213800IEX9ZXJRAOL133 2022-01-02 2022-12-31 213800IEX9ZXJRAOL133 2020-01-01 2020-12-31 wickesgroupplc:AdjustedMember iso4217:GBP 213800IEX9ZXJRAOL133 2022-01-02 2022-12-31 wickesgroupplc:AdjustingItemsMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 wickesgroupplc:AdjustedMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 wickesgroupplc:AdjustingItemsMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 iso4217:GBP xbrli:shares 213800IEX9ZXJRAOL133 2022-12-31 213800IEX9ZXJRAOL133 2022-01-01 213800IEX9ZXJRAOL133 2020-12-26 ifrs-full:IssuedCapitalMember 213800IEX9ZXJRAOL133 2020-12-26 ifrs-full:TreasurySharesMember 213800IEX9ZXJRAOL133 2020-12-26 ifrs-full:OtherReservesMember 213800IEX9ZXJRAOL133 2020-12-26 ifrs-full:RetainedEarningsMember 213800IEX9ZXJRAOL133 2020-12-26 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 ifrs-full:IssuedCapitalMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 ifrs-full:TreasurySharesMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 ifrs-full:OtherReservesMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 ifrs-full:RetainedEarningsMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 ifrs-full:IssuedCapitalMember ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 ifrs-full:TreasurySharesMember ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 ifrs-full:OtherReservesMember ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 ifrs-full:RetainedEarningsMember ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember 213800IEX9ZXJRAOL133 2020-12-27 2022-01-01 ifrs-full:IncreaseDecreaseDueToChangesInAccountingPolicyRequiredByIFRSsMember 213800IEX9ZXJRAOL133 2022-01-01 ifrs-full:IssuedCapitalMember 213800IEX9ZXJRAOL133 2022-01-01 ifrs-full:TreasurySharesMember 213800IEX9ZXJRAOL133 2022-01-01 ifrs-full:OtherReservesMember 213800IEX9ZXJRAOL133 2022-01-01 ifrs-full:RetainedEarningsMember 213800IEX9ZXJRAOL133 2022-01-02 2022-12-31 ifrs-full:IssuedCapitalMember 213800IEX9ZXJRAOL133 2022-01-02 2022-12-31 ifrs-full:TreasurySharesMember 213800IEX9ZXJRAOL133 2022-01-02 2022-12-31 ifrs-full:OtherReservesMember 213800IEX9ZXJRAOL133 2022-01-02 2022-12-31 ifrs-full:RetainedEarningsMember 213800IEX9ZXJRAOL133 2022-12-31 ifrs-full:IssuedCapitalMember 213800IEX9ZXJRAOL133 2022-12-31 ifrs-full:TreasurySharesMember 213800IEX9ZXJRAOL133 2022-12-31 ifrs-full:OtherReservesMember 213800IEX9ZXJRAOL133 2022-12-31 ifrs-full:RetainedEarningsMember
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.
Strategic report Governance Financial statements Other information
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
o
n
g
g
o
v
e
r
n
a
n
c
e
S
u
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
Strategic report Governance Financial statements Other information
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.
Strategic report Governance Financial statements Other information
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
Strategic report Governance Financial statements Other information
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.
Strategic report Governance Financial statements Other information
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202210
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
Strategic report Governance Financial statements Other information
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
Strategic report Governance Financial statements Other information
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
Strategic report Governance Financial statements Other information
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
Strategic report Governance Financial statements Other information
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
Strategic report Governance Financial statements Other information
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.
Strategic report Governance Financial statements Other information
Wickes Group Plc Annual Report and Accounts 202216
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.
Strategic report Governance Financial statements Other information
17
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%
RISKS
PRIMARY PRINCIPAL RISK FOCUS:
– Reputation and brand integrity
– Customer service andexperience
OTHER RELATED PRINCIPAL RISKS:
– Operations
– People, culture and safety
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 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 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
RISKS
PRIMARY PRINCIPAL RISK FOCUS:
– Finance and Treasury
– Customer service andexperience
OTHER RELATED PRINCIPAL RISKS:
– Operations
– Climate change
– Autonomy
Strategic report Governance Financial statements Other information
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
Strategic report Governance Financial statements Other information
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
RISKS
PRIMARY PRINCIPAL RISK FOCUS:
– Operations
– Customer service and experience
OTHER RELATED PRINCIPAL RISKS:
– Finance and Treasury
– People, culture and safety
Strategic report Governance Financial statements Other information
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 ENERGYAND
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
R
I
S
K
G
O
V
E
R
N
A
N
C
E
R
I
S
K
M
I
T
I
G
A
T
I
O
N
R
I
S
K
M
O
N
I
T
O
R
I
N
G
A
N
D
R
E
P
O
R
T
I
N
G
R
I
S
K
I
D
E
N
T
I
F
I
C
A
T
I
O
N
A
N
D
A
S
S
E
S
S
M
E
N
T
C
O
N
T
I
N
U
O
U
S
I
M
P
R
O
V
E
M
E
N
T
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