Wickes Group PLC (LSE:WIX) said second-quarter sales increased as the home improvement retailer confirmed it will commence a share buyback.
Revenue grew by 3% year on year in the 13 weeks to 1 July 2023, an improvement on the 1.8% fall reported in the first three months, according to a trading statement.
Sales in decorative and construction categories performed well, Wickes said, while outdoor projects benefited from better weather.
Trade sales have also performed well within its core business, reflecting healthy order pipelines, while inflation continues to slow in line with its expectations, down to 4% in its second quarter.
As a result of the current outlook for the business and excess cash, the group said it will commence a £25mln share buyback as “soon as practically possible”.
The share buyback was announced as part of a new capital allocation policy, focused on balance sheet strength, with an emphasis on cash as opposed to debt and prioritisation of growth.
Additionally, the company is targeting a dividend cover of 1.5x to 2.5x adjusted earnings per share and plans to maintain a 2023 dividend at 10.9p.
“We are also pleased to announce our revised capital allocation policy, which reflects confidence in the company's strategy and business model. The policy focuses on delivering additional shareholder returns through maintenance of the FY2023 dividend and the launch of a £25mln share buyback programme,” said chief executive David Wood.
Wickes said it is comfortable with the Pre-IAS38 adjusted profit before tax consensus of between £54.5mln to £57mln.