives
REMUNERATION LINKAGE
Gender diversity targets will represent 10%
of the annual bonus for Executives
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 aim to have one million TradePro
accounts which would ensure sales
herecontinue to grow faster than the
Companyaverage
TARGET
We expect our digital participation to
growover time as we serve our customers’
digital demands
TARGET
We plan to have all stores in the new format
within five years
TARGET
Deliver near-term Science Based Targets
TARGET
Over the long term the aspiration is to
achieve abalance of male and females
across all our store leadership teams
2 The 2021 number for Carbon emissions has been restated following an improved
methodology that was applied for the calculation of our Science Based Targets.
Seepage43(GHG) for further information.
1 Refer to the APM on page 163.
GROWTH LEVERS KEY:
1
Winning for Trade
4
Store investment
7
Delivering exceptional customer experience
through engaged colleagues, a winning
culture and growing responsibly
2
Accelerating DIFM
5
Digital capability
3
DIY category wins
6
Enhanced store
service model
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202232
INTRODUCTION TO
RESPONSIBLE BUSINESS
Responsible Business
SONITA ALLEYNE
Chair of the Responsible
Business Committee
2022 has been an exciting and challenging year
forResponsible Business at Wickes. Global events
continue to shine a light on social and environmental
issues in the UK, and we have worked hard to
position our strategy to address these issues.
The World Cup in Qatar has ignited conversations
around LGBTQI+ rights, as well as labour standards
and cultural diversity. We have always put people
atthe heart of our business, and the strength of
our‘Feel at Home’ Inclusion and Diversity networks
are a testament to that commitment. Our LGBTQ+
PRIDE network in particular, has strengthened our
position as a leader in the space, receiving several
awards and recognition throughout the year.
The Conference of the Parties (COP 27) in Egypt
hasonce again positioned climate change as a
generational crisis, and placed a greater focus on
the contributions of more developed nations and
businesses to support those on the front line of
climate change. Wickes is now in a position to drive
this conversation with our suppliers, colleagues
andcustomers, and do what we can to support
theirambitions to lower their carbon footprint.
InDecember, we were delighted to announce
ournear-term Science Based Targets, the details
ofwhich are laid out on page 42.
Through our three pillars of People,
Environment and Homes, we will look
toaddress key issues throughout
oursupply chain, our own business
andour customers.
The war in Ukraine, and the subsequent energy crisis,
has driven citizens to prioritise energy savingas part
of the cost of living crisis. We have developed energy
saving advice and guidance for customers and
colleagues, and will be working tomake our products
more efficient, as well as expanding ourranges to
support energy efficiency across thehome.
In 2022 we launched our new Responsible
BusinessStrategy, Built to Last. Asarecently
listedand standalone company, weinitially focused
our efforts on data collection, measurement and
benchmarking across the three pillars of People,
Environment and Homes. With the majority of this
groundwork now complete, 2022 has been a year
ofstrategy development, target setting and action
planning, and I’m delighted to report that we have
made significant progress across all three pillars
ofthe strategy.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 33
G
People
....where all our colleagues
can feel at home and are
empowered to support their
communities and customers
Colleagues
C
u
s
t
o
m
e
r
s
Homes
A
B
C
....that’s helping the
nation make their homes
more sustainable
Services
I
n
s
t
a
l
l
a
t
i
o
n
s
Products
Carbon
Environment
....and are supporting the
fight against climate change
and taking action to protect
the natural environment
Waste
W
a
t
e
r
Communities
A BUILT TO LAST RESPONSIBLE
BUSINESS STRATEGY
Responsible Business continued
S
A
F
E
T
Y
a
n
d
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
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
– helping the nation make their
homes more sustainable.
Supply chain and
responsible sourcing
Responsible sourcing
underpins our entire
Responsible Business
Strategy.From the materials
used to make our products
tohow they are manufactured
and transported, everything
wedo is built on a foundation
of a sustainable, responsible
supply chain.
Safety and wellbeing
Managing risks and
developing a great safety
culture are a fundamental
part of the way we do
business. 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.
PEOPLE
Grow a diverse and inclusive
business that supports the
needs of our colleagues,
customers and communities.
COLLEAGUES – CUSTOMERS
– COMMUNITIES
HOMES
Focus our products, services
and installations to support
sustainable homes that
everyone can be proud of.
PRODUCTS – SERVICES
–INSTALLATIONS
Strong governance
The first step in an effective strategy
is strong governance, and our
Responsible Business Strategy is no
exception. Through our Responsible
Business Committee and Working
Group, we ensure this programme of
work is managed effectively.
ENVIRONMENT
Decarbonise our sites,
operations and supply
chainto fight climate
change and protect the
natural environment.
CARBON – WASTE – WATER
We’re proud of our Responsible
Business Strategy and the work that
we’re doing, and we want to be able to
share it in an engaging, interesting and
inspiring way with all our stakeholders.
To do this, we’ve developed a visual
identity thatcreatively illustrates the
three pillars using photography, video
and animation, bringing to life allthe
great work that our teams are doing.
We’re excited to start using this
acrossall our internal andexternal
communication channels.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202234
G
People
....where all our colleagues
can feel at home and are
empowered to support their
communities and customers
Colleagues
C
u
s
t
o
m
e
r
s
Homes
A
B
C
....that’s helping the
nation make their homes
more sustainable
Services
I
n
s
t
a
l
l
a
t
i
o
n
s
Products
Carbon
Environment
....and are supporting the
fight against climate change
and taking action to protect
the natural environment
Waste
W
a
t
e
r
Communities
OUR GOAL
We are building a business
weareproud of where all our
colleagues feel at home and
areempowered to support their
communities and customers
OUR TARGETS
– Progress gender diversity
inleadershiproles
– Offer and support 200 Early
Careerplaces each year for
thenext three years
– Raise £2 million for our charity
partner over the 2-year partnership
– Wickes’ Community programme to
support 1,500 projects across our
local communities
Colleagues
Inclusion and diversity at Wickes continues to
bedriven by six ‘Feel at Home’ networks led by our
colleagues, whoare the driving force for change.
They raise awareness and understanding of the
different communities whilst supporting the
introduction ofpolicy and practice changes to
deliver our goals.
To drive awareness, at this year’s Pride events, the
Wickes LGBTQ+ community used its voice to share
astrong and important message supporting trans
inclusion. Our work with strategic partners such
asTrans in the City has helped us to better target
oursupport for trans colleagues and customers,
andraised much wider awareness of ourbusiness
amongst the trans and non-binary community. Wickes
was shortlisted for the British LGBT Inspirational
Leader and INvolve Ally of the Year awards – Ben
Jackson, Pride Network Lead, and Fraser Longden,
Chief Operating Officer, respectively – and achieved
Gold standard in Stonewall’s Workplace Equality Index.
Wickes participated in Mind’s Workplace Wellbeing
survey and achieved aSilver award, recognising the
efforts in promoting colleagues’ mental health and
demonstrating impact. We continue to educate our
teams and during Black History Month we launched a
RAACE Allyship programme (Raising Awareness and
Action on Culture and Ethnicity).
Our efforts to create an inclusive and diverse
workplace continue to see traction this year
inactioning policy and practice change. We’ve
worked with trans and bisexual colleagues to build a
strategy for marginalised LGBTQ+ groups and made
improvements to our Transgender Policy, which
includes the most up to date recommendations,
such as the introduction of Line Manager and
Colleague toolkits.
We continue to listen to our colleagues about
theirlived experiences of being menopausal whilst
at work. We’ve provided tools for managers to
support colleagues, including the Peppy app, giving
personalised expert advice. Our Period Positive
campaign offers colleagues free period products in
all stores, distribution centres and support centres.
We continue to build a modern, flexible workplace
andhave partnered with Timewise and the Institute for
Employment Studies to evidence the positive benefits
of flexible working practices within store-based roles.
In 2022, we conducted a pilot with seven store
managers giving them full flexibility in a working week.
The pilot has proven to be successful and in 2023 we
are moving into a second phase to further test how we
embed a consistent organisational culture, mindset
and understanding of the benefits and opportunities
for flexible working in all store-based leadership roles.
We believe that a balance of genders in our
leadership teams is only going to benefit our
business and our colleagues. We’re working
toensure all our store teams have a balance of
maleand female colleagues leading the store, and
we’veincreased the number of gender balanced
leadership teams from 67.4% in 2021 to 75.1%.
PEOPLE
Director, senior manager and employee gender breakdown information
As at 31 December 2022
Gender Male Male % Female Female %
PLC Board 5 83.3 1 16.7
Executive Board 6 75.0 2 25.0
Senior managers 59 68.6 27 31.4
All other colleagues 4,835 61.2 3,061 38.8
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 35
Customers
We want to reflect our customers and wider society
so we can properly serve them. Our customers care
about seeing an inclusive, diverse workplace full of
happy employees. We’re committed to supporting
our customers in store and online through strong
accessibility, support and education. Our Let’s Care
for Each Other ethos is internally and externally
focused and makes clear the zero tolerance
stanceon physical, verbal or racial abuse against
colleagues or customers. We launched a new
e-learning module this year to every colleague in
ourstores providing them with training on how to
defuse potentially dangerous situations. We stand
with other retailers and support the Shop Kind
initiative, which also tackles violence and abuse
against shopworkers.
Communities
Building skills in our local communities through an
Early Careers offering is essential to ensuring we
continue to attract and develop the skills required
for future growth and drive diverse pipelines. Our
focus has been on understanding the external early
talent landscape and defining our Early Careers
proposition which is supported by new Job Board
partnerships and social media marketing to amplify
our presence in this space.
Our core offering of nine apprenticeship programmes
supports our ambition to offer 200 Early Careers
placements every year for the next three years.
Thisyear we’ve seen an increase in demand for
ourprogrammes and are delighted to have 210
EarlyCareers placements, which includes 138 people
starting their apprenticeship with us. Positively, we’ve
over-indexed on female and under-represented ethnic
minority colleagues in this population when compared
with our colleague population overall. As part of the
separation from Travis Perkins Plc, we now have a
Wickes Apprenticeship Levy pot. Our Installer
Apprenticeship proposition remains a key point of
differentiation for us in the market. With the national
skills shortage and limited Government funding for
this key skills area, we plan to continue to invest in
developing these skills to protect future growth.
EARLY CAREERS
Nathan Taylor was part of the Wickes Installer
Apprenticeship pilot programme and is now a
certified WickesInstaller. In November, he took on
his own installer apprentice, Keenan Hasancevic
(seen here) whoispartofour ninth cohort.
Wickes is a great career opportunity
for me! Being with two great installers
who have both given me the
knowledge and valuable experience
required to become a great installer in
the future. They really inspire me to
start my own business and gain great
connections in the trade industry.
RAACE ALLY PROGRAMME
Our newly formed RAACE Ally programme is
designed for colleagues to understand issues
such as privilege and micro-aggression, providing
tools about how to have conversations about race
and actions on how to reduce their unconscious
bias. We launched this programme as part of
Black History Month and it has started with
ourleadership teams. We hope to take as many
colleagues as possible through the programme
and help the many move from great intentions
togreat actions!
Through our Driver Apprenticeship, which
trainsinternal colleagues to become a driver for
classifications Van, C1, C and C&E, we’ve focused
on attracting female talent to these opportunities.
We are delighted to now have three women on the
scheme. Our ambition is to grow the number of
internal female colleagues on this programme and
to broaden it to external delegates in the future.
We’ve achieved Youth Verified accreditation with
the Youth Group, giving us access to their network
of 1.7 million young people and a range of tools to
help us improve the experience for earlytalent.
As our charity partnership with YoungMinds
comesto an end in March 2023, we’re proud to
haveachieved our £2 million fundraising goal,
thanksto the generosity of our customers, suppliers
and colleagues, who have been so committed to
supporting young people’s mental health. This year
we’ve seen colleagues paddle on the Thames and
take on a ‘step up’ challenge, and our suppliers
participated in our annual Charity Dinner which
aloneraised £148,000. The £2 million raised will help
the YoungMinds Parents Helpline answer another
40,000 calls, offering advice and emotionalsupport
to parents about a young personin their care.
The Wickes Community Programme enables and
encourages our colleagues to support causes in
their local communities. Stores have access to
anumbrella programme with a dedicated fund of
£250,000 for product donations. This programme
isable to showcase the collective and significant
difference Wickes makes in local communities.
In2023, as a trial we will offer 500 colleagues the
opportunity to volunteer in their local communities.
The roll-out of our community programme
this year to all stores has seen over 200
stores support 800 projects in our local
communities, including helping schools,
community centres andanimal shelters.
NAOMI WOODSTOCK
Community programme manager
Responsible Business continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202236
SUPPORTING YOUNG PEOPLE’S MENTAL HEALTH
We’ve been able to help YoungMinds support ordinary people to do extraordinary things.
YoungMindshas been working with adults who support young people within community settings
andhas provided them with training to help them feel able to act when they are concerned about
ayoungperson’s wellbeing. In the last year, it has delivered over 80 courses and trained over
1,000community leaders, including launching dedicated online resources on its website for
adultsworking in community settings, which received over 13,000 page views in the first six
weeksoflaunch.
At YoungMinds we are working towards a world where no young person feels
alone with their mental health, and Wickes have helped us to make that a reality
for even more young people. This fundraising milestone is a huge achievement
and we are hugely grateful to every customer, Wickes staff member and supplier
who has contributed to it.
EMMA THOMAS
Chief Executive, YoungMinds
LOOKING FORWARD
Like any good project, we know there’s
alwaysmore to be done. In 2022, we laid the
foundations. Now we’ll continue to evolve and
make changes until everyone at Wickes feels
at home. In 2023, we will:
– align our policy and practices to deliver
ourgoals
– connect young people with careers and skills
in retail and DIY
– improve the quality of our data to enable
usto measure progress against targets that
bring the greatest shift around ethnicity
andgender
80
courses delivered
1,000
community leaders
13,000
page views in the first six weeks of launch
COMMUNITY PROGRAMME
Wickes store team in Canning Town supported StLuke’s Primary School with timber and paint to
giveamuch-needed facelift to its Eco Garden. The children have been actively involved in the design
oftheEcoGarden and each class has its own allotment to grow vegetables; there’s also a campfire
andgarden house.
School funds are always stretched, so this donation
fromWickeshasmadearealdifference to us.
MATT HIPPERSON
Head Teacher
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 37
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. We are actively
developing and maintaining an embedded safety
culture with the care of our people and strong,
active safety leadership at its centre.
We have a low risk tolerance for safety, and have
athree lines of defence model in place to manage this
risk. Our operations have accountability for ensuring
that any risk of harm is identified and controlled.
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 six
monthly to the PLC Board.
Our safety management framework
Our safety policies are supported by procedures
thatensure 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
accident investigation process. We take pride in our
learning culture, and always seek to understand how
we can do better when things go wrong. 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 the useof mechanicalhandling equipment
across ourstores.
Our progress
In 2022, our initial focus was emerging safely from
the pandemic, ensuring colleague and customer
safety and trust as we returned to previous ways
ofworking. We then began to focus on establishing
our operational Safety Risk Registers, and build our
risk improvement and assurance plans for safety.
– Safety Risk Registers were established across
ouroperations to help prioritise our safety
improvement plans and our assurance activity
for2023. The work led to better consistency of
our risk controls across distribution sites and
provided assurance that our established retail
improvement plans contained the right priorities.
– Colleagues moved back into our Support Centre
and, following consultation, we provided new
safety notice boards and familiarisation packs
forall colleagues which included guidance on
hybrid working and safety procedures. A new
Committee was established to manage risk
andculture improvement activities.
– Under our ‘Let’s Care For Each Other’ programme,
we launched training to better support our
colleagues with the skills required to manage
conflict situations and keep themselves safe.
Wecontinue to investigate all incidents of physical
abuse and provide support to colleagues through
our Employee Assistance Programme, as needed.
– We continued a successful Primary Authority
Partnership with West Northamptonshire Council,
which has provided advice on our Safety Policy
and expressed a high level of confidence in
ourstore managers’ general health and safety
experience and knowledge during a number
ofstore familiarisation visits.
– We introduced a more detailed risk-based
SafetyReview Programme, ensuring that all
stores have a thorough review of their safety
procedures at least every three years, and
included our distribution and support centres
inthe reviews. The new audit was designed to
align to our operational risk areas and provide
improved insight into our Safety Risk Registers
and future improvement plans.
– The mental health of our colleagues has
continued to be high on our wellbeing agenda and
we now have over 500 trained Mental Health First
Aiders (MHFAs). Our Wellbeing Committee has
the largest community within the business and
delivered a Wellbeing Month in September,
providing leader-led stories and tips on financial,
mental and physical wellbeing for all colleagues.
Our performance
In 2022, we raised the profile of our injury reporting
system across our Support Centre and installation
teams, encouraging the reporting of any injury
ornear miss associated with our work. Even
withapotential increase in reporting, we showed
astrongsafety performance across the year.
– A reduction of 27% total injuries reported.
– A reduction of 16% in Lost Time Accident
Frequency Rate.
– An increase of 16% in hours worked before
aLostTime Incident.
– A 14% reduction in actual customer accidents.
– A 21% increase in the active reporting of hazards
and near misses.
Looking forward
We will continue to 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 2023, our focus will be:
– the effective management of business wide
riskregisters and safety improvement plans
todemonstrably reduce the risk of harm to
ourpeople;
– establishing a colleague safety culture survey to
help identify where we can proactively improve our
safety culture and better engage our teams; and
– reviewing our injury reporting system to help
improve the insight from safety incidents and
support the implementation of effective safety
improvement plans.
OUR THREE LINES
OF DEFENCE
1
Operation
Accountability
Responsible for the implementation
ofsafety, ourpolicy, standards and
thedevelopment ofsafeprocedures
2
Stay Safe Team
Oversight
Responsible for the development
ofour SafetyManagement
Frameworkand provision ofrisk
assurance to the Wickes Board
3
Internal/independent
auditAssurance
Responsible for the independent
validation ofourSafety Policy and
itsimplementation
Responsible Business continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202238
COLLEAGUE VOICE
At Wickes our highly-engaged colleagues are key to our success and we want
themto be successful both individually and as a team. Seeking their feedback
regularly and ensuring they have a voice is fundamental to continuously improving
our business and creating a workplace where everyone feels at home.
We are committed to ensuring we use a number of
formal and informal ways to have open, robust and
regular two-way dialogue with colleagues across a
wide range of topics. Our 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.
Our listening initiatives in 2022 supported our ‘always
on’ approach and consisted of the following activities:
Colleague Engagement survey: This is an annual
survey that seeks both quantitative and qualitative
feedback from all colleagues on a range of subjects
and is used to assess overall engagement. In 2022,
our colleague engagement was 80%.
‘Ask the Exec’ roadshow: We hold an annual
roadshow where managers from our stores and
distribution centre have the chance to ask the
Executive Board questions about the business.
Colleague Voice: Led by Non-executive Director
Sonita Alleyne we invite a cross-section of
colleagues to meet with the Board once a year,
when they get the chance to ask questions on
various topics, including remuneration.
Inclusion and Diversity Network Surveys: During
the year we undertake a variety of external surveys
to support the objective and insights of our I&D
colleague networks
Cost of living working group: In 2022, we have
brought together a cross-section of colleagues to
share their thoughts, insights and ideas as to how
the business can provide support to colleagues
during the cost of living crisis.
COLLEAGUES’ FEEDBACK & OUTCOMES
Culture
Feedback: Our colleagues continue to tell us
thatthey believe 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 we have further opportunity to
enhance this through our recognition activities.
Outcome: Feedback inputted to our employer brand
strategy and reward and recognition strategy.
Strategy and purpose
Feedback: Colleagues are confident in the direction
of our business strategy. They feel that our balanced
business gives us a competitive edge. Our strategic
framework is clear and colleagues are keen to hear
more consistently as to how this plays into their role.
Outcome: Create more opportunities through our
internal communication channels to bring to life the
strategic framework.
Inclusion and diversity
Feedback: Colleagues are proud to work for a
modernbusiness that is truly leading in terms of
inclusion and diversity, and feel that we celebrate
everyone’s differences. We have a greater opportunity
to move at pace with implementing action plans and
offering flexibility across the business areas.
Outcome: Comments fed into the flexible working
programme, which is in partnership with Timewise.
Pay and benefits
Feedback: Colleagues value our total package.
Theyappreciate our colleague discounts, the
Wickes Reward scheme and the other benefits we
offer, and they feel we have a greater opportunity to
advertise these. Colleagues appreciate that in more
senior roles the variable pay increases versus the
fixed pay, as there are more elements linked to
business performance.
Outcome: Improved regular communication
highlighting the benefits available, including the
introduction of new benefits.
Working environment and communication
Feedback: Colleagues appreciate the consistent,
regular and transparent communication from
theExecutive Board. Colleagues believe that
communication is very effective up to manager level;
however, we have a further opportunity with the wider
store team to engage with them independently.
Outcome: Feedback inputted towards internal
communications channel strategy.
Career development
Feedback: Colleagues recognise that our culture
ofpersonal responsibility encourages them to
drivetheir own development, supported by their
manager. They appreciate the internal progression
opportunities across the organisation and recognise
that this can also include ‘squiggly careers’.
Outcome: Introduction of new Step Up leadership
programme accessible to all levels of colleagues
toself nominate themselves to take part.
Cost of living
Feedback: We set up a cost of living working
groupto develop meaningful and practical support
tohelpcolleagues with the cost of living pressures.
Colleagues identified that we needed targeted
support for those most in need. We had a greater
opportunity to improve communication and
education on promotional benefits and discounts.
Finally, they expressed the need to enhance pay
andbenefits for the wider population.
Outcome: Colleague concerns on food prices led
usto introduce the ‘Breakfast on Us’ provision to
allstores in October 2022. An enhanced Wickes
colleague discount of 30% was offered during
October as part of our cost of living promotion
which saw colleagues save £750,805. We adjusted
‘Gainshare’ incentive targets to reflect economic
conditions, and we invested £3.5m in bringing
forward our annual pay review for all colleagues
from April to January 2023.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 39
OUR GOALS
Fight climate change and
protect the natural environment
OUR TARGETS*
– Science Based Target 1
Operations: reduce absolute
scope 1 and 2 emissions by
42%by 2030
– Science Based Target 2
Goods and Services 45% of
suppliers by emissions tohave
Science Based Targets by2027
– Science Based Target 3
Use of sold products: reduce
absolute scope 3 GHG emissions
from theuse of sold products by
42%by 2030
* The baseline year for all targets is 2021.
Fighting climate change and protecting
thenatural environment
Climate change and sustainability continue to grow
in importance and impact. We are now feeling the
physical and transitional impacts ofclimate change
in the UK. InJuly, record temperatures of more than
40ºC gave us a glimpse of a warmer future, and
continuing challenges around energy supply,
including electric vehicle (EV) infrastructure, have
brought into question whether we are truly ready
totransition to a low-carbon economy. Wickes is
positioning itself not only to support the UK’s 2050
netzero target, but also to help colleagues and
customers transition to the low-carbon economy.
We have pledged our support to the British Retail
Consortium (BRC) Climate Action Roadmap to fully
decarbonise the retail industry and achieve net zero
by 2040.
Carbon emissions
We continue to track our carbon emissions
acrossall three scopes within our business.
Thevast majority ofour emissions sit within
oursupply chain, due to the large volume and
rangeofproducts we sell.
Through engagement with suppliers, we are
working to better understand and reduce the
emissions associated with the products we sell,
how they are packaged and the energy they use.
Weare also continuing to work on reducing our
operational emissions through energy efficiency
inour stores, LED lighting upgrades in our heritage
estate, heating and cooling control upgrades, and
EV chargers for support centre and distribution
centre colleagues. In 2022, we reduced our store
energy consumption by 2.3% primarily through
thework of our store colleagues managing their
consumption, and the upgrades as part of our
storerefit programme.
We have introduced a new EV policy for company
cars, which allows colleagues to transition toelectric
vehicles and charge them at the Support Centre. All
of our corporate cars will be electric by 2025. We are
also exploring affiliations withEV partners to support
colleagues, as well as customers in prominent EV
ownership areas, to beable to charge their vehicles
at our stores.
Waste
In 2022, we produced 60,007 tonnes of waste through
ouroperations and our supply chain. In total, we
recycle 92.8% of our waste, with 4.6% going to energy
recovery. Some of our waste, however, is not suitable
for recycling or energy recovery, which means that
2.6% is sent to landfill.
We have spent 2022 assessing our waste in
moredetail in order to set better recycling targets
across thedifferent parts of our business. We now
understand that the lowest recycling rates in our
business are those of our colleagues and customer
waste in stores, and as such we have set recycling
targets of 50% by 2025 in our store waste.
ENVIRONMENT
Through engagement with suppliers
we are working to better understand
and reduce the emissions associated
with the products we sell, how they are
packaged and the energy they use.
Responsible Business continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202240
Water
We do not use much water in our business
operations. Our total water consumption for 2022
was 66,388 m
3
, made up of colleague and cleaning
consumption in our stores, distribution and support
centres. Most of the water consumption sits within
our supply chain, integral to the growth of the
timberindustry and water intensive manufacturing
processes. Wehave used our Task Force on
Climate-related Financial Disclosures (TCFD) report
this year to investigate the impact of water scarcity
on our supplychain. This will help us to understand
water sensitivities in our supply chain, and help
suppliers to manage their risk. You can read more
about water risk in our TCFD section on pages 49-50.
Engagement
Environmental engagement at Wickes is delivered by
colleagues across the business and driven primarily
by the Responsible Business Working Group with
oversight from the Executive Board. Members of the
Working Group have contributed to our annual supply
away day to talk about sustainable products and
services, presented at our monthly business briefing
on the fundamentals of climate change and carbon
emissions, and launched a sustainable store working
group to test new technologies in our stores.
Using our colleague learning and communication
platform, Campus, the Forward Focus network
created a Climate and Sustainability learning
platformthat brings together information about
ourbroader Responsible Business Strategy, as well
asupdates from COP 26 and 27, and giving access
tolearning materials.
STORE ENERGY EFFICIENCY
In 2022, we created a group of sustainability
representatives for each of our stores to drive
energyefficiencyacross the estate. Using our
half-hourly energy data and store expertise,
wewereabletoidentifybehavioural changes
and control fixes that helped us to reduce our
energyconsumption. We have also invested
inour store heating controls and have started
upgrading our store heating controls so that
wecanmonitorandmanage our store
heatingremotely.
Energy efficiency will be central
toourstore decarbonisation
programme, andalso ensure
ourstores are comfortable over
thewinter for colleagues
andcustomers.
MAPPING OUR WASTE
ANDRESOURCES
In order to improve our understanding of our
waste and recycling, we are working to map
outallofourwasteand recycling across the
business, to not only find improvements in
ourrecyclingpracticesbut also see how
wecanbest manage our donations to our
charityand communitypartners. We have
alsobeen working with our partners to better
understandour wasteandrecycling journey,
including a tour of the Biffa Materials
RecoveryFacility (MRF) whereoursupport
centre and store waste is processed.
The Forward Focus colleague network has
delivered several events in 2022, driving
engagement on environmental issues across
thebusiness. These have included a clothes
donation drive, a waste awareness week for store
colleagues, and communications supporting the
British Retail Consortium Climate Action Week.
Disclosure
Disclosure is an essential part of any sustainability
strategy. It helps us to understand our performance,
benchmark ourselves against our peers and our
industry, and inform our customers and investors on
our progress. We have completed our second year of
greenhouse gas accounting and TCFD reporting. We
also completed our first CDP Climate Response.
Our TCFD report addresses three key risks and
opportunities, building on our 2021 report, which
investigated risks to our timber business. This year
wehave reviewed the impact of water stresses on key
supply chains, the potential future impacts of carbon
prices, and the opportunities of low-carbon products
and services as the UK tackles the energy and cost
ofliving crisis. We have also included in this report a
Sustainability Accounting Standards Board (SASB)
response, aligned to the guidance as a Building
Products and Services business.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 41
Responsible Business continued
Near-term Science Based Targets
Near-term Science Based Targets are the gold
standard of climate change commitments. We
identified the setting of near-term Science Based
Targets as one of our key deliverables for 2022.
We are pleased to announce that we have had
our near-term Science Based Targets approved
by the SBTi, joining other businesses in the UK by
committing to emissions reductions by 2030.
Our journey to Science Based Target approval
began in 2021, with the collection and verification
of our base year data. This base year data was
used to calculate our decarbonisation pathway
across all three scopes of emissions, in line with
SBTi guidelines, and support from our climate
partner South Pole.
Operational emissions (Scope 1 and 2)
We intend to address operational emissions
through absolute carbon reduction by focusing
on decarbonising our estate and fleet by
switching gas boilers for Air Source Heat
Pumps, transitioning towards HVO and
purchasing Renewable Energy Certificates.
Purchased goods and services (Scope 3.1)
We intend to address product emissions
through partnership Science Based Target
setting, supporting our key suppliers to set
theirown Science Based Targets by 2027.
Use of sold products (Scope 3.11)
We intend to address use of product emissions
through absolute carbon reduction by reviewing
ourranges of carbon intensive products,
griddecarbonisation and improved efficiencies.
We will be reporting against our near-term
Science Based Targets every year.
Our ambition is to improve our Climate
submission score in 2023, and also complete
a full Forestry submission for scoring.
CARBON DISCLOSURE PROJECT
For our first CDP submission, we set ourselves
a target of a D rating, placing ourselves in the
Disclosurecategory, and a stretch target of C,
reaching the Awareness category. We are
pleased to announce that we achieved a rating
of a B-, placing us in theManagement category
and above our stretch target.
This submission has highlighted areas
ofimprovement, specifically in our risk
management and strategy. We also completed
the basic Forestry CDP questionnaire, in order to
understand how we can improve our responsible
sourcing strategy and inform and develop our
timber policy. This submission was not scored.
We intend to complete the full Forestry
disclosure in 2023.
LOOKING FORWARD
2023 will be an important year in our
decarbonisation journey. We will begin our work
to deliver our near-term Science Based Targets,
with a particular focus on energy supply and
efficiency in our stores. This will include a new
electricity contract starting in April, which will be
sourced with 100% renewable electricity, and our
continued upgrade to our heating controls, to
better manage our gas consumption. We will
also continue to increase our support to our key
suppliers, in order for them to better understand
their environmental impact, and set Science
Based Targets of their own over the next
fiveyears.
Chemicals
Wickes recognises 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 in the Registration, Evaluation,
Authorisation and Restriction of Chemicals
(REACH). We also ensure that all our packaging
andproducts arecompliant with volatile organic
compound (VOC) and REACH standards.
Chromium 6 (Dangerous chemicals)
Chromium 6 is used in industrial processes and
canbe responsible for negative health effects.
Ourgoalistoremove Chromium 6 from all our own
brand products and replace it with Chromium 3,
whichdoes not have the same negative properties.
All new chromed products being developed by
Wickes are Chromium 6 free and we are working
with our suppliers with the aim of being completely
free of Chromium 6 in the production of Wickes
branded products by the end of 2023.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202242
GREENHOUSE GAS AND
STREAMLINED ENERGYAND
CARBON REPORTING
Greenhouse gas emissions
2022 Total
Tonnes of Co2
e
2021
(1)
Total
Tonnes of Co2
e
Scope 1 17,484 23,087
Scope 2 Market 15,722 14,541
Scope 2 Location 8,585 9,687
Total Scope 1 & 2 (Market) 33,206 37,628
Scope 1 & 2 Carbon Intensity (tCO
2
e/1,000 sq ft) 5 5
Scope 3.1 Purchased goods and services 1,590,648 1,075,463
Scope 3.11 Use of sold products 294,996 362,655
Scope 3.12 End of life treatment 119,973 120,951
Scope 3 Other 42,940 26,351
Total Scope 3 2,048,557 1,585,420
Total Emissions 2,081,763 1,623,048
(1) Following submission to the SBTi in 2022 Q3 for our 2021 Science Based Targets, updated methodologies were applied to categories 3.1
Purchased Goods & Services, 3.11 Use of Sold Products and 3.12 End of Life Treatment. This provided more accurate emissions data upon
which our targets for a 2021 baseline were approved. There has been no change to the 2021 base data.
Emissions overview
Our focus for GHG reporting in 2022 was to continue our data collection in line with our environmental strategy.
It was important for us to fully understand our emissions and be able to provide more detail than the previous
year. 2022 has been the first year we are able to directly report against our carbon reduction targets, which are
aligned to the British Retail Consortium (BRC) Climate Action Roadmap and Science Based Targets (SBTi).
We spent much of 2022 improving our data collection methodologies and verifying our data. We consolidated our
multiple water suppliers across the estate to improve visibility, as well as bringing our gas meters online into the
same platform as our electricity for better control of our energy consumption. We have collaborated with our
operational waste contractors to improve our waste and recycling data for our operations and installations by
increasing the frequency of reports received and refreshing our validation process. We have also been able to
report fully on our purchased goods and services, including our core ranges and kitchens and bathrooms, as well
as goods not for resale such as office equipment. The vast majority of our emissions still sit within our Scope 3,
specifically our purchased goods and services, use of sold products, and end of life treatment of products.
The increase in overall emissions from 2021 can be attributed to a combination of the improved methodologies
in data analysis, business growth, and external database updates. We have used the same emissions factor
databases in 2022 as with our previous year, namely BEIS and CEDA, however some cost-based factors have
increased significantly. Therefore emission scopes which are calculated using this cost-based methodology
have been impacted, and may also be influenced by other external factors including inflation. Our aim for the
2023 data collection process will be to minimise the use of cost based methodologies even more to continue
our improvement in emissions accuracy.
For more detail on our emissions calculations and methodology, our method statement is available to view
onour website www.wickesplc.co.uk.
Emissions commentary
Our emissions across Scope 1 and 2 have reduced following energy saving initiatives across our
operations, including updated heating controls in our stores and installing LED lighting in our refurbished
stores and heritage replacements.
The majority of our emissions continue to sit within our Scope 3, specifically our purchased goods and
services, use of sold products, and end of life treatment of products. Our approved near-term Science
Based Targets for Scope 3 are a partnership target to collaborate with our top suppliers to help them
settheir own Science Based Targets, and an absolute reduction of our Use of Sold Products emissions.
Assurance
Our independent limited assurance was carried out by LRQA using ISO 14064-3 2019 assurance standards.
This assurance covers all of our Scope 1, 2 and 3 emissions, with the exception of our water data. Our
assurance statement is available online in our Responsible Business pages.
Streamlined Energy and Carbon (SECR) Reporting
Group / UK 2022 Group / UK 2021
Annual emissions (Scope 1 & 2 Market tCO
2
e) 33,206 37,628
Annual Energy Use (GWh) 98,141 114,515
Emissions Intensity (tCO
2
e/1,000 sq ft) 5 5
SECR – 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 emissions, we have
followed the GHG Protocol Corporate Accounting Standard, using an operation control approach, and the
emissions factors used were from the Department for Business, Energy & Industrial Strategy Greenhouse
gasreporting: conversion factors 2022, and CEDA emissions database. Our Scope 1 was collected through
monthly invoice data for stationary emissions, mileage data for mobile emissions, and heating and cooling
asset registries for fugitive emissions. Our Scope 2 emissions were calculated through 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. Our Scope 3
emissions reporting includes all relevant scopes, with the vast majority of emissions representing purchased
goods and services, and use of sold products. Our purchased goods and services used a weight, and
volume-based methodology. We have improved our methodologies for transportation by providing transport
categories, as well as using accurate capital goods and goods not for resale spend data. For more detail
onour emissions calculations and methodology, our method statement is available to view on our website
www.wickesplc.co.uk. For more information about how we are managing our impacts, and identifying risks
and opportunities associated withthese emissions, please see our TCFD response on pages 45-50.
Energy efficiency measures
Energy efficiency measures this year include:
– upgrading our gas meters to enable half-hourly data reporting;
– upgrading our heating controls to allow for remote management and monitoring;
– trials of electric heating systems in a sample of stores;
– energy champions in stores seeking to drive behavioural changes around energy efficiency.
LOOKING FORWARD
2023 will be an important year in our
decarbonisation journey. We will begin our work
to deliver our near-term Science Based Targets,
with a particular focus on energy supply and
efficiency in our stores. This will include a new
electricity contract starting in April, which will be
sourced with 100% renewable electricity, and our
continued upgrade to our heating controls, to
better manage our gas consumption. We will
also continue to increase our support to our key
suppliers, in order for them to better understand
their environmental impact, and set Science
Based Targets of their own over the next
fiveyears.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 43
SASB 2022
BUILDING PRODUCTS & FURNISHINGS
ACCOUNTING METRIC CATEGORY UNIT OF MEASURE CODIFIED METRIC CODE RESPONSE
ENERGY MANAGEMENT IN RETAIL AND DISTRIBUTION
(1) Total energy consumed Quantitative Gigawatt hours (GWh) CG-MR-130a.1 (1) 98,141 GWh of energy across our estate
(2) Percentage grid electricity Percentage (%) (2) 100% grid electricity
(3) Percentage renewable (3) 0% renewable
Annual Report page 43
MANAGEMENT OF CHEMICALS IN PRODUCTS
Discussion of processes to assess and manage risks and/or hazards
associated with chemicals in products
Discussion and analysis n/a CG-BF-250a.1 Wickes maintains chemical commitments and guidance that ensure we manage our
risks and hazards appropriately, and compliant with REACH and VOC standards.
Annual Report page 42
Percentage of eligible applicable products meeting volatile organic compound
(VOC) emissions and content standards
Quantitative Percentage (%) by revenue CG-BF-250a.2 We do not currently track the total % of products at SKU level; however, all of our
applicable products meet VOC emissions and content standards.
Annual Report pages 42
PRODUCT LIFE CYCLE ENVIRONMENTAL IMPACTS
Description of efforts to manage product life cycle impacts and meet demand
for sustainable products
Discussion and analysis n/a CG-BF-410a.1 We continue to report against our carbon reduction targets to understand the life cycle
impacts of our products, and are currently reviewing potential new ranges to increase the
number of responsibly sourced and energy efficient products available to customers.
We will also be trialling a take back scheme for key products, and improving our
packaging to include more recycled materials.
Annual Report page 40 and 53
(1) Weight of end of life material recovered Quantitative Metric tonnes (t), CG-BF-410a.2 (1) 60,007 tonnes
(2) Percentage of recovered materials that are recycled Percentage (%) by weight (2) 92.79% of recovered materials
Annual Report page 40
WOOD SUPPLY CHAIN MANAGEMENT
(1) Total weight of wood fibre materials purchased Quantitative Metric tonnes (t), CG-BF-430a.1 (1) Total weight of wood fibre 377,686 tonnes
(2) Percentage from third party certified forestlands Percentage (%) by weight (2) 100% from third party certified forests
(3) Percentage by standard (3) 99.8% by FSC or PESC standard
(4) Percentage certified to other wood fibre standards (4) 0.2% to other wood standards
(5) Percentage by standard (5) 0% by other standards
Annual Report page 53
ACTIVITY METRIC
ACCOUNTING METRIC CATEGORY UNIT OF MEASURE CODIFIED METRIC CODE RESPONSE
ENERGY MANAGEMENT IN RETAIL AND DISTRIBUTION
Annual production Quantitative Tonnes CG-BF-000.A 1,366,848 tonnes of goods
Area of manufacturing facilities Quantitative Square foot CG-BF-000.B 6,586,448 sq ft stores, 748,556 sq ft distribution
SUSTAINABILITY ACCOUNTING STANDARDS BOARD
Responsible Business continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202244
We have set out below our climate-
relatedfinancial disclosures consistent
with theTCFD recommendations
andrecommended disclosures
forGovernance (all recommended
disclosures), Risk Management (all
recommended disclosures), Strategy
(disclosure a), and Metrics and Targets
(allrecommended disclosures) taking into
account the ‘Guidance for All Sectors’, the
‘Supplemental Guidance for Non-Financial
Groups’, and the ‘TCFD Guidance on
Scenario Analysis for Non-Financial
Companies’. Our disclosures in relation
tothe TCFD Strategy recommended
disclosures b) and c) are not yet
consistent and further work will be
undertaken over the coming year (2023)
to gather the data required to better
understand the impact of climate-related
risks and opportunities on Wickes’
strategy and financial planning, and
tocontinue to test the resilience of our
strategy under different scenarios with
aview to providing consistent disclosures
in our Annual Report next year.
TASK FORCE ON CLIMATE-RELATED
FINANCIAL DISCLOSURES (TCFD)
GOVERNANCE
The relevant organisational structures for
climateissues are summarised in the chart
anddescribed below.
Plc Board
The Board has overall responsibility for the delivery
ofthe Group’s strategy. The Board has delegated
responsibility for ESG matters, including climate-related
issues, to the Responsible Business Committee and
receives regular updates from the Committee on its
work. The Board considers climate-related issues
andrisks when guiding strategy, annual budgets and
business plans as well as performance objectives.
TheBoard level Audit and Risk Committee oversees the
management of climate-related risks and opportunities
as part of our risk management process (see Risk
management on page 69).
Responsible Business Committee
The Responsible Business Committee’s primary
purpose is to oversee the development of Wickes’
Responsible Business Strategy and monitor
performance in relation to environmental, societal
and governance matters, as set out on pages 98-100.
The members of the Responsible Business
Committee are the Chair of the Board and the
Non-executive Directors. The Committee is chaired
bySonita Alleyne, one of our Non-executive Directors.
Key members of our management, including the
CEO,General Counsel and Company Secretary, Chief
People Officer, Head of Sustainability and Investor
Relations Director attend all meetings.
Climate-related issues are part of the Responsible
Business Committee’s duties to oversee the Group’s
ESG conduct, and are a regular agenda item for
theCommittee, which meets on a quarterly basis.
The Committee monitors and oversees progress
against goals and targets for addressing climate-
related issues by reviewing and discussing the
reports presented.
The Committee reviews our operational energy
consumption, our annual CDP submission and
score,and our near-term Science Based Targets,
which together provide a view of our performance
against our climate-related ambitions.
Teams responsible for delivering
elements of strategy
Overall responsibility
for delivery of strategy
Approval, guidance, and
governance of strategy
PROPERTY
COMMERCIAL
LEGAL
HR
MARKETING
FINANCE
FLEET
OPERATION
IT
RESPONSIBLE BUSINESS COMMITTEE
RESPONSIBLE BUSINESS WORKING GROUP (LED BY THE HEAD OF SUSTAINABILITY)
EXECUTIVE BOARD
PLC BOARD
Executive Board meetings to
oversee department specific work
Programme management and forum for discussion,
collaboration, delivery and reporting
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 45
Executive Board
Department specific initiatives are overseen by the
Executive Board ensuring climate-related decision
making is integrated across the business. One
example of how climate-related issues are considered
when implementing strategy and financial planning is
the integration of delivery of our near-term Science
Based Targets into our operational and commercial
planning, including the budgeting for delivery of such
programmes, negotiations with our key suppliers,
andrange reviews within the products we sell. The
Executive Board is regularly updated by the Head
ofSustainability and operational leads (who are
members of the Responsible Business Working
Group) on progress with climate-related matters.
Responsible Business Working Group
The Responsible Business Working Group, with
membership from heads of functions across the
business, is chaired by the Head of Sustainability.
The Responsible Business Working Group is
responsible for the delivery of climate related
initiatives across the business. It reports to the
Executive Board and the Responsible Business
Committee on a regular basis through the Head
ofSustainability.
STRATEGY
Time horizons: short, medium and long term
We continually monitor climate-related risks and
opportunities across three time horizons:
– Short term (2025): our existing enterprise risk
management process already covers short term
climate-related risks in the next two years.
– Medium term (2030): this time horizon was
selected for climate-related risks and
opportunities as it aligns with global standards
and climate policy as well as our near-term
Science Based Targets.
– Long term (2040): this time horizon was selected
for climate-related risks and opportunities as it
aligns with global standards and climate policy
aswell as our long term target.
Last year, we focused on identifying a longlist
ofclimate-related risks and opportunities across
thebusiness and the value chain via engagement
with the Responsible Business Working Group. A
description of the specific climate-related issues
potentially arising in each time-horizon that could
have a material financial impact on the Group is
setout on page 48. Risks are considered to be
consistent across locations and sectors.
The scenario analysis was performed in two
stages.In 2021, we engaged with cross-functional
stakeholders to prioritise risks and opportunities
based on their importance to the business. When
determining importance a wide range of factors
wereconsidered, including the impact on key
stakeholders, the achievement of strategic objectives
and cost-benefit analysis. We then conducted an
initial scenario analysis to identify ‘hotspots’ of
climate change risks and opportunities.
This year, we also short listed three climate-related
risks and opportunities for further assessment.
These were:
– Exposure to carbon pricing mechanisms: We
assessed our level of exposure to future carbon
pricing mechanisms based on future carbon
prices under two climate scenarios across our
entire footprint.
– Water risks across the supply chain, focused
onkey suppliers: We assessed our vulnerability
to water scarcity across the supply chain, with
afocus on key locations for our major suppliers,
especially those with water intensive
manufacturing processes.
– Opportunities related to the sale of products
and services related to heat pumps, solar
panels and EV chargers: We assessed the
market opportunities for Wickes from three
products supporting the low-carbon transition
including solar panels, heat pumps and
EVchargers.
These risks were selected as they were considered
to be high potential future climate-related risks or
areas where we have limited knowledge of the
potential impact.
Potential impacts on strategy and
financialplanning
In 2022, we explored how these climate-related
issues might affect our strategy and financial
planning at a high level (see ‘Potential financial
impacts’ column in the table on page 48). Based
onthe latest assessment of the potential financial
impacts of these risks and opportunities, we plan
toexplore in more detail during 2023 how these will
serve as inputs to our financial planning process.
We will also be using the analysis to inform our
commercial strategy in new product areas, and in
our engagement with suppliers to aid in their
decarbonisation, reduce their emissions and set
Science Based Targets, and mitigate risks in water
shortages. Our near-term Science Based Targets
form the start of the development of our climate
transition plan, which we will continue to build on
inthe coming months. Now that our climate related
risks and opportunities are fully assessed, we can
undertake further analysis to better understand
their potential impacts across areas of the business
including products and services, value chain,
adaptation and mitigation activities, investment in
research and development, operations, acquisitions
or divestments, and access to capital. We intend to
provide an update on our work in this area in our
Annual Report next year.
Resilience of strategy under different scenarios
This year, we started to test the resilience of
ourbusiness strategy against prioritised climate-
related risks and opportunities, and identified
whatstrategic response is required to address gaps
identified (see‘Strategic response’ in the table on
page 48). Weplan tocontinue testing the resilience
of our strategy aswebetter understand how these
risks and opportunities are likely to impact our
business. Further information on the scenarios
wehave used this year and the findings of our
scenario analysis to date are set out on pages
49-50. We intend to provide an update on our
workin this area in our Annual Report next year.
Responsible Business continued
Task force on climate-related Financial disclosures (TCFD) continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202246
RISK MANAGEMENT
Our climate-related risk management processes
follow four main steps: risk identification and
monitoring, risk assessment, risk prioritisation
andrisk integration and management.
Risk identification and monitoring
Climate-related risks and opportunities identified
aspart of our first TCFD assessment in 2021 were
logged in a newly-developed Climate Risk Register.
Owned by the Head of Sustainability, this Register
sits separately to our main Group Risk Register,
andis used to monitor climate-related risks and
opportunities on an annual basis. This year, three
climate-related risks and opportunities were
shortlisted for further assessment (see Strategy).
Risk assessment
Prioritised climate-related risks and opportunities
are then assessed via a scenario analysis.
Scenario analysis is one of the processes that
Wickes utilises to identify and assess our climate
risk. We also use our EarthScan platform, to identify
any significant risks in our property estate, and
assess their impact on our ability to operate.
Significant risks are then tracked and managed
accordingly. In our operational estate we have
identified high-risk properties in our future estate
strategy, and invested in technology within our
estate to lower our carbon footprint and energy
consumption. Our improved understanding of our
supply chain in terms of their carbon footprint and
risk to changes in carbon pricing, for example, have
allowed us to begin engagement with them to
reduce these risks for both businesses. The
scenarios used to assess these future risks are
based on both existing and emerging regulatory
requirements. This year, we undertook a detailed
scenario analysis exercise to assess the three
prioritised climate risks and opportunities in a rapid
warming 4°C scenario, a high emission ‘limited
transition’ 3°C scenario, and a ‘rapid transition low
emissions’ 1.5°C scenario (see Scenario analysis
section on page 49).
Risk prioritisation
Climate-related risks and opportunities are prioritised
on the basis of the strength of the climate change
signal, and the extent of the potential financial or
strategic impact on our business, to help us
determine the relative significance of climate-related
risks when compared to the Group’s other risks. The
Group’s Enterprise Risk Management framework
requires the evaluation of risks based on their impact
and likelihood to arrive at an assessment score. This
is a process that Wickes already has in place for the
identification, assessment and management of risks
other than climate-related risks. Risks that scored
highly are then brought to the attention of the Risk
Management team.
Risk integration and management
Priority climate-related risks and opportunities are
then integrated into our Group risk register using the
prioritisation process described on pages 64-66 as
part of risk management and internal control.
Climate change risks have already been integrated
into our Group risk register as part of our 2021 TCFD
response, with additional risks identified as part of
our 2022 response also included, ensuring that we
anticipate and manage the strategic, operational and
reputational risks associated with climate change.
Climate is one of the Group’s principal risks and
uncertainties (see page 69 for further information).
The Audit and Risk Committee is responsible for the
management of key risks through Group Risk Registers,
with key risks regularly collated and reviewed by
management and the Board to assess the potential
impact and likelihood of occurrence, after taking into
account key controls and mitigating factors, as well as
interdependencies. The Group risk register is discussed
at Board level on a regular basis, and scores have been
attributed to each risk (before and after mitigation),
along with a mitigation plan and risk owner. Wickes has
assessed each risk against a risk appetite level.
METRICS AND TARGETS
GHG emissions
We have calculated our full 2022 GHG footprint for
our business, covering absolute Scope 1, 2 (market
and location) and 3 emissions and carbon intensity,
following best practice guidance from the World
Business Council for Sustainable Development
(WBCSD) and World Resources Institute (WRI)’s
Greenhouse Gas Protocol. This full GHG footprint
isprovided on page 43 including for historical
periods (from 2021) to allow for trend analysis.
Scope 1, 2 and 3 GHG emissions are key metrics
inmonitoring our climate impact over time, and are
independently verified. Wickes is a signatory of the
BRC Climate Action Roadmap, with an emissions
reduction roadmap which was defined in 2022
using our verified 2021 base year. Wickes does not
currently use internal carbon prices.
Near-term Science Based Targets
In 2022, we submitted near-term Science Based
Targets for approval to the SBTi, using our 2021 data
as our baseline year, with a target year of 2030 (see
pages 40-42). These targets were approved, and we
are now working to deliver our decarbonisation
pathway in line with the BRC Climate Action
Roadmap and our own intervention pathway. One of
these targets relates to our purchased goods and
services emissions, and aims to encourage our
major suppliers to set Science Based Targets of their
own. This supplier engagement will also help to
address our key transition opportunities and risks
identified in our 2022 scenario analysis.
Additional Metrics and Targets
We have defined a number of additional targets
related to packaging, including eliminating
unnecessary packaging by 2023, making all
packaging easy to recycle by 2025, and having at
least 50% of packaging volume containing recycled
materials, with progress being monitored using
relevant metrics. We also target 100% responsible
sourcing in our timber sourcing, monitoring our
suppliers through PESC and FSC.
Executive remuneration
Members of the Executive Board have an ESG
metricas part of their bonus targets (see Directors’
Remuneration report on pages 101-114), which in
2022 wasfocused on Environmental and Social
metrics. Environmental targets were to achieve a
submission and score of our first every CDP response,
as well as reduce our absolute energy use across
electricity and gas in our store estate.
This year, our ESG targets will be integrated into
ourExecutive Long Term Incentive Plan (LTIP),
andwill be linked to our near-term Science Based
Target roadmap.
Strategic report Governance Financial statements Other information
47Wickes Group Plc Annual Report and Accounts 2022
Responsible Business continued
Potential impact
TCFD category Climate-related risk/opportunity topic Potential financial impact
Climate
scenario 2025 2030 2040 Strategic response
Transition:
Policy, Market
Opp: Transition to heat pumps to heat homes across
the UK as part of UK Government’s plans to
decarbonise buildings
Increased sales/revenues
fromincrease in demand for
heatpumps
STEPS
(<2°C)
– Monitoring relevant policy developments
– Defining strategy related to heat pumps and services
NZE
(<1.5°C)
Transition:
Policy, Market
Opp: Opportunities related to new products and
services related to energy storage and
microgeneration
Increased sales from new products
and services related to solar PV
panels and EV chargers
STEPS
(<2°C)
– Monitoring relevant policy developments
– Exploring new products and ranges as part of internal
strategic initiatives
NZE
(<1.5°C)
Transition:
Policy
Risk: Implementation of carbon pricing mechanisms
including emissions trading schemes (ETS)
Increased costs passed on
bysuppliers
STEPS
(<2°C)
– Focusing on decarbonisation targets (incl. near-term
Science Based Targets)
– Engagement with suppliers on climate-related targets/
reduction plans
– Monitoring relevant policy developments
NZE
(<1.5°C)
Transition:
Policy, Market
Risk/Opp: Phase out of gas boilers and replacement
with low-carbon heating alternatives, driven by the UK
target of no new gas boilers by 2035
Reduced sales of gas boilers/
Increased sales from alternatives
to gas boilers
NZE
(<1.5°C)
– Exploring phase out and new ranges as part of internal
strategic initiatives
Transition:
Policy, Market
Opp: Expansion of existing and development of new
products and services relating to improving the
thermal efficiency of buildings, energy efficient
lighting and appliances and smart controls
Increased sales from new products
and services supporting these
areas
NZE
(<1.5°C)
– Exploring existing and new products and ranges as part
of internal strategic initiatives
Transition:
Policy
Risk: Implementation of product specific standards
related to embodied emissions
Increased costs to meet product
specific standards
NZE
(<1.5°C)
– Monitoring relevant policy developments
Transition:
Policy
Risk: Implementation of a carbon border adjustment
mechanism (CBAM) in the UK and the EU
Increased costs passed on
bysuppliers
NZE
(<1.5°C)
– Monitoring relevant policy developments
Transition:
Policy
Risk: UK Government targets to decarbonise
transport
Increased costs linked to the
decarbonisation of the fleet
NZE
(<1.5°C)
– Engaging on long term decarbonisation strategy of main
transport providers
– Defining business case for potential low/zero-carbon
fleet options
Transition:
Policy
Risk: Increased adoption of green clauses in building
leases
Increased costs linked to stores’
building leases
NZE
(<1.5°C)
– Monitoring energy usage and emissions of stores
– Exploring emission reduction possibilities in stores
Physical Risk: Water availability across the supply chain Production disruptions due to
water scarcity
RCP8.5
– Engaging with identified suppliers to discuss
mitigationactions
Physical Risk: Climate change risks related to timber sourcing Production and supply disruptions RCP8.5
– Monitoring weather conditions in sourcing regions
Selected for potential impact
Climate-related risks and opportunities
selected for focus in 2022
Low Medium High Uncertain Not deemed material in this time horizon
Task force on climate-related Financial disclosures (TCFD) continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202248
SCENARIO ANALYSIS
Climate scenario analysis is an essential tool
forusto better understand how climate change is
likely to affect our business in the future. This year,
we conducted the second stage of our scenario
analysis and assessed three climate-related risks
and opportunities in more detail. Two of the risks
andopportunities are transitional risks – business
exposure to future carbon pricing mechanisms, and
opportunities related to future products and services
supporting the low-carbon transition undera rapid
transition scenario. One physical risk, assessment
ofwater risks across our supply chainunder a
high-impact scenario, was considered in more detail.
Rapid transition scenario (<1.5°C)
Wickes explored climate-related transition risks
andopportunities using two reference scenarios
provided by the International Energy Agency (IEA).
The Net Zero Emissions by 2050 Scenario (NZE)
isa1.5°C-aligned scenario, showing a narrow but
achievable pathway to achieve net zero emissions
by2050. We also used the Stated Policies Scenario
(STEPS), as a “business as usual” (BAU) comparative
scenario. This scenario considers current policy
settings (already implemented or confirmed
upcoming policies) and is the IEA’s ‘worst-case’
scenario given the current policy andmarket
landscape and trends.
The scenario analysis for transition risks and
opportunities focused on two material transition
topics: the potential exposure to future carbon
pricing mechanisms and the opportunities related
to products that support the transition to net zero.
These topics were selected based on last year’s
scenario analysis results, which pointed towards
potential high risks related to our sourcing of carbon
intensive products as well as potential opportunities
arising from policy and market developments
related to heat pumps, solar panels and electric
vehicle (EV) chargers.
Exposure to future carbon pricing mechanisms
Explicit carbon costs under the IEA’s STEPS
scenario
1
are due to increase to ~£90/tCO
2
e by
2030 and ~£98/tCO
2
e by 2040.
2
Under the IEA’s
NZE scenario, prices are projected to increase to
~£146/tCO
2
e by 2030 and ~£205/tCO
2
e by 2040.
Under a BAU STEPS scenario, we estimated that
our exposure to carbon costs in the medium term
islower relative to other scenarios due to lower
carbon prices. In the long term, there is a continued
but small increase in carbon price projections
leading to a sustained but low risk exposure relative
to other scenarios. Achieving net zero by 2040 with
STEPS scenario price projections presents the
lowest risk outlook.
Under a NZE scenario, the business could be
subject to high carbon prices by 2030. This
presents a high carbon cost risk given that we will
still be at relatively early stages of decarbonisation
towards net zero by 2040.
2
If we achieve net zero in
this timeframe, our risk exposure will be mitigated
through a low GHG emissions profile. Failure to
decarbonise under a NZE scenario by 2040
presents the highest risk outcome to Wickes.
Thus decarbonisation presents the primary risk
mitigation action to reduce exposure to carbon
costs. Achieving both our near-term and long-term,
net zero Science Based Targets could substantially
reduce our exposure to these costs. With Scope 3
carbon costs more material than Scope 1 and 2
costs under all pathways (reflecting our GHG
footprint), engaging with our suppliers to reduce
emissions is a priority mitigation action to reduce
the impacts of future carbon costs.
Opportunities from products supporting
thelowcarbon transition
To meet its net zero target, the UK will need to
reduce emissions from heat and buildings by 100%
by 2050 compared with 2019.
3
With the majority of
emissions coming from heating buildings, the
primary focus of current and future policies is on
decarbonising heat while improving the energy
efficiency of UK homes. UK Government policies
like Future Home Standard (new homes), the Boiler
Upgrade Scheme and The Ten Point Plan For A
Green Industrial Revolution present opportunities
inrelation to expanding and developing low carbon
products and services across our Sustainable
Home offerings, specifically heat pumps, EV
chargers and solar panels.
The climate scenario analysis we conducted
foundthat:
– Heat pumps represent the biggest market
opportunity in terms of revenues as they are
keyto decarbonising home heating. However,
there is a significant gap between the BAU
andNZE scenarios reflecting a misalignment
between ambitious targets and current policy
andmarket conditions.
– EV chargers also represent a significant
opportunity based on current policies (aligned
with national emission reduction plans) and
market conditions, including the ban of new sales
of internal combustion engine cars by 2030, the
incentive for new builds to be ‘EV charger ready’
and grant schemes. This is reflected in a smaller
gap between scenarios, presenting a more
certain opportunity.
– Solar panels represent a smaller opportunity
which is likely to be boosted in a NZEscenario, as
the lack of current economic incentives (e.g. the
end of the Feed-in-Tariff Scheme) is translated
into a lower uptake in a BAU scenario.
High physical impact scenario (4°c)
Physical risks
We used the Intergovernmental Panel on Climate
Change (IPCC) Representative Concentration
Pathway (RCP) 8.5 scenario to project the most likely
climate outcomes associated with a trajectory where
global emissions continue rising at current rates,
leading to a temperature increase of 4°C by 2100.
As water use across our own operations is
negligible in comparison to that of our supply chain,
the analysis of physical risks focused on water
availability risk across the supply chain only. The
majority (62%) of our products are sourced from
industries with very high or high water intensity,
making them vulnerable to water availability risks
inthe future.
An exploratory scenario analysis of our supplier
locations was carried out with the purpose of
identifying water availability risk hotspots. 45
locations from the top 20 suppliers were identified
for the scenario analysis. The analysis (summarised
on the map on page 50) showed that 11 out of the 45
supplier sites are projected to be in locations with
high water availability risk by 2030 under an RCP8.5
scenario; these suppliers are located in the south
ofthe UK (Thames basin) and in Belgium (Scheldt
basin). By 2040 and under an RCP8.5 scenario, only
the location in Belgium is projected to be at high
water availability risk, while the sites in the south
ofthe UK are projected to be at moderate water
availability risk.
1 IEA (2022) World Energy Outlook.
2 Using the IEA categorisation of European Union for price
projections equitable to the UK’s.
3 HM Government (2021) Net Zero Strategy: Build Back Greener.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 49
Property and supply chain
Throughout 2022, Wickes has been working
withCervest to better understand how the physical
risks of climate change will affect our property and
supply chain portfolio. Using Cervest’s Earth Scan
technology, Wickes has created portfolios of
property and supply chain assets, and assesses
therisk of climate change through various warming
scenarios and physical climate risks such as
temperature, flooding and wind. The subsequent
reports act as intelligence for our property estate, to
integrate their findings into future property strategy,
as well as provide climate risk reports for category
managers for our largest product portfolios such as
timer and aggregates. We will continue to build out
our supply chain portfolios, to include a wider range
of suppliers covering a large geographic range, with
special focus on locations which are particularly
susceptible to the physical risks of climate change.
Projected water availability risk for selected Wickes’ supplier locations by 2030
UNITED
KINGDOM
BELGIUM
NETHERLANDS
GERMANY
DENMARK
SWEDEN
PROJECTED WATER STRESS:
High
Moderate
Low
Responsible Business continued
Task force on climate-related Financial disclosures (TCFD) continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202250
OUR GOAL
Help the nation to make their
homes more sustainable
OUR TARGETS
– Eliminate all unnecessary
packaging and all packaging to
be easy to recycle or reuse by
2025
– 50% of our own brand products
classified as sustainable
– Reduced in-use emissions
ofour products
Sustainable homes for everyone
Whilst making homes more sustainable ultimately
leads to them lowering their environmental impact
and carbon emissions, it also helps to address the
cost of living crisis gripping the UK. With the dramatic
rise in energy prices, reducing energy consumption
isan absolute priority for our customers. Wickes is
focused on providing customers with abroad range
ofsustainable and energy efficient products and
services to achieve long term decarbonisation targets
and short term relief onthe costof living.
Products
In 2021, we identified sustainable products and
services as a major growth lever for the business,
andso 2022 has been about understanding our
products, and their impact on the environment
andcustomers’ homes. At the start of the year,
wesetout to taxonomise our products into a new
set ofcategories, understand the environmental
performance of those products and assess any
gaps in our ranges to support energy efficiency.
Sustainable products are those that are
sustainablysourced, made, packaged or delivered.
Sustainable living are those that provide positive
social and environmental impacts through their
use.Each ofthese categories has a series of
subcategories depending on the qualities of the
product. You can read more about ourclassification
and their definitions on our website.
Services and support
Currently we do not offer any specific services for
customers on energy efficiency. We are working
withour customer insight and commercial teams
toassess how best to build our service offering,
lookingespecially at energy generation technologies.
We now offer energy advice and guidance in the
form of our ‘Energy Saving Advice’ pages on our
customer website. These pages provide product
information and installation guidance for key
products for customers to save energy. This page
issupported byanew partnership with the Energy
Saving Trust, which allows us to use verified energy.
Wickes Sustainable House Guide
In November, we released a new shopping
experience for our customers in the form of a
Sustainable House on our customer website. This
interactive shopping experience allows customers
to explore energy saving and sustainable products
for their homes and understand their environmental
impact, whilst being integrated into our existing
customer journey. The house highlights not only
theproducts available, but also useful hints and tips
to lower energy consumption through behaviours
and conservation. The house is also available to
customers in store, through prompts inthe form of
‘wobblers’ positioned next to key products, and as
part of our assisted selling model.
HOMES
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 51
SCAN ME
OUR SUSTAINABLE
HOUSE GUIDE
Learn what you can do
to save money and live
more sustainably.
Visit wickes.co.uk/
sustainable-house
tofind out more
Installations
We continue to focus on ensuring the waste from
our kitchen and bathroom installations is recycled,
and that all product packaging waste, and removed
kitchen and bathroom units are not sent to landfill.
Working with our waste partners AnyJunk and
Hippo, 98% of our installations waste is recycled,
with only a small amount of unrecyclable ceramic
waste being sent to landfill.
Packaging
We are continuing to deliver against our three key
packaging strategy targets:
We will eliminate all unnecessary packaging
across our business by 2023
This target is designed to focus our teams on
efficient packaging strategies, and to make
anabsolute reduction in our packaging volumes.
Allown label packaging has been assessed and we
have removed all unnecessary packaging from our
own brand products. We have eliminated 6% of
plastic and any new packaging introduced is as
minimal as possible.
All our packaging will be easy to recycle or reuse
by 2025
This target focuses on the materials we use in
ourpackaging – moving away from unrecyclable
materials such as PVC and polystyrene to those
that offer the opportunity for a second lease of life
as future packaging materials or construction
materials, or those that are biodegradable.
50% of our customer plastic and paper packaging
will come from recycled materials by 2025
This target aims to reduce the use of virgin materials
within our packaging strategy. To support these
targets, we have built a new packaging management
system, which allows us to monitor and manage the
packaging within our business, and work with our
suppliers and colleagues.
New packaging data portal
We have now started transitioning our packaging
data into our new portal, Valpak. This will enable us
conform with all legal compliance requirements,
manage our costs, and focus on improving recycled
content in our packaging. We are on target to
achieve this transition in 2023.
LOOKING FORWARD
We recognised that customers needed help and
advice on how to live more sustainably and
reduce their energy consumption. In 2022 we
developed an Energy Saving Advice guide and a
virtual Sustainable House on our website. The
aim of this virtual tool is to help guide customers
on how they can live more sustainably through
modifying their behaviours, and implementing
projects with Wickes products to make their
homes more sustainable and energy efficient .
In 2023 we will continue to support and guide
our customers on the right products and
projects they can implement through all our
channels including stores. We will also continue
to build our product offer to enable customers
to be more energy efficient and explore what
role we want to play in the installation of energy
efficient products and technologies.
BETTER PACKAGING
In addition to improving the recyclability and recycled content in our packing, we have also been
developing a new labelling system for our own brand products that help to make your home more
sustainable. These icons are currently in testing, and will begin to be integrated into our own brand
products through our range review process in 2023.
It is really rewarding to see the improvements we’ve made so far
toour own label packaging, and to have had such great levels of
engagement and collaboration from colleagues and suppliers.
VICTORIA ELLIS
Sustainable Materials Manager
Responsible Business continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202252
GOVERNANCE AND
RESPONSIBLE SOURCING
GOVERNANCE
Our established Responsible Business
Committeeis responsible for guiding and
overseeing the development of our Responsible
Business Strategy. Further information on our
governance arrangements are set out in the
TCFDreport on pages 45-50 and the Responsible
Business Committee report on pages 98-100.
RESPONSIBLE SOURCING
Our Responsible Business Strategy is built on
thefoundation of a sustainable, responsible
supplychain.
Wickes Supplier Manual
We ensure our suppliers demonstrate and share
similar values to our own, especially for their
employees’ health and safety, the 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.
Labour standards
Wickes is committed to upholding human rights
andpromoting positive working conditions and
practices throughout our supply chain. We aim to
work collaboratively, and to create an environment
that enables transparency throughout the
supplychain.
Health and safety
Wickes is committed to providing a safe environment
to work and shop in so that everyonereturns home
safe and well every day. You can find more information
on our health and safety culture on page 38.
Environment
Wickes is committed to making positive choices that
will reduce our impact on the environment. Wickes’
environmental management controls are externally
aligned to the international standard ISO14001, with
an independent audit due in the first half of 2023
followed by certification audits later in 2023. 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
understand the nature and scale of our impact, and
the importance of working with our supply chain and
partners to reduce it.
Business ethics
Wickes is committed to conducting our operations
honestly and with integrity.
Product quality
Wickes aims to source only products that are safe,
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.
Responsible Sourcing Policy
Our Responsible Sourcing Policy ensures that
wesource products and partners responsibly andset
minimum standards across our supply chain.
Thispolicy 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continue to conduct our ESG
questionnaire with key suppliers, which looks to better
understand the risks within our supply chain and the
opportunities for improvement and collaboration. We
regularly review the outcomes of the ESG supplier
questionnaires 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.
Auditing and risk assessments
Thanks to improved travel opportunities in the
last12 months, we have conducted in-person
verification with key suppliers in India, South Africa
and China. Our next ESG supplier questionnaire in
March 2023 will help to inform our future in-person
verification plans for the next 12 months.
Engagement
This year, we have focused on engagement
withkeysuppliers, including training sessions on
requirements and legislation. We connect with third
parties who can verify these suppliers, aswell as
ensuring continued compliance with UK law.
Near-term Science Based Targets
As part of our work to set and deliver near-term
Science Based Targets, we have begun to engage
our top 20 suppliers on their own carbon reduction
targets. Our ambition is to have 42% of our suppliers
by emissions to have also set Science Based Targets
by 2027. We will report on this target annually,
Timber Policy
Timber remains a key resource for our business,
making up 45% of our sold products. Under our
Timber Policy, each timber product that enters
oursupply chain has to comply with all applicable
legislation, including FSC and PEFC. We require full
chain of custody on all timber and joinery products.
We carry out regular inspections of our suppliers,
conduct a supplier risk assessment every two years,
and conduct Sedex ethical audits to complement our
process. This strategy means that all our timber is
responsibly sourced, with 99.8% being certified under
FSC andPEFC. The results of the inspections carried
out against our Timber Policy are reported to the
Executive Board.
Environment Policy
We set out our commitment to becoming a
sustainable business, along with all the responsibilities
that come with it, in our Environment Policy. This
includes working with our supply chain partners to
reduce our indirect impacts, improving the efficiency
of our estate and reducing waste and packaging.
Relevant business leads monitor compliance and
report regularly to the Executive Board.
Forestry CDP response
To support our main climate CDP response, which
you can read about in our Environment section,
wealso submitted a basic forestry CDP response.
The purpose of this submission was to better
understand the requirements of afull forestry
response in the future, as well as our own timber
and forestry practices. Although our response was
not scored, it provided us with an overview of key
strengths and focus areas, including:
– innovation – we are using new and innovative
methods to better understand risk in our timber
supply chain, such as mapping our exposure to
various physical climate-related risks across
oursupply chain geographies, which you can
read more about in our TCFD section;
– certification – our alignment to responsible
sourcing certifications including PEFC and FSC;
– auditing – our key suppliers are audited regularly
through our Sedex platform; and
– policy – we have a Wickes Timber Policy that
brings together our sourcing, auditing and
governance into a single document, which
enforces our approach to sourcing these
keyproducts.
We will complete a full forestry response in 2023.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 53
Non-financial information statement
NON-FINANCIAL 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 and also
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, Health and wellbeing
Safety Policy
Nominations Committee report: Inclusion and diversity
Principal risks and uncertainties: People, culture and safety
Directors’ Remuneration report
56
79
35-39
38
89-90
68
112
Stakeholders Section 172 statement 55-59
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
81-82
116
Social matters Section 172 statement
Strategic report: People, Environment, Homes
55-59
35-53
Anti-corruption and anti-bribery Board leadership and company purpose
Modern Slavery Statement
Anti-bribery Policy
Anti-Fraud Policy
Whistleblowing Policy
79
116
116
116
81
Environmental matters Task Force on Climate-related Financial Disclosures
Principal risks and uncertainties: Climate change
Strategic report: Environment
Responsible Business Committee report
Responsible Sourcing Policy
Environment Policy
Timber Policy
45-50
69
40-53
98-100
53
53
53
Principal risks and impact
ofbusiness activity
Principal risks and uncertainties
Audit and Risk Committee report
66-70
93-97
Business model Business model 20
Non-financial
key performance indicators
Key Performance Indicators:
Carbon emissions; Leadership group diversity 32
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202254
PROMOTING THE SUCCESS OF THE COMPANY
Section 172 statement
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, including our Code
of Business Ethics, which establish a robust system
of control and oversight in matters of ethics and
compliance. The main activities of the Board during
the year are set out on pages 83-84.
Engaging with stakeholders
The Board engages with our different stakeholder
groups to enable the Board to gain a good
understanding of stakeholders’ views and places
great emphasis on their feedback as part of its
decision making considerations. Inorderto fulfil
itsduties, the Board takes care tohave regard to
thelikely consequences on all stakeholders of the
decisions and actions which it takes. Such
considerations ensure the business is making
decisions with a longer term view in mind and with
the sustainable success of the business atits core.
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, the business and the Board can ensure that
they are taking all views into account and reaching
conclusions that will benefit the Company as a
whole. 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 business model and how we engage with
them is set out on pages 56-57.
s.172 factor More information Page ref.
a) The likely consequences of
anydecision in the long term
Strategy and business model 22-30,
20
Principal risks and uncertainties 66-70
Performance review 8-11
b) The interests of the
company’semployees
People strategy 35-39
Responsible Business 33-53
Section 172 55-59
Principal risks and uncertainties 66-70
Board leadership and Company purpose 79
Directors’ report 115 -117
Directors’ Remuneration report 101-114
c) The need to foster the company’s
business relationships with suppliers,
customers and others
Strategy 22-30
Responsible Business 33-53
Section 172 55-59
Principal risks and uncertainties 66-70
Board leadership and Company purpose 79
Responsible Business Committee report 98-100
d) The impact of the Company’s
operations on the community andthe
environment
Section 172 55-59
Responsible Business 33-53
TCFD disclosure 45-50
Responsible Business Committee report 98-100
e) The desirability of the company
maintaining a reputation for high
standards of business conduct
Strategy and business model 22-30,
20
Responsible Business 33-53
Responsible Business Committee report 98-100
Board leadership and Company purpose 79
Division of responsibilities 85
Whistleblowing 81
f) The need to act fairly as between
members of the company
Section 172 55-59
Board activities 83-84
Shareholder information and AGM 160
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:
During the year the Board has had to act in an agile
and responsive way to the uncertain economic
environment, the considerable geopolitical and
economic disruption following the Russian invasion
of Ukraine, as well as adjusting to the post-
pandemic business patterns and finalising the
separation programme after the demerger.
TheBoard has closely monitored business
performance during these uncertain trading
conditions and stakeholder feedback on market
expectations of our trading results.
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 55
Stakeholder
COLLEAGUES CUSTOMERS SUPPLIERS
Priorities
Our colleagues want a great place to work where everyone feels at
home and can bring their true authentic self to work. They want to
work for a business that prioritises the health and wellbeing of
colleagues, provides development opportunities, values inclusion and
diversity, and is an environment where colleagues feel recognised and
rewarded for the work they do. More recently colleagues have also
wanted support and guidance with managing the cost of living crisis
and more information on environmental matters.
Our customers want good quality, affordable and sustainable
products which have been ethically sourced, which they can buy
easily. They also want excellent service and for all our colleagues and
suppliers to be treated fairly.
Our customers want to know that we will conduct business ethically,
including protecting the environment and keeping their personal
datasafe.
Our suppliers want to be treated fairly and with respect. To receive a
fair price for the products and services they provide and be paid on
time. They welcome our collaborative approach and want to develop
long term partnerships based on trust to build capability together and
create value that can be shared.
Suppliers want our guidance and support to help them understand
their climate-related risks and set their own Science Based Targets.
Business model &
strategy link
Our passionate colleagues and the winning culture are an enabler at
the foundation of our business model and strategy to deliver our
Purpose – to help the nation feel house proud.
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 however they decide to
undertake their home improvement plans.
We recognise that getting it right for customers is key to achieving our
growth levers by delivering execeptional customer experience and
growing responsibily.
Having strong relationships with our suppliers to ensure that we offer
quality products, at the right price and have good availability
underpins our business model and our three customer propositions.
Working with suppliers on our Responsible Business Strategy means
we can have a greater impact on environmental issues, such as
packaging. We will work with suppliers to achieve our Scope 3.1
near-term Science Based Target by helping them set their own
Science Based Targets by 2030.
How we engage
& outcomes
Our people are key to our success and we want them tobesuccessful
individually and as a team. The Board ensures its understanding of
colleague interests through many forums, including a regular review
of talent and succession, reward and benefits and safety and
wellbeing reports, along with listening to colleague views.
We engage with and listen to our people in many ways, including
colleague surveys, site visits, forums, Support Centre monthly briefing
meetings, listening groups, face-to-face briefings, internal
communities, newsletters and through our anonymous
whistleblowing service. To help understand how colleagues are being
affected by the cost of living crisis, we have set up a cost ofliving
colleague working group. In response, the Board decided to bring
forward the annual pay review from April to January so that
colleagues could benefit from pay increases earlier.
Key areas of focus in our communications with colleagues include
business updates, new products and services, health and wellbeing,
inclusivity programmes, development programmes, pay and benefits,
and charity activities. The Board receives regular reports about what
is important to our colleagues and one of our Non-executive Directors,
Sonita Alleyne, takes the lead on ensuring colleague views are heard
by the Board and taken into consideration in Board decision making.
Through colleague engagement on environmental awareness and
changes made by colleagues in store we have seen a reduction in our
electricity usage during the year.
The business spends considerable time analysing customer trends
and reviewing customer feedback, including from customer listening
groups and surveys, to understand their needs and views and to listen
to how we can improve our offer and service. Our senior management
team meets on a monthly basis to review customer insights and
discuss the customer proposition in depth. Outputs are reported to
the Board at every meeting and Board members also attend customer
listening groups from time to time.
In response to customer interest we partnered with Klana in
November 2022 to provide customers with an alternative payment
method. We now offer customers the option to: pay now, pay later in
30 days, or pay in three installments.
During 2022 we launched our 30 minute click & collect service to
meet customers’ needs for a faster fullfilment service for online
orders.
In response to customer focus on environmental and sustainability
issues, we launched our sustainable house guide and energy saving
advice pages on our website to help support customers to engage in
environmental matters. Weare looking at opportunities to bring this
knoweldge and information to life in our stores by curating specific
ranges ofenergy saving products and providing better signposting
forcustomers in store to these products. We also provide information
on our website on our Responsible Business Strategy.
The Board places great importance on ensuring suppliers are treated
fairly and we build strong relationships with our suppliers to develop
mutually beneficial and lasting partnerships. This enables us to
provide the best products at the best prices for our customers and a
great platform for our suppliers to grow with us.
Engagement with our suppliers is primarily through a series of
interactions and formal reviews. Key areas of focus include
innovation, product development, health and safety, sustainability and
payment practices. We also host supplier conferences each year with
our largest suppliers. The Board’s forward plan includes a strategic
supplier visit and this year the Board visited one of our kitchen
cabinetry suppliers, receiving direct feedback from the supplier’s
management team.
We want to encourage our suppliers to be environmentally focused
and to set Science Based Targets by actively helping suppliers to
understand their climate-related risks.
To improve our ways of working with suppliers, we updated our
standard Terms of Business in 2022, both to simplify the structure of
the terms and to make them more commercially balanced to enable a
more efficient process for onboarding new suppliers. We also
published an updated Supplier Manual and set of Supplier
Commitments on our corporate website, setting out how we work
with Suppliers and the values and behaviours we expect our suppliers
to align with.
Section 172 continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202256
Stakeholder
LANDLORDS SHAREHOLDERS COMMUNITIES GOVERNMENT AND REGULATORS
Priorities
Our landlords want successful and reliable
tenants, to understand the environmental impact
of their assets and work with tenants to reduce
their carbon footprints.
Our Shareholders want us toachieve long term,
sustainable growth andreturns.
Shareholders want us to set targets and deliver
strongperformance on ESG matters and link
executive performance to ESG metrics.
Our communities want us to: be a responsible
employer that operates ethically, bring valueto
the community, and be committed to reducing
our impact on the environment. They want our
colleagues to be representative of the
communities that they serve and to provide
equalopportunities.
The Government and regulators want us to
operate in a safe and ethical way and comply
with laws and regulations.
Business model
& strategy link
A low-cost, right-sized physical estate is part of
the foundation of our business model and having
strong long term relationships with our landlords
supports our store investment decisions.
We aim to deliver long term sustainable growth
and returns to Shareholders through the
deliveryof our strategy. Our Responsible
Business Strategy provides a framework to
communicate our ESG targets and ambitions
with Shareholders.
Our Responsible Business Strategy sits
alongside our business model and supports an
inclusive and diverse society, an environment
that is protected for the next generations and
homes fit for a sustainable future for all.
Our sound corporate governance and high ethical
standards underpin our business model.
How we engage
& outcomes
Engagement with landlords is conducted via the
property team on a day-to-day basis and in
formal quarterly meetings. Discussions focus on
leasing arrangements and extensions, ESG
initiatives, energy data sharing and reporting, and
early stage green lease clauses. The Board
receives an annual update on property and
landlord matters.
We wantto work together to help decarbonise
ourestate. We have actively engaged in
conversations with our landlords on
environmental matters, such as installing solar
panels and heat source pumps. As part of these
projects, we have entered into Power Purchase
Agreements to set a fixed rate for solar energy to
be paid to landlords who install solar panels on
our stores.
Our Shareholders are key to the long term
success of the business and we value their input
and views. We engage with our Shareholders in a
number of ways, including one-to-one and group
meetings with Board Directors and senior
management, written communications, store
visits, roadshows, regulatory reports, market
announcements and presentations, and our
Annual General Meeting.
Our executive remuneration performance
metrics are strategically aligned with
Shareholders’ interests by linking incentive plan
metrics with KPIs, such as earnings per share
growth, total shareholder return and ESG
objectives. In response to shareholder views we
have incorporated a decarbonisation target into
our 2023 Long Term Incentive Plan.
We engage with the communities in which
weoperate to build trust and understand
thelocal issues that are important to them.
We engage with our communities at a local level
through our stores and distribution centres. Key
areas of focus include how we can support local
causes and issues, create opportunities to recruit
and develop local people and help to look after
the environment
In addition to our main national charity
parntership, through our Community Programme
we support local charitable activities at a store
level to raise awareness and funds and complete
community projects. To support our Community
Programme further we had a dedicated fund of
£250,000 for product donations in 2022.
We engage with our communities at a local level
through our stores and distribution centres. Key
areas of focus include how we can support local
causes and issues, create opportunities to recruit
and develop local people and help to look after
the environment.
We engage with the Government and regulators
to understand their views and priorities and to
share our views and experience to help shape
future policy.
We engage through a range of industry
consultations, forums, meetings and
conferences to communicate our views to policy
makers relevant to our business.
Key areas of focus are compliance with laws and
regulations, health and safety and product safety.
The Board also receives regular updates on legal
and regulatory developments.
This year, we wrote to the Government to express
our support for the Government’s commitment
to energy efficiency, including the new ECO+
scheme and the establishment of the UK
Transition Plan Taskforce.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 57
Section 172 continuedSection 172 continued
STAKEHOLDER KEY
Colleagues Communities Shareholders Suppliers Customers Government andregulators Landlords
NEAR-TERM SCIENCE BASED TARGETS
1
Background
Science Based Targets (SBTs) are the gold standard of climate change commitments. Growing our
business sustainably and managing the impact of our business on the environment isimportant to the
Board. The Board wants to be able to demonstrate that protecting the environment is an integral part of
our Responsible Business Strategy and to set firm commitments to decarbonise our business by having
approved near-term SBTs building on the collection of baseline data in 2021.
Stakeholder considerations
Shareholders
The Board considered the need to deliver long term sustainable value to shareholders and to provide
shareholders with globally recognised and measurable targets to assess our environmental
performance. The Board also considered the balance needed between a return of capital to
shareholders and the capital investment required to support a programme of works to decarbonise the
business, which will underpin our ability to achieve our near-term SBTs.
Customers
The Board recognises that customers are looking for ways to reduce their own impact on the
environment and to make their homes more energy efficient to help manage costs more effectively, as
well as wanting businesses that they deal with to look after the natural environment. The Board has
taken these views into account when setting our SBTs, which will help us to demonstrate our
commitment and monitor our progess so that customers can be confident that we are taking action.
Suppliers
Engagement with suppliers will be critical to deliver our near-term SBTs. The Board recognised the
importance of our supplier relationships and the opportunity to strengthen relationships through
support on common environmental matters, as well as identifying further opportunities for suppliers to
provide new sustainable products and services.
1 s172 paragraphs (a), (b), (c), (d), (e) and (f)
.
Landlords
As a business operating a leasehold structure of our physical estate, the Board considered the
supportand collaboration needed with landlords to decarbonise. In particular, the opportunity to
support landlords to install solar panels so that our store energy can be sourced from solar power
andto move from gas boilers to air source heat pumps. We also want to help landlords to achieve
theirown environmental reduction targets.
Colleagues
The Board felt that committing to near-term SBTs would support a culture where protecting the
environment was recognised as being important for the long term success of the business. Colleagues are
passionate about wanting to work for a responsible business and to feel that they can play a part in
contributing to a more sustainable future. Colleagues’ support will be crucial to delivering our near-term
SBTs through implementing our in store energy saving intiatives and encouraging more environmentally
friendly behaviours.
Communities
The communities that we operate in expect us to behave ethically as a responsible business and to
commit to reducing the impact of our business on the environment. Our near-term SBTs will enable us
to measure and demonstrate our environmental performance to these communities.
Government and Regulators
By setting near-term SBTs the Board is able to demonstrate our commitment to environmental issues.
SBTs will help us to meet our legal and regulatory climate related discloure requirements by making
environmental matters intergral to our business strategy.
Outcome
The Board approved the near-term Science Based Targets submission and the capital investment
required to support the programme of works to decarbonise the business. Our near-term SBTs were
approved by the SBTi in December 2022 and the Board will closely monitor progress to achieve them.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202258
SUPPLY CHAIN LOGISTICS
CONTRACT
2
Background
As part of a strategic review of our distribution
and supply chain logistics services, the Board
reviewed the contractual arrangements with our
current suppliers. An opportunity was identified
to simplify our contractual arrangements and
achieve cost efficiences, whilst maintaining
excellent service delivery and good outcomes
for colleagues by entering into a new medium
term supply chain logistics contract with a key
strategic supplier.
Stakeholder consideration
Suppliers
The Board considered the longstanding and
collaborative supplier relationship that had been
established and supported the opportunity to
simplify the existing supplier arrangements into a
single contract. This set consistent performance
measures, whilst also developed the relationship
by including additional services, providing
certainty to both parties on the duration of the
contract, and benefiting from the supplier’s
expertise.
Colleagues
The Board considered the impact of the new
supply chain logistics contract on colleagues,
which would require the majority of colleagues
WICKES LIFESTYLE KITCHENS
RANGE
3
Background
As part of a strategic review of our ready-to-fit
kitchen range, an opportunity was identified to
expand the range under a new brand and offer
customers a new digital design element. The
rebranded Wickes Lifestyle Kitchens range targets
the lower budget kitchen market and offers an
alternative to our DIFM showroom offering.
Stakeholder consideration
Customers
The Board considered the needs of customers
with a lower budget, customers who wished
totake advantage of a fully virtual sales and
design service, and already wanted a ready to
fit option.
Shareholders
The Board considered the importance of
making investment decisions that support long
term sustainable growth and provide new
opportunities to grow market share. The Board
wanted to act in an agile way to respond to
market trends and develop an already popular
product range.
Suppliers
The Board recognised that expanding the number
of products in the Wickes Lifestyle Kitchens
range would help to deepen existing supplier
relationships and provide opportunities for
suppliers to offer new products to us.
Colleagues
The Board felt that the expanded product range
would enable colleagues to better meet customer
needs. New jobs would be created at the virtual
sales centre in Bicester providing opportunities
for existing colleagues and for new colleagues to
join the business from the local community.
Outcome
The Board decided that investing in the
WickesLifestyle Kitchen range was a sound
investment case, which would give the business
the opportunity to increase market share and
better meet customers’ needs.
2 s172 paragraphs (a), (b), (c), (d), (e) and (f).
affected to transfer to the supplier pursuant to
TUPE regulations, with asmall number of
colleagues putat risk of redundancy. The Board
recognised the excellent health and safety record
of the supplier and the specialist skills and
learning opportunities for colleagues to further
their careers. It was felt that the supplier’s safety
and wellbeing values aligned with our own.
Customers
The Board recognised that the new contract would
enable the business to deliver a better service to
our customers in the longer-term by expanding the
scope of services to a specialist logistics partner.
Shareholders
The Board considered the cost efficiencies
associated with the new contract, which would
support the need to deliver long term
sustainable value to shareholders.
Communities
The Board consideredthe implication of the
new contract onthe Company’s related carbon
emissions and noted that the supplier already
had strongdecarbonisation initiatives in place.
Outcome
On balance, the Board decided that entering
intothe new contract was in thebest interest
of the Company because it provided favourable
cost savings and budget certainty for the
duration of the contract.
3 s172 paragraphs (a), (b), (c) and (f)
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 59
Financial review
We are pleased to report another period of sales
growth and market share gains in Core (source:
GfK). This builds on our long term track record of
growth, which reflects the effective business
model and the investments we have made in our
digital and service propositions. LFL sales for
FY2022 were ahead by 3.5%, with a strong finish
to the year in DIFM delivered sales, and, within
Core, strong Local Trade sales over the year.
Adjusted operating profit declined moderately
from the record high of 2021, with a lower
adjusted gross margin as a result of inflation and
mix factors, plus higher P&L investment costs in
areas such as distribution, refits and IT.
Adjusted profit before tax also declined, despite
reduced interest costs which were primarily a result
of lower leasehold debt. Note that from FY2022
onwards we will be excluding unrealised gains and
losses from forward currency contracts from
adjusted profit before tax, as these can potentially
be material, are non-cash and do not reflect
underlying business performance.
Statutory profit before tax also declined, reflecting
the reduction in adjusted profit before tax, a full year
of IT separation costs, and a right-of-use asset
impairment charge. The business was broadly cash
neutral in the year, other than the expenditure on
ITseparation.
Adjusted revenue
Adjusted revenue for the 52 weeks to 31 December
2022 was £1,559.0m, an increase of 1.6% on the
prior year. In FY2021, the 53rd week added £24.5m
of sales, so revenue growth on a 52 week basis was
3.2%. With a small net reduction in floorspace
(closure of two stores and a Kitchen and Bathroom
standalone unit, and the opening of a new store at
Bolton), full year LFL sales growth was 3.5%.
Core revenue, encompassing Local Trade and DIY
segments, declined by 3.8% to £1,187.9m, down 2.2%
on a 52 week basis. LFL sales declined by 2.0%,
although this improved over the course of the year.
This was partly as a result of weaker one-year sales
comparatives as Covid comparatives eased, but also
from some stabilisation in DIY sales, which had
softened from June onwards as a result of the cost of
living crisis. Stronger sales of energy-saving products
were a notable feature here. There was also some
impact from very hot weather in late summer, which
may have shifted some activity from Q3 into Q4.
On a three-year basis, Core LFL sales growth was
33.0%, driven by growth in Trade sales as our
TradePro business goes from strength to strength.
Looking ahead, the three-year comparatives
become less meaningful as the base year will
include the first Covid lockdown, so this measure
will no longer be provided.
Core sales performance was strongest in a number
of areas which have seen specific range reviews
and product development, such as garden,
decorative and SNAF (screws, nails and fittings).
The building category also performed well. Other
categories, such as outdoor decking, were affected
by a strong Covid-related performance in 2021.
Selling price inflation for the full year was 13%,
moderating as the year progressed. In the first half,
inflation was 15% (H1 2021 3%), as we experienced
the full impact of Covid recovery and the war in
Ukraine. Inflation then moderated in the second half
to 10% (H2 2021 11%) as we started to see some
price increases moderate and, in some categories
reverse (e.g.timber). We would expect a lower level
of inflation overall in 2023, although some price
inflation remains in energy-intensive categories
such as cement.
Our trading strategy remains to be very competitive
on price (even before the 10% TradePro discount),
and in 2022 our selling price inflation was
significantly less than cost price inflation.
Historically this strategy has helped to drive market
share gains.
This unprecedented level of price inflation had
several implications. Firstly, industry volumes came
under pressure, as consumer spending could not
grow in cash terms as fast as inflation. Our own
volume performance, excluding mix effects,
declined by 15% in 2022, although this improved
sharply as the year progressed and in the fourth
quarter was down by less than 5%.
Secondly, our customer surveys show an increasing
focus on value for money and shopping around,
especially using digital channels. Projects that have
been priced to a budget may be at risk unless
inflation can be managed out of raw materials
inputs. TradePro gives the trade the opportunity to
lower the cost of their materials, and we believe this
is one reason why our TradePro customer growth
has accelerated in 2022. As yet, however, we have
not seen a marked increase in the proportion of
Although profits stepped back from a record year in
FY2021, we are very pleased to report another year of
improving sales densities and Core market share.
MARK GEORGE
Chief Financial Officer
FINANCIAL REVIEW
Core LFL sales growth (%)
-2.0
14.2
6.5
18.8
2019 2020 20222021
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202260
Wickes branded products within the mix, although
we are well placed to benefit if this does materialise.
Finally, as outlined below, inflation affects both
gross margin and cost ratio measures.
DIFM delivered sales were £371.1m, an increase of
23.6%, as we successfully worked through the
elevated order book. LFL sales increased by 26.1%.
The performance was particularly strong in the
fourth quarter, where we benefited from reaching
our target of 3,000 installer teams (March 2022
2,600), as well as some impact in the prior year
from Omicron. On a three-year basis, delivered
sales were close to the level reported in 2019, with
LFL sales down 1.3% versus this pre Covid period.
DIFM orders in value terms were slightly down
year-on-year, although the trend improved over the
course of the second half. Orders have been
particularly strong in new designs, both in kitchens
and bathrooms, and the attachment rate (flooring,
tiling, doors) continues to rise. Our credit offer,
currently at 4.9% APR, remains very attractive.
Cancellations remain at low levels.
Mix effects between Core and DIFM had a limited
impact on adjusted gross margin. Inclusive of
installation revenue, DIFM overall gross margin
percentage is similar to that within Core.
Distribution costs, taken within gross profit, were flat
as a percentage of sales. Despite inflation in related
cost areas, some of these costs are volume, not value
linked, allowing some improvement in ratios. The
proportion of in-store sales also increased, with online
sales falling back slightly as trading patterns
normalised post pandemic.
Adjusted operating profit
Adjusted operating profit was £103.9m, down 10.7%
on the £116.3m reported in FY2021. Incremental profit
from the strong recovery in DIFM sales was more than
offset by a lower contribution from Core as a result of
lower LFL sales and the reduction in adjusted gross
profit margin percentage. The impact of cost inflation
and investment in growth initiatives were also not fully
offset by cost savings of over £20m.
The adjusted operating profit margin was 6.7%,
down from 7.6% last year. The majority of the
reduction was driven by the decline in the
adjustedgross margin, as noted above.
The cost to sales ratio
1
deteriorated by 20bps.
Selling costs were broadly flat, with cost inflation
offset by lower transaction numbers and
elimination of the final portion of Covid costs.
Adjusted administration costs were up moderately,
with increases in IT, Support Centre salaries, and
annualisation of PLC costs more than offsetting a
lower bonus pool.
Net finance costs
Adjusted net finance costs were £28.5m, down
from £31.3m last year. There was a £2m reduction
in IFRS16 lease interest as a result of a lower
average lease term, and a £1.8m increase in interest
receivable as a result of higher rates on cash
deposits. 2021 net finance costs included an
unrealised gain of £0.7m on forward currency
contracts. The corresponding figure for 2022 was
£1.7m, but this, and any unrealised gains and losses
in future years, will be taken as adjusting items as
explained above. 2021 results have not been
restated as the impact was immaterial.
Adjusted profit before tax
After finance costs adjusted profit before tax for the
full year was £75.4m, a decline of 11.3% on the
£85.0m reported in 2021. Excluding unrealised
foreign exchange gains in both years, the decline
would have been 10.6%.
Adjusting items
Adjusting items within revenue represent the
£3.4mVAT reclaim. Statutory revenue in FY 2022
was £1562.4m, compared with adjusted revenue
of£1559.0m.
Pre-tax adjusting item charges for full year 2022
were £35.1m (FY2021 £19.6m). IT separation costs
were in line with expectations at £24.4m, and there
was a non-cash impairment charge of £15.8m.
These were partially offset by the unrealised foreign
exchange gain of £1.7m referred to above, a reclaim
of VAT overpaid in previous years of £3.4m and a
tax credit of £6.8m.
At the end of 2022, the order book was below
December 2021, but still higher than 2019. With our
installer base now at the optimum level, we see the
order book returning to more normal levels by the
end of 2023, which will provide some benefit to
delivered sales in the current year.
Taken together, our growth levers have contributed
to a 27% improvement in sales per square foot
since FY2019. For FY2022, this metric improved
from £238 to £247.
Adjusted gross profit
Adjusted gross profit for the full year was £567.1m,
in line with the prior year. Adjusted gross profit
margin declined 70bp for the full year (H1 2022
-70bp) as a result of mix effects in Core and selling
price inflation below cost price inflation. Mix effects
included the consistent growth of TradePro (lower
percentage margin in trade products, plus the 10%
TradePro discount), and, in the second half, the
softening of DIY sales.
1 Cost to sales ratio is the total of Selling costs and Administrative
expenses as a proportion of Revenue.
DIFM LFL sales growth (%)
26.1
14.2
6.5
18.8
2019 2020 20222021
Sales density (£ per square foot)
247
238
194
202
2019 2020 20222021
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 61
Profit before tax
Profit before tax in full year 2022 was £40.3m,
compared with £65.4m in the prior year. The decline
reflects the reduction in adjusted profit before tax
and higher adjusting items.
Tax
Tax for the period is charged on profit before tax,
based on the forecast effective tax rate for the full
financial year. The underlying effective tax rate
(before adjusting items) for the 52 weeks ended
31 December 2022 is 20.1% (53 weeks ending
1 January 2022 19.4%). In FY2021 the underlying
effective tax rate was lower primarily reflecting a
significant deferred tax credit (£6.7m) arising from
changes to the UK corporation tax effective from
1 April 2023 from 19% to 25%.
Tax on adjusting items in full year 2022 was £6.8m
(FY 2021 £9.9m).
Capital expenditure
Capital expenditure in FY2022 totalled £40.4m,
slightly below our expectations at the start of the
year but ahead of the £26.5m in 2021.
The main components were £24.7m investment in
the store estate (2021 £13.0m), of which refits were
£16.2m, the new store in Bolton £1.4m and other
store capex across the estate of £7.1m. Separately,
there was a £6.1m investment in one freehold at
Braintree. There was £9.3m investment in our
digital IT capability (2021 £6.1m), as we continue to
develop our multi-channel offer.
We expect FY2023 capital expenditure once again
to be £40-45m. Although we are not expecting to
acquire further freeholds in FY2023, IT capital
expenditure will step up further during the year as
we continue to enhance our customer experience
and operating systems.
Cash / net debt
Net cash as at 31 December 2022 was £99.5m,
down from £123.4m in the prior year. Operating
profit was broadly equal to the capex investment,
working capital movement and dividend outflows,
and the net movement in cash overall was therefore
driven by the £24.4m of IT separation costs. As
expected, net cash has also moderated from the
£166.5m reported at the half year stage, as the
latter is a seasonally high figure benefitting from
thesell through of seasonal stock, the build up
ofdeferred income from the DIFM Winter Sale,
andis also struck before payment of the second
half dividend.
The inventory position of £201.6m compared with
£188.2m in the prior year. The increase resulted
from the impact of product inflation, which more
than offset the reduction in stock volumes. Despite
lower Core sales and the stock rebuild at the end of
2021, which has seen an improvement in availability,
stock turn remained healthy at 4.4x.
IFRS 16 net debt reduced to £591.8m (FY2021
£618.7m), driven by a fall in lease liabilities to
£691.3m (FY2021 £742.1m) due to the low level of
lease renewals during the period, partly offset by
the lower cash balance.
On a last twelve month basis, IFRS 16 leverage was
2.90x compared with our target of being
consistently below 2.75x.
Dividend
The Board has declared a final dividend of 7.3p per
share, in line with prior guidance, which will be paid
on 7 June 2023 to shareholders on the register at
the close of business on 21 April 2023. This will
bring the full year dividend for FY2022 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 20 April
2023. 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 16 May 2023.
Capital allocation policy
The company plans to announce a revised capital
allocation policy at the time of its Q2 trading update
in July.
Mark George
Chief Financial Officer
22 March 2023
Financial review continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202262
RISK MANAGEMENT OVERVIEW
Risk management overview
Background
At Wickes, we recognise that effective risk
management reinforces our short, medium
andlongterm success, safeguarding value and
enablingus to meet and exceed the expectations
ofour stakeholders.
In our second year since demerger, we have further
refined our riskmanagement approach to better
take into account the environment in which we
operate, as well as to further embed risk
management throughout our business operations
and decision making processes. Good awareness
of our current and emerging risks, together with a
sound understanding of our own strengths and
improvement areas, has continued to be a key
aspect of how we have operated our business
throughout 2022.
During the past 12 months, we have seen the
emergence of several new challenges, including the
war in Ukraine and inflationary pressures, together
with a return to normality after the significant
impact of the Covid-19pandemic.
Although Wickes does not have any operations
inUkraine or Russia and has minimal direct
supplychainexposure from the conflict, we have
nonetheless maintained a close eye over our
operations and supply chain arrangements to ensure,
if necessary, we are able to invoke continuity plans
tominimise any potential disruption.
Inflationary pressures have increased during 2022,
with the resulting effect being felt not only within
theUK, but globally. Contributing to the rising cost
of living, these economic forces have had a
significant effect on the markets we serve, with
fiscal projections indicating that the cost of living
crisis will continue deep into 2023. Although a
crystallising risk, the impact of this risk and the
mitigations that we can apply are likely to remain
akey focus of the Board andmanagement teams
going forwards.
Emerging risks
The Board’s processes for assessing risks that may
emerge in the medium tolong term continue to
operate efficiently. Where updates are required,
these updates have been reflected within Wickes’
risk profile and, where appropriate, form a key focus
forthe Board and management teams.
Structural changes to our markets first seen in
2020, driven by changes in working practices
because of the pandemic, have become
established, with levels of flexible working higher
than pre-pandemic levels. We continue to adapt our
service offering and evolve our strategy to meet the
needs of our customers, while continuing to create
long term value. 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.
Although a risk driver rather than an emerging risk
inits own right, climate change and its influence on
our operations, and the world around us, continue to
evolve. As an ongoing focus, Wickes is working hard
to reduce its impact on the environment and,
through supporting customers to make greener
choices and decarbonise their homes, is supporting
the wider climate change agenda. Details on our
approach to supporting efforts to combat climate
change are provided on pages 40-50.
Over the last 12 months, we have seen the cost of
living increase in magnitude. Whilst largely driven by
macro-economic factors, through our intelligent
sourcing strategy we have sought to maintain the
value that we are able to deliver toourcustomers.
Risk appetite
A critical part of a well-functioning risk
management process includes defining the level of
risk an organisation is willing to bear in the pursuit
of itsobjectives. The Board has established the
Company’s risk appetite for each principal risk, and
regularly reviews the suitability of these levels
considering our operating environment. No changes
toorganisation’s risk appetite hasbeen made
during 2022.
Risks that fall outside of appetite levels form the
basis of deeper-dive reviews on a periodical basis.
These assessments seek to provide assurance that
mitigating activity is sufficiently focused to either
reduce the level of risk exposure to within appetite
inan appropriate timeframe or, where appetite has
been purposefully set low, ongoing mitigations are
inplace to manage the risk as far as practicable.
Risk evolution
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 interlaced a more operational
viewof risk management. Combined, these two
perspectives support a more rounded and
effectivedecision making approach.
Strategic report Governance Financial statements Other information
63Wickes Group Plc Annual Report and Accounts 2022
2ND LINE1ST LINE 3RD LINE
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RISK
MANAGEMENT
PROCESS
LINES OF
DEFENCE
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
Risk management framework
Our risk management framework is constructed
around a five-point model. Integrated across the
three lines of defence, our framework 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 ensure that a
comprehensive and complete 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.
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.
Risk Governance
We have a formal risk management process, part
ofwhich assesses and prioritises the Company’s
principal risks (highlighted on page 66). 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 and the
Audit and Risk Committee. The Board sets the risk
appetite and monitors and reviews its application
and ongoing relevance.
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 overview continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202264
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 Executive 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 remain current andaccurate.
Risk mitigation
As the primary means by which we can influence
theimpact and probability of our risks, review and
assessment of our mitigation strategies form a
crucial aspect of our risk management framework.
As an independent and objective assurance
provider, Internal Audit, through delivery of 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 to which the corporate risk
register and principal risk view are 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 assessment of risks to take
place. 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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 65
To facilitate effective risk management, our principal
risks have been further subdivided to provide a level
ofmeaningful granularity, where individual risks and
their causes and consequences can be identified and
managed. These risks are reflected in the Corporate
Risk Register. A view of our principal risks provides
avaluable insight into our risk environment. We have
identified eight principal risks, which remain from the
prior year. In alphabetical order, theseprincipal risk
themes are:
Autonomy Finance and Treasury
Climate Change Operations
Customer Experience People, Culture
andSafety
Cyber Security
and Data
Reputation and
BrandIntegrity
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.
Opposite, a risk map 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.
HOW RISK MANAGEMENT WORKS AT WICKES
Following the demerger from the Travis Perkins Plc
and listing as an independent entity, the Wickes
Board and Executive team have prioritised
developing a sound understanding ofour risks, our
mitigations and additional efforts that are required
to manage our principal risks within agreed risk
appetite levels.
This has required risk management thinking to
permeate through decision making processes at
all levels, from operational teams through to those
key strategic decisions driven by the Board.
The approach taken has sought to avoid reliance
on box ticking and form filling, instead focusing on
developing a sound understanding of risks within
the operational context of the business andusing
this understanding to inform rather than constrain
thinking.
Red lines have been defined through risk appetite
discussions, empowering management to operate
within theboundaries set, supporting innovation
andacustomer centric mindset.
Lower Higher
Lower
Higher
LIKELIHOOD
IMPACT
RISK KEY
Risk stable
Risk decreasing
Risk increasing
RISK MAP
PRINCIPAL RISKS THEMES
A
Cyber Security and Data
B
Autonomy
C
People, culture and safety
D
Finance and Treasury
E
Reputation and Brand Integrity
F
Climate change
G
Operations
H
Customer experience
The risk map is designed to show the relative
exposure of each principal risk theme on a net
basis rather thanestablish 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 risks and uncertainties
G
B
A
C
D
E
F
H
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202266
RISK DESCRIPTION
AUTONOMY
(SYSTEMS
SEPARATION FROM
TRAVIS PERKINS PLC)
Executive
responsibility:
CEO, CFO and
Chief Information
Technology Officer
Trend:
Prior to demerger, Wickes was reliant on back office systems designed and
managed by the Travis Perkins Plc. A key aspect of the demerger has been the
transition to Wickes systems; however, there are other aspects covered under
the autonomy programme, which are required to ensure that Wickes can
continue to operate and thrive as a standalone entity. Failure to optimise the
outcome of this transition may have a negative consequence on several
aspects of back office operations.
MITIGATIONS PROGRESS
Ahead of the demerger and listing in 2021, a detailed
transition strategy, programme and individual project plans
were put in place to establish our future direction and drive
our separation from the Travis Perkins Plc.
As with all projects and programmes at Wickes, an
effective project governance approach is taken to provide
effective oversight and management of our projects,
helping to ensure that they remain on track and on budget
to deliver the outcomes required. In addition to following
defined best-practice project management frameworks,
regular, independent third party assurance is sought to
help ensure that things are operating as intended.
2023 will see Wickes enter its third
year as an independent entity and,
as such, the Autonomy programme
is well advanced and remains on
track to deliver full separation as per
original timeframes.
To date we have moved across over
300 applications to Wickes and
completed the implementation of
new HR and finance systems.
As individual projects are completed
and the number of projects still to
do reduces, there is a reduction in
both the gross and the net risk
associated with autonomy.
On completion of the separation
programme in 2023, Autonomy will
cease to be a principal risk.
RISK MOVEMENT KEY
 
Stable  
 Decreasing
  
 Increasing
RISK DESCRIPTION
CYBER
SECURITY
AND DATA
Executive
responsibility:
CEO, General Counsel
and Company Secretary,
and Chief Information
Technology Officer
Trend:
Robust and secure IT systems and accurate data are fundamental
requirements for any successful business. Failure to adequately prevent or
respond to a data breach or cyber incident could adversely impact our
reputation and reduce the level of trust that customers, colleagues and other
key stakeholders have in us, as well as leading to significant fines, loss of
information and business disruption.
MITIGATIONS PROGRESS
As a digitally-led, service-enabled home improvement
business, maintaining a secure IT domain and protecting
data is an absolute priority. We adopt a ‘Privacy by Design’
approach to ensure data security is embedded into our
business process. Policies are in place, as well as training
and awareness for all colleagues to support a secure
culture. We have security controls to prevent, detect and
mitigate unauthorised activity and these are regularly
tested to provide assurance. Our data and security
governance committee, made up of a network of internal
data champions in key business areas, meets regularly
throughout the year and oversees the development and
implementation of our data and security programme. We
also report to the Board on data and cyber risk at least
twice a year. Data and security provisions are included in
third party contracts and a vendor assurance programme
is in place to ensure appropriate due diligence is carried
out on any third parties we work with who process our
data.
Globally, 2022 has followed a similar
trend as previous years, with the
frequency and sophistication of
cyber attacks, particularly in the
retail sector, continuing to increase.
Given the external environment,
cyber and data is an increasing area
of focus for the business, with
additional resources being allocated
to reflect the additional work
required.
Against this backdrop of increasing
levels of threat, the direct
management of our own systems
following the demerger has
improved the extent to which we can
influence the controls we apply to
cyber threats. It has also driven
increased visibility and awareness in
the business of how we manage and
process data, enabling us to focus
our efforts on key risk areas. This
has been helped by the ongoing
work to refine and improve our
Record of Processing Activities. We
have had one reportable data
incident this year, which was dealt
with quickly and effectively to
mitigate any impact to customers,
with no regulatory action taken.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 67
RISK MOVEMENT KEY
 
Stable  
 Decreasing
  
 Increasing
RISK DESCRIPTION
PEOPLE
CULTURE
AND SAFETY
Executive
responsibility:
Executive Board
Trend:
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 ablity 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.
MITIGATIONS PROGRESS
People: The four pillars of Awareness, Education, Policy and
Practice, around which our people strategy is built, remain a
key focus to embed effective approaches in all that we do.
We regularly canvass our colleagues to understand their
views and challenges, and have built upon our colleague
assistance programme to support good mental health
through our ‘it is okay not to be okay’ campaign, underpinned
by our Stevenson/Farmer programme and signed charter.
Asthe cost of living crisis has deepened, additional
mechanisms to provide support to those colleagues who
need it have been identified, recognising that our colleagues
are vital to our continued success.
Culture: We have a well-embedded set of values and
leadership behaviours that are hardwired into people
processes, ensuring a consistent messaging and approach
throughout Wickes. Our motto of ‘Let’s do it right’ extends
right across Wickes, from what we do to how we engage
withcustomers, suppliers and colleagues.
Health and safety: The safety of our colleagues and
customers is our top priority. 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 are conducted to ensure that
ouroperations remain as safe as possible.
Our colleagues are vital to the
current and ongoing success of
the business. The cost of living
crisis has also impacted our
colleagues and we have
recognised that additional
support has been 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 2022 and
maintaining our good record
remains a key area of focus
forthe business. We are also
maintaining a watching brief
overour stores and existing
safeguards as incidents of
violence from members of the
public to our colleagues and
staged accidents have increased
towards the latter half of the year.
RISK DESCRIPTION
FINANCE AND
TREASURY
Executive
responsibility:
CFO
Trend:
Managing finances, including understanding and managing the impact of
external influences on our costs and revenue, in an effective and sustainable
manner 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.
MITIGATIONS PROGRESS
Effective financial control and financial management
enable us to support the delivery of our strategy and
ensure that we are able to continue to invest in our
colleagues and stores, and in innovating our products
andservices.
Through the devlopment and introduction of better
finance system modules during 2022. the efficacy of
financial reporting and associated financial control
processes have been substantially improved. These
processes support timely monitoring and reporting of
performance, including cash flows, which includes a
breakdown per store, forming thebasis of detailed
financial analysis and performance assessment used by
the Board and the Executive for decision making
purposes.
In addition, detailed modelling, as presented in our
financial viability assessment (see page 71) has been
developed to provide insight into our financial position
and sensitivities toexternal and internal stressors.
2022 has seen the emergence and
development of macro-economic
headwinds. Rising inflation and
energy costs, driving the cost of
living crisis, have become more
pronounced during the year.
Impacts from both a cost ofgoods
and energy perspective, and from
customers having less disposable
income, have contributed to
asoftening of demand. These
factors have resulted in both
thegross and net risks scores
forthis principal risk theme
increasing. However, despite these
challenges, we remain well
positioned within the market, having
maintained market share through
focusing on our value driven
customer proposition.
Although the external environment
has softened, we have made good
progress in terms of financial
process and controls in our second
year as a PLC, separated from our
previous parent. An important
milestone was the successful
implementation of a new finance
system, Oracle Netsuite, in the last
quarter of 2022.
Principal risks and uncertainties continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202268
RISK MOVEMENT KEY
 
Stable  
 Decreasing
  
 Increasing
RISK DESCRIPTION
REPUTATION
AND BRAND
INTEGRITY
Executive
responsibility:
Executive Board
Trend:
Maintaining and growing our reputation and brand underpins our long
termstrategic aims. Failure to do so may prevent us from achieving our
strategic objectives.
MITIGATIONS PROGRESS
Our brand integrity and reputation are fundamental factors
inensuring that we are able to achieve our strategic aims,
and to maintain and grow our position in the home
improvement market. These key elements are woven into the
fabric of everything that we do here at Wickes.
Multiple strands contribute to our approach in this area,
including 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.
Our strategy is underpinned by
our strong brand, a distinctive
customer proposition, a uniquely
balanced business and curated
product range delivered through
a low-cost and efficient
operating model. Great progress
has been made throughout the
year in delivering our strategy
and putting in place strong
foundations for future years.
Ourbrand monitoring
programme has helped to
protect our brand.
In light of the increasing
expectations of our customers,
Government and investors
towards probity and integrity
both at an individual level and at
an entity level, the Board and
Executive team are focused on
ensuring Wickes continues to
build upon its strong reputation
and brand.
RISK DESCRIPTION
CLIMATE
CHANGE
Executive
responsibility:
Executive Board
Trend:
The long term success of our business depends on the health of the natural
environment. Although the direct impact of climate change on our operations
is relatively small due to the business being located solely in the UK, it has the
potential to significantly impact our business during the transition to a
low-carbon environment. Environmental matters are increasingly important to
our colleagues, customers, suppliers, investors and communities in which we
operate, driving changes to expectations and information requirements.
Failure to manage our operations and influence our value chain towards a
low-carbon future may impact our ability to meet our strategic objectives and
could adversely impact our reputation and reduce the level of trust that
customers, colleagues and other key stakeholders have in us.
MITIGATIONS PROGRESS
Protecting the natural environment is one of the three
pillars of our Responsible Business Strategy. We track our
carbon emissions across all three scopes within our
business and have developed plans to reduce our
operational emissions. Through engagement with our
suppliers, we are working to better understand and reduce
the emissions associated with the products we sell, how
they are packaged and the energy they use.
Given the importance of ESG matters to our strategy and
our stakeholders, we put our Responsible Business
Committee in place on listing as an independent company
to oversee the delivery of our climate commitments. The
Committee is chaired by Sonita Alleyne, an independent
Non-executive Director.
The impact of climate-related
disasters on a global scale highlights
not only the fragility of the world we
live in but also the necessity for all
organisations to act as responsible
custodians of our planet.
In 2022, we set near-term Science
Based Targets (SBTs) and had these
approved, aligning us with other
businesses in the UK that are also
committed to reducing emissions by
2030 and support the Paris Climate
Agreement to limit global
temperature rises to 1.5C. We also
continue to report on our
climate-related financial disclosures
(see TCFD section on pages 45-50).
We submitted our first CDP
submission in 2022, achieving a
B- rating, and completed our first
basic forestry submission to better
understand the environmental
impact of our timber sourcing.
We continue to work on reducing
our operational emissions through
energy efficiency in our stores,
including LED lighting upgrades,
heating and cooling control
upgrades, and the addition of EV
chargers and solar panels. In 2022,
we also created a group of
sustainability representatives from
each of our stores to drive energy
efficiency across the estate.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 69
RISK DESCRIPTION
OPERATIONS
Executive
responsibility:
CEO, Chief Operating
Officer and Chief
Commercial Officer
Trend:
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.
MITIGATIONS PROGRESS
Our digitally-led and service-enabled strategy continues
tobuild on the solid foundations created in previous years.
Initiatives including Park & Collect, in-store digital picking
and in-store fulfilment space to support multi-channel
sales have supported customers with the products and
services they need at the best possible value and have
enabled us to maintain excellent product availability
across our range.
We continue to maintain a close view on product demand,
stock availability and supply to ensure that we can
continue to bring customers the level of service, product
range and value that our brand is known for.
The pandemic and resulting global
supply chain disruption proved
challenging for many businesses,
however, our team was able to build
on strong relationships with our
supply base to navigate inflationary
pressures and raw material
constraints over the period. Asthe
pressures relating to thepandemic
have eased, the measures that were
put in place have maintained a
robust and resilient supply chain.
We remain well positioned despite
the challenging global environment.
RISK MOVEMENT KEY
 
Stable  
 Decreasing
  
 Increasing
RISK DESCRIPTION
CUSTOMER
SERVICE AND
EXPERIENCE
Executive
responsibility:
CEO, Chief Operating
Officer, Chief Marketing
and Digital Officer
Trend:
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.
MITIGATIONS PROGRESS
Throughout 2022, Wickes has maintained a sharp focus
on our customer first approach, further enhancing and
refining several customer focused activities including our
Customer Closeness programme, our seven customer
personas, our customer satisfaction programme and our
rich understanding of data which fuels our Missions
Motivation Engine.
Daily and weekly customer surveys gather feedback
oncustomer experiences with Wickes. We also collect
customers’ views on their experience through our digital
platform, store channels and our Click & Collect and
Home Delivery services. Verbatim feedback is triaged and
fed into functional ownership so that we can tackle the
root cause of any issues found. This approach has
delivered year-on-year customer experience benefits. 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 causes of issues
rather than addressing symptoms. All complaints are
treated seriously and individually, and the customer
contact process and root cause approach has helped us
achieve an 80% Good or Excellent satisfaction rating
when looking at customer complaints resolution. We also
measure and report customer satisfaction at every stage
of the DIFM customer journey, helping us to drive
continuous improvement by targeting those parts of the
process which receive lower satisfaction scores.
We have seen a year-on-year
improvement inour customer
satisfaction scores, partly driven by
our investment in technology and
focus on measurement, corrective
action and root cause analysis.
Thisinvestment has resulted in
improvements to back-office
infrastructure and functionality
which deliver a better customer
experience. Wehave also made a
significant investment in technology
within our stores to support our
unique ‘4C’ (four channel) store
service model.
Principal risks and uncertainties continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202270
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 2027.
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 20-21 and 22-30, 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. There remains a lot of uncertainty over
macro-economic risks brought about by the
recessionary environment in the UK, high
inflation, and global supply chain issues; despite
the impact of these uncertainties in 2022, 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
maintain our dividend policy. 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.
– The progress of the Group’s demerger from Travis
Perkins Plc and the impact of any delays that
might be experienced as we move towards the
final completion of separating our systems and
processes in 2023: we are progressing well into
the final stages of the plan across multiple
workstreams and anticipate that this will continue
to the point of completion of separation.
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 72).
All eight 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 all of the individual
scenarios to model a worst-case hypothetical
situation (as these could theoretically all 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 is more extreme and not
considered possible to occur: in this scenario,
without any mitigations applied, the Group would
run out of cash, but limited and achievable
mitigations could be applied to return the scenario
to a positive cash position. Although covenant
breaches are noted, 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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 71
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 66 to 70. The financial
position of the Group, its cash flows, liquidity
position and borrowing facilities are described in
the Financial review on pages 60 to 62. The
Directors have considered the above and how they
may impact going concern as well as modelling
asevere but plausible downside scenario
whichassesses the impact on the Group’s liquidity
headroom of a combination of all six scenarios
asset out above.
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.
The Strategic report has been approved by
theBoard of Directors and is signed on its
behalfby:
David Wood
Chief Executive Officer
22 March 2023
Mark George
Chief Financial Officer
22 March 2023
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 2023 and return to growth in 2024.
ASSUMPTIONS
Sales decline by 6% in 2023, followed by growth percentages in line with the Five-Year Plan but from a lower starting point.
No change to margin and administrative costs.
Risk A: Cyber Security and
Data; Risk E: Reputation and
BrandIntegrity; Risk H:
Customer Experience
Scenario 2
INABILITY TO DELIVER AUTONOMY PROJECT TO BUDGET OR TO TIME
The significant ongoing Autonomy project requires additional further investment over a longer time period than currently budgeted to enable the business to meet its
strategic targets. Significant further cost is spent on the project up to the deadline of final separation of the remaining functions from Travis Perkins Plc in April 2023.
Sufficient additional cost is invested into the project that there is no impact on sales or margin.
ASSUMPTIONS
Separation costs are increased by 20% each month over the current budgeted lifespan of the project, and the lifespan of the project is increased by another three months.
No changes to sales or margin.
Risk B: Autonomy
Scenario 3
SUPPLY CHAIN AND COST MANAGEMENT DIFFICULTY
Costs to obtain and distribute goods are impacted by internal factors (operational efficiency, people factors) or external factors (macro-economic factors such as inflation and
the cost of living crisis, the cost implications of ESG, and the ongoing challenging global environment having an impact on 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%
Risk D: Finance and
Treasury; Risk F: Climate
change; Risk G: Operations
Scenario 4
FURTHER INCREASES IN ENERGY COSTS
Energy cost increases driven by the current uncertain economic environment result in costs 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.
Risk D: Finance and Treasury
Scenario 5
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%.
Risk C: People, Culture
andSafety
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.
Risk A: Cyber Security
andData
Scenario 7
A COMBINATION OF SCENARIOS 1-6 AS SET OUT ABOVE
This is seen as a worst-case scenario and the likelihood of occurrence is highly remote.
As above
Viability statement continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202272
Governance at a glance
HIGHLIGHTS
per share total dividend
for thefinancialyear ended 31 December 2022
(1)
(1) Includes the proposed final dividend of 7.3p per share due to be approved by
Shareholders at the 2023 AGM.
10.9p
introduced as a performance measure for the
2023 Long Term Incentive Plan
ESG LINKED
REMUNERATION TARGETS
in December 2022
inducted into the business
NEAR-TERM
SCIENCE
BASEDTARGETS
APPROVED
concluded the Board
is effective
FIRST
EXTERNAL
BOARD
EVALUATION
NEW CFO
MAJOR BOARD DECISIONS
During the year the Board has acted in an agile and responsive way to
the uncertain economic environment, whilst finalising key separation
programmes following the demerger and building momentum on
delivering our strategy. Major Board decisions included approving:
– to maintain the 2021 total dividend payout for the financial year
ended 31 December 2022;
– the appointment of the new CFO;
– the submission of our near-term Science Based Targets to the SBTi;
– significant contracts for a new outsourced service provider for IT
support services, and an expanded contract with one of our strategic
logistics partners; and
– reviewed and approved the 2023 annual budget.
GOVERNANCE UPDATES
During the year the Board has undertaken the following activities to
support and enhance its governance arrangements:
– appointed an external board evaluation facilitator to reflect on our
governance processes and identify opportunities to refine and
improve Board governance;
– commenced the search for a new Non-executive Director to
strengthen the Board’s current composition and assist with orderly
succession planning;
– implemented a comprehensive induction programme for the
newCFO;
– visited one of our largest kitchen cabinet suppliers as part of the
Board’s planned stakeholder engagement activities; and
– Regularly monitored progress against the separation programme
andthe implementation of new HR and Finance systems.
100%
attendance at Board and
Committee meetings in 2022
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 73
Introduction to governance
Being guided by our purpose and listening to
ourstakeholders has helped us tokeep moving
forward, doing the right thing andresponding
inan agile way to the uncertain economic
environment this year. Our purpose is deeply
embedded across the business and has helped
usto remain focused in order to make a positive
difference for our stakeholders and put us
inastrong position for the challenges and
opportunities ahead.
Dear Shareholder,
I am pleased to present to you, on behalf of the
Board, our Corporate Governance report for the
yearended 31 December 2022.
This year, we have had one change to the Board
with the retirement of Julie Wirth, Chief Financial
Officer, and the appointment of Mark George as her
successor in July 2022. During the recruitment
process, the Nominations Committee sought a
diverse range of candidates to be considered for the
Chief Financial Officer role and, after a thorough
process, Mark George was appointed as Chief
Financial Officer.
Wewill keep the diversity requirements of the new
FTSE Women Leaders Review (previously the
Hampton-Alexander review) at the front of our
minds, particularly in light of the change of Chief
Financial Officer, as we look to expand the Board
during 2023 with the appointment of an additional
Non-executive Director and as we plan for future
Board succession. More information onBoard
diversity and succession planning can befound on
pages 88-90 of the Nominations Committee report.
Monitoring the performance of the business during
these challenging economic times, whilst
considering the impact on our colleagues and other
stakeholders, was a key focus for the Board during
2022. We have had open and honest discussions
about the impact of the macroeconomic conditions
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.
The Board has also closely tracked progress on
theseparation of key IT and HR systems from
Travis Perkins Plc and I am pleased that the
separation programme is on track for completion in
2023.
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focus for the
business. Further details on the work of the Board
Committees can be found on pages 86-114.
The Board and I remain focused on creating long
term value for Shareholders, whilst supporting
andworking with all our stakeholders in this
uncertain economic time as wework towards
building a brighter future and helping the nation feel
house proud.
Christopher Rogers
Chair of the Board
22 March 2023
Whilst the new FCA Listing Rule requirements
(LR9.8.6R(9)) on diversity only apply to financial
years beginning on or after 1 April 2022, we have
chosen to disclose our Board diversity and inclusion
statement on page 89 of the Nominations
Committee report this year, as well as the
prescribed diversity data for theBoard and
Executive Board as required under LR9.8.6R (10)
and LR 14.3.33R(2), which is set out in the tables on
page 90.
Wickes has a unique and special culture, which we
need to protect and utilise to attract and retain
high-performing talent from all backgrounds and
genders. Our approach to inclusion and diversity
leads to a culture where all colleagues feel at home
at Wickes and this is an important foundation for
our business. The Board is committed to improving
diversity, in its widest sense, at all levels to ensure
we continue to support and enhance our culture.
Rather than wait until the Company’s third year as a
listed business, we chose to invite an external
facilitator to carry out our annual Board evaluation
review, as the Board was keen to gain some early
reflections on the Board’s performance and the
governance arrangements put in place at the
demerger just under two years ago. I am pleased to
report that the review concluded that the Board is
effective and there were no high-priority
recommendations arising. Details of the findings
can be found on page 91.
DOING THE
RIGHT THING
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202274
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
31 December 2022. The full wording of 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.
Being transparent and accountable
1. BOARD LEADERSHIP AND COMPANY PURPOSE
– 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 73-100. (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 33-53 and 98-100. (Code Principle A)
– The Board has set a clear purpose, we want to ‘Help the nation feel house proud’, and we have a strong business model to support this,
which aligns with the Wickes culture and values. More information can be found in the Strategic report on pages 20-23. (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 page 81. (Code Principle B)
– Our approach to risk management and internal controls is set out on pages 63-70. The Audit and Risk Committee support the Board with
oversight of our risk register. (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 55-59. (Code Principle D)
– Information on our Whistleblowing policy is set out on page 81 and details on our employment policies and practices and their
alignment with our values and strategy is set out on page 116. (Code Principle E)
4. AUDIT, RISK AND INTERNAL CONTROL
– The work of the Audit and Risk Committee is set out on pages 93-97. This
includes a description of the work 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 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 93-97. (CodePrinciple O)
5. REMUNERATION
Information on our remuneration policies
andpractices is set out in the Directors’
Remuneration report on pages 101-114.
(CodePrinciples P, Q & R)
2. DIVISION OF RESPONSIBILITIES
– 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 85 and information on
Directors’ time commitments and independence are detailed on pages 77 and 80.
(Code Principles F, G, H & I)
– The skills and capabilities of the Board are detailed in the Board biographies on page
77. (Code Principles G & H)
– The work of the Nominations Committee is set out on pages 86-92. (Code Principles F,
G & H)
3. COMPOSITION,
SUCCESSION AND
EVALUATION
– Board succession planning
and the appointment process
for Board members isset out
in the Nominations Committee
report on pages 86-92. (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 page
77. (CodePrinciple K)
– The conclusions and
recommendations from this
year’s external board
evaluation can be found on
pages 91. (CodePrinciple L)
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 75
LEADING WITH PURPOSE
Board of Directors
Strategic report Governance Financial statements Other information
76 Wickes Group Plc Annual Report and Accounts 2022
CHRISTOPHER ROGERS
Non-executive Chair of the
Board
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,
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
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.
More recently 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, change management
skills, strong strategic and commercial
acumen, and proven record in brand
building and marketing.
EXTERNAL APPOINTMENTS
– Non-executive Chair of the Board of
Green Sheep Group Ltd
MARK GEORGE
Chief Financial Officer
PRONOUN He/Him
APPOINTMENT DATE 29 July 2022
(Joined Wickes on 6 July 2022)
SKILLS AND EXPERIENCE
Mark has held senior roles in finance,
strategy and general management in a
number of public listed consumer
businesses including The Gym Group,
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 recent 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 are a
valuable asset to the Board and will help the
Board to deliver long term sustainable
success.
EXTERNAL APPOINTMENTS
None
MARK CLARE
Senior Independent
Non-executive Director
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.
In July 2022 Mark stepped down from his
position as Senior Independent Director at
United Utilities Group plc. Mark was the
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
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, supports her in the role as
Chair of the Responsible Business
Committee.
EXTERNAL APPOINTMENTS
– Master of Jesus College, Cambridge
MIKE IDDON
Independent
Non-executive Director
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 current experience as a Chief
Financial Officer of a public listed company,
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 and beneficial to
his role on the Board. His strong strategic
and commercial acumen, change
management, and current retail experience
strengthen his contribution to the Board.
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
N
R
RB
D
DD N
R
A
RB
D
N
R
A
RB
N
R
A
RB
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 77
Chair of the Board
0-1 years
Female
Independent Non-executive Directors
1-2 years
Male
Executive Directors
3+ years
* Based on individual Director self-evaluation responses. Further information on Board
composition can be found on pages 86 to 87.
Board Independence
No. of Directors
Gender balance
No. of Directors
Length of tenure
No. of Directors
Board and Committee meetings 2022
Board industry experience
Average score out of 5 *
5.0
STR ATEGY &
COMMERCIAL ACUMEN
4.7
FINANCIAL ACUMEN
4.3
RISK MANAGEMENT
4.0
RETAIL INDUSTRY
3.7
BRAND, CUSTOMER,
MARKETING
3.3
SUSTAINABILITY
3.2
DIGITAL / TECHNOLOGY
STRATEGY & GOVERNANCE
1
1
1
3
5
5
2
100% attendance at
all Board and
Committee
meetings in 2022
BOARD COMPOSITION AND ATTENDANCE
AS AT 31 DECEMBER 2022
9 6 3 5
4
Plc Board Audit and Risk
Committee
Nominations
Committee
Remuneration
Committee
Responsible
Business Committee
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202278
Board of Directors continued
OUR VISION
A WICKES PROJECT
IN EVERY HOME
OUR MISSION
TO BE THE PARTNER
OF CHOICE FOR HOME
IMPROVERS & LOCAL TRADE
OUR PURPOSE
TO HELP THE NATION
FEEL HOUSE PROUD
GROWTH LEVERS
WINNING FOR TRADE
TradePro growth
ACCELERATING DIFM
Natural category extensions,
broadeningthe proposition
DIY CATEGORY WINS
Getting our fair share in
underweight categories
DELIVERING EXCEPTIONAL CUSTOMER
EXPERIENCE THROUGH ENGAGED COLLEAGUES,
AWINNING CULTURE AND GROWING RESPONSIBLY
STORE INVESTMENT
High return on investment refits,
exploit new space
DIGITAL CAPABILITY
Continued development
of a seamless offer
ENHANCED STORE
SERVICE MODEL
Laying the foundations for future growth
BOARD LEADERSHIP AND
COMPANY PURPOSE
Governance report
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 page 77.
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 vision,
mission and 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 July 2022, the
Executive Board and key members of the leadership
team presented a range of opportunities to enhance
our strategy which were discussed and approved.
You can find details of our strategy and business
model in the Strategic report on pages 20-30.
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 2-72 and principal risks and uncertainties
can be found on pages 66-70. The Board requires
management to operate a robust control
framework, which enables risk to be assessed and
managed and reviews the effectiveness of this on
an annual basis. You can find information about our
internal controls framework on page 97.
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
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 pages 83-84.
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 86-114.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 79
18%
Governance
and
stakeholder
matters
20%
Strategy
27%
Operations
35%
Financial
performance
and risk
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 times the Board and its Committees
met 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 full attendance by all
members at all meetings during the year.
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
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
page 7 7.
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.
During the year, Mark Clare received approval from
the Board to accept the position of Non-executive
Director and Chair of the Board designate of Ricardo
plc from 1 November 2022 and Chair of the Board
from 17 November 2022. The Board discussed the
proposed time commitment required for this
incorporated as required. Theactivities carried out by
the Board in the year are set out on pages 83-84.
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.
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.
position and took into consideration Mark’s current
external appointment as Chair of Grainger plc.
Having considered that during the year, Mark
hadstepped down from his previous position as
Senior Independent Director at United Utilities
Group plc in July 2022, the Board was satisfied that
Mark would continue to have sufficient time to fulfil
his duties and be effective in his role at Wickes.
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.
Board attendance
Name and role Plc Board
Audit and Risk
Committee
Nominations
Committee
Remuneration
Committee
Responsible
Business
Committee
Christopher Rogers – Chair of the Board 8/8 n/a 3/3 5/5 4/4
David Wood – Chief Executive Officer 8/8 n/a n/a n/a n/a
Julie Wirth* – Chief Financial Officer 5/5 n/a n/a n/a n/a
Mark George** – Chief Financial Officer 3/3 n/a n/a n/a n/a
Mark Clare – Non-executive Director 8/8 6/6 3/3 5/5 4/4
Sonita Alleyne – Non-executive Director 8/8 6/6 3/3 5/5 4/4
Mike Iddon – Non-executive Director 8/8 6/6 3/3 5/5 4/4
* Julie Wirth retired from the business and stepped down as a Director on 29 July 2022.
** Mark George joined the Company on 6 July and was appointed to the Board on 29 July 2022.
Note: 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 Nominations and Remuneration Committee meetings as required.
The Chief Financial Officer has a standing invitation to attend all Audit and Risk Committee meetings and attends the Remuneration Committee
meetings as required.
Board activity - percentage of time spent
Governance report continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202280
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.
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
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 at 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.
ofcolleague surveys with the Chief Executive
Officer and Chief People Officer; and integrating
informal colleague engagement at 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 Stevenage and Oxford stores and received
toursby the store managers and presentations
from senior management. The Board regularly visits
the Support Centre in Watford, where the majority
of routine 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. It enables
us to provide the best products at the best prices
for our customers, and is 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 Gower Furniture Ltd, one of our
cabinetry suppliers, and received presentations
from management and a tour of the manufacturing
facilities.
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.
OUR
WINNING
BEHAV IOU RS
WINNING
HUMILITY
CAN DO SPIRIT
AUTHENTIC
BEING
AT YOUR BEST
Whistleblowing
The Company has a Whistleblowing Policy
which iswidely promoted and accessible to all.
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 and included in our monthly
colleaguecommunications.
All reports are investigated thoroughly and
appropriate actions taken. The Board monitors
theoperation of the whistleblowing
arrangements and receives reports annually on
notable outcomes and learnings from reports.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 81
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. When deciding the
appropriate level of dividend to pay at half year and
year end the Board considered the feedback it had
received from investors and, together with the
strength of the balance sheet, decided to pay a
dividend above the 40% payout ratio previously
announced.
The Chair of the Board wrote to the Company’s
largest Shareholders providing an update on topical
governance matters and inviting Shareholders to
meet with himself and/or the Chairs of each
Committee and a number of Shareholders engaged
with the Company.
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 2023 AGM tobe held as a
physical meeting at the Company’s Support Centre
in Watford, Hertfordshire.
At the 2022 AGM held on 26 May 2022, all
resolutions put to Shareholders were approved, with
in excess of 95% 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,
including our Code of Business Ethics, 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.
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 report continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202282
BUSINESS PERFORMANCE FINANCIAL PERFORMANCE STRATEGY
KEY ACTIVITIES
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 topics, commercial and supplier activity
and feedback; supply chain and availability
challenges; digital transformation; store refits; and
community and charity projects.
Operational updates
During the year, the Board had deep dive sessions
covering each of the customer propositions: Local
Trade, Do-it-for-me (DIFM) and Do-it-yourself (DIY).
These covered performance statistics, customer
trading metrics, operating costs and controls, and
strategic analysis of business performance.
Technology
The Board received 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.
KEY ACTIVITIES
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 2021 and half year 2022 results announcement,
and 2021 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 2022 budget and updated forecasts.
The Board reviewed and approved the budget for
2023 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. In May this year, the
Board approved the appointment of Investec Bank plc
as its joint corporate broker.
Treasury and tax
The Board received updates on tax and treasury
matters at every meeting, and approved the
Company’s Tax Strategy.
Dividend and capital allocation policies
During the year, the Board reviewed the capital
allocation policy and dividend policy, and approved
the payment of an interim dividend of 3.60 pence per
share and approved the recommendation of a final
dividend of 8.80 pence per share for the 2021
 financial year to Shareholders at the 2021 AGM.
KEY ACTIVITIES
Strategy review
The Board spent a day reviewing current analysis, the
customer and competitor environment, and the new
strategic growth lever progress review. The Board
also received an external perspective on the
economic outlook from its corporate broker Investec.
Strategic deep dives
During the year, the Board received presentations on
the strategy and plans for topics of particular
relevance to the business including customer insight,
store operations, refits, DIY proposition, Trade
proposition, installations and distribution.
Sustainability
The Board approved the submission of the business’s
first near-term Science Based Targets to reduce
Scope 1, 2, 3.1 and 3.11 emissions. Oversight of
performance against the targets was delegated to
the Responsible Business Committee.
BOARD ACTIVITIES
FORTHEYEARENDED
31DECEMBER 2022
The Board held eight scheduled formal meetings
and had an annual strategy day. During 2022, 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 2022 has been on
monitoring the performance of the business against
the backdrop of significant uncertainty around the
economic outlook, refining strategy around our
growth levers and developing 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
31 December 2022 and the key stakeholders
considered as part of the Board’s decision making
process.
STAKEHOLDER KEY
Colleagues Customers
Suppliers Shareholders
Communities Government andregulators
Landlord
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 83
Governance report continued
RISK
GOVERNANCE, REGULATORY
ANDCOMPLIANCE
MATERIAL CONTRACTS
ANDARRANGEMENTS
KEY ACTIVITIES
Risk Register
The Board reviewed the Risk Register during the year
and reviewed the reporting on the principal risks and
uncertainties for the 2021 full year and 2022 half year
results.
Autonomy progress
As a principal risk, the Board has received an update
at every meeting on the Separation Programme to set
up the Company’s own systems to replace those
previously provided by the Travis Perkins Plc under a
Transitional Services Agreement (TSA). The Board
closely monitored the key milestones during the year
to launch new Finance, IT and HR systems, and
achieve successful autonomy in line with the original
timeframes set out in the TSA.
Cyber risks and mitigations
The Board received a deep dive report on the cyber
risks facing the business and the mitigations in place,
which included an overview of the key controls and
the results of an internal audit on Information
Security.
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 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.
KEY ACTIVITIES
Policies and statements
The Board approved updates to Group policies
including the Delegation of Authority Policy and
approved the Group’s Modern Slavery Statement.
Board evaluation
The Board reviewed and discussed the findings from
its first external 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.
Employee 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 regulatory compliance
including the operation of and reports via the
Company’s anonymous whistleblowing service.
Cyber security incident
The Board discussed the Group’s response to a cyber
incident resulting in a phishing SMS message being
sent to customers. The incident was reported to the
Information Commissioner’s Office and no regulatory
action was taken.
Consumer Duty
In compliance with the new FCA Consumer Duty
 regulations, the Board approved an Implementation
  Plan and appointed Sonita Alleyne as the
   Non-executive Director Consumer Duty
     championfor the business.
KEY ACTIVITIES
Contract approvals
In line with the Delegation of Authority policy, the
Board reviewed and approved a fleet replacement
programme in 2022, a goods for resale contract and
three goods not for resale contracts during the year,
which were material due to their 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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202284
DIVISION OF
RESPONSIBILITIES
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 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
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.
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.
More information can be
found on pages 93-97
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.
More information can be
found on pages 86-92
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.
More information can be found
on pages
101-114
RESPONSIBLE BUSINESS COMMITTEE
Oversees the development of strategy and monitors
performance in relation to environmental, social and
governance matters.
More information can be
found on pages 98-100
DISCLOSURE COMMITTEE
1
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.
1 There have been no meetings of the Disclosure Committee
during 2022 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
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 Senior Independent Director 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 independent Non-executive Directors
provide strategic advice and guidance,
offer constructive challenge and hold the
Executive Directors to account.
The Non-executive Directors bring
independent oversight and specialist
advice to support good decision making
by the Board.
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 as a
Board 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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 85
Nominations Committee report
Christopher Rogers
Chair of the Board
Dear Shareholder,
I am pleased to present the Nominations Committee
report for the year ended 31 December 2022.
Duringthe year, the Committee held three scheduled
meetings and continued its focus on succession
planning and driving improvements in diversity at
alllevels.
At the start of the year, the Committee was focused
on the search for a new Chief Financial Officer.
Rigorous selection criteria were set and candidates
from a variety of backgrounds, including women and
underrepresented ethnic groups, were shortlisted.
Followingthe appointment of Mark George, we no
longer meet the targets for female representation
onthe Board as set previously by the Hampton-
Alexander Review. We also do not meet the new
targets under the FTSE Women Leaders Review.
However, the Board strongly supports the objective to
promote greater female and ethnic minority
representation on listed company boards and believes
that diversity in the boardroom and workforce is in the
best interests of the business.
During the year, the Committee focused much of
itstime on diversity as part of its review of our talent
pipeline and succession planning for the executive
leadership and the wider workforce. The business
works hard to attract and engage the highest-quality
talent from all backgrounds who will drive the
business forward. Further information on the
diversity of the Board is set out on pages 89-90.
As a newly appointed Board on demerger,
theCommittee is mindful of the need to plan an
orderly succession of the Board in order to avoid
asignificant change to the Board membership in a
short timeframe. This also creates the opportunity to
increase diversity on the Board, as well as rebalance
the skills and experience of the Board as a whole
toreflect the growing needs of the business.
During the year, the Committee also reviewed the
composition of the Board and recommended the
appointment of an additional Non-executive Director
with digital and marketing experience to strengthen
the current skills and experience of the Board. The
criteria for this role also require that the successful
candidate improves the diversity of the Board.
COMPOSITION, SUCCESSION
AND EVALUATION
The Board has established a Nominations Committee to review Board composition
and lead the succession process. Details regarding Board composition, succession
and evaluation can be found inthe Nominations Committee report below.
NOMINATIONS COMMITTEE
REPORT
Committee members
Christopher Rogers, Chair of the Board and
Committee Chair
Mark Clare, Senior Independent Non-executive Director
Sonita Alleyne, independent Non-executive Director
Mike Iddon, independent Non-executive Director
Although only in our second year, our Board
evaluation review was externally facilitated this
yearand the Board was pleased with the feedback
received, particularly on the creation of strong Board
dynamics, providing constructive engagement and
challenge, in a relatively short period of time since
the demerger. The review concluded that the Board
was effective and there were no high-priority or
urgent actions arising. Recommendations to help the
Board continue its development and progress were
agreed. More information on the Board evaluation
isset out on page 91-92.
Looking ahead to 2023, the Committee will focus
onBoard succession planning and driving a diverse
talent pipeline as part of the succession planning
forthe executive leadership over the medium to
longterm, as well as leading on the appointment and
induction of the additional Non-executive Director.
Christopher Rogers
Chair of the Board
22 March 2023
In a challenging external environment,
the role of the Nominations Committee
to ensure that the Board and senior
management have theskills and
experience necessary to succeed, to
maintain robust succession plans and to
continue to build a diverse pipeline of
future talentis more important than ever.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202286
Committee composition
The Committee membership comprises the
Non-executive Directors, including the Chair of
theBoard. Details of the experience and skills of
Directors are set out in the biographies on page 77.
You can find details of meetings and attendance
onpage 80.
Role of the Committee
The Committee’s role is to lead the process for
appointments to the Board and executive leadership
and to ensure orderly succession plans are in place,
as well as overseeing the development of a diverse
pipeline for succession. The Committee also reviews
the structure, size and composition, including skills,
knowledge, experience, independence and diversity
and the length of service of the Board as a whole,
and its Committees, and makes recommendations
to the Board with regard to any changes. The full
responsibilities of the Committee are set out in its
Terms of Reference, which can be found on the
Company’s website www.wickesplc.co.uk
Board composition
The Board comprises six Directors, three of whom
are independent Non-executives. In July 2022,
JulieWirth, Chief Financial Officer, retired and
MarkGeorge was appointed as her successor.
Allother Directors were appointed on 23 March
2021 as part of the demerger and have remained in
their roles throughout the year.
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.
Information onthe key strengths and experience of
each Director can be found on page 77.
To complement and strengthen the Board’s current
skill set the criteria for the additional Non-executive
Director includes digital and marketing experience.
The appointment of an additional Director will also
create an opportunity to increase the diversity on
the Board.
The Committee has reviewed the external time
commitments of the Chair of the Board and each of
the Non-executive Directors. The Board is satisfied that
during the year each Director committed enough time
to be able to fulfil their duties and has capacity to
continue doing so.
Appointments, induction and development
After Julie Wirth signalled her intention to retire
from a full-time executive role, Korn Ferry,
whichhas no connection with Wickes or any of its
Directors, was appointed to assist the Committee
inits search for a new Chief Financial Officer. Open
advertising was not used. The recruitment process
involved setting rigorous selection criteria, in terms
of both technical capabilities and cultural and style
attributes. A diverse longlist of candidates was
presented to the Committee from which a shortlist
of candidates was produced. Candidates on the
shortlist were interviewed bymembers of the
Committee and assessed by Korn Ferry. Following
extensive discussion of the assessments and
feedback from the interviews, Mark George was
recommended by the Committee for appointment
by the Board as Chief Financial Officer. The
Remuneration Committee considered and
approvedthe remuneration arrangements.
Mark George received a comprehensive induction
over several months, which was tailored to his
individual needs and designed to facilitate his
understanding of the business. This included
acomprehensive programme of meetings with
members of the Plc Board, Executive Board, senior
management and key third parties including
brokers, bankers, auditors and consultants; access
to relevant documentation such as recent Board
and Committee papers and demerger documents;
and site visits to stores and distribution centres
toensure he gained a detailed understanding of
business operations and experienced our special
culture in person.
Percentage of time spent by the Committee
6%
Board Composition
and Skills
8%
Governance
86%
Succession Planning
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 long term
development programme of scheduled visits and
activities to enhance the Directors’ knowledge on
the business across the differentiated customer
propositions. This year, the Board visited a key
supplier and previously visited the distribution
centres. Future visits are planned to the outsourced
customer support centre and key stores, as well as
an installations experience to integrate knowledge
of the end-to-end customer journey of the DIFM
proposition. Technical briefings are given to the
Board and Committee meetings on relevant legal
and regulatory developments, including guidance
and policies, or changes,and Directors are
encouraged to attend training to ensure that their
individual development needs are met.
Details of the process in relation to the appointment
of an additional Non-executive Director and their
induction will be set out in our 2023 Annual Report
and Accounts.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 87
Succession planning
The Board recognises that an effective and orderly
succession plan for the Board, ensuring the right
mix of skills and experience of future Board
members, is vital to delivering our strategy.
TheBoard is also committed to recognising and
developing talent within senior management across
the business, creating opportunities to develop
current and future leaders.
All Non-executive Directors were appointed at the
same time in April 2021 ahead of the listing of the
Company on the London Stock Exchange. The
Committee is mindfulof the need for orderly
succession planning to avoid a significant change
to Board membership in a short timeframe and will
start to develop plans for Non-executive Director
sucession in 2023. In line with the Code, Non-
executive Directors will not participate in
discussions concerning their own succession plans.
Given the short tenure of the Non-executive
Directors, although it was agreed that a plan would
need to be developed for orderly succession,
nospecific plans were agreed in the year.
The Committee, with input from the CEO,
considered during the year a talent map of potential
successors for the CEO. The talent map provided a
list of ‘ready now’ and ‘step up’ candidates against a
set of criteria and experiences which would provide
a starting point for recruitment should the need
arise. The map will be refreshed annually and
extended over time to include other Executive
Boardroles.
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 succession plans will result
in a continuously robust leadership structure that
can achieve the Company’s purpose and ensure its
long term sustainable success.
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.
4.
ASSESSMENT
The candidates are assessed
against the specification
including by interview with
Board members.
5.
APPOINTMENT
The Nominations Committee
recommends the preferred
candidate to the Board and
theRemunerationCommittee
considers and approves a
remuneration package.
DIRECTOR
APPOINTMENT
INDUCTION
PROCESS
AND
6.
INDUCTION
The Chair of the Board and General
Counsel and Company Secretary
agree a detailed induction whichis
tailoredtotheindividual’s
experience and specific needs.
3.
SHORTLIST
The Committee considers
a longlist and agrees a
shortlist of candidates.
Our approach is designed
to ensure a thorough and
inclusive process.
Nominations Committee report continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202288
Inclusion and diversity statement
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.
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 31 December 2022
1
, the Board comprises three
male Non-executive Directors (including the Chair of
the Board), one female Non-executive Director and
two male Executive Directors and, assuch, the
Company did not meet the targets on board diversity
relating to female representation on the Board as set
out in Listing Rule 9.8.6R(9)(a)(i) and (ii), which
require at least 40% of the individuals on the Board to
be women and at least one woman holding the
position of Chair, CEO, Senior Independent Director
or CFO. The Board meets the Listing Rule 9.8.6R(9)
(a)(iii) target of having one director from a minority
ethnic background. It is the intention of the Board,
through the Nominations Committee, to focus on
diversity as part of its succession planning.
The Board strongly supports diversity in its
broadest sense in the boardroom, although it
recognises that being a recently formed Board
andrelatively small in size will make achieving
diversity targets more challenging in the short term.
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 90. The Board also supports the Parker
Review regarding ethnic diversity on UK boards,
published in 2017, and continues to meet the
ParkerReview target of at least one director of
colour by 2024.
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 39.58% female and 60.42% male.
A key part of the People pillar of the Board’s
Responsible Business Strategy is our early careers
proposition, which includes apprenticeships,
traineeships and graduate placements. The Board
is committed to building skills in our local
communities to create a diverse and inclusive talent
pipeline for the business and to benefit wider
society. Through our apprenticeship schemes and
Kick Start programmes, we have created
opportunities to attract a significantly more diverse
workforce. We also have graduate and specialist
rotation programmes, which help us to build our
colleague capability and deliver our business
strategy. In 2022, the Board has committed to
offering 200 early careers places over the next three
years and has so far offered 172 places.
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.
Further details of the Company’s approach to
diversity and inclusion can be found on pages
35-39.
1 31 December 2022 is the Company’s chosen reference date forthe
purposes of reporting against Listing Rule 9.8.6R(9).
2 ‘Executive Board’ means ‘senior management’ for the purposes of
the Code and the requirements of Provision 26 and includes the
Company Secretary.
1
Female
5
Male
1
Black - Caribbean
5
White British
2
Female
6
Male
1
Other Ethnic Group
7
White British
39.6%
Female
60.4%
Male
38.8%
Female
61.2%
Male
PLC Board gender identity and ethnicity Executive Board gender identity and ethnicity
2
Direct reports of the Executive Board
genderidentity
All other colleagues gender identity
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 89
Reporting table on ethnicity representation
No. of Board
members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
& Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White (including
minority-white groups) 5 83.3 4 7 87.5
Mixed/Multiple Ethnic Groups — — —
Asian/Asian British — — —
Black/African/Caribbean/Black British 1 16.7 — — —
Other ethnic group, including Arab — — — 1 12.5
Reporting table on gender representation
No. of Board
members
Percentage of
the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
& Chair)
Number in
executive
management
Percentage of
executive
management
Men 5 83.3 4 6 75.0
Women 1 16.7 0 2 25.0
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 here.
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.
Inclusion and Diversity policy
This year, the Board approved a Board Inclusion and
Diversity policy and will now monitor compliance
against the objectives contained therein annually.
The Board policy compliments the Company’s wider
colleague inclusion and diversity policy, which has
previously been used as the diversity policy applied
to the Company’s administrative and management
bodies, the Board and its Committees.
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 is at the heart of our thinking.
2023 Board Inclusion and Diversity policy targets
The Board Inclusion and Diversity Polciy states that
the Board is committed to promoting inclusion and
diversity in the boardroom and aims to meet
industry targets and recommendations while
recognising that there may be periods when this
balance is not achieved. This includes the diversity
targets recommended by the FTSE Women Leaders
Review and Parker Review, with targets as follows:
– female representation on the Board of at least
40%;
– at least one of the roles of Chair, Senior
Independent Director, Chief Executive Officer
orChief Financial Officer filled by a woman; and
– at least one Director from a minority ethnic
background on the Board.
We will be reporting against the Board Inclusion
andDiversity Policy in next year’s Annual Report
and Accounts.
Nominations Committee report continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202290
The Board Alchemy report concluded that the Board
and its Committees was operating effectively. A
discussion of the Board effectiveness review report,
outlining the Board’s current strengths, challenges
and recommendations was facilitated by Board
Alchemy at the November Board meeting.
Board evaluation – key findings
The Board evaluation review concluded that the
Board was effective and there were no high-priority
or urgent recommendations arising. It found that
the Non-executives, as a group, have strong listed
company experience and this had served the
Company well asa recently listed company. The
Board has strong finance expertise, which reflects
itself in the focus of the Board and its areas of
challenge, although good focus is also given to a
wide range of other areas. The review noted the
valuable perspective brought by the different
Non-executives’ backgrounds and remits. The
Board is well led bythe Chair of the Board, who has
extensive listed company experience himself.
Feedback from interviews indicated that the CEO
leads the company well. He is visible across the
organisation and engages well with colleagues at all
levels.
The newly formed Board has benefited from its Board
meetings being held face-to-face during the year,
notwithstanding the challenges of the pandemic, and
holding regular Board dinners, which have contributed
to a good dynamic. The review found there to be open,
constructive and supportive relationships between the
Chair of the Board and CEO, and Chair of the Board and
SID. The review noted the good governance
arrangements that are in place, such as role
descriptions for the Chair of the Board, SID and CEO,
and good delegation by the Board to its Committees,
with well-considered and clear Terms of Reference.
The review highlighted where further skill and
experience capabilities could strengthen the
Board’s current skillset and the need for the Board
to work to improve its diversity. The observed Board
meeting dynamic had good discussion, debate and
challenge.
Board evaluation
The Code requires the Board to undertake a
formaland rigorous annual evaluation of its own
performance and that of its Committees and
individual Directors. The evaluation should be
externally facilitated at least once every three years.
This year’s annual Board effectiveness review was
facilitated externally, for the first time, by Board
Alchemy, an independent specialist consultancy,
and supported by the Company Secretary. Rather
than wait until its third year as a listed company,
theBoard decided to have an external review in its
second year as it felt that it would be agood time
toreflect on Wickes’ governance processes and
identify any opportunities to refine and improve
Board governance. A competitive tender process
was undertaken, which involved the Chair of the
Board and Company Secretary meeting with a short
list of providers and giving feedback to the Board.
Board Alchemy had no previous connection with the
Company. The Board was satisfied that the reviewer
was suitably qualified and experienced to conduct
the effectiveness review and that Board Alchemy
followed the principles set out in the Code of
Practice for independent reviewers.
The review included: one-on-one interviews with
each Board member, followed by individual
meetings with members of the Executive Board, the
former CFO and the external audit partner; a review
of the recent Board and Committee papers; and
observation of the October 2022 Board meeting.
The Board’s focus on strategy was found to be
appropriate and the review highlighted that, looking
forward, more time would be devoted to longer-term
strategy, moving on from the Board’s focus on the
immediate period after the demerger and the
impact of the current economic climate.
The Board gave good consideration to risk,
supported by the Audit and Risk Committee, and
haddeveloped an embedded risk culture when
deliberating and making decisions. Board members
showed considerable interest in stakeholder matters
and received regular updates at the Board, as well as
having direct involvement with several stakeholder
groups, including colleagues and investors.
The review also made recommendations in relation
to internal audit and risk management following
feedback on the outsourced internal audit function.
2022 Action plan
The Board considered all of the recommendations
contained in the review and developed an action plan
which will be reviewed by the Board during 2023 to
ensure progress is being made.
The key actions agreed by the Board arising from
the review were as follows:
1. Develop a plan for the orderly succession and to
increase the diversity of the Board.
2. Continue to develop relationships between Non-
executive Directors, the Executive Board and
colleagues.
3. Keep the forward plan under review to ensure
strategic matters are appropriately scheduled.
4. Propose a plan for the future provision of
internal audit services.
5. Map out key risks to Board agendas and
ensurekey risk owners present to the Board at
least once every year.
This summary of the 2022 external board evaluation
process and disclosure of the evaluation findings has
been reviewed and agreed with Board Alchemy.
Despite all Board members being
relatively new to each other and
effective new working relationships
needing to be established, the Board
has formed well and quickly.
BOARD ALCHEMY
November 2022
YEAR 2
2022
EXTERNAL
YEAR 5
2025
EXTERNAL
YEAR 1
2021
INTERNAL
YEAR 3
2023
INTERNAL
YEAR 4
2024
INTERNAL
BOARD EVALUATION
REVIEWTIMELINE
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 91
Progress against 2021 Board evaluation actions
During the year, the Committee monitored progress against the agreed key actions arising from the
internally facilitated 2021 Board evaluation. A summary of the actions and progress is set out below.
Forfurther information on the 2021 Board evaluation process, please refer to the 2021 Annual Report
andAccounts.
AREA ACTION PROGRESS
Board agenda The forward agenda would be updated
to incorporate priority topics identified
in the strategy meeting and to include
more focus on areas highlighted by the
Board of significant interest or relevance.
Additional agenda items were added
tothe Board’s schedule covering
topicsof interest, including customer
engagement and insights, supplier
engagement, employee feedback and IT
matters. The forward agenda is regularly
reviewed by the Chair of the Board, CEO
and Company Secretary, and is tabled at
every Board meeting forreview, which
allows flexibility for emerging discussion
topics to be addedand other changes to
be made where appropriate.
Board papers Management would review papers with
a view to making them more concise.
Guidance on drafting Board papers was
shared with senior management. Work
is ongoing to further streamline
reporting to the Board.
Board meetings The frequency of Board meetings would
be kept under review.
The number of scheduled Board
meetings was reduced by one and
the2022 evaluation concluded the
frequency was appropriate.
Additional training,
including
environmental, social
and governance (ESG)
and digital topics
Additional training would be arranged
for Board members with a focus on
ESG and digital topics.
Training on ESG matters was provided
through the Responsible Business
Committee meetings. Briefings on digital
developments and cyber risk were
delivered to the Board during theyear.
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 needs with
each Director.
The performance review of the Chair of the Board
was conducted by the Senior Independent Director
supported by Board Alchemy. The review included
feedback from Board and Executive Board members
gathered from a questionnaire and individual
interviews with Board Alchemy.
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.
Nominations Committee report continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202292
onthe Company’s risk management approach
andreviewed the principal and emerging risks
anduncertainties with a focus on supply chain, cyber
security and data privacy.
During the year the Committee was briefed on
preparations for the anticipated changes in audit
and corporate governance requirements following
the publication of the Government response to its
consultation paper ‘Restoring trust in audit and
corporate governance’ last year.
Looking ahead to 2023, the Committee will remain
focused on evolving the internal control framework
and preparing for the Government’s proposed
corporate governance reforms.
Mike Iddon
Chair of the Audit and Risk Committee
22 March 2023
Dear Shareholder,
I am pleased to present the Company’s Audit
andRisk Committee report for the year ended
31 December 2022.
In its second year of operation since listing, the
Committee met six times and I am pleased with
theconstructive environment that has been created,
providing supportive challenges to management,
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, particularly during the financial reporting
periods, toreceive feedback on their audit work.
The Committee has continued to prioritise the
development of internal financial processes and
controls, building on work undertaken in the
previous year. Taking into account observations
from management, and also the external and
internal auditors, we recognise the need for a
continued high level of focus on enhancing and
embedding financial controls around the new
finance system launched at the end of 2022.
I am pleased to note that the cut over to the new
system, which marked a key milestone in the
separation from Travis Perkins plc, was executed to
a high level of quality and provides a solid
foundation on which to deliver greater automation
throughout the financial processes, and presents a
great platform to improve the efficiency, timeliness
and quality of the financial controls.
The Committee will closely monitor progress in
delivering these improvements, in particular in
relation to the significant accounting areas,
including the production of impairment calculations
and the recognition of DIFM revenue. For both of
these areas, alongside enhancements to controls,
we would envisage more work being completed by
management ahead of the 2023 year end.
As usual, the Committee has spent time during
theyear reviewing financial results, 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 reviewed the
recognition of revenue in the DIFM segment.
Building on the establishment of the Group’s Risk
Register in 2021, the Committee received updates
AUDIT AND RISK
COMMITTEE REPORT
Committee members
Mike Iddon, Chair of the Committee, independent
Non-executive Director
Mark Clare, Senior Independent Non-executive Director
Sonita Alleyne, independent Non-executive Director
Mike Iddon
Chair of the Audit and Risk
Committee
The Committee has fostered adynamic
working relationship to bring together
stakeholders to focus on building a strong
internal control environment topromote
the long term success of thebusiness.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 93
Committee composition
The Committee membership comprises three
independent Non-executive Directors, with the Chair
of the Committee having recent and relevant
financial experience. The Committee as a whole
has relevant experience and competencies in the
retail sector. The Chair of the Board is not a member
of the Committee but was invited to and attended
all meetings in 2022. You can find details of
meetings and attendance on page 80.
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, andinclude the following:
– Monitoring the integrity of the financial statements
and related announcements and reviewing
significant financial reporting judgements.
– Advising the Board on whether the
AnnualReportand Accounts, taken as a whole,
isfair, balanced and understandable.
– Reviewing the Company’s internal financial
controls and internal control and risk
management systems and, where appropriate,
tomake recommendations to the Board.
– Monitoring and reviewing annually the
effectiveness of the internal audit function.
– Making recommendations to the Board
regardingthe appointment, reappointment and
removal of the external auditor and approving
itsremuneration and terms of engagement.
– Reviewing the effectiveness of the external audit
process, including monitoring the independence
and objectivity of the external auditor and making
recommendations on when to undertake a
competitive tender for statutory audit services.
– Determining the policy on non-audit fees and
monitoring the provision of non-audit services
– Considering the Company’s emerging and
principal risks and uncertainties, and reviewing
the mitigating actions management has taken to
ensure that these risks are appropriately
monitored and controlled.
Operation of the Committee
Prior to the start of each Committee meeting,
theChair of the Committee meets with the internal
and external auditors and members of the
Committee without the Executive team present to
discuss anyrelevant matters.
The Committee receives reports and updates from
both the internal and external audit functions; along
with reports on any non-audit services provided and
howthese meet the Non-audit Fees Policy. The
Committee has a structured forward looking
planner to ensure that the responsibilities of the
Committee are discharged during the year. The
content of the forward planner is regularly reviewed,
which also allows for the planner to evolve to reflect
the changing needs of the business.
The Chair of the Committee meets with both the
internal and external auditors, and executive
management, outside of formal meetings
aspreparation for the Committee meetings and
todiscuss any areas of concern or significance.
Percentage of time spent by the Committee
19%
Controls
11%
Governance
13%
Internal Audit
18%
Financial Reporting
10%
Risk
29%
External Audit
Work of the Committee
During the year, the Committee held six scheduled
meetings. A summary of the key activities of the
Committee is set out below.
Oversight of the preparation of financial results
Following the conclusion of the audit of the 2021
financial results, which were the first full year
results for the business as an independent listed
entity, the Committee carried out a detailed review
with management to identify process
improvements for future financial reporting periods,
supported by both internal and external audit.
Monitoring the internal control environment
A key area of focus for the Committee was to
continue to track progress against improvements to
the Group’s internal controls. Following the
Committee’s review of the first set of financial
statements (described above), a control
improvement plan, incorporating recommendations
from both management and external audit, was
agreed and monitoring completion of actions is
now a standing item on the Committee’s agenda
and is discussed at each meeting. Substantial
progress has been made during the year, including
the implementation of thenew finance system.
However, this area is a key priority for the business
and as such will be closely monitored by the
Committee in 2023.
Implementation of new finance system
The Committee closely monitored the
implementation of new finance system and the
migration from Travis Perkins Plc’s finance systems
as part of the separation programme by receiving
reports from the steering committee set up to
manage the project. The embedding of this system
and the continuing development of process and
control improvements will remain an area of interest
to the Committee inthe short term.
Proposed audit and corporate governance reforms
Duringthe year, the Committee received input fromthe
external and internal auditors on the Government
consultation on the reform of audit andcorporate
governance and the Government response to the
consultation. The Committee will continue to monitor
the Group’s readiness for any proposed reforms and
any necessary improvement activity required, and this
will become a key priority for the business alongside
strengthening the internal controls environment.
Risk management oversight
During the year, the Committee has regularly received
risk management updates, including reviewing the
approach to key risks, risk appetite, tolerance and
strategy. The Committee undertook adetailed review
of the Risk Register as part of the2021 year end
process and in support of the 2022 half year reporting.
More information on the Committee’s oversight of risk
management can befound on page 97 and the
principal risks and uncertainties for the Group are set
out on pages 66-70.
FRC Corporate Reporting Review 2022
In August 2022, the Company received a letter from
the Supervision Committee of the FRC following a
review of the Annual Report and Accounts for the
53 weeks ended 1 January 2022 in accordance with
Part 2 of the FRC Corporate Reporting Review and
Operating Procedures
(1)
.
The letter confirmed that following the review there
were no questions or queries that the FRC wished
to raise. The letter did note a number of matters
where the users of the Annual Report and Accounts
could benefit from improved disclosure and these
matters have been considered when preparing the
2022 Annual Report and Accounts.
(1) The FRC’s review was based on the Group’s Annual Report and
Accounts for the 53 weeks ended 1 January 2022 (the 2021
Accounts). It was conducted by staff of the FRC who have an
understanding of the relevant legal and accounting framework but
no detailed knowledge of the Group’s business or an understanding
of the underlying transactions entered into by the Group. The FRC’s
review provides no assurance that the 2021 Accounts are correct in
all material respects and the FRC’s role is not to verify the
information provided but to consider compliance with reporting
requirements. The FRC’s letters are written on the basis that the
FRC (which includes the FRC’s officers, employees and agents)
accepts no liability for reliance on them by the Company or any
third party, including but not limited to investors and Shareholders.
Audit and Risk Committee report continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202294
Internal audit reporting
At every 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. During the year, a number of minor
changes were made to the Internal Audit Plan to
ensure the plan focused on the key needs of the
business, such as adding an audit on the migration
of the finance systems and removing the audit on
flexible working. Timings of audits were also
adjusted to ensure that management resources were
available to fully support and engage with the internal
audit teams. You can read more information on the
provision ofinternal audit services on pages 96-97.
Governance oversight
In addition to the key matters discussed above,
during the year the Committee also undertook the
following activities: a review of the Committee’s
Terms of Reference; a review of the performance
ofthe internal and external auditors; regular
oversight of contractor and consultancy spend;
andmonitoring of non-audit fees. The Committee
received a briefing from management on fraud
prevention procedures, which include anti-bribery
and anti-money laundering controls and policies,
regular Key Control Audits of stores and distribution
centres, training colleagues on fraud prevention and
supporting fraud detection through whistleblowing.
Significant audit issues considered during the year
The following are the key matters associated with
the Group’s financial statements forthe year ended
31 December 2022 that were considered by the
Committee. This is not a complete list of all
accounting issues, estimates and policies, but
includes those which the Committee believes are
the most significant and discussed most
prominently.
In reaching its conclusions, set out in more detail
below, 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 internal
auditreports in respect of the matters under
consideration and the Committee also received
areport from the external auditor on the work
undertaken to arrive at the conclusions set out
initsaudit report on pages 119-126 and had
theopportunity to discuss it with the external
auditor in depth.
Area: The carrying value of right-of-use assets
The Group balance sheet contains £542.4m
(2021: £604.4m) of right-of-use assets. The
Directors are required todetermine whether those
assets have suffered any impairment whenever
there are indicators of possible impairment. They
do so by comparing 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, to identify which stores show
indicators of impairment, with a full impairment
analysis then being performedon those stores that
are considered toshow such indicators.
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 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, 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.
Factors considered and conclusions reached
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 and discount rate
calculations were prepared, how individual stores
were determined to be potentially impaired, 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 charge recognised and included
acceptable judgements.
Area: Revenue recognition in respect of
DIFM revenue
The Group recognised £371.1m (2021: £300.2m) of
revenue inthe financial year in respect of DIFM
revenue and carried deferred DIFM revenue of
£43.6m (2021: £60.6m) as aliability on its balance
sheet where orders had been paid in advance but
either fully or partially undelivered at the period end.
DIFM 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.
Factors considered and conclusions reached
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 through the audit period
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.
Area: The carrying value of investments
insubsidiaries (Company only)
The Company balance sheet contains £598.9m
(2021: £770.8m) 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.
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Wickes Group Plc Annual Report and Accounts 2022 95
Factors considered and conclusions reached
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
regarding the impairment charge recognised
andincluded acceptable judgements.
External audit
KPMG LLP (‘KPMG’) continued as our external
auditor for the financial period ended 31 December
2022, having been reappointed as auditor of the
Company on 26 May 2022 byShareholders at
theAGM.
KPMG was appointed under a competitive audit
tender whilst the Company was part of Travis
Perkins Plc in 2015. The Company became a public
interest entity (PIE) in April 2021 as a result of the
demerger from Travis Perkins Plc. Therefore, under
the Competition and Markets Authority’s Statutory
Audit Service for Large Companies Market
Investigation (Mandatory UseofCompetitive Tender
Processes and AuditCommittee Responsibilities)
Order 2014 (the‘CMA Order’), the next tender for an
external auditor will be required in 2025 (ten years
from thelast tender), which also complies with the
Companies Act 2006 which requires a tender for
PIEs after ten years. Auditor rotation is required
20years from the date of the Company becoming
aPIE and therefore this will be due in 2041.
The Committee currently has no plans to undertake
atender earlier than 2025 for the reason that the
Committee considers it is in the best interests of
the Company and its Shareholders to maintain
continuity of external auditor at this time as KPMG
has a detailed knowledge of our business and an
understanding of our sector, and continues to
demonstrate that it has the necessary expertise and
capability to undertake the audit. The Company is in
compliance with the requirements ofthe CMA
Order, which relates to the mandatory use of
competitive tender processes for the provision of
statutory audit services.
KPMG reported regularly to the Committee
duringthe year on its audit work and audit opinion.
During the year, the Committee considered the
performance, effectiveness and independence of
KPMG. The evaluation considered whether the
external auditor met the required standards of
qualification, independence, expertise, effectiveness
and communication. All members of the Committee,
as well as key members of management and those
who have regular contact with the external auditor,
completed a feedback questionnaire focusing 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.
Feedback was collated and presented to the
Committee in September 2022. The Committee
discussed the conclusions and any opportunities for
improvement, which were brought to the attention of
the external auditor. No significant issues were
reported as part of this process, and it was concluded
that the external audit process and services provided
by KPMG were satisfactory and effective.
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
2022 audit.
Non-audit services
The Non-audit Fees Policy was approved by the
Committee in 2021 and was 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 be engaged and includes approval
limits and a cap on allowable non-audit fees.
During the year the Committee monitored the
non-audit fees at each of its meetings. For the year
ended 31 December 2022 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 137 of the notes to the financialstatements.
* Fees paid to the auditor in relation to Reporting Accountant
servicesin respect of the demerger of the Group, which were agreed
by Travis Perkins Plc 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.
Internal audit
Internal audit services are provided by BDO LLP
(‘BDO’) in accordance with an annually agreed
Internal Audit Charter. The internal audit function is
responsible for providing independent and objective
assurance to the Audit and Risk Committee on the
design and effectiveness of the Group’s systems of
internal control through a risk-based approach.
BDO reports to the Chief Financial Officer and also
has direct access to the Audit and Risk Committee.
The Committee also meets with internal audit
without executive management present.
In addition, BDO provides the Audit and Risk
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.
Internal Audit Plan
The Internal Audit Plan for 2022 was approved
bythe Audit and Risk Committee and included
acombination of risk-based audits and projects.
Areas covered by the plan in 2022 included the
following:
– DIFM revenue recognition
– Cyber security
– Supplier contracts and supplier management
– Consumer credit
– Health and safety
– Strategic performance management
– Cash and banking
– HR – Wellbeing
– Facilitation of tax evasion (Criminal Finances
Act2017)
– Goods received not invoiced (GRNI)
BDO undertakes a regular review of the plan against
the corporate risk register to ensure it remains fit for
purpose and discusses the content of the plan with
the Executive Board on a monthly basis. Any
proposed changes to the plan are presented to the
Audit and Risk Committee for approval.
Audit and Risk Committee report continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202296
The high-level scope of the internal audit work is
agreed with the Audit and Risk Committee within
the Internal Audit Plan. An Executive ‘sponsor’
isallocated to each audit and involved in the
planning stages of each audit.
Ongoing visibility of the internal control environment
is provided via internal audit reports to the
Executive Board and the Audit and Risk 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 Audit
and Risk Committee regularly reviews actions being
taken as a result of internal audits. Progress reports
are presented to the Executive Board every month
and to the Audit and Risk Committee at every
meeting with a focus on the status of any deferred
and overdue actions.
The Committee formally assesses the effectiveness
of internal audit annually and seeks to satisfy itself
that the quality, expertise and experience of
thefunction are appropriate for the Group.
Thisassessment involves both Committee
members and members of the Executive Board
through the completion of a questionnaire,
withtheresults considered by the Committee.
Thisassessment includes a consideration of
independence and objectivity; the overall level
offees; the quality of the risk assurance process;
and the role of the function in the context of the
broader sources of risk assurance. The internal
audit function was considered to be effective for the
financial period ending 31 December 2022.
BDO also formally reflects on how it has added
value through its internal audit services on an
annual basis and reports the outcomes from
thisexercise to the Audit and Risk Committee.
Risk management and internal control
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 Group’s approach to risk management began to
be developed as an independent entity on demerger
in April 2021 and continues to be refined.
The principal risks and uncertainties are
developedfrom this Group view of risk
management, and are set out on pages 66-70,
together with information on how those risks are
mitigated and how emerging risks are assessed.
Prior to the demerger in April 2021, Wickes was
reliant on back office systems designed and
managed by Travis Perkins Plc. Significant progress
has been made in 2022 on the delivery ofthe
Autonomy programme to transition to standalone
systems. The Autonomy programme is on track and
will be completed in 2023. As part of the separation
activities, a replacement finance system was
implemented in 2022. These system developments
will provide a robust foundation upon which a sound
system of internalcontrol can be developed.
Following completion of the Company’s first year
end process for the 2021 financial year, athorough
review of controls was undertaken. An Improvement
Plan, addressing the control issues identified by
management and the internal and external auditors,
was prepared and approved by the Committee. As a
result of this review, investment has been made in
the finance team and a number of improvements
have been made to review processes.
Both management and the Committee
acknowledge that there still remains work to be
done topresent a fully effective control environment
to reduce the reliance on compensatory
procedures.
The Committee receives regular reports
throughoutthe year which provide assurance
overthe extent and performance of the control
environment, including:
– recommendation tracking reports where
thestatus update of control improvements
(including progress against the 2022
Improvement Plan), internal audit
recommendations and any recommendations
received through third party advisors is
presented;
– internal audit reports, delivered as per the Internal
Audit Plan; and
– KPMG’s external audit findings and insight from
the external audit process.
The Committee discussed the effectiveness of the
control environment in relation to the 2022 financial
year and concluded that, with the support from the
compensatory procedures and reviews in place, the
internal control environment was effective. The
Committee noted that although good progress had
been made against the Improvement Plan, further
improvement is still needed to reduce the reliance
on compensatory procedures. Delivery of the
Improvement Plan will continue to be closely
monitored by the Committee through 2023.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 97
Responsible Business Committee report
The Committee will continue to closely monitor the
implementation and development of our
Responsible Business Strategy over the coming
year, along with monitoring our performance on
ESG matters. Communication and engagement will
also be a key focus for 2023.
Further information on the Responsible Business
Strategy can be found on our website at
www.wickesplc.co.uk or on pages 33-53.
Sonita Alleyne
Chair of the Responsible Business Committee
22 March 2023
Dear Shareholder,
It gives me great pleasure to present my second
Responsible Business Committee report, covering
the year ended 31 December 2022. During the year,
we covered the full breadth of ESG matters
contained within the Responsible Business Strategy
and I am pleased with the great progress that has
been made.
It has also given me great pleasure to see the
number of external awards that have been given
tothe business and individual colleagues thisyear
giving well deserved recognition of Wickes’ inclusive
and diverse culture.
The separation of our standalone HR systems has
giventhe business greater control over the data
thatwe collect from colleagues and we have seen
an improvement in our baseline data on gender
andethnic background this year, which will help
usto monitor performance more accurately and
develop our future targets.
Our Early Careers proposition, which is essential
toattract the talent that the business needs and
tohelp create our diverse talent pipelines, has
continued to develop and we expect to start seeing
the benefits from our focus in this area.
Submitting and receiving approval of our first
near-term Science Based Targets this year, in such
a short period oftime since listing, has been a huge
achievement to demonstrating the commitment of
thebusiness to reducing our impact on the
environment. There is still work to be done by the
Committee to monitor our progress against the
roadmap and achieve the targets.
We also completed our first CDP submission this
year and received a B- score, which sits in the
‘management’ category. It is our aim to continue
improving and to achieve a ‘leadership’ rating over
the coming years.
Significant progress has been made on the Homes
pillar of our Responsible Business Strategy this year
and the recent launch of our interactive Sustainable
House Guide and energy saving advice pages on
the customer facing website have been an exciting
development. I look forward to seeing the positive
impact that sharing this knowledge will have on
customers and colleagues to help them save
money and make more sustainable choices during
the costof living crisis and rising energy costs.
RESPONSIBLE BUSINESS
COMMITTEE REPORT
Committee members
Sonita Alleyne, Chair of the Committee Chair,
independent Non-executive Director
Christopher Rogers, Chair of the Board
Mark Clare, Senior Independent Non-executive Director
Mike Iddon, independent Non-executive Director
Sonita Alleyne
Chair of the Responsible Business
Committee
We have continued to move at pace this
year todevelop plans to reduce our impact
on the environment and to help customers
to decarbonise their homes whilst protecting
our unique and inclusive culture.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202298
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 page 77. The CEO is not a
member of the Committee but, along with other key
members of management, is invited to and attends
all meetings to provide valuable operational insight
and feedback on performance against the
Responsible Business Strategy. You can find details
of meetings and attendance on page 80.
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, and include the following:
– oversee the Group’s conduct with regard to its
ESG obligations as a responsible corporate
citizen;
– review and approve the strategy for managing the
Group’s ESG responsibilities in such a way as to
build trust and confidence;
– approve ESG targets to support the Responsible
Business Strategy and monitor progress against
agreed performance measures;
– review and monitor the Group’s responsible
business disclosures, including carbon
disclosures and climate-related financial
disclosures consistent with the Task Force on
Climate-related Financial Disclosures (TCFD)
recommendations and recommended
disclosures;
– monitor the Group’s responsible business
engagement and communications with its
stakeholders; and
– recommend ESG targets for executive
remuneration purposes to the Remuneration
Committee.
Proportion of time spent by the Committee
16%
Remuneration
Targets
7%
Governance
77%
Strategy & performance
Work of the Committee
The Committee held four scheduled meetings
during the period ended 31 December 2022 and
over the course of the year 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.
People
During the year, the Committee received regular
updates from the Chief People Officer on people
matters, in particular on the progress to collect
better colleague gender and diversity data. The
launch of the new standalone HR systems this year
has greatly assisted with this data collection
exercise, as well as data being published from the
2021 Census. Now that we have established a good
baseline of colleague data, the Committee expects
to be able to set more focused targets to drive
progression in this area of the strategy in 2023
andbeyond.
The Committee received updates on the Inclusion
and Diversity (I&D) Policy and the work undertaken
by the six colleague-led I&D networks to support
meaningful change for colleagues. The Committee
commended the wide number of external
recognition awards for inclusivity, diversity and
wellbeing that had been received by the business
and a variety of individuals, including network leads,
during the year. The Committee received updates
on the communication strategy and supported the
bold event messaging used at Brighton Pride, which
received national media coverage.
The Committee also considered the results of the
‘Your Say, Our Future’ colleague engagement survey
and the outputs from a colleague cost of living
working group, including initiatives undertaken to
support colleagues facing the cost of living crisis.
Updates on our Early Careers proposition, which
includes apprenticeships, traineeships and graduate
placements, were presented to the Committee,
which reflected the Board’s commitment to building
skills in local communities. More information on the
Early Careers proposition is set out on page 36.
Regular updates were also received by the
Committee on fundraising for the charity partnership
with YoungMinds and the success of the Wickes
Community Programme. The Committee also
supported the ‘50p ask’ fundraising initiative, in
partnership with UNICEF, which took place in stores
in response to the conflict in Ukraine, and the Mission
Christmas campaign, creating gift ‘drop-off’ points in
stores for customers and colleagues to donate
Christmas gifts to children of families in crisis.
Environment
A significant amount of the Committee’s time has
been spent this year on the Environment pillar of the
Responsible Business Strategy, which reflects the
desire of the business to demonstrate its
commitment to tackling climate change and
reducing its impact on the natural environment.
The Committee oversaw the submission of our first
near-term Science Based Targets, which are set
against a 2021 baseline, receiving regular updates
on progress leading up to approval being received in
September 2022. It is a significant achievement to
have received approval of our three targets by the
Science Based Targets initiative (SBTi) within
18 months of listing and it aligns the Company with
other businesses in the UK that are also committed
to reducing emissions by 2030 and support the
Paris Climate Agreement to limit global temperature
rises to 1.5ºC.
The Committee has also considered our approach
to managing climate-related risks and is satisfied
that good progress continues to be made on
understanding and managing these risks in the
business, including developing a supply chain risk
profile. Further information on the TCFD can be
found on pages 45-50.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 99
SCAN ME
ENERGY SAVING ADVICE
Read our energy saving hints, tips and
projects to improve the energy rating of
yourproperty and help save you money on
energy bills.
Homes
Towards the end of the year, the Committee
received a detailed briefing from management on
the development of the Homes pillar of the
Responsible Business Strategy, focusing on the
opportunities and challenges of our sustainable
products and new installation opportunities, as well
as reviewing our communications of the newly
launched Sustainable House Guide on our customer
website at www.wickes.co.uk/sustainable-house
The Committee discussed the opportunities to
support colleagues and customers to select the
most sustainable products for their needs. In
addition to the interactive Sustainable House Guide,
specific energy saving advice has been added to the
website during the year, with a view to improving
awareness and education on energy saving
initiatives. The small changes recommended
through the advice and guidance content will help
customers to lower their personal environmental
impact and carbon emissions, and save money on
energy consumption during the cost of living crisis.
In addition to the key matters discussed above,
during the year the Committee also reviewed its
Terms of Reference, considered stakeholder views
and reviewed market trends and developments on
ESG matters.
More information on our Responsible Business
Strategy and work is set out on pages 33-53.
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 101-114.
Responsible Business Committee report continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022100
Directors' Remuneration report
Mark Clare
Chair of the Remuneration
Committee
Committee members
Mark Clare, Senior Independent Non-executive
Director and Committee Chair
Christopher Rogers, Chair of the Board
Sonita Alleyne, independent Non-executive Director
Mike Iddon, independent Non-executive Director
Dear Shareholder,
On behalf of the Remuneration Committee,
Iampleased to present the 2023 Directors’
Remuneration report for Wickes Group Plc.
Thereport covers three areas:
– A summary of the pay outcomes for FY2022,
andour approach for FY2023.
– A summary of our Directors’ Remuneration
Policy– the Company’s Directors’
RemunerationPolicy (the 'Policy') was approved
at the 2022 Annual General Meeting. A copy of
our full Policy is available on our website.
– The annual Directors’ Remuneration Report –
thissummarises the remuneration outcomes for
FY2022 and explains how we intend to apply the
Remuneration Policy in FY2023.
As our second year as a listed company, 2022
hasbeen a year of both economic and political
uncertainty following the Russian invasion of
Ukraine, resulting in rising inflation which has put
significant pressure on household finances. As we
continue to face into these challenges as a
business, we remain focused on supporting our
customers and colleagues with the challenges
associated with the cost of living crisis.
REMUNERATION COMMITTEE
REPORT
Our approach to remuneration as a Group
continuesto be guided by a set of reward principles
that are aligned to our business strategy. For
executives, pay is governed by our Remuneration
Policy, approved by Shareholders in 2022. Our key
focus for 2023 is effective implementation of this
Policy, for example by evolving our performance
measures to ensure they reflect our wider ESG
priorities and ensuring we continue to set pay at a
competitive level.
During the year there have been no changes to
membership of the Remuneration Committee,
which remains focused on maintaining an open
dialogue with Shareholders.
Reward and benefits across the Group in 2022
The Group provided meaningful andpractical
support to help colleagues with the cost of living
crisis, whilst rewarding them for their contribution
and maintaining our approach to fair pay. Further
details of our approach to colleague reward and
wellbeing, and our initiatives to help colleagues with
cost of living can be found on page112.
£3.5m
invested in bringing forward annual pay
review from April 2023 to January 2023
for our lower paid colleagues
18,542
food items ordered as part of our
‘Breakfast on Us’ food provision
introduced to stores in October
£2.97m
saved by colleagues on Wickes colleague
discount during 2022, including £750,805
alone in our October cost of living
promotion
5.8%
reduction in our median gender pay gap
from 8.4% to 2.6%
We remain focused on supporting
our customers and colleagues with
the challenges associated with the
cost of living crisis
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 101
Remuneration report continued
Responsible Business
Through our apprenticeship schemes and Kick Start programmes, we have created opportunities to attract
a significantly more diverse workforce. We also have graduate and specialist rotation programmes, which
help us to build our colleague capability and deliver our business strategy. In 2022, the Board has
committed to offering 200 early careers places each year over the next three years and has so far offered
172 places.
During 2022 we continued to develop and embed our Responsible Business Strategy. We have announced
our near term Science Based Targets to reduce our absolute emissions across our business and supply
chain by 2030.
Going forward, this work will form the basis of the targets for carbon reduction across the business and for
2023 these will be included as part of the Company's Long Term Incentive Plan (LTIP) for the first time.
Group performance highlights for 2022
During 2022, we maintained our market leading position, delivering record sales of £1,559.0m. The
uncertain economic environment has led to a material increase in our cost base, and as a result profits
were impacted.
£1,559.0m
adjusted revenue (2021: £1,534.9m)
£75.4m
profit before tax (adjusted) (2021: £85.0m)
£29.0m
free cash flow (2021: £16.6m)
23.8p
adjusted basic earnings per share (2021: 27.2p)
Shareholder experience in 2022
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 2021.
Recognition and retention
Against the backdrop of a challenging environment the Committee has been keen to focus on ensuring the
continued recognition of all our colleagues for their hard work in 2022.
Looking forward, the Committee also recognises the importance of retaining our high-performance teams
across the business and is taking appropriate action where it deems it necessary.
EXECUTIVE REMUNERATION IN 2022
Basic salary
From 1 April 2022, the annual salary for David Wood was increased by 2.5% to £507,375, in line with the
rateapplied to the wider workforce. Mark George joined the Company on 6 July 2022 on an annual salary
of£375,000.
Annual bonus outturn
The 2022 annual bonus paid out at 4.66% of maximum based on achievement of the ESG targets,
comprised of both people and environmental measures. There was no payout earned against the profit
andcash flow targets:
Of the 4 ESG measures, payout was achieved against 3 of these:
1.33%
ESG - People
% female representation in store leadership
2.5%
ESG – Environment
Carbon Disclosure Project scoring
0.83%
ESG – Environment
Store energy reduction
4.66%
Total % achievement of bonus in ESG
Further details on performance outturns can be found on page 106.
The Committee considered the results against the targets and has not exercised discretion in relation to the
bonus payout.
For the wider annual bonus eligible population below the Executive Directors, a 'recognition payment' was
made to those eligible under the plan to reflect their contribution during the year. Colleagues were awarded
a higher percentage payment than senior management in line with fair pay principles.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022102
LTIP and Transitional Award grants
As set out in last year's Annual Report and Accounts, the Committee made a grant of LTIP awards to
executives and senior management in 2021 known as ‘Transitional Awards’. These awards were put in
place to ensure continuity of incentives to the senior team post demerger. David Wood’s award was 391,614
options and Julie Wirth’s award was 237,342. The awards vest in two equal tranches. The first tranche
vested in April 2022, following achievement of the performance hurdles. The second tranche is due to vest
in April 2023 for David Wood, subject to achievement of the performance hurdles. The second tranche
lapsed for Julie Wirth in line with the departure terms agreed. These awards are subject to a two year
holding period for executives. Further details on these awards can be found on page 106.
2022 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. The Committee is
conscious that the share price used for the September 2022 award for Mark George was 33.15% lower than
the share price used to determine award levels for the primary grant in March 2022. In this context, the
Committee carefully considered whether it should scale back the grant of the award, but considered it
inappropriate to do so at the time. The Committee will, however, review the payout at vesting, and consider
whether Mark George has benefited from ‘windfall gains’, in which case the intention would be to scale back
vesting levels. More details on the performance measures and targets are set out on page 108.
Management changes
Mark George was appointed to the Board as Chief Financial Officer with effect from 6 July 2022. His
remuneration arrangements were disclosed as part of our Annual Report and Accounts 2021. His
predecessor, Julie Wirth, retired from the Company on 31 July 2022. Further details on the remuneration
arrangements in respect of Mark’s employment and Julie’s departure are set out on pages 108 and 106.
OUR APPROACH TO REMUNERATION IN 2023
As set out earlier in my statement, our Remuneration Policy is unchanged for 2023.
Both Executive Directors will receive a 4% salary increase in April 2023. This is below the average increase
of more than 8% awarded to the wider workforce as part of the annual review, which was also brought
forward to January 2023 to help with the cost of living.
2023 annual bonus
The operation of the annual bonus in 2023 will continue broadly unchanged. The maximum opportunity
willcontinue to be 140% of base salary (Chief Executive) and 120% of base salary (Chief Financial Officer).
The bonus for the 2023 financial year 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 109.
2023 LTIP
To further strengthen the link between our ESG priorities as a business and remuneration, the 2023 LTIP
will incorporate an additional ESG measure based on our approved near-term Science Based Targets. The
revised targets under the plan will be weighted 60% on Adjusted Basic Earnings per Share (EPS), 30% on
Total Shareholder Return (TSR), and 10% on ESG. The face value of the award will remain unchanged at
175% to David Wood and 150% to Mark George, in line with Policy.
Like the 2022 awards, the performance range has been set to reflect the Company plan and consensus
forecasts whilst recognising the greater levels of uncertainty over the longer-term. Further details on the
2023 LTIP measures and targets can be found on page 110.
Below the Executive Director level, the Committee has worked with the management team to expand the use
of share awards including schemes aimed at securing key talent in critical roles, allowing greater share
ownership and alignment with Shareholder value.
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 112. On behalf of the Board, I invite you to read
our Remuneration report and welcome your feedback.
Mark Clare
Chair of the Remuneration Committee
22 March 2023 
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 103
Our remuneration philosophy
Our approach to executive
remuneration is underpinned
byaset of reward principles
thatare aligned with our
businessstrategy.
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.
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*
Environment**
* Based on our inclusion and diversity targets in relation to gender mix in management roles
** Based on our approved Science Based Targets for carbon reduction
ALIGNMENT BETWEEN THE REMUNERATION
POLICY ANDWICKES' BUSINESS STRATEGY
The chart below sets out our overall remuneration philosophy
and its alignment to the Wickes' business strategy.
We aim to set pay at a market
competitive level across the
business, and fairly recognise
and reward colleagues for their
individual contribution
All colleagues are eligible to
participate in a performance-
based incentive plan
Bonuses for senior leadership
are based on profit and cash
– two of Wickes’ key financial
performance indicators
Good performance is not just
about profitable growth – our
incentive programmes include
ESG goals toencourage actions
that benefit theenvironment and
ourcolleagues (see pages
109-110)
Our incentives are based
on realistic but stretching
performance targets
Colleagues are encouraged to act
within the business’s risk appetite
Wickes SAYE enables all
colleagues to participate in
our success (seepage112)
Our LTIP measures encourage
focus on growth in Shareholder
returns, bottom line profitability
and carbon reduction targets
(seepage 110)
Align the interests
of employees and
shareholders
through share
ownership
Support the
Company’s approach
to risk, ensuring that
any are identified
and mitigated
Provide
competitive,
transparent and
fair rewards
Reward achievement
of short and long
term financial
objectives, and
delivery of business
strategy
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022104
Annual Report on Remuneration
Single total figure of remuneration (audited)
The table below sets out the remuneration received by the Directors in respect of the year ended 31 December 2022.
Salary/Fees
1
£’000
Benefits
1,2
£’000
Pension
1,3
£’000
Bonus
4
£’000
Long term incentives
5
£’000
Other
£’000
6
Total fixed
remuneration
£’000
Total variable
remuneration
£’000
Total remuneration
£’000
Director 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Executive Directors
David Wood 504 378 13 10 50 38 33 547 264 384 0 0 567 426 297 931 864 1,357
Mark George 183 – 6 – 16 – 10 – 0 – 184 – 205 – 194 – 399 –
Julie Wirth 204 261 8 13 18 28 0 332 0 232 0 0 230 302 0 564 230 866
Non-executive Directors
Christopher Rogers
7
188 144 0 0 0 0 0 0 0 0 0 0 188 144 0 0 188 144
Mark Clare
7
74 66 0 0 0 0 0 0 0 0 0 0 74 66 0 0 74 66
Sonita Alleyne
7
66 54 0 0 0 0 0 0 0 0 0 0 66 54 0 0 66 54
Mike Iddon
7
66 54 0 0 0 0 0 0 0 0 0 0 66 54 0 0 66 54
Total current Directors
8
1,081 957 19 23 66 66 43 879 264 616 184 0 1,166 1,046 491 1,495 1,657 2,541
Directors of the Company prior to the demerger
Alan Williams
9
– 1 – 0 – 0 – 0 – 0 – 0 – 0 – 0 – 1
Total – 1 – 0 – 0 – 0 – 0 – 0 – 0 – 0 – 1
1 For David Wood, base salary, benefit and pension figures relate to the full financial year. For Mark George, figures reflect the date he became a Director of Wickes Group Plc (6 July 2022). For Julie Wirth, figures reflect the period up to 31 July 2022, which was her leaving date. Please note that
the 2021 salary, benefits and pension figures for David Wood and Julie Wirth relate to the period 23 March 2021 to year end, reflecting the date they became Directors of Wickes Group Plc, as disclosed in last year's Annual Report and Accounts.
2 Includes the cost to the Company of private medical insurance and company car benefit. David Wood and Julie Wirth also received a fuel allowance.
3 Pension contributions equal to 10% of base salary were paid in cash in respect of 2022, in line with the maximum rate available to the wider workforce.
4 One third of bonus earned will be deferred into shares, in line with Policy.
5 For David Wood, figures relate to the second tranche of the Transitional Award due to vest on 28 April 2023 (subject to achievement of the performance underpin). The award has been valued using the average three-month share price to 31 December 2022 of £1.354 (see further details on
page106). Please note that the estimated figures disclosed in the previous Annual Report for the 2021 Transitional Award vesting have been restated to reflect the share price on the date of vesting. The estimated share price used was £2.260 and the actual share price on vesting was £1.960.
The differences in value were £58,742.10 for David Wood and £35,601.30 for Julie Wirth.
6 Mark George received a one-off cash buyout award upon joining of £183,973 (see further details on page 108).
7 The 2021 fees shown for Christopher Rogers, Mark Clare, Sonita Alleyne and Mike Iddon relate to the period each of them commenced qualifying services during 2021, as disclosed in last year's report.
8 The 2022 totals exclude Julie Wirth.
9 Alan Williams resigned as a Director of the Company on 23 March 2021. In the period from 27 December 2020 to 23 March 2021, he carried out administrative services for the Company and its subsidiaries.
Base salary
Salary effective from
1 April 2022
David Wood £507,375
Mark George £375,000
1
1 Since appointment as Chief Financial Officer on 6 July 2022.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 105
Annual Report on Remuneration continued
Benefits
For 2022, 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 in cash in
respect of 2022, 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 2022:
Measure
Weighting %
of bonus Threshold On-target Maximum Actual
%
achievement
of bonus
Discretion or
adjustment to
targets?
Profit before tax
(adjusted)* 70% £85.6m £90.1m £99.1m £75.4m 0% N
Free cash flow** 20% £57.3m £63.7m £76.4m £29.0m 0% N
ESG
% female
representation in store
leadership 2.5% 29% 30% 32% 30.26% 1.33% N
% female
representation in
Support Centre
management 2.5% 46% 47.9% 49% 44.31% 0% N
Carbon Disclosure
Project scoring 2.5% D- D C- B- 2.5% N
Store energy
reduction 2.5% 2% 3% 5% 2.28% 0.83% N
Total outturn 100% 4.66%
* Excludes adjusting costs such as demerger costs and IT separation costs.
** The increase in cash from operating activity less capital investment and excludes adjusting items, dividends and share purchases.
Further details on performance against the ESG targets is below:
– % female representation in store leadership: We saw a positive increase of 21 females during the year,
partly due to a higher female internal promotion rate for Operations Managers.
– % female representation in Support Centre management: We saw a positive increase of 7 females during
the year, however the percentage increase in the number of males was higher.
– Carbon Disclosure Project scoring: We received a B- scoring for our first CDP disclosure as an
independent business, which is above maximum target. Effective management of our climate risks and
opportunities was a key factor.
– Store energy reduction: We reduced electric and gas primarily through the focus given to this by our store
teams.
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 awards were granted to ensure the remuneration
offering remains market competitive during these first few years of operation and to reward management
for their role in the demerger and transformation of Wickes into an independent listed business.
Vesting of the Transitional Awards is dependent on achievement of the following performance underpin conditions:
– Personal performance
– Underlying corporate performance:
– For T1: 70% of the 2021 bonus profit target (£66.2m)
– For T2: 70% of the 2022 bonus profit target (£63.1m)
– Any Shareholder concerns
– Any other factors the Committee may consider relevant.
In the case of significant failure on the part of the Company or the participant, vesting may be reduced,
including to nil.
The first tranche (T1) of the Transitional Awards vested in full on 28 April 2022 following achievement of the
performance conditions outlined above. The 2021 bonus profit outcome was £116.3m.
The second tranche (T2) is due to vest for David Wood on 28 April 2023 based on achievement of the
performance conditions. The corporate performance element of the underpin for the second tranche of the
Transitional Awards has been met. A final decision on the underpin will be made on 28 April 2023. The share price
used to value the awards for the purpose of the single figure was £1.354 compared to a share price of £2.212 on
the date of the award. Therefore, no portion of the value disclosed is attributable to share price appreciation.
Payments to past Directors and payments for loss of office (audited)
As disclosed in last year’s Directors’ Remuneration Report, Julie Wirth retired as Chief Financial Officer
from 31 July 2022. The Remuneration Committee determined that Julie Wirth would receive good leaver
status only in respect of the incentives where the performance period was fully completed at the date of
leaving and only to the extent that the associated performance conditions were met. All other terms were
operated in line with those previously disclosed:
– Base salary and associated benefits were paid until the leaving date.
– No eligibility to receive a bonus in respect of the period of 2022 served in role.
– No eligibility to receive an LTIP grant in 2022.
– The 2021 LTIP award lapsed in full.
– The second tranche of the Transitional Awards (awarded in respect of the demerger from Travis Perkins
Plc) lapsed in full.
The following incentives were permitted to vest:
– The first tranche of the Transitional Awards.
– The 2021 bonus (including deferred element).
There were no other payments made for loss of office or to past Directors.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022106
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 – 2022
Director 31 Dec 2022 31 Dec 2021 Exercised
Vested but not
exercised
Unvested and
subject to
continued
employment
Unvested and
subject to
performance
Shareholding
requirement
Deferred annual
bonus plan (DABP)
Shareholding as %
of salary
Executive Directors
David Wood 367,436 16,615 204,303 0 0 1,078,475 200% 99,169 121%
Mark George 0 – 0 0 148,114 454,362 200% 0 0%
Julie Wirth
1
6,067 6,067 0 123,820 0 0 – 60,102 –
Non-executive Directors
Christopher Rogers 71,272 71,272 0 0 0 0 – – –
Mark Clare 42,797 40,000 0 0 0 0 – – –
Sonita Alleyne 0 0 0 0 0 0 – – –
Mike Iddon 0 0 0 0 0 0 – – –
1 The figures shown for Julie Wirth relate to her shareholding at her departure date of 31 July 2022. In line with Policy, post-departure Julie Wirth is expected to retain the lower of 100% of her actual shareholding at cessation and 200% of salary, for two years after leaving.
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 £1.463. There have been no changes in the shareholding of Directors between 31 December 2022 and the date
this report is signed.
The Executive Directors have five years to meet their shareholding guidelines, in line with Policy.
Share awards made during the financial year (audited)
The below table summarises the terms for the long term incentives and deferred annual bonus plan (DABP) awarded to Directors during 2022.
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 31/03/22 482,557 175% £887,905 1/1/22–31/12/24 31/03/25 2 years
David Wood Nil cost option DABP 31/03/22 99,169 36% £182,471 n/a 31/03/25 n/a
Mark George Nil cost option LTIP 28/09/22 454,362 150% £558,865 1/1/22–31/12/24 28/09/25 2 years
Mark George
1
Nil cost option Listing Rule 9.4.2
buyout award –
Tranche 1 28/09/22 101,216 33% £124,496 n/a 09/09/23 2 years
Mark George
1
Nil cost option Listing Rule 9.4.2
buyout award –
Tranche 2 28/09/22 46,898 15% £57,685 n/a 25/03/24 2 years
Julie Wirth Nil cost option DABP 31/03/22 60,102 32% £110,588 n/a 31/03/25 n/a
1 No further conditions apply to these awards.
The number of shares under award for David Wood and Julie Wirth’s awards was calculated using a share price of £1.845, being the closing market price of the Company’s shares on the dealing day immediately
preceding the grant date. The number of shares under award for Mark George was calculated using a share price of £1.238, being the closing market price of the Company’s shares on the dealing day immediately
preceding the grant date.
The Company's share plan rules are available from the Company Secretary on request.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 107
Annual Report on Remuneration continued
2022 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. The Committee is conscious
that the share price used for the September 2022 award for the CFO was 33.15% lower than the share
priceused to determine award levels for the primary grant in March 2022. In this context, the Committee
carefully considered whether it should scale back the grant of the award, but considered it inappropriate
todo so at the time. The Committee will, however, review the payout at vesting, and consider whether the
CFO has benefited from ‘windfall gains’, in which case the intention would be to scale back vesting levels.
Performance conditions attached to long term incentive awards granted during 2022
Measure Weighting Threshold Maximum
Vesting at
threshold
Vesting at
maximum
Adjusted basic EPS in FY2024 70% 27.2p 32.9p 20% 100%
Relative TSR vs constituents of the
FTSE 250 (excluding investment
trusts) 30% Median
Upper
quartile 20% 100%
Note – Vesting is on a straight line basis between threshold and maximum.
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 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.
The adjusted basic EPS targets were set with a narrower range in 2022 compared with 2021, where a wider
range was applied to provide for the uncertainty of the first year of operation as a demerged business and
in part to reflect the uncertainty of future trading conditions in relation to the pandemic.
CFO remuneration arrangements
Mark George was appointed to the Board as Chief Financial Officer with effect from 6 July 2022. Mark was
appointed on an annual base salary of £375,000. The Committee recognised that Mark’s base salary was
set at a level above the previous CFO’s salary but the Committee considers this appropriate taking into
account a number of factors including Mark’s prior experience as CFO of a listed business. Mark’s incentive
arrangements are in line with the Remuneration Policy.
The Remuneration Committee agreed to buy out some of The Gym Group incentive awards forfeited by
Mark. Upon appointment, Mark received a cash payment of £183,973, made up of £115,223 to replace his
forfeited 2021 Gym Group bonus in full, and £68,750 as a partial buyout of his 2022 bonus. In September
2023, Mark was awarded a total of 148,114 Wickes shares to replace his foregone 2020 and 2021 The Gym
Group LTIPs. A total of 101,216 shares are due to vest on 9 September 2023 and a total of 46,898 shares
are due to vest on 25 March 2024. The performance conditions associated with Mark’s 2019 The Gym
Group LTIP were not met, therefore no buyout award was made. None of these payments are pensionable.
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 2022 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
Apr
2021
May
2021
Jun
2021
Jul
2021
Aug
2021
Sep
2021
Oct
2021
Nov
2021
Dec
2021
Apr
2022
Mar
2022
Feb
2022
Jan
2022
May
2022
Jun
2022
Jul
2022
Aug
202
Sep
2022
Oct
2022
Nov
2022
Dec
2022
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 2022 864 4.66% 100%
David Wood 2021 1,357 79% 100%
* Note – the LTIP values relates to the Transitional Awards. The first tranche vested on 28 April 2022. The second tranche is due to vest on
28 April 2023 (subject to achievement of the performance underpin).
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' and Director, 'Dremt Consulting Ltd'. David Wood was paid a fee of £71,500 by 'Green Sheep Group Ltd'
1. Mark George served as Director, 'HMNG Ltd', Director, 'The Prentice and Seabright Cups Ltd' 2 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.
2 Position commenced on 27 May 2022.
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 10 year period, with a
further limitation of 5% in any ten year period for executive plans.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022108
Directors' Remuneration Policy
Implementation of Executive Remuneration Policy in 2023
The table below summarises the key elements of the Company’s Directors’ Remuneration Policy approved at the 2022 AGM and its proposed application in 2023. The full Policy wording, including details pertaining to
malus and clawback, is set out in the 2021 Annual Report and Accounts which is available on the Company’s website https://www.wickesplc.co.uk/investors/investors-overview/. When implementing the Policy, the
Remuneration Committee considered the Company’s remuneration principles on page 104 and the six factors listed under Provision 40 of the UK Corporate Governance Code. Further details of how our Policy aligns to
these six factors can be found in the full Policy on our website.
Policy element Statement of implementation of the Directors’ Remuneration Policy in 2023
BASE SALARY
To provide fixed remuneration that will attract and retain the executive talent required to execute our
strategy.
There is no maximum salary, or maximum salary increase level. Salary increases will generally be in line
withincreases awarded to the wider workforce. However, as with all employees, the Committee may make
increases above this level in specific circumstances such as: stepped or one-off increases to bring a recently
appointed executive’s salary up to targeted/market levels; an increase in the scope or responsibilities of the
role; an increase to the size/complexity of the business; increases in market pay levels.
Base salary levels are reviewed in the context of the potential value of the total remuneration package.
– Base salary for the CEO will be increased by 4% to £527,670 from 1 April 2023.
– Base salary for the CFO will be increased by 4% to £390,000 from 1 April 2023.
Both increases are below the average increase awarded to the wider workforce in 2023 of more than 8%.
PENSION
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.
There are no changes to the pension provision which will continue to be 10% of base salary in line with the
maximum rate available to the wider workforce.
BENEFITS
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.
There are no changes to the benefits provision for Executive Directors which includes family private
medical, life assurance, income protection and a company car or car allowance.
ANNUAL BONUS
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 Plc shares aligns Executive Directors with
Shareholder interests over the long term.
The maximum opportunity for the Chief Executive Officer is 140% 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.
– The annual bonus will continue to operate in line with the framework set out in the Policy table. The
maximum opportunity will continue to be 140% of salary for the CEO and 120% of salary for the CFO.
– The performance focus areas and weightings will remain broadly the same as for 2022: 70% profit
before tax (adjusted), 20% free cash flow, 10% ESG.
– The ESG targets will be focused on the gender balance of our management populations which forms
part of our wider ESG strategy.
– Due to commercial sensitivity, the performance targets for the financial metrics will be disclosed
retrospectively.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 109
Annual Report on Remuneration continued
LONG TERM INCENTIVES
To incentivise and reward long term Shareholder value creation.
Enables Executive Directors to build meaningful long term Wickes Group shareholdings, and further
align the interests of the Executive Directors with Shareholders.
The maximum annual LTIP opportunity under the rules of the plan is 200% of base salary.
The ongoing LTIP opportunity for the Chief Executive Officer is 175% 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.
– The LTIP will continue to operate in line with the framework set out in the Policy table. The maximum
opportunity will continue to be 175% of salary for the CEO and 150% of salary for the CFO.
– The performance metrics and weightings will be updated to incorporate an additional ESG measure
based on our approved Science Based Targets, and become 60% adjusted basic EPS, 30% Relative
TSR, 10% ESG.
– The adjusted basic EPS performance range has been widened to reflect greater uncertainty over the
longer-term.
– The performance targets for FY2023 LTIP awards are as detailed below the table.
Measure and weighting Threshold (20% vesting) Maximum (100% vesting)
Adjusted basic EPS growth (60%) 16.3 22.1
Relative TSR (30%) Median Ranking Upper Quartile Ranking
ESG – Science Based Targets (10%) See below
* We intend to make awards in line with Policy at levels no more than the maximum face values referred to above. Specific details will be
confirmed in the RNS shortly after grant.
ESG targets (10%)
The ESG target is based on Wickes' approved near-term Science Based Targets covering Operations,
Suppliers and Products, as detailed on page 40 within this report. The expected progress and milestones
associated with each of these longer term targets has been used to set the three year targets that apply
over the period FY2023 to FY2025, as detailed below:
– 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.
The performance targets for each of these measures hold equal weighting:
Measure and weighting Threshold (20% vesting) Maximum (100% vesting)
Target 1 – Operations (3.33%) 22.5% 27.5%
Target 2 – Suppliers (3.33%) 27.0% 33.0%
Target 3 – Products (3.33%) 14.4% 17.6%
Note: Should there be a significant change to the business that results in rebasing of the Company's near-term Science Based Targets, the
remuneration targets will be adjusted accordingly.
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Wickes Group Plc Annual Report and Accounts 2022110
EMPLOYMENT SHAREHOLDING GUIDELINES AND POST-CESSATION SHAREHOLDING GUIDELINES
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. Newly appointed Executive Directors are expected to build up this shareholding within five years of appointment.
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.
The Committee retains discretion to adjust the formulaic outcomes under the annual bonus and LTIP and both annual bonus and LTIP contain malus and clawback provisions.
Implementation of Non-executive Director Policy in 2023
Non-executive Director fees will be increased by 4% from 1 April 2023 in line with the wider workforce. Fees as at 1 April 2023 are set out below:
Role Fee level per annum
Basic non-Executive Director £58,630
Chair of the Board £197,210
Senior Independent Director £7,995
Chair of a Committee £10,660
In line with our Policy, reimbursement of reasonable expenses in relation to Non-executive duties may be paid.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 111
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 the year, we recognised that higher cost of
living would have a greater impact on our lower paid
colleagues. Basic pay was increased by more than
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.
For our management and head office populations,
we implemented a 5% salary increase for 2023.
With fairness in mind, this was higher than the
Executive Directors and senior management who
were awarded 4%.
Although the financial targets were not met under
the 2022 central colleague annual bonus plan, it
was decided a small 'recognition payment' would be
made to those eligible under the plan, in recognition
of their contribution during the year. Colleagues
were awarded a higher percentage payment than
senior management, in line with our approach to fair
pay.
We have invested over £3.5m in
bringing forward the annual salary
review for our store colleagues.
We set up a cost of living working group to develop
meaningful support for colleagues. We adjusted our
store ‘Gainshare’ incentive targets to reflect
economic conditions, which led to 4,843 additional
payments to colleagues totalling over £240,000.
Having listened to colleagues’ concerns around
food prices, we introduced 'Breakfast on Us', our
free food provision for store colleagues, and saw
18,542 food items ordered in the first quarter of the
scheme. Our colleague discount remains hugely
popular with our colleagues, and our October
promotion alone saw colleagues save a total of
£745,579.
In September, we introduced our second SAYE plan,
as a further means of strengthening the link
between colleagues’ interests and those of
Shareholders. A total of 1,644 (20% of eligible
colleagues) joined the 2022 plan, resulting in 2,200
colleagues (over 26% of total workforce) paying into
either the 2021 or 2022 plans.
Over 26% of our total workforce are in
either the 2021 or 2022 SAYE plans.
26%
Our colleague reward strategy was recognised at
the 2022 Reward Strategy magazine awards.
Gender pay gap
We continue to focus on reducing our gender pay
gap at all levels of the business, and in 2022 the
ESG element of the executive bonus plan included
specific targets relating to female representation
in management roles within the Support Centre
and store management populations.
In December 2022, we published our second
gender pay gap report as an independent
business. We reported a significant 5.8% reduction
in our median pay gap to 2.57%, from 8.36% in
2021. We also saw a modest increase in our mean
gender pay gap from 6.44% to 7.42%. This is
mainly down to a slight change in our executive
and senior leader composition as our headcount
has grown at that level.
5.8%
Reduction in our gender pay gap (median)
Our Winning Behaviours
Our business is powered by highly engaged teams
who operate around a set of simple principles.
See more on our Winning Behaviours on page 81.
Engagement with Shareholders
In our engagements with Shareholders since listing
we have had a number of discussions on the use
ofESG measures in remuneration targets.
Shareholders are increasingly wanting to see ESG
linkage to remuneration and we have taken this
feedback on board, initially through our bonus
scheme and going forward also through our LTIP.
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 places 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
employee views, takes the lead on ensuring these
are heard by the Board (see page 39 of the Annual
Report and Accounts 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 November 2022
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022112
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 2022,
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
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 2022 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 a reduction in the CEO pay ratio in 2022 compared with 2021, which is mainly reflective of
the lower executive annual bonus outcome in 2022.
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 2022 is consistent with the pay and
progression policies for the Company.
P25 P50 P75
Base salary £18,967 £18,967 £25,065
Total remuneration £19,117 £20,291 £27,504
Relative importance of spend on pay
The table below illustrates the total spend on colleague remuneration in 2022 compared with other
financial dispersals.
2022
£m
2021
£m %
Total colleague cost
1
220.5 217.9 1.2%
Total distributions to Shareholders
2
31.2 5.3 488.7%
Total income taxes paid
3
4.3 14.6 (70.5%)
Total capital expenditure
4
40.4 26.5 52.5%
1 Includes social security, pensions and share-based payments (see note 8 of the financial statements)
2 (See note 26 of the financial statement)
3 (See the cash flow statement on page 130)
4 (See the cash flow statement on page 130)
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
FY2022 compared with the prior year. 
Director Salary/fee Taxable benefits Bonus
Executive Directors
David Wood
1
3.80% (2.02%) (93.95%)
Mark George
2
n/a n/a n/a
Julie Wirth
3
4.95% (21.90%) na
Non-executive Directors
Christopher Rogers
1
2.03% n/a n/a
Mark Clare
1
1.70% n/a n/a
Sonita Alleyne
1
2.49% n/a n/a
Mike Iddon
1
2.49% n/a n/a
All employees
4
3.52% n/a (12.09%)
1 Salary and benefit amounts for David Wood, Julie Wirth, Chris Rogers, Mark Clare, Sonita Alleyne and Mike Iddon have been annualised for
2021 based on their joining date with Wickes, to reflect what they would have been over a full 12 month period, to aid comparison.
2 Mark George was appointed during 2022 and therefore no annual change is shown.
3 Julie Wirth stepped down in 2022. Salary and benefit amounts have been annualised for 2022 based on her leaving date, to reflect what they
would have been over a full 12 month period. Julie Wirth did not participate in the annual bonus for 2022 therefore no annual change is shown.
4 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.2.5% for colleagues and Executive Directors as part of the 2022 annual pay review,
however due to the timing of the increases in 2022 the % change figures are different in this table.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 113
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 employees.
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 77.
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:
Jan
22
March
22
Sept
22
Nov
22
Approved Remuneration Committee Terms of Reference
Reviewed Remuneration Policy and proposals
Approved appointment terms for the new CFO and leaving terms of the
departing CFO
Approved Directors' Remuneration Report
Approved Remuneration Policy
Approved 2021 annual bonus outcome
Approved 2022 bonus and LTIP targets
Approved the Shareholding Requirements Policy
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
31December 2022
Noted the colleague SAYE plan outcome for 2022
Discussed principles for 2023 annual salary review
Discussed the gender pay gap reporting outcome for 2022
Reviewed CEO and Chair of the Board expense claims
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 2022 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
£56,116.
Shareholder voting
The table below sets out the votes on the Annual Report on Remuneration and on the Directors’ Remuneration
Policy at the 2022 AGM.
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 (2022 AGM)
162,001,102 932,920
62.75% 2,214,01499.43% 0.57%
Directors' Remuneration Policy (2022 AGM)
161,449,811 3,683,296
63.60% 14,92997.77% 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
22 March 2023
Remuneration Committee
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022114
Directors’ report
DIRECTORS’ REPORT
The Directors present their report, together with
theaudited financial accounts for the 52 weeks
ended 31 December 2022. 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 UK Corporate
Governance Code 2018.
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 page 77 together with their biographical
information. During the year, Julie Wirth resigned
asa Director of the Company on 29 July 2022 and
Mark George was appointed as a Director of the
Company on 29 July 2022. 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.
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.
The interests of the Directors who served during
theyear and their immediate families in the shares
of Wickes Group Plc, along with details of Directors’
share options, are set out in the Directors’
Remuneration report on pages 101-114.
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
The Articles contain provisions governing the
ownership and transfer of shares. As at
31 December 2022, the Company had an allotted
and fully paid issued share capital of 259,637,998
ordinary shares of 10 pence each, with an aggregate
nominal value of £25,963,800.
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 147.
As at 31 December 2022, The Wickes Employee
Benefit Trust held 5,894,719 ordinary shares (2.27%
of theissued share capital) and the Wickes Share
Incentive Plan (SIP) Trust held 924,144 ordinary
shares (0.36% 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
At the AGM on 26 May 2022, 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.
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. No shares were purchased
under that authority during the financial year.
The Company is seeking to renew these authorities
at the forthcoming AGM, within the limits set out
in the notice of that meeting and in line with the
recommendations of the Pre-Emption Group.
Significant agreements – change of control
The Company is not party to any significant
agreements that would take effect, alter or
terminate following a change of control of the
Company. 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 31 December
2022 after taxation amounts to £31.9m from
continuing operations. The Directors have declared
dividends as follows:
Ordinary shares £m
Paid interim dividend of 3.60 pence
per share
1
9.1
Proposed final dividend of 7.3 pence
per share
2
18.4
Total dividend of 10.9 pence per share
inrespect of financial year ended
31December 2022
2
27.5
1 Excludes £0.2m dividends waived.
2 Subject to Shareholder approval at the 2023 AGM, the final ordinary
dividend in respect of the 2022 financial year will be paid on
Wednesday 7 June 2023 to all Shareholderson the Register of
Members at the close of businesson Friday 21 April 2023.
Further information on dividends can be found in
note 26 to the accounts on page 149.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 115
Directors’ report continued
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.
Major Shareholders
As at 31 December 2022, the Company had been
notified of the following interests in voting rights
pursuant to Chapter 5 of the Disclosure Guidance
and Transparency Rules. Between 31 December
2022 and the date of this report, Solas Capital
Management, LLC notified the Company that it had
dropped below the 3% reporting threshold.
Ordinary shares
Number
of shares
% of
voting rights
Solas Capital
Management, LLC 7,806,924 3.01
Employment policies
The Company’s policies and related guidance are
designed to create a modern and inclusive working
environment and provide support to colleagues
through the key moments that matter in their
personal and work life and help them to feel at
home at Wickes.
Family friendly and wellbeing policies have been
designed to support colleagues’ mental health and
wellbeing as well as their financial health. Policies
encourage and promote equal treatment, and any
decisions relating to any aspect of employment are
free from bias. Colleagues feel safe in speaking up
where unacceptable behaviour is experienced.
We recognise the benefits of inclusion and diversity
within our workforce and encourage equality
oftreatment and opportunities in all aspects of
employment, including recruitment, training and
development, and promotion. This is reflected in
allemployment policies and processes which are
designed to ensure that anyone with a disability
istreated fairly and any form of discrimination is
nottolerated.
We regularly review our facilities and working
practices to ensure we cater for people with special
requirements or disabilities. 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
empowered to flourish. To achieve this, the Wickes
Ability network exists to champion each colleague’s
own ability to ensure they reach their full potential
and to highlight opportunities where we can
continue to improve.
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.
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monthly CEO Company wide updates via email,
video and town halls. We also host an annual
managers’ meeting.
We use these many communication channels
toengage colleagues in the Company’s share
schemes, thereby giving them the opportunity
toshare in thefuture success of the business and
give them a personal connection to Company
performance. More information on colleague
reward and engagement can be found inthe
Directors’ Remuneration report on pages 101-114
and the Section 172 statement on pages 55-59.
Colleagues have an opportunity to give
regularfeedback through our annual colleague
engagement surveys, topical mini surveys, listening
roadshows with our Executive team and quarterly
Employee Voice sessions. In November, we held
avirtual Employee Voice session which was
represented by 17 colleague voices, and the Plc
Board was represented by our designated
Non-executive Director for employee voice,
SonitaAlleyne. The matters raised are fed back
anddiscussed by the Board.
Human Rights and Modern Slavery Policy
The Company is opposed to all forms of
unethicalbusiness behaviour. We are committed to
ensuring there is decent, fair and safe work for all,
both directly and indirectly throughout our supply
chain, as set out in our Human Rights Policy and
Modern Slavery and Human Trafficking Policy.
Through our supplier audits we monitor human
rights standards. We recognise the harmful impact
that modern slavery has on individuals and society
and we are committed to help prevent these illegal
practices. The Company’s statement on Modern
Slavery is reviewed and approved by the Board on
an annual basis and published on the Company’s
website www.wickesplc.co.uk
Anti-bribery Policy
We have a zero-tolerance approach to bribery.
Ouranti-bribery programme is built around a clear
understanding of how and where bribery risks
affect our business and comprises key controls of:
policies (including anti-bribery, gifts and
entertainment, conflicts of interest, charitable
donations); procedures (such as conducting due
diligence on suppliers); training all colleagues
annually 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 platform. All reports are thoroughly
investigated and the Board receives reports at least
annually on any breaches of policy.
Anti-Fraud Policy
We take a zero-tolerance approach to fraud and any
activity which amounts to fraud or is a dishonest
act is prohibited. We have a anti-fraud policy and
training module that all colleagues are required to
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022116
complete annually. We ask colleagues to complete
due diligence on any third parties before contracting
with them. We encourage any suspected incidents
of fraud to be reported to a line manager or via our
anonymous whistleblowing platform. We are
committed to assisting the police in any fraud
investigations and will endeavour to recover any
wronfully obtained assets.
Political Donations Policy
The Group’s policy is not to make donations to
political parties and has made no such payments
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.
Events after the balance sheet date
No important events have occurred after the
balance sheet date.
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
to this report can be located as follows:
Applicable disclosures required pursuant to
Listing Rule 9.8.4R
Long term incentive schemes LR9.8.4(4) 108
Dividend waivers LR9.8.4(12)(13) 116
Sections (1)(2)(5)(6)(7)(8)(9)(10)(11)(14) are not applicable.
Other disclosures incorporated by reference to
this Directors’ report
Business review 8-11
Future likely developments 1-72
Financial review and KPIs 60-62, 31-32
Directors’ interests in shares 107
Corporate Governance statement 73-114
Going concern and viability statements 71-72
Principal risks and uncertainties 66-70
Financial instruments and financial
risk management 153-154
People policies and colleague engagement 35-39,
116
Stakeholder engagement including customer and
suppliers 81-85
Streamlined Energy and
Carbon Reporting (SECR) disclosures 43
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 66 to 70.
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 forwardlooking
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.
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 2-72 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
74-100 and pages 115-117, has been approved by a
duly authorised Committee of the Board of
Directors on 22 March 2023 and is signed on their
behalf by:
Helen O’Keefe
General Counsel and Company Secretary
22 March 2023
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 117
Statement of Directors’ Responsibilities
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 4.1.14R, the financial statements
will form part of the annual financial report prepared
using the single electronic reporting format under
the TD ESEF Regulation. The auditor’s report on
these financial statements provides no assurance
over the ESEF format.
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
22 March 2023
Mark George
Chief Financial Officer
22 March 2023
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT
OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022118
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 31 December 2022 (“2022”) 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 31 December 2022 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 two financial years
ended 31 December 2022 as a Public Interest
Entity, and four 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
£3.5m (2021:£3.4m)
4.6 % (2021: 4.0%) of adjusted profit before tax
Coverage 100% (2021: 100%) of adjusted profit before tax
Key audit matters vs 2021
Recurring risks Recoverability of store assets
Completeness of Do It For Me (“DIFM”)
revenue recognition
Parent Company Recoverability of parent Company’s
investment in subsidiary
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 119
Independent Auditor’s report continued
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 53 week period ended 1 January 2022 (“2021”), 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 the se matters.
The risk Our response
Recoverability of store assets
Store assets carrying values
(£69.7 million; 2021
£51.4 million) and impairment
charges (£15.8 million;
2021: £4.1 million)
Refer to page 95 (Audit
Committee Report), page 136
(accounting policy) and page
144 (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. 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.
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. We performed an assessment of whether an understatement of the
impairment of store assets identified through these procedures was material. Our procedures included:
– Assessing indicators of impairment: We considered the actual and forecast performance by store for
indicators of impairment to assess the completeness of the Group’s store impairment review;
– 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 assessed whether the allocation of central costs to individual CGUs was complete and
was 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, 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 to be acceptable (2021:
acceptable).
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022120
The risk Our response
Completeness of Do It For Me
“DIFM” revenue recognition
(£371.1 million;
2021: £300.2 million) and
Deferred income (£43.6 million;
2021: £60.6 million)
Refer to page 95 (Audit
Committee Report), page 132
(accounting policy) and page
137 (financial disclosures).
Inappropriate deferral of 2022 DIFM revenue into 2023:
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 DIFM. A significant value of
DIFM orders are deferred at the end of the financial year, and
judgement exists as to whether performance obligations (delivery and/
or installation) have been satisfied in relation to these orders.
We consider the risk to relate to the completeness of revenue
recognised in the financial year, on the basis that the fraud risk factors
specific to the Group indicate there may be an incentive to defer
income recognition into the following financial 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:
– Tests of details: We carried out sample testing of DIFM orders included in the deferred income balance
(products ordered and not delivered and/or installed) to assess whether they should have been recorded as
revenue in the financial year, including agreeing to subsequent delivery and/or installation documentation,
where applicable; and
– Tests of details: We assessed whether the order dates of revenue recognised post period end indicated
that revenue recognised in the period may be incomplete.
Our results
– The results of our testing were satisfactory and we considered the amount of DIFM revenue recognised in
the financial year, and the deferred income at the period end, to be acceptable (2021: acceptable).
Recoverability of parent
Company’s investment in
subsidiary
(£598.9 million;
2021: £770.8 million) and
impairment charge
(£175.6 million; 2021: £nil)
Refer to page 95 (Audit
Committee Report), 157
(accounting policy) and page
158 (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 forecasts.
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 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 Company’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 future cash flows, 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 Company and the market, and external expectations of future financial performance; and
– Assessing transparency: We assessed whether the Company’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 its subsidiary.
Our results
– We found the balance of the Company’s investment in its subsidiary and the related impairment charge to
be acceptable (2021: no impairment of its investment in subsidiary to be acceptable).
2.Key audit matters: our assessment of risks of material misstatement continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 121
Independent Auditor’s report continued
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 £3.5m (2021: £3.4m), determined
with reference to a benchmark of group profit
before tax, normalised to exclude adjusting items of
£35.1m (2021: £19.6m) as disclosed in note 9, of
which it represents 4.6% (2021: 4.0%). 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 £3.4m
(2021: £2.7m), determined with reference to a
benchmark of parent Company total assets, of
which it represents 0.6% (2021: 0.4%).
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% (2021: 65%)
of materiality for the financial statements as a
whole, which equates to £2.3m (2021: £2.2m) for
the Group and £2.2m (2021: £1.76m) for the parent
Company.
We applied this percentage in our determination of
performance materiality based on the level of
identified misstatements, control deficiencies, and
the changes in the control environment during the
prior period.
We agreed to report to the Audit Committee any
corrected or uncorrected identified misstatements
exceeding £0.17m (2021: £0.17m), in addition to
other identified misstatements that warranted
reporting on qualitative grounds.
Of the Group’s 5 (2021: 5) reporting components,
we subjected 2 (2021: 2) to full scope audits for
group purposes and 1 (2021: 0) 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.
The Group team set the component materialities,
which ranged from £1.0m to £3.4m (2021: £1.0m to
£3.3m), 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.
Adjusted profit before tax
£75.4m (2021: £85.0m)
Group materiality
£3.5m (2021: £3.4m)
£3.5m
Whole financial statements materiality (2021: £3.4m)
£2.3m
Whole financial statements
performance materiality (2021: £2.2m)
£1.0m to £3.4m
Range of materiality at 3 components
(2021: £1.0m to £3.3m at 2 component)
£0.17m
Misstatements reported to the
audit committee (2021: £0.17m)
Group materiality
Adjusted PBT
Group revenue Group profit before tax
Specified risk-focused
audit procedures 2022
Full scope for group
audit purposes 2022
Full scope for group
audit purposes 2021
Specified risk-focused
audit procedures 2021
Residual components
Group total assets
Adjusted profit before tax
100%
(2021 100%)
100%
100%
100%
100%
100%
8%
92%
100%
100%
100%
(2021 100%)
100%
(2021 100%)
100%
(2021 100%)
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022122
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 management
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, to
remove operational waste from the business, 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.
In addition to this we held discussions with our own
climate change professionals to challenge our risk
assessment.
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.
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.
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 ability of the Group to remain profitable and
deliver on the budgeted Group performance for the
2023 period end.
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 72 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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 123
Independent Auditor’s report continued
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 DIFM revenue is understated through
recording revenues in the wrong period in order
to increase the likelihood of management
meeting future profit targets.
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 licence 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.
We did not identify any additional fraud risks.
Further detail in respect of the DIFM 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.
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.
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022124
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.
We are also required to review the viability
statement, set out on page 71 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.
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 on page 66 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.
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 125
Independent Auditor’s report continued
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 118, 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.
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
using the single electronic reporting format
specifiedin the TD ESEF Regulation. This auditor’s
report provides no assurance over whether the
annual financial report has been prepared
inaccordance 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
22 March 2023
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022126
Consolidated income statement and other comprehensive income
52 weeks ended 31 December 2022 53 weeks ended 1 January 2022
(£m) Notes Adjusted
Adjusting
items
(note 9) Total Adjusted
Adjusting
items
(note 9) Total
Revenue 5 1,559.0 3.4 1,562.4 1,534.9 — 1,534.9
Cost of sales (991.9) – (991.9) (966.4) — (966.4)
Gross profit 567.1 3.4 570.5 568.5 — 568.5
Selling costs (*) (332.1) (15.8) (347.9) (334.9) (0.1) (335.0)
Administrative expenses (131.1) (24.4) (155.5) (117.3) (19.5) (136.8)
Operating profit 6 103.9 (36.8) 67.1 116.3 (19.6) 96.7
Net finance costs 7 (28.5) 1.7 (26.8) (31.3) — (31.3)
Profit before tax 75.4 (35.1) 40.3 85.0 (19.6) 65.4
Tax 10 (15.2) 6.8 (8.4) (16.5) 9.9 (6.6)
Profit for the period and total comprehensive income 60.2 (28.3) 31.9 68.5 (9.7) 58.8
Profit for the period attributable to owners of the parent company 60.2 (28.3) 31.9 68.5 (9.7) 58.8
Earnings per share
Basic 11 12.6p 23.3p
Diluted 11 12.5p 23.3p
Adjusted earnings per share
Basic 11 23.8p 27.2p
Diluted 11 23.7p 27.1p
* Impairment charges in 2022 have been presented within Selling Costs. Impairment charges recorded in 2021 were originally presented within administrative expenses but have now been reclassified accordingly – see note 15
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 127
Consolidated balance sheet
(£m) Notes
As at
31 December
2022
As at
1 January
2022 (Restated*)
Assets
Non-current assets
Goodwill 12 8.4 8.4
Other intangible assets 12 16.6 12.5
Property, plant and equipment 13 114.9 105.0
Right-of-use assets 14 542.4 604.6
Deferred tax asset 16 22.7 30.1
Total non-current assets 705.0 760.6
Current assets
Inventories 18 201.6 188.2
Trade and other receivables 19 87.4 77.5
Corporation tax 8.4 6.5
Derivative financial instruments 29 2.6 0.7
Cash and cash equivalents 20 99.5 123.4
Total current assets 399.5 396.3
Total assets 1,104.5 1,156.9
* For details of restatement please see note 19
(£m) Notes
As at
31 December
2022
As at
1 January
2022 (Restated*)
Equity and Liabilities
Capital and reserves
Issued share capital 21 26.0 26.0
EBT share reserve 21 (0.7) (0.8)
Other reserve 21 (785.7) (785.7)
Retained earnings 924.8 921.3
Total equity 164.4 160.8
Non-current liabilities
Lease liabilities 14, 23 610.4 660.7
Long-term provisions 24 1.8 1.2
Total non-current liabilities 612.2 661.9
Current liabilities
Lease liabilities 14, 23 80.9 81.4
Trade and other payables 25 237.7 241.8
Derivative financial instruments 29 0.2 -
Short-term provisions 24 9.1 11.0
Total current liabilities 327.9 334.2
Total liabilities 940.1 996.1
Total equity and liabilities 1,104.5 1,156.9
The consolidated financial statements of Wickes Group Plc, registered number 12189061, were approved
by the Board of Directors on 22 March 2023 and signed on its behalf by:
David Wood Mark George
Chief Executive Officer Chief Financial Officer
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022128
Consolidated statement of changes in equity
(£m) Notes
Issued
share
capital
EBT
Share
reserves
Other
reserves
Retained
earnings
Total
equity
At 26 December 2020 25.2 – (785.7) 890.3 129.8
Profit for the period and other comprehensive income – – – 58.8 58.8
Issue of share capital 21 0.8 (0.8) – – –
IFRS 16 adoption adjustments – – – 3.1 3.1
Dividends paid 26 – – – (35.3) (35.3)
Equity-settled share-based payments 27 – – – 3.8 3.8
Tax on equity-settled share-based payments – – – 0.6 0.6
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
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 129
Consolidated cash flow statement
(£m) Notes
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Cash flows from operating activities
Operating profit 6 7.1 96.7
Adjustments for:
 Amortisation of other intangible assets 12 5.2 5.2
 Depreciation of property, plant and equipment 13 2 0 .1 19.1
 Depreciation of right-of-use assets 14 7 7. 7 78.1
 Impairment of property, plant and equipment 15 0.4 0.2
 Impairment of right-of-use assets 15 15 .4 5.1
 Reversal of impairment of right-of-use assets 15 – (1.0)
 Gains on terminations of leases (1. 8) (1.6)
 Losses on disposal of property, plant and equipment 6 0.6 0.6
 Foreign exchange 6 – (2.0)
 Share-based payments 27 4.4 3.8
Operating cash flows 1 8 9 .1 204.2
Movements in working capital:
 (Increase) in inventories (13 . 4) (49.9)
 (Increase) in trade and other receivables (9.9) (7.4)
 (Decrease) in trade and other payables (4 .1) (0.7)
 (Decrease)/increase in provisions (1. 3) 1.8
Cash generated from operations 16 0. 4 148.0
Interest paid (1. 0) (0.7)
Interest on lease liabilities (2 9.4) (31.3)
Income taxes paid (4 . 3) (14.6)
Net cash inflow from operating activities 1 25. 7 101.4
(£m) Notes
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Cash flows from investing activities
Purchases of property, plant and equipment (31.1) (20.4)
Development costs of computer software (9.3) (6.1)
Proceeds on disposal of property, plant and equipment 0.4 1.2
Interest received 1.9 0.1
Net repayments from TravisPerkinsPlc – 123.5
Net cash (outflow)/inflow from investing activities (38.1) 98.3
Cash flows from financing activities
Payment of lease liabilities (82.4) (77.8)
Lease incentives received 2.1 0.3
Dividends paid to equity holders of the Parent 26 (31.2) (5.3)
Net cash outflow from financing activities (111.5) (82.8)
Net (decrease)/increase in cash and cash equivalents (23.9) 116.9
Cash and cash equivalents at the beginning of the period 123.4 6.5
Cash and cash equivalents at the end of the period 20 99.5 123.4
Adjusting items 9
Adjusting items paid included in the cash flow 21.7 17.9
Total pre-tax Adjusting items 35.1 19.6
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022130
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 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 31 December 2022 have been
prepared in accordance with UK-adopted international accounting standards.
The current financial period is 52 weeks long, whereas the comparative financial period was 53 weeks long.
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 155 to 159.
Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis, except that certain
financial instruments including derivative instruments are stated at their fair value.
Summary of impact of Group restructure and listing of shares on the London Stock Exchange
On 28 April 2021, the Group listed its shares on the London Stock Exchange and was admitted to the
premium segment of the Official List of the Financial Conduct Authority.
Ahead of the listing and in order to establish an appropriate capital structure for the independent Group, cash
of £123.5 million was received from Travis Perkins Plc, through repayment of existing intercompany
receivables. The remaining intercompany receivables were settled through a non-cash dividend to Travis
Perkins Plc (£30 million), and a transaction whereby Travis Perkins Plc settled the repayment of 2020 rates on
behalf of the Group (£32.6 million).
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 31 December 2022.
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 60 to 62.
The principal risks and viability statement of the Group are set out on pages 66 to 72. 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 cashflow in 2022, despite
the impacts of the economic environment in the UK and global supply issues, and a positive start to the
2023 financial year. 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 2022 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.
At 31 December 2022, cash and cash equivalents stood at £99.5m. In addition the Group had available an
undrawn committed Revolving Credit Facility (RCF) of £80m which expires in March 2025, and which is not
forecast to be utilised for a period of at least 12 months.
Net debt stood at £591.8m relating to lease liabilities of £691.3m included on the balance sheet under IFRS
16, with £80.9m 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.
Notes to the consolidated financial statements
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 131
Notes to the consolidated financial statements continued
1 GENERAL INFORMATION AND ACCOUNTING POLICIES CONTINUED
The Directors’ review also included a severe but plausible scenario to assess the impact of a sales
reduction of 6% from 2022, a margin reduction of 1%, and a short period of operational shock, together with
increases to energy costs, staff costs, and the cost to complete the IT autonomy project, 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 severe but plausible scenario does show a
covenant breach but, as it does not require use of the facility at any point, this does not indicate a risk to
going concern. Nevertheless, if required there are further measures that could be taken to assist with
covenant compliance if this was considered necessary, including reducing bonuses and discretionary
spend in the short term.
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.
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 1 – Presentation of Financial Statements
– Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback
The following standards have been adopted by the UK Endorsement Board but are not yet effective for the
Group
– Amendments to IAS 12 – Deferred Tax
– Amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors
– Amendments to IAS1 – Disclosure of Accounting Policies
– IFRS 17 – Insurance Contracts, Amendments to IFRS 17, Initial Application of IFRS 17
– Annual Improvements to IFRS 2018 – 2020
– Amendments to IAS 37 – Onerous Contracts
– Amendments to IAS 16 – Property, Plant and Equipment
– Amendments to IFRS 3 – Reference to the Conceptual Framework
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022132
2 ACCOUNTING POLICIES CONTINUED
2.4. Adjusting items
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, significant write downs or impairments of current and
non-current assets, the costs of demerging and listing the business, the associated costs of separating the
business from Travis Perkins Plc’s IT systems, the impact of fair value movements on derivatives through
the profit and loss statement, the effect of changes in corporation tax rates on deferred tax balances, and in
the current year a reclaim of overpaid VAT relating to prior years.
2.5. 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 within 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 deferred tax liability in respect of the
corresponding Right-of-Use asset. No initial recognition exception was utilised in respect of these, in line
with Deferred Tax related to Assets and Liabilities arising from a Single Transaction (amendments to IAS
12) 2021. They are presented as the net deferred tax asset/liability in the balance sheet and in the Lease
section of the deferred tax note.
2.6. 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 business are capitalised and written off as an expense over their estimated useful life, which
range from 3 years to 10 years. 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 are expensed over the period the software is in use.
2.7. Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
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
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.
2.8. 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 do so, otherwise amounts are included in other receivables in
the balance sheet.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 133
Notes to the consolidated financial statements continued
2 ACCOUNTING POLICIES CONTINUED
2.9. 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.
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.
2.10. Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive
obligation because of a past event, and it is probable that an outflow of economic benefits will be required
to settle the obligation. 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.
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 and other payments, 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.
2.11. 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.
2.12. 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.
2.13. 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 ‘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.
– Retained earnings represents cumulative results for the Group.
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 stand-alone
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,
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022134
2 ACCOUNTING POLICIES CONTINUED
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
profit or loss 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.
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.
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 135
Notes to the consolidated financial statements continued
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 fair value through profit or loss (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.
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 amounts 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.
Prior to the demerger, the Group was part of a group share-based payment plan with Travis Perkins Plc. It
recognised and measured its share-based payment expense on the basis of a reasonable allocation of the
expense recognised for Travis Perkins Plc. This allocation was based on individual employees and where
their services were rendered for group companies.
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 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 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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022136
4 AUDITOR’S REMUNERATION
During the period the Group incurred the following costs for services provided by the Company’s auditors:
(£’000)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
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 665 665
Fees paid to the Company’s auditor for other services:
 Services relating to corporate finance transactions (demerger) – 575
Review of interim statement 80 70
845 1,410
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 96.
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.
Adjusted Revenue
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Core (product revenue) 1,187.9 1,234.7
“Do It For Me” (project revenue) 371.1 300.2
1,559.0 1,534.9
Revenue reconciliation and like-for-like adjusted revenue
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Adjusted revenue 1,559.0 1,534.9
Network change (1.0) (0.4)
Other movements (week 53) - (17.6)
Adjusted revenue (like-for-like basis) 1,558.0 1,516.9
Prior period revenue 1,534.9 1.346.9
Prior period network change (5.1) (4.8)
Prior period other movements (24.5) –
Prior period revenue (like-for-like basis) 1,505.3 1,342.1
Increase arising on a like-for-like basis 52.7 174.8
Like-for-like adjusted revenue (%) 3.5% 13.0%
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.
Other movements (week 53) reflects that the period ended 1 January 2022 was a 53 week period, whereas
the periods ended 31 December 2022 and 26 December 2020 were 52 week periods. The extra week is
presented separately to enable direct comparison.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 137
Notes to the consolidated financial statements continued
6 OPERATING PROFIT
Operating profit has been arrived at after charging/(crediting):
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Realised net foreign exchange gains recognised in cost of sales (4.9) (2.0)
Depreciation of property, plant and equipment (note 13) 20.1 19.1
Depreciation of right of use assets (note 14) 77.7 78.1
Amortisation of internally-generated intangible assets (note 12) 5.2 5.2
Impairment of right-of-use assets (note 14 and 15) 15.4 5.1
Reversal of impairment of right-of-use assets (note 14 and 15) – (1.0)
Impairment of property, plant and equipment (note 13 and 15) 0.4 0.2
Gains on terminations of leases (1.8) (1.6)
Loss on disposal of property, plant and equipment 0.6 0.6
Income from subleasing right-of-use assets (note 14) (2.6) (3.1)
Staff costs (note 8) 220.5 217.9
7 NET FINANCE COSTS
Finance income and expense recognised within adjusted profit (£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Finance income
Net unrealised gains on remeasurement of derivatives at fair value – 0.7
Interest receivable 1.9 0.1
1.9 0.8
Finance costs
Interest on lease liabilities (note 14) (29.4) (31.3)
Amortisation of loan arrangement fees (0.3) (0.1)
Commitment fee on revolving credit facilities (0.7) (0.6)
Other interest – (0.1)
(30.4) (32.1)
Net finance costs within adjusted profit (28.5) (31.3)
Adjusting items (£m)
Finance income
Net unrealised gains on remeasurement of derivatives at fair value 1.7 –
Net finance income within adjusting items 1.7 –
Total net finance costs (26.8) (31.3)
The net unrealised gains on remeasurement of foreign currency derivatives relate to the movement in the
fair value of foreign currency forward contracts. No hedge accounting is applied and all movements in the
fair value of derivatives are recognised in the income statement as net finance costs.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022138
8 STAFF COSTS
Average number of persons employed by the Group (including directors) during
the period
(No.)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Administration 513 443
Stores 7,827 7,995
8,340 8,438
Average number of full-time equivalent persons employed by the Group during
the period
(No.)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Administration 505 436
Stores 6,068 6,048
6,573 6,484
Aggregate payroll costs of these persons were as follows:
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Wages and salaries 194.3 194.8
Social security costs 16.6 15.5
Other pension costs (defined contribution plans) 4.6 3.8
Share-based payments (equity-settled) 5.0 3.8
220.5 217.9
There are wages and salaries and social security costs for the 52 weeks ended 31 December 2022 of
£0.2m in Adjusting items (53 weeks ended 1 January 2022: £0.2m).
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 ADJUSTING ITEMS
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, significant write downs or impairments of current and
non-current assets, the costs of demerging and listing the business, the associated costs of separating the
business from Travis Perkins Plc’s IT systems, the effect of changes in corporation tax rates on deferred
tax balances, net gains on remeasurement of derivatives at fair value, and in the current period a VAT
reclaim relating to overpaid output VAT in prior periods.
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Adjusting items – operating
Demerger related costs – 5.3
Property, plant and equipment impairment charge 0.4 –
Right-of-use asset impairment charge 15.4 1.1
Reversal of impairment of right-of-use assets recognised in prior
periods – (1.0)
IT separation project costs 24.4 14.2
Net unrealised gains on remeasurement of derivatives at fair value (1.7) –
Output VAT reclaim (3.4) –
Total pre-tax Adjusting items 35.1 19.6
Adjusting items – tax
Tax on adjusting items (6.8) (3.2)
Adjusting items – deferred tax rate change – (6.7)
Total tax on Adjusting items (6.8) (9.9)
Total post-tax Adjusting items 28.3 9.7
Demerger related costs
Demerger related costs are the costs incurred during the process of demerging the Wickes business from
Travis Perkins Plc. Costs predominantly relate to professional services fees.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 139
Notes to the consolidated financial statements continued
9 ADJUSTING ITEMS CONTINUED
Right-of-use asset and property, plant and equipment impairment charges and reversals
In the period ended 31 December 2022, due to the economic circumstances outlined in more detail in note
15, 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. 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. Future revisions to these impairments will
also be recognised within adjusting items.
In the period ended 1 January 2022, an impairment charge of £1.1m was recognised on stores that had
been identified as impaired in previous periods with the impairment charge included in adjusting items.
Additionally, £1.0m of previously identified impairment charge was reversed due to the improved
performance of the store.
In a portfolio of stores there will be, from time to time, impairments rising on certain specific stores that do
not arise from a broader macro economic condition but arise from underlying trading performance. Such
impairments are therefore included within adjusted profit. In the current period, no impairment charges (53
weeks ended 1 January 2022: £4.0m) due to such impairments are included within adjusted profit.
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 licencing 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.
Net unrealised gains on remeasurement of derivatives at fair value
During the period, the high level of foreign exchange rate volatility created significant fluctuations in the
gains and losses relating to derivatives at fair value. Recognising that these movements would have
distorted the trading result due to factors outside of management’s control, and that they may reverse in
future periods, a decision was made to treat these unrealised gains and losses as adjusting on an ongoing
basis.
An unrealised gain of £1.7m was recognised in relation to the remeasurement of derivatives at fair value
through the profit and loss account. As such movements can be significant due to major currency
fluctuations and the timing of the Group’s purchases, it has been classified as an adjusting item, which was
not the case in the prior year period. As the prior period movement was not considered material to the
financial statements, the comparatives have not been represented.
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 current year, the £3.4m credit has been reflected in
adjusting items. There were no such claims in the 53 weeks ended 1 January 2022.
Deferred tax rate change
The tax charge includes an adjusting credit of £nil (53 weeks ended 1 January 2022: £6.7m) arising from
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.
10 TA X ATIO N
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Current tax
UK corporation tax expense 6.2 12.4
UK corporation tax adjustment to prior periods (3.7) (0.1)
Total current tax charge 2.5 12.3
Deferred tax
Deferred tax movement in period 0.6 0.7
Other 0.2 -
Effect of change in tax rate - (6.7)
Adjustments in respect of prior periods 5.1 0.3
Total deferred tax credit 5.9 (5.7)
Total tax charge 8.4 6.6
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022140
10 TAXATION CONTINUED
The differences between the total tax charge and the amount calculated by applying the standard rate of
UK corporation tax of 19.0% (53 weeks ended 1 January 2021: 19.0%) to the profit before tax for the Group
are as follows:
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Profit before taxation 40.3 65.4
Tax at the standard corporation tax rate 7.7 12.4
Effects of:
 Depreciation of non-qualifying property 1.0 0.9
 Tax effect of non taxable income and non deductible expenses (0.3) 0.4
 Adjustment to prior period 1.4 0.2
 Effect of share based payments (0.2) (0.2)
 Change in tax rate - (6.7)
 Other 0.2 -
 Impact of superdeduction (1.4) (0.4)
Total tax charge 8.4 6.6
The tax charge includes an adjusting credit of £nil (53 weeks ended 1 January 2022: £6.7m) arising from
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.
The effective tax rate for the period is 20.8% (53 weeks ended 1 January 2022: 10.1%). The effective tax rate
for the period was higher than the standard rate primarily due to enhanced capital allowance claims made
in the 2021 submitted tax computations, which whilst reducing the current tax charge at 19%, resulted in a
deferred tax charge at the future enacted rate of 25%. The effective tax rate for the 53 weeks ended
1 January 2022 was affected by the impact of the change in tax rate on the Group’s deferred tax asset.
These events and their 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 31 December 2022
is 20.2% (53 weeks ended 1 January 2021: 19.4%). 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
31 December 2022.
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Profit attributable to the owners of the Parent 31.9 58.8
(No.)
Weighted average number of ordinary shares 259,637,998 256,163,656
Adjustment for weighted average number of shares held in EBT (6,941,807) (4,019,733)
Weighted average number of ordinary shares in issue 252,696,191 252,143,923
Basic earnings per share (in pence per share) 12.6p 23.3p
For dilutive 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.
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Profit attributable to the owners of the Parent 31.9 58.8
(No.)
Weighted average number of shares in issue 252,696,191 252,143,923
Diluted effect of share options on potential ordinary shares 1,698,226 259,182
Diluted weighted average number of ordinary shares in issue 254,394,417 252,403,105
Diluted earnings per share (in pence per share) 12.5p 23.3p
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 141
Notes to the consolidated financial statements continued
11 EARNINGS PER SHARE CONTINUED
Reconciliation of profit after taxation to profit after taxation excluding Adjusting items
(“Adjusted profit”):
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Profit attributable to the owners of the parent from continuing
operations 31.9 58.8
Adjusting items before tax 35.1 19.6
Tax on adjusting items (6.8) (3.2)
Adjusting items – deferred tax – (6.7)
Adjusting items after tax (note 9) 28.3 9.7
Adjusted profit 60.2 68.5
Weighted average number of ordinary shares in issue 252,696,191 252,143,923
Weighted average number of dilutive ordinary shares in issue 254,394,417 252,403,105
Adjusted basic earnings per share (in pence per share) 23.8p 27.2p
Adjusted diluted earnings per share (in pence per share) 23.7p 27.1p
12 GOODWILL AND OTHER INTANGIBLE ASSETS
(£m) Goodwill Software Total
Cost or valuation
At 26 December 2020 8.4 23.3 31.7
Additions – 6.1 6.1
Disposals – (1.0) (1.0)
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
Amortisation
At 26 December 2020 – 11.0 11.0
Charged in the period – 5.2 5.2
Disposals – (0.3) (0.3)
At 1 January 2022 – 15.9 15.9
Charged in the period – 5.2 5.2
Disposals – (0.4) (0.4)
At 31 December 2022 – 20.7 20.7
Net book value
At 31 December 2022 8.4 16.6 25.0
At 1 January 2022 8.4 12.5 20.9
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. 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 goodwill with indefinite useful
lives was in excess of their 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 goodwill 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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022142
13 PROPERTY, PLANT AND EQUIPMENT
(£m)
Land and
buildings
Leasehold
improvements
Plant and
equipment Total
Cost
At 26 December 2020 – 126.4 240.6 367.0
Additions 14.3 8.0 22.3
Disposals – (4.7) (17.2) (21.9)
Impairments – (0.2) – (0.2)
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
Accumulated depreciation
At 26 December 2020 – 70.9 193.0 263.9
Charged in the period – 6.5 12.6 19.1
Disposals – (3.9) (16.9) (20.8)
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
Net book value
At 31 December 2022 6.0 70.8 38.1 114.9
At 1 January 2022 – 62.3 42.7 105.0
£0.4m (53 weeks ended 1 January 2022: £0.2m) of impairment was recognised in the period on stores
where the remaining cash flows from the store are not expected to support the carrying value of the asset.
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 ten years (1 January 2022: ten years). Information about leases for which the
Group is a lessee is presented below.
At 31 December 2022, the Group had no material leases committed to but not yet commenced (1 January
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
(£m)
Land and
buildings
Plant and
equipment Total
At 26 December 2020 642.8 11.4 654.2
Additions 1.4 3.0 4.4
Modifications 32.5 – 32.5
Terminations (3.6) (0.7) (4.3)
Depreciation (72.6) (5.5) (78.1)
Impairments (5.1) – (5.1)
Reversal of previous impairments 1.0 – 1.0
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
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 143
Notes to the consolidated financial statements continued
14 RIGHT-OF-USE ASSETS CONTINUED
Lease liabilities
(£m)
As at
31 December
2022
As at
1 January
2022
Maturity analysis – contractual undiscounted cash flow
Less than one year 107.3 109.5
One to two years 102.9 105.8
Two to five years 275.7 284.6
Five to ten years 260.4 290.1
More than ten years 89.7 108.4
Total undiscounted lease liabilities 836.0 898.4
Lease liabilities included in the balance sheet
Current 80.9 81.4
Non-current 610.4 660.7
691.3 742.1
Amounts recognised in profit and loss
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Interest expense on lease liabilities 29.4 31.3
Expenses related to short-term leases 0.5 0.9
Expenses related to low-value assets – 0.3
Depreciation 77.7 78.1
Impairment 15.4 5.1
The weighted average incremental borrowing rate applied to property leases is 4.1% (1 January 2022: 4.1%),
and for fleet leases is 3.0% (1 January 2022: 2.4%). 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.
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:
(£m)
As at
31 December
2022
As at
1 January
2022
Within one year 2.0 2.9
One to five years 6.1 7.9
After five years 3.2 4.7
Total 11.3 15.5
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.
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, gross margin,
and an allocation of a percentage of central costs.
2022 2021
Pre-tax discount rate 11.2% 10.5%
Revenue growth rate 1% – 6% 5% – 6%
Gross margin 39% – 47% 44% – 45%
Central cost allocation 60.5% 50.2%
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”).
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022144
15 IMPAIRMENT TESTING CONTINUED
– 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 the latest
expectations of the business and will fluctuate 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 (2028 and beyond) have been determined using a long-term
nominal growth rate referencing UK nominal GDP.
Whilst the Directors consider their assumptions to be realistic: should actual results, including those for
market changes, 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.
Impairment of goodwill
At 31 December 2022 the recoverable amount of goodwill was in excess of its book value and therefore no
impairment has been recognised. Of the impairments noted on right-of-use assets below, £1.5m relates to
right-of-use assets for stores associated with some goodwill: however, the goodwill is associated with a
group of CGUs and there remains significant headroom within this group as a whole. The impairment
review was not sensitive to changes in the assumptions used in the value-in-use model.
Impairment of store related fixed assets
The impairment trigger review noted above identified 31 stores for which an impairment review was
required. The number of stores with an indicator of impairment in the period has increased significantly
reflecting the deterioration in the UK macro-economic environment and economic outlook in 2022, leading
to an expectation of a downturn in financial performance in the short term, with a potentially significant
impact across the retail sector as a whole.
The impairment reviews were carried out using the assumptions and methodology disclosed in this note.
Any impairments have been recognised initially 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 20 stores that should be impaired resulting in £15.8m (1 January
2022: £5.1m) of impairment charge, split as £15.4m (1 January 2022: £5.1m) relating to right of use assets
and £0.4m (1 January 2022: £nil) relating to property, plant and equipment. No reversal of previous
impairments has been recognised (1 January 2022: £1.0m). This impairment charge is 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 subject to an
impairment review after this impairment is £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 impairment charge recognised
from reasonably possible changes in assumption, all other assumptions remaining the same, are shown in
the table below.
Assumption
(£m)
Change in impairment
charge
Store revenue increases/(decreases) by 2% £6.5m – £(6.5)m
Gross margin increases/(decreases) by 1% £7.8m – £(7.9)m
Percentage of central costs allocated (increases)/decreases by 10% £4.7m – £(4.0)m
Discount rate (increases)/decreases by 100 basis points £3.4m – £(3.0)m
Reasonably possible changes of the other key assumptions, including reducing the growth rate to 0 per
cent 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.
Pension
Capital
Allowance
Share-based
payments Leases Total
At 26 December 2020 – 0.3 0.5 23.2 24.0
(Credit)/charge to the profit or loss – (0.7) 0.2 (0.2) (0.7)
Charge to equity – – 0.4 – 0.4
Prior period adjustment – (0.1) (0.2) – (0.3)
Change in tax rates – (0.2) 0.2 6.7 6.7
At 1 January 2022 – (0.7) 1.1 29.7 30.1
(Credit)/charge to the profit or loss (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
Disclosed within non-current
assets – (8.5) 0.2 31.0 22.7
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 145
Notes to the consolidated financial statements continued
16 DEFERRED TAX CONTINUED
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.
At 31 December 2022, the Group had unused capital losses of £37.6m (1 January 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 31 December 2022, 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
(£m)
As at
31 December
2022
As at
1 January
2022
Inventories 201.6 188.2
Inventories consist of goods for resale. Inventories are stated after provisions for impairment of £5.0m
(2021: £4.4m).
Inventories include a deduction to account for rebates receivable on inventory purchases of £8.1m
(1 January 2022: £8.8m).
Cost of sales for the 52 weeks ended 31 December 2022 includes inventory recognised as an expense
amounting to £856.2m (1 January 2022: £829.1m).
Period ended
31 December 2022
Period ended
1 January 2022
Movement in stock provisions
Opening provision 4.4 4.0
Provision utilised (13.2) (10.9)
Provision increased 13.8 11.3
Closing provision 5.0 4.4
19 TRADE AND OTHER RECEIVABLES
(£m)
As at
31 December
2022
As at
1 January
2022 (Restated)
Trade receivables 38.7 33.3
Allowance for expected credit losses (1.3) (1.6)
37.4 31.7
Other receivables 32.8 32.2
Prepayments 17.2 13.6
Total current trade and other receivables 87.4 77.5
Trade receivables primarily represent amounts receivable following the delivery of goods purchased
through finance agreements or the completion of a DIFM 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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022146
19 TRADE AND OTHER RECEIVABLES CONTINUED
The loss allowance for trade receivables was determined as follows:
31 December 2022 Current
1-30
days
31-60
days
61-120
days
More than
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)
1 January 2022 Current
1-30
days
31-60
days
61-120
days
More than
120 days Total
Expected loss rate – – – – 64.0% 4.8%
Carrying amount of trade
receivables (£m) 29.7 0.7 0.2 0.2 2.5 33.3
Loss allowance (£m) – – – – (1.6) (1.6)
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.
The movement in the allowance for impairment in respect of trade receivables during the period was
as follows:
(£m)
As at
31 December
2022
As at
1 January
2022
At the beginning of the period 1.6 0.6
Provided in the period 0.2 1.6
Released during the period (0.5) (0.6)
At the end of the period 1.3 1.6
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 settlor of trade receivables is large financing
providers, such as Barclays or Hitachi, 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 £23.4m
(1 January 2022: £28.9m).
For the year ended 1 January 2022, the tax receivable of £6.5m was disclosed within current trade and
other receivables. In accordance with paragraph 54(n) of IAS 1, ‘Presentation of Financial Statements’, the
tax receivable should have been presented separately on the face of the consolidated balance sheet. The
consolidated balance sheet for the year ended 1 January 2022 has been restated to separately present the
tax receivable. This adjustment has no impact on the prior year reported profit or net assets.
20 CASH AND CASH EQUIVALENTS
(£m)
As at
31 December
2022
As at
1 January
2022
Cash at Bank 29.5 28.4
Short-term deposits 70.0 95.0
99.5 123.4
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 26 December 2020 252,143,923 25.2
Allotted under share option schemes 7,494,075 0.8
At 1 January 2022 and 31 December 2022 259,637,998 26.0
The Group and Company has 259,637,998 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.
Further to a prospectus of the Group dated 24 March 2021, the Group issued and allotted 6,557,475
ordinary shares at 10 pence each on the 17 June 2021 to the trustee of the Group’s employee benefit trust.
In addition and on the same date, the Group issued and allotted a further 936,600 ordinary shares of 10
pence each to the trustee of the Group’s Share Incentive Plan. These shares were issued to support the
employee share schemes put in place at the point of demerger.
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 147
Notes to the consolidated financial statements continued
21 CAPITAL AND RESERVES CONTINUED
During the 52 weeks ended 31 December 2022, nil ordinary shares were issued and allotted to the Wickes
Employee Benefit Trust and Equiniti Share Plan Trustees Limited (53 weeks ended 1 January
2022: 6,557,475 and 936,600 shares).
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 31 December 2022, 6,818,863 shares (1 January
2022: 7,489,514 shares) were held by the Trusts in relation to the Company’s Share Incentive Plan.
(number of shares)
As at
31 December
2022
As at
1 January
2022
At beginning of the period 7,489,514 –
Issued and allotted shares - 7,494,075
Shares released to participants (670,651) (4,561)
At end of the period 6,818,863 7,489,514
Other reserves
The ‘Other reserves’ balance as at 31 December 2022 of £785.7m (1 January 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.
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 31 December 2022 (1 January 2022: undrawn). In March 2022, a one year
extension was obtained on the revolving credit facility, extending the expiry date to March 2025. A further
one year extension, extending the expiry date to March 2026, is available.
The group does not have an overdraft facility as at 31 December 2022 (1 January 2022: no facility).
At the period end, the Group had the following borrowing facility available:
(£m)
As at
31 December
2022
As at
1 January
2022
Undrawn facilities:
3-year committed revolving credit facility (expires March 2025) 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 £691.3m (1 January 2022: £742.1m), expire in various years
to 2043 and carry an average incremental borrowing rate of 4.1% (1 January 2022: 4.0%). 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 £0.5m (1 January 2022: £1.2m) 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 (ROU) assets and note 7 for more detail
on the interest expense relating to leases.
23 MOVEMENT IN NET DEBT
(£m)
Cash and cash
equivalents
Lease
liability Total
At 26 December 2020 6.5 (790.0) (783.5)
Cashflow
 Net repayments from Travis Perkins Plc 123.5 – 123.5
 Decrease in cash and cash equivalents – other (6.6) – (6.6)
 Repayment of lease liabilities – 109.1 109.1
Discount unwind on lease liability – (31.3) (31.3)
Lease modifications – (32.5) (32.5)
Lease additions – (3.0) (3.0)
Lease incentives received – (0.3) (0.3)
Lease terminations – 5.9 5.9
At 1 January 2022 123.4 (742.1) (618.7)
Cashflow
 Decrease in cash and cash equivalents – other (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)
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022148
23 MOVEMENT IN NET DEBT CONTINUED
Balances
(£m)
As at
1 January
2022
As at
1 January
2022
Cash and cash equivalents 99.5 123.4
Current lease liabilities (80.9) (81.4)
Non-current lease liabilities (610.4) (660.7)
Net debt (591.8) (618.7)
During the 53 weeks ended 1 January 2022, the Group received a £123.5m cash settlement of certain
intercompany balances owed by Travis Perkins Plc as part of the pre-Demerger Reorganisation. On
settlement of these intercompany balances the Group derecognised an equivalent amount of the
intercompany receivables due from Travis Perkins Plc.
24 PROVISIONS
(£m) Property Warranty Insurance Total
At 26 December 2020 2.4 1.5 6.8 10.7
Charge to income statement 1.1 1.7 – 2.8
Cash received from Travis Perkins Plc in respect
of dilapidations 1.2 – – 1.2
Utilisation (1.0) (1.0) (0.5) (2.5)
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
(£m)
As at
31 December
2022
As at
1 January
2022
Current 9.1 11.0
Non-current 1.8 1.2
10.9 12.2
Property provisions primarily arise following a decision to close a store where there is still 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.
In the period ended 1 January 2022, £1.2m was received from Travis Perkins Plc in respect of dilapidations
on a distribution centre previously leased by Travis Perkins Plc and transferred to the Group in the period.
The insurance claims provision represents management’s best estimate, based on external advice, of the value
of outstanding claims against it where the final settlement date is uncertain, 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 31 December 2022 other than £1.8m of property provisions (1 January 2022: £1.2m of
property provisions) are considered to be current and expected to be utilised within the next twelve months.
25 TRADE AND OTHER PAYABLES
(£m)
As at
31 December
2022
As at
1 January
2022
Trade payables 119.9 112.6
Social security and other taxes 15.9 8.9
Other payables 12.4 15.3
Deferred income 48.1 64.2
Accrued expenses 41.4 40.8
Trade and other payables 237.7 241.8
The trade payables balance includes a deduction to account for amounts due from suppliers to the Group
for rebates of £8.6m (1 January 2022: £9.1m).
The deferred income balance represents amounts received directly from customers for goods and services
where the Group has not fulfilled its performance obligations. Under the terms of the relevant contracts,
sales made where third parties have provided finance to the customer do not give rise to deferred income.
Of the total deferred income balance, £43.6m (1 January 2022: £60.6m) related to DIFM deferred income.
Revenue of £56.8m was recognised in the 52 weeks ended 31 December 2022 which had been included in
the deferred income balance at the beginning of the period (53 weeks ended 1 January 2022: £32.1m).
As at 31 December 2022, no supply chain finance arrangements were in place.
26 DIVIDENDS
(£m)
As at
31 December
2022
As at
1 January
2022
Amounts recognised in the financial statements as distributions to
equity shareholders are shown below:
– final dividend for the 53 weeks ended 1 January 2022 of 8.8 pence
(52 weeks ended 26 December 2020: nil pence) 22.1 –
– interim dividend for the 52 weeks ended 31 December 2022 of 3.6
pence (53 weeks ended 1 January 2022: 2.1 pence) 9.1 5.3
– Pre demerger dividend paid to Travis Perkins Plc - 30.0
Total dividend 31.2 35.3
In the period prior to demerger, a dividend payment of £30.0m was recognised in the financial
statements as a distribution to the former sole shareholder, Travis Perkins Plc, in the 53 weeks ended
1 January 2022.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 149
Notes to the consolidated financial statements continued
26 DIVIDENDS CONTINUED
The dividend paid to Travis Perkins Plc was as a result of the reorganisation of the legal structure of the
Wickes entities in preparation for the demerger. The dividend paid was in the form of an intercompany
transfer, as a result no cash payment was made.
A final dividend of 7.3p is proposed in respect of the 52 weeks ending 31 December 2022. It will be paid on
7 June 2023 to shareholders on the register at the close of business on 21 April 2023 (the Record Date).
The shares will be quoted ex-dividend on 20 April 2023.
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 16 May 2023.
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, SAYE and Free Shares recognised in the income statement was £5.0m in
the period ended 31 December 2022 (period ended 1 January 2022: £3.8m). Of this charge, £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 £0.6m (period
ended 1 January 2022: £0.7m).
The total cost between each of the relevant schemes, together with the number of options outstanding are
shown below:
52 weeks ended 31 December 2022 53 weeks ended 1 January 2022
Charge (£m)
Wickes
Group Plc
Travis
Perkins Plc* Total
Wickes
Group Plc
Travis
Perkins Plc* Total
Long Term Incentive Plan 0.4 – 0.4 0.9 0.3 1.2
Transition Awards 2.1 – 2.1 1.2 – 1.2
Save As You Earn (SAYE) 2.2 – 2.2 0.2 0.8 1.0
Free Shares 0.3 – 0.3 0.4 – 0.4
5.0 – 5.0 2.7 1.1 3.8
Number of options (thousands)
Wickes
Group Plc
Travis
Perkins Plc*
As at
31 December
2022
Wickes
Group Plc
Travis
Perkins Plc*
As at
1 January
2022
Long Term Incentive Plan 4,371 – 4,371 1,795 – 1,795
Transition Awards 862 – 862 1,617 – 1,617
Save As You Earn (SAYE) 10,727 – 10,727 5,434 – 5,434
Free Shares 612 – 612 882 – 882
16,572 – 16,572 9,728 – 9,728
* to the date of demerger
A summary of the main features of the schemes are shown below:
Long Term Incentive Plan
The Long Term Incentive Plan (‘LTIP’) is open to Executive Directors and designated senior managers, and
awards are made at the discretion of the Remuneration Committee. Awards are subject to market and
non-market performance criteria.
Awards granted under the LTIP vest subject to achievement of performance conditions measured over a
period of at least three years and the Wickes Group Awards are in the form of nil-cost options as allowed by
the Plan rules.
Vesting of awards will be dependent on financial and share price measures, as set by the Remuneration
Committee, which are aligned with the long-term strategic objectives of the Group and shareholder value
creation. 30% of an award is based on share price measures. The remaining 70% are based on financial
measures. At the threshold performance, no more than 20% of the award will vest, rising to 100% for
maximum performance.
The charge in the period for LTIP includes an accrual of £0.1m (period ended 1 January 2022: £nil) for
the LTIP Buy-out in respect of the 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 charge in the period for LTIP includes an accrual of £nil (period ended 1 January 2022: £0.6m) for the
Group’s Deferred Share Bonus plan in respect of the bonus payable in shares for the period ended
31 December 2022.
On 31 March 2022 and 28 September 2022, the Company granted a total of 1,998,542 and 666,396 options
respectively, to the Executive directors and other senior management. The options will vest based on earnings
per share (‘EPS’) (70%) targets for the period ending 29 December 2024 and relative total shareholder return
(‘TSR’) (30%) targets on performance over the three year period to 31 December 2024. Upon vesting, the
options will remain exercisable until 31 March 2032 and 28 September 2032 respectively.
On 28 September 2022, the Company granted 148,114 options to Mark George. These Buy-out awards
were granted following the decision to buy-out some of The Gym Group incentive awards forfeited from his
previous employment. Of the total options, 101,216 will vest on 9 September 2023, with the balance vesting
on 25 March 2024. Upon vesting, the options will remain exercisable until 28 September 2032. The awards
are subject to his continued employment.
On 28 September 2021, the Company granted a total of 1,795,194 options to the Executive directors and
other senior management. The options will vest based on earnings per share (‘EPS’) (70%) targets for the
period ending 30 December 2023 and relative total shareholder return (‘TSR’) (30%) targets on performance
over the three year period to 31 August 2024. Upon vesting, the options will remain exercisable until
28 September 2031.
The Travis Perkins Plc charges included in the prior period are in respect of options on shares in Travis
Perkins Plc held by the staff of Wickes Building Supplies Limited, now a subsidiary of Wickes Group plc, up
to the point of demerger in 2021. All these shares were accrued up to the date of demerger and are
available to be exercised.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022150
27 SHARE-BASED PAYMENTS CONTINUED
Transition Awards
On 28 September 2021, the Company granted a total of 1,616,863 Transition Awards as planned shortly
after the announcement of the Company’s half year financial results.
The Transition Awards vested 50% on the first anniversary of the completion of the Demerger (28 April
2022) with the balance vesting on the second anniversary of the completion of the Demerger (28 April
2023).
Any awards made will be subject to the continued employment of recipients and for Executive Directors,
a performance underpin.
Save As You Earn
The Save As You Earn (“SAYE”) scheme is open to all Wickes Group employees. Vesting will be dependent
on continued employment for a period of 3 years from grant. A maximum monthly contribution of £500 is
permitted under the option scheme.
On 18 October 2022 the Company launched its second SAYE scheme, following its first SAYE scheme
which the Company launched on 19 October 2021. There are no performance conditions in respect of the
schemes and the vesting dates are 18 October 2025 and 19 October 2024 for the second and first schemes
respectively. 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 31 December 2022, the 53 weeks ended 1 January 2022 and, in the case
of Travis Perkins Plc, the options granted in the periods prior to the demerger. The information is expressed
as weighted averages where relevant:
52 weeks ended 31 December
2022
The Group and Company:
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%
53 weeks ended 1 January 2022
The Group and Company:
LTIP (nil cost
options)
Transition
Awards SAYE Free Shares
Share price at grant date (pence) 221.2 221.2 232.8 249.0
Option exercise price (pence) – – 196.0 –
Option life (years) 2.8 0.8 2.8 2.5
Expected dividends as a dividend yield (%) 2.5% 2.5% 2.5% 2.5%
Risk free interest rate (%) 0.4% 0.2% 0.7% 0.2%
Volatility (%) 26.8% 26.8% 26.5% 31.9%
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 options remain unexercised after a period of 10 years from the date of grant, these options expire.
Options are forfeited if the employee leaves the Group before options vest. SAYE options vest after 3
and expire 3½ years after the date of grant.
The expected life of options used in the model has been adjusted, based upon management’s best
estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
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 options being exercised
in accordance with historical patterns. For LTIP options (nil cost options) the vesting period is three years.
Travis Perkins Plc shares before Demerger
53 weeks ended 1 January 2022
Executive
options SAYE
Nil price
options
Share price at grant date (pence) 1,149 1,204 1,096
Option exercise price (pence) 1,144 898 –
Option life (years) 2.2 3.1 2.2
Expected dividends as a dividend yield (%) 2.5% 2.5% 2.6%
Risk free interest rate (%) (0.1%) 0.0% (0.1%)
Volatility (%) 42.5% 42.4% 42.6%
If options remain unexercised after a period of 10 years from the date of grant, these options expire.
Options are forfeited if the employee leaves the Group before options vest. SAYE options vest after 3 or 5
years and expire 3½ or 5½ years after the date of grant.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 151
Notes to the consolidated financial statements continued
27 SHARE-BASED PAYMENTS CONTINUED
The expected life of options used in the model has been adjusted, based upon management’s best
estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.
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 estimated using a dividend cover of three times (within the Travis Perkins Board’s target range at
the time).
Volatility is based on historic share prices over a period equal to the vesting period. Option life used in the
model has been based on options being exercised in accordance with historical patterns. For executive
share options the vesting period is three years.
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 101 to 114. 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 2022 and 2021 are shown below:
Grant date – scheme Expiry date
Exercise price
(pence)
Share options
(thousands)
Fair value for the
Group (£m)
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
28/09/2021 – Long Term Incentive Plan 28/09/2031 – 1,795 2.5
28/09/2021 – Transition Awards 28/09/2031 – 1,617 3.5
19/10/2021 – Save As You Earn plan 19/04/2025 196.0 5,434 2.7
28/06/2021 – Free Shares n/a – 882 1.5
In the period the Group charged £5.0m (1 January 2022: £3.8m) to the income statement in respect of
equity-settled share-based payment transactions.
The aggregate number of share awards outstanding for the Group and their weighted average exercise
price is shown below:
52 weeks ended 31 December 2022 53 weeks ended 1 January 2022
Weighted
average
exercise price
(pence)
Number of
options
(thousands)
Number of nil
price options
(thousands)
Weighted
average
exercise price
(pence)
Number of
options
(thousands)
Number of nil
price options
(thousands)
Outstanding at the beginning
of the period 110 5,182 4,294 932 1,108 346
Exercised during the period –
Travis Perkins Plc 932 (1,108) (346)
Outstanding at end of period /
before the date of the Demerger – – –
Granted during the period –
Wickes Group Plc 80 9,475 2,813 109 5,434 4,294
Exercised during the period – – (636) – – –
Forfeited during the period –
Wickes Group Plc 192 (3,930) (626) 90 (252) –
Outstanding at the end of
the period 75 10,727 5,845 110 5,182 4,294
Exercisable at the end of the
period – – 126 – – –
Details of the share options outstanding at 31 December 2022 are shown below:
52 weeks ended 31 December 2022 53 weeks ended 1 January 2022
LTIP
Transition
Awards
SAYE and
Free Shares LTIP
Transition
Awards
SAYE and
Free Shares
Range of exercise price (pence) – – nil–196 – – nil–196
Weighted average exercise price
(pence) – – 110 – – 169
Number of shares (thousands) 4,371 862 11,339 1,795 1,617 6,316
Weighted average expected
remaining life (years) 2.1 0.3 2.6 2.8 0.8 2.8
Weighted average contractual
remaining life (years) 9.2 8.8 3.1 9.8 9.8 3.2
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022152
28 COMMITMENTS
Consignment stock
At 31 December 2022, the Group held consignment stock on sale or return of £8.0m (1 January 2022: £9.0m). 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:
(£m)
As at
31 December
2022
As at
1 January
2022
Contracted but not provided for in the accounts 11.2 13.8
29 FINANCIAL INSTRUMENTS
The carrying value of categories of financial instruments
(£m) Note
As at
31 December
2022
As at
1 January
2022
Financial assets:
Cash and cash equivalents 20 99.5 123.4
Trade and other receivables at amortised cost 19 70.2 70.4
169.7 193.8
Financial liabilities:
Trade and other payables at amortised cost 25 132.3 127.9
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 in place to prevent credit risk occurring.
Most revenues arise from the Core business and DIFM projects. Core and DIFM business revenues give rise
to trade receivables which are mainly financed by large reputable financing institutions, which have high
credit worthiness.
The Group establishes an allowance for impairment that represents its expected credit loss in respect
of trade and other receivables.
This allowance is composed of specific losses that relate to individual exposures and also an Expected
Credit Loss (ECL) component established using rates reflecting historical information for payor groups,
and forward looking information.
The ECL as at 31 December 2022 is £1.3m (1 January 2022: £1.6m).
Trade and other receivables exclude prepayments of £17.2m (1 January 2022: £13.6m).
Trade and other payables excludes taxation, social security, accruals and deferred income amounts
totalling £105.4m (1 January 2022: £113.9m).
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.
Fair value of financial instruments
Financial assets 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:
(£m)
As at
31 December
2022
As at
1 January
2022
Included in assets
Level 2
Foreign currency forward contracts at fair value through profit
and loss 2.6 0.7
Included in liabilities
Level 2
Foreign currency forward contracts at fair value through profit
and loss (0.2) -
2.4 0.7
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 153
29 FINANCIAL INSTRUMENTS CONTINUED
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 31 December 2022 (53 weeks ended 1 January 2022: none).
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$58.8.m (1 January 2022: US$87.3.m). The fair value of these derivatives
was a £2.6m asset and a £0.2m liability (1 January 2022: £0.7m asset and £nil liability). These contracts
are not designated as cash flow hedges and accordingly the fair value movement has been reflected in the
income statement as an adjusting item (see note 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
(£m) Note
Carrying
amount
Contractual
cash flows
Within
1 year
Between
one and five
years
More than
five years
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
As at 1 January 2022
Trade and other payables at
amortised cost 25 127.9 127.9 127.9 – –
Lease liabilities 14 742.1 898.4 109.5 390.4 398.5
870.0 1,026.3 237.4 390.4 398.5
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
page 7 7.
Key management compensation
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Salaries and other short-term employee benefits 1.5 1.6
Post-employment benefits 0.1 0.1
Share based payments 0.8 0.9
Total 2.4 2.6
Further information about the remuneration of individual Directors is provided in the audited section of the
Directors’ Remuneration Report on page 105.
The Group has a related party relationship with its subsidiaries, with its Directors and up to the date of the
demerger had related party relationships with Travis Perkins Plc companies. There have been no related party
transactions with Directors other than in respect of remuneration. Transactions with Travis Perkins Plc
companies relate to the purchase of goods and lease arrangements before the demerger date of 28 April
2021 and are detailed below. The Travis Perkins Plc companies ceased to be related parties after the
demerger date and therefore there are no further related parties transactions after that date.
Purchases of £nil (53 weeks ended 1 January 2022: £0.9m) were made from other entities in the Travis
Perkins Plc group. Rental payments of £nil (53 weeks ended 1 January 2022: £0.9m) were made to other
entities in the Travis Perkins Plc group. Rental income of £nil (53 weeks ended 1 January 2022: £0.4m)
was received from other entities in the Travis Perkins Plc group.
31 EVENTS AFTER THE REPORTING PERIOD
After the year end the Group received notification from Barclays of its intention to substantially withdraw its
consumer finance offering from the market, and therefore its intention to cease offering this service to the
Group in relation to finance products for DIFM customers. The Group has commenced the search for an
alternative provider and is confident that this will be completed during 2023.
Notes to the consolidated financial statements continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022154
Company balance sheet
(£m) Notes
As at
31 December
2022
As at
1 January
2022
Assets
Non-current assets
Investment C6 598.9 770.8
Total non-current assets 598.9 770.8
Total assets 598.9 770.8
Equity and Liabilities
Capital and reserves
Issued share capital 21 26.0 26.0
EBT share reserves 21 (0.7) (0.8)
Retained earnings 571.8 738.5
Total equity 597.1 763.7
Current liabilities
Other payables C8 1.8 7.1
Total current liabilities 1.8 7.1
Total liabilities 1.8 7.1
Total equity and liabilities 598.9 770.8
The loss attributable to the owners of the Company for the period ended 31 December 2022 was £139.8m (1 January 2022: profit of £27.3m).
The company’s financial statements of Wickes Group Plc, registered number 12189061, were approved by the Board of Directors on 22 March 2023 and signed on its behalf by:
David Wood Mark George
Chief Executive Officer Chief Financial Officer
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 155
Company statement of changes in equity
(£m)
Issued share
capital
EBT share
reserve
Retained
earnings
Total
equity
At 26 December 2020 25.2 – 743.8 769.0
Profit for the period and other comprehensive income – – 27.3 27.3
Issue of share capital 0.8 (0.8) – –
Dividends paid – – (35.3) (35.3)
Equity-settled share-based payments – – 2.7 2.7
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
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022156
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 million pounds (£m), 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 profit or loss 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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 157
Notes to the Company financial statements continued
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.
C6 INVESTMENT IN SUBSIDIARIES
(£m)
Subsidiary
undertakings Cost
At 26 December 2020 887.5
Additions – share based payments 1.8
At 1 January 2022 889.3
Additions – share based payments 3.7
At 31 December 2022 893.0
Impairment
At 26 December 2020 and 1 January 2022 (118.5)
Impairment (175.6)
At 31 December 2022 (294.1)
Net book value
At 31 December 2022 598.9
At 1 January 2022 770.8
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.
2022 2021
Pre-tax discount rate 17.0% 10.5%
Revenue growth rate 0% – 7.7% 5% – 6%
Gross margin 44.7% – 45.0% 44% – 45%
Long term growth rate 3.5% 1.4%
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 FY22 impairment review was 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). In the prior year, where no impairment charge was
required to be calculated due to the headroom in the impairment review, the Value in Use calculation was
derived on a post IFRS 16 basis.
Impairment
An impairment review was therefore performed with an impairment charge of £175.6m being recognised.
This impairment reflects the deterioration in the UK macro-economic environment and economic
outlook’in 2022, leading to an expectation of a downturn in financial performance in the short term, with a
potentially significant impact across the retail sector as a whole.
Impairment sensitivities
It is possible that a materially different impairment would have been identified in the impairment review if
the key assumptions were changed in the value-in-use calculations. The impact on the impairment charge
recognised from reasonably possible changes in assumption, all other assumptions remaining the same,
are shown in the table below.
Assumption Change in impairment charge
Discount rate increases or decreases by 0.5% £26.7m – £(24.2)m
Revenue increases or decreases by 2% £106.9m – £(106.9)m
Gross margin increases or decreases by 1% £119.5m – £(119.5)m
Long term growth rate increases or decreases by 0.5% £18.8m – £(17.0)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 £597.1m (1 January 2022: £763.7m)
asat 31 December 2022.
Credit risk
As at 31 December 2022, the Company had no amounts owed (1 January 2022: £nil). The Company’s
maximum exposure to credit risk is £nil (1 January 2022: £nil)
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.
Market risk
As at 31 December 2022, the Company had short-term payables of £1.7m (1 January 2022: £7.1m) owed
tosubsidiary undertakings, which are repayable on demand and bear no interest. The Directors do not
perceive that servicing this debt poses any significant risk to the Company given its size in relation to
theCompany’s net assets.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022158
C7 CAPITAL MANAGEMENT AND FINANCIAL INSTRUMENTS CONTINUED
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 £565.6m (1 January 2022: £735.9m). When required the Company
canreceive dividends from its subsidiaries to further increase the distributable reserves.
In the 52 weeks ended 31 December 2022, the Company received £38.3m of dividends from its
subsidiaries (53 weeks ended 1 January 2022: £35.3m) to pay to its equity shareholders of the Parent.
Share-based payments made during the 52 weeks ended 31 December 2022 include nil (53 weeks ended
1 January 2022: £1.1m) of pre-demerger charges for Wickes employees under the Travis Perkins Plc share
schemes.
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
31 December
2022
As at
1 January
2022
Amounts owed to subsidiary undertakings – Wickes Building
SuppliesLimited 1.8 7.1
1.8 7.1
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
31 December
2022
53 weeks
ended
1 January
2022
Amounts invoiced by subsidiaries (1.7) (7.1)
Dividend received from subsidiaries 38.3 35.3
36.6 28.2
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 105.
(£m)
52 weeks
ended
31 December
2022
53 weeks
ended
1 January
2022
Salaries and other short-term benefits* 1.5 1.6
Post-employment benefits* 0.1 0.1
Share-based payments* 0.8 0.9
2.4 2.6
* 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
There have been no events to disclose after the reporting date.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 159
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. 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 (AGM)
The AGM is an important event that gives us an opportunity to engage with our shareholders. Our 2023
AGM is scheduled to be held on 23 May 2023 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 4 November 2022. Shareholders will be
asked to approve a final dividend for the financial year ended 31 December 2022 at the AGM. If approved, a
dividend of 7.3 pence per ordinary share will be paid on 7 June 2023 to Shareholders on the register on the
record date of 21 April 2023.
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 consolidated tax voucher
for each tax year will be available electronically.
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.
ShareGift
ShareGift is a charity share donation scheme for Shareholders who may wish to dispose of a small
quantityof shares where the market value makes it uneconomic to sell on a commission basis. The
scheme is administered by the Orr Mackintosh Foundation and further information can be obtained by
contacting them:
Telephone: 020 7930 3737
Email: www.sharegift.org
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 2022 will be available to view and download on the Company’s website at
www.wickesplc.co.uk. We will 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.
Shareholder information
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022160
ANNUAL GENERAL
MEETING (AGM)
Our 2023 AGM will be held
on23May 2023 at 9.00am.
Details about the meeting and how
to participate are contained within
the Notice of Meeting which will be
available at
www.wickesplc.co.uk
DIVIDENDS
In 2022, we removed cheque dividend
payments and now pay all cash
dividends directly to Shareholders’ bank
accounts. Register your bank details
with Link through the Shareholder Portal
or by contacting Link.
SHAREHOLDER
PORTAL
1
Manage your shareholding
byregistering for the Link
Shareholder portal at
www.signalshares.com
ELECTRONIC
COMMUNICATIONS
Switch to electronic
communications by visiting
theShareholder Portal or
contactingLink.
Investor Relations
investorrelations@wickes.co.uk
Corporate brokers
Citigroup
Investec
Independent auditor
KPMG LLP
Registered office address:
Wickes Group Plc
Vision House
19 Colonial Way
Watford
WD24 4JL
United Kingdom
Registrar
Link Group
10th Floor, Central Square
29 Wellington Street
Leeds LS1 4DL
Tel: +44 (0)371 664 0300*
Email: enquiries@linkgroup.co.uk
Useful information
* 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. (1) You will need your Shareholder reference number to register. This can be found on your share certificate or dividend confirmation.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 161
Adjusted EBITDA Adjusted EBITDA is defined as Earnings before Interest, Tax, Depreciation and
Amortisation and before adjusting items. Adjusting items are defined as those items
of income and expenditure that are material in size or unusual in nature or incidence,
and in the current year such items relate to separation and demerger costs and
certain store impairments, as set out in more detail in Note 9. Removal of such
adjusting items allows the reader to understand the impact of the separation and
demerger project separately from the performance of the underlying business.
AGM Annual General Meeting
BAU Business as usual
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
DIFM Do-it-for-me
DIY Do-it-yourself
DRR Directors’ Remuneration report
DTR Disclosure Guidance and Transparency Rules
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
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
REACH Registration, Evaluation, Authorisation and Restriction of Chemicals
RIDDOR Reporting of Injuries, Diseases and Dangerous Occurrences Regulations
ROCE Return on Capital Employed: a measure of the profit generated by new capital expenditure
RPI Retail Prices Index
Sales density Sales per square foot
SASB Sustainability Accounting Standards Board
SAYE Save As You Earn
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 for Climate-related Financial Disclosures
TSR Total Shareholder Return
VOC Volatile organic compound
Glossary
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022162
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:
(£m)
31 December
2022
1 January
2022
Cost of goods sold 856.2 829.1
Opening stock 188.2 138.3
Closing stock 201.6 188.2
Average stock 194.9 163.2
Cost of goods sold divided by average stock 4.4 5.1
Like-for-like sales
The use of like for like 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 - 52 week basis
The comparative period ended 1 January 2022 is a 53 week period and the current period ended
31 December 2022 is a 52 week period. To enable comparability, Like-for-like sales on a 52 week basis are
calculated as follows:
(£m)
52 weeks ended
31 December
2022
Adjusted revenue 1,559.0
Prior period revenue (53 weeks ended 1 January 2022) 1,534.9
Impact of week 53 (24.5)
Prior period revenue on 52 week basis 1,510.4
Revenue increase on 52 week basis 48.6
Like-for-like sales growth % 3.2%
Like-for-like sales - Core and DIFM
Like-for-like sales are further broken down into Core and DIFM related sales to enable further visibility of the
relative performance of the two areas.
Like-for-like sales – Core
(£m)
52 weeks ended
31 December
2022
Adjusted revenue 1,187.9
Network change (0.3)
Adjusted revenue (like-for-like basis) 1,187.6
Prior period revenue 1,234.7
Prior period network change (3.5)
Prior period other movements (19.7)
Prior period revenue (like-for-like basis) 1,211.5
Increase arising on a like-for-like basis (23.9)
Like-for-like revenue (%) (2.0)%
Like-for-like sales – DIFM
(£m)
52 weeks ended
31 December
2022
Adjusted revenue 371.1
Network change (0.7)
Adjusted revenue (like-for-like basis) 370.4
Prior period revenue 300.2
Prior period network change (1.6)
Prior period other movements (4.8)
Prior period revenue (like-for-like basis) 293.8
Increase arising on a like-for-like basis 76.7
Like-for-like revenue (%) 26.1%
Alternative Performance Measures
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022 163
Like-for-like sales - 3 Year Basis
Given the exposure of recent years to COVID-19 lockdowns, a comparison to a pre-COVID revenue figure is
considered to give a more meaningful analysis. These three year comparatives become less meaningful
when the base year includes the COVID lockdown period, and therefore will no longer be provided after this
year.
3 Year Like-for-like sales is calculated by compounding the like for like growth over the past three years:
Core DIFM Total
2020 like-for-like 18.8% (27.8%) 5.0%
2021 like-for-like 14.2% 8.5% 13.0%
2022 like-for-like (2.0%) 26.1% 3.5%
Compounded 33.0% (1.3%) 22.8%
Free cash flow
The use of free cash flow and why it is useful is discussed on page 31. It is calculated as follows:
(£m) 31-Dec-22 01-Jan-22
Cash generated from operations 160.4 148.0
Add back cash impact of adjusting items 21.7 17.9
Adjusted cash inflow from operating activities 182.1 165.9
Less: repayment of lease liabilities (80.3) (77.5)
Less: Interest on lease liabilities (29.4) (31.3)
Less: purchases of property, plant and equipment (40.4) (26.5)
Less: tax paid (4.3) (14.6)
Add: property disposal proceeds 0.4 1.2
Add: interest received 1.9 0.1
Less: interest paid (1.0) (0.7)
Free cash flow 29.0 16.6
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) 31-Dec-22 01-Jan-22
Adjusted selling costs 332.1 334.9
Adjusted administrative expenses 131.1 117.3
Total adjusted costs 463.2 452.2
Total adjusted sales 1,559.0 1,534.9
Ratio 29.7% 29.5%
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.
(£m)
52 weeks ended
31 December
2022
Adjusted operating profit 103.9
Add back depreciation of property, plant and equipment 20.1
Add back depreciation of right-of-use assets 77.7
Add back amortisation 5.2
Adjusted EBITDA 206.9
(£m) 31-Dec-22
Net debt 591.8
Adjusted EBITDA 206.9
Leverage ratio 2.9x
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
31-Dec-22 01-Jan-22
Sales (£m) 1,559.0 1,517.4
Average square footage (million) 6.3 6.4
Sales density 247 238
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.
Alternative Performance Measures continued
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 2022164
Consultancy, design and production
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Printed on Magno Satin, an FSC
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© Wickes Group Plc
Head office:
Vision House
19 Colonial Way
Watford
United Kingdom
WD24 4JL
Company number 12189061
www.wickesplc.co.uk
Annual Report and Accounts 2022