Wickes Group plc Prospectus March 2021

Wickes Group plc Prospectus

March 2021

DOCUMENT AND ANY ACCOMPANYING DOCUMENTS ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you

are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, solicitor, accountant or other

professional adviser authorised under the Financial Services and Markets Act 2000 (as amended) (“FSMA”) immediately, if you are in the

United Kingdom, or from another appropriately authorised independent professional adviser if you are taking advice in a territory outside

the United Kingdom.

This document comprises a prospectus (the “Prospectus”) relating to Wickes Group plc (the “Company” or “Wickes”) prepared in

accordance with the Prospectus Regulation Rules of the Financial Conduct Authority (the “FCA”) made under section 73A of FSMA. This

Prospectus has been filed with, and approved by, the FCA in accordance with section 87A of FSMA and has been made available to the

public in accordance with the Prospectus Regulation Rules by the same being made available, free of charge, at www.wickesplc.co.uk and

at the Company’s registered office at Vision House, 19 Colonial Way, Watford WD24 4JL, United Kingdom.

This Prospectus has been approved by the FCA, as competent authority under Regulation (EU) 2017/1129 (as it forms part of retained

European Union (“EU”) law as defined in the EU (Withdrawal) Act 2018) (the “Prospectus Regulation”). The FCA only approves this

Prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by the Prospectus Regulation; such

approval should not be considered as an endorsement of the quality of the securities that are the subject of this Prospectus. Investors

should make their own assessment as to the suitability of investing in the securities. This Prospectus has been prepared in connection with

the proposed demerger of the Wickes Group from the Travis Perkins Group and on the assumptions that the Resolutions will be passed

at the General Meeting and that the Demerger will become effective as proposed.

Applications will be made to the FCA for all of the ordinary shares of the Company (the “Wickes Shares”) to be admitted to the premium

segment of the Official List of the FCA (the “Ofcial List”) and to trading on the main market of the London Stock Exchange plc (the

“London Stock Exchange”) for listed securities (together, “Admission”). It is expected that Admission will become effective, and that

dealings in the Wickes Shares will commence, at 8.00 a.m. (UK time) on 28 April 2021. No application is currently intended to be made for

the Wickes Shares to be admitted to listing or dealing on any other exchange.

The directors of the Company, whose names appear on page 33 of this Prospectus (the “Directors”), and the Company accept responsibility

for the information contained in this Prospectus. To the best of the knowledge of the Company and the Directors, the information contained

in this Prospectus is in accordance with the facts and contains no omission likely to affect the import of such information.

Wickes Group plc

(incorporated under the Companies Act 2006 and registered in England and Wales with registered number 12189061)

Prospectus

Admission to the premium listing segment of the Ofcial List and to trading on

the London Stock Exchange of the Wickes Shares

Joint Financial Advisors and Joint Sponsors

Citigroup Deutsche Bank

Issued and fully paid share capital immediately following Admission

Number

252,143,923

Nominal value

£0.10

This document does not constitute an offer or invitation to sell or issue, or a solicitation of an offer or invitation to purchase or

subscribe for, any securities offered by any person in the Company in any jurisdiction in which it is unlawful for such person

to make such an offer or solicitation. This document is intended solely for holders of Travis Perkins Shares. No Wickes Shares

have been marketed to, or are available for purchase by, the public in the United Kingdom or elsewhere in connection with the

introduction of the Wickes Shares to the premium listing segment of the Ofcial List or the Demerger. This document does not

constitute an offer or invitation for any person to subscribe for or purchase any securities in the Company or any other company.

Investors should read the entire Prospectus and, in particular, examine all the risks that might be relevant in connection with

an investment in the Wickes Shares. See Part I: “Risk Factors” for a discussion of certain risks and other factors that should be

considered prior to any investment in the Wickes Shares.

Citigroup Global Markets Limited (“Citi”) is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the PRA and

the FCA. Citi is acting exclusively as financial adviser and sponsor for the Company and Travis Perkins plc and for no one else in connection with

the Demerger and Admission or any other matters referred to in this document and will not be responsible to anyone other than the Company

and Travis Perkins plc for providing the protections afforded to clients of Citi nor for providing advice in connection with the Demerger, Admission,

or any other matters referred to in this document. Neither Citi nor any of its affiliates, directors or employees owes or accepts any duty, liability or

responsibility whatsoever (whether direct or indirect, consequential, whether in contract, in tort, in delict, under statute or otherwise) to any person

who is not a client of Citi in connection with the Demerger, Admission, this document, any statement contained herein, or otherwise.

Apart from the responsibilities and liabilities, if any, which may be imposed on Citi by FSMA or the regulatory regime established thereunder or

under the regulatory regime of any other applicable jurisdiction, where exclusion of liability under the relevant regulatory regime would be illegal,

void or unenforceable, neither Citi nor any of its affiliates, directors, officers, employees or advisers accepts any responsibility whatsoever for the

contents of this document, including its accuracy, completeness and verification or for any other statement made or purported to be made by it,

or on its behalf, in connection with the Company or its subsidiaries, Wickes Shares or the Demerger or Admission. Citi and its affiliates, directors,

officers, employees and advisers accordingly disclaim, to the fullest extent permitted by applicable law, all and any liability whether arising in tort,

contract or otherwise (save as referred to above) which they might otherwise be found to have in respect of this document or any such statement.

No representation or warranty, express or implied, is made by Citi or any of its affiliates, directors, officers, employees or advisers as to the

accuracy, completeness, verification or sufficiency of the information set out in this document, and nothing in this document will be relied upon as

a promise or representation in this respect, whether or not to the past or future.

Deutsche Bank AG is a joint stock corporation incorporated with limited liability in the Federal Republic of Germany, with its head office in

Frankfurt am Main where it is registered in the Commercial Register of the District Court under number HRB 30 000. Deutsche Bank AG is

authorised under German Banking Law banking law. The London branch of Deutsche Bank AG is registered in the register of companies

for England and Wales (registration number BR000005) with its registered address and principal place of business at Winchester House, 1

Great Winchester Street, London EC2N 2DB. Deutsche Bank AG is authorised and regulated by the European Central Bank and the German

Federal Financial Supervisory Authority (BaFin). With respect to activities undertaken in the UK, Deutsche Bank AG is authorised by the PRA

with deemed variation of permission. It is subject to regulation by the FCA and limited regulation by the PRA. Details about the Temporary

Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on

the FCA’s website. In connection with the Demerger and Admission, Deutsche Bank is acting through its London branch (“Deutsche Bank”

and together with Citi, the “Joint Sponsors”). Deutsche Bank is acting as financial adviser and sponsor exclusively for the Company and Travis

Perkins plc, and no one else in connection with the Demerger and Admission, and Deutsche Bank will not regard any other person (whether

or not a recipient of this document) as a client in relation to the Demerger or Admission and will not be responsible to anyone other than the

Company for providing the protections afforded to its clients or for providing advice in relation to the Demerger or Admission or any other

transaction, matter or arrangement referred to in this document.

Apart from the responsibilities and liabilities, if any, which may be imposed on Deutsche Bank by FSMA or the regulatory regime established

thereunder or under the regulatory regime of any other applicable jurisdiction, where exclusion of liability under the relevant regulatory

regime would be illegal, void or unenforceable, neither Deutsche Bank nor any of its affiliates, directors, officers, employees or advisers

accepts any responsibility whatsoever for the contents of this document, including its accuracy, completeness and verification or for any

other statement made or purported to be made by it, or on its behalf, in connection with the Company or its subsidiaries, Wickes Shares or

the Demerger or Admission. Citi and Deutsche Bank and their affiliates, directors, officers, employees and advisers accordingly disclaim,

to the fullest extent permitted by applicable law, all and any liability whether arising in tort, contract or otherwise (save as referred to above)

which they might otherwise be found to have in respect of this document or any such statement. No representation or warranty, express

or implied, is made by Deutsche Bank or any of its affiliates, directors, officers, employees or advisers as to the accuracy, completeness,

verification or sufficiency of the information set out in this document, and nothing in this document will be relied upon as a promise or

representation in this respect, whether or not to the past or future.

Investors acknowledge they have not relied on the Joint Sponsors or any person affiliated with the Joint Sponsors in connection with any

investigation of the accuracy of any information contained in this Prospectus or that investment decision. Each investor must rely on such

investor’s own examination, analysis and enquiry of the Company and Wickes Shares. Investors should be aware that an investment in

the Company involves a degree of risk and that, if certain risks described in the Prospectus occur, investors may find their investment

materially and adversely affected. The contents of this document should not be construed as legal, business, financial or tax advice. None

of the Company, Citi, Deutsche Bank or any of their respective representatives is making any representation to any prospective investor

regarding the legality of an investment in the Wickes Shares by such prospective investor under the laws applicable to such prospective

investor. Each prospective investor should consult such investor’s own legal, business, financial or tax advisers for advice.

This Prospectus does not constitute an offer to sell or an invitation to subscribe for, or the solicitation of an offer to buy or to subscribe for,

any securities to any person in any jurisdiction.

NOTICE TO US SHAREHOLDERS

The Wickes Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the “US Securities

Act”) or with any securities regulatory authority of any state of the United States, and may not be offered or sold in the United States

absent registration under the US Securities Act an exemption from, or in transactions not subject to, the registration requirements of the

US Securities Act, and in compliance with any applicable State or local securities laws. The Wickes Shares are expected to be issued in

reliance on the position taken by the Division of Corporation Finance of the US Securities and Exchange Commission (“SEC”), set forth in

Staff Legal Bulletin No. 4, that shares distributed in a spin-off do not require registration under the US Securities Act if, as is the case with

respect to the Demerger, certain conditions are satisfied. None of the SEC, any other US federal or state securities commission or any US

regulatory authority has approved or disapproved of the Wickes Shares nor have such authorities reviewed, passed upon or endorsed the

accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence.

NOTICE TO OVERSEAS SHAREHOLDERS

Overseas Shareholders may be affected by the laws of other jurisdictions in relation to the Demerger. Overseas Shareholders should

inform themselves about and observe all applicable legal requirements.

It is the responsibility of any person into whose possession this document comes to satisfy themselves as to the full observance of the laws

of the relevant jurisdiction in connection with the allotment and issue of Wickes Shares following the Demerger, including the obtaining of

any governmental, exchange control or other consents which may be required and/or compliance with other necessary formalities which are

required to be observed and the payment of any issue, transfer or other taxes or levies due in such jurisdiction.

This document has been prepared for the purposes of complying with English law and the rules of the FCA, and the information disclosed

may not be the same as that which would have been disclosed if this document had been prepared in accordance with the laws of jurisdictions

outside the UK. No action has been taken or will be taken by the Company to permit a public offering of the Wickes Shares or to permit the

possession, issue or distribution of this Prospectus in any jurisdiction where action for that purpose may be required. Accordingly, neither

this Prospectus nor any advertisement nor any other offering material may be distributed or published in any jurisdiction, except under

circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Prospectus

comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a

violation of the securities laws of any such jurisdiction.

Overseas Shareholders should consult their own legal and tax advisers with respect to the legal and tax consequences of the Demerger

in their particular circumstances.

This document is dated 24 March 2021.

TABLE OF CONTENTS

SUMMARY INFORMATION ............................................................................................................ 5

EXPECTED TIMETABLE OF PRINCIPAL EVENTS ....................................................................... 12

PART I RISK FACTORS ................................................................................................................. 13

PART II PRESENTATION OF FINANCIAL AND OTHER INFORMATION ..................................... 29

PART III DIRECTORS, SECRETARY, REGISTERED AND HEAD OFFICE AND ADVISERS ...... 33

PART IV BUSINESS DESCRIPTION AND MARKET OVERVIEW ................................................. 34

PART V DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE ................ 63

PART VI SELECTED FINANCIAL INFORMATION ......................................................................... 69

PART VII OPERATING AND FINANCIAL REVIEW ........................................................................ 73

PART VIII CAPITALISATION AND INDEBTEDNESS..................................................................... 91

PART IX HISTORICAL FINANCIAL INFORMATION ...................................................................... 93

PART X UNAUDITED PRO FORMA STATEMENT OF NET ASSETS ........................................... 129

PART XI TAXATION ........................................................................................................................ 133

PART XII ADDITIONAL INFORMATION ......................................................................................... 138

PART XIII DEFINITIONS ................................................................................................................. 180

SUMMARY INFORMATION

A. INTRODUCTION AND WARNINGS

A.1.1 Name and international securities identier number (“ISIN”) of the securities

Ordinary shares in the capital of Wickes Group plc (the “Company” or “Wickes”) with a nominal

value of £0.10 (the “Wickes Shares”).

ISIN code GB00BL6C2002.

A.1.2 Identity and contact details of the issuer, including its legal entity identier (“LEI”)

The Company is a public limited company. Its registered office is at Vision House, 19 Colonial

Way, Watford WD24 4JL, United Kingdom. The Company’s telephone number is +44 (0)19 2365

6600 and its LEI is 213800IEX9ZXJRAOL133.

A.1.3 Identity and contact details of the competent authority approving this Prospectus

This Prospectus has been approved by the FCA, as competent authority, with its head office

at 12 Endeavour Square, London E20 1JN and telephone number: +44 (0)20 7066 1000, in

accordance with Regulation (EU) 2017/1129 (together with the delegated acts, implementing

acts and technical standards thereunder as such legislation forms part of retained EU law, the

“Prospectus Regulation”).

A.1.4 Date of approval of this Prospectus

This Prospectus was approved on 24 March 2021.

A.1.5 Warning

This summary has been prepared in accordance with Article 7 of the Prospectus Regulation

and should be read as an introduction to the Prospectus. Any decision to invest in the Wickes

Shares should be based on consideration of the Prospectus as a whole by the investor. Any

investor could lose all or part of their invested capital and, where any investor’s liability is not

limited to the amount of the investment, it could lose more than the invested capital. Civil liability

attaches only to those persons who have tabled the summary, including any translation thereof,

but only if the summary is misleading, inaccurate or inconsistent when read together with the

other parts of the Prospectus or if it does not provide, when read together with the other parts of

the Prospectus, key information in order to aid investors when considering whether to invest in

the Wickes Shares.

B. KEY INFORMATION ON THE ISSUER

B.1 Who is the issuer of the securities?

B.1.1 Domicile, legal form, jurisdiction of incorporation and country of operation

The Company is domiciled in England and Wales and was incorporated in England and Wales

under the Companies Act on 4 September 2019 as Wickes Group Limited with registered

number 12189061. Wickes Group Limited re-registered as a public limited company by shares

and changed its name to Wickes Group plc on 17 March 2021.

B.1.2 Principal activities

The principal activity of the Company is to act as the ultimate holding company of the Wickes

Group following the Demerger.

The Wickes Group is a digitally-led, service-enabled home improvement retailer, delivering

choice, convenience, value and best-in-class service to customers across the United Kingdom.

The Wickes Group’s mission is to be the home improver’s and the local tradesperson’s partner

of choice, with a vision for “a Wickes project in every home” and its purpose to “help the nation

feel houseproud”. The Wickes Group aims to support its customers however they decide to

undertake their home improvement projects through three tailored customer propositions aimed

at each customer segment: local trade; do-it-for-me; and do-it-yourself. The Wickes Group

drives sales through its estate of 233 retail stores, which support nationwide fulfilment from

convenient locations throughout the United Kingdom, and its website and TradePro mobile app

for trade members, which allow customers to research and order an extended range of the

Wickes Group’s products and services, arrange in-person or virtual design consultations, and

organise timely home delivery or “click-and-collect” from across the Wickes Group network.

B.1.3 Major shareholders

The Company was incorporated in anticipation of the Demerger and, as at 19 March 2021 (being

the latest practicable date prior to publication of this Prospectus) (the “Latest Practicable Date”),

is wholly owned by Travis Perkins. Immediately following the Demerger, the shareholders of the

Company, and the levels of their shareholdings, will be the same as the shareholders of Travis

Perkins as at the Record Time.

As at the Latest Practicable Date, insofar as it is known to the Company (by reference

to notifications to Travis Perkins made in accordance with the Disclosure Guidance and

Transparency Rules), the following persons are, directly or indirectly, interested in 3 per cent.

or more of Travis Perkins’ issued share capital and, assuming such persons do not acquire or

dispose of any Travis Perkins Shares and no changes are made to Travis Perkins’ issued share

capital (in each case, prior to the Record Time), the amount of such person’s holding of the total

voting rights in respect of Wickes Shares at Admission is expected to be as follows:

Shareholder

Percentage of total voting

rights at Admission

BlackRock Inc. ....................................................................... Less than 5 per cent.

Investec Asset Management ................................................. 5.05

Ninety One UK Limited .......................................................... 4.95

Harris Associates L.P. ........................................................... 4.92

OppenheimerFunds, Inc. ....................................................... 4.91

Sanderson Asset Management LLP ...................................... 4.89

B.1.4 Key managing directors

David Wood is Chief Executive Officer (“CEO”) of the Company.

Julie Wirth is Chief Financial Officer (“CFO”) of the Company.

B.1.5 Identity of the statutory auditors

The auditor of the Company since the date of its incorporation has been KPMG LLP, whose

registered office is at 15 Canada Square, Canary Wharf, London E14 5GL. KPMG LLP is a

member of the Institute of Chartered Accountants in England and Wales and has no material

interest in the Wickes Group.

B.2 What is the key nancial information regarding the issuer?

Selected historical key nancial information

The tables below set out selected key financial information for the Wickes Group as at and for

the 52-week periods ended 26 December 2020, 28 December 2019 and 29 December 2018.

Consolidated Prot or Loss and Other Comprehensive Income Data

For the Financial Year 2020, Financial Year 2019 and Financial Year 2018

Financial Year 2020 Financial Year 2019 Financial Year 2018

Adjusted

Adjusting

items

(1)

Total Adjusted

Adjusting

items

(1)

Total Adjusted

Adjusting

Items

(1)

Total

(£ millions)

Revenue .............................. 1,346.9 — 1,346.9 1,292.4 — 1,292.4 1,199.6 — 1,199.6

Cost of sales ........................ (837.8) — (837.8) (791.1) — (791.1) (729.9) — (729.9)

Gross prot ........................ 509.1 — 509.1 501.3 — 501.3 469.7 — 469.7

Selling costs ........................ (323.5) — (323.5) (303.1) — (303.1) (300.6) — (300.6)

Administrative expenses...... (104.0) (20.6) (124.6) (102.4) (39.6) (142.0) (93.2) (19.3) (112.5)

Operating prot ................. 81.6 (20.6) 61.0 95.8 (39.6) 56.2 75.9 (19.3) 56.6

Finance costs ...................... (32.1) — (32.1) (33.5) — (33.5) (34.5) — (34.5)

Prot before tax ................. 49.5 (20.6) 28.9 62.3 (39.6) 22.7 41.4 (19.3) 22.1

Tax....................................... (8.9) 6.3 (2.6) (11.8) 2.0 (9.8) (8.1) 0.9 (7.2)

Prot for the period and

total comprehensive

income ................................ 40.6 (14.3) 26.3 50.5 (37.6) 12.9 33.3 (18.4) 14.9

Note:

(1) In Financial Year 2020, adjusting items included £8.2 million arising from activities related to the Demerger, £10.2 million in impairment charges

relating to a small number of loss-making stores, £2.2 million in relation to restructuring the DIFM design consultant team, tax on adjusting

items of £(3.9) million and deferred tax rate change of £(2.4) million. In Financial Year 2019, adjusting items included Wickes Group separation

costs of £9.2 million, store impairment charge of £1.9 million, loss on legal entity restructuring of £26.6 million and IT impairment charges of

£0.7 million, restructuring costs of £1.2 million and tax on adjusting items of £(2.0) million. In Financial Year 2018, adjusting items included IT

impairment charges of £6.5 million, restructuring costs of £12.8 million, tax on adjusting items of £(3.5) million and deferred tax rate change of

£2.6 million.

Consolidated Balance Sheet Data

As at 26 December 2020, 28 December 2019 and 29 December 2018

26 December 2020 28 December 2019 29 December 2018

(£ millions)

Assets

Total non-current assets ................................ 802.0 886.3 950.1

Total current assets ....................................... 406.4 502.8 887.6

Total assets .................................................. 1,208.4 1,389.1 1,837.7

Equity and Liabilities ...................................

Total equity ................................................... 129.8 278.6 263.7

Total non-current liabilities............................. (713.1) (781.7) (820.9)

Total current liabilities .................................... (365.5) (328.8) (753.1)

Total liabilities .............................................. (1,078.6) (1,110.5) (1,574.0)

Total equity and liabilities ........................... 1,208.4 1,389.1 1,837.7

Consolidated Cash Flow Statement Data

For the Financial Year 2020, Financial Year 2019 and Financial Year 2018

Financial

Year 2020

Financial

Year 2019

Financial

Year 2018

(£ millions)

Net cash inflow from operating activities ....... 76.8 108.5 176.8

Net cash (outflow) from investing activities ... (19.9) (24.1) (41.3)

Net cash (outflow) from financing activities ... (75.8) (75.2) (125.9)

Net decrease/(increase) in cash and cash

equivalents ................................................... (18.9) 9.2 9.6

Cash and cash equivalents at the beginning

of the period................................................... 25.4 16.2 6.6

Cash and cash equivalents at the end of

the period ..................................................... 6.5 25.4 16.2

Selected pro forma key nancial information

This document presents certain pro forma financial information of the Wickes Group to illustrate the

impact of the Demerger on the net assets of the Wickes Group as if the Demerger had taken place on

26 December 2020.

The unaudited pro forma statement of net assets of the Wickes Group is based on the net assets of the

Wickes Group as at 26 December 2020 and has been prepared on the basis that the Demerger was

effective as of 26 December 2020 and in a manner consistent with the accounting policies adopted by the

Company in preparing its audited consolidated financial statements for the year ended 26 December 2020.

Because of its nature, the unaudited pro forma statement of net assets addresses a hypothetical situation

and, therefore, does not represent the Wickes Group’s actual financial position or results. It may not,

therefore, give a true picture of the Wickes Group’s financial position or results nor is it indicative of

the results that may, or may not, be expected to be achieved in the future. The pro forma statement

of net assets has been prepared for illustrative purposes only and in accordance with Annex 20 of the

PR Regulation.

Net assets of the

Wickes Group as

at 26 December

2020

Adjustment for

cash settlement

of intercompany

balances by the

Travis Perkins

Group

Adjustment

for the

repayment

of rate relief

Adjustment for

transaction

costs in

connection with

the Demerger

Adjustment

for settlement

of remaining

intercompany

balances with

the Travis

Perkins Group Pro Forma

Note 1

£’m

Note 2

£’m

Note 3

£’m

Note 4

£’m

Note 5

£’m £’m

Non-current assets

Goodwill ............................. 8.4 — — — — 8.4

Other intangible assets ...... 12.3 — — — — 12.3

Property, plant and

equipment .......................... 103.1 — — — — 103.1

Right-of-use assets............ 654.2 — — — — 654.2

Deferred tax asset ............. 24.0 — — — — 24.0

Total non-current assets . 802.0 — — — — 802.0

Current assets

Inventories ......................... 138.3 — — — — 138.3

Trade and other

receivables ........................ 261.6 (156.1) — — (30.0) 75.5

Cash and cash equivalents 6.5 156.1 (32.6) (5.0) — 125.0

Total current assets ......... 406.4 — (32.6) (5.0) (30.0) 338.8

Total assets ...................... 1,208.4 — (32.6) (5.0) (30.0) 1,140.8

Non-current liabilities

Lease liabilities .................. 712.8 — — — — 712.8

Long-term provisions ......... 0.3 — — — — 0.3

Total non-current

liabilities ........................... 713.1 — — — — 713.1

Current liabilities

Lease liabilities .................. 77.2 — — — — 77.2

Trade and other payables.. 277.9 — (32.6) — — 245.3

Short-term provisions ........ 10.4 — — — — 10.4

Total current liabilities 365.5 — (32.6) — — 332.9

Total liabilities .................. 1,078.6 — (32.6) — — 1,046.0

Net assets/(liabilities) 129.8 — — (5.0) (30.0) 94.8

Notes:

(1) The net assets of the Wickes Group as at 26 December 2020 have been extracted without material adjustment from the Group’s audited

consolidated financial statements as at and for the year ended 26 December 2020.

(2) The adjustment in Note 2 reflects the £156.1 million cash settlement of certain intercompany balances owed by the Travis Perkins Group to the

Wickes Group as part of the pre-Demerger Reorganisation in order to provide that the Wickes Group had a cash balance of £130.0 million as at

26 December 2020. On the settlement of these intercompany balances immediately prior to the Demerger the Wickes Group will derecognise

an equivalent amount of the intercompany receivables due from the Travis Perkins Group.

(3) The adjustment in Note 3 reflects the voluntary repayment of £32.6 million of business rates relief claimed by the Wickes Group in April to

December 2020.

(4) The adjustment in Note 4 reflects transaction costs that are directly attributable to the Demerger that are being borne by the Wickes Group and

which had not been incurred at 26 December 2020. These comprise estimated professional adviser fees and exclude one-off costs arising from

the separation of the Wickes Business from the Travis Perkins Group which are estimated to be £5.0 million.

(5) The adjustment in Note 5 reflects the settlement of the remaining intercompany balance by the Travis Perkins Group to the Wickes Group

achieved via the payment of dividends equal to a total amount of £30.0 million by the Wickes Group to the Travis Perkins Group, left outstanding

as an intercompany balance and offset against the remaining equivalent intercompany balances owed by the Travis Perkins Group.

(6) Each of the adjustments in Notes 2, 3, 4 and 5 are non-recurring items.

No adjustment has been made to reflect any other change in the Wickes Group financial position in this

period since 26 December 2020.

B.3 What are the key risks that are specic to the issuer?

Risks related to the Wickes Group’s business

The Wickes Group operates in the highly competitive UK home improvement market, and

competitive behaviour could negatively impact customer demand and sales.

The market for home improvement purchases, and as a result the Wickes Group’s business,

may be adversely affected by economic and political conditions and other factors influencing

disposable income in the United Kingdom.

The Wickes Group faces risks related to the impact of COVID-19 and other communicable

diseases or pandemics in the future.

The Wickes Group relies on its reputation as a trusted provider of high-quality home improvement

products and services at good value, and any deterioration in its reputation could adversely

affect its business.

The Wickes Group may experience interruptions involving its suppliers.

A failure to implement the Wickes Group’s integrated growth strategy may adversely affect

its business.

The Wickes Group may not be able to accurately predict and plan for changes in customer demand

and preferences, which could lead to reductions in sales or negatively impact operating margins.

A failure of a key information technology system or process, including due to a cyber-attack,

could adversely affect the Wickes Group’s operations or cause a loss of customer data.

The Wickes Group faces risks relating to any property damage or interruption of operations at

one of its delivery centres, which could significantly interrupt its operating activities.

Risks related to the Demerger

Wickes will incur new costs in its transition to a standalone public company and its management

team will be required to devote substantial time to new compliance matters.

Following the Demerger, Wickes will face new challenges as an independent company, which

could adversely affect its financial or operating performance.

The Wickes Group utilises Travis Perkins for the continued provision of certain transitional

services (specifically relating to IT and human resources), and a material interruption could

negatively impact the Wickes Group’s operating activities.

C. KEY INFORMATION ON THE SECURITIES

C.1 What are the main features of the securities?

C.1.1 Type, class and ISIN

The Wickes Shares are fully paid ordinary shares with a nominal value of £0.10 each. The

Company has, and on Admission will have, one class of ordinary shares, comprising the entire

issued share capital of the Company. On Admission, the Wickes Shares will be registered with

ISIN number GB00BL6C2002 and SEDOL number BL6C200.

C.1.2 Currency, denomination, par value, number of securities issued and duration

The currency of the Wickes Shares is pounds sterling.

On Admission, the number of Wickes Shares in issue will be equal to the number of Travis

Perkins Shares in issue at the Record Time, all of which will be fully paid or credited as fully paid.

At the Latest Practicable Date, Travis Perkins’ share capital consisted of 252,143,923 ordinary

shares and therefore the Company’s share capital also consisted of 252,143,923 ordinary

shares. Further Travis Perkins Shares may be issued by Travis Perkins to satisfy entitlements

under the Travis Perkins Share Plans, although it is not currently anticipated that any further

Travis Perkins Shares will be issued. Any additional Travis Perkins Shares will, if issued, be

issued prior to the Record Time and a corresponding number of Wickes Shares will also be

issued prior to the Record Time.

C.1.3 Rights attached to the Wickes Shares

The rights attaching to the Wickes Shares will be uniform in all respects and they will form a

single class for all purposes, including with respect to voting and for all dividends and other

distributions thereafter declared, made or paid on the Company’s share capital.

Subject to the provisions of the Companies Act, any equity securities issued by the Company

for cash must first be offered to the holders of Wickes Shares (“Wickes Shareholders”) in

proportion to their holdings of Wickes Shares. The Companies Act and Listing Rules allow for

the disapplication of pre-emption rights which may be waived by a special resolution of the

Wickes Shareholders, whether generally or specifically, for a maximum period not exceeding

five years.

On a show of hands, every Wickes Shareholder who is present in person shall have one vote

and, on a poll, every Wickes Shareholder present in person or by proxy shall have one vote per

Wickes Share.

Except as provided by the rights and restrictions attached to any class of shares, Wickes

Shareholders will under general law be entitled to participate in any surplus assets in a winding-

up in proportion to their shareholdings.

C.1.4 Rank of securities in the issuer’s capital structure in the event of insolvency

The Wickes Shares do not carry any rights with respect to capital to participate in a distribution

(including on a winding-up) other than those that exist as a matter of law. The Wickes Shares

will rank pari passu in all respects.

C.1.5 Restrictions on the free transferability of the securities

The Wickes Shares are freely transferable and there are no restrictions on transfer.

C.1.6 Dividend or payout policy

Wickes is a strongly cash generative business and the Board recognises the importance of

balancing investment in the business with dividends to shareholders. The Board intends to

adopt a progressive dividend policy and currently expects to start with a dividend of 30 per

cent. of adjusted profit after tax in respect of the full financial year ending 1 January 2022, split

approximately one-third and two-thirds between interim and final dividends, respectively. The

Company intends to put in place a dividend re-investment plan following Admission.

C.2 Where will the securities be traded?

Application will be made to the FCA for all of the Wickes Shares, issued and to be issued, to be

admitted to the premium listing segment of the Official List and to the London Stock Exchange

for such Wickes Shares to be admitted to trading on the London Stock Exchange’s main market

for listed securities.

C.3 What are the key risks that are specic to the securities?

There is no prior trading record for the Wickes Shares and an active trading market for the

Wickes Shares may not develop or be sustained.

Significant trading volumes of Wickes Shares in the public market in the period post-Demerger

and subsequently could impact the share price.

The Wickes Shares are priced in pounds sterling and will be quoted and traded in pounds

sterling. In addition, any dividends the Company may pay will be declared and paid in pounds

sterling. Accordingly, holders of the Wickes Shares resident outside the United Kingdom are

subject to risks arising from adverse movements in the value of their local currencies against the

pound sterling.

D. KEY INFORMATION ON THE ADMISSION TO TRADING ON A REGULATED MARKET

D.1 Under which conditions and timetable can I invest in this security?

It is expected that admission of the Wickes Shares to listing and trading on the London Stock

Exchange will become effective and that dealings will commence at 8.00 a.m. (UK time) on

28 April 2021.

D.2 Why is this Prospectus being produced?

This Prospectus does not constitute an offer or invitation to any person to subscribe for or

purchase any shares in the Company. It is intended solely for holders of Travis Perkins Shares

and has been prepared in connection with the application to list the Wickes Shares on the

premium listing segment of the Official List and to admit the Wickes Shares to trading on the

London Stock Exchange.

LR 2.2.4(1)

(11) 4.8

(1) 18.5.1

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Event Time and date

Publication of this Prospectus and the Travis Perkins

Circular

24 March 2021

Latest time and date for receipt of Proxy Forms and

CREST electronic proxy appointment instruction

10.4 a.m. on 23 April 2021

Travis Perkins’ Annual General Meeting 10.00 a.m. on 27 April 2021

General Meeting

(1)

10.45 a.m. on 27 April 2021

Announcement of result of General Meeting 27 April 2021 (after the General Meeting)

Latest time and date for transfers of Travis Perkins

Shares to be registered in order for the transferee to be

registered at the Record Time

6.00 p.m. on 27 April 2021

Record Time for determining entitlement to the

Demerger Dividend

6.00 p.m. on 27 April 2021

Demerger Dividend to Qualifying Travis Perkins

Shareholders

After 6.00 p.m. on 27 April 2021

Admission and commencement of dealings in Wickes

Shares on the London Stock Exchange

8.00 a.m. on 28 April 2021

CREST accounts credited in respect of Wickes Shares

in uncertificated form

As soon as practicable after 8.00 a.m. on

28 April 2021

Posting of share certificates for Wickes Shares Week commencing 10 May 2021

Notes:

(1) The start time for the General Meeting may be delayed if Travis Perkins’ annual general meeting runs over 10.45 a.m., in which case the General

Meeting shall commence immediately after Travis Perkins’ annual general meeting is concluded or adjourned.

All references to time in this document are to London time unless otherwise stated.

The dates given are based on the Company’s current expectations and may be subject to change. If any of the times or dates above change, Travis

Perkins will give notice of the change by issuing an announcement through a Regulatory Information Service.

PART I

RISK FACTORS

Any investment in the Wickes Shares is subject to a number of risks. Prior to investing in the Wickes

Shares, prospective investors should carefully consider the risk factors associated with any investment in

the Wickes Shares, the Wickes Group’s business and the industry in which it operates, together with all

other information contained in this Prospectus, including, in particular, the risk factors described below.

Prospective investors should note that the risks relating to the Wickes Group, its industry and the Wickes

Shares summarised in the section of this Prospectus headed “Summary Information” are the risks that

the Directors and the Company believe to be the most essential to an assessment by a prospective

investor of whether to consider an investment in the Wickes Shares. However, as the risks which the

Wickes Group faces relate to events and depend on circumstances that may or may not occur in the

future, prospective investors should consider not only the information on the key risks summarised in

the section of this Prospectus headed “Summary Information” but also, among other things, the risks

and uncertainties described below.

The risk factors described below are not an exhaustive list or explanation of all risks which investors may

face when making an investment in the Wickes Shares and should be used as guidance only. Additional

risks and uncertainties relating to the Wickes Group that are not currently known to the Wickes Group,

or that the Wickes Group currently deems immaterial, may individually or cumulatively also have a

material adverse effect on the Wickes Group’s business, results of operations and/or financial condition

and, if any such risk should occur, the price of the Wickes Shares may decline and investors could lose

all or part of their investment. An investment in the Wickes Shares involves complex financial risks and

is suitable only for investors who (either alone or in conjunction with an appropriate financial or other

adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient

resources to be able to bear any losses that may result therefrom. Investors should consider carefully

whether an investment in the Wickes Shares is suitable for them in the light of the information in this

Prospectus and their personal circumstances.

The order in which the following risk factors are presented does not necessarily reect the

likelihood of their occurrence.

Risks related to the Wickes Group’s business

The Wickes Group operates in the highly competitive UK home improvement market, and

competitive behaviour could negatively impact customer demand and sales.

The UK market for home repair, maintenance and improvement products and services is highly

competitive, particularly with respect to customer experience, price, quality, availability, product and

delivery options, as well as digital capabilities. With respect to the Wickes Group’s stores, it also

competes based on store location and appearance as well as presentation of merchandise.

The Wickes Group’s competitors include other national home improvement retailers, as well as local

home improvement retailers and a variety of specialty design and home decorating stores in many

of the cities and towns where the Wickes Group’s stores are located, as well as online retailers. New

competitors could also emerge, including as a result of a non-UK home improvement or generalist

retailer expanding into the United Kingdom or merging with an existing UK home improvement retailer.

Consolidation in the industry could also alter the competitive landscape.

In the past, competitors have attempted to use aggressive pricing strategies in order to gain market

share, including for example Bunnings following its purchase of Homebase and brief entry into the UK

market from 2016 to 2018. This created market disruption which negatively affected the Wickes Group’s

market share, sales volumes and revenue. Competitors may also target certain of the Wickes Group’s

customer markets, for example, by offering a more attractive proposition for local trade customers, or

aiming to significantly improve customer service generally or competing kitchen and bathroom service

offerings, or any future do-it-for-me (“DIFM”) services offered by the Wickes Group. There can be no

assurance that existing or future competitors will not undertake similar strategies in the future, which

could negatively impact the Wickes Group’s market share and result in defensive pricing and other

strategies being undertaken by the Wickes Group in response. In particular, because DIFM services are

a strategic growth area for the Wickes Group, significantly increased competition – whether from new

entrants, or a return to this market by previous market participants – for these customers could have a

significant impact on the Wickes Group’s customer proposition and revenue from DIFM services.

The Wickes Group also competes with a variety of generalist retailers, including discounters and local

grocers, as well as online retailers such as Amazon, which sell various products offered by the Wickes

Group even if they do not specialise in home improvement products. As a result, the Wickes Group faces

competition for its target DIY and trade customers across a variety of the product lines that it offers.

Some of these competitors may have better market presence, name or brand recognition, financial

resources, supply chains, distribution platforms, economies of scale and/or lower cost bases than the

Wickes Group, in particular as compared to the Wickes Group’s historical operations as part of the

Travis Perkins Group, which could allow them to offer a wider range of products or products at lower

prices than the Wickes Group and to respond more swiftly to changes in market conditions. During

periods of deteriorating economic conditions, customers may become increasingly price-conscious and

competitors may respond accordingly in order to maintain volume. Certain competitors may also seek to

offer greater choice and convenience than the Wickes Group.

Actions taken by the Wickes Group’s competitors, as well as actions taken by it to maintain its

competitiveness and reputation, may place pressure on its pricing strategy, margins and profitability. The

Wickes Group’s competitors may also merge or form strategic partnerships, thus achieving economies

of scale in buying, distribution and logistics, which could cause additional competitive pressure for the

Wickes Group. There can be no assurance that the Wickes Group will be able to respond adequately

to these multiple sources and forms of competition, whether from existing competitors or new market

entrants. As a result of the above, or as a result of increasing competitive pressure due to factors

beyond the Wickes Group’s control, its business, results of operations, financial condition or prospects

could be materially adversely affected.

The market for home improvement purchases, and as a result the Wickes Group’s business,

may be adversely affected by economic and political conditions and other factors inuencing

disposable income in the United Kingdom.

The Wickes Group’s financial performance depends significantly on the strength of the UK home

improvement market, which is in turn influenced by the housing market in the United Kingdom. Trends

in home improvement, housing repair and maintenance expenditure have historically been linked to

leading housing market indicators, such as housing turnover and mortgage approvals. As a result, if

economic or political conditions lead to low growth levels, negatively impacting the UK housing market,

this may create uncertainty in the Wickes Group’s strategic business planning and negatively impact

demand for the Wickes Group’s products and services.

The UK housing market can be affected by a variety of economic factors, including inflation, real

disposable income, salaries, interest rates, the availability of consumer credit and consumer confidence,

as well as global economic conditions, health concerns (including related to COVID-19, see “—The

Wickes Group faces risks related to the impact of COVID-19 and other communicable diseases or

pandemics in the future”) and UK government policy. In particular, these factors could lead to a decline

in consumer confidence, increases in unemployment and repossession rates, and limited availability

of credit (including mortgages, home equity loans and consumer credit), which could result in lower

sales for the Wickes Group. For example, consumer confidence levels and housing transactions were

impacted by the result of the 2016 UK referendum to leave the European Union, and lockdown measures

early in the COVID-19 pandemic restricted home viewing activities and reduced transactions. Sentiment

can also be negatively impacted by consumer perception of economic and political conditions, as well as

changes to UK government regulation and policy, such as changes to stamp duty levels.

As a result, adverse conditions in, or uncertainty about, these markets, the economy or the political

climate could adversely impact the Wickes Group’s customers’ confidence or financial condition, causing

them to decide against purchasing home improvement products and services, causing them to delay

purchasing decisions or impacting their ability to pay for products and services. Any of these trends may

have a material adverse effect on the Wickes Group’s business, results of operations, financial condition

or prospects.

The Wickes Group faces risks related to the impact of COVID-19 and other communicable

diseases or pandemics in the future.

The spread of the COVID-19 strain of coronavirus and associated responses have caused significant

disruption to the global economy and financial markets, including supply chains, manufacturing

processes, and travel and shipment capabilities in various countries globally. On 11 March 2020, the

World Health Organisation officially declared the coronavirus outbreak a pandemic, and governments

around the world have at various times implemented emergency measures, including international and

domestic travel and other restrictions in an attempt to contain and slow down the further spread of the

virus. Emergency measures by central banks and governments around the world may not be sufficient

to offset the negative economic consequences caused by this outbreak, and there remains significant

uncertainty regarding the extent to which the pandemic will affect consumer behaviour (including in

relation to home purchase and home improvement activities, see “—The market for home improvement

purchases, and as a result the Wickes Group’s business, may be adversely affected by economic and

political conditions and other factors influencing disposable income in the United Kingdom”) in the future.

Preventative measures to contain the spread of COVID-19 have led, at times, to the temporary closure

of retail locations, factory and industrial facilities, schools and public spaces, as well as travel restrictions

impacting the movement of people and goods in the United Kingdom, a number of European countries

and other regions worldwide. Such closures and restrictions have caused disruptions to elements of

the Wickes Group’s supply chain (including through distributors and production of the Wickes Group’s

branded products), and significant delays or shortages could negatively impact its ability to serve

customers. In the longer term, the cost of production charged by such manufacturers may increase as

a result of supply or other issues arising as a result of the outbreak, which may negatively affect the

Wickes Group’s margins.

The Wickes Group faces risks arising from the impact of COVID-19 on its customers and the UK home

improvement market generally. Although the Wickes Group’s stores (as with other home improvement

retailers) have been classified as “essential businesses” and permitted to remain open throughout most

of the pandemic, the Wickes Group experienced a one-day closure of all stores on 24 March, followed

initially by an online-only light operating model, during which all locations (other than dedicated kitchen

and bathroom stores) continued to operate as fulfilment centres for click-and-collect and home delivery.

Subsequent public re-openings of these stores were staged, with an initial six stores on 30 April 2020 and

the remainder of these locations on 14 May and 19 May for all locations on 14 May and 19 May. Kitchen

and bathroom stores did not reopen until 1 July, and showroom space experienced intermittent closures

across the network, including during the November-December 2020 lockdown and since 5 January

2021. In the future, a significant deterioration of public health conditions could lead to implementation

of strict lockdown measures and forced closure of retail locations including Wickes stores or severely

limit the number of colleagues and customers allowed in a store at one time. Under severe lockdown

measures, the Wickes Group could also be prohibited from offering click-and-collect services or providing

home-delivery services from store locations, or from operating fulfilment and delivery activities from its

distribution centres, any of which would significantly limit the Wickes Group’s ability to continue serving

its customers. The pandemic could also affect the Wickes Group’s colleagues, see “The Wickes Group’s

success is dependent upon senior management and colleague teams, as well as skilled third-party

personnel”.

In addition, the pandemic has caused particular disruption to the DIFM and Local Trade markets, as

lockdowns, stay-at-home orders and social distancing measures have, at times, limited demand for

home improvement services that require third parties entering the home and, in particular in DIFM, limited

in-store showroom and in-person design activities due to social-distancing requirements. In addition,

the Wickes Group’s six kitchen and bath stores and its DIFM showrooms in a significant number of

stores have been closed at times during the course of the pandemic. Although the Wickes Group has

significantly expanded its virtual DIFM offering since the start of the pandemic, and it continues to engage

with customers through its expanded digitally-led offering and growth in delivery and click-and-collect

services, it has experienced periods of slow demand in Local Trade and significantly slower demand in

DIFM at times since the start of the pandemic and there remains uncertainty whether and when demand

in particular in DIFM, will reach levels observed prior to outbreak of the pandemic. In addition, while

the Wickes Group has experienced a significant increase in core DIY demand since the start of the

pandemic, this trend may not continue in the coming years.

Although the significance of COVID-19 and governmental actions to curtail its spread remain uncertain, it

is expected to continue to have a significant negative impact on the affected economies, negatively impact

global trade and markets and impact consumer demand. In the future, outbreaks of other communicable

diseases or pandemics could result in implementation of similar restrictions on travel and commercial

activity, or lead to supply disruptions in the United Kingdom or elsewhere, and negatively impact the

Wickes Group’s operations or demand for its products and services. If any of these events materialise,

it could have a material adverse effect on the Wickes Group’s business, results of operations, financial

condition or prospects.

The Wickes Group relies on its reputation as a trusted provider of high-quality home improvement

products and services at good value, and any deterioration in its reputation could adversely

affect its business.

The Wickes brand is an important asset, and maintaining the reputation of and value associated with

the Wickes brand is central to the success of the Wickes Group’s business. However, the Wickes Group

could be adversely affected if customers lose confidence in the perceived value, quality or safety of the

products or services offered by the Wickes Group, or in the Wickes Group’s reputation as a responsible

partner for home improvement projects.

In order to promote its products, the Wickes Group engages in promotional activity, such as limited time

price reductions and sales events, which may be subject to scrutiny. If consumers or the Advertising

Standards Authority (“ASA”) conclude that promotional activity by the Wickes Group does not provide an

accurate representation of the true or discounted value of a product, this could have a negative impact

on the perception of the Wickes Group as offering value for money to its customers, and therefore harm

its reputation and its operating and financial performance.

In addition, a significant portion of the home improvement products sold by the Wickes Group are

third-party branded products. As a result, the Wickes Group is, in part, dependent on manufacturers’

investment in their own marketing initiatives and efforts to promote their brands, in order for customers

to purchase these products. The Wickes Group also depends on its suppliers to comply with applicable

employment, environmental, safety and other laws and standards so as not to negatively impact their

branded products. However, there can be no assurance that suppliers are or will continue to effectively

promote their brands or remain in compliance with applicable law, and if they fail to do either of these,

it could lead to a deterioration in the reputation of the third-party brands stocked by the Wickes Group.

The Wickes Group also sells a number of products under the Wickes brand. However, the Wickes Group

sources these products from third parties and does not control the design or production of these items.

The Wickes Group could be adversely affected if customers lose confidence in the safety and quality of

the Wickes Group’s own-brand products. These products are important to the Wickes Group’s strategy

because they support the reputation of the Wickes brand and the Wickes Group typically earns a higher

margin on own-brand products than third-party branded items. Maintaining broad market acceptance

of its own-brand products depends on many factors, including pricing, costs, quality and customer

perception, and the Wickes Group may not achieve or maintain expected sales for its own-brand

products. A shift in the Wickes Group sales mix away from own-brand products, or a decline in overall

sales if any negative perception of these products adversely affects customers’ perception of the Wickes

Group more generally, could cause customers to switch to other home improvement retailers and have

a negative impact on the Wickes Group operating results.

The Wickes Group’s reputation may also depend on its perceived sustainability credentials. Across its

operations, and in light of increased public focus on environmental, social and governance matters,

the Wickes Group faces risks that customers and potential customers will not view it as a responsible

partner for their home improvement projects. As a result, any violation, or allegations of a violation, of

such laws, regulations or customer expectations by the Wickes Group or its suppliers could lead to

unfavourable publicity and reputational damage, which may cause a decline in public demand for the

Wickes Group’s products or services. In addition, if the Wickes Group does not meet applicable legal

requirements, it may be required to incur expenditure or make changes to its supply chain and other

business arrangements to ensure compliance.

If the Wickes Group is not perceived as providing value for money, or is not considered a trustworthy

and high-quality home improvement partner, and customers choose other products, retailers or service

providers over the Wickes Group, it could have a material adverse effect on the Wickes Group’s business,

results of operations, financial condition or prospects.

The Wickes Group relies on certain key suppliers, the loss of which could negatively impact

operating performance.

The Wickes Group product and service offerings rely on its relationships with a variety of domestic and

international suppliers. While the Wickes Group seeks to diversify its supplier network and maintains

relationships with approximately 370 different suppliers, certain key products that the Wickes Group

relies on, including kitchen cabinetry and timber, paint and plaster, are acquired from a limited number

of suppliers. As a result, if any one of the suppliers of key products fails to deliver on commitments or,

for any reason, cannot provide the Wickes Group with the products or supplies necessary for ongoing

operations, the Wickes Group could experience merchandise shortages or significant delays to its DIFM

services, which could lead to lost sales and reputational damage.

In addition, the Wickes Group may not be able to identify, develop and maintain relationships with

qualified suppliers who can satisfy its standards for price, quality, safety standards, quantity and other

requirements, including if an existing key supplier ceases trading or ends its relationship with the Wickes

Group and a new supplier needs to be located. The Wickes Group typically enters into contracts with

suppliers for an average of one to three years, which provides a measure of assurance of price and

supply (subject to the suppliers fulfilling their contractual obligations). However, when a contract expires,

the Wickes Group cannot be assured that it will be able to renew that contract or secure a contract with

a new supplier on equal or better terms and its sales and inventory levels could suffer if it is unable to

promptly replace a supplier.

Any substantial decrease in the availability of products from the Wickes Group’s key third-party suppliers

and own-brand manufacturers, including due to the loss of a key supplier, or significant changes to supply

terms at the time of renewal, could lead to lost sales or increased costs, which could have a material

adverse effect on the Wickes Group’s business, results of operations, financial condition or prospects.

The Wickes Group may experience interruptions involving its suppliers.

The products sold by the Wickes Group, whether they are sold under the Wickes brand or a third-party

label, are produced by third parties. In addition, third-party suppliers support a number of services

provided by the Wickes Group, including courier services as part of the Wickes Group’s fulfilment

capabilities and installation services as part of the Wickes Group’s DIFM offering. The Wickes Group

also relies on service providers for certain internal operating functions, such as information technology

integration.

A variety of issues might disrupt these supply chains and supplier relationships. For example, political

and economic instability in the countries in which foreign suppliers or manufacturers are located, the

financial instability of suppliers, suppliers’ failure to meet the Wickes Group’s standards, issues with

labour practices of its suppliers or labour problems they may experience (such as strikes), the availability

and cost of raw materials to suppliers, merchandise quality or safety issues, transport availability and

cost, inflation and other factors relating to the suppliers and the countries in which they are located or

from which they import could interrupt the Wickes Group’s sourcing activities. In addition, the COVID-19

pandemic, in particular if a significant deterioration in public health conditions leads to renewed lockdown

and other restrictions, could heighten the risks of certain of these supply risks. Any of these factors,

which are beyond the Wickes Group’s control, could have negative implications for the Wickes Group.

A significant proportion of the products sold by the Wickes Group, whether under the Wickes brand

or a third-party brand, are imported from outside the United Kingdom or purchased from domestic

distributors that import from outside the United Kingdom. As a result, the terms of the United Kingdom’s

departure from the European Union may impact the Wickes Group’s ability to procure these products

in a timely and cost-effective manner, whether from EU countries or from outside the European Union

pursuant to the United Kingdom’s existing trade arrangements. Further exchange rate volatility may

also negatively affect the Wickes Group’s cost of sales, as described in “—Cost inflation, including

wage inﬂation, could have an impact on the Wickes Group’s businesses, results of operations, nancial

condition or prospects”. Following its formal departure from the European Union on 31 January 2020,

the United Kingdom ceased trading as part of the European Union on 31 December 2020 following entry

by the United Kingdom and the European Union into the EU-UK Trade and Cooperation Agreement

(the “EU-UK TCA”). The impact of the changes in the trading relationship between the United Kingdom

following entry into and implementation of the EU-UK TCA is uncertain and may continue to change in

the coming years. However, if changes to the United Kingdom’s trading relationship with the European

Union result in the introduction of tariffs, in particular on products from third-party countries with whom

the United Kingdom needs to establish new trading relationships, or other costs arise from non-tariff

measures, there can be no assurance that these costs could be passed on to customers. Disruption to

the United Kingdom’s import capacity could also affect the availability of products sold by the Wickes

Group. As a result, the United Kingdom’s departure from the European Union may cause significant

disruption, which could negatively impact the Wickes Group’s ability to source products.

Disruptions due to labour stoppages, strikes or slowdowns that affect the Wickes Group’s suppliers, or

changes in global trade that negatively impact the Wickes Group’s ability to procure products on the

same terms it currently does, or other disruptions involving the Wickes Group’s suppliers or the shipping,

transportation and handling industries also may affect its ability to receive merchandise in a timely

manner and thus may negatively affect the Wickes Group’s sales and profitability. The Wickes Group

may in the future experience product shortages, due to any or all of the factors described above, which

could have a material adverse effect on the Wickes Group’s business, results of operations, financial

condition or prospects.

A failure to implement the Wickes Group’s integrated growth strategy may adversely affect

its business.

The Wickes Group’s growth strategy relies on its ability to provide customers with best-in-class service

and a fast and convenient shopping experience, whether they are shopping online or in-store. As a

result, the Wickes Group has undertaken efforts to improve its digital capabilities, further integrate its

operations across its service offering and to improve its in-store product selection and order fulfilment

services, so that the Wickes Group can provide its customers with the products they need when and

where they need them. In Financial Year 2020, the Wickes Group approached two-thirds of sales that

utilise its digitally-enabled capabilities, including online ordering, advanced “online, in-store” purchases

from in-store, the TradePro digital app, online research ahead of an in-store purchase, showroom web

leads and through the virtual DIFM journey. This strategy places the Wickes Group’s digital capabilities

at the heart of the customer journey and utilises its store estate to support efficient order fulfilment,

but it may prove unsuccessful or additional investment may be required to support further systems

improvements.

In addition, investment activities undertaken in the past may not deliver the targeted returns. For

example, the Wickes Group has undertaken significant work as part of its ongoing store transformation

initiative, including to improve the quality of the store estate and right-size certain store locations to

support more efficient operations and improve the customer experience. While the COVID-19 pandemic

has accelerated certain in-store reconfiguration activities, including to increase in-store storage space

in a number of high-volume, small-footprint locations to support click-and-collect activities, there can be

no assurance the extent to which they will support operating activities in the future or whether or where

further investment will be required. Future re-fit activities will require additional investment and may

not deliver a similar sales uplift and level of return as historical investment at other stores. The Wickes

Group anticipates undertaking re-fit activities at between 35 and 40 additional stores. In addition, a

decline in the Wickes Group’s operating performance could limit its ability to undertake future renovation

and re-fit works, which could negatively impact its revenue and reputation.

A number of factors, including the manifestation of the other risks described in this document, could

limit management’s ability to accurately project and strategically plan for shifts in customer demand and

preferences and, as a result, prevent the Wickes Group’s strategic initiatives from being successfully

or promptly completed. In addition, the Wickes Group’s strategy relies on customers finding the Wickes

Group’s website easy to use and helpful, welcoming and conveniently located stores, compelling

kitchen and bathroom service offerings, as well as any future DIFM offerings, and online and in-store

product range offerings that meet their needs. However, customers may not respond positively to

these initiatives and digitally-enabled sales may not continue growing. If the Wickes Group is unable to

continue developing and implementing its digitally-led, service-enabled strategy, it could have a material

adverse effect on the Wickes Group’s business, results of operations, financial condition or prospects.

The Wickes Group may not be able to accurately predict and plan for changes in customer demand

and preferences, which could lead to reductions in sales or negatively impact operating margins.

The Wickes Group derives revenue from the sale of products and provision of services that are subject to

changing customer demand. As a result, its success depends, in part, on its ability to effectively predict

and respond to changing market conditions and customer preferences in order to provide a compelling and

targeted service proposition to its local trade (“Local Trade”), DIFM and do-it-yourself (“DIY”) customers.

In recent years, the Wickes Group has invested significantly to transform its physical infrastructure, digital

capabilities and product and service proposition to better reflect changing behaviours in the UK home

improvement market, based on customer demand and projected market trends. These changes include

the expansion of its DIFM service offering and integration of operations to provide digitally-led solutions.

However, in the future, customer behaviour may shift in a way that the Wickes Group cannot predict or

plan for or the Wickes Group’s service proposition may not continue to meet customer home improvement

preferences or demands, either of which could lead to reductions in sales or require the Wickes Group

to incur additional costs to continue serving its customers. For example, the COVID-19 pandemic has

led to periodic lockdown restrictions, stay-at-home orders and otherwise impacted customer behaviour,

which has at times negatively impacted the broader DIFM and Local Trade markets (see “—The Wickes

Group faces risks related to the impact of COVID-19 and other communicable diseases or pandemics

in the future”) and resulted in increased demand for click-and-collect and home delivery services. The

Wickes Group responded to these changes by accelerating certain digital strategies, including its virtual

DIFM service, and expanding its distribution and fulfilment offering. However, significant changes, or

implementation moderate changes over the longer term, may require the Wickes Group to incur higher

costs than it has historically and negatively impact its operating margins.

As part of this transformation in recent years, the Wickes Group has undertaken significant work on its

product ranges. This strategy relies on providing curated ranges of products online and in-store, in an

effort to make the shopping experience easier for its trade and DIY customers. As a result, inventory

management is a key component of this strategy, and the Wickes Group must balance the need to

maintain sufficient inventory levels to meet its customers’ demands for timely delivery and in-store

collection options, with potential increased costs associated with excess inventory and the risk this

unduly impacts the Wickes Group’s financial condition. This strategy also relies on the Wickes Group’s

ability to ensure that the right products and brands are included in its curated in-store product ranges.

If the Wickes Group is unable to correctly predict the products and brands demanded by its customers,

or if it selects products and brands that are not in high demand, it may result in lower sales levels and

longer inventory turnover times.

In addition, the Wickes Group must ensure that it evaluates customer trends and procures the right

products with adequate lead time. A significant portion of the products offered in the Wickes Group’s

stores are manufactured outside of the United Kingdom. The Wickes Group regularly enters into

contracts for the purchase and manufacture of merchandise from suppliers outside the United Kingdom

and domestic distributors that import products supplied from outside the United Kingdom. The Wickes

Group is subject to variable lead times depending on where the products are sourced from, which can

affect the agility of its supply chain and have knock-on effects throughout the business. There can be no

assurance that the Wickes Group’s orders will match actual demand. If the Wickes Group is unable to

identify and source products on a timely basis and at prices that customers find attractive, or to maintain

adequate stock levels of products in-store or from its extended range online, its customers may be more

likely to shop from a competitor or decrease the regularity with which they visit the Wickes Group’s

stores. This decrease in footfall and sales could have a material adverse effect on the Wickes Group’s

business, results of operations, financial condition or prospects.

A failure of a key information technology system or process, including due to cyber-attack,

could adversely affect the Wickes Group’s operations or cause a loss of customer data.

The Wickes Group relies extensively on its key operational systems, some of which are managed

or provided by third-party service providers, for the efficient functioning of its business, including to

analyse, process, store, manage and protect transactions and data. In particular, the Wickes Group

relies on its information technology, network and communications systems to effectively manage its

sales, distribution, fulfilment, merchandise planning and replenishment functions and to maintain its

in-stock positions and a record of its results of operations and financial position. As the Wickes Group

continues to leverage its digitally-led service proposition and aims further embed digital capabilities in its

customer relationships, it will increasingly rely on these underlying systems to support its operations. As

a result, any failure or significant disruption to these information technology, network or communications

systems, including due to security breach, could have an adverse effect on the proper functioning of the

Wickes Group’s digital proposition and its businesses.

As the Wickes Group’s product range strategy involves offering a curated range of products online

and in-store, and fast fulfilment options for click-and-collect orders and home delivery, in many cases

from a nearby store, disruptions in sourcing or distribution across the Wickes Group’s store network

could have a significant impact on the customer experience, and could be costly, time consuming and

resource-intensive to remedy. System disruptions could also negatively impact the Wickes Group’s

ability to maintain its financial records and produce timely financial information to enable it to manage

its operations. As the Wickes Group continues to grow its digitally-led capabilities, it expects increasing

amounts of customer data, which may create additional risks if it is improperly accessed or lost. Although

the Wickes Group and its third-party service providers seek to maintain these respective systems

effectively and to successfully address the risk of compromise of the integrity, security and consistent

operations of these systems, the IT landscape supporting these operating systems is complex and, over

time, may become increasingly difficult to support, and as a result such efforts may not be successful.

Future investment in these systems may be more expensive or complex to implement than anticipated,

which could negatively impact the Wickes Group’s operating or financial performance.

In addition, the computer and communications systems are vulnerable to damage or interruption from

a variety of sources, including attacks by computer viruses, ransomware, electronic break-ins or cyber-

attacks, theft or corruption of confidential data or other unanticipated problems, particularly in light of

increased home-working of the Group’s head office staff. In addition, because the Wickes Group’s

systems sometimes contain information about individuals and businesses, any failure to appropriately

safeguard the security of the data it holds, whether as a result of its own error or the malfeasance or

errors of others, could harm its reputation or give rise to legal liabilities. Although the Wickes Group

has introduced various security measures, including both technology and policy controls, it cannot

guarantee that these measures offer the appropriate level of security or protection. For more information,

see “—Data privacy compliance breaches or failure to protect confidential information could harm

the Wickes Group’s reputation and expose the Wickes Group to litigation or other legal or regulatory

actions”. The Wickes Group’s systems may also be vulnerable to damage or interruption from fire,

telecommunications failures, floods, power outages and other malfunctions or disruptions. The Wickes

Group has not experienced significant outages in the past, but there can be no certainty that they will

not occur in the future or that the Wickes Group’s disaster recovery and contingency plans will be

effective or sufficient in the event that they need to be activated. As the Wickes Group further integrates

its multi-channel offering across its website and store estate, it may make further investments in its

information technology and related systems. As these systems have been developed over time, they

form a complex IT landscape and certain older components may be at risk of becoming incompatible, or

require additional investment to integrate, with future systems advances. Despite significant investment

in integrating digital capabilities, there can be no assurance that this complex infrastructure will not be

subject to disruptions. In the future, the Wickes Group may not be able to upgrade or install technology

in a timely manner, train its employees effectively in the use of its technology or obtain the anticipated

benefits of its technology.

In connection with the Demerger, the Wickes Group will receive certain services from the Travis Perkins

Group pursuant to the Transitional Services Agreement, including certain IT services. For a discussion

of risks faced by the Wickes Group in connection with these services, see “—The Wickes Group utilises

Travis Perkins for the continued provision of certain transitional services (specifically relating to IT and

human resources), and a material interruption could negatively impact Wickes’ operating activities”.

Any of the foregoing could have a material adverse effect on the Wickes Group’s business, results of

operations, financial condition or prospects.

The Wickes Group faces risks relating to any property damage or interruption of operations at

one of its delivery centres, which could signicantly interrupt its operating activities.

The Wickes Group operates two main delivery centres in Northampton, England, the store delivery

centre (the “SDC”) and the home delivery centre (the “HDC”). The SDC primarily supports fulfilment for

the Wickes Group’s store network, storing the range of home improvement products sold in-store for

stocking on site. The HDC primarily supports the Wickes Group’s DIFM services, and houses kitchen

and bathroom cabinetry and other items ahead of delivery directly to the relevant customer’s home.

The Wickes Group’s operating strategy focuses on providing customers with a curated range of products.

As a result, a key aspect of this strategy is ensuring effective inventory, distribution and stocking

practices. Any disruptive events that cause significant property damage at the SDC could significantly

limit the Wickes Group’s ability to manage in-store inventory and stock levels across its 233-store estate.

In addition, products used in the Wickes Group’s DIFM services are distributed from the HDC, so any

significant damage or interruption of operations at this centre could negatively impact the Wickes Group’s

ability to complete DIFM projects in a timely manner, which could have a material adverse effect on the

Wickes brand and reputation in the DIFM market. Such property damage could be caused by a variety

of factors, including: external events such as natural disasters or severe weather events; utility outages,

such as power outages, fires, flooding, plumbing problems; public health concerns, including as a result

of the spread of the COVID-19 strain of coronavirus or responsive measures; or other issues, such as

infestation. In the event of significant property damage or interruption, there can be no assurance that

the Wickes Group’s continuity plans will be successful. The occurrence of any of these events would

interrupt operations at one or more the Wickes Group stores, potentially for a significant amount of

time, which could have a material adverse effect on the Wickes Group’s business, results of operations,

financial condition or prospects.

Disruptions in the Wickes Group’s customer-facing technology systems could impair its

interconnected multi-channel strategy and give rise to negative customer experiences.

The Wickes Group uses its digital platforms both as sales channels for its products and also as methods

of providing inspiration, as well as product, project and other relevant information, such as inventory

stock levels, to its customers to drive sales, regardless of whether they occur online or in-store. The

retail industry is continually evolving and expanding, and the Wickes Group must effectively respond to

new developments and changing customer preferences with respect to an interconnected experience.

The Wickes Group continually seeks to enhance its website and social media capabilities to provide

an attractive, user-friendly interface for its customers. Disruptions, failures or other performance issues

with these customer-facing technology systems could impair the benefits that they provide to the Wickes

Group’s business and negatively affect its relationships with its customers. If the Wickes Group is unable

to maintain, and to continue developing, strong customer relationships through these digital channels,

it could have a material adverse effect on the Wickes Group’s business, results of operations, financial

condition or prospects.

Data privacy compliance breaches or failure to protect condential information could harm

the Wickes Group’s reputation and expose the Wickes Group to litigation or other legal or

regulatory actions.

The Wickes Group is subject to a number of laws relating to privacy and data protection, including,

in particular, the General Data Protection Regulation (Regulation (EU) 2016/679) (as it forms part of

retained European Union (“EU”) law as defined in the EU (Withdrawal) Act 2018) (“GDPR”), the United

Kingdom’s Data Protection Act 2018 and the EU Privacy and Electronic Communications Regulations.

Such laws govern the Wickes Group’s ability to collect, use and transfer personal data, including relating

to its customers and business partners, as well as any such data relating to its employees and others. In

processing transactions through the Wickes Group’s technology platforms, the Wickes Group receives

and stores a large volume of personal data, including credit card information. The Wickes Group also

relies on third-party service providers to collect and process certain personal data and to maintain its

databases. Therefore, the Wickes Group is exposed to the risk that such data could be wrongfully

appropriated, lost or disclosed, damaged or processed in breach of privacy or data protection laws.

While the Wickes Group strives to comply with all applicable laws and regulations relating to privacy

and data protection, such laws are subject to frequent evolution. It is possible that applicable privacy

and data protection laws and regulations may be interpreted and applied in a manner that may conflict

with other rules or the Wickes Group’s practices. Any perceived or actual failure by the Wickes Group,

including its third-party service providers, to protect confidential data or any material non-compliance

with privacy or data protection or other consumer protection laws or regulations may harm its reputation

and credibility, adversely affect revenue, reduce its ability to attract and retain customers, result in

litigation or other actions being brought against the Wickes Group and the imposition of significant

fines and, as a result, could have a material adverse effect on the Wickes Group’s business, results of

operations, financial condition or prospects.

The Wickes Group faces risks related to its customer service levels, and a deterioration could

adversely impact customer demand.

The Wickes Group’s strategy relies on providing best-in-class service, including a convenient and

welcoming shopping experience and good value in-store, online and via delivery and click-and-collect

services with high levels of availability. Similarly, the success of the Wickes Group’s DIFM services rely,

in part, on providing customers with a positive concept-to-completion experience, from the initial design

phase through to completion of the installation and their use of the new installation. If the quality or

perceived quality of the Wickes Group’s customer service deteriorates, it could lose existing customers

to competitors or fail to win new customers, which would have a negative impact on the Wickes Group’s

sales. Such deterioration in customer service may include services provided by the Wickes Group’s

colleagues or third-party installers, and could result from any significant loss of the Wickes Group’s

colleagues with specialist expertise or third-party installers that undertake installation works on DIFM

projects. Deterioration in customer service could also result from any product shortages, whether online

or in-store, including for reasons beyond the Wickes Group’s control. As a result, any deterioration or

perceived deterioration in the Wickes Group’s customer service levels could have a material adverse

effect on the Wickes Group’s business, results of operations, financial condition or prospects.

The Wickes Group’s success is dependent upon senior management and colleague teams, as

well as skilled third-party personnel.

The Wickes Group is highly dependent upon key senior management personnel who have extensive

experience and knowledge of the UK home improvement and broader retail industries. The successful

implementation of the Wickes Group’s strategy depends on the continuing availability of senior

management and the Wickes Group’s ability to continue to attract and retain other highly qualified

employees and foster a motivated and supportive colleague culture. If members of the Wickes Group’s

senior management depart, the Wickes Group may not be able to find effective replacements in a timely

manner, or at all, these initiatives may be interrupted or the Wickes Group’s business may be disrupted

or damaged.

To meet the needs and expectations of its customers, the Wickes Group must attract, develop and retain

a large number of highly qualified colleagues to support the full range of its operating activities online

and in-store. Although the Wickes Group has historically experienced relatively low levels of colleague

turnover, the expertise and experience of its colleague teams are crucial to its reputation, customer

service levels and success. As a result, the Wickes Group’s ability to continue implementing its strategy,

in particular following the Demerger, would be negatively affected if it is unable to continue to retain

and motivate its existing personnel and maintain a strong colleague culture, or if it were to experience

widespread colleague illness, absence or leave, including as a result of COVID-19 or other pandemics

or significant events. The Wickes Group must also control personnel costs, which are influenced by

numerous external factors, including prevailing wage rates and the impact of legislation or regulations,

which are subject to change.

The Wickes Group’s DIFM service offering is dependent on highly skilled design consultants and skilled

third-party installers. Events or trends that negatively impact the ability of skilled tradespersons – such

as the United Kingdom’s departure from the European Union, which may prevent the ability of nationals

of EU countries to live and work in the United Kingdom – may require the Wickes Group to incur higher

costs to provide DIFM services. In addition, a decline in the population of skilled tradespersons in the

United Kingdom may also result in a deterioration in the quality of installation works, which could have

a negative impact on customer satisfaction and reduce demand for the Wickes Group’s DIFM services.

Only a limited amount of time has passed since the United Kingdom ceased trading as part of the

European Union on 31 December 2020, and there remains uncertainty as to whether and to what extent

the United Kingdom’s exit from the European Union will impact the availability of skilled workers in the

United Kingdom.

The failure to recruit and retain key senior management, other skilled personnel and experienced colleague

teams across the Wickes Group’s operations, while controlling labour costs, could have a material adverse

effect on the Wickes Group’s business, results of operations, financial condition or prospects.

If the Wickes Group is unable to effectively manage its DIFM services business, including third-party

installers, it could suffer lost sales and be subject to nes, lawsuits and reputational damage.

The Wickes Group’s reputation as a trusted services provider is a key component of its DIFM

service offering, as this proposition is founded on the Wickes Group’s ability to provide a leading and

comprehensive service for significant home improvement projects. As the Wickes Group’s concept-to-

completion DIFM offering relies on its ability to undertake installation works, which it does through third-

party installers, it faces risks arising from the quality of these works and the conduct of the installers

while they are working in customers’ homes. In particular, as these installers are coordinated by the

Wickes Group, customers associate their conduct and performance with the Wickes brand. Although

these installers are carefully screened by the Wickes Group, they are not employees, and so Wickes

has limited control over their conduct or the quality of their work. If the Wickes Group fails to manage

these processes effectively or to provide proper oversight of these services, it could suffer remediation

costs, lost sales, fines, an impaired reputation, lawsuits and governmental enforcement actions for

violations of regulatory requirements, as well as for property damage or personal injury. Further, if the

quality of installation work does not meet a customer’s expectations, the Wickes Group is responsible

for remedying any issue, which may lead to financial loss or reputational damage related to DIFM

services and more generally.

As these DIFM services rely on the use of highly skilled third-party installers, the Wickes Group’s DIFM

proposition may suffer if it is unable to engage installers in sufficient numbers, or with adequate skills

or on reasonable terms. The availability of highly skilled installers may be impacted by a variety of

factors outside the Wickes Group’s control, including an aging installer workforce and potential decline

of skilled UK workers. As mentioned under “—The Wickes Group’s success is dependent upon senior

management and colleague teams, as well as skilled third-party personnel”, the United Kingdom’s exit

from the European Union may also negatively impact the availability of skilled personnel to provide

installation services.

Any inability to successfully manage the use of third-party installers in the DIFM operations could have

a material adverse effect on the Wickes Group’s business, results of operations, financial condition

or prospects.

The Wickes Group’s business could suffer as a result of weak sales during peak selling seasons,

or extreme or unseasonal weather conditions.

The Wickes Group is subject to fluctuations in demand for different categories at different times of the

year. The Wickes Group has seasonal peaks associated, in particular, with the Easter period and the

May and, to a lesser extent, August bank holidays, as well as other periods during the year, for core

Local Trade and DIY products, in addition to increased DIFM kitchen and bathroom sales during the

“Winter Sale” January/February period. The Wickes Group incurs additional expenses in advance of

these peak selling seasons in anticipation of higher sales during these periods, including the cost of

additional inventory and seasonal advertising.

If sales during the Wickes Group’s peak trading seasons for a particular category prove to be significantly

lower than it expects for any reason, it may be unable to adjust its expenses for that category in a timely

fashion and may be left with high levels of stock holding. In the event that this includes seasonal items

– such as landscaping and gardening items, in particular growing media and other items that cannot

be kept long term or other exterior products that would be difficult to store – the Wickes Group may be

forced to rely on markdowns or promotional sales to dispose of stock. Such discounts may not offset

additional inventory and wage costs, and could have a material adverse effect on its business, results

of operations, financial condition or prospects.

The Wickes Group’s sales are also sensitive to periods of extreme weather conditions. The Wickes

Group may see a reduction of sales during periods of inclement weather due to reduced customer

footfall or interest in home improvement activities. For example, poor weather conditions in March and

April 2018, followed by extreme heat in June and July of that year, negatively affected footfall and trading

during the respective Easter and summer trading periods. The number of customers visiting the Wickes

Group’s stores may also decline during periods of snow or extreme weather conditions affecting the

relevant local catchment area. Prolonged unseasonal weather conditions, or temporary severe weather

during the Wickes Group’s peak trading seasons, could have a material adverse effect on the Wickes

Group’s business, results of operations, financial condition or prospects.

The Wickes Group’s business and competitive position are subject to risks associated with its

leasehold property portfolio.

All of the Wickes Group’s 233 retail stores are operated under leaseholds. In addition, the Wickes Group

leases its two main delivery centres in Northampton, England, and its headquarters facility in Watford,

England. These leaseholds are generally subject to periodic rent review, lease expiry and renegotiation.

As a result, the Wickes Group is susceptible to changes in the property rental market.

As most rent reviews occur every five years, and a significant number of the lease agreements related to

the Wickes Group’s retail stores are renewable every five to 15 years, the Wickes Group may be affected

in the future by changes in the commercial property rental market, such as a decrease in available sites

or fluctuations in market rents for new stores, and scheduled rent reviews. In the event that the Wickes

Group does not continue operations in a location following the expiration of a lease, there can be no

assurance that it will not lose customers or suffer reputational damage. In addition, while the Wickes

Group regularly maintains the condition of its properties, including as part of its ongoing refurbishment

programme, it may be liable for costs arising from dilapidation or other damage to premises during the

course of its lease term that it did not anticipate or provision for.

In addition, the Wickes Group may not be able to renew its existing store leases where, for example, the

landlord is able to establish statutory grounds for non-renewal or if the leases do not have the benefit

of statutory or contractual rights of renewal. In these cases, the Wickes Group may face competition for

existing or potential premises, including from retailers or businesses in other industries, or companies

that have greater financial resources. As of 31 December 2020, a limited number of stores were operated

under a lease arrangements that do not have the benefit of a right of renewal (or security of tenure

protections under the Landlord and Tenant Act 1954).

Any inability to renew existing leases may result in, among other things, significant alterations to rental

terms (including increasing rental rates), the closure of stores in desirable locations, increased costs to

fit out replacement locations or failure to secure a relocation in attractive locations. The manifestation

of any of these risks could have a material adverse effect on the Wickes Group’s business, results of

operations, financial condition or prospects.

Cost ination, including wage ination, could have an impact on the Wickes Group’s businesses,

results of operations, nancial condition or prospects.

The Wickes Group is exposed, either directly or indirectly, to price ﬂuctuations or price increases related

to products it sells or, for its DIFM services, the products used in these projects, which may result in

higher costs or reduced sales. These items are subject to ﬂuctuations in availability and price, which

may be attributable to, among other things, changes in supply and demand for raw materials, changes

in tariffs on imported goods, energy prices, exchange rates and global trade matters. In particular, as

the Wickes Group imports, or purchases from distributors that import, a significant portion of its products

from outside the United Kingdom, exchange rate volatility (such as following the UK referendum to leave

the European Union) can negatively affect its cost of sales. General economic conditions, unanticipated

demand, problems in production or distribution, natural disasters or compliance with environmental

regulations can also adversely affect availability and prices. These cost increases may negatively affect

the Wickes Group’s gross profits or require the Wickes Group to increase the prices of products and

services it offers to customers, which may have a negative impact on sales and revenue levels.

In addition, the Wickes Group needs to comply with UK labour laws and regulations such as national

minimum wage and national living wage requirements and faces the risk that more stringent labour

regulations will be implemented in the future. Wickes individuals may be subject to criminal prosecution

for deliberate non-compliance with the legislation and anyone found guilty may be disqualiﬁed from

being a company director for a certain number of years. Any increase in the national minimum wage or

the national living wage, or their scope, would increase the Wickes Group’s operating costs.

Any inability to pass such cost increases on to customers could have a material adverse effect on

Wickes’ business, results of operations, financial condition or prospects.

The Wickes Group’s business may be materially adversely affected by compliance with,

or changes to, governmental regulations that could require it to modify its current business

practices, incur increased costs and subject it to potential liabilities.

The Wickes Group’s business operations are affected by various statutes, regulations and laws applicable

to businesses generally, some of which are complex in nature and subject to interpretation, including

but not limited to, laws affecting advertising, consumer protection, product safety, quality and liability,

health and safety, environmental (including emissions, energy consumption, packaging and waste), fire,

planning, landlord tenant, competition, tax, data protection, employment practices (including pensions)

and other laws and regulations that apply to retailers generally and/or govern the import, promotion

and sale of products and the operation of retail stores and delivery centres. The Wickes Group is also

subject to regulation by the FCA in connection with facilitating customer borrowings for DIFM project

purchases coordinated by a third-party lender. The Wickes Group is also subject to challenge by the

ASA in relation to its promotional positionings. In Financial Year 2019, the ASA upheld a complaint in

relation to promotional activities undertaken by the Wickes Group. Although this finding has not resulted

in a material impact on the Wickes Group’s financial or operating performance, any adverse findings

in the future could adversely impact promotional activities and, in certain circumstances, the Wickes

Group’s financial or operating performance.

If any statutes, laws or regulations to which the Wickes Group is subject were to change, including as a

result of change of government or policy in the United Kingdom, or the Wickes Group’s management,

employees or suppliers were to fail to comply with them, the Wickes Group may be required to

implement extensive system and operating changes and it could experience delays in shipments of its

goods, be subject to fines or penalties, or suffer reputational harm. Furthermore, changes in tax laws,

the interpretation of existing laws or the Wickes Group’s failure to sustain its reporting positions on

examination could adversely affect its effective tax rate or lead to increases in operating costs.

As a result, changes in these requirements, or in the interpretation thereof, could have a material adverse

effect on the Wickes Group’s business, results of operations, financial condition or prospects.

The terms of the Wickes Group’s borrowings could materially adversely affect its

nancial condition.

As of 26 December 2020, the Wickes Group had no outstanding borrowings. However, in connection with

the Demerger, on 23 March 2021 the Wickes Group entered into an agreement with National Westminster

Bank plc as agent and security agent and Barclays Bank plc, BNP Paribas, London Branch, National

Westminster Bank plc, and The Governor and Company of the Bank of Ireland as lenders to provide a

revolving credit facility of £80 million (the “Revolving Credit Facility”). The Wickes Group may utilise

the Revolving Credit Facility from time to time to support its cash flow management activities. A material

increase in the Wickes Group’s finance costs may limit its cash available for investment expenditure in

the future, which could negatively affect its operations. The Wickes Group does not currently anticipate

incurring additional indebtedness in relation to existing strategic plans or other activities, and its ability

to do so may be affected by a number of factors, including its operating and financial performance as

well as broader market and macroeconomic conditions. A significant change in finance costs, whether to

higher levels of borrowing or an increase in interest payable on future borrowings, may have a material

adverse effect on the Wickes Group’s business, results of operations, financial condition or prospects.

Risks related to the Demerger

Wickes will incur new costs in its transition to a standalone public company and its management

team will be required to devote substantial time to new compliance matters.

As a standalone public company, Wickes will incur additional legal, accounting, financing and other

expenses, including the costs of recruiting and retaining non-executive directors, costs resulting from

public company reporting obligations and the rules and regulations regarding corporate governance

practices, including the listing requirements of the London Stock Exchange. There can be no assurance

that, under a changed Board structure and ownership, and in an environment where it is subject to

greater scrutiny and disclosure requirements, the Wickes Group will be able to manage its operations in

the same manner as it has done as part of the Travis Perkins Group.

In particular, the Wickes Group will be subject to increased regulatory obligations as a result of being

listed, and its management team will need to devote a substantial amount of time to ensure that the

Wickes Group complies with all of these requirements. Although certain members of the Wickes

Group’s management team have experience managing other public companies, the implementation

of new policies and procedures at the Wickes Group could require significant time and energy that

would otherwise be devoted to the business’s operating activities and strategy. In addition, the reporting

requirements, rules and regulations will increase the Wickes Group’s legal and financial compliance

costs and make some activities more time-consuming and costly.

Following the Demerger, Wickes will face new challenges as an independent company, which

could adversely affect its nancial or operating performance.

As a standalone public company, Wickes will face risks arising from operating under policies and

procedures without the experience and oversight historically provided through its relationship with

Travis Perkins.

While the Wickes Group has historically existed as a standalone business within the Travis Perkins

Group, the Wickes Group’s operations have benefitted from certain Travis Perkins central resources

including, among other things, access to its larger finance and treasury, corporate secretariat, legal,

information technology, investor relations and human resources teams. The Wickes Group has also

benefitted from negotiating arrangements with third-party suppliers, distributors, licensors, lessors, other

business partners and/or other counterparties as part of the larger Travis Perkins Group. Following

the Demerger, the Wickes Group will take on additional responsibility for certain activities, including

operational treasury functions (such as managing its cash flow and funding requirements), investor

relations and internal communications, organisational matters (such as optimising its capital structure)

and maintaining best practice in the areas of corporate governance and compliance.

Although the Wickes Group will continue to have access to certain technical service resources under the

terms of the Transitional Services Agreement for a transitional period as required by the Wickes Group,

of up to a maximum of 24 months following the Demerger (depending on the service) (and subject to

the right to a single extension for up to six months under certain circumstances), it may lose access to

some or all such resources (as described under “—The Wickes Group utilises Travis Perkins for the

continued provision of certain transitional services (specifically relating to IT and human resources),

and a material interruption could negatively impact Wickes’ operating activities.”) or could otherwise

encounter difficulties and incur additional costs in conducting its business following the Demerger

that could have a material adverse effect on its business, results of operations, financial condition or

prospects.

The Wickes Group utilises Travis Perkins for the continued provision of certain transitional

services (specically relating to IT and human resources), and a material interruption could

negatively impact Wickes’ operating activities.

In connection with the Demerger, Wickes Building Supplies and Travis Perkins Trading Company

Limited entered into the Transitional Services Agreement. Services to be procured by the Wickes

Group under the Transitional Services Agreement include certain human resources and IT services

for a transitional period as required by the Wickes Group, of up to a maximum of 24 months following

the Demerger (depending on the service) (and subject to the right to a single extension for up to six

months under certain circumstances). As the Wickes Group does not currently have the capabilities to

provide these services internally, on a standalone basis, without third-party support, the Transitional

Services Agreement provides contractual protections for the continued provision of these services

during the relevant transitional period, absent which the Wickes Group would need to procure these

services from other third-party providers or provide these services internally. As a result, any significant

disruption or other issues in the services provided by the Travis Perkins Group under the Transitional

Services Agreement, even if they give rise to a contractual claim, may cause operational difficulties that

could negatively impact the Wickes Group’s customer service levels and customer relationships and

interruptions to day-to-day operating activities. Disruptions to the Wickes Group’s IT systems may also

arise as a result of separation processes at the time of the Demerger or during the term of the Transitional

Services Agreement, or at the time that services are fully separated from the Travis Perkins Group

(whether migrated to a third-party service provider or undertaken in-house by the Wickes Group). Any

such service disruptions or other issues may require the Wickes Group to procure third-party services,

and the cost of doing so could be significantly higher than under the terms of the Transitional Services

Agreement. Further, procuring and integrating such third-party services could divert management

attention.

Following the transitional period set out in the Transitional Services Agreement, the Wickes Group will

be required to provide these services internally or obtain these services from a third-party provider. If the

Wickes Group does not effectively develop and implement these capabilities, or it is unable to source

further arrangements from third-party providers, its business, results of operations, financial condition

and prospects could be materially adversely affected.

Third parties may terminate or seek to modify existing contracts with the Wickes Group as a

result of the Demerger.

As part of the Demerger, it is intended that the Wickes Group or its subsidiaries will become counterparties

by assignment and/or novation of a number of contracts of the Travis Perkins Group or any of its

subsidiaries, with third party suppliers, distributors, licensors, lessors, other business partners and/or

other counterparties. Some of these contracts require the counterparty’s consent to assignment and/

or novation. If these consents cannot be obtained, or if a number of these consents remain outstanding

following the Demerger, the Wickes Group may be unable to obtain some of the benefits, assets and/

or contractual commitments that are intended to be allocated to it as part of the Demerger. In addition,

certain agreements require amendment or renegotiation to the extent that the counterparty will continue

to receive or provide services from or to the Wickes Group. Counterparties may seek to renegotiate the

contracts on terms less favourable to the Wickes Group.

In addition, some of the contracts to which the Wickes Group is, or following the Demerger will be, a

party contain “change of control” or similar clauses that allow the counterparty to terminate or change

the terms of their contract as a result of the Demerger, or may otherwise enable the counterparty to

seek to modify the terms of the existing contract. This is especially relevant for contracts with longer

contractual terms. There can be no assurance that the Wickes Group will be able to contract on the

same terms as the Travis Perkins Group has done prior to the Demerger.

If a large number of third-party consents cannot be obtained, or the terms of such contracts are modified

in a manner that is adverse to the Wickes Group, its business, results of operations, financial condition

and prospects could be materially adversely affected.

Risks related to the Wickes Shares

There is no existing market for the Wickes Shares and an active trading market for the Wickes

Shares may not develop or be sustained.

Prior to Admission, there has been no public trading market for the Wickes Shares. Although the

Company has applied to the FCA for admission to the premium listing segment of the Official List

and has applied to the London Stock Exchange for admission to trading on its main market for listed

securities, the Company can give no assurance that an active trading market for the Wickes Shares will

develop or, if developed, could be sustained following the closing of the Demerger. If an active trading

market is not developed or maintained, the liquidity and trading price of the Wickes Shares could be

adversely affected.

Shares in the Company may be subject to market price volatility and the market price of the

shares in the Company may decline disproportionately in response to developments that are

unrelated to the Wickes Group’s operating performance.

The market price of the Wickes Shares may be volatile and subject to wide fluctuations. The market

price of the Wickes Shares may fluctuate as a result of a variety of factors, including, but not limited to,

those referred to in this Part I, as well as period-to-period variations in operating results or changes in

revenue or profit estimates by the Wickes Group, industry participants or financial analysts. The market

price could also be adversely affected by developments unrelated to the Wickes Group’s operating

performance, such as the operating and share price performance of other companies that investors

may consider comparable to the Wickes Group, speculation about the Wickes Group in the press or

the investment community, unfavourable press, strategic actions by competitors (including acquisitions

and restructurings), changes in market conditions, regulatory changes and broader market volatility and

movements. In addition, the market price could be negatively affected by sales of Wickes Shares by

Travis Perkins Shareholders following the Demerger, commonly referred to as “flowback”, including due

to any of the reasons discussed above. Any or all of these factors could result in material fluctuations in

the price of Wickes Shares, which could lead to investors getting back less than they invested or a total

loss of their investment.

Shareholders in the United States and other jurisdictions outside of the United Kingdom may not

be able to participate in future equity offerings.

The Articles provide for pre-emption rights to be granted to Wickes Shareholders in the Company, unless

such rights are disapplied by a shareholder resolution. However, securities laws of certain jurisdictions

may restrict the Company’s ability to allow participation by Wickes Shareholders in future offerings. In

particular, shareholders in the United States may not be entitled to exercise these rights, unless either

the Wickes Shares and any other securities that are offered and sold are registered under the US

Securities Act, or the Wickes Shares and such other securities are offered pursuant to an exemption

from, or in a transaction not subject to, the registration requirements of the US Securities Act. The

Company cannot assure prospective investors that any exemption from such overseas securities law

requirements would be available to enable US or other Wickes Shareholders to exercise their pre-

emption rights or, if available, that the Company will utilise any such exemption.

Not all rights available to shareholders under US law will be available to holders of the

Wickes Shares.

Rights afforded to shareholders under English law differ in certain respects from the rights of

shareholders in typical US companies. The rights of holders of the Wickes Shares are governed by

English law and the Articles. In particular, English law currently limits significantly the circumstances

under which the shareholders of English companies may bring derivative actions. Under English law, in

most cases, only the Company may be the proper plaintiff for the purposes of maintaining proceedings

in respect of wrongful acts committed against it and, generally, neither an individual shareholder, nor

any group of shareholders, has any right of action in such circumstances. In addition, English law does

not afford appraisal rights to dissenting shareholders in the form typically available to shareholders in a

US company.

The Company’s ability to pay dividends in the future depends, among other things, on the Wickes

Group’s nancial performance and capital requirements.

There can be no guarantee that the Wickes Group’s historic performance will be repeated in the future,

particularly given the competitive nature of the industry in which it operates, and its sales, profit and cash

flow may significantly underperform market expectations. If the Wickes Group’s cash flow underperforms

market expectations, then its capacity to pay dividends will suffer. Any decision to declare and pay

dividends will be made at the discretion of the Directors and will depend on, among other things,

applicable law, regulation, restrictions on the payment of dividends in the Wickes Group’s financing

arrangements, the Wickes Group’s financial position, the Company’s distributable reserves, regulatory

capital requirements, working capital requirements, finance costs, general economic conditions and

other factors the Directors deem significant from time to time.

The issuance of additional shares in the Company in connection with future acquisitions, any

share incentive or share option plan or otherwise may dilute all other shareholdings.

The Wickes Group may seek to raise financing to fund future acquisitions and other growth opportunities.

The Company may, for these and other purposes, issue additional equity or convertible equity securities.

As a result, existing holders of Wickes Shares may suffer dilution in their percentage ownership or the

market price of the Wickes Shares may be adversely affected.

Overseas shareholders may be subject to exchange rate risk.

The Wickes Shares are, and any dividends to be paid in respect of them will be, denominated in pounds

sterling. An investment in Wickes Shares by an investor whose principal currency is not pounds sterling

exposes the investor to foreign currency exchange rate risk. Any depreciation of pounds sterling in

relation to such foreign currency will reduce the value of the investment in the Wickes Shares or any

dividends in foreign currency terms.

PART II

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

General

This Prospectus comprises a prospectus for the purposes of Article 6 of the Prospectus Regulation and

is issued in compliance with the Listing Rules.

Investors should rely solely on the information contained in this Prospectus. No representation or

warranty, express or implied, is made and no responsibility or liability is accepted by any person other

than the Company and the Directors, as to the accuracy, completeness, verification or sufficiency of, the

information contained herein, and nothing in this Prospectus is, or may be relied upon as, a promise or

representation by any of the Company’s advisers (including the Joint Sponsors) or any of their respective

affiliates in this respect, as to the past or future, and any of the Company’s advisers or their respective

affiliates, directors, officers, employees or advisers accordingly disclaim, to the fullest extent permitted

by applicable law, any and all liability whether arising in tort, contract or otherwise which they might

otherwise be found to have in respect of this document or any such statement. No person is or has been

authorised to give any information or to make any representation not contained in or not consistent with

this Prospectus and, if given or made, such information or representation must not be relied upon as

having been authorised by the Company.

Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant

to section 87G of FSMA and Rule 3.4 of the Prospectus Regulation Rules, neither the delivery of this

Prospectus nor any subscription or sale made under this Prospectus shall, under any circumstances,

create any implication that there has been no change in the business or affairs of the Company or of the

Wickes Group taken as a whole since the date hereof or that the information contained herein is correct

as of any time subsequent to its date.

This Prospectus has been filed with, and approved by, the FCA and has been made available to the

public in accordance with the Prospectus Regulation Rules. This Prospectus does not constitute an offer

or invitation to sell or issue, or a solicitation of an offer or invitation to purchase or subscribe for, any

securities offered by any person in the Company, nor shall this Prospectus alone (or any part of it), or the

fact of its distribution, form the basis of, or be relied upon in connection with, or act as any inducement

to enter into, any contract or commitment whatsoever with respect to any offer, invitation or otherwise.

The Company will update the information provided in this document by means of a supplement hereto if

a significant new factor that may affect Admission occurs prior to Admission or if this document contains

any material mistake or inaccuracy.

The contents of this Prospectus are not to be construed as legal, business or tax advice. Recipients of this

Prospectus should consult their lawyers, financial advisers or tax advisers for legal, financial or tax advice.

This Prospectus is not intended to provide the basis of any credit or other evaluation and should not be

considered as a recommendation by any of the Company, the Directors, any of the Company’s advisers

(including the Joint Sponsors) or any of their affiliates or representatives regarding the securities of

the Company.

None of the Company, the Directors or the Joint Sponsors accept any responsibility for the accuracy or

completeness of any information reported by the press or other media, nor the fairness or appropriateness

of any forecasts, views or opinions expressed by the press or other media regarding the Company and

the Wickes Group. None of the Company, the Directors or the Joint Sponsors make any representation

as to the appropriateness, accuracy, completeness or reliability of any such information or publication.

The Joint Sponsors and any of their respective affiliates may have engaged in transactions with, and

provided various investment banking, financial advisory and other services for, the Company for which

they would have received customary fees.

Presentation of nancial information

Historical nancial information

All financial information relating to the Wickes Group in this Prospectus, including the historical financial

information set out in Part IX: “Historical Financial Information”, is stated on a consolidated basis for the

entirety of the 52-week periods ended 26 December 2020, 28 December 2019 and 29 December 2018.

Unless otherwise stated, the consolidated financial information in this Prospectus has been prepared

in accordance with the requirements of the Prospectus Regulation, the Listing Rules and the basis of

preparation included in Note 2 of Section B of Part IX: “Historical Financial Information”. The historical

financial information is prepared for inclusion in this Prospectus for the purposes of admission to the

premium listing segment trading on the London Stock Exchange, and has been prepared in accordance

with the requirements of the Prospectus Regulation, Listing Rules and international accounting standards

in conformity with the requirements of the Companies Act 2006.

Unless otherwise stated, financial information relating to Wickes Group has been extracted without

material adjustment from Part IX: “Historical Financial Information”.

The Wickes Group also presents certain financial measures from Financial Year 2017, Financial Year

2016, Financial Year 2015, Financial Year 2014 and Financial Year 2013.

To enable presentation of the historical financial information on a consistent and comparable basis, the

Wickes Group have early adopted IFRS 16 – Leases from 1 January 2017 in advance of its effective

date. The accounting policies applied and stated in the consolidated historical financial information

of the Wickes Group, set out in Note 2 therein, are those expected to be applied to future financial

information reported by the Company.

Non-IFRS nancial information

This Prospectus contains certain financial measures that are not defined or recognised under IFRS,

including Adjusted Operating Profit and Adjusted Operating Profit Margin, Gross Profit, and Like-for-Like

Sales Growth, each as defined below.

The Directors consider these metrics to be the non-IFRS financial measures used by the Wickes Group

to help evaluate growth trends, establish budgets and assess operational performance and efficiencies.

The Directors believe that these non-IFRS financial measures, in addition to IFRS measures, provide

an enhanced understanding of the Wickes Group’s results and related trends, therefore increasing

transparency and clarity into the Wickes Group’s results and business. There are no generally accepted

accounting principles governing the calculation of these measures and the criteria upon which these

measures are based can vary from company to company. These measures, by themselves, do not

provide a sufficient basis to compare the Wickes Group’s performance with that of other companies and

should not be considered in isolation or as a substitute for operating profit or loss or any other measure

as an indicator of operating performance, or as an alternative to cash generated from operating activities

as a measure of liquidity. The Wickes Group does not regard these non-IFRS financial measures as a

substitute to, or superior to, the equivalent measures that are calculated in accordance with IFRS. The

non-IFRS financial measures presented in this Prospectus may not be comparable to other similarly titled

measures used by other companies, have limitations as analytical tools and should not be considered in

isolation or as a substitute for analysis of the Wickes Group’s operating results as reported under IFRS.

The following non-IFRS measures are presented in this Prospectus:

● “Adjusted Operating Proﬁt” – operating profit for a given financial year, reflecting adjustments for

one-off charges (including separation costs, restructuring costs and IT impairment).

● “Adjusted Operating Proﬁt Margin” – for a given financial year, Adjusted Operating Profit divided

by revenue, expressed as a percentage.

● “Gross Proﬁt Margin” – for a given financial year, gross profit divided by revenue, expressed as

a percentage.

● “Like-for-Like Sales Growth” – stores contribute to Like-for-Like Sales once they have been

trading for more than 12 months. Revenue included in Like-for-Like Sales is for the equivalent

time periods in both financial years being compared. When a store closes for an extended

period, revenue is excluded from the prior year figures for the months equivalent to the post-

closure period in the current year. Like-for-Like Sales Growth represents this between two

financial years, expressed as a percentage.

For further detail on the calculation of these non-IFRS financial measures, including reconciliations to their

nearest IFRS measures, see Part VI “Selected Financial Information—Non-IFRS Financial Measures”.

Currency presentation

Unless otherwise indicated, all references in this Prospectus to “sterling”, “pounds sterling” or “£” are

to the lawful currency of the United Kingdom. The Wickes Group prepares its financial information in

pounds sterling.

Rounding

Percentages and certain amounts in this Prospectus, including financial, statistical and operating

information, have been rounded. As a result, the figures shown as totals may not be the precise sum of

the figures that precede them.

Market, economic and industry data

This Prospectus contains economic, industry, statistics, market data, forecasts and other information

relating to markets, market sizes, market shares, market positions and other industry data pertaining

to the Business and markets. Unless otherwise indicated, such information is based on the Directors’

analysis of multiple sources, including peer financial and operating data and third-party market research

and reports, in aggregate representing the beliefs of management and the Directors. The Company

confirms that all third-party data contained in this Prospectus has been accurately reproduced and, so

far as the Company is aware and able to ascertain from information published by that third party, no

facts have been omitted that would render the reproduced information inaccurate or misleading.

Where third-party information has been used in this Prospectus, the source of such information has been

identified. While industry surveys, publications, consultant surveys and forecasts generally state that the

information contained therein has been obtained from sources believed to be reliable, the accuracy

and completeness of such information is not guaranteed. The Company has not independently verified

any of the data from third-party sources, nor has the Company ascertained the underlying economic

assumptions relied upon therein. Similarly, internal surveys, industry forecasts and market research,

which the Company believes to be reliable based upon the Directors’ knowledge of the industry, have

not been independently verified.

Information regarding forward-looking statements

This Prospectus includes certain forward-looking statements. These forward-looking statements

involve known and unknown risks and uncertainties, many of which are beyond the Company’s control

and all of which are based on the Directors’ current beliefs and expectations about future events.

Forward-looking statements are sometimes identified by the use of forward-looking terminology such as

“believe”, “expects”, “may”, “will”, “would”, “could”, “should”, “shall”, “risk”, “intends”, “estimates”, “aims”,

“plans”, “predicts”, “goal”, “continues”, “assumes”, “positioned”, “anticipates” or “targets” or the negative

thereof, other variations thereon or comparable terminology. These forward-looking statements include

all matters that are not historical facts. They appear in a number of places throughout this Prospectus

and include statements regarding the intentions, beliefs or current expectations of the Directors or

the Company concerning, among other things, the future results of operations, financial condition,

prospects, growth, strategies, and dividend policy of the Company and the industry in which it operates.

In particular, the statements under the headings “Risk Factors”, “Business Description” and “Operating

and Financial Review” regarding the Company’s strategy, targets and other future events or prospects

are forward-looking statements.

These forward-looking statements and other statements contained in this Prospectus regarding matters

that are not historical facts involve predictions. No assurance can be given that such future results will

be achieved; actual events or results may differ materially as a result of risks and uncertainties facing

the Company. Such risks and uncertainties could cause actual results to vary materially from the future

results indicated, expressed or implied in such forward-looking statements.

Forward-looking statements contained in this Prospectus speak only as of the date of this Prospectus. The

Company, the Directors and the Company’s advisers expressly disclaim any obligation or undertaking

to update these forward-looking statements contained in the document to reflect any change in their

expectations or any change in events, conditions, or circumstances on which such statements are

based unless required to do so by applicable law, the Prospectus Regulation Rules, the Listing Rules,

the Disclosure Guidance and Transparency Rules or the Market Abuse Regulation. The statements

above related to forward-looking statements should not be construed as a qualification of the working

capital statement contained in Part XII: “Additional Information—Working Capital”.

Denitions

Certain terms used in this Prospectus, including all capitalised terms and certain technical and other

terms, are defined and explained in Part XIII: “Definitions”.

Information not contained in this Prospectus

No person is or has been authorised to give any information or to make any representation not contained

in or not consistent with this Prospectus and, if given or made, such information or representation must

not be relied upon as having been authorised by the Company. The delivery of this Prospectus shall

not, under any circumstances, create any implication that there has been no change in the business

or affairs of the Company since the date of this Prospectus or that the information contained herein is

correct as of any time subsequent to its date.

No incorporation of website information

The contents of the Company’s website, any website mentioned in this Prospectus or any website, directly

or indirectly, linked to these websites have not been verified and do not form part of this Prospectus, and

information contained therein should not be relied upon.

US Considerations

The Wickes Shares have not been, and will not be, registered under the US Securities Act or under

the securities laws of any state or other jurisdiction of the United States and may not be offered or

sold within the United States, except pursuant to an applicable exemption from, or in a transaction not

subject to, the registration requirements of the US Securities Act and in compliance with any applicable

securities laws of any state or other jurisdiction of the United States. There will be no public offering

of the Wickes Shares in the United States for the purposes of the US Securities Act. At the time of the

Demerger, the Wickes Shares will not be listed on any securities exchange in the United States, and the

Wickes Group expects to rely on an exemption from registration under the US Securities Exchange Act

1934, as amended, provided by Rule 12g 3-2(b) thereunder.

The Wickes Shares are expected to be issued in reliance on the position taken by the Division of

Corporation Finance of the US Securities and Exchange Commission (“SEC”), set forth in Staff Legal

Bulletin No. 4, that shares distributed in a spin-off do not require registration under the US Securities Act

if, as is the case with respect to the Demerger, certain conditions are satisfied.

The Wickes Shares have not been approved or disapproved by the US Securities and Exchange

Commission, any state securities commission in the United States or any US regulatory authority, nor

have any of the foregoing authorities passed upon or endorsed the merits of the Wickes Shares or the

accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence in the

United States.

PART III

DIRECTORS, SECRETARY, REGISTERED AND HEAD OFFICE AND ADVISERS

Directors Christopher Rogers

David Wood

Julie Wirth

Mark Clare

Sonita Alleyne

Michael Iddon

Chair

Chief Executive Officer

Chief Financial Officer

Senior Independent Non-

Executive Director

Independent Non-Executive

Director

Independent Non-Executive

Director

General Counsel and

Company Secretary

Helen O’Keefe

Registered and head ofce

of the Company

Vision House

19 Colonial Way

Watford WD24 4JL

United Kingdom

Joint Financial Advisors and

Joint Sponsors

Citigroup Global Markets

Limited

Citigroup Centre

Canada Square

London E14 5HQ

United Kingdom

Deutsche Bank AG, London

Branch

Winchester House

1 Great Winchester Street

London EC2N 2DB

United Kingdom

Legal advisers to

the Company

Linklaters LLP

One Silk Street

London EC2Y 8HQ

United Kingdom

Legal advisers to the Joint

Financial Advisors and Joint

Sponsors

Ashurst LLP

London Fruit & Wool Exchange

1 Duval Square

London E1 6PW

United Kingdom

Reporting Accountants and

Auditor

KPMG LLP

15 Canada Square

Canary Wharf

London E14 5GL

United Kingdom

Registrar Link Market Services Limited,

trading as Link Group

Floor

Central Square

29 Wellington Street

Leeds

LS1 4DL

PART IV

BUSINESS DESCRIPTION AND MARKET OVERVIEW

1 Overview

Company Overview

The Wickes Group is a digitally-led, service-enabled home improvement retailer, delivering

choice, convenience, value and best-in-class service to customers across the United Kingdom.

The Wickes Group’s mission is to be the home improver’s and the local tradesperson’s partner

of choice, with a vision for “a Wickes project in every home” and its purpose to “help the nation

feel houseproud”. The Wickes Group aims to support its customers however they decide to

undertake their home improvement projects through three tailored customer propositions aimed

at each customer segment: local trade (“Local Trade”); do-it-for-me (“DIFM”); and do-it-yourself

(“DIY”). The Wickes Group drives sales through its estate of 233 retail stores, which support

nationwide fulfilment from convenient locations throughout the United Kingdom, and its website

(www.wickes.co.uk) and TradePro mobile app for trade members, which allow customers to

research and order an extended range of the Wickes Group’s products and services, arrange

virtual and in-person design consultations, and organise timely home delivery or “click-and-

collect” from across the Wickes Group’s store network.

The following diagram encapsulates the Wickes brand and value proposition, across

these activities:

The COVID-19 pandemic presented challenges and opportunities in 2020, as agility and

acceleration of key operating initiatives within the Wickes Group’s digitally-led, service-enabled

model reinforced customer relationships across Local Trade, DIFM and DIY. These initiatives,

including enhancements to digital capabilities, improvements to in-store fulfilment, click-and-

collect and home delivery services, are expected to continue to support operations moving

through and beyond the recovery phase of the pandemic.

The Wickes Group’s operating and financial performance has supported its position as a leading

UK home improvement retailer. From 2013 to 2019, the Wickes Group’s revenue grew at a

compound annual growth rate (“CAGR”) of 4.9 per cent. from £972 million in Financial Year

2013 to £1,292.4 million in Financial Year 2019, as compared to estimated market growth at a

CAGR of 2.5 per cent. during that period, and from Financial Year 2019 to Financial Year 2020

the Wickes Group’s revenue increased by 4.2 per cent. to £1,346.9 million, outpacing a flat UK

home improvement market during the COVID-19 pandemic.

Market Overview

The Wickes Group operates in the UK retail market for home repair, maintenance and

improvement products and services, with a specific focus on home improvement projects that

are undertaken either directly by the homeowner or occupier or with the assistance of a local

trade professional or turnkey “do-it-for-me” service-provider. Management estimates that annual

sales in this market were approximately £25 billion in 2020, including sales by DIY retailers,

generalist and specialist merchants, fixed-price operators, direct-to-site sales and pure-play

online retailers.

Management believes this market is underpinned by strong long-term fundamentals, such as

aging UK housing stock, trends in home purchases and remodelling work, and the proportion of

single residency homes in the United Kingdom, which supported market growth at a CAGR of 2.5

per cent. between 2013 and 2019 to reach approximately £25 billion. The COVID-19 pandemic

and related lockdown and other restrictions starting in early 2020 severely disrupted consumer

behaviour over the course of the year, which resulted in lower levels of demand for home

improvement works undertaken by third-party suppliers, such as local trade professionals and,

in particular, “do-it-for-me” service-providers, while leading to significant increases in spending

on DIY activities. Management believe that the overall home improvement market was broadly

stable at approximately £25 billion in 2020. Despite the impact of the COVID-19 pandemic on

the home improvement market, management expect that historical structural trends will, in the

longer term, continue to support market growth at a CAGR of over 2.5 per cent. between 2020

and 2024-2025 to reach approximately £28 billion.

In the last 15 years, the UK home improvement market has experienced a gradual shift due to

changes in consumer behaviours and approaches to undertaking home improvement projects.

These changes have been driven in part by a continued broad decline in DIY skills, capabilities

and experience, and more limited time available to homeowners and occupiers to undertake DIY

projects, although demand for DIY has increased since the start of the COVID-19 pandemic with

the potential for continued growth in the coming years. The market has also been impacted by

an increasing number of skilled tradespersons operating in the United Kingdom and increasing

demand for high quality end-to-end design and installation services. In addition, customers have

increasingly demanded digitally-led solutions, such as online ordering and web-based product

research and support capabilities, that go beyond straightforward ecommerce offerings. These

customer expectations require advanced, integrated digital capabilities, including convenient

and flexible fulfilment choices, such as scheduled home delivery and click-and-collect options,

alongside broader support for their home improvement projects.

In response to this gradual structural shift, the Wickes Group has rebalanced its business and

developed its service proposition across these three main journeys.

● Local Trade – includes home improvement projects where the end consumer appoints

a tradesperson to a project, and the tradesperson purchases the products required to

complete the job. This is most likely to be a local one or two-person trade business,

undertaking works including relatively complex projects such as home extensions,

kitchen and bathroom renovations, and flooring and tiling. These require products such

as timber, plasterboard, sheet materials, quick-set cement and other building products.

Local Trade customers are typically focused on convenience, immediate access to the

products they require and competitive pricing.

● DIFM – is an end-to-end service-led proposition, where an adviser provides design

support and the relevant project products. The consumer can choose a comprehensive

installation service overseen by the adviser or can arrange professional installation

separately. These services can cover a wide range of home improvement projects

including kitchens, bathrooms, flooring and tiling. DIFM customer needs include

inspiration, on-trend designs, trustworthy support across the design and installation

process and post-completion assurance on the quality of the work.

● DIY – includes projects where the end consumer purchases the products and undertakes

the project. DIY projects are typically more straightforward in nature, such as painting and

decorating, shelving, and planting and gardening, which require products such as brushes

and paint, light power tools and simple landscaping supplies. DIY customers are typically

most concerned with convenient access to the right product ranges at the right price,

supportive advice from knowledgeable store staff and ease of purchase or delivery.

2 History and Transformation

The Wickes business was initially founded by Henry Dunn Wickes, commencing operations

in the United States in 1854. In 1972, the first Wickes stores opened in the United Kingdom.

By 1987, the UK business had grown to over 40 stores and was floated on the London Stock

Exchange. Operations during the 1990s included international store openings in South Africa

(as part of a joint venture) and Northern Europe, which were disposed of in 1997. By 2000,

when the company was purchased by Focus Do It All, it had grown to over 130 stores in the

United Kingdom. In 2004, the business exceeded 170 stores across the United Kingdom and

was purchased by Travis Perkins. As part of the Travis Perkins Group, the Wickes Business

continued to grow its estate and its digitally-led, service-enabled offering, expanding to 233

stores by December 2020.

At a capital markets event in December 2018, Travis Perkins announced its intention to focus

on two overarching strategic aims: to renew its focus on advantaged trade businesses and to

simplify the Travis Perkins Group. At the same time, Travis Perkins committed to review the

options for maximising the value of the Wickes Business in the medium to long term.

Following the good progress made in strengthening the Wickes Business’s trading performance,

steps were taken to provide it with greater autonomy from the Travis Perkins Group through the

separation of its systems and processes. On 31 July 2019 the decision to demerge the Wickes

Business was announced.

In recent years, the Wickes Business has undergone a transformation in order to evolve from

its historical focus on Local Trade and experienced-DIY to a digitally-led, service-enabled home

improvement retailer, to better position its product and service offering for evolving customer

demands. Since 2014, this transformation has included significant renovation and re-fit works

across the Wickes Business’s store estate, development of its online and in-store ranges of core

Local Trade and DIY products, and growth of its DIFM service offering, alongside improvements

in customer service and building strong colleague engagement and a winning culture. During

this time, there have also been a number of store relocations to ensure that Wickes stores are

operating at a suitable size, as well as re-negotiations of existing leases to reduce the footprint at

certain locations. These initiatives are guided by the Wickes mission to be the home improver’s

and the local trade’s partner of choice, offering a welcoming environment and a customer-project

focus with a vision for “a Wickes project in every home”.

The outbreak of the COVID-19 pandemic has validated the Wickes Group’s digitally-led,

service-enabled customer proposition, highlighting the resilience of its deep-rooted customer

relationships and its robust service platforms as a result of transformation activities undertaken

in recent years. The pandemic has severely disrupted customer behaviour, including demand for

home improvement projects utilising Local Trade and DIFM providers, while travel restrictions

and periodic lockdown measures limited customers’ ability to visit store locations—including

one-day closure of all locations on 24 March 2020, and “dark” trading to support click-and-

collect and home delivery only until reopening almost all locations in mid-May 2020. However,

the Wickes response, guided by its purpose to “help the nation feel houseproud”, enabled it to

meet customer needs through expanded click-and-collect offerings, growth in home delivery

services, improvements in operating efficiencies and enhancements to digital and virtual

DIFM capabilities while further embedding its digitally-led service proposition in its customer

relationships. The Wickes Business undertook a number of proactive measures early in the

pandemic to ensure the safety of customers, colleagues and other community stakeholders,

such as store closures of dedicated kitchen and bathroom locations and showrooms and layout

modifications to support social distancing, while accelerating digital transformation activities

and trialling “park-and-collect” services alongside other COVID-secure measures. Changes

in operating activities and customer behaviours accelerated development of best practices to

drive efficiencies and new learning for click-and-collect and home delivery across the stores

network, given the significant increase in volume network during the course of the year. In

addition, higher levels of website traffic, advances in data analytic capabilities and renewed

focus on range development supported improvements in stocking productivity and drove order

fulfilment efficiencies. These steps enabled the Wickes Group to tailor inventory management

and ordering to high-demand products and ensure in-store accessibility, while limiting the use of

promotional periods and discounting activity to drive sales through the course of the year.

Digital Transformation

The Wickes Group has invested in its digital capabilities in recent years to integrate its online and

in-store offerings and provide a digitally-led service proposition through its website, advanced

“online, in-store” (“OLI”) product search and order capabilities and targeted TradePro mobile

app, in addition to the DIY app targeted for launch in the first half of 2021.

In 2014, the Wickes Group launched its mobile e-commerce capabilities, including an expansion

of online ordering and delivery capabilities. This was followed by the launch of click-and-collect

purchasing and day-of-choice fulfilment in 2015 and allocated customer delivery slots in 2016.

In addition to online ordering, customers can use the Wickes Group’s website to research

recent design trends, book DIFM consultations and access a range of “how-to” guides, which

cover a variety of projects such as decorating, flooring and tiling, home maintenance, and

landscaping. In Financial Year 2019, approximately 77,000 DIFM customer leads originated

online, as compared to approximately 18,000 in Financial Year 2015, and during that time sales

per lead increased by approximately 33 per cent. and DIFM installation sales growth was over

100 per cent. Between Financial Year 2017 and Financial Year 2019, the average order value

of a DIFM project increased by approximately 13 per cent.

By early 2020, at the start of the COVID-19 pandemic, this digital offering provided the Wickes

Group with an established platform to continue supporting customers with their home improvement

projects. Accelerated development of the digital proposition, including through tailored customer-

facing in-store and click-and-collect services, enhancements to its online and delivery offerings

and growth in its data analytic capabilities, allowed the Group to continue trading and deepen

customer relationships during the year. Within DIFM, the roll-out of enhanced virtual capabilities

in the kitchen and bathroom showroom journey, including investment in new equipment and

design consultant training for virtual consultations, 360-degree virtual visits and advanced digital

planning, supported DIFM activities during periods of showroom closures and changing customer

needs. An increasing number of customers have utilised these virtual journey tools, requiring

no face-to-face contact, and the number of DIFM customer-leads originating online increased

from approximately 77,000 in 2019 to approximately 101,000 in 2020. Across the business,

demand increased significantly for versatile fulfilment options, with customer home deliveries

more than doubling during the course of the year and average click-and-collect orders growing

by over 450 per cent., and by over 12 times during the first lockdown as compared to the prior

year. New, tailored service offerings have been introduced, including a trial service whereby

customers identify themselves when they arrive at the store for their collection and products are

delivered to their vehicle. Throughout the year, visits to the Wickes Group website increased

by approximately 96 per cent., resulting in a strong growth in digital market share (measured

by website visits) against UK home improvement retailers, and investments in page-view and

sales analytics capabilities to identify customers high-demand products and suggest them to

customers supported an increase website visitor conversion rates. These digitally led capabilities

are expected to continue supporting the Wickes Group, including as a result of renewed home

improvement interest in the 18-34 demographic since the start of the pandemic and their use

of digital channels for project inspiration. The Wickes Group grew its active customer database

by approximately 92 per cent. during the year, supporting advanced data analytics to enable

personalised interactions with customers to drive engagement, loyalty, sales and profitability.

Management estimate that across the business core product sales delivered double digit market

outperformance in the second half of 2020.

This digitally-led proposition operates on the Wickes Group’s centralised systems, which utilise

a “smart fulfilment” approach to track product availability across the store estate and the Wickes

Group’s delivery centres and match online orders with a nearby store location for efficient stock-

picking and fulfilment. These systems support digital capabilities including the Wickes OLI

system, which was introduced in 2018. OLI allows colleagues to track stocking and inventory

information from the extended product ranges and place customer orders from the shopfloor,

as well as providing website features for customers to check stock availability at a nearby store

and arrange at-home delivery or in-store click-and-collect purchases. Website features include

options for customers, such as the “kitchen visualiser” and other virtual DIFM capabilities, online

tile installation services, and AI-driven real-time product search and recommendations based on

products already selected by a customer. The Wickes Group believes that it is moving towards

two-thirds of sales from digitally-enabled customer interactions, including online ordering, OLI

purchases from in-store, the TradePro digital app, online research ahead of an in-store purchase

and showroom web leads.

Across these capabilities, the Wickes Group has leveraged its digitally-led proposition and

data analytic capabilities to drive growth. This approach creates a virtuous cycle, (i) utilising data

and significant growth in digital customers and visibility in demand and preferences, as well as the

planned DIY app launch in the first half of 2021, (ii) providing insight matched with third-party data

and machine learning models to map strategic value, (iii) enabling action based on behavioural

value drivers to target communications and identify lookalike audiences, and (iv) driving outcomes

through high engagement levels, increased loyalty, and higher retention rates.

The following chart shows the approximate proportion of the Wickes Group’s Financial Year

2020 sales by fulfilment option, highlighting the various methods through which complementary

digitally-enabled and in-store capabilities continue to serve customers.

In 2014, the Wickes Group implemented a Local Trade customer programme to further engage

these customers and support new local trader relationships, followed by full launch of TradePro

in 2017. The TradePro programme is available exclusively to Local Trade customers and

offers registered members an everyday, every-purchase 10 per cent. discount. The TradePro

programme is facilitated by the TradePro mobile app, which allows customers to check stock and

to place and pay for orders in real-time. It is also a key client relationship management tool that

provides the Wickes Group with direct access to its Local Trade customers for periodic offers and

regular communications along with advanced capabilities to analyse their purchasing patterns.

Store Estate Improvements

The Wickes Group has undertaken significant work as part of its store transformation initiative,

including to improve the quality of the Group’s store estate and right-size certain stores to a

smaller footprint to support more efficient in-store operations and provide an improved and more

consistent customer experience. The estate improvement initiative has included renovation works

at nearly 110 stores since 2015, comprising re-fit activities to make the stores more welcoming

and easier for customers to use. The Wickes Group has benefitted from an average sales uplift

of approximately 25 per cent. at re-fit stores, which it has sustained in subsequent years, and

has historically exceeded its targeted average return on capital investment of 25 per cent. across

these activities. As of 26 December 2020, the Wickes Group operated 142 stores in its new

format, and future targets include re-fit activities at between 35 and 40 additional stores over the

medium term, 5 to 7 strategic relocations and right-size activities at 15 to 20 additional stores.

The Wickes Group expects to open approximately 10 new stores and close approximately

10 locations in the coming years.

The COVID-19 pandemic has accelerated certain in-store reconfiguration activities, including

to increase in-store storage space at nearly 40 high-volume, small-footprint locations to

support click-and-collect activities, and technology improvements, such as bringing forward

pilot programmes for handheld technology to improve the efficiency of product picking. These

targeted efforts, which require lower investment levels than a full re-fit, allowed the Wickes

Group to simplify in-store processes and storage for click-and-collect services, shortening

the amount of time required for a collection and increasing the number of slots available, at a

low cost and without significantly reducing the in-store product range offering. These tailored

improvements are expected to continue supporting operating efficiencies in the future, with

the potential to undertake similar reconfigurations in additional stores, as the Wickes Group

continues to grow click-and-collect services and the role its store estate plays in supporting its

digitally-led service proposition.

While there are opportunities for further re-fits to the store estate with between 35 and 40

additional re-fit projects targeted in the medium term, management believes the geographic

reach of the current store estate is adequate to drive the required footfall. The Wickes Group

also intends to undertake refresh activities, on a rolling five-year basis, following the completion

of re-fit activities to maintain its store estate going forward. These renovation and re-fit activities

also support the Wickes Group’s digital proposition and flexible fulfilment capabilities by

simplifying in-store stock-picking and collections while leveraging the 233 store locations to

better serve customers.

Service Transformation

In response to growing customer demand for start-to-finish support on their home improvement

projects in recent years, the Wickes Group has also expanded its DIFM design and installation

services. This includes expanding its kitchen and bathroom offering to more stores and

increasing the number of design consultants and qualified installers to support these projects.

Continued efforts to improve process management (from effective design and a targeted product

range to improving the quality of installations) have supported significant growth. The Wickes

Group’s in-house oversight team manages the process to ensure quality control throughout

each project, including accurate delivery to the customer’s home and engaging with the Wickes

Group’s specialised third-party installation teams aiming to ensure a seamless DIFM journey.

In Financial Year 2019, the Wickes Group’s net promoter score was 91 per cent. and the

business received Service Mark with Distinction from the Institute of Customer Service for DIFM

installation services.

From its existing strength in kitchens and bathrooms, the Wickes Group expanded its DIFM

offering in 2019 to include tiling for its kitchen and bathroom projects and as a standalone

offering, with significant growth since launch and approximately 14,200 projects sold and 13,600

projects delivered during 2020. The tiling service has also seen high attachment rates across

kitchen and bathroom installation projects. Recent DIFM service introductions include flooring,

with approximately 3,800 projects sold and 1,500 delivered during 2020. The Wickes Group

continues to explore ways to strategically leverage its successful DIFM model into new and

adjacent service offerings. For example, the Wickes Group piloted installation of home offices

within its DIFM kitchens offering and, following positive customer feedback, plans to launch a

standalone home office service in the first half of 2021 alongside door and window, specialist

works and associated carpentry.

Product Range Transformation

The Wickes Group has taken significant steps to enhance its range of core Local Trade and

DIY products in recent years. This initiative has supplemented the Wickes Group’s own-brand

products by introducing leading third-party brand products in 2013, such as Bosch, DeWalt,

Dulux and Yale. The range of products available in-store has been edited to improve the in-

store shopping experience for all customers, while avoiding a “warehouse” approach, which it

believes is less conducive to fostering customer loyalty and driving sales and is typically more

expensive and complex to stock and operate. This strategy supports the evolution to operating

in smaller-footprint stores. The Wickes Group’s tailored in-store approach to its product range is

complemented by an extended product offering available online. When customers are shopping

from home or with the help of colleagues through the Wickes Group’s advanced OLI capabilities,

they are able to access the full range of products, in quantities and with variations beyond what

is available in-store, which are able to be delivered to the customer’s home or collected from the

store through click-and-collect.

These investments and initiatives have bolstered the Wickes Group’s position in the UK

home improvement market, fostering strong brand support and customer relationships. This

transformation has also supported the Wickes Group’s relationships with its Local Trade

customers, with over 550,000 enrolments in the TradePro programme since launch in 2014,

supporting strong trading through the COVID-19 pandemic.

Strategy – Levers for Future Growth

The Wickes Group aims to continue developing its digitally-led, service-enabled proposition

across Local Trade, DIFM and DIY through focused efforts on key strategic levers. The outbreak

of the COVID-19 pandemic has resulted in acceleration of key initiatives, leveraging existing

digital capabilities through targeted investment to continue to support customers and colleagues

and grow its service offering for Local Trade, DIFM and DIY customers.

This strategy includes continuing to develop its customer proposition, while leveraging its highly-

engaged colleagues and foundations:

● Growing the Wickes Group’s TradePro programme by expanding the customer base,

creating targeted personalised marketing offers and utilising digital rewards to increase

loyalty and the frequency of Local Trade and TradePro purchases. The Wickes Group

aims to grow TradePro from over 550,000 members to over one million members and to

double TradePro revenue in the medium term.

● Accelerating growth in DIFM through enhancing its existing proposition, including

through the introduction of new kitchen ranges, activities to refresh and re-fit showrooms,

launch of an improved bathrooms offering, and natural extensions into adjacent service

offerings such as flooring and home offices, by leveraging its DIFM model.

● Building on its DIY proposition and driving volume growth and solidifying market share

in core DIY product categories by targeting large markets for common DIY projects, in

particular where the Wickes Group is currently underweight, and driving footfall and

new customers through its curated in-store and extensive online range, simple pricing,

welcoming in-store experience, and fast and flexible fulfilment.

● Continuing to improve the store estate through re-fit and refresh activities, including

between 35 and 40 additional re-fit projects, 5 to 7 relocations, 15 to 20 store downsizes,

approximately 10 new stores and approximately 10 closures in the medium term,

enabling the Wickes Group to operate from a fully modernised store estate with a right-

sized format and efficient fulfilment capabilities and positioning the business on a five-

year cycle for store refresh activities.

● Building on digital capabilities and the digitally-led service proposition, including initiatives

to double fulfilment capacity in stores, utilising semi-dark areas of stores to drive efficiency,

leveraging online DIFM service capabilities, personalising the web experience through

AI and refining the project and bundle focus to drive sales while helping customers locate

the products they need for their projects. Data analytics continue to drive improvements

across operating activities, inventory management, website features and customer

relationships. These initiatives aim, over the medium term, for all customer journeys to

start online, for 70 per cent. of DIFM leads to be generated online and to increase the

percentage of orders fulfilled to customer homes from 16 per cent. in Financial Year

2019 to one-third under normalised trading conditions, in order to provide customers

across Local Trade, DIFM and DIY with a seamless offer.

● Enhancing the store service model to lay the foundations for future growth, across its

Local Trade, DIFM and DIY offerings. This approach will aim to further leverage Wickes’

stores across its digitally-led operations, developing customer-delivery and click-and-collect

capability, and supporting Wickes’ growth levers across its operations.

The Wickes Group’s strategic aims are enabled by engaged colleagues, supported by high

internal promotion rates and evidenced by employee engagement levels exceeding 70 per

cent. across the business, with higher levels for design consultants and for store and regional

management (see “—Foundations of the Wickes Group’s Customer Proposition—Highly

Engaged Colleagues, a Winning Culture and Leading Sustainability Position”, and its articulated

desire to grow responsibly (see “—Sustainability”).

3 The Wickes Group’s Service Proposition – Three Customer Journeys

The Wickes Group’s evolution into a digitally-led, service-enabled home improvement retailer

positions it uniquely with a differentiated customer proposition balanced across Local Trade,

DIFM and DIY.

A customer’s specific needs will vary depending on whether a home improvement project

is undertaken through a turnkey DIFM service, as a DIY project or relying on Local Trade

professionals. The Wickes Group’s service proposition is designed to provide the support and

products needed to get the job done by offering tailored ranges and advice within product

categories that align to key customer needs for each of these three routes. The following chart

shows the variety of home improvement projects targeted by the Wickes Group’s service-enabled

offering, from relatively complex projects, such as home extensions, to more straightforward

projects, such as painting and decorating.

Across this range of home improvement projects, there is overlap between the types of projects

undertaken by customers across the Wickes Group’s target customer bases, as represented in

the chart above. This dynamic is reflected in the Wickes Group’s product stocking and product

range management, which aim to ensure that its core product offering reflects the needs of

these customers. As these types of home improvement projects can be undertaken by different

types of customers, it is not always possible to categorise specific purchases of these core home

improvement projects to a particular customer group, but management estimates that sales are

broadly balanced across Local Trade, DIFM and DIY.

Although the COVID-19 pandemic has resulted in periods of varying demand within each of

these three customer journeys, management believe that as the recovery continues these three

journeys will continue to underlie the home improvement market and its service proposition in

the coming years. The Wickes Group has implemented targeted responses for each type of

customer journey, allowing it to continue to support customers online and in-store during the

course of the pandemic, as further described below.

The Wickes Group’s Local Trade Service Proposition

The Wickes Group’s Local Trade offering provides a simple and straightforward proposition to

help Local Trade customers save time and money by shopping with TradePro which gives them

10 per cent. off all purchases and access to trade trusted brands.

For Local Trade customers, the Wickes Group offers a targeted proposition to serve small-

sized trade professionals that may be overlooked by large-scale merchants that focus on larger

trade operations. It builds relationships founded on respect for the Local Trade job at hand and

recognition that Local Trade needs differ from DIY. The approach supports Local Trade by

providing stocking certainty, a trade-focused product range that includes trade-trusted, high-

quality products (under the Wickes brand and leading third-party brands), available at competitive

prices and convenient online and in-store fulfilment options.

Through the digital TradePro programme and a straightforward pricing proposition for all

Local Trade customers, the Wickes Group aims to continue growing its Local Trade customer

relationships. The Wickes Group estimates that Local Trade sales represent approximately one

third of total sales, reaching over £225 million in TradePro sales in Financial Year 2020.

The UK Local Trade market

In 2019, the UK Local Trade market for home improvement materials was estimated to be

approximately £11 billion, having grown at a CAGR of 2.7 per cent. from approximately £10

billion in 2013 based on management estimates.

The UK Local Trade market is highly fragmented because the products required for home

improvement projects can be purchased from a variety of trade and specialist merchants as well

as national DIY retail chains and smaller hardware stores. Approximately 50 per cent. of Local

Trade purchases are from specialised merchant suppliers that focus on the trade market, which

creates a significant amount of diversity and relatively low market share.

The UK Local Trade market has grown faster than the overall UK home improvement market and

the market for DIY between 2013 and 2019. This growth has been supported by the increased

availability of skilled tradespersons in the United Kingdom, including due to immigration in the

early parts of the twenty-first century, and a shift away from DIY skills and capabilities among

homeowners, landlords and renters. The COVID-19 pandemic has negatively impacted demand

for Local Trade services, influenced by lockdown, stay-at-home and social distancing measures

that reduced demand for in-home third-party service providers and higher levels of DIY activity.

Although these factors are expected to have moderately reduced the size of the Local Trade

market as compared to recent years, management believes the underlying trends that supported

historical growth will continue to do so in the coming years.

The Wickes Group’s differentiated Local Trade offering

The Wickes Group has established itself as a leading Local Trade supplier, with a tailored service

proposition for the Local Trade portion of the UK home improvement market. This approach

aims to ensure that products regularly used by Local Trade customers, from the brands they

trust, are readily available in-store and by stocking key products in easy-to-locate positions near

the front of the store. Local Trade sales continue to be an essential component of the Wickes

Group’s home improvement proposition, and it aims to continue growing its relationships with

Local Trade professionals as the supplier of choice by providing a consistent, convenient and

straightforward service. The Wickes Group’s broader transformation initiatives have supported

its differentiated Local Trade proposition, as described under “—History and Transformation”.

The Wickes Group’s differentiated Local Trade proposition is powered by its TradePro

programme, through which approximately 55 per cent. of the Wickes Group’s sales to trade

customers were made in Financial Year 2020. This digitally-enabled programme is facilitated

by the TradePro mobile app, which provides Local Trade customers with a convenient and

easy-to-use mobile solution for checking in-store stock, ordering for click-and-collect or on-site

delivery, and verifying membership for a simple and straight forward 10 per cent. discount on

every purchase. This straightforward approach differentiates the Wickes Group’s Local Trade

proposition from other trade loyalty schemes, which can require volume purchases or rely on

complicated tiered pricing structures or rebates. Because TradePro is a fully digital programme,

it is a key client relationship management tool and provides the Wickes Group with direct access

to these customers, including for targeted advertising and the ability to analyse their purchasing

patterns. For example, analysis shows that the average transaction value for Local Trade

customers ordering through the TradePro app is 4.1 times higher than for an average Wickes

Group customer and approximately 2.5 times higher than TradePro member purchases outside

the app. The Wickes Group does not offer credit within its Local Trade proposition.

The Wickes Group Local Trade customer journey

A typical customer journey for a Local Trade customer may start through a targeted TradePro

offer sent via the Wickes Group mobile app. Using the app, the TradePro member can identify

the products they need, check stock and arrange for delivery to the site or reserve for collection

in-store en route to a job, maximising speed, convenience and efficiency for the customer, while

offering value with the TradePro discount. For Local Trade customers who are not registered

TradePro members, the Wickes Group actively engages in targeted social media advertising, to

support in-store footfall and online purchases for key trade products.

Since the start of the COVID-19 pandemic, an increasing proportion of Local Trade interactions

have taken place through digitally-led capabilities, including the TradePro app and Wickes website,

and higher proportion of purchases utilising click-and-collect and on-site delivery capabilities.

In-store, Local Trade customers can find the products they regularly need located in convenient

positions near the front of the store and near the tills. This facilitates quick and easy visits to

stores and minimises the need to move heavy items a long distance. Additional support is also

available in-store, including the ability to place orders for items from the Wickes Group’s extended

online range with the help of a Wickes colleague using OLI capabilities, and to arrange for on-

site delivery. At check-out, TradePro members verify their membership status by scanning their

digital membership card on the mobile app, which applies the TradePro 10 per cent. discount to

all purchases.

The Wickes Group’s DIFM Service Proposition

The Wickes Group offers a comprehensive home improvement showroom and service proposition

from concept to completion, with all the finishing touches that provides customers with best-in-

class service, primarily for kitchen and bathroom projects.

This solution provides a single place that gives customers the inspiration to co-create the best

design, the help and advice they need to do it right, an end-to-end service, including installation,

that takes away their concerns and clarity over who is responsible for delivering the whole project.

The Wickes Group has developed a repeatable, trainable customer journey followed by its 550+

design consultants to ensure a successful outcome. This service covers the whole process

from initial contact, through the inspirations stage, working with the customer to create the

design for their space and lifestyle, a dedicated two-person room-of-choice delivery process

and finally a quality checked and guaranteed installation service. The whole journey is led by

the customer’s dedicated design consultant, who not only ensures a home visit is completed to

properly understand the space they are designing for, how the customer uses this space and

their vision for their new kitchen and bathroom, but they also stay with the customer throughout

the whole process to ensure they have a single Wickes point of contact.

In 2019, the Wickes Group’s installation service was awarded a distinction level accreditation

from the Institute of Customer Services, and their benchmarking study noted that the customers

of this service recorded a 91 per cent. Net Promoter Score.

The Wickes Group’s DIFM offering is a digitally-led, service enabled proposition. Big projects that

are going to transform their home are often weeks, months or years in the dreaming stage. In the

early stages, this dreaming and planning is increasingly done online, often searching Pinterest

for ideas, looking at various websites for tips and deciding what style and finish the customer

wants. The Wickes Group has, in recent years, increasingly contributed to these communities

(with over 19 million views on Wickes Pinterest pin boards) and created online resources to

support customers at this stage, whether this be better content to help them visualise the finished

project, videos to bring the journey to life, pictures of real kitchens in real customer homes that

showcase the beautiful products and finishing touches.

These DIFM offerings aim to simplify complex home improvement projects and provide positive

experiences for customers and incremental profitability for the Wickes Group in a growing

segment of the UK home improvement market. The Wickes Group’s DIFM sales grew by 12.8

per cent. from Financial Year 2018 to Financial Year 2019, as set out in Note 3 of Section B of

the Historical Financial Information, before declining as a result of the COVID-19 pandemic in

Financial Year 2020.

The Wickes Group’s experience in DIFM services positions it to expand into additional areas,

including services ancillary to its existing strengths in kitchens and bathrooms, as well as

exploring potential growth in new home improvement projects. For example, in 2019 the Wickes

Group commenced offering DIFM tiling services alongside its existing kitchen and bathroom

offering, with approximately 14,000 installations sold since the launch of the service, and the

Wickes Group plans to continue rolling out the service across additional stores. In 2020, the

Wickes Group commenced a flooring offering, and it trialled a home office proposition within

kitchens with plans to roll-out more broadly in the first half of 2021.

Management believes that by leveraging its design capabilities, comprehensive service and

ability to provide all of the finishing touches, the Wickes Group’s DIFM offering is a market-

leading proposition with significant strengths over other national providers.

The UK DIFM market

DIFM services include a variety of home improvement projects, including kitchens, bathrooms,

flooring, staircases, windows and doors. As a result, the UK market for DIFM services is

generally comprised of a diverse range of service providers that undertake these types of home

improvement projects. Management believes that this market has grown at a CAGR of 3.6 per

cent. from approximately £3 billion in 2013 to approximately £4 billion in 2019, as customers

increasingly require end-to-end support for their home improvement projects.

Between 2013 and 2019, the UK market for DIFM services grew faster than the overall UK

home improvement market, and considerably faster than the specific DIY market segment. This

growth was supported by a continued broad decline in individuals’ home improvement skills,

capabilities and experience, as well as the prevalence, in particular in urban areas, of “time-poor”

homeowners, landlords or renters with limited leisure and other time available to undertake,

or hire and coordinate tradespersons to undertake, these home improvement projects. These

trends have driven demand for comprehensive, all-in-one solutions. Customers undertake these

projects infrequently and therefore demand expertise and high product and service quality

levels, especially as these projects typically entail major transformations in key rooms in their

homes, and straightforward solutions are required to manage the various joinery, electrical and

plumbing works. As a result, making the right choice requires the availability of experienced

guidance about current trends and project design, in-store, print and online materials as well as

showroom displays to help visualise completed projects, and experienced consultants to bring

the project together and coordinate the process.

In 2020, the DIFM market experienced periods of significant disruption due to the COVID-19

pandemic. Demand for at-home and in-store consultations, historically a key step in a DIFM

project, reduced as a result of lockdowns, stay-at-home orders and social distancing measures,

resulting in a decline in the DIFM market size as compared to recent years. In addition, closure

of storeroom spaces negatively impacted DIFM sales and interest in new projects.

The UK market for DIFM services is fragmented, with only a limited number of national service

providers that undertake DIFM services other than the Wickes Group, a large number of small,

local traders and a number of providers that focus on specialist projects. Despite continued growth

in customer demand for DIFM services, certain competitors have faced challenges implementing

a profitable DIFM strategy due to design, installation and process oversight issues that required

costly remedial actions, and as a result exited this market in recent years. Management believes

this market provides a significant growth opportunity, using its existing strengths in kitchen and

bathrooms to expand its service offering into additional home improvement project categories.

Management expects customer demand trends to continue to support growth in the UK market

for DIFM services in the coming years, creating significant opportunities for DIFM service

providers such as the Wickes Group with compelling and comprehensive service offerings.

The Wickes Group’s differentiated DIFM offering

The Wickes Group has grown its DIFM offering in recent years in response to increasing customer

demand for comprehensive support on their home improvement projects. This integrated

offering has historically focused on kitchen and bathroom projects and recently expanded into

tiling and other services, providing customers with an all-in-one service solution, from concept to

completion, to simplify complex home improvement projects.

The Wickes Group’s differentiated DIFM offering provides customers with an end-to-end

service offering, commencing with expert and empowered design consultants who can inspire

customers at the design phase. The Wickes Group’s multifunctional oversight teams manage

the entire DIFM process through to installation and oversee post-installation quality control. This

comprehensive and bespoke approach to meeting customer needs supports the Wickes Group’s

ability to undertake projects in an efficient and profitable manner, by aligning customer needs

and designs with a curated range and effective project management and oversight. The Wickes

Group carefully manages its designs and available ranges, which reduces the risk of costly errors

or other issues at the design or installation stages. The Wickes Group’s in-house oversight team

manages the process and provides quality control across each project, overseeing over 40,000

home quality control inspections in 2019. This includes coordinating to ensure accurate delivery

and, where the customer selects installation services, engaging with the relevant installation

team and confirming works are undertaken to a high standard. This model has proven successful

for kitchen and bathroom projects and the Wickes Group recently expanded its DIFM offering

into tiling services, with plans to continue growing into new service offerings in line with customer

demand.

In-store kitchen and bathroom showrooms support active customer engagement to inspire new

projects and help customers visualise design options and features. In addition, in-store DIFM

appointments give customers the opportunity to select appliances and other products, facilitates

cross-selling opportunities for appliances and services related to customers’ projects. Customers

can also select their finishing touches, including tiling, flooring, paint and lighting.

The Wickes Group has reinforced its position by continuing to develop its kitchen and bathroom

DIFM offering as part of its broader digitisation and range transformation initiatives. For example,

the Wickes Group expanded its online capabilities, including a gallery of finished projects,

design and installation details, and appointment-booking features, which improves the tracking

of new-customer leads and supports lead conversion rates. The Wickes Group enhanced these

capabilities during the pandemic through the development of virtual tools to manage the kitchen

and bathroom sales journey, enabling customers to undertake the full process through video

conferencing and tailored one-to-one sessions without leaving home. These virtual services

offer customers a versatile and convenient approach to undertaking DIFM projects across the

Wickes Group’s range of DIFM services, while improving design consultant efficiency. Many of

these enhancements will also continue to support operational efficiencies beyond the pandemic,

including through roll-out across the range of DIFM service offerings.

Across these activities, the Wickes Group’s DIFM proposition is uniquely positioned against

local operators and other national competitors, as well as DIY, generalist and online retailers

that cannot provide comprehensive and bespoke service solutions for these types of projects.

As compared to smaller scale DIFM service providers, the Wickes Group’s national presence

allows it to access significant scale benefits, including its branding and marketing, as well as

sourcing, design and process management oversight and expertise. Unlike many of its national

competitors, the Wickes Group’s comprehensive offering is supported by a large and developed

installer network of more than 2,300 third-party installation teams, approved by the Wickes

Group to undertake DIFM projects.

The Wickes Group offers customer financing for DIFM projects. For many customers, financing

options are an important factor when making the decision to undertake major home improvement

projects and when planning the scope and scale of such projects. A variety of options are

available, including the Wickes Group’s “Buy Now, Pay Later” programme as well as traditional

interest-bearing credit. In addition, the Wickes Group undertakes periodic promotions that offer

interest-free credit to support DIFM sales and volumes in strategic periods during the year.

The Wickes Group partners with a third-party lender, who facilitates these financing programmes.

Under this arrangement, interested customers apply online or from in-store and are approved

for financing by the third-party lender, who retains credit risk in connection with the financing.

The Wickes Group selects which financing options are made available to customers at any

given time, which allows it to undertake seasonal promotional periods such as interest-free

credit to drive DIFM volumes throughout the course of the year. The Wickes Group incurs a fee

depending on the type of credit arrangement offered to the customer.

The Wickes Group’s DIFM customer journey

The Wickes Group’s DIY service offering supports its customers’ DIY needs, providing a curated

range of quality products at competitive prices, along with advice, guidance and knowledge.

The first point of contact will often be through the Wickes Group’s digital capabilities or an

in-store kitchen consultant, who can arrange a dedicated design consultant for the project.

At the design stage, the design consultant will arrange either a virtual consultation or an at-home

meeting and survey with the customer to discuss the customer’s ideas, better understand the

customer’s aims for the project and take measurements of the space for use early in the design

process. The customer can then review their plans online or arrange an in-store meeting to

review a preliminary 3D design, explore the Wickes Group’s showroom installations and discuss

appliances and other features that fit the style and budget for their project, or continue through

the process using a fully digital journey for consultant meetings. The Wickes Group’s expansion

of its DIFM service into a fully-virtual journey will support growth of additional DIFM services in

the future.

Once the customer confirms the final design, the Wickes Group will schedule the home delivery

and installation, providing the customer with a single point-of-contact for the process – including

for shipping, fitting and any needed plumbing, wiring, gas or lighting works. The Wickes Group

has taken steps to ensure these activities are undertaken in a COVID-safe manner. Following

installation, the Wickes Group completes its quality control process and the customer will receive

an in-home visit to ensure the project meets the customer’s requirements. The Wickes Group

provides each kitchen with a 20-year guarantee on cabinets, units, hinges and drawer runners

and a 10-year guarantee on cabinet doors and drawer fronts. Installation works are provided

with a two-year workmanship guarantee.

The Wickes Group’s DIY Service Proposition

The Wickes Group’s DIY service offering supports its customers’ DIY needs: “from Wickes’

curated range to bringing customers the right quality products at the right prices, Wickes can

help customers to tackle their projects by providing advice, guidance and knowledge”.

This approach provides DIY customers with simple, clear choices and certainty that the Wickes

Group will stock the products and provide the support to get the job done. This digitally-led

service proposition supports DIY customers with online resources and in-store support and

offers reliable and flexible in-store fulfilment and home-delivery options to ensure the products

are delivered where and when desired to fulfil their projects. The Wickes Group estimates that

DIY sales typically represent approximately one-third of total sales, which increased during

Financial Year 2020.

The UK DIY market

Despite growth and supportive structural trends in the overall UK home improvement market,

the UK DIY market experienced periods of low growth in recent years, although DIY activity

increased dramatically as a result of the COVID-19 pandemic.

In 2019, the UK DIY market was estimated to be approximately £10 billion, having grown at a

CAGR of 1.8 per cent. between 2013 and 2019, based on management estimates. Although

this market is fragmented, a number of well-known, national retailers operate in the industry.

In addition, DIY customers are also served by regional and local retailers, including small

hardware stores and specialist retailers such as painting and decorating retailers and garden

and landscaping centres. A variety of generalist online retailers also sell products used for

DIY activities, aiming to compete on the basis of price and convenient delivery options for the

products they stock.

In 2020, DIY activity increased during lengthy periods of lockdown and widespread working from

home. Management believe that this trend was supported by a number of factors including how

people live and work during the pandemic, including increased time spent at home changes to

commuting patterns and spending habits, restrictions on holiday travel, and hesitancy to have

third-party service providers entering the home during peak periods of the pandemic. These factors

are estimated to have supported an increase in the DIY market as compared to recent years.

The UK DIY market is expected to continue to be supported by structural fundamentals,

including the age of housing stock and repair, maintenance and improvement trends across the

broader industry, in addition to renewed interest in DIY activities. While these longer term trends

in consumer behaviour, and an anticipated rebound in Local Trade and DIFM demand, are

expected to lead to lower growth levels in DIY than the broader UK home improvement market

in the coming years, heightened core DIY demand in 2020 highlights the potential for continued

growth as compared to historical levels.

The Wickes Group’s differentiated DIY offering

The Wickes Group’s DIY proposition offers customers an integrated, easy-to-use digital service

and a welcoming in-store environment with a curated product range supplemented by an

extended range online.

This approach supports DIY customers whether they shop online or in-store. In recent years,

the Wickes Group has aligned its DIY proposition across online capabilities and its in-store

offering by significantly developing its product ranges and improving its in-store environment,

as described in “—History and Transformation”. By reducing in-store shelf clutter and providing

customers with convenient in-store access to the products they need, the Wickes Group aims

to reduce the complexity and confusion that can be associated with tackling a DIY project and

differentiate its DIY offering from large “warehouse” style DIY stores by making it easier to shop.

This approach has supported sales growth in key product areas, including garden maintenance

sales, which more than doubled between Financial Year 2014 and Financial Year 2019, and

colour paint sales, which increased by approximately 49 per cent. during that time. The Wickes

Group believes that it is under-indexed in many product categories, and this approach targets

future sales growth. In addition to customer service benefits, this approach supports in-store

stock availability and creates procurement efficiencies, which helps the Wickes Group to invest

in the overall service proposition.

The Wickes Group offers a broad range of categories for “light trade” and “heavy trade”, including

a strong stable of trusted Wickes-branded products, such as paint, screws and nails under

“light trade” and timber, aggregates and plaster under “heavy trade”, as well as recognisable,

leading third-party brands, such as Bosch, DeWalt, Dulux and Yale. The Wickes Group own-

branded products support brand loyalty and continue to be popular with customers, in particular

for product lines that are regularly purchased by DIY customers, such as paint, hand tools and

growing media (e.g. compost). In addition, these Wickes-branded products typically provide

relatively higher margins than third-party branded products, supporting profitability across the

Wickes Group’s operations. The Wickes Group differentiated DIY service proposition provides

customers with curated in-store product ranges and comprehensive online offerings at good

value, as well as warm and friendly assistance and flexible fulfilment options, all of which provide

a unique and more rewarding experience for DIY customers.

Alongside these initiatives, the Wickes Group has expanded its digital proposition in recent

years by integrating its stocking and fulfilment capabilities across its website and store locations

to simplify shopping for DIY customers. The Wickes Group offers a variety of straightforward

fulfilment options – whether a customer is shopping in-store, ordering from the website for in-

store collection or arranging delivery from a website or in-store purchase from the extended range

that is not available in-store, as described under “—Multi-channel Fulfilment and Distribution

Capabilities”. This approach efficiently utilises the Wickes Group’s 233-store estate as a fulfilment

network. It also differentiates the Wickes Group from competitors in the DIY market, in particular

generalist retailers that cannot provide an extended range of products and online retailers that

cannot efficiently dispatch or provide convenient collection options for many types of larger or

bulky items. These flexible fulfilment options have become increasingly popular in recent years,

as orders delivered to customers more than doubled between Financial Year 2018 and Financial

Year 2020 for products regularly purchased by DIY customers, such as tiles, flooring and garden

fences.

The Wickes Group’s DIY customer journey

A typical Wickes DIY project will start with a customer’s visit to the Wickes Group’s website,

where they can research the supplies necessary for the job. Once the customer has viewed the

Wickes Group’s product range online, they can place an order for home-delivery or click-and-

collect, or make the purchase in-store after checking stock availability.

If required, the next step of the journey is typically an in-store visit, where customers can quickly

find the products they need and select from accessories and other products they may require

for their project with the help of in-store colleagues. For click-and-collect orders, the customer

receives a notification when the product is ready for collection from the store, and they can

complete the purchase at the collection counter. If a customer requires a specialist product, or

a greater quantity of a particular product than is in stock at the relevant store, a colleague can

help with viewing the extended range via the Wickes Group’s OLI capabilities and, as a result,

capture a sale without risk of losing the customer to another provider. Once the customer has

the products they need, they receive fast service at the front-of-store till points and can get back

to their project.

4 Foundations of the Wickes Group’s Customer Proposition

The Wickes Group’s Local Trade, DIFM and DIY customer propositions are enabled by its highly

engaged colleagues and winning culture and further supported by its digitally-led capabilities,

complementary low-cost and right-sized store estate, distinctive service model to provide

inspiration, service and fulfilment, and simple, clear pricing to provide value to customers.

Highly Engaged Colleagues, a Winning Culture and Leading Sustainability Position

The Wickes Group’s customer proposition is founded on its engaged colleagues and experienced

management team, creating a winning culture to support high customer service levels across its

Local Trade, DIFM and DIY offerings. This culture promotes and rewards an inclusive colleague

environment and engages them to support customers, whether during an in-store visit or via the

Wickes Group’s digitally-enabled capabilities or call centre. Across its operations, the Wickes

Group has implemented a common set of values and aims to ensure that all colleagues are

recognised and rewarded for living these values.

The culture at the Wickes Group reflects a modern approach to working, which promotes

personal responsibility, flexible working arrangements and family leave, the use of effective

performance management underpinned by regular feedback, and a focus on health and

wellbeing. Management believes the positive culture has enabled the Wickes Group’s colleagues

to operate to their maximum potential and positions the Wickes Group to take full advantage

of market opportunities and overcome challenges as they arise. The success of this approach

is evidenced by the high levels of internal promotions (in Financial Year 2019, prior to the

pandemic, 72 per cent. of store managers were promoted internally) and retention rates across

the business (87 per cent. for design consultants, 89 per cent. for store managers, 79 per cent.

for regional leaders and 75 per cent. across the business). In addition, the Wickes Group has

attained high employee engagement levels, as evidenced by scoring nearly 75 per cent. across

the business on nationally recognised employee engagement surveys during 2020 (79 per cent.

for design consultants, 94 per cent. for store managers and 86 per cent. for regional leaders),

which is higher than pre-pandemic levels and management believe is significantly higher than

industry average. By maintaining low turnover levels and high levels of internal promotions,

the Wickes Group develops experience and expertise among its colleagues, allowing them to

spend less time in recruiting and training activities than would be required to support operations

affected by higher turnover rates and more time on the shopfloor.

The Wickes Group has a successful track record of promoting diversity through its partnerships

with Stonewall, Working Mums and the Armed Forces, and through its “Evolving Women in

Leadership” programme. In 2020, Wickes was named one of the top ten diverse retailers in the

United Kingdom by the Financial Times, and commenced partnerships as a member of Valuable

500 and with Mind and joined the British Disability Forum. This positive culture is underpinned by

a focus on internal progression where possible (with the vast majority of promotions internally), a

continued investment in internal talent through the “Leadership, Effectiveness and Development”

programme (“LEAD”) and through the Wickes Group’s partnership with Oxford Summer School,

and by maximising the use of apprenticeships through the “Learn and Earn Apprenticeship

Programme” (“LEAP”). The Wickes Group is committed to a policy of equal opportunities for staff

at all levels and provides direct employment and career development to thousands of employees

across the United Kingdom. The Wickes Group is dedicated to training and development, and

has invested significant amounts in training programmes. The Wickes Group also provides

opportunities for large numbers of people seeking flexible or part-time hours. The Wickes Group

regularly reviews its operations and its sourcing and supply chain functions to seek to ensure

that its suppliers operate fairly and ethically, and in compliance with anti-slavery laws.

Across the Wickes Group’s operations, the culture also promotes a safety-first approach, which

aims to ensure that sites are safe, legal and compliant. This is demonstrated by the Wickes Group

achieving a score of 6+ out of a maximum score of 8 on internal health and safety audits. These

audits assess and measure the implementation of risk management controls by operational

management and provide assurance that hazards and risks have been adequately identified

and that controls and risk management measures are suitable, fit for purpose and operating as

intended. The Wickes Group employs a team of health and safety business partners to ensure that

a safe and healthy environment is provided for its employees and customers. It also endeavours to

ensure that its suppliers, manufacturers and licensees also provide appropriate working standards

for their employees and do not contravene the employment laws of their countries.

Strategic incentive programmes reinforce the Wickes Group’s culture, including schemes that

support in-store colleagues’ role in implementing the Wickes Group’s digitally-led and integrated

fulfilment strategy, which capture in-store support for digitally-enabled sales within each store’s

revenue and profit totals, and targeted sales tracking for DIFM design consultants.

Working together, the management team continues to develop and build upon the winning

entrepreneurial culture that has made the Wickes Group so successful to date, with extensive

experience in the retail and home improvement sectors. David Wood, CEO, joined Wickes in

May 2019. With almost 30 years in the retail and consumer sector, David is a highly experienced

executive with extensive board level experience in both the UK and internationally, having worked

for Tesco, Unilever, Kmart and Mondelez. Julie Wirth joined Wickes as CFO in November 2018,

having held board and senior finance roles at group and divisional level in the retail sector,

including twenty years at Home Retail Group plc, five years at Musgrave GB Ltd and three

years at Countrywide Farmers plc, with responsibility across finance, IT, legal and secretariat,

and change management. Fraser Longden, the Chief Operating Officer, has been with Wickes

for over six years, prior to which he was a B&Q Board Director, having spent over 15 years

with Kingfisher in senior roles in both the United Kingdom and Asia. Other members of the

management team have significant retailing and home improvement experience, including at

Marks & Spencer, Tesco, Kingfisher, Homebase and Wilko.

Delivering a sustainable approach to business is fundamental to the Wickes Group’s service

proposition. The Wickes Group aims to be a sustainable business sourcing from sustainable

supply chains and helping customers to have more sustainable homes, as described in

“Sustainability” below.

Curated Product Ranges

The Wickes Group’s service proposition aims to provide customers with an in-depth and carefully

curated range that offers customers the variety of options they require without overwhelming

them with redundant product offerings, which simplifies the customer journey, while supporting

the Wickes Group’s efficient operating model.

The Wickes Group’s product range provides an average of approximately 9,500 products in-store,

supplemented by the extended range available online, which means Wickes Group colleagues

“never have to say no” to customers. Across its Local Trade, DIFM and DIY service offerings, all

product categories are purchased by all customer groups, creating significant efficiencies in the

Wickes Group’s operations, both online and in-store, regardless of customer type. In addition,

Wickes utilises this curated approach across its store estate, which provides customers with a

consistent experience and the confidence that they will be able to find the products they need

for their projects.

Utilising a curated product range enables the Wickes Group’s efficient operating model. A tighter

product range enables simpler and more efficient product refreshing, and it reduces complexity

for distribution and in-store stocking activities. Product range and inventory efficiencies support

the business to keep prices low. During Financial Year 2019, the Wickes Group’s inventory

stock turn was approximately 5 times. In Financial Year 2020, the Wickes Group’s inventory

stock turn was approximately 5.6 times, reflecting COVID-related inventory management.

This strategy relies on active category management to produce a balanced product offering,

supplementing the existing offering within a particular product range with additional own-brand

or third-party branded options to reflect changing customer needs or other trends. Management

undertakes targeted volume and margin management (in particular for high-volume building

products) to ensure changes to the product range support the business’s operating results.

Similarly, own-brand products are important to the Wickes Group’s strategy because they

support the reputation of the Wickes brand and the Wickes Group typically earns a higher margin

on own-brand products than third-party branded items. During Financial Year 2020, own-brand

products comprised approximately two-thirds of sales.

Digitally-Led Proposition

In response to fundamental shifts in customer behaviour, the Wickes Group has integrated its

operations across its website and retail store channels to provide customers with a unique,

digitally-led comprehensive service offering, as described in “—History and Transformation”.

The Wickes Group’s digital proposition sits at the heart of each of the three customer journeys,

integrating online and in-store service offerings and providing advanced operational and

customer service capabilities from flexible fulfilment options to OLI service on the shopfloor.

These digital capabilities have become increasingly important to customer relationships, and the

Wickes Group continues to move toward two-thirds of sales through digitally-enabled capabilities

(including online ordering, OLI purchases from in-store, the TradePro digital app, online research

ahead of an in-store purchase and showroom web leads). Digitally-enabled sales are attributed

to stores resulting in an alignment of incentives.

The Wickes Group continues to develop ways to build customer relationships through a variety of

advanced features across its digital capabilities. On its website, customers can browse and research

the Wickes Group’s full range of home improvement products, explore ideas for larger projects,

obtain information about the Wickes Group’s DIFM services and view online tutorials and “how-

to” guides. Recently added website features include options for customers to create project lists

and save favourite products or designs, and AI-driven real-time product recommendations based

on products already selected by a customer. In addition, the website offers more standardised

features, including optimised search functions, product details and customer reviews to help

customers find the products they need for their home improvement projects.

Management believes that its fully integrated digital offering differentiates the Wickes Group

from its competitors and other online marketplaces, and will continue to drive customer loyalty

and sales going forward.

Distinctive Service Model Providing Inspiration, Service and Fullment

The Wickes Group’s store estate is the front line of its fulfilment capabilities, using a versatile and

integrated system to enable the Wickes Group to fulfil certain website orders locally through its

233 retail stores (in addition to purchases fulfilled directly through the Wickes Group centralised

delivery centre). As the Wickes Group continues toward two-thirds of sales utilising digitally-

enabled capabilities, approximately 98 per cent. of purchases touch a Wickes Group store in

some manner (whether visiting a store or utilising store network fulfilment capabilities), showing

the essential role the store estate continues to play in the Wickes Group’s customer proposition,

even as the ways that customers interact with the Wickes Group evolve.

This model utilises an approach to store layout and capabilities that is complementary to the

digital journey, offering inspiration, service and fulfilment. Self-service customers are supported

by in-store colleagues and re-fitted shopfloor spaces, which create a welcoming environment

that makes it simple, quick and easy to shop. Dedicated showroom space in-store supports

DIFM customers, with space to dream and visualise their projects and with expert help at hand.

Assisted selling capabilities across the store are easy-to-find for customer questions across in-

store product ranges, and OLI capabilities provide access to the full range of products, in quantities

and with variations beyond what is available in-store. Each store’s operations are integrated with

the Wickes Group’s digitally-enabled capabilities, with colleagues picking orders and preparing

for either in-store collection or home delivery. The COVID-19 pandemic has accelerated certain

in-store reconfiguration activities and technology trials to simplify in-store product picking and

storage for click-and-collect services, as described in “—History and Transformation”, and trials

of “park-and-collect” services alongside other COVID-secure measures. During the course of

2020, alongside rapid growth in click-and-collect and home orders, the Wickes Group also

continued to evaluate its ability to holistically leverage the broader store, including use of in-store

space to support customer delivery demand across geographic areas. The Wickes Group is also

reviewing end-to-end customer order management systems to build more capacity throughout

the customer journey.

The following graphic illustrates how a Wickes Group store is typically structured.

Across the Wickes Group’s operations, this approach utilises a centralised smart fulfilment

system to manage distribution and track in-store inventory across the Wickes Group’s store

estate, matching online orders with a nearby store location. When an order is placed online, the

relevant store is notified, and an in-store colleague will pick and prepare the products from the

shopfloor. Click-and-collect orders are typically ready for collection within one hour of the online

order. If the customer selects a home-delivery option, a specialist courier service will be centrally

arranged, for collection and onward delivery by the courier from the local store once the order

has been prepared and packaged. This approach to local fulfilment is supported by efficient

centralised distribution processes that are flexible and aligned to customer needs – varying

depending on the type of product, with some large products shipped directly from the supplier

to the store (either for in-store shopping or click-and-collect), while other items are distributed

via the HDC or, for certain DIFM and core DIY items, directly to the customer. As a result, the

digitally-led proposition drives efficiency and sales density across the physical store network.

These integrated capabilities provide the Wickes Group with a competitive advantage over

online-only vendors, allowing it to fulfil a number of customer orders in real-time rather than

shipping from centralised or even regional warehouse facilities for the vast majority of products.

This approach maximises efficiency across the nationwide store estate and helps customers

save time by collecting products in-store when they need them, as compared to next-day

delivery from online retailers. In addition, these capabilities also allow the Wickes Group to take

advantage of the expertise of its in-store colleagues, who pick and prepare customer orders

from the store’s available stock, to ensure orders are accurate and ready when the customer

arrives. During Financial Year 2019, prior to commencement of the pandemic, approximately

16 per cent. of the Wickes Group’s online orders were fulfilled through its store estate, which

increased to approximately 28 per cent. in Financial Year 2020, and the Wickes Group is aiming

for these sales to comprise over one-third under normalised trading conditions in the future.

In-store visits also create the opportunity for additional sales from the Wickes Group’s curated

product ranges.

Low-Cost, Right-Sized Physical Estate

The Wickes Group’s retail estate of 233 stores provides the backbone of its customer

proposition, encompassing approximately 6.6 million square feet of sales and inventory space

and a nationwide fulfilment network for click-and-collect and home-delivery orders. In Financial

Year 2019, prior to the pandemic, the Wickes Group averaged approximately £194 in sales per

square foot across its store network, which increased to approximately £204 per square foot

from an average store size of 28,400 square feet.

The illustration below shows the locations of Wickes Group stores throughout the United Kingdom.

As at 26 December 2020, all of the Wickes Group’s stores were operated under leasehold

agreements with a diverse landlord base. Individual store leases vary as to their terms, rental

provisions and expiration dates. The Wickes Group aims to enter into store lease agreements

for terms of between 5 and 15 years, with rent renewals typically every 5 years if relevant,

although certain historic leases are for longer periods. As of 26 December 2020, the weighted

average unexpired lease term of the Wickes Group’s store estate was approximately 9.4 years.

Annual rental costs (cash basis) are approximately £100 million. The table below shows the

maturity profile for lease expiries for the Wickes Group’s stores as of 26 December 2020:

0-5 years 5-10 years

Over 10

years

Number of stores .......................................... 36 105 92

The Wickes Group’s store estate comprises a key component of the Wickes Group’s integrated

and digitally-led, service-enabled proposition by providing customers with inspiration for their

projects, in-person service to support their work, and broad and flexible fulfilment options to help

them tackle projects quickly.

The Wickes Group continually reviews the footprint of its store network, utilising a “right size, right

place, right cost” approach, to ensure that stores are strategically located for maximum footfall

and to act as fulfilment centres to support digital sales across the network. Store spaces have

been designed for ease of use by Local Trade customers, DIFM customers and DIY customers

alike. This approach aims to provide customers an in-depth and carefully curated product range

alongside strategically positioned adjacencies aimed at providing customers with the options

they require in easy-to-access store locations while creating operating efficiencies across a

cost-effective right-sized format.

In recent years, the Wickes Group has commenced a store estate improvement initiative,

as described in “—History and Transformation”. These activities have included renovation

works at nearly 110 stores since Financial Year 2015, with an aim to improve the customer

experience by making stores brighter, more comfortable and easier to navigate. The Wickes

Group has observed a sustainable sales increase of approximately 25 per cent. from these re-fit

activities, which it benchmarks against control stores in the network. Over the course of the re-fit

programme, the Wickes Group has observed stronger uplift performance as it refines its store

re-fit activities. In Financial Year 2020, the Wickes Group’s sales were approximately £170 per

square foot in heritage format stores and £227 per square foot in new format stores.

These activities have also supported more efficient in-store operations by simplifying re-stocking

activities, making room for key products in easy-to-reach locations and creating showroom space

for key DIFM services. Across these activities, the Wickes Group has maintained a broadly

stable average store footprint while making its stores more customer friendly and efficient. The

Wickes Group has focused historically on operating stores that are relatively smaller than those

of its “big box” DIY competitors in the UK home improvement market (with the larger stores

generally on long leases). The Wickes Group currently operates between 15 and 20 stores that it

deems to be oversized. Further, it anticipates approximately 10 closures in the medium term. In

recent years, the Wickes Group has undertaken a number of store relocations and completed re-

negotiations of existing leases to ensure that stores are operating at a suitable size and reduce

the footprint at certain store locations. These efforts aim to keep lease expenses low across

the store estate while supporting efficient in-store operations. The Wickes Group anticipates

undertaking 5 to 7 store relocations and 10 new openings in the medium term. Although there

remain significant opportunities for further re-fits to the store estate with between 35 and 40

additional re-fit projects targeted in the medium term, management believes the geographic

reach of the store estate is adequate to drive the required footfall.

Simple, Clear Pricing Offering Value to Customers

The Wickes Group’s product pricing strategy is based on providing customers with a simple and

transparent offering, with consistency across its website and each of its store locations. The

Wickes Group undertakes a weekly market benchmarking exercise, across its top products and

its total offering, to evaluate its product and service pricing on top selling lines and across its

product ranges to deliver value for all customers. This approach aims to support loyal customer

relationships and stable, volume-driven sales, through its four-part pricing architecture:

● Simple pricing – the Wickes Group’s straightforward pricing structure is at the heart of

its pricing strategy, whether customers shop online or in-store. Through a simple and

consistent pricing structure, without confusing volume-based discounts for different sized

customers, the Wickes Group aims to maintain and foster its customer relationships as a

trustworthy outlet for home improvement products and services.

● Everyday value and quality – the Wickes Group’s pricing strategy relies on providing

customers with good value across its product lines and ranges, by offering products at a

variety of price points from value brands to own-brand, lead brands and premium brands,

to meet each customer’s needs. In addition, the Wickes Group regularly benchmarks its

product pricing against the market. This approach aims to provide customers with pricing

consistency across the product range to support repeat customer visits and stability

in sales.

● Volume through offers – the Wickes Group employs strategic targeted offers and

seasonal high-low promotional periods, including around Easter and the May and, to

a lesser extent, August bank holidays, to support sales volumes and footfall at store

locations throughout the year, in particular for its DIY customers.

● Passing cost savings on to customers – the Wickes Group’s ongoing efforts to simplify

its in-store product ranges and leverage its scale, along with procurement initiatives, to

improve costs are expected to continue to support value for customers.

In addition, the Wickes Group offers members of the TradePro programme a 10 per cent. discount

on their purchases. This simple programme aims to provide Local Trade customers with everyday

transparency and predictable pricing, without requiring volume purchases or relying on complicated

tiered pricing structures or rebates, to support its relationships with programme members.

The Wickes Group’s DIFM services are provided as an end-to-end service, and as a result

projects are priced on an all-inclusive basis, including design, production and installation.

These DIFM prices are generally driven by the size of the project and each customer’s design

selections, including the specific design range, customisable features including worktops, sinks,

taps, splashbacks, handles and lighting, as well as appliances. As a result, pricing will vary

from customer-to-customer, and across the different services that the Wickes Group offers. The

Wickes Group offers customers a variety of flexible third-party financing options on its DIFM

services, as well as running occasional promotional periods during the course of the year.

5 Further Details of the Wickes Group’s Operating Model

Products

Across its three customer journeys, the Wickes Group offers approximately 9,500 different

products on the shop floor and, in total, approximately 22,000 when including its website

and OLI capabilities. The Wickes Group’s product offering of core product categories, across

hundreds of product ranges and growing DIFM services, is tailored to meet the requirements

of its customers for their home improvement projects – from “light trade” and “heavy trade” to

painting and decorating. Although DIY and Local Trade customers tend to undertake projects

of different types and different complexity levels, and so require different products on a day-to-

day basis, there is significant overlap along the spectrum of home improvement products. This

allows the Wickes Group to leverage its proposition for each customer journey while offering a

comprehensive variety. Across its online and in-store operations, the Wickes Group offers the

following core product lines: joinery; tools, electrical and hardware, building supplies; garden;

decorative; tiles and flooring; ready-to-fit kitchens and bathrooms; showroom products (currently

primarily kitchen and bathroom); and services (installation).

Within its curated product offering, the Wickes Group’s ranges are developed to provide

customers with choice to select the products they need to complete their home improvement

projects. Ranges include:

● Value – a variety of value brand products, at opening price points to provide customers

with good quality home improvement products at low prices.

● Own-brand – the Wickes Group’s offering of products bearing the Wickes label (produced

by third parties) across a broad range of product types and projects. These products are

provided online and in-store, at better value than third-party brands.

● Lead brands – a number of market-leading home improvement brands, with full store

distribution across a wide range of products, and additional brands available online.

Lead brands are priced competitively and include Dulux paint and decorating products,

Stanley tools and home improvement products, McAlpine plumbing products and Mapei

grouting, sealants and adhesives.

● Premium brands – a limited range of specialised products available to complement

the Wickes Group’s full service and product offering. Premium brands include Bosch

appliances and Harris decorating brushes and tools.

Sourcing

The Wickes Group maintains strong relationships with a broad range of suppliers. In total, the

Wickes Group purchased from approximately 370 suppliers in Financial Year 2020 across light-

side and heavy-side products.

Due to the volume of suppliers, management believes that most of the products offered for sale

by the Wickes Group could be sourced from alternative suppliers if necessary.

The Wickes Group regularly enters into contracts for the purchase and manufacture of

merchandise from suppliers outside the United Kingdom or domestic distributors that import

products from outside the United Kingdom.

6 Multi-channel Fullment and Distribution Capabilities

In-store Fullment and Home Delivery

The Wickes Group offers customers a variety of collection and delivery options, whether

they are shopping online or in-store. As described in “—Foundations of the Wickes Group’s

Customer Proposition”, these flexible fulfilment options comprise a unique aspect of the Wickes

Group’s service proposition by integrating its digital and in-store offerings. The Wickes Group’s

integrated capabilities support its broader strategic planning, by extending the breadth of its

domestic reach and the speed at which it can reach customers. This allows the Wickes Group

to provide customers with a fully national offering and grow its operations, without the expense

of adding in-fill stores to its existing retail network.

For in-store purchases, customers can choose from various collection and delivery options,

depending on the type of product, the quantity being purchased and the availability in-store.

Customers shopping in-store may collect and take away items at the time of purchase, in

particular for smaller home improvement products, such as decorating, plumbing or electrical

supplies. In addition, the Wickes Group offers home-delivery services for products that customers

select and purchase at one of the Wickes Group’s stores, and the popularity of the Wickes

Group’s home delivery and use of third-party local courier services highlight the importance of

fulfilment support for home improvement customers. These delivery services allow customers

to discuss their home improvement needs with the Wickes Group’s experienced colleagues in-

store, helping them to make informed decisions and select the product that best supports their

requirements, even if they do not have capabilities to transport items. Delivery services can be

arranged by colleagues in-store, allowing them to discuss the customer’s delivery timing and

requirements, including any access restrictions or special instructions, face-to-face.

Wickes Group colleagues can also arrange home delivery for products that are not available

in-store during a customer’s visit. From the shopfloor, Wickes Group colleagues have access to

the full range of home improvement products available on the Wickes Group’s website through

its OLI capabilities, including additional product ranges and colours and larger volumes than are

stocked or available in-store. Home delivery can be arranged for a small cost, or free of charge

for large orders, and certain orders are fulfilled by the manufacturer or supplier.

Customers making purchases online can choose to collect their orders in a Wickes Group store,

for the range of products stocked in-store, or by home delivery. The Wickes Group utilises

outsourced third-party couriers and delivery providers for these delivery options.

The Wickes Group’s DIFM services include a coordinated delivery service, which is included

in the overall cost of the DIFM project. These deliveries typically require a significant number

of individual boxes, allowing for on-site installation. This coordinated approach reduces the

number of deliveries typically required prior to installation and aims to ensure that each delivery

is accurate and complete, which is essential to prevent installation delays or costly re-delivery to

correct any issues or errors.

Centralised Distribution Capabilities

The Wickes Group’s multi-channel offering is supported by an advanced, integrated distribution

function. The distribution function utilises centralised distribution for Wickes Group stores and

certain direct-to-customer deliveries, which supports the Wickes Group’s decentralised in-store

fulfilment, providing customers with fast service for click-and-collect or home delivery for products

stocked in-store. Additionally, in recent years, an increasing proportion of distribution is coordinated

via shipments directly from a third-party manufacturer or distributor directly to the relevant Wickes

Group store locations, in particular for heavy building materials. This approach reduces distribution

costs and increases the speed of re-stocking store locations with these key products.

The Wickes Group operates two delivery centres in Northampton, England. The SDC primarily

supports fulfilment for the Wickes Group’s store network, storing and shipping the range of home

improvement products sold in-store. The HDC primarily supports the Wickes Group’s DIFM

services, holding kitchen and bathroom cabinetry and other items ahead of delivery directly to

the relevant customer’s home.

The Wickes Group also works closely with a number of manufacturers and suppliers for certain

direct-to-customer deliveries. These include a variety of items, such as specific lines of sheds

and doors, as well as lawn turf, that are not stocked in-store or kept at centralised delivery

centres. For these purchases, the Wickes Group takes payment from the customer, and delivery

is arranged directly between the supplier and the customer.

7 Centralised Support

The Wickes Group operates a centralised support management model, which aims to ensure

consistency in the customer experience across the Wickes Group’s 233 stores and website and

to support effective and efficient operations throughout the Wickes Group.

This approach relies on the Wickes Group’s centralised management functions, in particular

its category directors for product line and product range selection, as well as inventory

procurement, stocking and pricing decisions, and its regional and store management. Wickes

Group management also centralises other support functions including marketing operations,

human resources, finance, legal and information technology.

Information Technology

As part of the Demerger, the Wickes Group is undertaking actions to put in a place an efficient,

integrated, resilient and scalable standalone IT infrastructure. This approach aims to cover all

major aspects of the Wickes Group’s business, including in-store systems, product management,

warehousing, logistics, human resources, finance and other administrative systems by utilising a

web-based approach and supported by targeted third-party capabilities.

Following the Demerger, the Wickes Group will continue to procure certain IT systems and

capabilities from Travis Perkins under the Transitional Services Agreement for as long as the

Wickes Group requires up to 24 months (depending on the service) (and subject to the right to

a single extension for up to six months under certain circumstances). These services primarily

relate to the supply of infrastructure (e.g. wide area network) and hosting services for certain

applications and data access tools. These capabilities provide the Wickes Group with an efficient

solution with independent access to its business data, entirely separated from business data of

the Travis Perkins Group. The Transitional Services Agreement covers datacentre capabilities

for access to the Wickes Group’s general ledger and independent purchase ledger, HR systems

(including user profiles to access stored payroll information) and Google based collaboration and

productivity services (including email). In addition, cyber security capabilities have historically

been predominantly managed by the Travis Perkins information security team across the shared

networks and will continue to be for these IT capabilities during the term of the Transitional

Service Agreement. All Wickes Group stores currently have a broadband connection to the

Wickes Group’s support centre that is provided by Vodafone, and Cisco Meraki devices are used

for Wi-Fi connectivity and management, which will also continue under the Transitional Services

Agreement. Further details in relation to the Transitional Services Agreement are set out in “—

Transitional Services Arrangements” and section 18.3 of Part XII: “Additional Information”.

During the term of the Transitional Services Agreement, the Wickes Group will continue

to develop internal IT infrastructure and capabilities supported by third-party services with a

focus on moving onto a cloud-based environment, where possible. As part of this process, the

Wickes Group is also undertaking work to separate internal cyber security capabilities, including

by setting up an internal security team and planning to procure third-party support for threat

monitoring and management activities in the future.

The Wickes Group has historically operated a suite of additional IT applications that support

its ongoing business activities, strategy planning and budgeting, financial processes and other

procedures. These include the e-commerce platform, in-store point-of-sale systems and supplier

portals. In addition, the Wickes Group continues to operate its financial reporting and data

systems, including aggregation and presentation capabilities to prepare internal management

reporting materials and undertake budget analysis and HMRC reporting processes.

Hosting and back-up capabilities are provided for applications managed by Travis Perkins from

primary and secondary data centres in Northampton, which the Wickes Group will also utilise

under the Transitional Services Agreement from the time of the Demerger. Data between these

data centres is backed up on a daily basis. Active business continuity planning activities focus on

a number of areas and outline appropriate actions, including identifying responsible persons and

resources required to manage the relevant issue. As the Wickes Group moves to a cloud-based

infrastructure, it will become less reliant on these datacentres culminating in full separation.

For example, at the time of the Demerger, certain existing Wickes Group capabilities rely on

Amazon cloud one-region back-up capabilities.

Marketing and Branding

The “Wickes” brand is an important part of the Wickes Group’s business and underpins its

reputation and marketing. It has been associated with quality, value and innovation in the UK

market for nearly 50 years and is one of the most recognised home improvement brands in the

United Kingdom.

The Wickes Group’s marketing initiatives, across its multi-channel operations, are centrally

managed by its marketing team. These activities cover the full range of the Wickes Group’s

customer and marketing initiatives, from in-store design and layout as part of the store estate

transformation to advertising and promotional activities using the full spectrum of media outlets,

including television, radio, print, direct mail and online advertising. During the year, the Wickes

Group targets key markets with strategic campaigns and seasonal high-low promotional periods.

The Wickes Group actively monitors changes in underlying trends in customer behaviour,

including customer needs and preferences, and customer satisfaction. This allows the Wickes

Group to modify in-store product display and run periodic promotional offers to take advantage

of seasonal trends and shifts in consumer preferences.

In recent years, the Wickes Group has sought to better align its public image with its operational

initiatives to modernise the store estate, including its efforts to make its stores easier to use

and more welcoming to customers, and to fully integrate its digitally-enabled and in-store

propositions. Digital marketing has played a significant role in this process. The Wickes Group

has established an active social media presence, including on Facebook, Twitter, Instagram,

Pinterest and TikTok, which allows it to communicate directly with customers and foster deeper

relationships and loyalty. The use of social media is increasingly important in the DIFM space

as customers look for inspiration for their home improvement projects. The Wickes Group also

operates a YouTube channel, where it provides customers with how-to guides that cover a

range of home improvement projects.

8 Sustainability

Delivering a sustainable approach to business is fundamental to the Wickes Group’s service

proposition. This approach embeds sustainability within the Wickes Group’s strategy and

demonstrates its desire to grow responsibly through its supply-chain and sourcing, its community

interactions and its support for sustainability in customers’ homes. Performance across all

material sustainability topics is closely monitored and key focus areas have specific programmes

to drive these forward. The five key focus areas are:

Sustainable business

● “Everyone is welcome at Wickes” – building on the already diverse and inclusive culture

of the business with ambitious targets to lead in this area. Over the last five years,

working groups including ‘LGBT+ – Let’s do it with Pride’, ‘RAACE – Let’s have fairness

through transparency’, ‘Ability – Let’s make Wickes accessible to all’, ‘Balance for Better

– Let’s balance the gender pay gap’, ‘Wellbeing – Let’s create a place of wellbeing’

and ‘Youth Board – Let’s plan for the future’ have been built and led by Wickes Group

colleagues to effect positive change with support from the executive board. Activities

include influencing the development of policy and training, running events and driving

engagement through communications and forums for colleagues to share experiences

and support each other.

● “Developing skills in our communities” – expanding development opportunities for existing

colleagues and creating new opportunities for local communities. Apprenticeships provide

a broad range of development opportunities and the Wickes Kickstart program provides

opportunities to support people into work. In addition, Wickes Group colleagues are

empowered through a culture of self-directed learning and are motivated to learn through

the provision of relevant and accessible resources and tools and the use of technology

to enhance the learning experience, enabling learning to be easily incorporated into a

working day.

● “Protecting our environment” – bringing together commitments to reduce both carbon

and waste. The Wickes Group has committed to net zero carbon targets for scope 1 &

2 emissions by 2035 and plans to set a scope 3 target once it has completed a carbon

footprint assessment. Carbon emissions have been reduced through the introduction of

LED lighting and through fleet management systems and the replacement of vehicles to

improve driving efficiencies. Detailed decarbonisation roadmaps are under development

for our estate and fleet. Waste targets on own-label products have been set to eliminate

unnecessary packaging by 2023, have at least 50 per cent. recycled content by 2025

and for all packaging to be reusable, recyclable or compostable by 2025. In addition,

targets have been set for zero operational waste by 2025 and recovering and recycling

customer packaging from DIFM services. Approximately 94 per cent. of waste was

diverted from landfill in 2020 and recyclable waste is backhauled to distribution centres

and recycled.

Sustainable supply chain

● “Sourcing responsibly” – sourcing and partnering responsibly and helping suppliers to

operate more sustainably. Wickes Group suppliers and products are assessed to ensure

they meet the Wickes Group’s quality, ethical, safety and environmental standards.

Approximately 97 per cent. of Wickes timber is FSC or PEFC certified.

Sustainable homes

● “Sustainable products and services” – providing more sustainable products and services

and helping customers create more sustainable homes. The Wickes Group promotes

sustainable products such as certified timber and products which can be used under

government green homes schemes. Wickes plans to work with customers to understand

their sustainability needs to inform the development and promotion of sustainable

products and services.

The Wickes Group has a clear and simple sustainability framework which is set out for

colleagues in a Code of Business Ethics, backed up by policies, guidance and training and

underpinned by minimum standard assessments to monitor compliance against policies and

expectations. The sustainability framework is embedded in the business and is overseen by

senior management, which will include a board level Environmental, Social and Governance

(ESG) Committee comprising the non-executive directors and attended by members of senior

management following the Demerger.

9 Transitional Services Arrangements

Following the Demerger, Travis Perkins and the Wickes Group have agreed to put in place

certain transitional services arrangements pursuant to the Transitional Services Agreement

which was entered into between Travis Perkins Trading Company Limited and Wickes Building

Supplies on 23 March 2021.

Travis Perkins Trading Company Limited has agreed to provide (or procure that the relevant

members of the Travis Perkins Group provide) certain transitional services to the relevant

members of the Wickes Group for a transitional period (the “Travis Perkins Transitional

Services”). No transitional services will be provided by the Wickes Group to the Travis Perkins

Group. The Travis Perkins Transitional Services include:

● Human resources: Payroll; rewards and benefits; compensation; HR information

systems access and administration; HR data management; employee relations and legal

services; management of apprenticeships levy; recruitment systems access; company

car expenses support; and pensions services.

● Information technology: Wide and local area network support; telephony and internet

access; data centre, storage and computation facilities; on-premise technology solutions

(including business applications, delivery services, end-user and platform services);

Google collaboration and productivity services (G-Suite); software as a service solution;

and technical support and maintenance services.

The Wickes Group has access to the Travis Perkins Transitional Services as long as required

following the Demerger, up to long stop dates of up to 24 months in respect of human resources

and IT services (depending on the service) (and subject to the right to a single extension for up

to six months under certain circumstances). The Wickes Group will continue to evaluate the

need for the Travis Perkins Transitional Services as it develops and sources these capabilities

and aims to cease utilisation of these services when able.

The Travis Perkins Group is under an obligation to use its best endeavours to provide the Travis

Perkins Transitional Services to the same standards, in terms of scope, performance levels

and efficiency and the time period in which they will be performed, as those services that were

provided to members of the Wickes Group immediately preceding the Demerger, that were

provided in the 12-month period immediately preceding the Demerger. The fee payable for all of

the Travis Perkins Transitional Services will be at arm’s length. Further details in relation to the

Transitional Services Agreement are set out in section 18.3 of Part XII: “Additional Information”.

10 Intellectual Property

The Wickes Group owns a wide range of trademarks, including the rights to “Wickes”, “Intelliga”,

“Trade Pro” and “Wickes Let’s Do it Right”, which are the Wickes Group’s most important

trademarks. These trademarks are registered (in word form) with the appropriate authorities

in the United Kingdom. The Wickes Group uses the “Wickes” name as a trade name, as a

trademark in connection with various products and as a service mark.

In addition, the Wickes Group manages various web domain names, particularly www.wickes.

co.uk. The Wickes Group has no patents. The Wickes Group regards its trademarks and other

intellectual property rights as valuable assets and takes appropriate action to protect and will,

when necessary, enforce them.

11 Regulation

Overview

While the Wickes Group is not engaged in a highly regulated industry, its operations are subject

to governmental regulation from national regulatory authorities concerning, among other things,

export and import quotas and other customs regulations, consumer and data protection, the

advertisement, promotion and sale of products, taxation, product safety, the health, safety

and working conditions of the Wickes Group’s colleagues, the safety of the Wickes Group’s

stores and their accessibility for the disabled, environmental matters, sourcing and supply chain

matters, and the Wickes Group’s competitive and marketplace conduct. A brief overview of

certain key areas of regulation for the Wickes Group is set out below.

Consumer credit regulation

As described above, the Wickes Group introduces its customers to financing options to support

customers undertaking DIFM projects and the purchase of the Wickes Group’s products and

services. The Wickes Group’s provision of financing options is subject to financial regulation

relating to credit broking. Credit broking is a regulated activity under FSMA, and as such, requires

the Wickes Group to be authorised before it undertakes a regulated activity.

The detailed rules and guidance made by the FCA under the powers given to it by FSMA are

contained in the FCA Handbook. Wickes Building Supplies (FRN: 723596) is an FCA-registered

entity and an FCA authorised firm and has the permission to undertake credit broking, on a

limited basis. The credit-broking permission is limited to secondary broking, such that the broking

must be a secondary activity to help finance the purchase of Wickes Building Supplies’ goods or

non-financial services (i.e. its main business). Wickes Building Supplies’ credit broking activities

are currently limited to providing introductions to finance provider(s), who in turn enter into a

credit agreement with the customer. As a regulated entity, Wickes Building Supplies is subject to

FCA principles and rules in connection with its credit-broking activities, including the Consumer

Credit Sourcebook and Senior Managers and Certification Regime.

Consumer protection

The products which the Wickes Group sells are subject to various consumer protection laws in the

national market, which influences the pricing of products, product descriptions and promotional

activity among other things.

The Wickes Group must comply with the terms of the Consumer Rights Act 2015 which

consolidates the rules dealing with the fairness of contractual terms in relation to consumers as

well as clarifying the remedies that consumers have. The Wickes Group must also comply with

legislation controlling the claims made in advertising, including the Consumer Protection from

Unfair Trading Regulations 2008. These regulations prohibit unfair commercial practices during

the lifetime of a consumer to trader transaction, including in advertising, and enable consumer

claims for civil redress in respect of certain breaches, including rights to refunds. Insofar as it

governs advertising, the regulations are reflected and expanded upon in the UK Code of Non-

broadcast Advertising and Direct & Promotional Marketing (“CAP Code”), which is the rule book

for non-broadcast advertisements, sales promotions and direct marketing communications, and

must be complied with by the Wickes Group.

The CAP Code is endorsed and administered by the ASA who investigate and assess complaints

received from consumers and make recommendations to ASA Council, which is the independent

jury that is responsible for deciding if the CAP Code has been breached (the “ASA Council”).

Rulings made by the ASA Council are published on the ASA website. If a ruling is upheld

against an advertiser, the ASA can require the amendment or withdrawal of the non-compliant

advertisement while persistent breach of the CAP Code could lead to referral to other bodies for

the further action, such as Trading Standards or The Office of Communications (Ofcom).

Product safety regulation

Brexit has affected a number of regulations that govern product safety. Primarily the United

Kingdom has adopted the existing EU regulations and directives into UK law with a few notable

changes detailed below:

● Replacing the EU conformity mark known as CE with its own version UKCA. All products

that currently carry the CE mark will be updated to the UKCA mark in line with the timings

defined by the UK government;

● Chemicals will now be registered into a UK REACH database. All existing UK companies

that have registered products will automatically be enrolled;

● Energy Labelling – the United Kingdom will adopt the same rating system, but labels

must show the UK flag;

● Construction Products – update of the Declaration of Performance to have UKCA and

where applicable tested by a UK notified body; and

● EU harmonised standards are now referred to as designated standards and have been

adopted as they currently stand.

The Wickes Group does not operate out of or within Northern Ireland and will therefore not be

subject to any EU requirements.

The Wickes Group is subject to various product safety laws. The General Product Safety

Regulations 2005 (“GPSR”) provide a broad umbrella of regulation to ensure that consumer

products, when marketed, are safe. The regulations create a series of obligations on producers

and distributors to ensure that this goal is achieved and to reduce the risk to consumers

from unsafe products. The GPSR gives wide powers to Trading Standards departments and

other authorities to ensure that unsafe products do not remain on the market and, if need be,

are recalled.

Other product safety laws that the Wickes Group are also subject to are set out below:

● The Consumer Protection Act 1987 complements the GPSR and can be used by

consumers to recover losses caused by defective products.

● The Construction Products (Amendment etc.) (EU Exit) Regulations 2019 applies to

construction products and Wickes is required to provide a Declaration of Performance

(“DOP”) in respect of all products sold by the Wickes Group. The DOP covers various

performance criteria of the type of product being used and is made available to customers

online. Construction products are subject to the transition of UKCA mark on both the

DOP and marking of the product.

● The UK Registration Evaluation Authorisation and Restriction of Chemicals regulation

applies and Wickes needs to ensure banned chemicals are not used in products,

restricted chemicals do not exceed stated limits and, where a product contains a

substance of very high concern (“SVHC”), the business needs to be aware that it is

present and of the volume present. An annual declaration needs to be made where more

than 1 tonne of that SVHC has been placed into the market on an aggregated basis. The

Wickes Group is also required to register substances where it imports more than 1 tonne

into Great Britain annually. The Wickes Group does not currently import any substances

into Great Britain.

● The Chemical Labelling and Packaging of Chemicals Regulations 2015 applies to all

products that contain hazardous materials and Wickes must ensure that Wickes branded

products are correctly labelled and packaged, informing users of the hazard and safe

usage of the product.

● The Control of Poisons & Explosives Precursors Regulations 2015 also apply to

certain products sold by the Wickes Group. The Wickes Group is required to report any

suspicious transactions, including any significant losses or theft, relating to products

that are classified as “reportable” under the regulations to the authorities. The Wickes

Group does not currently sell any products that are classified as “regulated” under the

regulations which would require a licence to be held.

● Under the Offensive Weapons Act 2019, the Psychoactive Substances Act 2016 and the

Anti-social Behaviour Act 2003, the Wickes Group is required to ensure age restricted

products (such as spray paints) are flagged as restricted and take all reasonable

measures to prevent under-age consumers from purchasing the products.

● Under the Machinery Directive, Low Voltage Directive and Electromagnetic Compatibility

Directive, electrical products and certain power tools and garden power tools are required

to have a declaration of conformity demonstrating they meet safety requirements of the

specific safety standard. The Wickes Group is also required to display the correct energy

rating for products that fall under the Energy Labelling Directive. Products that fall under

these regulations are also subject to transition from CE to UKCA marking.

Employee Health and Safety

The Wickes Group must comply with applicable laws to protect employees against occupational

injuries. Health and safety law in the UK is primarily based on the Health and Safety at Work etc

Act 1974 under which all employers and employees owe duties to ensure the health, safety and

welfare of persons at work. The Health and Safety Executive, with local authorities (and other

enforcing authorities) is responsible for enforcing the Health and Safety at Work etc Act and a

number of other acts and statutory instruments relevant to the working environment.

Under such laws, employers typically must establish and maintain working conditions and

workplaces that effectively prevent danger to employees. In particular, employers must comply

with certain medical and hygiene standards and meet certain health and safety requirements

at work, such as carrying out risk assessments and deriving measures for the safety of

employees. This is based, for example, on regulations for permissible maximum values for noise

at the workplace, for the use of personal protective equipment and requirements for ambient

temperature, ventilation and lighting, as well as working time and work break regulations.

The Wickes Group is also required to report and declare its approach to modern slavery in its

supply chains in accordance with the Modern Slavery Act 2015. Suppliers are risk assessed

and factories producing Wickes branded products are audited to ensure they have practices in

place to identify if modern slavery exists and procedures are in place to manage occurrences of

modern slavery where it has been identified.

Data protection (GDPR)

The Wickes Group is subject to the Data Protection Act 2018, Privacy and Electronic

Communications Regulations and the GDPR. The GDPR regulates the processing of the

personal data of living individuals (“data subjects”) by, among others: (i) companies that collect

or receive personal data and control the use of that data (“data controllers”); and (ii) companies

that process personal data on behalf of data controllers (“data processors”). The Wickes Group

is a data controller and required to comply with GDPR.

According to the GDPR, personal data includes any information relating to data subjects who

can be identified from that information. It can therefore include: personal details such as name,

address, email address, telephone number and date of birth; and information relating to the

individual, whether in their personal, family or professional life. The processing of personal data

covers any activity done to or in relation to the personal data.

GDPR entails strict requirements, including with respect to (i) international data transfers,

(ii) data mapping and accountability obligations, (iii) the involvement of a data processor, (iv) the

appointment of a data protection officer, (v) data subjects’ rights (e.g., notices, right to data

portability and right to be forgotten), (vi) the need to carry out a data privacy impact assessment

regarding data processing activities using new technologies likely to result in a high risk to the

rights and freedom of natural persons, and (vii) notification obligations in case of a data breach.

Other regulations

Other regulations that the Wickes Group is required to comply with include those relating to

timber imports, packaging, electrical & electronic equipment and water. Where the Wickes

Group imports timber into the UK, it is required under the Illegal Timber Regulation – 995/2010

(as it forms part of retained EU law as defined in the EU (Withdrawal) Act 2018) to identify the

source forest and ensure that the timber has been harvested legally. The Wickes Group is

required to pay a tariff for the packaging and electrical and electronic equipment placed into the

market and contribute to the disposal of that waste through the Packaging & Packaging Waste

regulation and the Waste Electrical and Electronic Equipment regulations. The Wickes Group is

also subject to water regulations and needs to demonstrate that products do not present a risk

to contamination of drinking water.

PART V

DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE

1 Directors and Senior Management

Directors

The following table lists the names, ages and positions of the Directors. The business address

of each of the Directors is Vision House, 19 Colonial Way, Watford WD24 4JL, United Kingdom.

Name Age Position

Christopher Rogers 60 Chair

David Wood 51 Chief Executive Officer

Julie Wirth 55 Chief Financial Officer

Mark Clare 63 Senior Independent Non-Executive Director

Sonita Alleyne 54 Independent Non-Executive Director

Michael Iddon 56 Independent Non-Executive Director

Senior Management

The following table lists the current members of the Senior Management team with responsibility

for day-to-day management of the Wickes Group’s business in addition to the Executive Directors

listed above. The business address of each of the members of the Senior Management team is

at Vision House, 19 Colonial Way, Watford WD24 4JL, United Kingdom.

Name Age Position

Sonia Astill 51 Chief People Officer

Mark Cooke 50 Chief Commercial Officer

Gary Kibble 49 Chief Marketing and Digital Officer

Fraser Longden 49 Chief Operating Officer

Helen O’Keefe 51 General Counsel and Company Secretary

Biographies

The management experience and expertise of each of the Directors and members of Senior

Management is set out below.

Directors

Christopher Rogers – Chair

Chris was appointed as Chair on 23 March 2021. Since September 2013 he has served as

a Non-Executive Director of Travis Perkins plc where until 28 April 2020 he was the Senior

Independent Director. Chris is currently Non-Executive Director of Sanderson Design Group

plc (formerly Walker Greenbank plc), a Non-Executive Director of Vivo plc and of Kerry Group,

and is a visiting fellow at Durham University. During his executive career, Chris held a number

of senior roles in and directorships of public companies. From 2005 to 2016 Chris was an

Executive Director of Whitbread plc, serving as Group Finance Director from 2005 to 2012

and as Global Managing Director of Costa Coffee from 2012 to 2016. He was Group Finance

Director of Woolworths Group plc and Chairman of the Woolworths Entertainment businesses

from 2001 to 2005. Prior to that, Chris held senior roles in both the finance and commercial

functions of Comet Group plc and Kingfisher plc.

David Wood – Chief Executive Ofcer

David joined the Wickes Group in May 2019. With almost 30 years in the retail and consumer

sector, David is a highly experienced executive and CEO with extensive board level experience

in the UK, Europe and North America, having spent the majority of his career with Tesco,

Unilever and Mondelez. David served as Commercial Director on the Board of Tesco Hungary

from 2010 to 2012 and between 2012 and 2015 David served on the UK Operating Board of

Tesco PLC as Chief Marketing Officer and Group Managing Director. More recently David was

Group President of Kmart Holding Corp from 2015 to 2017, followed by a brief tenure as CEO of

Mothercare plc in 2018.

Julie Wirth – Chief Financial Ofcer

Julie joined the Wickes Group as CFO in November 2018 having held Board and senior finance

roles at group and divisional level in the retail sector. This included 20 years at Home Retail

Group plc, five years at Musgrave GB Ltd and three years at Countrywide Farmers plc, with

responsibility across finance, IT, legal and secretariat, and change management.

Mark Clare – Senior Independent Non-Executive Director

Mark has extensive public listed company experience in the consumer service, property and

construction sectors, particularly in customer facing businesses and has served on a number

of public listed company remuneration committees. He is currently the Chairman of Grainger

plc; Non-Executive Director and Chairman Designate of Aggreko plc; the Senior Independent

Director at United Utilities Group plc; and Non-Executive Director at Premier Marinas Holdings

Ltd. Previously Mark was the Senior Independent Director at Ladbroke’s Coral Group plc from

2016 until 2018; and Non-Executive Director and Audit Committee Chair at BAA plc from 2001

until 2006. Mark’s executive career included Chief Executive for Barratt Developments plc from

2006 until 2015; the Managing Director of Centrica’s retail subsidiary British Gas from 2002 to

2006; and CFO of Centrica plc from 1997 to 2002. He also served as a trustee of the Energy

Savings Trust, the Green Building Council and BRE. Mark is a qualified accountant and held a

number of senior finance roles earlier in his career including at Nortel, STC and GEC-Marconi.

Sonita Alleyne – Independent Non-Executive Director

Sonita has extensive experience as a Non-Executive Director on both private and public sector

boards. She is a board member of the London Legacy Development Corporation, The Cultural

Capital Fund and The Museum of London and recently joined the Main Advisory Committee of

the Freelands Foundation. She is the Master of Jesus College, Cambridge. Previously Sonita

was Chair of the BBFC’s Management Committee and the Radio Sector Skills Council and a

board member of Archant. Sonita spent five years on the BBC Trust and was a non-executive

director of the Department for Culture, Media and Sport. Sonita was also a board member of the

National Employment Panel and the London Skills and Employment Board. In addition, she held

membership of the Court of Governors at the University of the Arts London.

Michael Iddon – Independent Non-Executive Director

Mike has extensive public listed company experience, having held a number of senior finance

roles throughout his career and has been the Chief Financial Officer of Pets at Home Group

plc since 2016. He was previously the Chief Financial Officer of New Look from 2014 to 2016

and prior to this, he held a number of senior finance roles over 13 years for Tesco plc both in

the UK and overseas. These roles included Group Planning, Tax and Treasury Director, UK

Finance Director and Chief Financial Officer of Tesco Homeplus (South Korea). Mike has also

held senior roles with Kingfisher plc and Whitbread plc. Mike is a Chartered Accountant and a

graduate of the Harvard Advanced Management Programme.

Senior Management

Sonia Astill – Chief People Ofcer

Sonia joined the Wickes Group as Chief People Officer in February 2020 having previously been

an HR Director within the Travis Perkins Group. Prior to that she held a number of senior HR

roles in Kingfisher and Home Retail Group over an 18 year period, latterly as HR & OD director

of Argos leading the people and organisation aspects of the digital transformation.

She has also worked in the IT and manufacturing sectors, starting her career as an Industrial

Engineer with Courtaulds Chemicals before making the move into HR when she joined IBM.

Mark Cooke – Chief Commercial Ofcer

Mark joined the Wickes Group in September 2017 as Chief Commercial Officer. Mark has

worked in the Home Improvement Retail sector for over 30 years.

Mark joined the Wickes Group after 14 years with Kingfisher and before that 15 years with

Homebase. His last roles at Kingfisher included Group Sales & Pricing Director and leading

B&Q’s Trade proposition as TradePoint Director. Before that he held senior roles across the

Commercial Categories in B&Q.

Gary Kibble – Chief Marketing and Digital Ofcer

Gary joined the Wickes Group in January 2020. Gary has been in retail for the duration of his

career in a variety of commercial, marketing and digital roles for some of the UK’s largest retailers.

Most recently, Gary was Chief Marketing Officer at Sainsbury’s Argos having spent the previous

ten years leading the digital transformation of the Very Group (formerly Shop Direct Group) and

approximately two and a half years as Chief Customer Officer of Mothercare plc.

Whilst at the Very Group (the UK’s largest pure-play digital retailer), Gary was the executive

director accountable for the launch of Very.com, holding a variety of marketing and digital roles

and latterly was the group’s Business Transformation Director. He started his career at W H

Smith where he progressed from a marketing graduate trainee to Business Commercial Director.

Fraser Longden – Chief Operating Ofcer

Fraser joined the Wickes Group in September 2014. During his time at the Wickes Group,

Fraser has covered a number of roles including HR Director and Chief Commercial Officer and

since 2017 he has been the Chief Operating Officer.

Fraser joined the Wickes Group after 15 years with Kingfisher. His last roles at Kingfisher included

sitting on the main Executive Board for B&Q as Human Resources Director and Executive Vice

President HR at B&Q China. Alongside this role in China, Fraser was also the General Manager

of the B&Q China Design Centre business.

Helen O’Keefe – General Counsel and Company Secretary

Helen joined the Wickes Group as General Counsel and Company Secretary in January 2020

having previously been Deputy Company Secretary within the Travis Perkins Group. Prior to

that she held a variety of roles in Tesco over a 25-year period, including roles in finance and HR

and latterly as Deputy Company Secretary.

2 Corporate governance

2.1 UK Corporate Governance Code

From Admission, the Company will comply and intends to comply, with the requirements

of the UK Corporate Governance Code.

As envisaged by the UK Corporate Governance Code, the Board has established

three committees: an Audit and Risk Committee; a Nominations Committee; and a

Remuneration Committee. The Board has also established an Environmental, Social

and Governance (ESG) Committee. If the need should arise, the Board may set up

additional committees as appropriate.

The UK Corporate Governance Code recommends that at least half the board of

directors of a UK-listed company, excluding the chair, should comprise non-executive

directors determined by the Board to be independent and free from circumstances which

may impair, or could appear to impair, the director’s independence. As of the date of

this Prospectus, the Board consists of four Non-Executive Directors (including the non-

executive Chair) and two Executive Directors. The Company regards all of the Non-

Executive Directors as “independent non-executive directors” within the meaning of the

UK Corporate Governance Code and free from any circumstance that could materially

interfere with the exercise of their independent judgement.

The UK Corporate Governance Code recommends that the board of directors of a

company with a premium listing on the Official List of the FCA should appoint one of the

Non-Executive Directors to be the Senior Independent Director to provide a sounding

board for the Chair and to serve as an intermediary for the other Directors and Wickes

Shareholders when necessary. The Senior Independent Director should be available

to Wickes Shareholders if they have concerns for which contact through the normal

channels of the chief executive officer, chair or other executive directors has failed to

resolve or for which such contact is inappropriate. Mark Clare has been appointed Senior

Independent Director.

The UK Corporate Governance Code further recommends that directors should be subject

to annual re-election. The Company intends to comply with these recommendations.

2.2 Audit and Risk Committee

The Audit and Risk Committee will be made up of a minimum of three members who are

all independent non-executive directors and includes at least one member with recent

and relevant financial experience. The Audit and Risk Committee is chaired by Michael

Iddon and its current membership is as follows:

Name Committee Position

Michael Iddon Chair of the Audit and Risk Committee

Sonita Alleyne Independent Non-Executive Director

Mark Clare Independent Non-Executive Director

The Directors consider that Michael Iddon has recent and relevant financial experience.

The Audit and Risk Committee will meet at least three times a year and otherwise as

appropriate.

The Audit and Risk Committee assists the Board in discharging its responsibilities with

regard to financial reporting, external and internal audits and controls, including reviewing

and monitoring the integrity of the Company’s annual and interim financial statements

and any formal announcements made regarding the Company’s financial performance,

developing and implementing a policy on the engagement of the external auditor to

supply non-audit services, advising on the appointment of external auditors, overseeing

the Company’s relationship with its external auditors, including monitoring the external

auditor’s independence and objectivity, reviewing the effectiveness of the external

audit process, and reviewing the effectiveness of the Company’s internal audit, internal

controls, risk management and fraud systems in place. The ultimate responsibility for

reviewing and approving the annual report and accounts and the half-yearly reports

remains with the Board. The Audit and Risk Committee will give due consideration to

laws and regulations, the provisions of the UK Corporate Governance Code and the

requirements of the Listing Rules.

The terms of reference of the Audit and Risk Committee cover such issues as membership

and frequency of meetings, together with the requirements for the quorum for and the

right to attend meetings, reporting responsibilities and the authority of the Audit and Risk

Committee to carry out its duties.

2.3 Nominations Committee

The Nominations Committee will be made up of a minimum of three members and,

in compliance with the UK Corporate Governance Code, a majority of whom will be

independent non-executive directors. The Nominations Committee is chaired by the

Chair, except when it is dealing with the appointment of a successor chair of the Board,

when the Nominations Committee will be chaired by an independent non-executive

director. Its current membership is as follows:

Name Committee Position

Christopher Rogers Chair of the Nominations Committee

Sonita Alleyne Independent Non-Executive Director

Mark Clare Independent Non-Executive Director

Michael Iddon Independent Non-Executive Director

The Nominations Committee will meet at least twice per year and otherwise as appropriate.

The Nominations Committee assists the Board in reviewing the structure, composition,

diversity and make-up of the Board, any committees of the directors and the composition

of significant subsidiary boards within the Company, succession planning, evaluating the

balance of skills, experience, diversity, independence and knowledge of the directors

and leading the process for board appointments and making recommendations to the

Board on such matters.

The terms of reference of the Nominations Committee also cover issues such as

membership and frequency of meetings, as mentioned above, together with the

requirements for the quorum for and the right to attend meetings, reporting responsibilities

and the authority of the Nominations Committee to carry out its duties.

2.4 Remuneration Committee

In compliance with the UK Corporate Governance Code, the Remuneration Committee

will be made up of a minimum of three members who are independent non-executive

directors. The Remuneration Committee will be chaired by Mark Clare, and its current

membership is as follows:

Name Committee Position

Mark Clare Chair of the Remuneration Committee

Sonita Alleyne Independent Non-Executive Director

Michael Iddon Independent Non-Executive Director

Christopher Rogers Independent Non-Executive Director

The Remuneration Committee will meet not less than twice a year and otherwise

as appropriate. The Remuneration Committee assists the Board in determining its

responsibilities in relation to remuneration, including making recommendations to the

Board on the Company’s policy on executive remuneration, setting the over-arching

principles, parameters and governance framework of the Company’s remuneration

policy and determining the individual remuneration and benefits package of each of

the Company’s Executive Directors, the Chair and other senior executives. The

Remuneration Committee will ensure compliance with the UK Corporate Governance

Code in relation to remuneration and prepare an annual remuneration report for approval

by Wickes Shareholders at the annual general meeting.

The terms of reference of the Remuneration Committee cover such issues as membership

and frequency of meetings, together with the requirements for the quorum for and the

right to attend meetings, reporting responsibilities and the authority of the Remuneration

Committee to carry out its duties.

2.5 Environmental, Social and Governance (ESG) Committee

The ESG Committee will be made up of a minimum of three members who are all

independent non-executive directors. The ESG Committee is chaired by Sonita Alleyne

and its current membership is as follows:

Name Committee Position

Sonita Alleyne Chair of the ESG Committee

Mark Clare Independent Non-Executive Director

Michael Iddon Independent Non-Executive Director

Christopher Rogers Independent Non-Executive Director

The ESG Committee will meet not less than twice a year and otherwise as appropriate.

The ESG Committee assists the Board in determining its responsibilities in relation to the

Wickes Group’s environmental, societal and governance obligations as a responsible

corporate citizen. The ESG Committee will approve and monitor the Wickes Group’s

ESG strategy and appropriate policies and supporting measures, monitor its engagement

with stakeholders and external developments likely to affect its reputation and review

expenditure on corporate donations, community programmes and charitable support.

The terms of reference of the ESG Committee cover such issues as membership and

frequency of meetings, together with the requirements for the quorum for and the right

to attend meetings, reporting responsibilities and the authority of the ESG Committee to

carry out its duties.

2.6 Share dealing

The Company has adopted, with effect from Admission, a code of securities dealings in

relation to the Wickes Shares which aids compliance with the Market Abuse Regulation.

The code adopted will apply to the Directors and all employees of the Wickes Group.

PART VI

SELECTED FINANCIAL INFORMATION

The selected consolidated historical nancial information relating to the Wickes Group set out below has

been extracted, without material adjustment, from Section B of Part IX: “Historical Financial Information”.

The selected non-IFRS nancial information and operating information relating to the Wickes Group

set out below has been calculated on the basis set out in Part II: “Presentation of Financial and Other

Information”. The selected nancial and operating information presented below should be read in

conjunction with Part VII: “Operating and Financial Review”.

Consolidated Prot or Loss and Other Comprehensive Income

For the Financial Year 2020, Financial Year 2019 and Financial Year 2018

Financial Year 2020 Financial Year 2019 Financial Year 2018

Adjusted

Adjusting

items

(1)

Total Adjusted

Adjusting

items

(1)

Total Adjusted

Adjusting

items

(1)

Total

(£ millions)

Revenue ................ 1,346.9 — 1,346.9 1,292.4 — 1,292.4 1,199.6 — 1,199.6

Cost of sales .......... (837.8) — (837.8) (791.1) — (791.1) (729.9) — (729.9)

Gross prot .......... 509.1 — 509.1 501.3 — 501.3 469.7 — 469.7

Selling costs .......... (323.5) — (323.5) (303.1) — (303.1) (300.6) — (300.6)

Administrative

expenses (104.0) (20.6) (124.6) (102.4) (39.6) (142.0) (93.2) (19.3) (112.5)

Operating prot ... 81.6 (20.6) 61.0 95.8 (39.6) 56.2 75.9 (19.3) 56.6

Finance costs ........ (32.1) — (32.1) (33.5) — (33.5) (34.5) — (34.5)

Prot before tax ... 49.5 (20.6) 28.9 62.3 (39.6) 22.7 41.4 (19.3) 22.1

Tax......................... (8.9) 6.3 (2.6) (11.8) 2.0 (9.8) (8.1) 0.9 (7.2)

Prot for the

period and total

comprehensive

income .................. 40.6 (14.3) 26.3 50.5 (37.6) 12.9 33.3 (18.4) 14.9

Note:

(1) In Financial Year 2020, adjusting items included £8.2 million arising from activities related to the Demerger, £10.2 million in impairment

charges relating to a small number of loss-making stores, £2.2 million in relation to restructuring the DIFM design consultant team, tax on

adjusting items of £(3.9) million and deferred tax rate change of £(2.4) million. In Financial Year 2019, adjusting items included Wickes Group

separation costs of £9.2 million, store impairment charge of £1.9 million, loss on legal entity restructuring of £26.6 million and IT impairment

charges of £0.7 million, restructuring costs of £1.2 million and tax on adjusting items of £(2.0) million. In Financial Year 2018, adjusting items

included IT impairment charges of £6.5 million, restructuring costs of £12.8 million, tax on adjusting items of £(3.5) million and deferred tax

rate change of £2.6 million.

Consolidated Balance Sheet

As at 26 December 2020, 28 December 2019 and 29 December 2018

As at

26 December

2020

As at

29 December

2019

As at

30 December

2018

(£ millions)

ASSETS

Non-current assets

Goodwill ........................................................................... 8.4 8.4 8.4

Other intangible assets .................................................... 12.3 13.9 13.1

Property, plant and equipment ........................................ 103.1 109.0 133.8

Right-of-use assets.......................................................... 654.2 735.8 776.8

Deferred tax asset ........................................................... 24.0 19.2 18.0

Total non-current assets ............................................... 802.0 886.3 950.1

Current assets

Inventories ....................................................................... 138.3 150.4 147.8

Trade and other receivables ............................................ 261.6 327.0 723.6

Cash and cash equivalents ............................................. 6.5 25.4 16.2

Total current assets ....................................................... 406.4 502.8 887.6

Total assets .................................................................... 1,208.4 1,389.1 1,837.7

EQUITY AND LIABILITIES

Capital and reserves

Issued share capital......................................................... 25.2 25.2 25.2

Share premium account .................................................. — 862.3 862.3

Other reserve................................................................... (785.7) (785.7) (785.7)

Retained earnings ........................................................... 890.3 176.8 161.9

Total equity ..................................................................... 129.8 278.6 263.7

Non-current liabilities

Lease liabilities ................................................................ 712.8 779.5 819.6

Long-term provisions ....................................................... 0.3 2.2 1.3

Total non-current liabilities ........................................... 713.1 781.7 820.9

Current liabilities

Lease liabilities ................................................................ 77.2 75.5 75.6

Trade and other payables................................................ 277.9 240.0 661.3

Short-term provisions ...................................................... 10.4 13.3 16.2

Total current liabilities .................................................. 365.5 328.8 753.1

Total liabilities ................................................................ 1,078.6 1,110.5 1,574.0

Total equity and liabilities ............................................. 1,208.4 1,389.1 1,837.7

Consolidated Cash Flow Statement

For Financial Year 2020, Financial Year 2019 and Financial Year 2018

Financial Year

2020

Financial Year

2019

Financial Year

2018

(£ millions)

Cash ows from operating activities

Operating prot ............................................................... 61.0 56.2 56.6

Adjustments for:

Depreciation of property, plant and equipment.................. 21.3 23.8 26.9

Depreciation of right-of-use assets .................................... 77.3 78.8 79.5

Amortisation of internally-generated intangibles................ 4.5 3.4 1.8

Impairment of assets ......................................................... 12.1 2.2 (0.7)

Gains of terminations of leases ......................................... (1.9) (3.0) (0.1)

Share-based payments ..................................................... 1.7 2.0 1.4

Losses/(gains) on disposal of property, plant and equipment .. 1.6 3.2 (0.3)

Operating cash ows ...................................................... 177.6 166.6 166.6

Decrease/(increase) in inventories .................................... 12.1 (2.6) 4.7

(Increase)/decrease in receivables.................................... (107.3) 412.1 (27.2)

Increase/(decrease) in payables ....................................... 43.8 (426.6) 76.2

Cash generated from operations ................................... 126.2 149.5 220.3

Other interest ..................................................................... (0.1) (0.2) (0.2)

Interest on lease liabilities ................................................. (32.0) (33.3) (34.3)

Income taxes paid ............................................................. (17.0) (7.5) (9.0)

Net cash inow from operating activities ..................... 76.8 108.5 176.8

Cash ows from investing activities

Proceeds on disposal of property, plant and equipment ... 0.2 — 2.5

Development of computer software ................................... (2.9) (4.5) (4.5)

Purchases of property, plant and equipment ..................... (17.2) (19.6) (39.3)

Net cash inow/(outow) from investing activities ...... (19.9) (24.1) (41.3)

Cash ows from nancing activities

Repayment of lease liabilities ............................................ (75.8) (75.2) (75.2)

Dividends paid ................................................................... — — (50.7)

Net cash (outow) from nancing activities ................. (75.8) (75.2) (125.9)

Net (decrease)/increase in cash and cash equivalents .. (18.9) 9.2 9.6

Cash and cash equivalents at the beginning of the period... 25.4 16.2 6.6

Cash and cash equivalents at the end of the period .........

6.5 25.4 16.2

Non-IFRS Financial Measures

The following table reconciles the Wickes Group’s Like-for-Like Sales Growth to revenue for Financial

Year 2020, Financial Year 2019 and Financial Year 2018

Financial Year

2020

Financial Year

2019

Financial Year

2018

(£ millions, unless otherwise indicated)

Revenue .......................................................................... 1,346.9 1,292.4 1,199.6

Core (product sales) .................................................... 1,072.4 906.2 857.2

Do-It-For-Me (project sales) ......................................... 274.5 386.2 342.4

Store openings and closures ........................................... (10.1) (8.5) (25.4)

Revenue (like-for-like basis) ........................................... 1,357.0 1,283.9 1,174.2

Prior period revenue ........................................................ (1,292.4) (1,199.6) (1,236.4)

Increase (decrease) arising on a like-for-like basis ......... 64.6 84.3 (62.2)

Like-for-Like Sales Growth (%) .................................... 5.0% 8.7% (4.1)%

Core goods Like-for-Like Sales Growth ....................... 18.8% 6.5% (2.2)%

Project-based Like-for-Like Sales Growth ................... (27.8)% 14.1% (8.7)%

The following table sets out the calculation of the Wickes Group’s Gross Profit, Gross Profit Margin,

Adjusted Operating Profit and Adjusted Operating Profit Margin for Financial Year 2020, Financial

Year 2019 and Financial Year 2018. Calculation of the Wickes Group’s Adjusted Operating Profit (and

reconciliation to the Wickes Group’s revenue for each of those years) is set out in “—Consolidated

Profit or Loss and Other Comprehensive Income”, see Note 5 of Section B of the Historical Financial

Information for additional detail regarding these adjusting items.

Financial Year

2020

Financial Year

2019

Financial Year

2018

(£ millions, unless otherwise indicated)

Revenue .......................................................................... 1,346.9 1,292.4 1,199.6

Gross profit ...................................................................... 509.1 501.3 469.7

Gross Prot Margin (%) ............................................. 37.8% 38.8% 39.2%

Adjusted Operating Profit ................................................ 81.6 95.8 75.9

Adjusted Operating Prot Margin (%) ...................... 6.1% 7.4% 6.3%

PART VII

OPERATING AND FINANCIAL REVIEW

The following discussion and analysis is intended to assist in the understanding and assessment of

the trends and signicant changes in the Wickes Group’s results of operations and nancial condition.

Historical results may not indicate future performance. Some of the information in this Part VII, including

information in respect of the Wickes Group’s plans and strategies for the business and expected

sources of nancing, contains forward-looking statements that involve risk and uncertainties and is

based on assumptions about the Wickes Group’s future business. Actual results could differ materially

from those contained in such forward-looking statements as a result of a variety of factors, including

the risks discussed in Part I: “Risk Factors” included elsewhere in this Prospectus. Potential investors

should read Part II: “Presentation of Financial and Other Information—Information regarding forward-

looking statements” for a discussion of the risks and uncertainties related to those statements and

should also read Part I: “Risk Factors” for a discussion of certain factors that may affect the business,

results of operations or nancial condition of the Wickes Group. The following discussion should be

read in conjunction with the historical nancial information, including accompanying notes, included in

Part IX: “Historical Financial Information”. To enable presentation of the historical nancial information

on a consistent and comparable basis, the Wickes Group have early adopted IFRS 16 – Leases from

1 January 2017 in advance of its effective date. The accounting policies applied and stated in the

consolidated historical nancial information of the Wickes Group, set out in Note 2 of Section B therein,

are those expected to be applied to future nancial information reported by the Company.

1 Overview

The Wickes Group is a digitally-led, service-enabled home improvement retailer, delivering

choice, convenience, value and best-in-class service to customers across the United Kingdom.

The Wickes Group’s mission is to be the home improver’s and the local tradesperson’s partner

of choice, with a vision for “a Wickes project in every home” and its purpose to “help the nation

feel houseproud”. The Wickes Group aims to support its customers however they decide to

undertake their home improvement projects through three tailored customer propositions aimed

at each customer segment: Local Trade, DIFM and DIY. The Wickes Group drives sales through

its estate of 233 retail stores, which support nationwide fulfilment from convenient locations

throughout the United Kingdom, and its website (www.wickes.co.uk) and TradePro mobile app

for trade members, which allow customers to research and order an extended range of the

Wickes Group’s products and services, arrange virtual and in-person design consultations, and

organise timely home delivery or “click-and-collect” from across the Wickes Group’s network.

The Wickes Group’s operating and financial performance has supported its position as a leading

UK home improvement retailer. From 2013 to 2019, the Wickes Group’s revenue grew at a

CAGR of 4.9 per cent. from £972 million in Financial Year 2013 to £1,292.4 million in Financial

Year 2019, as compared to estimated market growth at a CAGR of 2.5 per cent. during that

period, and from Financial Year 2019 to Financial Year 2020 the Wickes Group’s revenue

increased by 4.2 per cent. to £1,346.9 million, outpacing a flat UK home improvement market

during the COVID-19 pandemic.

In Financial Year 2020, the Wickes Group recorded revenue of £1,346.9 million and Adjusted

Operating Profit of £81.6 million, compared to £1,292.4 million and £95.8 million, respectively, in

Financial Year 2019 and £1,199.6 million and £75.9 million, respectively, in Financial Year 2018.

2 Key Factors Affecting the Wickes Group’s Results of Operations and Financial Position

The Wickes Group’s financial performance in recent years has been influenced by a number of

transformation initiatives across its operating activities, which focused on developing its digitally-

led, service-enabled proposition and controlling costs throughout the business. The Wickes

Group’s financial performance has also been influenced by market factors that have affected

the UK housing sector and home improvement market during the periods under review, together

with the impact of COVID-19 disruption in Financial Year 2020.

Between Financial Year 2013 and Financial Year 2019, the Wickes Group’s revenue grew at

a CAGR of 4.9 per cent., from £972.0 million to £1,292.4 million. Due to challenging market

and competitive dynamics during 2017 and 2018, the Wickes Group’s revenue decreased

from £1,236.4 million in Financial Year 2017 to £1,199.6 million in Financial Year 2018, before

recovering to £1,292.4 million in Financial Year 2019 and £1,346.9 million in Financial Year

2020 despite the impact of COVID-19 disruption across the market, in particular in DIFM.

During Financial Year 2020, the outbreak of the COVID-19 pandemic and responsive measures

had a significant impact on the Wickes Group’s trading environment and its operating and

financial performance. In particular, in the early stages of the pandemic, operating restrictions

led to a one-day closure of all stores on 24 March, followed initially by an online-only light

operating model, during which all locations (other than dedicated kitchen and bathroom stores)

continued to operate as fulfilment centres for click-and-collect and home delivery. Six of the

Wickes Group’s stores were opened to the public on 30 April 2020 to trial COVID-19 safe ways

of working, and subsequent staged re-openings on 14 May and 19 May for almost all locations.

While the Wickes Group’s proactive measures across its digitally-led operations and versatile

stores network supported performance in Local Trade and DIY, DIFM activity was significantly

impacted by closures of kitchen and bathroom showroom space and dedicated stores between

late March and early July and again during the November-December lockdown period, leading

to a decline in revenue from DIFM activities as compared to Financial Year 2019.

The following shows the Wickes Group’s Like-for-Like Sales Growth (i) across the business, (ii) for

core Local Trade and DIY and (iii) for DIFM (K&B) during the course of Financial Year 2020.

The strength of the Wickes Group’s underlying performance in 2020 enabled it to return COVID-

related business rate and Job Retention Scheme support of £38.8 million to the UK government.

The following charts set out the Wickes Group’s revenue for the Financial Years 2013 to 2020 in

millions and corresponding growth rates during that period:

4.8%

4.9%

7.7% 4.2%

4.3%

(3.0%)

6.2%

1.9%

7.7%

9.8%

6.6%

6.3%

7.0%

972

2013 2014 2015 2016 2017 2018 2019 2020

Rolling

CSGR

Revenue

growth (%)

1,040

1,105

1,213

1,236

1,200

1,292

1,347

These market trends, competitive dynamics and operational initiatives are summarised below.

Macroeconomic Conditions and the UK Home Improvement Market

The Wickes Group operates in the UK retail market for home repair, maintenance and

improvement products and services with a specific focus on home improvement projects

undertaken using Local Trade, DIFM service providers or as a DIY project. Although this market

is characterised by supportive long-term fundamentals, it has also experienced periods of slow

growth and been influenced by underlying consumer trends and confidence as well as periods

of heightened competition, which have affected the Wickes Group’s operating and financial

performance during the periods under review.

Management estimates that annual sales in this market were approximately £25 billion in 2020,

including sales by DIY retailers, generalist and specialist merchants, fixed-price operators,

direct-to-site sales and pure-play online retailers. This portion of the UK home improvement

market has experienced moderate growth in recent years, increasing at a CAGR of 2.5 per cent.

between 2013 and 2019 to reach approximately £25 billion, before levelling in 2020 as a result

of the COVID-19 pandemic and related restrictions.

This market growth has supported the Wickes Group’s operating and financial performance

during that period. Management believes that growth in the Local Trade and DIFM segments of

this market has been stronger than in the broader UK home improvement market through to 2019,

increasing at CAGRs of 2.7 per cent. and 3.6 per cent. from 2013 to 2019, respectively. Growing

customer demand for completing home improvement projects via Local Trade professionals or

DIFM services has supported the Wickes Group’s strong operating and financial performance in

Local Trade and DIFM in recent years. Management believe that lockdown and other restrictions

and changes in consumer behaviour as a result of the COVID-19 pandemic led to moderate

declines in the Local Trade market and broader declines in DIFM, whilst DIY increased as

consumers re-engaged with DIY activity.

Growth in the UK home improvement market has been, and management expects that it will

continue to be, supported by structural trends that include a number of macro-economic and

specific factors that influence how homeowners and occupiers undertake home improvement

projects. Broader macro-economic trends in the United Kingdom have influenced leading

housing market indicators (such as housing turnover and mortgage approvals) that have

historically influenced demand for home improvement products and services. These trends

include increases in household formation rates, which are expected to continue rising; resilient

household disposable income levels; below-target net additions to the national housing stock;

and the over-indexation of the UK housing stock toward older dwellings, which are more likely

to require repair and maintenance expenditure. Customer demand for home improvement

products and services is further underpinned by specific factors that include continued broad

decline in home improvement skills, capabilities and experience; more limited time available

to homeowners to undertake home improvement projects; and an increasing number of skilled

tradespersons operating in the United Kingdom. Following renewed consumer re-engagement

with DIY in 2020, and general consensus that high consumer savings rates during the pandemic

and post-pandemic consumer sentiment will support economic growth as the effects of the

pandemic recede, management believes this part of the market may also have the potential for

growth. Overall, management expect these factors to support market growth at a CAGR of over

2.5 per cent. to £28 billion by 2024-2025.

Notwithstanding this broader growth and strong market fundamentals, the UK home improvement

market has experienced periods of volatility in recent years, which have impacted the Wickes

Group’s operating and financial performance during the periods under review. The early months

of the COVID-19 pandemic resulted in periods of restrictions on home purchasing and broader

consumer activity, which negatively impacted the DIFM and Local Trade markets during 2020,

although increases in home-purchase activity have historically led to higher demand for Local

Trade and DIFM services in subsequent months, which may support market growth in 2021. In

the coming years, these markets are expected to exceed historical growth rates, although the

pace and timing will depend on a number of factors that impact the macroeconomic environment

and activity in the housing and home improvement markets. Consumer confidence levels and

housing transactions were also impacted by the result of the 2016 UK referendum to leave the

European Union. Following the referendum, the UK political and economic environment has been

characterised by periods of uncertainty that influenced various economic and housing indicators,

which have led to periods of low wage inflation and declines in consumer spending that have

created challenges in the UK home improvement market. As a result, housing transactions and

home prices in certain regions of the United Kingdom experienced significant volatility in the

years following the 2016 referendum, before showing signs of stabilising during the course of

2019 and periods of growth in 2020.

Developments in the Competitive Landscape

The Wickes Group’s operating and financial performance in recent years has been particularly

affected by competitive pressures and the changing competitive landscape across its Local

Trade, DIFM and DIY customer propositions. The UK home improvement market is highly

competitive, particularly with respect to customer experience, price, quality, availability, product

assortment and delivery options, as well as store location and appearance and the presentation

of merchandise. Growth in customer demand for digitally-enabled solutions has also affected

the competition landscape. In the UK home improvement market, the Wickes Group competes

with a diverse range of national home improvement retailers, local independently run home

improvement retailers, specialty design and home decorating stores, and generalist retailers

that sell home improvement products, including online competitors and discounters.

During the periods under review, the Wickes Group’s operating and financial performance

was affected by competitive pricing behaviour driven primarily by a new entrant and then exit

from the market. In 2016 the Australian company Wesfarmers entered the UK market through

its purchase of Homebase, which included branding certain locations under the name of its

Australian DIY business, Bunnings. Across these operations, Wesfarmers sought to increase

market share through aggressive pricing between 2016 and 2018. These competitive actions

created significant market disruption, which negatively affected the Wickes Group’s market

share, sales volumes and revenue. In response to Bunnings’ entry, the Wickes Group, like other

market participants, adjusted product and service prices in order to defend market share and

drive volume in certain product categories. These market dynamics and the Wickes Group’s

competitive responses had an impact on the Company’s Gross Profit during Financial Years 2017

and 2018, as compared to prior years, and certain initiatives to support growth in DIY and DIFM

offerings did not prove successful. However, following its attempt to grow in the United Kingdom,

Wesfarmers disposed of its investment in Homebase and left the UK home improvement market

in 2018, and stores that had been converted to the Bunnings brand reverted to the Homebase

brand. Since that time, the Wickes Group has observed moderate stabilisation of prices and

customer demand, in particular in certain DIY product categories, supporting improvements in

the Wickes Group’s market share through Financial Year 2019 and Financial Year 2020.

The Wickes Group’s kitchen and bathroom DIFM services have also faced a shifting customer

and competitive landscape during the periods under review. Customer demand for these types

of services has increased in recent years, supported by continued broad decline in individuals’

home improvement skills, capabilities and experience. In addition, demand has been supported

by the prevalence, in particular in urban areas, of “time-poor” homeowners, landlords or renters

with limited leisure and other time available to undertake, or hire and coordinate tradespersons

to undertake these home improvement projects. In addition, competitive dynamics were affected

by B&Q’s decision to exit the installation market within its DIFM service offering in late 2018,

which supported the Wickes Group’s market share and revenue for kitchen and bathroom DIFM

services

. As the Wickes Group continues to develop its DIFM offering, including growth into

tiling services and potential further areas, as well as recent investment in this proposition and

operating efficiencies as described under “—The Wickes Group’s Transformation Programme”,

management expects these trends to support continued revenue and profit growth from its DIFM

services despite competitors re-entering the installation market with different operating models.

The Wickes Group’s Transformation Programme

In recent years, the Wickes Group has undergone a transformation in order to evolve from

its historical focus on Local Trade and experienced-DIY customers to a digitally-led, service-

enabled home improvement retailer, in order to better position its products and service offerings

for evolving customer demands and broaden the Wickes Group’s appeal beyond its heritage

strengths. These initiatives, which started in 2014, have contributed to the Wickes Group’s

operating and financial performance since that time and during the periods under review, and

they are expected to continue to support future results, as described below and in Part IV

“Business Description and Market Overview—History and Transformation”.

Digital transformation

The Wickes Group’s digitally-enabled capabilities supported its operating and financial

performance in recent years and, in particular, during the periods under review, where digital

enablement was critical to the continuation of trading throughout lockdown periods. The Wickes

Group has invested in its digital capabilities to integrate its in-store and online offerings and

provide a digitally-led service proposition through its website, advanced “online, in-store” (or

OLI) product search and order capabilities, targeted TradePro mobile app and more recently a

virtually enabled customer journey for DIFM customers. Milestones in this digital transformation

include launching the Wickes Group’s mobile e-commerce capabilities in 2014, click-and-collect

purchasing and day-of-choice fulfilment in 2015, smart fulfilment in 2018, OLI capabilities in

2019, digitally-enabled virtual DIFM customer journey in 2020 and enhanced website capabilities,

which have evolved throughout this period. Management believes that, during Financial Year

2019, these digital capabilities supported over 50 per cent. of the Wickes Group’s sales, including

online ordering, OLI purchases from in-store, the TradePro digital app, online research ahead of

an in-store purchase and DIFM web leads, approaching two-third of the Wickes Group’s sales

in Financial Year 2020. Capital investment in the Wickes Group’s digital transformation activities

totalled £2.9 million in Financial Year 2020, £3.4 million in Financial Year 2019 and £4.5 million

in Financial Year 2018 as described in “—Capital Expenditure”.

Store estate improvements

The Wickes Group has undertaken significant work as part of its store transformation initiative,

including to improve the quality of the store estate and right-size its stores to support more

efficient in-store operations and provide an improved and more consistent customer experience.

The estate improvement initiative has included renovation works at nearly 110 stores since

2015, comprising re-fit activities to make the stores more welcoming and easier for customers to

1 B&Q subsequently commenced scaled re-introduction of installation services in late 2019.

use. The Wickes Group has benefitted from an average sales uplift of approximately 25 per cent.

in the first year following re-fit activities, which it has sustained in subsequent years. In Financial

Year 2020, the Wickes Group’s average sales per square foot was approximately 32 per cent.

higher in new format stores than heritage stores. The Wickes Group has observed an average

return on capital investment of approximately 25 per cent. from re-fit activities completed to date,

which it continues to target from future re-fit activities.

Future targets include re-fit activities at between 35 and 40 additional stores in the medium term,

5 to 7 relocations and 15 to 20 downsizes. In addition, the Wickes Group anticipates continuing

roll-out works to update kitchen and bathroom showroom space across the store estate, in

connection with improvements to the kitchen and bathroom ranges.

DIFM service proposition

The Wickes Group’s DIFM service capability contributed significantly to the Company’s financial

performance improvement in recent years, driven by the Wickes Group’s transformation activities

and increased market demand.

This service from concept to completion combines inspiration, advice, service and guarantee

currently across a range of kitchens, bathrooms, tiling and flooring. The Wickes Group has

invested in a team of 550+ design consultants, improving quality of capability and delivery, who

manage the end-to-end process for the customer. The third-party installer network has been

expanded, together with strengthening the quality control oversight of installation through an in-

house team. These improvements supported an increase in the proportion of DIFM customers

utilising the Wickes Group’s installation services, growing by over 100 per cent. from Financial

Year 2015 to Financial Year 2020. The DIFM service proposition is underpinned by the Wickes

Group’s digital capability with the number of DIFM customer-leads originating online increasing

from approximately 18,000 in Financial Year 2015 to approximately 77,000 in Financial Year

2019 and approximately 101,000 in Financial Year 2020. Store re-fit investment supports the

Wickes Group’s DIFM proposition, by improving showroom space to inspire and help customers

visualise completed projects and additional investment commenced during Financial Year 2020

to update kitchen and bathroom ranges across the store estate.

Since Financial Year 2019, the average order value of a DIFM project has increased by 1.9 per

cent. with DIFM sales of £274.5 million in Financial Year 2020 despite significant disruption in

the market as a result of COVID-19 restrictions. The Wickes Group expanded its DIFM offering

in Financial Year 2019 to include tiling, and in Financial Year 2020 launched flooring together

with completing updated bathroom ranges. Wickes continues to explore ways to strategically

leverage its successful DIFM model into new and adjacent service offerings with, as an example,

plans well underway to launch home office in the first half of 2021 alongside door and window,

specialist works and associated carpentry. Extension opportunities include loft conversions,

patios, landscaping and driveways.

Core Local Trade and DIY product range development

The Wickes Group has undertaken significant work to develop its Local Trade and DIY core

product ranges to meet customer needs and drive sales growth during the periods under review.

This includes development of a curated range of approximately 9,500 products available in-store,

which creates procurement and stocking efficiencies and improves the shopping experience,

together with a broader range of products available online. The Wickes Group’s revenue mix

among its core product categories (joinery; tools, electrical and hardware; building supplies;

garden; decorative; tiles and flooring; and ready-to-fit kitchens and bathrooms) has remained

relatively stable during the periods under review, with continued focus on competitive pricing

and own brand sales participation of approximately two-thirds.

TradePro programme

The Wickes Group has refined its TradePro programme, enabling Local Trade customers to

“save time, save money”. The TradePro programme delivers a 10 per cent. discount on all sales

to members and is fully digitally-enabled. Membership in the TradePro programme increased

from approximately 192,000 members in December 2014 to approximately 346,000 members

in December 2017 and over 550,000 members in December 2020, and sales through the

programme reached over £225 million in Financial Year 2020, delivering higher levels of spend

frequency and average transaction value.

Analysis also shows that the average transaction value for Local Trade customers ordering

through the TradePro app is 4.1 times higher than for an average Wickes Group customer and

nearly 2.5 times higher than TradePro member purchases outside the app.

Cost-reduction programme and cost base

Cost efficiency underpins the Wickes Group’s operational model, with a number of activities

undertaken to reduce operating costs during the periods under review, both to respond to more

challenging market conditions and to continue to drive productivity. The business seeks to

balance fixed and flexible resourcing to maximise the opportunity for operational leverage and

enable agility and flexibility in those areas with variable support demands. The business also

continually and routinely reviews opportunities to drive operational productivity through a more

detailed examination of end-to-end processes.

Within operational costs, initiatives in recent years include a review of store personnel structures,

which delivers store wage-to-sales cost ratios of under 10 per cent. In addition, during Financial

Year 2020, the DIFM design consultant population was restructured to deliver improved flexibility

and efficiency across the store estate and respond to increasing levels of digitally-led sales

leads. Focus was placed on reducing shrinkage and remedial costs by reviewing end to end

processes to drive efficiency and cost saving. The distribution infrastructure was reduced from

four to two main warehouses, together with more flexibility and efficiency being sought in the

way product was delivered to customers through smart fulfilment capability, leveraging the store

infrastructure and outsourcing delivery capability to a third party. Similarly, installation capability

is entirely variable, delivered through a team of independent contractors.

The central support centre saw a reduction of a third of its headcount in 2018, de-layering

structures and improving agility/speed of decision making.

As a result of the Wickes Group’s strategic approach across its Local Trade, DIFM and DIY

service propositions, management believe that the business is broadly balanced throughout the

year and can operationally leverage resources during the peak trading periods for each service

proposition. In particular, the Wickes Group’s operations are subject to seasonal peaks within

the business, which include key trading periods for core Local Trade and DIY products during

the Easter period and May bank holidays and, to a lesser extent, August bank holidays, and

during the “Winter Sale” January/February period for DIFM kitchen and bathroom sales.

The pattern of trade through Financial Year 2020 was disrupted by the impact of COVID-19

lockdown periods, whereby the Wickes business has continued to flexibly adapt its resources

in response to trading conditions. Operational costs in both distribution and stores continued

to drive productivity gains in response to strong volume sales in core Local Trade and core

DIY. The cost base was impacted, however, by specific investment to maintain a safe working

environment for colleagues and customers, such as cleaning, personal protective equipment,

marshalling and screens. The Wickes business also carried a level of unproductive resource

during the first lockdown period, related to DIFM (which was entirely closed for over eight weeks),

for sales, delivery and installation activities.

In Financial Year 2019, selling and administration costs reflected improving cost-to-revenue ratio

trends as compared to Financial Year 2018. The Wickes Group experienced only a marginal

increase in Financial Year 2020, compared to Financial Year 2019, despite the COVID-19

disruption impact outlined above and continued pressure from areas such as minimum wage,

business rates and fuel/energy costs.

The Wickes Group has subsequently repaid all government support for financial 2020 in respect

of both the UK government Job Retention Scheme and the business rates holiday.

A further notable change in Financial Year 2020 was driven by a step change in the participation

of delivery to customers’ homes, which drove increased fulfilment costs (reported within gross

profit). Although underlying trends have increased somewhat, there was a marked one-off impact

notably in the first lockdown period in the first half of Financial Year 2020, during which stores

operated “dark” to support click-and-collect and home delivery only for a number of weeks.

Product/Service Mix – Protability by Category

The Wickes Group drives incremental cash profit through each of its core Local Trade, core DIY,

DIFM product and DIFM installation project categories. Within each of these four categories,

operating profit margin is driven by a combination of gross profit (reflecting cost of goods sold,

distribution and customer fulfilment costs) and the selling and administration costs behind the

sale (in particular store and marketing costs). As a result, the Wickes Group’s operating profit

margin varies between these four categories – for example, DIFM installation services deliver

a relatively lower gross profit margin, whereas product sales in core DIY and DIFM relatively

higher gross profit margin.

Management monitor customer needs and strategically manage product ranging and availability,

together with fulfilment capability, to drive incremental cash generation while supporting operating

profit margins across the business. The Wickes Group’s operating profit margins will continue to

be influenced by the change in mix across these four core Local Trade, core DIY, DIFM product

and DIFM installation project categories and the preferred customer fulfilment route.

3 Current Trading, Listed Company Costs and IT Separation Costs

The strong Core sales performance seen in the second half of Financial Year 2020 has continued

into the current financial year. DIFM orders are around 50 per cent. lower year-on-year through

the Wickes Group’s key winter sale period as showrooms remain closed. The introduction

of the Group’s digital DIFM customer journey in the second half of Financial Year 2020 has

enabled Wickes to maximise the opportunity in the market through this extended period of

restrictions. Whilst sales remain robust, the benefit has been offset by costs associated with

higher participation of customer delivery and assuring a COVID-19 safe operating environment

for colleagues and customers.

Whilst the economic outlook and trading environment remains uncertain, including the potential

for further restrictions, as the Wickes Group emerges from current COVID-19 restrictions,

management remain confident in continuing to deliver sales growth ahead of the broader home

improvement market for the full year. Within this, Core growth is expected to moderate against

tough comparatives as the Wickes Group moves through the year, and management are

confident in a recovery of DIFM sales with pent up demand likely to come through as lockdown

restrictions ease evidenced by high levels of enquiries.

Incremental full year costs relating to being an independently listed company, including share-

based compensation, are expected to be approximately £7 million per annum.

Wickes expects to incur legal and professional demerger costs of approximately £5 million in

Financial Year 2021, together with approximately £40 million of IT separation costs over the next

two years. The IT separation will enable the Wickes Group to operate an entirely standalone IT

environment from the Travis Perkins Group, together with providing an opportunity to modernise

legacy environments.

4 Key Operating and Performance Measures

The table below sets out the Wickes Group’s key operating and performance measures in

Financial Years 2020, 2019 and 2018.

Financial Year

2020 2019 2018

Revenue growth (%) ................................................................. 4.2% 7.7% (3.0)%

Like-for-Like Sales Growth

(1)

(%) .............................................. 5.0% 8.7% (4.1)%

Core (product sales) Like-for-Like Sales Growth

(1)

(%) ............ 18.8% 6.5% (2.2)%

Do-It-For-Me (project sales) Like-for-Like Sales

Growth

(1)

(%) ............................................................................. (27.8)% 14.1% (8.7)%

Gross Profit Margin

(1)

(%) ......................................................... 37.8% 38.8% 39.2%

Adjusted Operating Profit

(1)

(£ millions) .................................... £81.6m £95.8m £75.9m

Note:

(1) For a reconciliation of non-IFRS measures, see Part VI: “Selected Financial Information—Non-IFRS Financial Measures”.

Like-for-like performance across the reported period was influenced by a number of factors

which weakened like-for-like growth in Financial Year 2018, which reflect a subdued market and

negative consumer confidence during that time, following the Brexit vote in 2016, competitor

activity, effectiveness of promotional execution and extreme weather conditions. Recovery of

strong performance in Financial Year 2019 was supported by the transformation programme

combined with more favourable weather conditions and the exit of competitors from the

installation of Kitchens and Bathrooms.

Within core, performance weakened through Financial Years 2017 and 2018, a period following

the arrival of Bunnings into the UK DIY market in 2016. Bunnings re-positioned the Homebase

brand/product away from Home Furnishing towards Core DIY – reducing prices and directly

competing for DIY customers often ‘head to head’ in key trading catchments. This combined with

a subdued market and negative consumer confidence, together with extreme weather conditions

in Financial Year 2018, delivering negative like-for-like sales growth on core of 2.2 per cent. in

Financial Year 2018. Performance recovered strongly in Financial Year 2019 with core like-for-

like growth of 6.5 per cent. driven notably by a combination of core range development, more

effective trade planning, promotional execution and digital capability together with normalised

weather conditions. In Financial Year 2020, trading patterns were significantly impacted by

COVID-19 restrictions. Core DIY performed very strongly driven by DIY rather than trade

customers and underpinned by Wickes digital and fulfilment capability.

Within DIFM, performance weakened in Financial Year 2018, as a result of a change in

promotional strategy and a subdued market, following strong performance in Financial Year

2017 as a result of a strengthened proposition and the temporary exit of Homebase from

the kitchen installation market. Performance recovered strongly in Financial Year 2019 as a

result of re-positioning the promotional approach, strengthening of range and notably service

capability and was also supported by the exit of B&Q from the kitchen installation market later

in 2018. In Financial Year 2020, DIFM performance has been directly and negatively impacted

by restrictions on showroom openings, combined with customers remaining cautious towards

installation projects in their homes and supply challenges in some product areas directly as a

result of COVID-19 disruption. Development of the digitally-enabled virtual DIFM journey was

introduced in the second half of the year, enabling Wickes to optimise the opportunity remaining

in the market.

Adjusting Items

The Wickes Group’s audited financial statements reflect certain income and expenditure

adjusting items. These are items that, by reference to the Wickes Group’s combined operations,

are material in size or unusual or “one-off” in nature or incidence and that in the judgement of

the Directors should be disclosed separately on the face of the financial statements to ensure

both that the reader has a proper understanding of its financial performance and that there is

comparability of financial performance between periods.

The following table sets out adjusting items reflected in the Wickes Group’s consolidated income

statement for Financial Years 2020, 2019 and 2018:

Financial Year

2020 2019 2018

(£ millions)

Wickes separation costs ............................................................ 8.2 9.2 —

Store impairment charge ........................................................... 10.2 1.9 —

Loss on legal entity restructuring ............................................... — 26.6 —

IT impairment charge................................................................. — 0.7 6.5

Restructuring costs .................................................................... 2.2 1.2 12.8

20.6 39.6 19.3

Tax on adjusting items (3.9) (2.0) (3.5)

Adjusting items – deferred tax rate change (2.4) — 2.6

Adjusting items – after tax......................................................

14.3 37.6 18.4

In Financial Year 2020, the Wickes Group incurred separation costs of £8.2 million in relation to

the process of demerging the Wickes Business from the Travis Perkins Group, which primarily

related to separation of shared services, as compared to £9.2 million in Financial Year 2019.

Store impairment charges of £10.2 million in Financial Year 2020 related to a small number of

loss-making stores.

The Wickes Group incurred restructuring costs in Financial Years 2020, 2019 and 2018 resulting

from cost-reduction programmes consisting of redundancy and re-organisation. These include for

example the reduction of a third of support centre headcount in Financial Year 2018, outsourcing

activity across 2018 and 2019 and restructuring the DIFM design consultant team in Financial

Year 2020.

In Financial Year 2019, adjusting items in the consolidated Group accounts reflect a loss arising

from the sale of a number of dormant companies and property companies to another entity in

the Travis Perkins Group, as part of the process of restructuring the Group’s legal structure in

preparation for demerger. In addition, in Financial Year 2019, the Wickes Group incurred IT

impairment charges of £0.7 million, which related to IT no longer in use. In Financial Year 2018,

the Wickes Group incurred IT impairment charges of £6.5 million. This relates to an intangible

fixed asset impairment charge arising from termination of IT projects related to point-of-sale

systems that were written-off ahead of completion.

For additional detail on examples of situations that may give rise to classification of income and

expense items as adjusting items, see Note 5 of Section B of the Historical Financial Information.

5 Description of Key Consolidated Statement of Prot or Loss and Other Comprehensive

Income Items

Revenue

The Wickes Group’s revenue represents amounts receivable for products and services provided

in the normal course of business, net of discounts, customer finance costs and value added tax.

Revenue is categorised according to (i) core goods, which is product purchased by Local Trade

and DIY customers; and (ii) project-based, which includes all revenue arising from DIFM design,

product and installation.

Cost of Sales

Cost of sales consists of the direct cost of goods and services sold together with the costs of

running and operating the distribution centres and the fulfilment costs of delivering product direct

to the customer.

Selling Costs

Selling costs consist of the costs of running and operating of all stores together with marketing

investment.

Administrative Expenses

Administrative expenses consist of support centre and group/centralised costs such as HR,

Finance, and IT.

Operating Prot

Operating profit is calculated as revenue less the cost of sales, selling costs and administrative

expenses, plus other income.

Finance Costs

Finance costs consist of interest on the Wickes Group’s lease liabilities and other interest; any

future interest expenses arising from the Revolving Credit Facility will be recognised here.

Tax

Tax represents the sum of the tax currently payable and deferred tax. Current tax is based on

the Wickes Group’s taxable profit for the year and deferred tax is the tax expected to be payable

or recoverable by the Wickes Group.

6 Results of Consolidated Operations

Financial Year

2020 2019 2018

(£ millions)

Revenue .......................................................................... 1,346.9 1,292.4 1,199.6

Cost of sales .................................................................... (837.8) (791.1) (729.9)

Gross prot .................................................................... 509.1 501.3 469.7

Selling costs .................................................................... (323.5) (303.1) (300.6)

Administrative expenses.................................................. (124.6) (142.0) (112.5)

Operating prot ............................................................. 61.0 56.2 56.6

Finance costs .................................................................. (32.1) (33.5) (34.5)

Prot before tax ............................................................. 28.9 22.7 22.1

Tax................................................................................... (2.6) (9.8) (7.2)

Prot for the period .......................................................

26.3 12.9 14.9

Results of Consolidated Operations in Financial Year 2020 Compared to Financial Year

2019

Revenue

Revenue was £1,346.9 million in Financial Year 2020, an increase of £54.5 million, or

4.2 per cent., from £1,292.4 million in Financial Year 2019.

The following table sets out the Wickes Group’s revenue and Like-for-Like Sales Growth for the

Financial Years indicated:

Financial Year – Revenue

Like-for-Like

Sales Growth

2020 2019 2020

(£ millions)

Core (product sales) .............................................. 1,072.4 906.2 18.8%

Do-It-For-Me (project sales) .................................. 274.5 386.2 (27.8)%

Revenue................................................................ 1,346.9 1,292.4 5.0%

The increase in the Wickes Group’s revenue from Financial Year 2019 to Financial Year 2020

was driven by strong core Like-for-Like Sales Growth, partially offset by a reduction in DIFM

sales. This performance was significantly influenced by COVID-19 restrictions, which impacted

trading operations and consumer requirements. Although the Wickes Group’s stores (as with

other home improvement retailers) have been classified as “essential businesses” and permitted

to remain open throughout most of the pandemic, the Wickes Group experienced a one-day

closure of all stores on 24 March, followed initially by an online-only light operating model, during

which all locations (other than dedicated kitchen and bathroom stores) continued to operate

as fulfilment centres for click-and-collect and home delivery. Most stores re-opened from

late April through mid-May, although kitchen and bathroom showroom space and dedicated

stores remained closed until early July and were closed again during the November-December

lockdown period, leading to a decline in revenue from DIFM activities as compared to Financial

Year 2019.

Revenue from core sales increased by £166.2 million, or 18.3 per cent., from £906.2 million in

Financial Year 2019 to £1,072.4 million in Financial Year 2020. Within core, Like-for-Like Sales

Growth of 18.8 per cent. was driven across a broad range of categories and enabled by strong

digital and fulfilment capability, together with core customers re-engaging with DIY projects

as COVID-19 disruption continued. Membership of the Wickes Group’s TradePro programme

also continued to grow during Financial Year 2020, from approximately 492,000 members in

December 2019 to over 550,000 members in December 2020.

Revenue from project-based sales (DIFM) decreased by £111.7 million, or 28.9 per cent., from

£386.2 million in Financial Year 2019 to £274.5 million in Financial Year 2020. Within project-

based sales (DIFM), Like-for-Like Sales decline of 27.8 per cent. was significantly impacted by

restrictions in enabling access to the Wickes Group’s DIFM showroom environments, which

continued throughout the year. Kitchen and bathroom design, delivery and installation services

were entirely closed for a period of over eight weeks. This combined with reduced customer

demand and product supply challenges as disruption in the market continued in response to

COVID-19 restrictions.

Cost of sales

Cost of sales was £837.8 million in Financial Year 2020, an increase of £46.7 million, or 5.9

per cent., from £791.1 million in Financial Year 2019. This increase was primarily due to higher

sales levels in core DIY, partly offset by lower DIFM sales. Gross Profit Margin declined from

38.8 per cent. in Financial Year 2019 to 37.8 per cent. in Financial Year 2020. This was primarily

driven by an increase in customer delivery participation and investment in COVID-19 secure

distribution operating environments partially offset by reduced participation of promotions and

Local Trade.

Selling costs

Selling costs were £323.5 million in Financial Year 2020, an increase of £20.4 million, or

6.7 pe ent., from £303.1 million in Financial Year 2019. This increase reflected a combination of

additional investment of £9.4 million to make operational environments COVID-19 safe, inflation

and volume driven costs.

Administrative expenses

Administrative expenses were £124.6 million in Financial Year 2020, a decrease of £17.4 million,

or 12.3 per cent., from £142.0 million in Financial Year 2019. This decrease reflected the loss

in the consolidated Group accounts in Financial Year 2019 arising from the sale of a number

of dormant companies and property companies to another entity in the Travis Perkins Group,

as part of the process of restructuring the Group’s legal structure in preparation for demerger,

which was not repeated in Financial Year 2020.

Excluding adjusting items of £20.6 million (before tax), adjusted administrative expenses were

£104.0 million in Financial Year 2020, an increase of £1.6 million, or 1.6 per cent., from £102.4

million in Financial Year 2019. Adjusting items (before tax) in Financial Year 2020 included £8.2

million arising from activities related to the Demerger, £10.2 million in store impairment charges

relating to a small number of loss-making stores and £2.2 million in relation to restructuring the

DIFM design consultant team, as compared to £9.2 million (Demerger-related), £1.9 million

(store impairment charges), £1.2 million (restructuring) and £0.7 million (IT asset impairment), in

addition to £26.6 million in losses in relation to the pre-Demerger restructuring referenced above,

in Financial Year 2019. Excluding these adjusting items, the broad stability in administrative

expenses reflected a strongly controlled cost base with the impact of inflation and investment

partly offset by lower levels of bonus.

Operating prot

Operating profit was £61.0 million in Financial Year 2020, an increase of £4.8 million, or 8.5 per

cent., from £56.2 million in Financial Year 2019, as a result of the reasons described above.

Excluding adjusting items of £20.6 million (before tax), adjusted operating profit was £81.6

million in Financial Year 2020 a decrease of £14.2 million, or 14.8 per cent., from £95.8 million

in Financial Year 2019.

Finance costs

Finance costs were £32.1 million in Financial Year 2020, a decrease of £1.4 million, or 4.2 per

cent., from £33.5 million in Financial Year 2019. These costs primarily relate to IFRS 16 property

lease portfolio interest.

Tax

Tax was £2.6 million in Financial Year 2020, a decrease of £7.2 million, or 73.5 per cent., from

£9.8 million in Financial Year 2019. This decrease was due to the decrease in the Wickes

Group’s adjusted profit before taxes between Financial Year 2019 and Financial Year 2020

together with a movement in deferred tax reflecting a change in tax rate from prior periods.

Prot for the period

Profit for the year was £26.3 million in Financial Year 2020, an increase of £13.4 million from

£12.9 million in Financial Year 2019, as a result of the reasons described above.

Excluding adjusting items of £14.3 million (after tax), adjusted profit was £40.6 million in Financial

Year 2020, a decrease of £9.9 million, or 19.6 per cent., from £50.5 million in Financial Year

2019.

Results of Consolidated Operations in Financial Year 2019 Compared to Financial Year

2018

Revenue

Revenue was £1,292.4 million in Financial Year 2019, an increase of £92.8 million, or 7.7 per

cent., from £1,199.6 million in Financial Year 2018.

The following table sets out the Wickes Group’s revenue and Like-for-Like Sales Growth for the

Financial Years indicated:

Financial Year –

Revenue

Like-for-

Like Sales

Growth

2019 2018 2019

(£ millions)

Core (product sales) ........................................................... 906.2 857.2 6.5%

Do-It-For-Me (project sales) ............................................... 386.2 342.4 14.1%

Revenue............................................................................. 1,292.4 1,199.6 8.7%

The increase in the Wickes Group’s revenue from Financial Year 2018 to Financial Year 2019

was driven by both DIFM and core goods. This performance was driven by the Wickes Group’s

transformation programme combined with more favourable weather conditions and the exit of

competitors from the installation of kitchens and bathrooms.

Revenue from core sales increased by £49.0 million, or 5.7 per cent., from £857.2 million in

Financial Year 2018 to £906.2 million in Financial Year 2019. Within core, Like-for-Like Sales

Growth of 6.5 per cent. was driven by a combination of core range development, more effective

trade planning and promotional execution together with less severe weather conditions than in

Financial Year 2018. Within core range development, new garden maintenance and coloured

paint ranges were introduced supporting growth. Membership of the Wickes Group’s TradePro

programme continued to grow during Financial Year 2019, from approximately 418,000

members in December 2018 to approximately 492,000 members in December 2019, supporting

core revenue growth.

Revenue from project-based sales (DIFM) increased by £43.8 million, or 12.8 per cent., from

£342.4 million in Financial Year 2018 to £386.2 million in Financial Year 2019. For project-

based sales (DIFM), Like-for-Like Sales Growth of 14.1 per cent. benefitted from re-positioning

the promotional approach, strengthening of range and notably installation service capability

and was also supported by the exit of B&Q from the kitchen installation market in late 2018,

which had a full-year impact on the Wickes Group’s Financial Year 2019 operating and financial

performance.

Overall revenue growth was also supported by development of the Wickes Group’s digital

capabilities, which included the rollout of OLI, improvements in its website and TradePro app

functionality, and enablement of smart fulfilment. Investment in store refurbishments also

continued, again underpinning revenue growth in these particular locations.

Cost of sales

Cost of sales was £791.1 million in Financial Year 2019, an increase of £61.2 million, or 8.4 per

cent., from £729.9 million in Financial Year 2018. This increase was primarily due to higher sales

levels across the Wickes Group’s activities. Gross Profit Margin declined marginally from 39.2

per cent. in Financial Year 2018 to 38.8 per cent. in Financial Year 2019. This was driven by sales

mix, in particular the continued growth in DIFM installation (which deliver a relatively lower gross

profit margin than other activities), together with increased participation of customer fulfilment

activity supporting sales growth. The Wickes Group’s Gross Profit Margin was supported during

Financial Year 2019 by stabilisation of competitive pricing behaviour in the home improvement

market and more considered and effective promotional planning.

Selling costs

Selling costs were £303.1 million in Financial Year 2019, broadly stable as compared to £300.6

million in Financial Year 2018. This stability reflected improvement in store operational costs

including store labour and shrinkage, together with more targeted marketing activity offset by

inflation.

Administrative expenses

Administrative expenses were £142.0 million in Financial Year 2019, an increase of £29.5

million, or 26.2 per cent., from £112.5 million in Financial Year 2018. This increase primarily

reflected the loss in the consolidated Group accounts in Financial Year 2019 arising from the

sale of a number of dormant companies and property companies to another entity in the Travis

Perkins Group, as part of the process of restructuring the Group’s legal structure in preparation

for demerger, as described above.

Excluding adjusting items of £39.6 million (before tax), adjusted administrative expenses were

£102.4 million in Financial Year 2019, an increase of £9.2 million, or 9.9 per cent., from £93.2

million in Financial Year 2018. Adjusting items (before tax) in Financial Year 2019 included £9.2

million arising from activities related to the Demerger, £1.9 million in store impairment charges,

£1.2 million in restructuring costs and £0.7 million in IT impairment charges, in addition to £26.6

million in losses in relation in pre-Demerger restructuring referenced above, as compared to

£12.8 million from restructuring costs and £6.5 million in impairment charges in Financial Year

2018. Excluding these adjusting items, administrative expenses increased primarily as a result

of increased investment in digital capability, bonus costs and inflation, which more than offset a

decrease in expenses related to restructuring activities undertaken in Financial Year 2018 that

were not repeated at the same level in Financial Year 2019. Administrative expense levels in

Financial Year 2019 were supported by the full-year impact of these cost-reduction activities.

Operating prot

Operating profit was £56.2 million in Financial Year 2019, a decrease of £0.4 million, or 0.7 per

cent., from £56.6 million in Financial Year 2018, as a result of the reasons described above.

Excluding adjusting items of £39.6 million (before tax), adjusted operating profit was £95.8

million in Financial Year 2019, an increase of £19.9 million, or 26.2 per cent., from £75.9 million

in Financial Year 2018.

Finance costs

Finance costs were £33.5 million in Financial Year 2019, an increase of £1.0 million, or

2.9 per cent., from £34.5 million in Financial Year 2018. These costs primarily relate to operating

leases and the increase was primarily due to changes in the property lease portfolio.

Tax

Tax was £9.8 million in Financial Year 2019, an increase of £2.6 million, or 36.1 per cent., from

£7.2 million in Financial Year 2018. This increase was primarily due to an increase in adjusted

profit before tax partially offset by the loss on legal entity restructuring.

Prot for the period

Profit for the year was £12.9 million in Financial Year 2019, a decrease of £2.0 million, or 13.4

per cent., from £14.9 million in Financial Year 2018, as a result of the reasons described above.

Excluding adjusting items of £37.6 million (after tax), adjusted profit was £50.5 million in Financial

Year 2019, an increase of £17.2 million, or 51.7 per cent., from £33.3 million in Financial Year

2018.

7 Liquidity and Capital Resources

The Wickes Group has historically generated sufficient cash from operations to fund its operating

expenses and capital investment during the periods under review. As part of the Travis Perkins

Group, the Wickes Group did not undertake borrowing activities on a standalone basis. As at 26

December 2020, the Wickes Group had cash and cash equivalents of £6.5 million.

Following the Demerger, Wickes expects to be able to meet its cash requirements through cash

from operations. In connection with the Demerger, the Wickes Group is entering into a £80

million Revolving Credit Facility with National Westminster Bank plc as agent and security agent

and Barclays Bank plc, BNP Paribas London Branch, National Westminster Bank plc, and The

Governor and Company of the Bank of Ireland as lenders, as further described below. As at the

date of this Prospectus, the Wickes Group does not carry any external debt (other than certain

lease liabilities and trade payables) on its balance sheet.

Working Capital

The Company is of the opinion that the Wickes Group has sufficient working capital for its

present requirements, that is for at least the next 12 months from the date of this document.

Cash Flows

The table below sets out the Wickes Group’s cash flows in Financial Years 2020, 2019 and

2018:

Financial Year

2020 2019 2018

(£ millions)

Net cash inflow from operating activities ................................ 76.8 108.5 176.8

Net cash (outflow) from investing activities ............................ (19.9) (24.1) (41.3)

Net cash (outflow) from financing activities ............................ (75.8) (75.2) (125.9)

Net (decrease)/increase in cash and cash equivalents .... (18.9) 9.2 9.6

Cash and cash equivalents at the beginning of the period ..... 25.4 16.2 6.6

Cash and cash equivalents at end of the period ............... 6.5 25.4 16.2

As cash management activities related to the Wickes Business were historically undertaken at

the Travis Perkins Group-level, management of the Wickes’ Business by the management team

historically focused on various operating measures and financial measures, including revenue

and operating profit, to a greater extent than cash flow measures. Following the Demerger,

the Wickes Group’s management will be responsible for cash management activities and, as a

result the Wickes Group’s cash flow may differ materially from its cash flow during the periods

under review.

Net cash inﬂow from operating activities

Net cash inflow from operating activities was £76.8 million in Financial Year 2020, a decrease

as compared to £108.5 million in Financial Year 2019. This change reflected strong underlying

trading performance partially offset by movements in inter-company balances and an overall

increase in working capital. Working capital reflected higher levels of DIFM and Supplier Income

debtors partially offset by lower levels of inventory compared to 2019.

Net cash inflow from operating activities was £108.5 million in Financial Year 2019, a decrease

as compared to £176.8 million in Financial Year 2018. This change reflected significant changes

in the Wickes Group’s intercompany payables position within the Travis Perkins Group, which

more than offset improvement in the Wickes Group’s operating profit from Financial Year 2018

to Financial Year 2019.

Net cash outﬂow from investing activities

Net cash outflow from investing activities was £19.9 million in Financial Year 2020, as compared

to £24.1 million in Financial Year 2019. This change primarily reflects disposal of subsidiaries in

relation to intercompany reorganisations in 2019 in connection with the Demerger in Financial

Year 2019.

Net cash outflow from investing activities was £24.1 million in Financial Year 2019, as compared

to £41.3 million in Financial Year 2018. This change reflects the impact of intercompany

reorganisations within the Travis Perkins Group, in connection with the Demerger, in Financial

Year 2019. In addition, the Wickes Group’s completed fewer store re-fits in Financial Year 2019

than in Financial Year 2018.

Net cash outﬂow from nancing activities

Net cash outflow from financing activities was £75.8 million in Financial Year 2020, broadly

stable as compared to £75.2 million in Financial Year 2019, reflecting stability in the profile of

lease payments in the two years.

Net cash outflow from financing activities was £75.2 million in Financial Year 2019, a decrease

from £125.9 million in Financial Year 2018. This decrease was due to dividends paid of £50.7

million in Financial Year 2018, as compared to nil in Financial Year 2019.

Net Indebtedness

As at 26 December 2020, the Wickes Group’s net indebtedness was £598.4 million, which

included lease liabilities of £790.0 million (of which £77.2 million were current lease liabilities).

As at that date, the Wickes Group recorded intercompany balances within the Travis Perkins

Group of £186.1 million (amounts receivable). See Notes 16, 17 and 26 of Section B of the

Historical Financial Information.

Revolving Credit Facility

The Wickes Group entered into the Revolving Credit Facility for £80 million with National

Westminster Bank plc as agent and security agent and Barclays Bank plc, BNP Paribas, London

Branch, National Westminster Bank plc, and The Governor and Company of the Bank of Ireland

as lenders (the “Lenders”) on 23 March 2021. Up to £20 million of the Revolving Credit Facility

may be carved out into ancillary facilities to be provided by the Lenders and their affiliates

to allow for overdrafts, short term loans, letters of credit or other ancillary bilateral facilities

customary for a facility of this nature. The Revolving Credit Facility is intended to be used for

general corporate purposes and may be drawn in pounds sterling, Euro, US dollars or any other

freely available currency approved by all the Lenders. Further information on the terms of the

Revolving Credit Facility can be found in Part XII: “Additional Information”.

8 Capital Expenditure

During the periods under review, the Wickes Group’s capital expenditure primarily related to

property, plant and equipment, including investment in new stores, initiatives to support the

development of the Wickes Group’s digital capabilities and store re-fit activities, as well as other

investment. At times during the periods under review, capital made available for investment

activities within the Travis Perkins Group (including by the Wickes Group) was constrained in

order to target consistent cash flows across the business during periods of challenging trading

conditions. Within the Wickes Business, these actions reduced the rate at which store re-fit

activities were undertaken across the estate, exhibiting flexibility within the Wickes Group’s

capital investment strategy during the periods under review and going forward.

The following table sets out the Wickes Group’s capital expenditure in Financial Years 2020,

2019 and 2018:

Financial Year

2020 2019 2018

(£ millions)

Proposition

New space ............................................................................ — 0.8 3.9

Re-fit activities ...................................................................... 11.0 12.7 19.7

IT / Digital ............................................................................. 2.9 4.5 4.5

Range development ............................................................. 3.4 0.2 2.3

Efciency

Other 1.0 5.9 6.8

Total .................................................................................. 18.3 24.1 37.2

Capital expenditure in Financial Year 2020 was £18.3 million, as compared to capital expenditure

in Financial Year 2019 of £24.1 million and restrained as compared to budget. In particular,

Financial Year 2020 capital expenditure was lower than anticipated primarily as a result of

constraining investment to preserve cash in response to COVID-19 disruption. During Financial

Year 2020 the Wickes Group completed re-fit activities at 6 stores together with 1 relocation, as

compared to 12 completed re-fit projects during Financial Year 2019 Investment was maintained

in IT/digital capability together with commencing rollout of updated kitchen and bathroom ranges

across a number of showrooms.

Capital expenditure in Financial Year 2019 was £24.1 million, a decrease from capital expenditure

in Financial Year 2018 of £37.2 million, primarily as a result of constraining investment notably

in refit activity and reducing the emphasis on opening new space. During Financial Year 2019

the Wickes Group completed re-fit activities at 12 stores, as compared to significant work

undertaken during Financial Year 2018, including 24 re-fit projects. Capital expenditure on new

space continued to decline from three store openings in Financial Year 2018 to one in Financial

Year 2019.

Capital expenditure in Financial Year 2018 was £37.2 million, a decrease from capital expenditure

in Financial Year 2017 of £50.0 million, reducing investment across a range of activity driven

in response to weakened trading performance. During Financial Year 2018, the Wickes Group

completed re-fit activities at 23 stores, as compared to 27 completed re-fit projects during

Financial Year 2017.

In the future, the Wickes Group aims to focus its capital investment on driving its customer

proposition, in particular through continuation of its re-fit activities and further development of its

digital capabilities and its product and service offering. As a result, the Wickes Group will target

capital investment of approximately £30 million per annum. For re-fit activities and IT/digital

investment (both consumer facing and digital foundations), capital expenditure will continue in

line with the Wickes Group’s strategy, and capital expenditure will be required for DIFM range

development. The Wickes Group expects that, in the medium term, minimal future capital

expenditure will be required for new space. The Wickes Group has not undertaken significant

capital investment on new stores and new space in recent years, which had been a historical

focus area for investment. Investment in new space is expected to be minimal going forward,

subject to attractive new-build or “white space” or relocation opportunities.

9 Off-balance Sheet Arrangements

As at 26 December 2020, the Wickes Group had no material off-balance sheet arrangements.

10 Critical Accounting Policies

Critical accounting policies are those policies that require the application of management’s most

challenging, subjective or complex judgements, often as a result of the need to make estimates

about the effect of matters that are inherently uncertain and may change in subsequent periods.

Critical accounting policies involve judgements and uncertainties that are sufficiently sensitive

to result in materially different results under different assumptions and conditions. A detailed

description of certain of the main accounting policies used in preparing the Historical Financial

Information is set forth in Note 2 of Section B of the Historical Financial Information.

PART VIII

CAPITALISATION AND INDEBTEDNESS

1 Capitalisation

The following table sets out the capitalisation of the Company as at 26 December 2020.

As at 26

December

2020

£ millions

Shareholders’ equity

Share capital........................................................................................................ 25.2

Other reserves ..................................................................................................... (785.7)

Total .................................................................................................................... (760.5)

Note:

(1) As at 26 December 2020, share capital includes 252,143,923 ordinary shares with a nominal value of £0.10.

2 Indebtedness

The following table sets out the indebtedness of the Wickes Group as at 26 December 2020 (the

Company did not have any financial indebtedness as at 26 December 2020):

As at 26

December

2020

£ millions

Current debt .......................................................................................................

Guaranteed.......................................................................................................... —

Secured ............................................................................................................... —

Unguaranteed/unsecured .................................................................................... (78.2)

Total non-current debt (excluding current portion of long-term debt) (78.2)

Guaranteed.......................................................................................................... —

Secured ............................................................................................................... —

Unguaranteed/unsecured .................................................................................... (712.8)

Total gross indebtedness ................................................................................. (791.0)

3 Net Financial Indebtedness

The following table sets out the net indebtedness of the Wickes Group as at 26 December 2020

(the Company did not have any financial indebtedness as at 26 December 2020):

As at 26

December

2020

£ millions

A. Cash ................................................................................................................ 6.5

B. Cash equivalent .............................................................................................. —

C. Trading securities............................................................................................ —

D. Liquidity (A+B+C) .......................................................................................... 6.5

E. Current nancial receivables ....................................................................... 186.1

F. Current bank debt............................................................................................ —

G. Other current portion of non-current debt ....................................................... —

H. Other current financial debt............................................................................. (78.2)

I. Current nancial debt (F+G+H) ..................................................................... (78.2)

J. Net current nancial assets (D+E+I) ............................................................ 114.4

K. Non-current bank loans ................................................................................... —

L. Bonds issued ................................................................................................... —

M. Other non-current loans.................................................................................. (712.8)

N. Non-current nancial indebtedness (K+L+M) ............................................ (712.8)

O. Net nancial indebtedness (J-N) ................................................................. (598.4)

The Wickes Group had no other indirect or contingent liabilities, or any contingent commitments

as at 26 December 2020.

The Net Financial Indebtedness presented above excludes intercompany balances between the

Wickes Group and Travis Perkins Group.

Since 26 December 2020, the following material changes in the indebtedness of the Wickes

Group have occurred:

1. The £156.1 million cash settlement of certain intercompany balances owed by the Travis

Perkins Group to the Wickes Group as part of the pre-Demerger Reorganisation in order

to provide that the Wickes Group had a cash balance of £130.0 million as at 26 December

2020 and to repay £32.6 million of business rates relief received from the Government in

April to December 2020. On the settlement of these intercompany balances the Wickes

Group will derecognise an equivalent amount of the intercompany receivables due from

the Travis Perkins Group.

2. The settlement of the remaining intercompany balance by the Travis Perkins Group

to the Wickes Group achieved via the payment of dividends equal to a total amount

of £30.0 million by the Wickes Group to the Travis Perkins Group, left outstanding as

an intercompany balance and offset against the remaining equivalent intercompany

balances owed by the Travis Perkins Group.

PART IX

HISTORICAL FINANCIAL INFORMATION

Section A – Accountant’s Report on Historical Financial Information

KPMG LLP Tel +44 (0) 20 7311 1000

Transaction Services Fax +44 (0) 20 7311 3311

15 Canada Square

London E14 5GL

United Kingdom

The Directors

Wickes Group plc

Vision House

19 Colonial Way

Watford

United Kingdom

WD24 4JL

24 March 2021

Ladies and Gentlemen

Wickes Group plc

We report on the financial information set out on pages 95 to 128 for the three years ended 29 December

2018, 28 December 2019 and 26 December 2020. This report is required by Item 18.3.1 of Annex 1 of

the UK version of Commission Delegated Regulation (EU) 2019/980 (the “PR Regulation”) and is given

for the purpose of complying with that item and for no other purpose.

Opinion on nancial information

In our opinion, the financial information gives, for the purposes of the prospectus dated 24 March 2021,

a true and fair view of the state of affairs of Wickes Group plc and its subsidiary undertakings (the

“Group”) as at 29 December 2018, 28 December 2019 and 26 December 2020 and of its Consolidated

profits, cash flows, statement of comprehensive income and changes in equity for the periods ended 29

December 2018, 28 December 2019 and 26 December 2020 in accordance with the basis of preparation

set out in Section B, Note 2 of Part IX and in accordance with international accounting standards in

conformity with the requirements of the Companies Act 2006 (“Adopted IFRS”) as described in Section

B, Note 2 of Part IX.

Responsibilities

The Directors of Wickes Group plc are responsible for preparing the financial information in accordance

with international accounting standards in conformity with the requirements of the Companies Act 2006.

It is our responsibility to form an opinion on the financial information and to report our opinion to you.

Save for any responsibility arising under Prospectus Regulation Rule 5.3.2R (2)(f) to any person as and

to the extent there provided, to the fullest extent permitted by law, we do not assume any responsibility

and will not accept any liability to any other person for any loss suffered by any such other person as a

result of, arising out of, or in connection with this report or our statement, required by and given solely

for the purposes of complying with Item 1.3 of Annex 1 of the PR Regulation, consenting to its inclusion

in the prospectus.

Basis of Preparation

The financial information has been prepared for inclusion in the prospectus dated 24 March 2021 of

Wickes Group plc on the basis of the accounting policies set out in Section B, Note 2 of Part IX.

Basis of Opinion

We conducted our work in accordance with Standards for Investment Reporting issued by the Financial

Reporting Council in the United Kingdom (the “FRC”). We are independent, and have fulfilled our

other ethical responsibilities, in accordance with the relevant ethical requirements of the FRC’s Ethical

Standard as applied to Investment Circular Reporting Engagements.

Our work included an assessment of evidence relevant to the amounts and disclosures in the financial

information. It also included an assessment of the significant estimates and judgments made by those

responsible for the preparation of the financial information and whether the accounting policies are

appropriate to the entity’s circumstances, consistently applied and adequately disclosed.

We planned and performed our work so as to obtain all the information and explanations which we

considered necessary in order to provide us with sufficient evidence to give reasonable assurance that

the financial information is free from material misstatement whether caused by fraud or other irregularity

or error.

Conclusions Relating to Going Concern

The Directors of Wickes Group plc have prepared the financial information on the going concern basis as

they do not intend to liquidate the entity or to cease its operations, and as they have concluded that the

entity’s financial position means that this is realistic. They have also concluded that there are no material

uncertainties that could have cast significant doubt over its ability to continue as a going concern for at

least a year from the date of approval of the financial information (“the going concern period”).

Our conclusions:

● we consider that the Directors’ use of the going concern basis of accounting in the preparation

of the entity’s financial information is appropriate; and

● we have not identified, and concur with the Directors’ assessment that there is not, a material

uncertainty related to events or conditions that, individually or collectively, may cast significant

doubt on the entity’s ability to continue as a going concern for the going concern period.

Declaration

For the purposes of Prospectus Regulation Rule 5.3.2R (2)(f) we are responsible for this report as part

of the prospectus and declare that, to the best of our knowledge, the information contained in this report

is in accordance with the facts and that the report makes no omission likely to affect its import. This

declaration is included in the prospectus in compliance with Item 1.2 of Annex 1 of the PR Regulation.

Yours faithfully

KPMG LLP

Section B – Historical Financial Information

Consolidated Prot or Loss and Other Comprehensive Income

For the 52 weeks periods ended 29 December 2018, 28 December 2019 and 26 December 2020

52 weeks ended

26 December 2020

52 weeks ended

28 December 2019

52 weeks ended

29 December 2018

Adjusted

Adjusting

items

(note 5) Total Adjusted

Adjusting

items

(note 5) Total Adjusted

Adjusting

items

(note 5) Total

(£m)

Revenue (note 3) ................. 1,346.9 — 1,346.9 1,292.4 — 1,292.4 1,199.6 — 1,199.6

Cost of sales ........................ (837.8) — (837.8) (791.1) — (791.1) (729.9) — (729.9)

Gross prot ........................ 509.1 — 509.1 501.3 — 501.3 469.7 — 469.7

Selling costs ........................ (323.5) — (323.5) (303.1) — (303.1) (300.6) — (300.6)

Administrative expenses...... (104.0) (20.6) (124.6) (102.4) (39.6) (142.0) (93.2) (19.3) (112.5)

Operating prot (note 4) ... 81.6 (20.6) 61.0 95.8 (39.6) 56.2 75.9 (19.3) 56.6

Finance costs (note 6) ......... (32.1) — (32.1) (33.5) — (33.5) (34.5) — (34.5)

Prot before tax ................. 49.5 (20.6) 28.9 62.3 (39.6) 22.7 41.4 (19.3) 22.1

Tax (note 10) ....................... (8.9) 6.3 (2.6) (11.8) 2.0 (9.8) (8.1) 0.9 (7.2)

Prot for the period and

total comprehensive

income ................................ 40.6 (14.3) 26.3 50.5 (37.6) 12.9 33.3 (18.4) 14.9

Earnings per share

(note 31)

Basic 10.4p 5.1p 5.9p

Diluted ................................. 10.4p 5.1p 5.9p

Consolidated Balance Sheet

For the 52 weeks periods ended 29 December 2018, 28 December 2019 and 26 December 2020

Notes

26 December

2020

28 December

2019

29 December

2018

(£m)

Assets

Non-current assets

Goodwill ............................................ 13 8.4 8.4 8.4

Other intangible assets ..................... 13 12.3 13.9 13.1

Property, plant and equipment ......... 11 103.1 109.0 133.8

Right-of-use assets........................... 12 654.2 735.8 776.8

Deferred tax asset ............................ 20 24.0 19.2 18.0

Total non-current assets ................ 802.0 886.3 950.1

Current assets

Inventories ........................................ 14 138.3 150.4 147.8

Trade and other receivables ............. 16 261.6 327.0 723.6

Cash and cash equivalents .............. 27 6.5 25.4 16.2

Total current assets ........................ 406.4 502.8 887.6

Total assets ..................................... 1,208.4 1,389.1 1,837.7

Equity and Liabilities

Capital and reserves

Issued share capital 25.2 25.2 25.2

Share premium account — 862.3 862.3

Other reserve (785.7) (785.7) (785.7)

Retained earnings 890.3 176.8 161.9

Total equity 30 129.8 278.6 263.7

Non-current liabilities

Lease liabilities ..................................... 12 712.8 779.5 819.6

Long-term provisions ............................ 19 0.3 2.2 1.3

Total non-current liabilities 713.1 781.7 820.9

Current liabilities

Lease liabilities .....................................

12 77.2 75.5 75.6

Trade and other payables.....................

17 277.9 240.0 661.3

Short-term provisions ...........................

19 10.4 13.3 16.2

Total current liabilities .......................

365.5 328.8 753.1

Total liabilities .....................................

1,078.6 1,110.5 1,574.0

Total equity and liabilities ..................

1,208.4 1,389.1 1,837.7

Consolidated Statement of Changes in Equity

For the periods ended 29 December 2018, 28 December 2019 and 26 December 2020

Issued

capital

premium

account

Other

reserve

Retained

earnings

Total

equity

(£m)

At 31 December 2017 ........ 25.2 862.3 (785.7) 196.2 298.0

Profit for the period and other

comprehensive income........ — — — 14.9 14.9

Dividends paid ..................... — — — (50.7) (50.7)

Equity-settled share-based

payments ............................. — — — 1.5 1.5

At 29 December 2018 ........ 25.2 862.3 (785.7) 161.9 263.7

Profit for the period and other

comprehensive income........ — — — 12.9 12.9

Equity-settled share-based

payments ............................. — — — 2.0 2.0

At 28 December 2019 ........ 25.2 862.3 (785.7) 176.8 278.6

Profit for the period and other

comprehensive income........ — — — 26.3 26.3

Share capital reduction ........ — (862.3) — 862.3 —

Dividends paid ..................... — — — (176.8) (176.8)

Equity-settled share-based

payments ............................. — — — 1.7 1.7

At 26 December 2020 ........ 25.2 — (785.7) 890.3 129.8

Consolidated Cash Flow Statement

For the 52 weeks periods ended 29 December 2018, 28 December 2019 and 26 December 2020

26 December

2020

28 December

2019

29 December

2018

(£m)

Cash ows from operating activities

Operating prot ...................................................... 61.0 56.2 56.6

Adjustments for:

Depreciation of property, plant and equipment......... 21.3 23.8 26.9

Depreciation of right-of-use assets ........................... 77.3 78.8 79.5

Amortisation of internally-generated intangibles....... 4.5 3.4 1.8

Impairment of assets ................................................ 12.1 2.2 0.7

Gains of terminations of leases ................................ (1.9) (3.0) (0.1)

Share-based payments ............................................ 1.7 2.0 1.5

Losses/(gains) on disposal of property, plant and

equipment ................................................................. 1.6 3.2 (0.3)

Operating cash ows ............................................. 177.6 166.6 166.6

Decrease/(increase) in inventories ........................... 12.1 (2.6) 4.7

(Increase)/decrease in receivables........................... (107.3) 412.1 (27.2)

Increase/(decrease) in payables .............................. 43.8 (426.6) 76.2

Cash generated from operations .......................... 126.2 149.5 220.3

Other interest ............................................................ (0.1) (0.2) (0.2)

Interest on lease liabilities ........................................ (32.0) (33.3) (34.3)

Income taxes paid .................................................... (17.3) (7.5) (9.0)

Net cash inow from operating activities ............ 76.8 108.5 176.8

Cash ows from investing activities

Proceeds on disposal of property, plant and

equipment................... .............................................. 0.2 — 2.5

Development of computer software .......................... (2.9) (4.5) (4.5)

Purchases of property, plant and equipment ............ (17.2) (19.6) (39.3)

Net cash outow from investing activities........... (19.9) (24.1) (41.3)

Cash ows from nancing activities

Repayment of lease liabilities ................................... (75.8) (75.2) (75.2)

Dividends paid .......................................................... — — (50.7)

Net cash outow from nancing activities .......... (75.8) (75.2) (125.9)

Net (decrease)/increase in cash and cash

equivalents .............................................................. (18.9) 9.2 9.6

Cash and cash equivalents at the beginning of

the period.................................................................. 25.4 16.2 6.6

Cash and cash equivalents at the end of the period 6.5 25.4 16.2

Notes to the nancial information

For the periods ended 29 December 2018, 28 December 2019 and 26 December 2020. Unless otherwise

stated, all references to 2018, 2019 and 2020 refer to the period-end dates stated above.

1 General information

Wickes Group plc (the ‘Company’) is a limited company incorporated on 4 September 2019 in

the United Kingdom under the Companies Act 2006. The registered office of the Company is 19

Colonial Way, Watford, WD24 4JL.

The consolidated financial statements represent the results of the Company and its subsidiaries

(together referred to as the ‘Group’).

The principal activity of the Group is the operation of retail DIY stores across the United Kingdom.

2 Accounting policies

2.1 Basis of preparation

The historical financial information is prepared for inclusion in the Prospectus of the

Company for the purposes of admission to the premium listing segment trading on the

London Stock Exchange, and has been prepared in accordance with the requirements

of the Prospectus Regulation, Listing Rules and international accounting standards in

conformity with the requirements of the Companies Act 2006 (‘Adopted IFRS’). The

statements do not constitute the Company’s statutory accounts, which were prepared

under FRS 102 and have been filed with the Registrar of Companies. The audit report

on these accounts was not qualified, did not include a reference to any matters to which

the Auditor drew attention by way of emphasis without qualifying the report, and did not

contain statements under Section 498 (2) or Section 498 (3) of the Companies Act 2006.

These accounts have been prepared in accordance with the period-end date of Wickes

Building Supplies Limited, the trading entity in the Group. Four members of the Group

(Wickes Group plc, Wickes Group Holdings Limited, Wickes Finance Limited and Wickes

Holdings Limited) had a period-end date of 31 December 2020. No transactions occurred

in any of these companies during the period from 27 December 2020 to 31 December

2020.

On 17 March 2020, Wickes Group Holdings Limited acquired Wickes Building Supplies

Limited and Wickes Finance Limited by means of a share-for-share exchange and

the Company acquired Wickes Group Holdings Limited by means of a share-for-

share exchange (‘the Capital Reorganisation’), in order to put in place a new parent

company and intermediate parent company for Wickes Building Supplies Limited and

Wickes Finance Limited, which comprise the assets and liabilities used in managing and

operating the Wickes home improvement business.

The Capital Reorganisation falls outside the scope of IFRS 3 – ‘Business combinations’

and has been accounted for using the principles of predecessor accounting using the

carrying amounts of assets and liabilities included in the financial statements of the

acquired entities. This policy reflects the economic substance of the transaction and

means that, although the Capital Reorganisation did not become effective until 17 March

2020, the consolidated financial statements have been prepared for the periods ended

29 December 2018 and 28 December 2019 and 26 December 2020 as if the Group had

been in existence throughout the periods presented.

The share capital issued as consideration is treated as if it had existed from the earliest

period presented. This presentation of share capital results in the creation of the other

reserves in the consolidated balance sheet. The other reserves represent the difference

between the carrying values of the assets and liabilities of the parties to the Capital

Reorganisation, which are not required to be adjusted to fair value on acquisition, and

the nominal value and premium of the shares issued.

This is the first time the consolidated financial information has been prepared in

accordance with IFRS. In preparing these financial statements, IFRS 1 – First

time adoption of International Financial Reporting Standards has been applied. No

100

reconciliations are presented as the Group has not previously prepared consolidated

financial statements. The Group financial statements have been prepared based on the

date of transition of Wickes Group plc of 31 December 2017 with the exception of the

assets and liabilities of Wickes Building Supplies Limited, the main trading company in

the group, which previously prepared IFRS financial statements with a date of transition

of 1 January 2017 and early adopted IFRS 16 – Leases from that date. The financial

information has been prepared on the historical cost basis.

The accounting policies applied and stated below are those expected to be applied to

future financial information reported by the Group.

The consolidated financial statements are prepared on the going concern basis. In

performing their assessment the Directors considered both the current ownership of the

Group, and the impact of the proposed demerger.

Going concern

Current ownership

At the date of approval of the Historical Financial Information, the Group is wholly owned

by Travis Perkins plc (the “Travis Perkins Group”). In determining the appropriateness

of the going concern assumption, the Directors reviewed the Group’s forecasts and risk

assessment. In arriving at their opinion the Directors considered:

● The Group’s cash flow forecasts and revenue projections.

● The impact on trading performance of severe but plausible downside scenarios,

including continued Covid-19 restrictions, the removal of government support

schemes such as Stamp Duty Relief and the Coronavirus Job Retention Scheme

and adverse macroeconomic conditions. Key assumptions include significant

reductions in revenue and a fall in margin.

● Mitigating actions controllable by management, reflected in the severe but

plausible downside scenarios, include certain amounts in respect of the following:

● accepting rates relief offered by the government;

● non-payment of bonuses;

● reductions in discretionary costs (e.g. marketing, development costs);

● reducing staff costs by reducing recruitment;

● reduction in capital expenditure; and

● reduction in dividend payments.

● The Group’s robust policy towards liquidity and cash flow management.

● The Group’s ability to successfully manage its principal risk factors during periods

of uncertain economic outlook and challenging macroeconomic conditions.

● The position of Wickes Building Supplies Limited (the Group’s principal trading

subsidiary) as a guarantor under the Travis Perkins Group’s borrowing facilities.

In this scenario, the Group participates in the Travis Perkins Group’s treasury

arrangements and the going concern position is directly linked to the Travis Perkins

Group’s position. Accordingly, Travis Perkins plc has provided the Group with an

undertaking that for at least 12 months from the date of approval of these financial

statements, as long as the Company remains part of the Travis Perkins Group, it will

continue to make available such funds as are needed by the Group. As with any Group

placing reliance on other group entities for financial support, the Directors acknowledge

that there can be no certainty that this support will continue although, at the date of

approval of these financial statements, they have no reason to believe that it will not

do so.

101

Proposed demerger

The Directors have considered the appropriateness of the going concern assumption in

the event of the proposed demerger. In arriving at their opinion the Directors considered:

● the cash flow forecasts and revenue projections, severe but plausible downside

scenarios and mitigating actions available to management as set out above;

● the impact of standalone public company running costs and associated

separation costs;

● the £124 million of cash funding received at the point of demerger following the

settlement of outstanding receivables from the Travis Perkins Group; and

● the committed facilities available to the Group and the covenants thereon.

The Group negotiated a revolving credit facility with a syndicate of four banks in March

2021, which will be made available on the Group’s listing and admission to trading on

the London Stock Exchange. The facility is for a total value of £80 million and matures

in March 2024. The Group does not expect to draw down on this facility in the going

concern assessment period. The facility is subject to covenants relating to fixed charge

cover and gearing which will be assessed on a quarterly basis.

After reviewing the Group’s forecasts and risk assessments under both scenarios and

making other enquiries, the Directors have formed a judgement at the time of approving

the financial statements, that there is a reasonable expectation that the Group has

adequate resources to continue in operational existence for the 12 months from the date

of signing these accounts. For this reason, the Directors continue to adopt the going

concern basis in preparing the financial statements.

Functional and presentational currency

The financial information is presented in Pounds Sterling, the currency of the primary

economic environment in which the Group operates. All amounts in the financial

statements have been rounded to the nearest £0.1m.

Transactions denominated in foreign currencies are recorded at the rates ruling on

the date of the transaction. At the balance sheet date, monetary assets and liabilities

denominated in foreign currencies are translated at the rate of exchange ruling at that

date. Foreign exchange differences arising on translation are recognised in the income

statement.

Business segments

The operating segments are identified on the basis of internal reports about components

of the Group that are regularly reviewed by the Chief Operating Decision Maker

(“CODM”), which is considered to be the Board, to assess performance and allocate

capital. Management considers there to be one operating segment.

2.2 Impact of new standards and interpretations

The following standards and interpretations, which have not yet been applied in these

financial statements were in issue, but not yet effective:

● Amendments to IFRS 3 – Business Combinations

● Amendments to IAS 1 – Presentation of Financial Statements

● Amendments to IAS 8 – Accounting Policies, Changes in Accounting Estimates

and Errors

● Amendments to References to Conceptual Framework in IFRS Standards

● IFRS 17 – Insurance Contracts.

102

Adoption of these standards in future periods is not expected to have a material impact

on the financial statements.

2.3 Revenue

Revenue is recognised when the Group has satisfied its performance obligations to

the customer and the customer has obtained control of the goods or services being

transferred. Revenue is measured at the transaction price received or receivable less

an appropriate deduction for actual and expected returns and represents amounts

receivable for goods and services provided in the normal course of business, net of

discounts and value added tax.

Customers are entitled to return goods for a period after purchase. A right of return is not

a separate performance obligation and the Group is required to recognise revenue net of

estimated returns. A refund liability and a corresponding asset in inventory representing

the right to recover products from the customer are recognised. The value of customer

returns is immaterial in the context of the financial statements.

For the Group, services comprise kitchen and bathroom installations and these are

typically completed over a short period of time. The Group does not sell installation

services separately from the sale of kitchen and bathroom products. Control of installed

kitchens and bathrooms passes to the customer when the Group has fulfilled all its

obligations under the installation contract and revenue from the installation of kitchens

and bathrooms is recognised at this point.

2.4 Inventories

Inventories, which consist of goods for resale, are stated at the lower of average weighted

cost and net realisable value. Cost comprises direct materials and, where applicable,

direct labour costs and those overheads that have been incurred in bringing the

inventories to their present location and condition. Net realisable value is the estimated

selling price less the estimated costs of disposal.

Cost of inventories

In determining the cost of inventories the Directors have to make estimates to arrive

at cost and net realisable value. The Directors believe that the £7.2m deduction from

the gross invoice cost of stock (2019: £7.0m, 2018: £7.0m) is appropriate. Determining

the net realisable value of the wide range of products held in many locations requires

judgement to be applied to determine the likely saleability of the product and the potential

price that can be achieved. In arriving at any provisions for net realisable value the

Directors take into account the age, condition and quality of the product stocked and

the recent trend in sales. The Group does not consider that there is a significant risk of

material adjustment arising within the next financial period as a result of this estimate.

2.5 Adjusting items

Adjusting items are those items of income and expenditure that, by reference to the

Group, are material in size or unusual in nature or incidence and that in the judgement

of the Directors should be disclosed separately on the face of the financial statements

to ensure both that the reader has a proper understanding of the Groups financial

performance and that there is comparability of financial performance between periods.

Items of income or expense that are considered by the Directors for designation as

adjusting items include, but are not limited to, significant restructurings; onerous

contracts; write-downs or impairments of current and non-current assets; the costs of

acquiring and integrating businesses; gains or losses on disposals of businesses and

investments and the associated costs of separating businesses and their systems; re-

measurement gains or losses arising from changes in the fair value of derivative financial

instruments; and the effect of changes in corporation tax rates on deferred tax balances.

2.6 Tax

The tax expense represents the sum of the tax currently payable and deferred tax.

103

Current tax

The tax currently payable is based on taxable profit for the period. Taxable profit

differs from net profit as reported in the income statement because it excludes items

of income and expense that are taxable or deductible in other periods and it further

excludes items that are never taxable or deductible. The Group’s liability for current tax

is calculated using tax rates that have been enacted or substantially enacted by the

balance sheet date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between

the carrying amounts of assets and liabilities in the financial statements and the

corresponding tax bases used in the computation of taxable profit. This is accounted for

using the balance sheet liability method.

Deferred tax liabilities are generally recognised for all taxable temporary differences and

deferred tax assets are recognised to the extent that it is probable that taxable profits

will be available against which deductible temporary differences can be utilised. Such

assets and liabilities are not recognised if the temporary difference arises from goodwill

or from the initial recognition of other assets and liabilities in a transaction (other than in

a business combination) that affects neither the taxable profit nor the accounting profit.

Deferred tax is calculated at the tax rates that are expected to apply in the period when

the liability is settled or the asset realised based on tax laws and rates that have been

enacted or substantially enacted at the balance sheet date. Deferred tax is charged or

credited in the income statement, except when it relates to items charged or credited

directly to equity, in which case the deferred tax is also dealt within equity.

2.7 Goodwill and other intangible assets

Goodwill

Goodwill arising on acquisition represents the excess of the cost of acquisition over

the share of the aggregate fair value of identifiable net assets (including intangible

assets) of a business or a subsidiary at the date of acquisition. All material intangible

fixed assets obtained on acquisition have been recognised separately in the financial

statements. Goodwill is initially recognised as an asset and allocated to cash generating

units or groups of cash generating units that are expected to benefit from the synergies

of the combination and is then reviewed at least annually for impairment. Any impairment

is recognised immediately in the income statement and is not reversed. Goodwill is

accordingly stated in the balance sheet at cost less any provisions for impairment in

value.

Software

The directly attributable costs incurred for the development of computer software

controlled by and for use within the business are capitalised and written off as an

administrative expense over their estimated useful life, which range from three years to

10 years. No amortisation is charged on computer software under construction.

Costs relating to research, maintenance and training are expensed as they are incurred.

No amortisation is charged on assets in the course of construction. License fees for

using third-party software are expensed over the period the software is in use.

2.8 Property, plant and equipment

Property, plant and equipment is stated at cost or deemed cost less accumulated

depreciation and any impairment in value. Assets are depreciated to their estimated

residual value on a straight-line basis over their estimated useful lives as follows:

● Leasehold improvements – over the term of the lease

● Plant and equipment – three to 10 years

The residual value and useful life of assets are reviewed annually.

104

The gain or loss arising on the disposal or retirement of an asset is determined as the

difference between the sale proceeds net of expenses and the carrying amount of the

asset in the balance sheet and is recognised in the income statement.

2.9 Supplier income

Supplier income comprises fixed price discounts and volume rebates.

Fixed price discounts and volume rebates received and receivable in respect of goods

which have been sold are initially deducted from the cost of inventory and therefore

reduce cost of sales in the income statement when the goods are sold. Where goods on

which the fixed price discount or volume rebate has been earned remain in inventory at

the period-end, the cost of that inventory reflects those discounts and rebates.

Supplier income receivable is netted off against trade payables when there is a legally

binding arrangement in place and it is management’s intention to do so, otherwise

amounts are included in other receivables in the balance sheet.

2.10 Financial instruments

The Group’s trade and other receivables at the balance sheet date comprises principally

of amounts receivable from the sale of goods, amounts due in respect of rebates and

sundry prepayments.

Trade receivables are subject to the expected credit loss model in IFRS 9 – Financial

Instruments. The Group applies the IFRS 9 – Financial Instruments simplified approach

to measuring expected credit losses. This uses a lifetime expected loss allowance for all

trade receivables. To measure the expected credit losses trade receivables have been

grouped based on shared credit risk characteristics and the days past due.

Trade receivables are written off when there is no reasonable expectation of recovery.

Indicators that there is no reasonable expectation of recovery include the failure of a

debtor to engage in a repayment plan with the Group and the commencement of legal

proceedings.

2.11 Provisions

A provision is recognised in the balance sheet when the Group has a present legal or

constructive obligation because of a past event, and it is probable that an outflow of

economic benefits will be required to settle the obligation. Provisions are measured at

the Directors’ best estimate of the expenditure required to settle the obligation at the

balance sheet date, and are discounted to present value.

Should a provision ultimately prove to be unnecessary then it is credited back into the

income statement. Where the provision was originally established as an adjusting item,

any release is shown as an adjusting credit.

The Group’s stores operate from a significant number of leased properties. Where

necessary a provision has been made for the residual commitments for rates and other

payments, after taking into account existing and anticipated subtenant arrangements.

It is Group policy to insure itself using policies with a high excess against claims arising

in respect of damage to assets, or due to employers or public liability claims. The nature

of insurance claims means they may take some time to be settled. The insurance claims

provision represents management’s best estimate, based upon external advice, of the

value of outstanding claims against it where the final settlement date is uncertain.

2.12 Trade payables and liabilities

Trade and other payables principally comprise amounts outstanding for trade purchases

and ongoing costs and are measured at amortised cost. The Directors consider that

the carrying amount of trade payables approximates to their fair value. The Group has

105

financial risk management policies in place to ensure that all payables are paid within the

credit timeframe.

2.13 Employee benets – pensions

Payments to defined contribution retirement benefit schemes are recognised as an

expense when employees have rendered services entitling them to the contributions.

2.14 Equity

Equity instruments represent the ordinary share capital of the Group and are recorded at

the proceeds received, net of directly attributable incremental issue costs.

A description of the nature and purpose of each reserve is given below:

● The share premium represents the amounts above the nominal value received

for shares sold

● The other reserves represent the difference between the carrying values of the

assets and liabilities of the parties to the Capital Reorganisation, which are not

required to be adjusted to fair value on acquisition, and the nominal value and

premium of the shares issued.

● Retained earnings represents cumulative results for the Group.

2.15 Leases

IFRS 16 – Leases establishes principles for the recognition, measurement, presentation

and disclosure of leases, with the objective of ensuring that lessees and lessors provide

relevant information that faithfully represents those transactions.

Identifying a lease

At inception of a contract, the Group assesses whether a contract is, or contains, a

lease. A contract is, or contains, a lease if it conveys the right to control the use of an

identified asset for a period of time in exchange for consideration. Control is conveyed

where the Group has both the right to direct the identified asset’s use and to obtain

substantially all the economic benefits from that use.

At inception or on reassessment of a contract that contains a lease component, the

Group allocates the consideration in the contract to each lease component on the basis

of their relative stand-alone prices. However, for fleet leases in which it is a lessee, the

Group has elected not to separate non-lease components and account for the lease and

non-lease components as a single lease component.

For each lease or lease component, the Group follows the lease accounting model as

per IFRS 16 – Leases, unless the recognition exceptions can be used.

Recognition exceptions

The Group has elected to account for lease payments as an expense on a straight-line

basis over the lease term or another systematic basis for the following two types of

leases:

(i) leases with a lease term of 12 months or less and containing no purchase options

– this election is made by class of underlying asset; and

(ii) leases where the underlying asset has a low value when new – this election can

be made on a lease-by-lease basis,

For leases where the Group has taken short-term lease recognition exemption and there

are any changes to the lease term or the lease is modified, the Group accounts for the

lease as a new lease.

Lessee accounting

Upon lease commencement the Group recognises a right-of-use asset and a lease liability.

106

Initial measurement

The right-of-use asset is initially measured at cost, which comprises the initial amount of

the lease liability adjusted for any lease payments made at or before the commencement

date, plus any initial direct costs incurred and an estimate of costs to dismantle and

remove the underlying asset or to restore the underlying asset or to restore the underlying

asset or the site on which is located, less any lease incentives received.

Right-of-use assets were measured at the date of adoption of IFRS 16 – Leases at either:

● Their carrying amount as if IFRS 16 – Leases had been applied since the lease

commencement date, discounted by the lessees’ incremental borrowing rate

as at 1 January 2017. The Group has applied this methodology to the Group’s

property leases and the majority of plant and equipment leases.

● At amounts equal to the lease liability, adjusted by the amount of any prepaid or

accrued lease payments relating to that lease recognised on the balance sheet.

This has been applied to the remaining portfolio of leases.

The lease liability is initially measured at the present value of the lease payments payable

over the lease term, discounted at the rate implicit in the lease if that can be readily

determined. If that rate cannot be readily determined, the Group uses the incremental

borrowing rate.

Variable lease payments that depend on an index or a rate are included in the initial

measurement of the lease liability and are initially measured using the index or rate as at

the commencement date. Amounts expected to be payable by the lessee under residual

value guarantees are also included.

Variable lease payments that are not included in the measurement of the lease liability

are recognised in profit or loss in the period in which the event or condition that triggers

payment occurs, unless the costs are included in the carrying amount of another asset

under another accounting standard.

Subsequent measurement

After lease commencement, the Group measures right-of-use assets using a cost

model. Under the cost model a right-of-use asset is measured at cost less accumulated

depreciation and accumulated impairment.

The lease liability is subsequently remeasured to reflect changes in:

● the lease term (using a revised discount rate)

● the assessment of a purchase option (using a revised discount rate)

● the amounts expected to be payable under residual value guarantees (using an

unchanged discount rate)

● future lease payments resulting from a change in an index or a rate used to

determine those payments (using an unchanged discount rate)

The remeasurements are matched by adjustments to the right-of-use asset.

Lease modifications may also prompt remeasurement of the lease liability unless they

are determined to be separate leases.

Depreciation

The right-of-use asset is subsequently depreciated using the straight-line method from

the commencement date to the earlier of the end of the useful life of the right-of-use

asset or the end of the lease term. The estimated useful lives of right-of-use assets are

determined on the same basis as those of property, plant and equipment. In addition

107

the right-of-use asset is reduced by impairment losses, if any, and adjusted for certain

remeasurements of the lease liability.

Lessor Accounting

When the Group acts as a lessor, it determines at lease inception whether each lease

is a finance or operating lease. To classify each lease, the Group makes an overall

assessment of whether the lease transfers substantially all the risks and rewards

incidental to ownership of an underlying asset. If this is the case, then the lease is

a finance lease; if not, then it is an operating lease. As part of this assessment, the

Group considers certain indicators such as whether the lease is for the major part of the

economic life of the

The Group recognises operating lease payments as income on a straight-line basis over

the lease term as part of ‘other income’. The Group recognises finance income over the

lease term of a finance lease, based on a pattern reflecting a constant periodic rate of

return on the net investment.

2.16 Borrowings

Interest bearing bank loans and overdrafts and other loans are recognised in the balance

sheet at amortised cost. Finance charges associated with arranging non-equity funding

are recognised in the income statement over the life of the facility. All other borrowing

costs are recognised in the income statement in accordance with the effective interest

rate method.

2.17 Net debt

Cash and cash equivalents comprise cash balances net of overdrafts. The carrying

amount of these assets approximates to their fair value.

2.18 Financial instruments

Classication

The Group classifies its financial assets in the following measurement categories:

● those to be measured subsequently at fair value (either through Other

Comprehensive Income ‘‘FVOCI’’, or through profit or loss “FVTPL”); and

● those to be measured at amortised cost.

The classification depends on the business model for managing the financial assets and

the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or

loss or OCI. For investments in equity instruments that are not held for trading, this will

depend on whether the Group has made an irrevocable election at the time of initial

recognition to account for the equity investment at FVTPL or at FVOCI.

The Group reclassifies debt investments when and only when its business model for

managing those assets changes.

Measurement

At initial recognition, the Group measures a financial asset at its fair value plus, in the

case of a financial asset not at fair value through profit or loss (FVTPL), transaction costs

that are directly attributable to the acquisition of the financial asset. Transaction costs of

financial assets carried at FVTPL are expensed in profit or loss.

Debt instruments

Subsequent measurement of debt instruments depends on the Group’s business model

for managing the asset and the cash flow characteristics of the asset. There are two

measurement categories into which the Group classifies its debt instruments:

● Amortised cost: Assets that are held for collection of contractual cash flows

where those cash flows represent solely payments of principal and interest

are measured at amortised cost. Interest income from these financial assets is

108

included in finance income using the effective interest rate method. Any gain or

loss arising on derecognition is recognised directly in profit or loss and presented

in finance income or finance costs, together with foreign exchange gains and

losses.

● FVTPL: Assets that do not meet the criteria for amortised cost or FVOCI are

measured at FVTPL. A gain or loss on a debt instrument that is subsequently

measured at FVTPL is recognised in profit or loss and presented net within other

gains/(losses) in the period in which it arises.

Impairment

The Group assesses on a forward looking basis the expected credit losses associated

with its debt instruments carried at amortised cost and FVOCI. The impairment

methodology applied depends on whether there has been a significant increase in credit

risk. For trade receivables, the Group applies the simplified approach permitted by IFRS

9 – Financial Instruments, which requires expected lifetime losses to be recognised from

initial recognition of the receivables.

2.19 Impairment

Impairment of tangible and intangible assets

The carrying amounts of the Group’s tangible and intangible assets with a definite useful

life are reviewed at each balance sheet date to determine whether there is any indication

of impairment to their value. If such an indication exists, the asset’s recoverable amount

is estimated and compared to its carrying value. Where the asset does not generate

cash flows that are independent from other assets, the Group estimates the recoverable

amount of the cash-generating unit (“CGU”) to which the asset belongs. The Group has

determined that each store is a separate CGU. The recoverable amount of an asset is

the greater of its fair value less disposal cost and its value-in-use (the present value of

the future cash flows that the asset is expected to generate). In determining value in use

the present value of future cash flows is discounted using a pre-tax discount rate that

reflects current market assessments of the time value of money in relation to the period

of the investment and the risks specific to the asset concerned. The carrying value of

CGUs includes right-of-use assets.

Where the carrying value exceeds the recoverable amount a provision for the impairment

loss is established with a charge being made to the income statement. When the reasons

for a write down no longer exist the write down is reversed in the income statement up to

the net book value that the relevant asset would have had if it had not been written down

and if it had been depreciated.

For intangible assets that have an indefinite useful life the recoverable amount is

estimated at each annual balance sheet date.

Measuring recoverable amounts

The Group tests goodwill and other non-monetary assets with indefinite useful lives

for impairment annually or more frequently if there are indications that an impairment

may have occurred. The recoverable amounts of the goodwill and other non-monetary

assets with indefinite useful lives are determined from value in use calculations. The key

assumptions for the value in use calculations are those regarding the discount rates,

growth rates and like-for-like market volume changes which impact sales and therefore

cash flow projections and maintenance capital expenditure. Management estimates pre-

tax discount rates that reflect current market assessments of the time value of money and

the risks specific to the CGU groupings that are not reflected in the cash flow projections.

2.20 Share-based payments

The Travis Perkins plc group issues equity-settled share-based payments to certain

employees. Equity-settled share-based payments are measured at fair value (excluding

the effect of non market-based vesting conditions) at the date of grant. The fair value

determined at the grant date of the equity-settled share-based payments is expensed on

109

a straight-line basis over the vesting period, having been adjusted to reflect an estimate of

shares that will eventually vest and for the effect of non market-based vesting conditions.

Fair value is measured by use of the Black-Scholes pricing model which is considered

by management to be the most appropriate method of valuation. The expected life used

in the model has been adjusted, based on management’s best estimate, for the effects

of non-transferability, exercise restrictions, and behavioural considerations. The scheme

also provides employees with the ability to purchase ordinary shares at 80 per cent. of

the current market value. These are measured at fair value at the date of the grant and

expensed on a straight-line basis over the vesting period.

As the Group is part of a group share-based payment plan it recognises and measures

its share-based payment expense on the basis of a reasonable allocation of the expense

recognised for the Travis Perkins group. This allocation is based on individual employees

and where their services are rendered for group companies.

2.21 Post balance sheet events

These accounts reflect events only up to the date on which the relevant underlying

financial statements were approved, except in relation to the final period presented. In

respect of this final period, post balance sheet events have been reflected as required

by IAS 10 – Events After the Reporting Period up to the date of approval of this historical

financial information.

3 Revenue

3.1 Revenue

2020 2019 2018

(£m)

Core (product sales) ........................... 1,072.4 906.2 857.2

“Do It For Me” (project sales).............. 274.5 386.2 342.4

1,346.9 1,292.4 1,199.6

Revenue recognised in 2020 included £26.7m (2019: £28.7m, 2018: £31.8m) in the

deferred revenue balance at the start of the period.

3.2 Revenue reconciliation and like-for-like sales

2020 2019 2018

(£m)

2019 / 2018 / 2017 revenue.................. 1,292.4 1,199.6 1,236.4

Network change.................................... (10.1) (18.1) (8.4)

2019 / 2018 / 2017 like-for-like

revenue................................................. 1,282.3 1,185.5 1,228.0

Like-for-like revenue ............................. 64.6 102.4 (53.9)

Network change.................................... — 8.5 25.5

2020 / 2019 / 2018 revenue.................. 1,346.9 1,292.4 1,199.6

Like-for-like revenue % ......................... 5.0% 8.7% (4.1)%

Calculating like-for-like sales enables management to monitor the performance trend of

the underlying business year-on-year. It also gives management a good indication of the

health of the business compared to competitors.

Like-for-like sales are a measure of underlying sales performance for two successive

periods. Branches and stores contribute to like-for-like sales once they have been trading

for more than 12 months. Revenue included in like-for-like sales is for the equivalent times

in both periods being compared. When branches close revenue is excluded from the prior

period figures for the months equivalent to the post closure period in the current period.

110

4 Operating prot

Operating profit has been arrived at after charging/(crediting):

2020 2019 2018

(£m)

Loss/(profit) on disposal of property, plant and

equipment ..................................................................... 1.6 3.2 (0.3)

Income from subleasing right-of-use assets (note 12) . (3.8) (3.7) (4.3)

During the period the Group incurred the following costs for audit and non-audit services provided

by the Group’s auditor:

2020 2019 2018

(£000’s)

Audit fees..................................................................... 180 133 110

Services relating to corporate finance transactions ..... 250 475 —

5 Adjusting items

2020 2019 2018

(£m)

Wickes separation costs ............................................... 8.2 9.2 —

Store impairment charge .............................................. 10.2 1.9 —

Loss on legal entity restructuring .................................. — 26.6 —

IT-related project termination costs .............................. — 0.7 6.5

Restructuring costs ....................................................... 2.2 1.2 12.8

20.6 39.6 19.3

Tax on adjusting items (3.9) (2.0) (3.5)

Adjusting items – deferred tax rate change (2.4) — 2.6

Adjusting items - after tax ............................................. 14.3 37.6 18.4

Separation costs

Separation costs are the costs incurred during the process of demerging the Wickes business

from the Travis Perkins plc group. Costs relate to the separation of shared services and

professional service fees.

Store impairment charge

The Covid-19 pandemic and related government restrictions implemented on 23 March 2020

was considered an impairment trigger and as a result all stores were tested for impairment.

These impairment reviews resulted in a £12.1m impairment charge in respect of right-of-use

assets, which are the only material assets of these stores. Details of the impairment reviews are

presented in note 32. This charge is stated net of £1.9m of gains on the termination of leases

where the right-of-use asset had previously been impaired and the charge presented as an

adjusting item.

Restructuring costs

The restructuring charge relates to the cost-reduction programmes announced for the Wickes

business in June 2018 and May 2020 and consist of redundancy and reorganisation costs in the

business.

Loss on legal entity restructuring

This amount represents the loss in the consolidated Group accounts arising from the sale of a

number of dormant companies and property companies and the assignment of intercompany

balances to other entities in the Travis Perkins Group, as part of the process of restructuring the

Group’s legal structure in preparation for demerger. See note 24.

111

IT-related project termination costs

The IT-related adjusting charge of £0.7m in 2019 and £6.5m in 2018 arose from the termination

of certain IT projects in the Wickes business.

Deferred tax rate change

The tax charge includes an adjusting credit of £2.4m (2019: £nil, 2018 £2.6m charge) arising

from the increase in the rate of UK corporation tax effective on 1 April 2020 from 17% to 19%.

6 Finance costs

2020 2019 2018

(£m)

Interest on lease liabilities (note 12) ............................. 32.0 33.3 34.3

Other interest ................................................................ 0.1 0.2 0.2

32.1 33.5 34.5

7 Staff costs

7.1 Average number of persons employed

The average monthly number of persons employed (including Directors):

2020 2019 2018

Administration and support ................... 368 386 413

Sales ..................................................... 7,613 7,147 7,172

7,981 7,533 7,585

7.2 Aggregate remuneration

2020 2019 2018

(£m)

Wages and salaries ............................ 181.8 169.6 161.9

Social security costs ........................... 11.6 10.9 10.1

Other pension costs ............................ 4.0 3.6 3.0

Share-based payments ....................... 1.7 2.0 1.5

199.1 186.1 176.5

8 Key management personnel

The remuneration of key management personnel of the Group is set out below in aggregate for

each of the categories specified in IAS 24 – Related Party Disclosures.

2020 2019 2018

(£m)

Short-term employee benefits .................................... 1.9 3.1 1.6

Post-employment benefits .......................................... 0.3 0.3 0.3

2.2 3.4 1.9

One of the Directors was paid by the Travis Perkins plc group and received total emoluments

(including non-performance related bonuses) of £0.6m (2019: £1.3m, 2018: £0.9m) during the

period, but it is not practicable to allocate his remuneration for services rendered to the Wickes

business. None of the Directors were paid directly by the Wickes Group. These disclosures have

been prepared as if the Directors of the Company at the date of the Capital Reorganisation were

the directors of the Company throughout the period.

During the period no Directors were members of a defined benefit pension scheme (2019: none,

2018: none). One Director paid by the Travis Perkins group exercised share options during the

period (2019: one, 2018: one).

112

The total amounts received or receivable by Directors under long-term incentive schemes in

respect of qualifying service in the period is £235,600 (2019: £60,300, 2018: £205,200). The

aggregate of gains made by the Directors in the period on the exercise of share options equated

to £8,000 (2019: £nil, 2018: £nil).

9 Share-based payments

Share-based payment transactions relate to employee and executive share options. These

are solely existing options on shares in Travis Perkins plc held by the staff of Wickes Building

Supplies Limited thus have no direct impact on the future share capital of the Wickes group.

9.1 Fair value of options

The Black-Scholes option-pricing model is used to calculate the fair value of the options

and the amount to be expensed. The probability of the performance conditions being

achieved was included in the fair value calculations. The inputs into the model for options

granted in the period expressed as weighted averages are as follows:

2020 2019 2018

Executive

options SAYE

Nil price

options

Executive

options SAYE

Nil price

options

Executive

options SAYE

Nil price

options

Share price

at grant date

(pence) ...... 1,149 1,204 1,096 1,402 — 1,354 1,295 1,089 1,234

Option

exercise price

(pence) ...... 1,144 898 — 1,395 — — 1,300 909 —

Volatility (%) 42.5% 42.4% 42.6% 32.0% — 32.4% 29.3% 30.3% 29.3%

Option life

(years) ....... 2.2 3.1 2.2 2.7 — 2.7 2.2 3.3 2.2

Risk free

interest rate

(%) ............. (0.1%) (0.0%) (0.1%) 0.70% — 0.67% 1.2 % 1.2% 1.2%

Expected

dividends as a

dividend yield

(%) ............. 2.5% 2.5% 2.6% 2.60% — 2.60% 3.2% 3.8% 3.3%

Volatility is based on historic share prices over a period equal to the vesting period.

Option life used in the model has been based on options being exercised in accordance

with historical patterns. For executive share options the vesting period is three years.

If options remain unexercised after a period of 10 years from the date of grant, these

options expire. Options are forfeited if the employee leaves the Group before options

vest. SAYE options vest after three or five years and expire 3½ or 5½ years after the

date of grant.

The risk-free interest rate of return is the yield on zero-coupon UK Government bonds on

a term consistent with the vesting period. Dividends used are based on actual dividends

where data is known and future dividends estimated using a dividend cover of three

times (within the Board’s target range).

The expected life of options used in the model has been adjusted, based upon

management’s best estimate, for the effects of non-transferability, exercise restrictions

and behavioural considerations.

113

9.2 Income statement charge and shares granted

The estimated fair values of the shares under option granted under the Group’s share

schemes in 2020 are as follows:

Share scheme Grant date Fair value

(£m)

Co-investment plan (nil price options) ........................... 22/09/2020 £1.4m

Performance share plan (approved components –

executive options, unapproved components – nil price

options) .......................................................................... 14/09/2020 £1.5m

Save As You Earn plan ................................................ 08/10/2020 £2.9m

Share scheme Grant date Fair value

(£m)

Co-investment plan (nil price options) ........................... 01/04/2019 £1.0m

Performance share plan (approved components –

executive options, unapproved components – nil price

options) .......................................................................... 12/03/2019 £0.2m

Share scheme Grant date Fair value

(£m)

Co-investment plan (nil price options).......................... . 29/03/2018 £0.2m

Performance share plan (approved components –

executive options, unapproved components – nil price

options) .......................................................................... 13/03/2018 £0.2m

Save As You Earn plan ................................................. 26/09/2018 £6.4m

The Group charged £1.7m (2019: £2.0m, 2018: £1.5m) to the income statement in

respect of equity-settled share-based payment transactions.

9.3 Share options

The number and weighted average exercise price of share options is as follows:

2020 2019 2018

Weighted

average

exercise

price

(p)

Number of

options

Number of

nil price

options

Weighted

average

exercise

price

(p)

Number of

options

Number of

nil price

options

Weighted

average

exercise

price

(p)

Number of

options

Number of

nil price

options

(In thousands of options)

Outstanding at

the beginning

of the period..... 791 640 105 1,068 930 87 1,306 833 87

Forfeited during

the period......... 1,053 (82) (3) 988 (210) (18) 1,302 (514) (1)

Exercised

during the

period 1,204 (84) (19) 917 (89) (46) 1,287 (26) (28)

Granted during

the period......... 907 634 263 134 9 82 919 637 29

Outstanding at

the end of the

period............... 932 1,108 346 791 630 105 1,068 930 87

Exercisable at

the end of the

period............... 1,530 33 2 1,232 24 3 1,519 54 57

114

Details of the options outstanding at 26 December 2020 are as follows:

2020 2019 2018

Executive

options SAYE

Nil price

options

Executive

options SAYE

Nil price

options

Executive

options SAYE

Nil price

options

Range of exercise

price (pence)... 743-1958 898-1616 — 473-1958 909-1616 — 473-1,335 909-1,616 —

Weighted average

exercise price

(pence) ........... 1,241 921 — 1415 999 — 1,287 1,064 185

Number of shares

(thousands)..... 38 1,070 346 20 620 105 19 911 87

Weighted

average expected

remaining life

(years) ............ 1.6 2.2 0.9 1.5 2.0 1.3 2.0 2.6 0.8

Weighted average

contractual

remaining life

(years) ............ 9.2 2.4 9.3 7.8 2.0 8.2 8.7 2.5 7.8

9.4 Impact of vesting and exercise

If all 0.04m outstanding executive options vest and then are exercised on the date of

vesting, or in the case of SAYE all 1.1m shares are acquired on the first possible day

1.14m of shares will be issued for a consideration of £10.3m in the periods below:

2021 2022 2023 2024 2025

No. Value No. Value No. Value No. Value No. Value

(m) (£m) (m) (£m) (m) (£m) (m) (£m) (m) (£m)

Options ............. 0.005 0.06 0.009 0.1 0.02 0.3 — — — —

SAYE ................ 0.033 0.4 0.3 3.2 0.013 0.2 0.6 5.2 — —

The table above shows theoretical amounts. For the Group to receive the cash indicated

in the periods shown, the following must occur:

● All performance conditions on executive share options must be fully met

● Options must be exercised on the day they vest (option holders generally have

a seven year period post vesting to exercise the option)

● The share price at the exercise date for SAYE options must exceed the exercise

price and every holder must exercise

● All option/SAYE holders must remain with the Group, or leave on good terms

If none of the requirements are met then the Group will receive no consideration.

10 Tax

2020 2019 2018

(£m)

Current tax

current period ............................................................... 7.3 12.2 6.0

prior period ................................................................... 0.1 (1.2) (0.4)

Total current tax............................................................ 7.4 11.0 5.6

Deferred tax

current period ............................................................... (2.0) (1.8) (0.9)

prior period adjustment – change in tax rate ................ (2.4) — 2.6

prioperiod adjustment – other ....................................... (0.4) 0.6 (0.1)

Total deferred tax ......................................................... (4.8) (1.2) 1.6

Total tax charge ............................................................ 2.6 9.8 7.2

115

The differences between the total tax charge and the amount calculated by applying the standard

rate of UK corporation tax of 19 per cent. (2019: 19 per cent., 2018: 19 per cent.) to the profit

before tax for the Group are as follows:

2020 2019 2018

(£m)

Profit before tax ............................................................ 28.9 22.7 22.1

Tax at the standard corporation tax rate....................... 5.5 4.3 4.2

Depreciation of non-qualifying property ........................ 0.6 0.7 0.6

Tax effect of expenses that are not deductible ............. 0.2 5.2 —

Prior period adjustment ................................................ (0.3) (0.6) (0.3)

Effect of share based payments ................................... — 0.1 0.3

Change in tax rate ........................................................ (2.4) (0.2) 2.6

Other differences .......................................................... (1.0) 0.3 (0.2)

Total tax charge ............................................................ 2.6 9.8 7.2

The effective tax rate for the period is 11.7 per cent. (2019: 43.4 per cent., 2018: 32.6 per cent.).

The 2020 and 2019 effective tax rates are affected by the impact of the change in tax rate on the

Group’s deferred tax asset and the loss on legal entity restructuring respectively. These events

and their tax effect do not provide a guide to the Group’s future tax charge.

11 Property, plant and equipment

Leasehold

improvements

Plant and

equipment Total

(£m)

Cost

At 31 December 2017.................................... 119.8 227.4 347.2

Additions ........................................................ 17.0 22.3 39.3

Disposals ....................................................... (6.5) (9.0) (15.5)

At 29 December 2018.................................... 130.3 240.7 371.0

Additions ........................................................ 12.7 6.9 19.6

Disposals ....................................................... (22.3) (9.1) (31.4)

At 28 December 2019.................................... 120.7 238.5 359.2

Additions ........................................................ 9.3 7.9 17.2

Disposals ....................................................... (3.6) (5.8) (9.4)

At 26 December 2020.................................... 126.4 240.6 367.0

Accumulated depreciation

At 31 December 2017.................................... 63.0 160.7 223.7

Charged in the period .................................... 6.6 20.2 26.8

Disposals ....................................................... (4.8) (8.5) (13.3)

At 29 December 2018.................................... 64.8 172.4 237.2

Charged in the period .................................... 5.4 18.4 23.8

Impairment..................................................... 1.9 — 1.9

Disposals ....................................................... (5.3) (7.4) (12.7)

At 28 December 2019.................................... 66.8 183.4 250.2

Charged in the period .................................... 6.4 14.9 21.3

Disposals ....................................................... (2.3) (5.3) (7.6)

At 26 December 2020.................................... 70.9 193.0 263.9

Net book value

At 29 December 2018.................................... 65.5 68.3 133.8

116

Leasehold

improvements

Plant and

equipment Total

(£m)

At 28 December 2019.................................... 53.9 55.1 109.0

At 26 December 2020.................................... 55.5 47.6 103.1

In preparation for the demerger, on 19 December 2019 assets of £15.5m held by the Group were

transferred to Travis Perkins plc at book value for consideration left outstanding as intercompany debt

as they did not form part of the continuing Wickes business.

12 Leases

The Group leases many assets including land and buildings and vehicles, the weighted average

remaining lease term is nine years (2019: nine years, 2018: nine years). Information about

leases for which the Group is a lessee is presented below.

Extension and termination options are included in a number of property and equipment leases

across the Group. These terms are used to maximise operational flexibility. The Group has applied

judgement to determine the lease term for some lease contracts in which it is a lessee that includes

renewal options and break clauses. The assessment of whether the Group is reasonably certain

to exercise such options impacts the lease term, which can significantly affect the amount of lease

liabilities and right-of-use assets recognised. In determining the lease term, management considers

all facts and circumstances that create an economic incentive to exercise an extension option, or

not exercise a termination option. Extension options (or periods after termination options) are only

included in the lease term if the lease is reasonably certain to be extended (or not terminated).

For property leases the following factors are normally the most relevant:

● The profitability of the leased store/warehouse and future plans for the business

● If there are significant penalties to terminate (or not extend), the Group is typically

reasonably certain to extend (or not terminate)

At 26 December 2020 the Group had no material leases committed to but not yet commenced. The

Group, which does not enter into turnover rent agreements and which has extension options solely

in respect of some vehicle leases, does not have material variable payments in its leases and does

not have significant exposure to extension options that are not reflected in the lease liability.

Right-of-use assets

Land and

buildings

Plant and

equipment Total

(£m)

Net carrying value

At 31 December 2017.................................................. 761.8 18.5 780.3

Additions ...................................................................... 75.3 1.0 76.3

Terminations ................................................................ (0.3) — (0.3)

Depreciation ................................................................ (74.8) (4.7) (79.5)

At 29 December 2018.................................................. 762.0 14.8 776.8

Additions ...................................................................... 40.4 6.2 46.6

Terminations ................................................................ (8.8) — (8.8)

Depreciation ................................................................ (73.9) (4.9) (78.8)

At 28 December 2019.................................................. 719.7 16.1 735.8

Additions ...................................................................... 9.7 0.3 10.0

Terminations ................................................................ (2.0) (0.2) (2.2)

Depreciation ................................................................ (72.5) (4.8) (77.3)

Impairments ................................................................. (12.1) — (12.1)

At 26 December 2020.................................................. 642.8 11.4 654.2

117

Lease liabilities

2020 2019 2018

(£m)

Maturity analysis – contractual undiscounted cash

ows

Less than one year ....................................................... 110.0 108.8 107.2

One to five years .......................................................... 404.5 410.6 399.1

More than five years ..................................................... 472.7 543.7 582.1

Total undiscounted lease liabilities ............................... 987.2 1,063.1 1,088.4

Lease liabilities included in the balance sheet

Current.......................................................................... 77.2 75.5 75.6

Non-current................................................................... 712.8 779.5 819.6

790.0 855.0 895.2

Amounts recognised in prot and loss

2020 2019 2018

(£m)

Depreciation expense on right-of-use assets ............... 77.3 78.8 79.5

Interest expense on lease liabilities .............................. 32.0 33.3 34.3

Gain on terminations .................................................... (1.9) (3.0) (0.1)

Impairment.................................................................... 12.1 — —

Expenses related to short-term leases ......................... 0.8 1.5 2.7

Expenses related to low-value assets .......................... 0.5 0.5 0.1

Income from subleasing right-of-use assets ................. (3.8) (3.7) (4.3)

The weighted average incremental borrowing rate applied to property leases is 4.0 per cent., and

for fleet leases was 1.8 per cent. Incremental borrowing rates for property leases are calculated

from Group debt costs modified for retail property yields across the UK. Incremental borrowing

rates for fleet leases are calculated from hire-purchase rates.

Sublet income

The Group leases space in some of its stores to third parties. Property rental income earned

during the period in respect of these properties is disclosed in the table above.

At the balance sheet date, the Group had contracts with lessees for the following undiscounted

future minimum lease payments:

2020 2019 2018

(£m)

Within one year............................................................. 3.8 3.3 4.1

One to five years .......................................................... 11.5 10.3 12.7

After five years.............................................................. 7.2 8.6 10.2

22.5 22.2 27.0

118

13 Goodwill and other intangible assets

Goodwill Software Total

(£m)

Cost

At 31 December 2017................................................... 8.4 11.4 19.8

Additions ....................................................................... — 4.5 4.5

At 29 December 2018................................................... 8.4 15.9 24.3

Additions ....................................................................... — 4.5 4.5

At 28 December 2019................................................... 8.4 20.4 28.8

Additions ....................................................................... — 2.9 2.9

At 26 December 2020................................................... 8.4 23.3 31.7

Amortisation and impairment

At 31 December 2017................................................... — 0.3 0.3

Charged in the period ................................................... — 1.8 1.8

Impairment.................................................................... — 0.7 0.7

At 29 December 2018................................................... — 2.8 2.8

Charged in the period ................................................... — 3.4 3.4

Impairment.................................................................... — 0.3 0.3

At 28 December 2019................................................... — 6.5 6.5

Charged in the period ................................................... — 4.5 4.5

At 26 December 2020................................................... — 11.0 11.0

Net Book Value

At 39 December 2018................................................... 8.4 13.1 21.5

At 28 December 2019................................................... 8.4 13.9 22.3

At 26 December 2020................................................... 8.4 12.3 20.7

Goodwill arising on acquisition represents the excess of the cost of acquisition over the share of

the aggregate fair value of identifiable net assets (including intangible assets) of a business or a

subsidiary at the date of acquisition. The goodwill held by the Group arose on the acquisition of

Focus DIY stores.

At the beginning and end of the financial periods the recoverable amount of goodwill with indefinite

useful lives was in excess of their book value. In the absence of a binding agreement to sell

the assets and active reference market on which fair value can be determined, the recoverable

amount of the goodwill was determined according to value in use. The Directors’ calculations

have shown that no impairments have occurred. Details of impairment tests are shown in note

32.

14 Inventories

2020 2019 2018

(£m)

Inventories .................................................................... 138.3 150.4 147.8

Inventories consist of goods for resale. Inventories are stated after provisions for impairment of

£4.6m (2019: £4.6m, 2018: £4.5m).

Inventory included in expenses in the period was £837.8m (2019: £791.1m, 2018: £729.9m).

15 Supplier income

Supplier income balances included within balance sheet are as follows:

2020 2019 2018

(£m)

Trade payables and other receivables ......................... 35.3 18.4 19.2

Inventories .................................................................... (7.2) (7.0) (7.0)

119

16 Trade and other receivables

2020 2019 2018

(£m)

Trade receivables ................................................... 43.7 32.9 28.8

Expected loss allowance ........................................ (0.6) (0.2) (0.3)

43.1 32.7 28.5

Amounts owed by Travis Perkins group

undertakings ........................................................... 186.1 282.7 684.6

Tax receivable ........................................................ 4.0 — —

Other receivables ................................................... 24.9 5.2 5.5

Prepayments .......................................................... 3.5 6.4 5.0

Trade and other receivables ................................... 261.6 327.0 723.6

Trade receivables represent amounts due from third parties providing finance to the Group’s

customers. These amounts are payable to the Group by the financing providers following the

provision of the financed goods or the completion of kitchen or bathroom installation. Cash

received from third parties providing finance to the Group’s customers is recognised in the Cash

Flow Statement as an operating cash flow.

The Group does not retain consumer credit risk in respect of these financed sales and does not

provide credit services directly to customers. The Directors consider that the only class of asset

containing significant credit risk is trade receivables.

Amounts due to Travis Perkins group undertakings relate to loans and trading balances. These

loans are interest-free and have no fixed date for repayment. The Directors expect these

balances to be settled in 2021 in advance of the Group’s demerger.

Expected credit loss assessment

The following table provides information about the exposure to credit risk and expected credit

losses for trade receivables as at 26 December 2020.

Gross

carrying

amount

Weighted

average

loss rate

Net loss

allowance

Credit

impaired

(£m)

Current (not past due) ............................ 41.5 1.7% (0.6) No

Days overdue:

1-30 ........................................................ 1.1 — — No

31-60 ...................................................... — — — No

61-90 ...................................................... — — — No

91-120 .................................................... — — — No

More than 120 ........................................ 0.1 — — No

43.7 (0.6)

The following table provides information about the exposure to credit risk and expected credit

losses for trade receivables as at 28 December 2019.

Gross

carrying

amount

Weighted

average

loss rate

Net loss

allowance

Credit

impaired

(£m)

Current (not past due) ......................... 32.2 0.7% (0.2) No

Days overdue:

1-30 ..................................................... 0.3 — — No

31-60 ................................................... 0.2 — — No

61-90 ................................................... — — — No

91-120 ................................................. — — — No

More than 120 ..................................... 0.2 — — No

120

32.9 (0.2)

The following table provides information about the exposure to credit risk and expected credit

losses for trade receivables as at 29 December 2018.

Gross

carrying

amount

Weighted

average

loss rate

Net loss

allowance

Credit

impaired

(£m)

Current (not past due) ............................ 28.0 1.3% (0.3) No

Days overdue:

1-30 ........................................................ 0.1 — — No

31-60 ...................................................... 0.1 — — No

61-90 ...................................................... 0.1 — — No

91-120 .................................................... 0.1 — — No

More than 120 ........................................ 0.4 — — No

28.8 (0.3)

Loss rates are assessed on a forward-looking basis, considering actual credit loss experience

over the past three years and whether there has been a significant increase in credit risk.

17 Trade and other payables

2020 2019 2018

(£m)

Trade payables ............................................................ 150.1 132.0 126.4

Amounts owed to Travis Perkins group

undertakings ................................................................. 1.0 13.9 458.9

Other taxation and social security ................................ 15.0 17.2 9.6

Other payables ............................................................. 16.7 11.9 7.9

Deferred income ........................................................... 36.1 26.7 28.7

Accruals ........................................................................ 59.0 38.3 29.8

Trade and other payables............................................. 277.9 240.0 661.3

The accruals balance includes £32.6m in respect of the Government’s Business Rates Relief

arrangement. The Travis Perkins Group announced in December 2020 that it would repay all

support it received in 2020 under these schemes.

The deferred income balance represents amounts received directly from customers for goods

and services where the Group has not fulfilled its performance obligations. Under the terms of

the relevant contracts, sales made where third parties have provided finance to the customer do

not give rise to deferred income.

18 Financial instruments

Carrying value of categories of nancial instruments

2020 2019 2018

(£m)

Financial assets

Trade and other receivables (including cash) at

amortised cost ............................................................ 78.5 63.3 50.2

Amounts owed by Travis Perkins group at amortised

cost ............................................................................... 186.1 282.7 684.6

264.6 346.0 734.8

Financial liabilities

Trade and other payables at amortised cost ................ 166.8 143.9 134.3

121

Amounts owed to Travis Perkins group at amortised

cost ............................................................................... 1.0 13.9 458.9

167.8 157.8 593.2

Trade and other receivables exclude prepayments of £3.5m (2019: £6.4m, 2018: £5.0m). Trade

and other payables excludes taxation, social security, accruals and deferred income amounts

totalling £110.1m (2019: £82.2m, 2018: £68.1m). The carrying amount of financial assets

recorded in the financial statements, which is net of impairment losses, represents the Group’s

maximum exposure to credit risk. Management consider the credit risk of the counterparty to

both trade and intercompany receivables to be low. Trade receivables represents amounts due

from reputable finance institutions. Intercompany receivables represents amounts due from

Travis Perkins PLC – a FTSE 250 business with a robus financial position. Prior to the issue of

this Historical Financial Information the intercompany receivables have been settled in full.

Liquidity analysis

The following table details the Group’s liquidity analysis for its other financial liabilities. When

the amount payable or receivable is not fixed, the amount disclosed has been determined by

reference to the projected interest and foreign currency rates as illustrated by the yield curves

existing at the reporting date.

0-1 year 1-2 years 2-5 years 5+ years Total

(£m)

2020:

Trade and other payables at

amortised cost .............................. 166.8 — — — 166.8

Amounts owed to Travis Perkins

group at amortised cost ................ 1.0 — — — 1.0

167.8 — — — 167.8

2019:

Trade and other payables at

amortised cost .............................. 143.9 — — — 143.9

Amounts owed to Travis Perkins

group at amortised cost ................ 13.9 — — — 13.9

157.8 — — — 157.8

2018:

Trade and other payables at

amortised cost .............................. 134.3 — — — 134.3

Amounts owed to Travis Perkins

group at amortised cost ................ 458.9 — — — 458.9

593.2 — — — 593.2

19 Provisions

Property Warranty Restructuring Insurance Total

(£m)

At 31 December 2017................... 2.6 — 0.3 7.9 10.8

Charge to income statement ........ 1.0 — 6.1 3.2 10.3

Utilisation ...................................... (0.9) — — (2.7) (3.6)

At 29 December 2018................... 2.7 — 6.4 8.4 17.5

Charge to income statement ........ 1.4 1.4 3.1 3.5 9.4

Utilisation ...................................... (0.4) — (5.6) (5.4) (11.4)

At 28 December 2019................... 3.7 1.4 3.9 6.5 15.5

Charge to income statement ........ 1.7 0.1 2.2 2.8 6.8

Utilisation ...................................... (3.0) — (6.1) (2.5) (11.6)

At 26 December 2020................... 2.4 1.5 — 6.8 10.7

122

Property-related provisions primarily arise following the decision to close a branch where there is

still an obligation to fulfil rate, insurance and dilapidation payments under the lease contract. The

provision will be revised in future periods should the lease be terminated early or a subtenant found.

The provision will be utilised over the life of the properties to which they relate, as shown below.

As set out in note 5, the Group recognised an adjusting charge relating to restructuring costs.

The restructuring provision relates to these costs. It excludes property-related provisions and

trade creditor amounts, which are presented separately.

The insurance provision relates to outstanding insurance claims where the final settlement is

uncertain.

The following table details the Group’s liquidity analysis of its provisions, based on the

undiscounted net cash outflows.

0-1 year 1-2 years 2-5 years 5+ Total

(£m)

2020:

Property ........................... 2.1 0.1 — 0.2 2.4

Warranty .......................... 1.5 — — — 1.5

Insurance ......................... 6.8 — — — 6.8

10.4 0.1 — 0.2 10.7

2019:

Property ........................... 1.5 2.0 0.1 0.1 3.7

Warranty .......................... 1.4 — — — 1.4

Restructuring ................... 3.9 — — — 3.9

Insurance ......................... 6.5 — — — 6.5

13.3 2.0 0.1 0.1 15.5

2018:

Property ........................... 1.4 0.5 0.6 0.2 2.7

Warranty .......................... — — —

Restructuring ................... 6.4 — — — 6.4

Insurance ......................... 8.4 — — — 8.4

16.2 0.5 0.6 0.2 17.5

20 Deferred tax

The following are the major deferred tax assets and liabilities recognised by the Group and

movements thereon during the current and prior reporting periods.

Asset/(liability)

At 29

December

2019

Recognised

in income

Recognised

in equity

At 26

December

2020

(£m)

2020:

Capital allowances...................... (1.3) 1.6 — 0.3

Share-based payments .............. 0.2 0.3 — 0.5

Leases ........................................ 20.3 2.9 — 23.2

Deferred tax ................................ 19.2 4.8 — 24.0

Asset/(liability)

At 30

December

2018

Recognised

in income

Recognised

in equity

At 28

December

2019

(£m)

2019:

Capital allowances...................... (2.3) 1.0 — (1.3)

Share-based payments .............. 0.2 — — 0.2

Leases ........................................ 20.1 0.2 — 20.3

Deferred tax ................................ 18.0 1.2 — 19.2

123

Asset/(liability)

At 31

December

2017

Recognised

in income

Recognised

in equity

At 29

December

2018

(£m)

2018:

Capital allowances..................... (2.6) 0.3 — (2.3)

Share-based payments ............. 0.3 (0.1) — 0.2

Leases ....................................... 21.9 (1.8) — 20.1

Deferred tax ............................... 19.6 (1.6) — 18.0

At 26 December 2020 the Group had unused capital losses of £38.7m available for offset against

future capital profits. No deferred tax asset has been recognised because it is improbable that

future taxable profits will be available against which the Group can utilise the losses.

21 Pension arrangements

All qualifying employees are able to contribute to the Travis Perkins Pension Plan, a defined

contribution pension scheme. The pension cost, which represents contributions payable by the

Group, amounted to £4.0m (2019: £3.6m, 2018: £3.0m).

22 Dividends

The components of the dividends paid that are recognised in equity are as follows:

2020 2019 2018

(£m)

Dividends paid ..................................................... 176.8 — 50.7

The dividends paid in 2020 were as a result of the reorganisation of the legal structure of

the Wickes entities in preparation for the demerger. The dividend paid was in the form of an

intercompany transfer, as a result no cash payment was made.

23 Investments

The Group’s subsidiary undertakings at 26 December 2020 are listed below:

Subsidiary

undertaking

Country of

incorporation Holding

Percentage

of shares

held

Nature of

business

Wickes Group Holdings

Limited

England and Wales Ordinary shares 100% Holding

company

Wickes Building

Supplies Limited

England and Wales Ordinary shares* 100% Home

improvement

retailer

Wickes Finance Limited England and Wales Ordinary shares* 100% Dormant

Wickes Holdings

Limited

England and Wales Ordinary shares* 100% Dormant

* indirect shareholding

The registered office of the above subsidiary undertakings is Vision House, 19 Colonial Way,

Watford, United Kingdom, WD24 4JL.

The following direct and indirect subsidiaries were disposed of on 19 December 2019. See note 24.

Subsidiary

undertaking

Country of

incorporation Holding

Percentage

of shares

held

Nature of

business

Wickes Retail Sourcing

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

HTG (1996) Limited England and Wales Ordinary shares 100% Dormant

subsidiary

124

Subsidiary

undertaking

Country of

incorporation Holding

Percentage

of shares

held

Nature of

business

Hunter Limited England and Wales Ordinary shares 100% Dormant

subsidiary

MD (1995) Group

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

HT (1995) Limited England and Wales Ordinary shares 100% Dormant

subsidiary

Hunter Estates Limited England and Wales Ordinary shares 100% Active

Wickes Group Trustees

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

Wickes Properties

Limited

England and Wales Ordinary shares 100% Active

Wickes Developments

Limited

England and Wales Ordinary shares 100% Active

MD (1995) Limited England and Wales Ordinary shares 100% Dormant

subsidiary

May & Hassell Limited England and Wales Ordinary shares 100% Dormant

subsidiary

Builders Mate Limited England and Wales Ordinary shares 100% Dormant

subsidiary

Christie & Vesey

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

Curran Sawmills Limited England and Wales Ordinary shares 100% Dormant

subsidiary

Downpatrick Timber

Slate & Coal Company

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

JT Stanton & Co

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

John Dove & Co Limited England and Wales Ordinary shares 100% Dormant

subsidiary

Kisling Limited England and Wales Ordinary shares 100% Dormant

subsidiary

Malden Timber (West)

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

Elecnation Limited

(formerly Malden

Timber Limited)

England and Wales Ordinary shares 100% Dormant

subsidiary

MD (Park Street)

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

MD-DOR3 Limited England and Wales Ordinary shares 100% Dormant

subsidiary

MD-DOR4 Limited England and Wales Ordinary shares 100% Dormant

subsidiary

Norman Mackenzie

(Building Supplies)

Limited

Scotland Ordinary shares 100% Dormant

subsidiary

R A Thomas (Joinery)

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

Deny Mott & Dickson

Limited

England and Wales Ordinary shares 100% In Liquidation

Harrison Trenery

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

M & H (North East)

Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

May & Hassell

(Cumbria) Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

125

Subsidiary

undertaking

Country of

incorporation Holding

Percentage

of shares

held

Nature of

business

May & Hassell

(Scotland) Limited

Scotland Ordinary shares 100% Dormant

subsidiary

Vaner Holdings Limited England and Wales Ordinary shares 100% Dormant

subsidiary

Chandler Forest

Products Limited

England and Wales Ordinary shares 100% Dormant

subsidiary

May & Hassell Saw

Mills (Liverpool) Limited

England and Wales Ordinary shares 100% In Liquidation

24 Disposals

In preparation for the demerger, on 19 December 2019 the investments held by the Group in the

dormant companies and property companies listed as disposed of in note 23 were transferred

to other entities in the Travis Perkins Group for consideration of £92.7m left outstanding as

intercompany debt. This consideration represented the book value of these companies’ assets

and liabilities in their individual company accounts, which differed from the net impact of these

companies’ assets and liabilities on the consolidated balance sheet of the Group. The disposal

of these companies resulted in the derecognition of £119.3m of intercompany receivables and a

£26.6m loss on disposal in these consolidated accounts. This has been disclosed as an adjusting

item (note 5). No assets or liabilities other than intercompany amounts were affected by these

disposals.

25 Related party transactions

The Group has related party relationships with its subsidiaries plus other Travis Perkins Group

companies and with its Directors. There have been no related party transactions with Directors

other than in respect of remuneration. Transactions with the Travis Perkins Group companies

relate to the purchase of goods and lease arrangements.

Purchases of £2.8m (2019: £3.1m, 2018: £4.0m) were made from other entities in the Travis

Perkins group, of which £1.0m (2019: £nil, 2018: £nil) remained due at the period-end. Rental

payments of £4.7m (2019: £9.8m, 2018: £10.5m) were made to other entities in the Travis

Perkins group, of which £0.2m (2019: £nil, 2018: £nil) remained due at the period-end, and

received rental income of £2.1m (2019: £1.3m, 2018: £1.5m), of which £nil (2019: £nil, 2018:

£nil) remained due at the period-end.

In preparation for the demerger, on 19 December 2019 assets of £15.5m held by the Group were

transferred to Travis Perkins plc at book value for consideration left outstanding as intercompany

debt as they did not form part of the continuing Wickes business.

26 Guarantees and security

At 29 December 2018, 28 December 2019 and 26 December 2020, Wickes Building Supplies

Limited, together with six other subsidiaries of the Travis Perkins plc group have guaranteed:

● The Travis Perkins Group’s £400 million UK syndicated bank facility (2019: £400 million,

2018: £550 million). At 31 December 2020 the facility was undrawn (2019: undrawn,

2018: undrawn).

● £550 million of UK guaranteed notes, issued by Travis Perkins plc.

● A £30 million overdraft facility available to the Travis Perkins Group. At the period-end

the overdraft facility was not utilised.

● Certain agreements entered into during the normal course of business by the Travis

Perkins plc group which at the period-end totalled £25.0m (2019: £25.0m, 2018: £25.0m)

On demerger Wickes Building Supplies Limited will cease to be a guarantor of the above debt

facilities. The Group negotiated a revolving credit facility with a syndicate of four banks in March

2021. The facility is for a total value of £80m and matures in March 2024. The facility is subject to

covenants relating to fixed charge cover and gearing which will be assessed on a quarterly basis.

126

27 Net debt

Movement in net debt

Cash

and cash

equivalents

Lease

liability Total

(£m)

At 31 December 2017.......................................... (6.6) 895.5 888.9

Cash flow ............................................................. (9.6) (109.5) (119.1)

Discount unwind on lease liability ........................ — 34.3 34.3

Lease additions ................................................... — 75.4 75.4

Lease terminations .............................................. — (0.5) (0.5)

At 29 December 2018.......................................... (16.2) 895.2 879.0

Cash flow ............................................................. (9.2) (108.5) (117.7)

Discount unwind on lease liability ........................ — 33.3 33.3

Lease additions ................................................... — 46.6 46.6

Lease terminations .............................................. — (11.6) (11.6)

At 28 December 2019.......................................... (25.4) 855.0 829.6

Cash flow ............................................................. 18.9 (107.8) (88.9)

Discount unwind on lease liability ........................ — 32.0 32.0

Lease additions ................................................... — 15.0 15.0

Lease terminations .............................................. — (4.2) (4.2)

At 26 December 2020.......................................... (6.5) 790.0 783.5

Balances

2020 2019 2018

(£m)

Cash and cash equivalents ................................. (6.5) (25.4) (16.2)

Non-current lease liabilities ................................. 712.8 779.5 819.6

Current lease liabilities ........................................ 77.2 75.5 75.6

Net debt ............................................................... 783.5 829.6 879.0

28 Capital commitments

2020 2019 2018

(£m)

Contracted for but not provided in the

accounts ............................................................. 13.9 8.7 0.1

29 Post balance sheet events

Travis Perkins plc announced on 2 March 2021 that the demerger process, which was put

on hold in 2020 as a result of the Covid-19 pandemic, had re-commenced. Accordingly it is

expected that the Company will be re-registered as a public company in 2021.

30 Capital and reserves

On 17 March 2020, the Company acquired Wickes Group Holdings Limited in exchange

for the issuance of 252,143,913 ordinary shares with a nominal value of £0.10 each. Group

reconstruction relief was applied and resulted in the recognition of share premium of £862.3m.

Following this, the Company had 252,143,923 allotted and fully paid ordinary shares of £0.10

each. There is a single class of ordinary shares. There are no restrictions on the distribution of

dividends and the repayment of capital.

On 18 March 2020, after the Capital Reorganisation, the Company undertook a capital reduction

and the entire balance on the share premium account of £862.3m was reduced and credited to

retained earnings.

127

31 Earnings per share

Basic and diluted earnings per share

2020 2019 2018

Earnings for the purposes of earnings

per share ............................................................. 26.3 12.9 14.9

Weighted average number of shares for the

purposes of basic earnings per share ................. 252,143,923 252,143,923 252,143,923

Dilutive effect of share options on potential

ordinary shares .................................................... — — —

Weighted average number of ordinary shares for

the purposes of diluted earnings per share ......... 252,143,923 252,143,923 252,143,923

Earnings per share .............................................. 10.4p 5.1p 5.9p

Diluted earnings per share .................................. 10.4p 5.1p 5.9P

32 Impairment

Measuring recoverable amounts

For impairment testing purposes, the Group has determined that each store is a separate

CGU. ‘Click and collect’ sales and an allocation of delivered online sales are included in store

cash flows. Each CGU is tested for impairment at the balance sheet date if any indicators of

impairment have been identified. The Covid-19 pandemic and related government restrictions

implemented on 23 March 2020 was considered an impairment trigger and as a result all stores

were tested for impairment as at 30 June 2020.

The Group’s goodwill balance, which arose in relation to the acquisition of certain stores formerly

operating under the Focus brand in 2007 and 2011, is allocated and monitored for impairment

testing purposes to groups of individual CGUs. The Group tests goodwill for impairment annually,

or more frequently if there are indications that an impairment may have occurred.

At the end of the 2020 financial year, the recoverable amount of goodwill was in excess of its

book value and therefore no impairment has been recognised. Then impairment review was not

sensitive to changes in the assumptions used in the value in use model.

The recoverable amount of each CGU is determined from value-in-use calculations. The key

assumptions for the value-in-use calculation are those regarding discount rates, long-term

growth rates, the growth rate of sales and gross margin and changes in the operating cost base.

Management estimates pre-tax discount rates that reflect current market assessments of the

time value of money and the risks specific to the Group that are not reflected in the cash flow

projections.

Key assumptions

The key financial assumptions used in the estimation of the recoverable amount are set out

below. The values assigned to the key assumptions represent management’s assessment of

current market conditions and future trends and have been based on historical data from both

external and internal sources.

2020 2019 2018

Pre-tax discount rate ........................................... 11.8% 9.3% 9.3%

Long-term growth rate ......................................... 1.5% 1.6% 1.5%

Management determined the values assigned to these financial assumptions as follows:

● The pre-tax discount rate is derived from the Group’s weighted average cost of capital,

which has been calculated using the capital asset pricing model, the inputs of which

include a UK risk-free rate, equity risk premium, Group size premium and a risk

adjustment (“beta”). Due to Covid-19 and its impact on debt and equity markets, the

Group’s estimated cost of capital was significantly higher during some periods of 2020

compared to December 2019.

128

● Long-term growth rate: This is the weighted average growth rate used to extrapolate

cash flows beyond the budget period. This represents the forecast GDP growth for the

final period considered in the Office for Budget Responsibility’s most recent Economic

and Fiscal Outlook report.

Cash flow forecasts are derived from the latest budget and forecast cash flows that form the

most recent Board-approved corporate plan updated for changes in current trading conditions

and adjusted for risks relevant to the cash flows. These updates have included the impact of

Covid-19 on sales and operating costs. The key operating assumptions used in the estimation of

future cash flows are sales and gross margin growth and operating margin changes for the store

budgets. These are derived from a variety of sources including historical store performance, local

competitor activity, consumer outlook reports, current and forecast housing market transaction

numbers, the household saving ratio and the impact of committed initiatives.

Cash flows beyond the corporate plan period (2025 and beyond) have been determined using

the long-term growth rate.

Impairment of goodwill

At the end of 2020 financial period the recoverable amount of goodwill was in excess of its

book value and therefore no impairment has been recognised. The impairment review was not

sensitive to changes in the assumptions used in the value-in-use model.

Impairment of right-of-use assets

Due to Covid-19 and its impact on the UK economy and the Group, an impairment review was

performed on the Group’s stores as at 30 June 2020. An impairment charge of £12.1m was recognised

in respect of five Wickes stores where the impacts of Covid-19 have made it more challenging to

implement the performance improvement plans necessary to generate cash flows that support the

stores’ value-in-use. The carrying amount of non-current assets attributable to these five stores after

this impairment is £21.9m. The impairment reviews were carried out using the assumptions and

methodology disclosed in this note. The remaining lease term was used as the remaining useful life.

The impairments have been recognised against the right-of-use assets associated with these stores,

which are the only material assets. The impairment did not relate to any CGU to which goodwill is

allocated. The Directors do not believe that there is a significant risk of material adjustment to these

impairments in 2021 as these impairments arose as a result of specific circumstances related to the

Covid-19 pandemic and its impact on the Group’s ability to improve the performance of these stores.

It is possible that a materially different impairment would have been identified in the impairment review

undertaken as at 30 June 2020 if the key assumptions were changed significantly in the value-in-use

calculations. The impact on the impairment charge recognised from reasonably possible changes in

assumption, all other assumptions remaining the same, are shown in the table below.

Assumption

Increase in

impairment charge

(£m)

5% fall in sales and 20bps reduction in gross margin ............................. 7.5

1% fall in sales and 10bps reduction in gross margin ............................. 2.6

3% increase in overhead costs................................................................ 2.7

Reasonably possible changes of the other key assumptions, including a 50 basis point increase

in the discount rate or reducing the long-term growth rate to 0 per cent., would not result in a

significant increase to the impairment charge, either individually or in combination.

Key estimates over assumptions used in value-in-use calculations

In testing for impairment, the Directors have made certain estimates concerning discount

rates, future cash flows and the future development of the business that are consistent with the

corporate plan. Whilst the Directors consider their assumptions to be realistic, should actual

results, including those for market volume changes, be different from expectations, for instance

due to a worsening of the UK economy, then it is possible that the value of non-current assets

included in the balance sheet could become impaired.

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PART X

UNAUDITED PRO FORMA STATEMENT OF NET ASSETS

Section A: Introduction

The unaudited pro forma statement of net assets set out in Section B of this Part X: “Unaudited Pro

Forma Statement of Net Assets” has been prepared to illustrate the impact of the Demerger on the net

assets of the Wickes Group as if the Demerger had taken place on 26 December 2020. The unaudited

pro forma statement of net assets has been prepared on the basis of, and should be read in conjunction

with, the notes set out below.

The unaudited pro forma statement of net assets of the Wickes Group is based on the net assets of

the Wickes Group as at 26 December 2020 and has been prepared on the basis that the Demerger

was effective as of 26 December 2020 and in a manner consistent with the accounting policies

adopted by the Company in preparing its audited consolidated financial statements for the year ended

26 December 2020.

Because of its nature, the unaudited pro forma statement of net assets addresses a hypothetical situation

and, therefore, does not represent the Wickes Group’s actual financial position or results. It may not,

therefore, give a true picture of the Wickes Group’s financial position or results nor is it indicative of

the results that may, or may not, be expected to be achieved in the future. The pro forma statement

of net assets has been prepared for illustrative purposes only and in accordance with Annex 20 of the

Prospectus Regulation.

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Section B – Unaudited Pro Forma Statement of Net Assets

Net assets of the

Wickes Group as at

26 December 2020

Adjustment for

cash settlement

of intercompany

balances by the

Travis Perkins

Group

Adjustment

for the

repayment

of rate relief

Adjustment for

transaction

costs in

connection

with the

Demerger

Adjustment

for settlement

of remaining

intercompany

balances with the

Travis Perkins

Group Pro Forma

Note 1

£’m

Note 2

£’m

Note 3

£’m

Note 4

£’m

Note 5

£’m £’m

Non-current assets

Goodwill 8.4 — — — — 8.4

Other intangible assets 12.3 — — — — 12.3

Property, plant and equipment 103.1 — — — — 103.1

Right-of-use assets 654.2 — — — — 654.2

Deferred tax asset 24.0 — — — — 24.0

Total non-current assets 802.0 — — — — 802.0

Current assets

Inventories 138.3 — — — — 138.3

Trade and other receivables 261.6 (156.1) — — (30.0) 75.5

Cash and cash equivalents 6.5 156.1 (32.6) (5.0) — 125.0

Total current assets 406.4 — (32.6) (5.0) (30.0) 338.8

Total assets 1,208.4 — (32.6) (5.0) (30.0) 1,140.8

Non-current liabilities

Lease liabilities 712.8 — — — — 712.8

Long-term provisions 0.3 — — — — 0.3

Total non-current liabilities 713.1 — — — — 713.1

Current liabilities

Lease liabilities 77.2 — — — — 77.2

Trade and other payables 277.9 — (32.6) — — 245.3

Short-term provisions 10.4 — — — — 10.4

Total current liabilities 365.5 — (32.6) — — 332.9

Total liabilities 1,078.6 — (32.6) — — 1,046.0

Net assets/(liabilities) 129.8 — — (5.0) (30.0) 94.8

Notes:

(1) The net assets of the Wickes Group as at 26 December 2020 have been extracted without material adjustment from Part IX: “Historical Financial

Information”.

(2) The adjustment in Note 2 reflects the £156.1 million cash settlement of certain intercompany balances owed by the Travis Perkins Group to the

Wickes Group as part of the pre-Demerger Reorganisation in order to provide that the Wickes Group had a cash balance of £130.0 million as at

26 December 2020. On the settlement of these intercompany balances immediately prior to the Demerger the Wickes Group will derecognise

an equivalent amount of the intercompany receivables due from the Travis Perkins Group.

(3) The adjustment in Note 3 reflects the voluntary repayment of £32.6 million of business rates relief claimed by the Wickes Group in April to

December 2020.

(4) The adjustment in Note 4 reflects transaction costs that are directly attributable to the Demerger that are being borne by the Wickes Group and

which had not been incurred at 26 December 2020. These comprise estimated professional adviser fees and exclude one-off costs arising from

the separation of the Wickes Business from the Travis Perkins Group which are estimated to be £5.0 million, as detailed in the section headed

“Current Trading, Listed Company Costs and IT Separation Costs” in Part VII: “Operating and Financial Review”.

(5) The adjustment in Note 5 reflects the settlement of the remaining intercompany balance by the Travis Perkins Group to the Wickes Group

achieved via the payment of dividends equal to a total amount of £30.0 million by the Wickes Group to the Travis Perkins Group, left outstanding

as an intercompany balance and offset against the remaining equivalent intercompany balances owed by the Travis Perkins Group.

(6) Each of the adjustments in Notes 2, 3, 4 and 5 are non-recurring items.

No adjustment has been made to reflect any other change in the Wickes Group’s financial position in

this period since 26 December 2020.

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Section C – Accountant’s Report on Pro Forma Financial Information

KPMG LLP Tel +44 (0) 20 7311 1000

Transaction Services Fax +44 (0) 20 7311 3311

15 Canada Square

London E14 5GL

United Kingdom

The Directors

Wickes Group plc

Vision House

19 Colonial Way

Watford

United Kingdom

WD24 4JL

24 March 2021

Ladies and Gentlemen

Wickes Group plc

We report on the pro forma financial information (the ‘Pro forma financial information’) set out in Part X of

the prospectus dated 24 March 2021. This report is required by Section 3 of Annex 20 of the UK version

of Commission Delegated Regulation (EU) 2019/980 (the “PR Regulation”) and is given for the purpose

of complying with that Section and for no other purpose.

Opinion

In our opinion:

● the Pro forma financial information has been properly compiled on the basis stated; and

● such basis is consistent with the accounting policies of Wickes Group plc.

Responsibilities

It is the responsibility of the directors of Wickes Group plc to prepare the Pro forma financial information

in accordance with Annex 20 of the PR Regulation.

It is our responsibility to form an opinion, as required by Section 3 of Annex 20 of the PR Regulation, as

to the proper compilation of the Pro forma financial information and to report that opinion to you.

In providing this opinion we are not updating or refreshing any reports or opinions previously made by

us on any financial information used in the compilation of the Pro forma financial information, nor do we

accept responsibility for such reports or opinions beyond that owed to those to whom those reports or

opinions were addressed by us at the dates of their issue.

Save for any responsibility arising under Prospectus Regulation Rule 5.3.2R (2)(f) to any person as and

to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility

and will not accept any liability to any other person for any loss suffered by any such other person as a

result of, arising out of, or in connection with this report or our statement, required by and given solely

for the purposes of complying with item 1.3 of Annex 1 of the PR Regulation, consenting to its inclusion

in the prospectus.

Basis of Preparation

The pro forma financial information has been prepared on the basis described in Section A of Part X,

for illustrative purposes only, to provide information about how the proposed demerger of Wickes Group

plc and its respective subsidiary undertakings (the “Group”) from Travis Perkins plc and its respective

subsidiary undertakings (the “Travis Perkins Group”) might have affected the financial information

presented on the basis of the accounting policies adopted by Wickes Group plc in preparing the financial

statements for the year ended 26 December 2020.

132

Basis of Opinion

We conducted our work in accordance with the Standards for Investment Reporting issued by the

Financial Reporting Council (the “FRC”) in the United Kingdom. We are independent, and have fulfilled

our other ethical responsibilities, in accordance with the relevant ethical requirements of the FRC’s

Ethical Standard as applied to Investment Circular Reporting Engagements.

The work that we performed for the purpose of making this report, which involved no independent

examination of any of the underlying financial information, consisted primarily of comparing the

unadjusted financial information with the source documents, considering the evidence supporting the

adjustments and discussing the Pro forma financial information with the directors of Wickes Group plc.

We planned and performed our work so as to obtain the information and explanations we considered

necessary in order to provide us with reasonable assurance that the Pro forma financial information has

been properly compiled on the basis stated and that such basis is consistent with the accounting policies

of Wickes Group plc.

Our work has not been carried out in accordance with auditing or other standards and practices generally

accepted in the United States of America or other jurisdictions and accordingly should not be relied upon

as if it had been carried out in accordance with those standards and practices.

Declaration

For the purposes of Prospectus Regulation Rule 5.3.2R (2)(f) we are responsible for this report as part

of the prospectus and declare that, to the best of our knowledge, the information contained in this report

is in accordance with the facts and that the report makes no omission likely to affect its import. This

declaration is included in the prospectus in compliance with Item 1.2 of Annex 1 of the PR Regulation.

Yours faithfully

KPMG LLP

133

PART XI

TAXATION

General

The following is a summary of certain United Kingdom and United States tax considerations

relating to an investment in the Wickes Shares.

United Kingdom Taxation

The comments set out below are based on current United Kingdom tax law as applied in England and

Wales and HM Revenue & Customs published practice (which may not be binding on HM Revenue

& Customs), in each case as at the Latest Practicable Date before the date of this Prospectus, and

both of which are subject to change, possibly with retrospective effect. They are intended as a general

guide and apply only to Wickes Shareholders resident and, in the case of an individual, domiciled

for tax purposes in the United Kingdom and to whom “split year” treatment does not apply (except

insofar as express reference is made to the treatment of non-United Kingdom residents), who hold

their Wickes Shares as an investment and who are, or are treated as, the absolute beneficial owners

thereof. The discussion does not address all possible tax consequences relating to an investment in

the Wickes Shares. Certain categories of Wickes Shareholders, including those carrying on certain

financial activities, those subject to specific tax regimes or benefiting from certain reliefs or exemptions,

those connected with the Company or Group and those for whom the Wickes Shares are employment-

related securities may be subject to special rules and this summary does not apply to such Wickes

Shareholders.

Wickes Shareholders or prospective Wickes Shareholders who are in any doubt about their tax position,

or who are resident or otherwise subject to taxation in a jurisdiction outside the United Kingdom, should

consult their own professional advisers immediately. In particular, Wickes Shareholders should be aware

that the tax legislation of any jurisdiction where a Wickes Shareholder is resident or otherwise subject to

taxation (as well as the jurisdiction discussed below) may have an impact on the tax consequences of an

investment in the Wickes Shares including in respect of any income received from the Wickes Shares.

Taxation of Dividends

The Company will not be required to withhold amounts on account of United Kingdom tax at source

when paying a dividend.

Individual Wickes Shareholders

Dividends received by a United Kingdom resident individual Wickes Shareholder from the Company will

generally be subject to tax as dividend income.

The first £2,000 (the “Dividend Allowance”) of the total amount of dividend income (including any

dividends received from the Company) received by such a Wickes Shareholder in a tax year will be

taxed at a nil rate (and so no income tax will be payable in respect of such amounts).

If a United Kingdom resident individual Wickes Shareholder’s total dividend income for a tax year

exceeds the Dividend Allowance (such excess being referred to as the “Taxable Excess”), then the

Taxable Excess will be subject to tax depending on the tax rate band or bands it falls within. The relevant

tax rate band is determined by reference to the Wickes Shareholder’s total income charged to income

tax (including the dividend income charged at a nil rate by virtue of the Dividend Allowance) less relevant

reliefs and allowances (including the Wickes Shareholder’s personal allowance). The Taxable Excess

is, in effect, treated as the top slice of any resulting taxable income and:

(a) to the extent that the Taxable Excess falls below the basic rate limit, the Wickes Shareholder will

be subject to tax on it at the dividend basic rate of 7.5 per cent.;

(b) to the extent that the Taxable Excess falls above the basic rate limit but below the higher rate limit,

the Wickes Shareholder will be subject to tax on it at the dividend upper rate of 32.5 per cent.;

and

134

will be subject to tax on it at the dividend additional rate of 38.1 per cent.

Corporate Wickes Shareholders

Wickes Shareholders who are within the charge to corporation tax will be subject to corporation tax on

dividends paid by the Company, unless (subject to special rules for such Wickes Shareholders that are

small companies) the dividends fall within an exempt class and certain other conditions are met. Each

such Wickes Shareholder’s position will depend on its own individual circumstances, although it would

normally be expected that the dividends paid by the Company would fall within an exempt class.

Non-UK Wickes Shareholders

A Wickes Shareholder resident or otherwise subject to tax outside the United Kingdom (whether an

individual or a body corporate) may be subject to foreign taxation on dividend income under local law.

Wickes Shareholders to whom this may apply should obtain their own tax advice concerning tax liabilities

on dividends received from the Company.

Taxation of Capital Gains

Wickes Shareholders who are resident in the United Kingdom, or, in the case of individuals, who

cease to be resident in the United Kingdom for a period of five years or less may, depending on their

circumstances (including the availability of exemptions or reliefs), be liable to United Kingdom taxation

on chargeable gains in respect of gains arising from a sale or other disposal of their Wickes Shares.

Inheritance Tax

Wickes Shares will be assets situated in the United Kingdom for the purposes of United Kingdom

inheritance tax. A gift of such assets by, or the death of, an individual holder of such assets may (subject

to certain exemptions and reliefs) give rise to a liability to United Kingdom inheritance tax, even if the

holder is neither domiciled in the United Kingdom nor deemed to be domiciled there (under certain

rules relating to long residence or previous domicile). Generally, United Kingdom inheritance tax is

not chargeable on gifts to individuals if the transfer is made more than seven complete years prior to

the death of the donor. For inheritance tax purposes, a transfer of assets at less than full market value

may be treated as a gift and particular rules apply to gifts where the donor reserves or retains some

benefit. Special rules also apply to close companies and to trustees of settlements who hold Wickes

Shares bringing them within the charge to inheritance tax. Holders of Wickes Shares should consult

an appropriate professional adviser if they make a gift of any kind or intend to hold any Wickes Shares

through such a company or trust arrangement. They should also seek professional advice in a situation

where there is potential for a double charge to United Kingdom inheritance tax and an equivalent tax in

another country or if they are in any doubt about their United Kingdom inheritance tax position.

Stamp Duty and Stamp Duty Reserve Tax (“SDRT”)

The statements in this section are intended as a general guide to the current United Kingdom stamp

duty and SDRT position. Special rules apply to certain transactions such as transfers of shares to a

company connected with the transferor and those rules are not described below. Investors should also

note that certain categories of person are not liable to stamp duty or SDRT and others may be liable at

a higher rate or may, although not primarily liable for tax, be required to notify and account for SDRT

under the Stamp Duty Reserve Tax Regulations 1986.

Issue

No stamp duty or SDRT will arise on the issue of Wickes Shares in registered form by the Company. In

the case of Wickes Shares issued to a clearance service or depositary receipt system, this is as a result

of case law which has been accepted by HM Revenue & Customs.

Transfers outside of Depositary Receipt Systems and Clearance Services

An agreement to transfer Wickes Shares will normally give rise to a charge to SDRT at the rate of 0.5 per

cent. of the amount or value of the consideration payable for the transfer. SDRT is, in general, payable

by the purchaser.

135

Transfers of Wickes Shares will generally be subject to stamp duty at the rate of 0.5 per cent. of the

consideration given for the transfer (rounded up to the next £5). The purchaser normally pays the

stamp duty.

If a duly stamped transfer completing an agreement to transfer is produced within six years of the date

on which the agreement is made (or, if the agreement is conditional, the date on which the agreement

becomes unconditional), any SDRT already paid is generally repayable, normally with interest, and any

SDRT charge yet to be paid is cancelled.

Transfers within CREST

Paperless transfers of Wickes Shares within the CREST system are generally liable to SDRT, rather

than stamp duty, at the rate of 0.5 per cent. of the amount or value of the consideration payable.

CREST is obliged to collect SDRT on relevant transactions settled within the CREST system. Deposits

of Wickes Shares into CREST will not generally be subject to SDRT or stamp duty, unless the transfer

into CREST is itself for consideration.

Transfers to and within Depositary Receipt Systems and Clearance Services

Where Wickes Shares are transferred: (a) to, or to a nominee or an agent for, a person whose business

is or includes the provision of clearance services; or (b) to, or to a nominee or an agent for, a person

whose business is or includes issuing depositary receipts, stamp duty or SDRT may be payable at the

higher rate of 1.5 per cent. of the amount or value of the consideration given or, in certain circumstances,

the value of the Wickes Shares.

Except in relation to clearance services that have made an election under section 97A(1) of the Finance

Act 1986 (to which the special rules outlined below apply), no stamp duty or SDRT is payable in respect

of paperless transfers within clearance services or depositary receipt systems.

There is an exception from the 1.5 per cent. charge on the transfer to, or to a nominee or agent for,

a clearance service where the clearance service has made and maintained an election under section

97A(1) of the Finance Act 1986, which has been approved by HM Revenue & Customs. In these

circumstances, SDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable

for the transfer will arise on any transfer of Wickes Shares into such an account and on subsequent

agreements to transfer such Wickes Shares within such account.

Any liability for stamp duty or SDRT in respect of a transfer into a clearance service or depositary receipt

system, or in respect of a transfer within such a service, which does arise will strictly be accountable by

the clearance service or depositary receipt system operator or their nominee, as the case may be, but

will, in practice, be payable by the participants in the clearance service or depositary receipt system.

US taxation

The following is a summary of certain US federal income tax consequences of the ownership and

disposition of Wickes Shares by US Holders (as defined below). This summary deals only with initial

holders of Wickes Shares that are US Holders that received Wickes Shares pursuant to the Demerger,

that use the US dollar as their functional currency and that will hold their Wickes Shares as capital

assets. The following discussion is a general summary; it is not a substitute for tax advice.

This summary does not address tax considerations applicable to US Holders subject to special rules,

such as banks or other financial institutions, insurance companies, tax exempt entities, dealers, traders

in securities that elect to mark to market, regulated investment companies, real estate investment

trusts, US expatriates, persons that that will own immediately after the Demerger directly, indirectly

or constructively five per cent. or more by vote or value of Wickes’ equity interests, or persons holding

their Wickes Shares as part of a hedge, straddle, conversion, constructive sale or other integrated

transaction. It also does not address US federal taxes other than the income tax (such as the alternative

minimum tax and estate or gift taxes) or US state and local, or non-US tax considerations.

As used in this summary, “US Holder” means a beneficial owner of Wickes Shares that is, for US

federal income tax purposes: (i) a citizen or individual resident of the United States; (ii) a corporation

or entity treated as such created or organised under the laws of the United States, any State thereof or

the District of Columbia; (iii) a trust subject to the control of a US person and the primary supervision of

a US court; or (iv) an estate the income of which is subject to US federal income tax without regard to

its source.

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The tax consequences to a partner in a partnership (or other entity treated as a partnership for US

federal income tax purposes) receiving, holding or disposing of Wickes Shares generally will depend

on the status of the partner and the activities of the partnership. Partnerships holding Wickes Shares

should consult their own tax advisers about the US federal income tax consequences to their partners

of owning and disposing of Wickes Shares.

The Company believes that it will not be a passive foreign investment company (“PFIC”) for the current

year, and this discussion assumes that the Company will not be a PFIC in the current year or future years.

This summary is based on the tax laws of the United States, including the Internal Revenue Code

of 1986, as amended, its legislative history, existing and proposed regulations thereunder, published

rulings and court decisions, as well as on the income tax treaty between the United States and the

United Kingdom (the “US-UK Treaty”), all as of the date hereof and all of which are subject to change

at any time, possibly with retroactive effect.

THE SUMMARY OF US FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR

GENERAL INFORMATION ONLY. ALL US HOLDERS SHOULD CONSULT THEIR TAX ADVISERS

AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING AND DISPOSING OF THE

WICKES SHARES, INCLUDING THEIR ELIGIBILITY FOR THE BENEFITS OF THE US-UK TREATY,

THE APPLICABILITY AND EFFECT OF STATE, LOCAL, NON-US AND OTHER TAX LAWS, AND

POSSIBLE CHANGES IN TAX LAW.

Dividends

The gross amount of any distribution of cash or property with respect to the Wickes Shares (other than

certain distributions, if any, of the Wickes Shares distributed pro rata to all shareholders) generally will

be included in a US Holder’s gross income as ordinary income to the extent of the Wickes Group’s

current and accumulated earnings and profits as determined under US federal income tax laws. The

amount of such distribution in excess of current and accumulated earnings and profits will be treated as

a non-taxable return of capital to the extent of US Holder’s basis in the Wickes Shares and thereafter

as capital gain. However, the Wickes Group does not expect to maintain calculations of its earnings

and profits for US federal income tax purposes. Therefore, a US Holder should expect that any such

distribution will generally be treated as a dividend from foreign sources when received. The dividends

will not be eligible for the dividends-received deduction generally available to US corporations.

Dividends received by eligible non-corporate US Holders should be taxed at the preferential rates

applicable to qualified dividend income, provided that Wickes qualifies for the benefits of the US-UK

Treaty, which Wickes believes it will, and such dividend is paid on the Wickes Shares that have been

held by such US holder for at least 61 days during the 121-day period beginning 60 days before the

ex-dividend date.

Dividends received by certain non-corporate US Holders will generally be includible in net investment

income for purposes of the Medicare contribution tax on net investment income.

Sale or other taxable disposition

A US Holder generally will recognise capital gain or loss on the sale or other taxable disposition of

Wickes Shares equal to the difference between the US dollar value of the amount realised and the US

Holder’s tax basis in the Wickes Shares. Any gain or loss generally will be treated as arising from US

sources. The gain or loss will be long term capital gain or loss if the US Holder’s holding period exceeds

one year. Long term capital gains of non-corporate US Holders are subject to preferential tax rates.

Deductions for capital loss are subject to significant limitations.

Capital gains from the sale or other taxable disposition of the Wickes Shares received by certain non-

corporate US Holders will generally be includible in net investment income for purposes of the Medicare

contribution tax.

Backup withholding and information reporting

Dividends on Wickes Shares and proceeds from the sale or other taxable disposition of Wickes Shares

may be reported to the IRS unless the holder establishes a basis for exemption. Backup withholding tax

may apply to amounts subject to reporting. Any amount withheld may be credited against the holder’s US

federal income tax liability subject to certain rules and limitations. US Holders should consult with their

own tax advisers regarding the application of the US information reporting and backup withholding rules.

137

Certain non-corporate US Holders are required to report information with respect to investments in

Wickes Shares not held through an account with a domestic financial institution. US Holders that fail to

report required information could become subject to substantial penalties. US Holders are encouraged

to consult with their own tax advisers about these and any other reporting obligations arising from their

ownership of Wickes Shares.

138

PART XII

ADDITIONAL INFORMATION

1 The Demerger

On 31 July 2019, the Travis Perkins Board announced its intention to separate the Wickes Group

from the Travis Perkins Group and on 20 March 2020, the Travis Perkins Board announced that

it would pause the Demerger process as a result of the level of uncertainty surrounding the

impact of COVID-19 on the Travis Perkins Group’s end markets and the extreme volatility in

global and UK equity markets.

On 2 March 2021, the Travis Perkins Board announced that, as the Wickes digitally-led model

has proved highly effective during the pandemic and the business is in great shape to embark

on its journey as a standalone entity, the process to demerge Wickes has recommenced.

It is proposed that the separation of the Wickes Group be effected by way of a demerger of the

Wickes Group from the Travis Perkins Group by Travis Perkins making an interim in-specie

distribution of Wickes Shares to Travis Perkins Shareholders immediately prior to Admission

(the “Demerger Dividend”).

As at the Latest Practicable Date, the entire issued share capital of the Company was held by

Travis Perkins. Immediately following the Demerger, the Wickes Shareholders will be the same

as the Travis Perkins Shareholders as at the Record Time. The Demerger is conditional on,

among other things, the approval of the Demerger Resolution by Travis Perkins Shareholders at

the General Meeting.

Assuming the Demerger proceeds, Qualifying Travis Perkins Shareholders (being Travis Perkins

Shareholders who are registered on the Travis Perkins Share Register at the Record Time) will

receive:

For each Existing Travis Perkins Share held at the Record Time

1 Wickes Share

Detailed information about how the Demerger will be effected, including in relation to the

Demerger Dividend and Travis Perkins Share Consolidation, is contained in the Travis Perkins

Circular, and those considering the Demerger should rely only on the information in the Travis

Perkins Circular.

2 Responsibility statement

The Company and the Directors, whose names are set out in Part V: “Directors, Senior

Management and Corporate Governance”, accept responsibility for the information contained in

this Prospectus. To the best of the knowledge of the Company and the Directors, the information

contained in this Prospectus is in accordance with the facts and does not omit anything likely to

affect the import of such information.

3 Incorporation and activity of the Company

3.1 The Company was incorporated and registered in England and Wales on 4 September

2019 and re-registered as a public company limited by shares on 17 March 2021 under

the Companies Act with the name Wickes Group plc and with the registered number

12189061. The Company’s legal entity identifier is 213800IEX9ZXJRAOL133.

3.2 The Company’s registered office and principal place of business is at Vision House, 19

Colonial Way, Watford WD24 4JL, United Kingdom and its telephone number is +44

(0)19 2365 6600.

3.3 The Company’s customer website is www.wickes.co.uk and its corporate website is www.

wickesplc.co.uk. Information contained on the Company’s website or the contents of any

website accessible from hyperlinks on the Company’s website are not incorporated into

and do not form part of this Prospectus.

3.4 The principal laws and legislation under which the Company operates and the Wickes

Shares have been created are the Companies Act and regulations made thereunder.

139

3.5 The principal activity of the Company is to act as the ultimate holding company of the

Wickes Group. Save for the engagement of professional advisers, the Company has not

traded since its incorporation.

4 Share capital of the Company

4.1 Issued share capital of the Company on Admission

On Admission, the number of Wickes Shares in issue will be equal to the number of

Travis Perkins Shares in issue at the Record Time. Wickes Shares have a nominal value

of £0.10 each and will be fully paid.

As at the Latest Practicable Date, there were 252,143,923 Travis Perkins Shares in issue

and 252,143,923 Wickes Shares in issue. Further Travis Perkins Shares may be issued

by Travis Perkins to satisfy entitlements under the Travis Perkins Share Plans, although

it is not currently anticipated that any further Travis Perkins Shares will be issued. Any

additional Travis Perkins Shares will, if issued, be issued prior to the Record Time and a

corresponding number of Wickes Shares will also be issued prior to the Record Time.

On Admission, the Company will not hold any Wickes Shares in treasury.

4.2 History of Wickes’ share capital and Reorganisation

On incorporation, the Company’s share capital consisted of 10 ordinary shares with a

nominal value of £0.10 each which were issued, fully paid, to Travis Perkins.

The Wickes Group completed a reorganisation in 2020 of its corporate structure to

bring all of the companies that comprise the Wickes Group under the ownership of the

Company and ensure that the number of Wickes Shares in issue will be equal to the

number of Travis Perkins Shares in issue at the Record Time (the “Reorganisation”).

Following completion of the Reorganisation, the Company owns 100 per cent. of the

entire issued share capital (either directly or through its subsidiaries) of Wickes Group

Holdings Limited, Wickes Building Supplies, Wickes Finance Limited and Wickes Holdings

Limited. A summary of the key Reorganisation steps that relate to the establishment of

the Wickes Group and the share capital of the Company is set out below.

4.2.1 On 17 March 2020, Travis Perkins contributed 100 per cent. of the issued share

capital in Wickes Finance Limited (which holds 100 per cent. of the issued share

capital in Wickes Holdings Limited) and Wickes Building Supplies to Wickes

Group Holdings Limited by way of a share-for-share exchange, issuing one

£0.10 share at a premium as consideration.

4.2.2 On 17 March 2020, Travis Perkins contributed 100 per cent. of the issued share

capital in Wickes Group Holdings Limited to the Company by way of a share-for-

share exchange. The Company issued 252,143,913 ordinary shares of £0.10

each, which reflects the total number of Travis Perkins Shares expected to be in

issue at the Record Time minus the 10 ordinary shares of £0.10 issued by the

Company on incorporation, resulting in there being an equal number of Wickes

Shares and Travis Perkins Shares in issue.

4.2.3 On 18 March 2020, the Company undertook a reduction of capital through the

directors’ solvency statement process by extinguishing all share premium in

order to create distributable reserves.

5 Information about the Wickes Shares

5.1 Description and type of securities

The Wickes Shares are fully paid ordinary shares with a nominal value of £0.10 each. The

Company has, and, on Admission, will have, one class of ordinary shares, comprising

the entire issued share capital of the Company.

The currency of the Wickes Shares is pounds sterling.

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5.2 Rights attached to the Wickes Shares

The rights attaching to the Wickes Shares will be uniform in all respects and they will form

a single class for all purposes, including with respect to voting and for all dividends and

other distributions thereafter declared, made or paid on the Company’s share capital.

Subject to the provisions of the Companies Act, any equity securities issued by the

Company for cash must first be offered to the Wickes Shareholders in proportion to

their holdings of Wickes Shares. The Companies Act and Listing Rules allow for the

disapplication of pre-emption rights which may be waived by a special resolution of

the Wickes Shareholders, whether generally or specifically, for a maximum period not

exceeding five years. The Company intends to seek approval prior to Admission from

Travis Perkins, its sole shareholder, for resolutions of the Company disapplying pre-

emption rights to this effect as summarised at section 6 of this Part XII.

On a show of hands, every Wickes Shareholder who is present in person shall have one

vote and, on a poll, every Wickes Shareholder present in person or by proxy shall have

one vote per Wickes Share.

Except as provided by the rights and restrictions attached to any class of shares, Wickes

Shareholders will, under general law, be entitled to participate in any surplus assets in a

winding-up in proportion to their shareholdings.

The Wickes Shares do not carry any rights as respects to capital to participate in a

distribution (including on a winding-up) other than those that exist as a matter of law.

5.3 Conrmations

At the date of the Prospectus, and save as otherwise disclosed in this Part XII: “Additional

Information”:

5.3.1 no share or loan capital of the Company has, since the incorporation of the

Company, been issued or agreed to be issued, or is now proposed to be issued,

fully or partly paid, either for cash or for a consideration other than cash, to any

person;

5.3.2 no commission, discounts, brokerages or other special terms have been granted

by the Company in connection with the issue or sale of any share or loan capital;

and

5.3.3 no share or loan capital of the Company is under option or has been agreed,

conditionally or unconditionally, to be put under option.

5.4 Listing

Application will be made to the FCA and the London Stock Exchange for the Wickes

Shares to be admitted to the premium listing segment of the Official List and to trading

on the London Stock Exchange’s market for listed securities, respectively. As at the date

of this document, no Wickes Shares are admitted to trading on a regulated market.

If the Demerger proceeds as currently envisaged, it is expected that Admission will

become effective, and that dealings in the Wickes Shares will commence on the London

Stock Exchange, at 8.00 a.m. (London time) on 28 April 2021.

The Wickes Shares have not been marketed to, and are not available in whole or in part

for purchase by, the public in the United Kingdom or elsewhere in connection with the

introduction of the Wickes Shares to the premium listing segment of the Official List. No

application has been or is currently intended to be made for the Wickes Shares to be

admitted to listing elsewhere or dealt in on any other exchange. There is no prior trading

record for the Wickes Shares.

The Wickes Shares are in registered form and capable of being held in certificated or

uncertificated form. Application has been made to Euroclear for the Wickes Shares to

be enabled for dealings through CREST as a participating security. For Travis Perkins

Shareholders who held their Travis Perkins Shares in uncertificated form at the Record

Time, Wickes Shares to which the Travis Perkins Shareholder is entitled will be issued

141

in uncertificated form through CREST. For Travis Perkins Shareholders who held their

Travis Perkins Shares in certificated form at the Record Time, Wickes Shares to which

the Travis Perkins Shareholder is entitled will be issued in certificated form. Definitive

share certificates for the Wickes Shares are expected to be despatched on in the week

commencing 10 May 2021.

Pending the despatch of share certificates for Wickes Shares, transfers of Wickes

Shares will be certified against the register of members of the Company. Temporary

documents of title will not be issued in respect of the Wickes Shares.

None of Travis Perkins or Wickes or their respective agents shall be responsible for any

loss or delay in the transmission or delivery of any certificates sent in accordance with

this section 5.4, which shall be sent at the risk of the persons entitled thereto.

The International Securities Identification Number for the Wickes Shares is

GB00BL6C2002. The rights attaching to the Wickes Shares are set out in section 5.2 of

this Part XII.

5.5 Restrictions on free transferability

The Wickes Shares are freely transferable and there are no restrictions on transfer.

6 Authorisations relating to the share capital of the Company

On 23 March 2021, Travis Perkins, in its capacity as sole shareholder of the Company passed

the following resolutions relating to the share capital of the Company, each of which is subject

to and conditional upon Admission occurring.

6.1 In substitution for all existing authorities, the Directors be generally and are hereby

unconditionally authorised in accordance with section 551 of the Companies Act to

exercise all the powers of the Company to allot shares in the Company or grant rights to

subscribe for, or to convert any security into, shares in the Company:

6.1.1 up to an aggregate nominal amount of £8,404,797 (such amount to be reduced

by the aggregate nominal amount allotted or granted under section 6.1.2 below

of this resolution in excess of £8,404,797); and

6.1.2 comprising equity securities (as defined in section 560(1) of the Companies Act)

up to an aggregate nominal amount of £16,809,595 (such amount to be reduced

by the aggregate nominal amount allotted or granted under section 6.1.1 above

of this resolution) in connection with an offer by way of a rights issue:

(a) to ordinary shareholders in proportion (as nearly as may be practicable)

to their existing holdings; and

(b) to holders of other equity securities as required by the rights of those

securities, and so that the Directors may impose any limits or restrictions

and make any arrangements which they consider necessary or

appropriate to deal with treasury shares, fractional entitlements, record

dates, legal, regulatory or practical problems in, or under the laws of, any

territory or any other matter,

such authorities to apply until the end of the Company’s next annual general

meeting after this resolution is passed (or, if earlier, until the close of business

23 June 2022) but, in each case, so that the Company may make offers and

enter into agreements before the authority expires which would, or might, require

shares to be allotted or rights to subscribe for or convert any security into shares

to be granted after the authority expires and the Directors may allot shares or

grant such rights under any such offer or agreement as if the authority had not

expired.

6.2 If the resolution referred to at section 6.1 above is passed, the Board be authorised

pursuant to sections 570 and 573 of the Companies Act to allot equity securities (as

defined in the Companies Act) for cash under the authority given by that resolution and

to sell shares held by the Company as treasury shares for cash as if section 561 of the

Companies Act did not apply to any such allotment or sale, such authority being limited:

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6.2.1 to the allotment of equity securities or sale of treasury shares in connection with

an offer of securities (but in the case of the authority granted under section 6.1.2

of resolution 6.1 above, by way of rights issue only) in favour of the holders of

shares on the register of members at such record date as the Directors may

determine where the equity securities respectively attributable to the interests

of the shareholders are proportionate (as nearly as may be practicable) to the

respective numbers of shares held by them on any such record date, and so that

the Directors may impose any limits or restrictions and make any arrangements

which they consider necessary or appropriate to deal with treasury shares,

fractional entitlements, record dates, legal, regulatory or practical problems in,

or under the laws of, any territory or any other matter; and

6.2.2 to the allotment of equity securities or sale of treasury shares (otherwise than

under section 6.2.1 above) up to a nominal amount of £1,260,720,

such authority to expire at the end of the next annual general meeting of the Company

(or, if earlier, at the close of business on 23 June 2022) but, in each case, so that prior

to its expiry the Company may make offers, and enter into agreements, which would, or

might, require equity securities to be allotted (and treasury shares to be sold) after the

authority expires, and the Board may allot equity securities (and sell treasury shares)

under any such offer or agreement as if the authority had not expired.

6.3 The Company be and is hereby generally and unconditionally authorised to make one or

more market purchases (within the meaning of section 693(4) of the Companies Act) of

Wickes Shares, provided that:

6.3.1 the maximum aggregate number of ordinary shares authorised to be purchased

is 25,214,392;

6.3.2 the minimum price (exclusive of expenses) which may be paid for a Wickes

Share is its nominal value;

6.3.3 the maximum price (exclusive of expenses) which may be paid for a Wickes

Share is the higher of: (a) 105 per cent. of the average of the middle market

quotations for a Wickes Share as derived from the London Stock Exchange Daily

Official List for the five business days immediately preceding the day on which

that Wickes Share is contracted to be purchased; and (b) an amount equal to the

higher of the price of a Wickes Share quoted for the last independent trade and

the highest current independent bid for a Wickes Share on the trading venues

where the purchase is carried out;

6.3.4 this authority (unless previously renewed, varied or revoked by the Company in

general meeting) expires at the conclusion of the next annual general meeting of

the Company or 23 June 2022, whichever is the earlier; and

6.3.5 the Company may make a contract to purchase Wickes Shares under this

authority before the expiry of such authority, which will or may be executed

wholly or partly after the expiry of such authority, and may make a purchase of

ordinary shares pursuant to any such contract.

6.4 That a general meeting of the Company, other than an annual general meeting, may be

called by notice of not less than 14 clear days.

6.5 That the Company and those companies which are subsidiaries of the Company at any

time during the period for which this resolution has effect be authorised for the purposes

of Part 14 of the Companies Act during the period from the date of the passing of this

resolution to the conclusion of the Company’s next annual general meeting after this

resolution is passed (or, if earlier, until the close of business on 23 June 2022):

6.5.1 to make political donations to political parties, and/or independent election

candidates;

6.5.2 to make political donations to political organisations other than political parties;

and

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6.5.3 to incur political expenditure,

up to an aggregate amount of £50,000, and the amount authorised under each of

paragraphs 6.5.1 to 6.5.3 shall also be limited to such amount (words and expressions

defined for the purpose of the Companies Act shall have the same meaning in this

resolution).

7 Summary of the Articles

The Articles, which were adopted with effect from 11 March 2021 by a special resolution of the

Company, will be substantially identical to the Travis Perkins Articles and will contain, inter alia,

provisions to the following effect:

7.1 Objects

Section 31 of the Companies Act provides that the objects of a company are unrestricted unless

any restrictions are set out in its articles of association. There are no such restrictions in the

Articles and the objects of the Company are therefore unrestricted.

7.2 Rights attaching to Wickes Shares

7.2.1 Voting rights

Subject to any rights or restrictions attached to any shares:

(a) on a show of hands:

(I) every member who is present in person has one vote;

(II) every proxy present who has been duly appointed by one or

more members entitled to vote on the resolution has one vote,

except that if the proxy has been duly appointed by more than

one member entitled to vote on the resolution and is instructed

by one or more of those members to vote for the resolution and

by one or more others to vote against it, or is instructed by one or

more of those members to vote in one way and is given discretion

as to how to vote by one or more others (and wishes to use that

discretion to vote in the other way), the proxy has one vote for

and one vote against the resolution; and

(III) every corporate representative present who has been duly

authorised by a corporation has the same voting rights as the

corporation would be entitled to;

(b) on a poll every member present in person or by duly appointed proxy

or corporate representative has one vote for every share of which such

member is the holder or in respect of which such person’s appointment

as proxy or corporate representative has been made; and

vote need not, if such member, proxy or corporate representative votes,

use all such votes or cast all the votes being used the same way.

7.2.2 Joint holders

In the case of joint holders, the vote of the joint holder whose name appears first

on the register of members in respect of the joint holding shall be accepted to the

exclusion of the votes of the other joint holders.

7.2.3 Dividends

The Company may by Ordinary Resolution declare dividends in accordance with

the respective rights of the members, but no dividend shall exceed the amount

recommended by the Directors.

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7.3 Variation of rights

The rights attached to a class of shares may be varied:

7.3.1 in such manner (if any) as may be provided by those rights; or

7.3.2 in the absence of any such provision, with the consent in writing of the holders of

three-quarters in nominal value of the issued shares of that class (excluding any

shares of that class held as treasury shares), or with the sanction of a special

resolution passed at a separate meeting of the holders of the shares of that

class.

7.4 Transfer of shares

7.4.1 Transfer of shares in certicated form

Shares in certificated form may be transferred by any usual form or in any other

form which the Directors approve and shall be executed by or on behalf of the

transferor and, where the share is not fully paid, by or on behalf of the transferee.

7.4.2 Transfer of shares in uncerticated form

If a class of shares is, for the time being, a participating security, title to shares

of that class which are recorded on an Operator (as such term is defined in the

CREST Regulations) register of members as being held in uncertificated form

may be transferred by means of the relevant system concerned. The transfer

may not be in favour of more than four transferees.

7.5 Disclosure of interests in shares

If a member, or another person appearing to be interested in shares held by that member,

has been given a notice under section 793 of the Companies Act and has failed in relation

to any shares to give the Company the information thereby required within 14 days from

the date of giving the notice, such member will be subject to sanctions (including voting

and transfer restrictions), unless the Directors otherwise determine.

7.6 General meetings

The Directors may call general meetings whenever and at such times and places as

they shall determine. If there are not sufficient Directors to form a quorum in order to call

a general meeting, any Director may call a general meeting. If there is no Director, any

member of the Company may call a general meeting.

7.6.1 Notice of annual general meetings and other general meetings

An annual general meeting and all other general meetings of the Company shall

be called by at least such minimum period of notice as is prescribed or permitted

under the Companies Act. The notice shall specify the place or places (including

for a combined physical and electronic general meeting, electronic platform),

the date and the time of the meeting and the general nature of business being

transacted and, in the case of an annual general meeting, shall specify the

meeting as such. Subject to the provisions of the Articles and to any rights or

restrictions attached to any shares, notices shall be given to all members, to

all persons entitled to a share in consequence of the death or bankruptcy of a

member or otherwise by operation of law and to the Directors and Auditors.

7.6.2 Quorum

The quorum for a general meeting is two persons who are entitled to vote upon

the business to be transacted, each being a member or a proxy for a member or

a duly authorised representative of a corporation which is a member (including,

145

for this purpose, two persons who are proxies or corporate representatives of the

same member).

7.6.3 Postponement or cancellation of general meetings

7.7 The Board may resolve to postpone or cancel any general meeting or move the place

or places (including, for a combined physical and electronic general meeting, electronic

platform) of such meeting before the date on which it is to be held, except where the

postponement or cancellation or move would be contrary to the Companies Act, the

CREST Regulations or any other enactment for the time being in force concerning

companies and affecting the Company. Directors’ appointments, interests,

retirements and removals

7.7.1 Number of Directors

The Articles provide that the number of Directors (disregarding any alternate

directors) shall not be less than two but, unless otherwise determined by the

Company by Ordinary Resolution, shall not be subject to any maximum.

7.7.2 Appointments

Directors may be appointed by Ordinary Resolution.

7.7.3 Permitted interests

Provided that they have disclosed to the Directors the nature and extent of any

material interest, a Director notwithstanding such Director’s office, may be: (i)

a party to, or otherwise interested in, any transaction or arrangement with the

Company or in which the Company is otherwise interested; or (ii) a director or

other officer of, or employed by, or hold any position with, or be a party to any

transaction or arrangement with, or otherwise interested in, any body corporate

in which the Company is interested.

7.7.4 Retirements

At each annual general meeting, all of the Directors shall retire from office except

for any Director appointed by the Board after the notice of that general meeting

has been given and before that annual general meeting has been held. If the

vacancy of the retiring Director is not filled, a Director who retires in this way

and, if willing to act, is deemed to have been reappointed unless at the meeting

it is resolved not to fill the vacancy or a resolution for the reappointment of the

Director is put to the meeting and lost.

7.7.5 Removal

The Company may, by special resolution, remove a Director before the expiration

of their period in office. No special notice is required in respect of any resolution

to remove a Director in accordance with the Articles and no Director proposed to

be removed in this way has any special right to protest against such Director’s

removal. The Company may, by Ordinary Resolution, appoint another person

who is willing to act as a Director instead of the Director who is removed.

7.8 Alternate director

Any Director (other than an alternate director) may appoint any other Director, or any

other person approved by resolution of the Directors and willing to act and permitted

by law to do so, to be an alternate director. Any Director may also remove an alternate

director appointed by such Director from such Director’s appointment as alternate

director.

7.9 Board meetings

7.9.1 Calling and notice of board meetings

A board meeting may be called by any Director or the Company Secretary at

the request of a Director. Notice of a board meeting may be given to a Director

146

personally, or by telephone, or sent in hard copy or electronic form. A Director may

waive notice of any board meeting and any such waiver may be retrospective.

7.9.2 Proceedings

Questions arising at a board meeting shall be decided by a majority of votes.

In case of an equality of votes, the Chair of the meeting shall (unless the Chair

is not entitled to vote on the resolution in question) have a second or casting

vote. A Director who is also an alternate director shall be entitled in the absence

of such Director’s appointor to a separate vote on behalf of such appointor in

addition to such Director’s own vote, and an alternate director who is appointed

by two or more Directors shall be entitled to a separate vote on behalf of each of

appointor in such appointor’s absence.

7.9.3 Quorum

No business shall be transacted at any board meeting unless a quorum is

present. The quorum may be fixed by the Directors, however, if it is not fixed, it

shall be two. A Director shall not be counted in the quorum present in relation to

a matter of resolution on which such Director is not entitled to vote (or when such

Director’s vote cannot be counted), but shall be counted in the quorum present in

relation to all other matters or resolutions considered or voted on at the meeting.

7.10 Directors’ interests in contracts

Subject to the provisions of the Articles, a Director shall not vote at a meeting of the

Directors on any resolution concerning a matter in which such Director has, directly

or indirectly, a material interest (other than an interest in shares, debentures or other

securities of, or otherwise in or through, the Company), unless such Director’s interest

falls within one or more of the exceptions set out in the Articles.

7.11 Directors’ fees and expenses

7.11.1 Fees

Until otherwise determined by an Ordinary Resolution, Directors who do not hold

executive office (other than alternate directors) shall be paid such fees for their

services in the office of director as the Directors may determine, provided that

the amount payable to each of the Non-Executive Directors shall not exceed

£600,000 per annum in aggregate or such larger amount as the Company may

by Ordinary Resolution decide. The fees shall be deemed to accrue from day

to day and shall be distinct from and additional to any remuneration or other

benefits which may be paid or provided to any Director pursuant to any other

provision of the Articles.

7.11.2 Expenses

The Directors may also be paid all reasonable expenses properly incurred by

them in connection with their attendance at board meetings or of committees

of the Directors or general meetings or separate meetings of the holders of any

class of shares or debentures of the Company, and any reasonable expenses

properly incurred by them otherwise in connection with the exercise of their

powers and the discharge of their responsibilities as directors of the Company.

7.12 Directors’ gratuities and pensions

The Directors may (by the establishment of, or maintenance of, schemes or otherwise)

provide benefits, whether by the payment of allowances, gratuities or pensions, or

by insurance or death, sickness or disability benefits or otherwise, for any Director or

any former Director of the Company or of any body corporate which is or has been a

subsidiary undertaking of the Company or a predecessor in business of the Company

or of any such subsidiary undertaking, and for any member of such Director’s family

(including a spouse or civil partner or a former spouse or former civil partner) or any

person who is or was dependent on such Director and may (before as well as after such

147

Director ceases to hold such office) contribute to any fund and pay premiums for the

purchase or provision of any such benefit.

7.13 Indemnity of ofcers

Subject to the provisions of the Companies Act or any other provision of law, the

Company:

7.13.1 may indemnify to any extent any person who is or was a Director, or a director

of any associated company, directly or indirectly (including by funding any

expenditure incurred or to be incurred by him), against any loss or liability,

whether in connection with any proven or alleged negligence, default, breach of

duty or breach of trust by such Director or otherwise, in relation to the Company

or any associated company;

7.13.2 may indemnify to any extent any person who is or was a director of an associated

company that is a trustee of an occupational pension scheme, directly or indirectly

(including by funding any expenditure incurred or to be incurred by him) against

any liability incurred by such Director in connection with the company’s activities

as trustee of an occupational pension scheme; and

7.13.3 may purchase and maintain insurance for any person who is or was a Director,

or a director of any associated company, against any loss or liability or any

expenditure such Director may incur, whether in connection with any proven or

alleged negligence, default, breach of duty or breach of trust by such Director or

otherwise, in relation to the Company or any associated company.

7.14 Borrowing powers

The Directors shall restrict the borrowings of the Company and exercise all powers of

control exercisable by the Company in relation to its subsidiary undertakings so as to

secure (as regards subsidiary undertakings so far as by such exercise they can secure)

that the aggregate principal amount (including any premium payable on final repayment)

outstanding of all money borrowed by the Wickes Group (excluding amounts borrowed

by any member of the Wickes Group from any other member of the Wickes Group) shall

not at any time, save with the prior sanction of an Ordinary Resolution of the Company,

exceed an amount equal to two and a half times the aggregate of:

7.14.1 the amount paid up, or credited as paid up, on the share capital of the Company

(excluding any share capital presented as debt); and

7.14.2 the total of any credit balance on the distributable and undistributable reserves

of the Wickes Group, but excluding amounts attributable to outside shareholders

in subsidiary undertakings of the Company and deducting any debit balance on

any reserve,

all as shown in the latest audited consolidated balance sheet of the Wickes

Group.

8 Directors and Senior Management

8.1 Directorships and partnerships outside of the Wickes Group

The Directors and members of Senior Management, their functions within the Company

and brief biographies are set out in Part V: “Directors, Senior Management and Corporate

Governance”.

Each of the Directors and Senior Managers holds directorships of the various entities within

the Wickes Group. In addition to these directorships, the companies and partnerships of

which the Directors and members of Senior Management are, or have been, within the

past five years, members of the administrative, management or supervisory bodies or

partners are as follows:

148

Name

Current directorships/

partnership

Former directorships/

partnerships

Directors

Christopher Rogers Kerry Group plc

Sanderson Design Group

plc

Snowfox Topco Limited

Travis Perkins plc (to retire

following Travis Perkins’

annual general meeting on

27 April 2021)

Vivo Energy plc

Abaris Holdings Limited

Abaris (Overseas) Holdings

Limited

Anstey Wallpaper Company

Limited

Anthology Fabrics and

Wallcoverings Limited

Arthur Sanderson & Sons Limited

Barracks Fabric Printing Limited

Caldicott Trust Limited

Cirka Limited

Coffeeheaven Holdings Limited

Coffeeheaven International

Limited

Costa Beijing Limited

Costa Card Elmi Limited

Costa China Holdings Limited

Costa International Limited

Costa Limited

Design Edition Limited

Globaltex 2015 Limited

Globaltex Limited

Harlequin Fabric & Wallcoverings

Limited

Life Coffee Cafes Limited

Morris & Co. (Artworkers) Limited

Rush Hair Group Limited

Sanderson of London Limited

Scion Fabrics and Wallcoverings

Limited

Scion Living Limited

Standfast Dyers and Printers

Limited

Strines Textiles Limited

Style Library Limited

Walker Greenbank Distribution

Limited

Whitbread plc

William Morris Wallpapers Limited

Zoffany Limited

David Wood Dremt Consulting Limited

Green Sheep Group Ltd

Early Learning Centre Limited

Incorporated Society of British

Advertisers Limited

Kmart Holding Corporation

Mothercare plc

Mothercare UK Limited

149

Name

Current directorships/

partnership

Former directorships/

partnerships

Julie Wirth Wirthwhile Resources Ltd Conviviality plc

Countrywide Farmers plc

Chepstow Farmers Limited

Country Keeper Limited

Countrywide 2018 Limited

Countrywide Farmers Retail

Limited

Countrywide Farmers Stores

Limited

H E Pringle Limited

Heart of England Grain Company

Limited

Lidstone Midwinter Holdings

Limited

MB 2000 Limited

M.S.F. (Property) Ltd

Neway Datacare Limited

Passey Nott & Co. Limited

Porthouse Farms Limited

S.M. Hackett & Son Limited

West Midland Farmers Limited

Wiltshire Farmers Limited

Mark Clare Aggreko plc

Grainger plc

Premier Marinas Holdings

Limited

United Utilities Group plc

United Utilities Water

Limited

Barratt Developments plc

Geneff Limited

The Apartment Network Limited

Sonita Alleyne They’re Watching Us

Limited

Jesus College

Developments Limited

Jesus College Cambridge

Properties Limited

Alcock Investments

Limited

Jesus College Cambridge

Conferences Limited

Jesus College (Station

Road Investments) Limited

Jesus College (Harston

Barns) Limited

Yes Programme Limited

Temple Bar Investment Trust Plc

British Board of Film

Classification

Michael Iddon Pets at Home Group plc Linnaeus Referrals Ltd

New Look Limited

New Look Retailers Limited

Top Gun Realisations Limited

Top Gun Realisations 50 Limited

Top Gun Realisations 60 Limited

Top Gun Realisations 61 Limited

Top Gun Realisations 70 Limited

Top Gun Realisations 72 Limited

Top Gun Realisations 73 plc

Top Gun Realisations 74 plc

Top Gun Realisations 80 Limited

Top Gun Realisations 90 Limited

150

Name

Current directorships/

partnership

Former directorships/

partnerships

Senior Managers

Sonia Astill None Eostre Education Limited

Kingsdown Management

Services Limited

Astill & Sons (Holdings) Limited

Mark Cooke None None

Gary Kibble None Mothercare UK Limited

Mothercare Group Foundation

Early Learning Centre Limited

Fraser Longden None None

Helen O’Keefe None Travis Perkins Plumbing &

Heating LLP

TP Directors Ltd

TPG Management Services

Limited

8.2 Save as set out above, none of the Directors or any member of the Senior Management

has any business interests, or performs any activities, outside the Company which are

significant with respect to the Company.

8.3 Conicts of interest

There are no:

8.3.1 potential conflicts of interest between any duties to the Company of the Directors

and members of Senior Management and their private interests and/or other

duties; or

8.3.2 arrangements or understandings with any other major shareholders, customers,

suppliers or others pursuant to which any Director or member of Senior

Management was selected as a Director or member of Senior Management.

8.4 Directors and Senior Managers’ conrmations

8.4.1 Save as set out below, as at the date of this Prospectus, none of the Directors or

any member of Senior Management has, at any time within the last five years:

(a) had any prior convictions in relation to fraudulent offences;

(b) been declared bankrupt or been the subject of any individual voluntary

arrangement;

or companies put into administration when acting in the capacity of a

member of the administrative, management or supervisory body or of a

senior manager;

(d) been subject to any official public incrimination and/or sanction by any

statutory or regulatory authority (including designated professional

bodies);

(e) been disqualified by a court from acting as a member of the administrative,

management or supervisory bodies of any issuer or from acting in the

management or conduct of the affairs of any issuer;

(f) been a partner or senior manager in a partnership which, while such

Director or Senior Manager was a partner or within 12 months of such

Director’s or Senior Manager’s ceasing to be a partner, was put into

compulsory liquidation or administration or which entered into any

partnership voluntary arrangement;

151

(g) owned any assets which have been subject to a receivership or been a

partner in a partnership subject to a receivership where such Director

or Senior Manager was a partner at the time or within the 12 months

preceding such event; or

(h) been an executive director or senior manager of a company which has

been placed in receivership, compulsory liquidation, creditors’ voluntary

liquidation or administration or which entered into any company voluntary

arrangement or any composition or arrangement with its creditors

generally or any class of creditors, at any time during which such Director

or Senior Manager was an executive director or senior management of

that company or within 12 months of such Director’s or Senior Manager’s

ceasing to be an executive director or senior manager.

8.4.2 There are no family relationships between any Directors, between any members

of Senior Management or between any Directors and members of Senior

Management.

8.4.3 There are no restrictions agreed by any Director or any member of Senior

Management on the disposal within a certain time of their holdings in the

Company’s securities.

8.4.4 David Wood was the CEO of Mothercare plc from April 2018 to May 2018 and

Group Managing Director from June 2018 to November 2018 prior to it being

placed into administration in November 2019.

8.4.5 Julie Wirth was the interim CEO of Countrywide Farmers plc when it was placed

into administration in March 2018.

8.4.6 Gary Kibble was the Chief Marketing Officer (Global) of the Mothercare group

from March 2015 to June 2017 prior to it being placed into administration in

November 2019.

8.5 Interests of the Directors and Senior Management

As at the date of this Prospectus, the Directors and Senior Managers have no interest

in the share capital of the Company. Following Admission, the interests of the Directors

and Senior Managers will be based on the number of Travis Perkins Shares held by

such persons at the Record Time. In addition, certain Directors and Senior Managers will

have an interest in the share capital of the Company pursuant to awards held under the

Transitional Demerger Award arrangement as described in section 13.1 of this Part XII.

In due course, it is anticipated that the Directors and Senior Managers will receive share

awards over Wickes Shares as described in section 13 of this Part XII.

8.5.1 Issued Travis Perkins plc share capital

Set out below are the interests (all of which are beneficial unless otherwise stated)

as at the Latest Practicable Date of the Directors and the Senior Managers in

the share capital of Travis Perkins or interests of a person connected (within

the meaning of Article 3(1)(26) of the Market Abuse Regulation) with a Director,

together with such interests as are expected to be held immediately following the

Demerger.

The interests of the Directors and Senior Management together represent 0.03

per cent. of the issued share capital of Travis Perkins as at the Latest Practicable

Date and are expected to represent 0.03 per cent. of the issued share capital of

the Company upon the Demerger becoming effective.

Name

Number of

Travis Perkins

Percentage of

Travis Perkins

issued share

capital (%)

Christopher Rogers ........................................... 9,228 0.004

David Wood ....................................................... 16,615 0.007

Julie Wirth .......................................................... 6,067 0.002

152

Name

Number of

Travis Perkins

Percentage of

Travis Perkins

issued share

capital (%)

Mark Clare ......................................................... 0 0.000

Sonita Alleyne.................................................... 0 0.000

Michael Iddon .................................................... 0 0.000

Sonia Astill ......................................................... 10,390 0.004

Mark Cooke ....................................................... 10,350 0.004

Gary Kibble ........................................................ 7,131 0.003

Fraser Longden ................................................. 16,341 0.006

Helen O’Keefe ................................................... 607 0.000

8.5.2 Options and awards over Travis Perkins Shares

The following table sets out details of the options and awards under the Travis

Perkins Share Plans over Travis Perkins Shares held by the Directors and Senior

Managers as at the Latest Practicable Date:

Name Plan

Number of

options/

awards over

Travis Perkins

Option

exercise price

(£)

Option

exercise

period

Christopher Rogers ......... n/a n/a n/a n/a

David Wood ..................... Co-Investment

Plan 2020

Performance

Share Plan

Unapproved

2020

Performance

Share Plan

Approved 2020

Sharesave 2020

42,501

50,772

2,623

2,004

0.00

11.435

8.98

03/04/2023 to

02/04/2030

17/03/2023 to

16/03/2030

17/03/2023 to

16/03/2030

01/12/2023 to

31/05/2024

Julie Wirth ........................ Co-Investment

Plan 2020

Performance

Share Plan

Unapproved

2020

Performance

Share Plan

Approved 2020

Sharesave 2020

22,061

13,117

2,623

2,004

0.00

11.435

8.98

03/04/2023 to

02/04/2030

17/03/2023 to

16/03/2030

17/03/2023 to

16/03/2030

01/12/2023 to

31/05/2024

Mark Clare ....................... n/a n/a n/a n/a

Sonita Alleyne.................. n/a n/a n/a n/a

Michael Iddon .................. n/a n/a n/a n/a

153

Name Plan

Number of

options/

awards over

Travis Perkins

Option

exercise price

(£)

Option

exercise

period

Sonia Astill ...................... Co-Investment

Plan 2018

Co-Investment

Plan 2019

Co-Investment

Plan 2020

Deferred Share

Bonus Plan

2018

Deferred Share

Bonus Plan

2019

Performance

Share Plan

Unapproved Mar

2018

Performance

Share Plan

Unapproved Mar

2020

Performance

Share Plan

Approved 2020

Sharesave 2020

7,830

13,625

17,301

659

762

3,830

10,452

2,623

2,004

0.00

11.435

8.98

29/03/2021 to

28/03/2028

01/04/2022 to

31/03/2029

03/04/2023 to

02/04/2030

13/03/2021 to

12/03/2028

12/03/2022 to

11/03/2029

13/03/2021 to

12/03/2028

17/03/2023 to

16/03/2030

17/03/2023 to

16/03/2030

01/12/2023 to

31/05/2024

Mark Cooke .................... Co-Investment

Plan 2019

Co-Investment

Plan 2020

Performance

Share Plan

Unapproved

2020

Performance

Share Plan

Approved 2020

Sharesave 2018

16,682

21,498

11,854

2,623

1,980

0.00

11.435

9.09

01/04/2022 to

31/03/2029

03/04/2023 to

02/04/2030

17/03/2023 to

16/03/2030

17/03/2023 to

16/03/2030

01/12/2021 to

31/05/2022

Gary Kibble ..................... Co-Investment

Plan 2020

Performance

Share Plan

Unapproved

2020

Performance

Share Plan

Approved 2020

Sharesave 2020

25,589

15,216

2,623

1,002

0.00

11.435

8.98

03/04/2023 to

02/04/2030

17/03/2023 to

16/03/2030

17/03/2023 to

16/03/2030

01/12/2023 to

31/05/2024

154

Name Plan

Number of

options/

awards over

Travis Perkins

Option

exercise price

(£)

Option

exercise

period

Fraser Longden ............... Co-Investment

Plan 2018

Co-Investment

Plan 2019

Co-Investment

Plan 2020

Performance

Share Plan

Unapproved

2020

Performance

Share Plan

Approved 2020

Sharesave 2018

20,673

18,257

22,494

13,037

2,623

1,980

0.00

11.435

9.09

29/03/2021 to

28/03/2028

01/04/2022 to

31/03/2029

03/04/2023 to

02/04/2030

17/03/2023 to

16/03/2030

17/03/2023 to

16/03/2030

01/12/2021 to

31/05/2022

Helen O’Keefe ................ Performance

Share Plan

Approved Mar

2017

PSP Linked Mar

2017

Performance

Share Plan

Approved Mar

2018

Performance

Share Plan

Unapproved Mar

2018

Performance

Share Plan

Unapproved

2019

Performance

Share Plan

Approved 2020

Performance

Share Plan

Unapproved Mar

2020

Sharesave 2018

593

332

642

1,446

907

7,870

1,980

14.880

0.00

13.001

0.00

11.435

0.00

9.09

15/03/2020 to

14/03/2027

15/03/2020 to

14/03/2027

13/03/2021 to

12/03/2028

13/03/2021 to

12/03/2028

12/03/2022 to

11/03/2029

17/03/2023 to

16/03/2030

17/03/2023 to

16/03/2030

01/12/2021 to

31/05/2022

Upon the Demerger becoming effective, in accordance with their terms, options/

awards under the Travis Perkins Share Plans held by Directors and Senior

Managers will be subject to “good leaver” treatment, meaning that:

(a) awards under the Travis Perkins Co-Investment Plan continue to vest

on the normal vesting date subject to time pro-rating and performance

testing;

(b) awards under the Travis Perkins Deferred Share Bonus Plan continue to

vest on the normal vesting date;

be released on the normal release date subject to time pro-rating and

performance testing (where performance conditions apply);

155

(d) options under the Travis Perkins Sharesave Scheme become exercisable

to the extent of savings made and remain exercisable for six months

(after which they lapse); and

(e) shares under the Travis Perkins Share Incentive Plan will be transferred

to the Directors and Senior Managers as soon as reasonably practicable

after the Demerger, participation will stop and ongoing contributions will

be paid to the Directors and Senior Managers as soon as practicable.

8.5.3 No Director has or has had any interest in any transaction which is or was

unusual in its nature or conditions or is or was significant to the business of

the Company and was effected by the Company in the current or immediately

preceding financial year or was effected during an earlier financial year and

remains in any respect outstanding or unperformed.

8.5.4 As at the Latest Practicable Date, there were no outstanding loans granted

by any member of the Wickes Group to any Director or member of Senior

Management, nor by any Director or member of Senior Management to any

member of the Wickes Group, nor was any guarantee which had been provided

by any member of the Wickes Group for the benefit of any Director or member

of Senior Management, or by any Director or member of Senior Management for

the benefit of any member of the Wickes Group, outstanding.

9 Directors’ service agreements, letters of appointment and remuneration

9.1 Executive Directors

9.1.1 Service agreements

The Chief Executive Officer and the Chief Financial Officer will be employed

under service agreements dated 23 March 2021, which are conditional, and

become effective, on completion of the Demerger. Key terms of the service

agreements (other than those that relate to remuneration and benefits, which

are addressed separately below) are as follows:

Term Description

Duties Both executives are required to devote the whole of their

time and attention to their duties and to use their best

endeavours to promote, protect, develop and extend the

business of the Company and the Wickes Group.

Holidays Both executives are entitled to 30 days’ holiday plus bank

holidays.

Notice Period Both the Chief Executive Officer and the Chief Financial

Officer are subject to twelve months’ notice from Wickes

and six months’ notice from the executive.

Payment in

Lieu of Notice

Both service agreements can be terminated immediately

by serving notice and undertaking to pay the relevant

executive in lieu of notice. The payment in lieu of

notice clause provides that payments may be made in

equal monthly instalments, during which time the Chief

Executive Officer and Chief Financial Officer would

be obliged to take reasonable steps to find alternative

employment or otherwise replace their income and, if

they are successful in entirely replacing their income, the

Company would be under no obligation to continue to pay

any remaining instalments. The only amount payable in

respect of loss of office is in respect of the twelve month

notice period.

156

Garden Leave Both the Chief Executive Officer and the Chief Financial

Officer can be required to remain away from the office

during their notice period. During this time, the Company

can require them not to engage in certain activities,

including requiring them not to contact employees,

suppliers and customers, and to take any accrued but

untaken holiday.

Summary

Termination

The service agreements can be terminated without

notice or payment in lieu of notice in certain prescribed

circumstances. The specific grounds for summary

dismissal include for example misconduct, persistent

breaches of the service agreement, bankruptcy, a

criminal charge or conviction (other than minor motor

offences), acting in a way prejudicial to the interests

or reputation of the Company and disqualification as a

director.

Sick Pay Both executives shall be entitled to receive full salary and

contractual benefits during such absence subject to the

relevant notification and certification procedures being

complied with, for a period or periods aggregating twenty-

six weeks in any fifty-two period.

Conicts of

Interest

There is a limitation in both service agreements on

conflicts of interest, however, both the Chief Executive

Officer and the Chief Financial Officer are permitted to

hold up to 5 per cent. of the issued shares or loan capital

in any other publicly listed entity.

Restrictive

Covenants

Both the Chief Executive Officer and the Chief Financial

Officer are subject to nine month restrictive covenants

covering non-competition, non-solicitation of clients,

prospective clients and key employees, non-dealing

with customers and prospective customers, and non-

interference with suppliers.

Condentiality Both executives are under an obligation not to disclose

information confidential to the Company or any Wickes

Group company.

9.1.2 Base salaries

Salaries are set taking into account the performance, experience and

responsibilities of the individual, the scope and scale of the role, internal pay

comparators and external benchmark data. Base salaries are presently £495,000

for the Chief Executive Officer and £350,000 for the Chief Financial Officer.

Salaries are normally reviewed annually and the next review date is 1 April 2022.

9.1.3 Benets and pension

Benefits include family private medical insurance, life assurance, income

protection and company car/car allowance. Other benefits, including relocation

allowances may be provided, as appropriate.

Pension comprises a contribution into the Wickes Group personal pension plan

or a cash allowance in lieu of pension contributions (or a mix of both) and will be

in line with the general workforce at rates of up to 10 per cent. of base salary per

annum.

9.1.4 Annual bonus

Annual bonuses are payable at the sole discretion of the Remuneration

Committee and are based on the achievement of demanding metrics measured

over a one-year performance period.

157

The potential bonus opportunity under the remuneration policy will be set at 140

per cent. of salary for the Chief Executive Officer and 120 per cent. of salary

for the Chief Financial Officer. Performance measures and targets will be

determined by the Remuneration Committee at the start of the financial year,

with financial targets accounting for at least 80 per cent. of the targets. In the first

year of operation 70 per cent. of the target set will be measured against profit, 20

per cent. against cash performance and 10 per cent. will be against measurable

Environmental, Social and Governance (“ESG”) objectives.

It is intended that any annual bonus in respect of the 2021 financial year will

be payable in a mix of cash and shares. For Executive Directors at least 33 per

cent. of any bonus paid will be deferred in Wickes Shares for three years. Any

deferral into shares will be awarded under the Wickes Deferred Annual Bonus

Plan (“DABP”), the key terms of which are set out in section 13.2 of this Part XII,

which was adopted by the Board on 23 March 2021, conditional on Admission

and approval of the Share Plans Resolution by Travis Perkins Shareholders at

the General Meeting.

9.1.5 LTIP

The Board adopted the LTIP on 23 March 2021, conditional on Admission and

approval of the Share Plans Resolution by Travis Perkins Shareholders at the

General Meeting. This will form the primary long-term incentive arrangement

for executive directors and senior management. The purpose of the LTIP is to

incentivise and reward the creation of long-term shareholder value.

Under the LTIP, it is intended that awards will be in the form of conditional free

shares or nil cost options and will be granted to the Executive Directors and

selected senior executives (including senior management) on an annual basis.

The maximum LTIP award in any financial year under the plan rules will be 200

per cent. of base salary (excluding Transitional Demerger Awards).

Awards under the LTIP to Executive Directors are currently planned to be on the

basis of performance share awards (subject to performance conditions).

In order to retain the Executive Directors and other senior management through

the period until the vesting of the first LTIP awards, an initial, one-off transitional

award will be granted under the LTIP as restricted share awards (subject to

a performance underpin), within six weeks of the announcements of the

Company’s half year financial results (the “Transitional Demerger Awards”).

The Transitional Demerger Awards for Executive Directors shall have reference

grant values of:

(a) 175 per cent. of salary for the Chief Executive Officer; and

(b) 150 per cent. of salary for the Chief Financial Officer.

Subject to an underpin and continued service, half of these awards will vest on

the first anniversary of Demerger and the remainder on the second anniversary

of Demerger.

The LTIP will also be used to satisfy regular awards for Executive Directors and

senior managers.

The first annual awards under the LTIP to the Executive Directors and other

selected senior executives are presently timetabled for grant within six weeks of

the announcement of the Company’s half year financial results. It is intended that

these first regular awards will have reference grant values as follows in respect

of the Executive Directors:

(a) 175 per cent. of salary for the Chief Executive Officer; and

(b) 150 per cent. of salary for the Chief Financial Officer.

The second annual grant of awards under the LTIP to Executive Directors and

other selected senior executives is presently timetabled for March/April 2022

158

following the announcement of the Company’s annual results for 2021. Annual

grants are expected to follow this timetable in future years.

In the normal course of events, awards under the LTIP to Executive Directors

(other than Transitional Demerger Awards) will vest three years from award

subject to the participant’s continued service. Any shares vesting for Executive

Directors, other than those sold to settle tax and national insurance contributions,

will be subject to a two-year holding period during which they may not ordinarily

be sold.

The performance conditions for the first performance share awards to the

Executive Directors to be granted in the 2021 financial year will be determined

closer to the time of the award and will be disclosed in the Directors’ Remuneration

Report next year. It is intended that these will be based on earnings growth for

70 per cent. of the award and relative total shareholder return for 30 per cent. of

the award.

A summary of the principal terms of the LTIP, including further details in respect

of the Transitional Demerger Awards, is set out in section 13.1 of this Part XII.

9.1.6 In-post share ownership requirements

Executive Directors are expected to accumulate a shareholding in the Company’s

shares to the value of 200 per cent. of salary over the first five years but with

the Remuneration Committee having the discretion to extend this period if it

considers circumstances warrant it.

Shares directly owned by the Executive Directors and their spouses or partners,

shares that have vested or are otherwise held under DABP awards and shares

that have vested under the LTIP but are held within the two-year holding period

would all count towards the share ownership requirements.

9.1.7 Post-cessation share ownership requirements

Executive Directors are required to hold the lower of 100 per cent. of their in-post

share ownership requirement or their actual holding on departure for two years

post-cessation.

9.1.8 Recruitment policy

New Executive Director hires (including those promoted internally) will be offered

packages in line with the remuneration policy in force at the time, including

the maximum limits set out therein. In the case of an external hire, it may be

necessary to buy out previous remuneration arrangements (which would be

forfeited on leaving the previous employer). This would be provided for taking

into account the form (cash or shares), timing and expected value (i.e. likelihood

of meeting any existing performance criteria) of the remuneration being forfeited.

9.1.9 Malus, clawback and override of formulaic outcomes

Best practice malus and clawback provisions will apply in respect of the operation

of the annual bonus plan, DABP and LTIP including in the case of material

misstatement of the Company’s financial results, an error of calculation or in the

event of serious misconduct, serious reputational damage or corporate failure.

In addition, notwithstanding any other provision of the LTIP, and irrespective of

whether any performance condition and/or additional condition attached to an

award has been satisfied, the Remuneration Committee retains discretion under

the LTIP to scale back the level of vesting that would otherwise result by reference

159

to formulaic outcomes alone. Such discretion would only be used in exceptional

circumstances and may include corporate and personal performance.

9.1.10 Other share plans

The Executive Directors are also eligible to participate in any all-employee share

plans operated by the Company on the same terms as other eligible employees

(for further information see section 13 of this Part XII).

9.2 Non-Executive Directors

The Company’s Non-Executive Chair is Christopher Rogers who was appointed on 23

March 2021. The Company’s other current Non-Executive Directors are Mark Clare,

Michael Iddon and Sonita Alleyne who were also appointed on 23 March 2021. Each

of the Non-Executive Directors has agreed terms of appointment with the Company as

follows:

9.2.1 Each of the Non-Executive Directors is engaged under a non-executive director

appointment letter, which states that the appointment will continue for a renewable

three-year term provided that the appointment must not continue for more than

nine years in total. In any event, each appointment is terminable by either party

on three months’ written notice.

9.2.2 From Admission, the Chair is entitled to receive an annual fee of £185,000.

Each of the other Non-Executive Directors is entitled to receive an annual fee of

£55,000. Additional fees of £10,000 are payable to any Non-Executive Director

serving as a committee chair of the Board. A further £7,500 is payable to the

Senior Independent Director.

9.2.3 Each Non-Executive Director is also entitled to reimbursement of reasonable

expenses. The Non-Executive Directors are not entitled to receive any

compensation on termination of their appointment and are not entitled to

participate in the Company’s share, bonus or pension schemes.

9.2.4 The Non-Executive Directors are subject to confidentiality undertakings without

limitation in time. They are also subject to non-compete restrictive covenants for

the duration of their appointments.

9.3 Directors’ remuneration

Under the terms of their service contracts and any applicable incentive plans, effective

in Financial Year 2020, the aggregate remuneration and benefits to the Directors who

served during Financial Year 2020, consisting of two individuals, was £1,176,234.

Under the terms of their service contracts and applicable incentive plans, effective in

Financial Year 2020, the Directors were remunerated as set out below:

Name Remuneration

Benets in

kind Pension Total

David Wood

£669,900 £13,138 £44,660 £727,698

Julie Wirth

£394,020 £10,516 £44,000 £448,536

9.4 Senior Management remuneration

Under the terms of their service contracts and any applicable incentive plans, effective in

Financial Year 2020, the aggregate remuneration and benefits to the Senior Managers

who served during Financial Year 2020, consisting of five individuals, was £1,864,319.

This consisted of remuneration of £1,640,364, benefits in kind of £47,222 and pension

of £176,734.

10 Remuneration policy

The Directors and their functions are set out in Part V: “Directors, Senior Management and

Corporate Governance”. Summaries of material terms of the service agreements with the

160

Executive Directors and letters of engagement of the Non-Executive Directors are set out below

together with summary details of proposed post Demerger and Admission remuneration policy.

10.1 Executive Directors

Remuneration philosophy

The Wickes Group’s overall philosophy on remuneration is that it should be linked to

the performance and behaviour of the individual, business results and shareholder and

customer outcomes.

The remuneration approach is intended to:

10.1.1 provide competitive, transparent and fair rewards;

10.1.2 reward achievement of short and long-term financial objectives and support

delivery of the business strategy;

10.1.3 align the interests of employees and shareholders through share ownership; and

10.1.4 support the company’s approach to risk and ensure that any risks are identified

and mitigated.

Reward levels are set to attract, retain and engage high calibre talent to support

the business strategy. Selected employees are able to share in the success of

the Wickes Group through participation in annual bonus schemes, with Executive

Directors and other select members of the senior management team also eligible

for participation in the LTIP.

Executive Director remuneration policy

In anticipation of the Demerger and Admission, the Wickes Group undertook a review of its

remuneration policy for senior management, including the Executive Directors.

The remuneration policy as it now stands has been structured taking into account the latest

principles set out in the UK Corporate Governance Code, remuneration levels in place prior

to Admission and market practice for comparable FTSE-listed companies. The aim of the

remuneration policy is to provide an appropriate reward structure for Executive Directors and

senior management to ensure their retention, focus them on the achievement of the business

strategy and enable them to share in the success of the Wickes Group.

The remuneration policy, insofar as it applies to the Executive Directors, will be subject to a

binding shareholder vote at the Company’s first annual general meeting in 2022.

A summary of the key terms of the remuneration policy for Executive Directors is set out at

section 9.1 of this Part XII.

10.2 Non-Executive Directors

The terms of the Non-Executive Directors’ appointment with the Company are set out at

section 9.2 of this Part XII.

11 Interests of signicant Shareholders

11.1 As at the Latest Practicable Date, insofar as it is known to the Company (by reference

to notifications to Travis Perkins made in accordance with the Disclosure Guidance and

Transparency Rules), the following persons are directly or indirectly interested in 3 per

cent. or more of Travis Perkins’ issued share capital and, assuming that such persons do

not acquire or dispose of any Travis Perkins Shares and no changes are made to Travis

Perkins’ issued share capital (in each case, prior to the Record Time), the amount of

such person’s holding of the total voting rights in respect of Wickes Shares at Admission

is expected to be as follows:

Shareholder

Number of Travis

Perkins Shares

held

Percentage of total voting

rights at Admission

BlackRock Inc. ............................................ Not disclosed Less than 5 per cent.

Investec Asset Management ...................... 12,741,837 5.05

161

Shareholder

Number of Travis

Perkins Shares

held

Percentage of total voting

rights at Admission

Ninety One UK Limited ............................... 12,480,008 4.95

Harris Associates L.P. ................................ 12,398,948 4.92

OppenheimerFunds, Inc. ............................ 12,381,080 4.91

Sanderson Asset Management LLP ........... 12,321,382 4.89

11.2 Save as disclosed above, insofar as is known to the Directors, there are no other

holdings of voting rights (within the meaning of Chapter 5 of the Disclosure Guidance

and Transparency Rules) which will represent 3 per cent. or more of the total voting

rights in respect of the issued share capital of the Company following Admission.

11.3 The Company is not aware of any persons who, as at the Latest Practicable Date, directly

or indirectly, jointly or severally, will exercise or could exercise control over the Company,

nor is it aware of any arrangements the operation of which may at a subsequent date

result in a change in control of the Company.

11.4 None of the shareholders referred to above has or will have different voting rights from

any other holder of Wickes Shares in respect of any Wickes Shares held by them, and

all Wickes Shares have the same voting rights.

12 Dividend policy

Wickes is a strongly cash generative business and the Board recognises the importance of

balancing investment in the business with dividends to shareholders. The Board intends to

adopt a progressive dividend policy and currently expects to start with a dividend of 30 per

cent. of adjusted profit after tax in respect of the full financial year ending 1 January 2022, split

approximately one-third and two-thirds between interim and final dividends, respectively.

The Company intends to put in place a dividend re-investment plan following Admission. Details

of the availability of the Wickes dividend re-investment plan and the relevant elections that need

to be made in order to participate will be sent to certificated Wickes Shareholders together with

the share certificates in respect of their Wickes Shares and will also be posted on the Wickes

Group’s website at www.wickesplc.co.uk.

13 Wickes Share Plans

To cater for discretionary share-based incentive awards to selected employees, the Company

has adopted, conditional on Admission and approval of the Share Plans Resolution by Travis

Perkins Shareholders at the General Meeting, the Wickes Long Term Incentive Plan (the “LTIP”)

and the Wickes Deferred Annual Bonus Plan (the “DABP”) (together, the ‘‘Wickes Executive

Share Plans”).

Details of the proposed operation of the Wickes Executive Share Plans in respect of the Executive

Directors is summarised in sections 9.1.4 to 9.1.5 of this Part XII.

Separately, to provide flexibility for a broad based “all-employee” share incentive policy, the

Company has adopted, conditional on Admission and approval of the Share Plans Resolution

by Travis Perkins Shareholders at the General Meeting, the Wickes Share Incentive Plan (the

‘‘SIP’’) and the Wickes Savings Related Share Option Scheme (the “Sharesave”) (together, the

“Wickes All-Employee Share Plans”).

The Wickes Executive Share Plans and the Wickes All-Employee Share Plans (together, the

“Wickes Share Plans”) were adopted by the Board on 23 March 2021 conditional on Admission

and approval of the Share Plans Resolution by Travis Perkins Shareholders at the General

Meeting.

Sections 13.1 to 13.4 of this Part XII describe the key unique features of the LTIP, DABP, SIP

and Sharesave and the key features which are common to the Wickes Share Plans. It also

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provides details of the Wickes Employee Benefit Trust (which may be used to acquire shares to

hold or distribute them in respect of the various share schemes) in section 13.6 of this Part XII.

13.1 Summary of the LTIP

13.1.1 Operation and eligibility

The Remuneration Committee will supervise the operation of the LTIP. Any

employee (including an Executive Director) of the Company and its subsidiaries

will be eligible to participate in the LTIP at the discretion of the Remuneration

Committee.

13.1.2 Grant of awards under the LTIP

The Remuneration Committee may grant awards to acquire Wickes Shares as

conditional share awards or as nil (or nominal) cost options. The Remuneration

Committee may also decide to grant cash-based awards of an equivalent value

to share-based awards or to satisfy share-based awards in cash, although it

does not currently intend to do so.

13.1.3 Timing of grants

The Remuneration Committee may grant awards within 90 days of Admission.

Thereafter, the Remuneration Committee may grant awards within six weeks

following the Company’s announcement of its results for any period. The

Remuneration Committee may also grant awards at any other time when it

considers there to be exceptional circumstances which justify the granting of

awards (for example, in the case of recruitment).

The first use of the LTIP will be to grant two awards: the Transitional Demerger

Awards and the first annual grant of awards under the LTIP which are planned

for grant to the Executive Directors and other selected senior management within

six weeks of the announcement of the Company’s half year financial results.

The second annual grant of awards under the LTIP to Executive Directors and selected

others is presently timetabled for March/April 2022 following the announcement of the

Company’s annual results for 2021.

13.1.4 Individual limit

An employee may not receive awards in any financial year in respect of Wickes

Shares having a market value in excess of 200 per cent. of their annual base

salary in that financial year.

Market value for such purposes shall be based on the market value of Wickes

Shares on the dealing day immediately preceding the grant of an award (or by

reference to a short averaging period) or on such other basis as the Remuneration

Committee determines appropriate having regard to such exceptional factors as

it considers relevant.

The Transitional Demerger Awards shall not count towards such limits.

13.1.5 Extent of vesting

The extent of vesting of awards for Executive Directors will be subject to

performance conditions and/or such additional conditions (in each case if any)

as set for the relevant award by the Remuneration Committee and may be so in

the case of awards to other employees.

Details of the proposed operation of the LTIP in respect of the Executive Directors

is summarised in section 9.1.5 of this Part XII and as further explained in that

section is (other than the Transitional Demerger Awards) planned to be in the

form of performance share awards (subject to performance conditions).

The Remuneration Committee may vary the performance conditions applying to

any award if an event has occurred which causes the Remuneration Committee

to consider it appropriate to do so, provided the Remuneration Committee

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considers the varied conditions to be fair and reasonable and, in the case of

an award held by Executive Directors, not materially less challenging than the

original conditions would have been but for the event in question.

13.1.6 Vesting of awards

Awards shall ordinarily vest on such normal vesting date specified for the award

or, if later, when the Remuneration Committee determines the extent to which

any performance conditions and/or additional conditions have been satisfied.

The normal vesting date in respect of awards to Executive Directors (other than

the Transitional Demerger Awards) shall not be earlier than the third anniversary

of the grant of the award.

Where awards are granted in the form of options, once exercisable these will

then remain exercisable up until the tenth anniversary of grant (or such shorter

period specified by the Remuneration Committee at the time of grant) unless

they lapse earlier.

Shorter exercise periods shall apply in the case of ‘‘good leavers’’ and/or vesting

of awards in connection with corporate events.

13.1.7 Leaving employment

As a general rule, an award will lapse upon a participant’s termination of

employment within the Wickes Group.

However, if a participant ceases to be an employee of the Wickes Group because

of death, injury, ill-health, disability, redundancy, retirement with the agreement

of the Remuneration Committee, their employing company or the business for

which they work being sold out of the Wickes Group or in other circumstances

at the discretion of the Remuneration Committee, then their award will normally

vest on the normal timetable. The extent to which an award will vest in these

situations will depend upon two factors: (i) the extent to which the performance

conditions/additional conditions (in each case, if any) have, in the opinion of

the Remuneration Committee, been satisfied over the original performance

measurement period, and (ii) ordinarily pro rating of the award to reflect the

period spent in service relative to the normal vesting period. The Remuneration

Committee can decide to pro-rate an award to a lesser extent (including as to nil)

if it regards it as appropriate to do so in the circumstances.

Alternatively, in such “good leaver” circumstances specified above (including

in the case of a discretionary good leaver), the Remuneration Committee

can decide that the participant’s award will vest when they leave, subject to:

(i) the performance conditions/additional conditions measured at that time;

and (ii) ordinarily pro-rating as described above (including the Remuneration

Committee’s discretion as described above in respect of pro-ration).

Holding periods (if any) will typically continue to apply to a good leaver’s awards.

13.1.8 Corporate events

In the event of a takeover or winding up of the Company (not being an internal

corporate reorganisation) all awards will vest early subject to: (i) the extent that

the performance conditions/additional conditions (in each case, if any) have

been satisfied at that time; and (ii) pro-rating of the awards to reflect the period

elapsed into the award’s normal vesting period. The Remuneration Committee

can decide to pro-rate an award to a lesser extent (including as to nil) if it regards

it as appropriate to do so in the circumstances.

In the event of an internal corporate reorganisation awards will be replaced by

equivalent new awards over shares in a new holding company.

In the event of a demerger, special dividend or other similar event which, in

the opinion of the Remuneration Committee, would affect the market price of

the Wickes Shares to a material extent, the Remuneration Committee may

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decide that awards shall vest early or be adjusted on such basis as considered

appropriate.

13.1.9 Holding periods

The terms of the LTIP include that Executive Directors (and such others, if any,

as the Remuneration Committee requires) will ordinarily be required to retain

their net of tax number of vested shares (if any) delivered under the LTIP (or the

full number of the vested shares whilst held under an unexercised nil (or nominal)

cost option award, where relevant) until the fifth anniversary of the grant of the

award.

13.1.10 Override

Notwithstanding any other provision of the LTIP, and irrespective of whether

any performance condition and/or additional condition attached to an award has

been satisfied, the Remuneration Committee retains discretion under the LTIP

to scale back the level of vesting that would otherwise result by reference to

formulaic outcomes alone.

13.1.11 Dividend equivalents

The Remuneration Committee may decide that participants will receive a

payment (in cash and/or Wickes Shares) on or shortly following the vesting/

exercise of their awards of an amount equivalent to the dividends that would

have been paid on those Wickes Shares between the time (or part of the time)

when the awards were granted and the time when they vest (or where an award

is structured as an option and subject to a holding period, the date of expiry of

the holding period or if earlier the exercise of such award). This amount may

assume the reinvestment of dividends. Alternatively, participants may have their

awards increased as if dividends were paid on the Wickes Shares subject to their

award and then assumed to be reinvested in further Wickes Shares.

13.1.12 Malus and clawback

The Remuneration Committee may apply the LTIP’s malus and clawback

provisions if, at any point prior to the third anniversary of the date of vesting

of an award, it is discovered that there has been a material misstatement of

the Company’s financial results, an error of calculation (including on account

of inaccurate or misleading information) or in the event of serious misconduct,

serious reputational damage or corporate failure.

The malus and clawback may be satisfied by way of a reduction in the amount of

any future bonus, existing award or future share awards and/or a requirement to

make a cash payment.

13.1.13 Transitional Demerger Awards

As noted above the Transitional Demerger Awards are planned for grant under

the LTIP within six weeks of the announcement of the Company’s half year

financial results.

The Transitional Demerger Awards shall ordinarily vest 50 per cent. on the first

anniversary of the completion of the Demerger with the balance vesting on the

second anniversary of the completion of the Demerger.

It is currently anticipated that the Transitional Demerger Awards shall be granted

over Wickes Shares having an aggregate market value at grant of no more than

£4 million and be granted to senior managers and the Executive Directors. The

reference grant values of the proposed Transitional Demerger Awards to the

Executive Directors are £866,250 for the Chief Executive Officer and £525,000

for the Chief Financial Officer. The maximum reference grant value of the

proposed Transitional Demerger Awards to other recipients shall not exceed

£330,000 per individual.

165

Any awards made will be subject to the continued employment of recipients and

for Executive Directors, a performance underpin.

Market value for the purposes of setting the number of shares under the

awards shall be based on the market value of Wickes Shares on the dealing

day immediately preceding the grant of an award (or by reference to a short

averaging period) or on such other basis as the Remuneration Committee

determines appropriate having regard to such exceptional factors as it considers

relevant.

The terms of the LTIP shall apply to the Transitional Demerger Awards in the

same manner as other awards under the LTIP.

13.2 Summary of Deferred Annual Bonus Plan

The Remuneration Committee will supervise the operation of the DABP. Any employee

(including an Executive Director) of the Company and its subsidiaries will be eligible to

participate in the DABP at the discretion of the Remuneration Committee.

13.2.1 Overview

The general purpose of the DABP is to facilitate the deferral of part of an

Executive Director’s and other key managers’ annual bonus into Wickes Shares

at the discretion of the Remuneration Committee. The decision (if any) to require

such bonus deferral in any year, and the portion of any bonus which will be

deferred, will be determined by the Remuneration Committee and, in the case

of Executive Directors, also having regard to the requirements of the prevailing

shareholder approved directors’ remuneration policy (where relevant).

The Remuneration Committee currently proposes to require 33 per cent of any

bonuses payable to the Executive Directors and 25 per cent of any bonuses

payable to key senior managers to be deferred under the DABP.

13.2.2 Grant of awards under the DABP

The Remuneration Committee may grant awards to acquire Wickes Shares as

conditional share awards or as nil (or nominal) cost options. The Remuneration

Committee may also decide to grant cash-based awards of an equivalent value

to share-based awards or to satisfy share-based awards in cash, although it

does not currently intend to do so.

13.2.3 Timing of grants

The Remuneration Committee may grant awards within six weeks following the

Company’s announcement of its results for any period or the date on which

bonuses are determined. The Remuneration Committee may also grant awards

at any other time when it considers there to be exceptional circumstances which

justify the granting of awards (for example, in the event awards cannot be granted

during the normal grant windows due to dealing constraints).

The first awards under the DABP are presently timetabled for grant in March/

April 2022 following the announcement of the Company’s annual results for

2021.

13.2.4 Individual limits

Awards may only be granted in relation to the deferral of bonus and accordingly

the employee may not receive awards in any financial year of Wickes Shares

having a market value in excess of the relevant portion of the bonus being

deferred under the DABP.

Market value for such purposes shall ordinarily be based on the market value

of Wickes Shares on the dealing day immediately preceding the grant of an

award (or by reference to a short averaging period) or on such other basis as

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the Remuneration Committee determines appropriate having regard to such

exceptional factors as it considers relevant.

13.2.5 Vesting of awards

The normal vesting date for awards will be the third anniversary of grant (or

such other normal vesting date (or dates in respect of distinct portions) as the

Remuneration Committee may specify).

Where awards are granted in the form of options, once exercisable these will

then remain exercisable up until the tenth anniversary of grant (or such shorter

period specified by the Remuneration Committee at the time of grant) unless

they lapse earlier. Shorter exercise periods shall apply in the case of ‘‘good

leavers’’ and/or vesting of awards in connection with corporate events.

13.2.6 Leaving employment

An award will be retained upon a participant’s termination of employment within

the Wickes Group except in the case of the participant’s dismissal for misconduct

or departure following misconduct that could have warranted such dismissal.

Retained awards will vest on the normal timetable unless the Remuneration

Committee decide that the participant’s award will instead vest when they leave.

13.2.7 Corporate events

In the event of a takeover or winding up of the Company (not being an internal

corporate reorganisation), all awards will vest early in full.

In the event of an internal corporate reorganisation, awards will be replaced by

equivalent new awards over shares in a new holding company.

If a demerger, special dividend or other similar event is proposed which, in the

opinion of the Remuneration Committee, would affect the market price of the

Wickes Shares to a material extent, then the Remuneration Committee may

adjust the awards, or may decide that awards will vest on the basis which would

apply in the case of a takeover as described above.

13.2.8 Dividend equivalents

The Remuneration Committee may decide that participants will receive a

payment (in cash and/or Wickes Shares) on or shortly following the vesting/

exercise of their awards of an amount equivalent to the dividends that would

have been paid on those Wickes Shares between the time when the awards were

granted and the time when they vest. This amount may assume the reinvestment

of dividends. Alternatively, participants may have their awards increased as

if dividends were paid on the Wickes Shares subject to their award and then

assumed to be reinvested in further Wickes Shares.

13.2.9 Malus and clawback

The Remuneration Committee may apply the DABP’s recovery and withholding

provisions if, at any point prior to the third anniversary of the grant of an award,

it is discovered that there has been a material misstatement of the Company’s

financial results, an error of calculation (including on account of inaccurate or

misleading information) or in the event of serious misconduct, serious reputational

damage or corporate failure.

The malus and clawback may be satisfied by way of a reduction in the amount of

any future bonus, existing award or future share awards and/or a requirement to

make a cash payment.

13.3 Summary of Share Incentive Plan

13.3.1 Operation

The Board will supervise the operation of the SIP. It is intended that the SIP will

meet the requirements of Schedule 2 to the Income Tax (Earnings and Pensions)

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Act 2003 (‘‘ITEPA’’) as amended and re-enacted from time to time in order to

provide UK tax-advantaged participation to UK employees.

The SIP comprises the following three elements and the Board may decide

which element to offer (if any) to eligible employees:

(a) “Free Shares” which are free Wickes Shares which may be allocated to

an employee.

The market value of Free Shares allocated to any employee in any

tax year may not exceed the limit permitted by the relevant legislation

(currently £3,600). Free Shares may be allocated to employees equally

or on the basis of salary, length of service or hours worked, or on the

basis of performance, as permitted by legislation.

(b) “Partnership Shares” which are Wickes Shares an employee may

purchase out of their pre-tax earnings.

The market value of Partnership Shares which an employee can agree

to purchase in any tax year may not currently exceed £1,800 (or 10

per cent. of the employee’s salary, if lower), or such other limit as may

be permitted by the relevant legislation. The funds used to purchase

Partnership Shares will be deducted from the employee’s pre-tax salary.

Salary deductions may be accumulated over a period of up to 12 months

and then used to buy Wickes Shares.

allocated to an employee who purchases Partnership Shares.

The Board may allocate up to a maximum of two Matching Shares for

every one Partnership Share purchased (or such other maximum ratio as

may be permitted by the relevant legislation). The same Matching Share

ratio will apply to all employees who purchase Partnership Shares under

the SIP on the same occasion.

13.3.2 Eligibility

Employees of the Company and any designated participating subsidiary who are

UK resident taxpayers are eligible to participate. The Board may allow non-UK

tax resident taxpayers to participate. The Board may require employees to have

completed a qualifying period of employment of up to 18 months in order to be

eligible to participate. All eligible employees must be invited to participate.

The Board currently envisages using the Free Shares element of the SIP within

six months of Admission to make an award of Free Shares (of an anticipated

aggregate value on award of up to £2.5 million) to eligible UK tax resident

employees.

13.3.3 Retention of Shares

The trustee of the SIP trust will acquire Partnership Shares on behalf of

participants and hold those shares in the SIP trust on their behalf. Employees

can withdraw Partnership Shares from the SIP trust at any time.

The trustee will award Free Shares and Matching Shares to participants and hold

those shares in the SIP trust on their behalf. The Board may decide that awards

of Free Shares or Matching Shares will be forfeited in certain circumstances.

The default position is that such shares will be forfeited on leaving employment

within three years of the award unless the participant leaves by reason of death,

injury, disability, redundancy, retirement or the employing company or business

ceasing to be part of the Wickes Group. In addition, the default position includes

that Free Shares and Matching Shares will be forfeited if the participant attempts

to withdraw such shares or the corresponding Partnership Shares (as relevant)

from the SIP trust within the first three years. The Board may amend or remove

the forfeiture provisions applying to a particular award but the same provisions

must apply to all shares under the same award.

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If a participant ceases to be employed by the Wickes Group at any time such

participant will be required to withdraw such participant’s shares from the SIP

trust (if they are not forfeited).

13.3.4 Corporate events

In the event of a general offer being made to Shareholders, participants will be

able to direct the trustees how to act in relation to their Wickes Shares. In the

event of a corporate reorganisation any Wickes Shares held by participants may

be replaced by equivalent shares in a new holding company.

13.3.5 Dividends on Wickes Shares held by the trustee of the SIP

Any dividends paid on Wickes Shares held by the trustee of the SIP on behalf

of participants may be either used to acquire additional Wickes Shares for

employees or distributed to participants.

13.3.6 Rights attaching to Wickes Shares

An employee will be treated as the beneficial owner of Wickes Shares held on

his/her behalf by the trustee of the SIP.

13.4 Summary of Sharesave

13.4.1 Operation

The operation of the Sharesave will be supervised by the Board.

It is intended that the Sharesave will meet the requirements of Schedule 3 to

ITEPA as amended and re-enacted from time to time in order to provide UK tax-

advantaged options to UK employees.

13.4.2 Eligibility

Employees and full-time directors of the Company and any designated

participating subsidiary who are UK resident tax payers are eligible to participate.

The Board may require employees to have completed a qualifying period of

employment of up to five years before the grant of options (although current

intention is to require no more than one year). The Board may also allow other

employees to participate.

13.4.3 Grant of options

Options can only be granted to employees who enter into HMRC approved

savings contracts, under which monthly savings are normally made over a

period of three or five years. Options must be granted within 30 days (or 42 days

if applications are scaled back) of the first day by reference to which the option

price is set. The number of Wickes Shares over which an option is granted will

be such that the total option price payable for those Wickes Shares corresponds

to the proceeds on maturity of the related savings contract.

13.4.4 Individual participation

Monthly savings by an employee under all savings contracts linked to options

granted under any sharesave scheme may not exceed the statutory maximum

(currently £500). The Board may set a lower limit in relation to any particular

grant.

13.4.5 Option price

The price per Wickes Share payable upon the exercise of an option will not be

less than the higher of: (i) 80 per cent. of the average middle-market quotation of

a Wickes Share on the London Stock Exchange on the three days preceding a

date specified in an invitation to participate in the Sharesave (or such other day

or days as may be agreed with HMRC); and (ii) if the option relates only to new

issue Wickes Shares, the nominal value of a Wickes Share.

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The option price will be determined by reference to dealing days which fall within

six weeks of Admission, the announcement by the Company of its results for

any period, any day on which a new savings contract prospectus is announced

or comes into force, or by reference to any other time when the Board considers

there to be exceptional circumstances which justify offering options under the

Sharesave.

13.4.6 Exercise of options

Options will normally be exercisable for a six-month period from the third or

fifth anniversary of the commencement of the related savings contracts. Earlier

exercise is permitted, however, in the following circumstances:

(a) following cessation of employment by reason of death, injury, disability,

redundancy, retirement or the business or company that the employee

works for ceasing to be part of the Wickes Group;

(b) where employment ceases more than three years from grant for any

reason other than dismissal for misconduct; and

the Company, except in the case of an internal corporate reorganisation

when the Board may decide to exchange existing options for equivalent

new options over shares in a new holding company.

Except where stated above, options will lapse on cessation of employment or

directorship within the Wickes Group.

Wickes Shares will be allotted or transferred to participants within 30 days of

exercise.

13.5 Principal terms common to the Wickes Share Plans

13.5.1 Life of the Wickes Share Plans

An award may not be granted more than 10 years after the date on which the

Wickes Share Plans were adopted.

No payment is required for the grant of an award save in the case of the purchase

of Partnership Shares or allocation of dividend shares under the SIP.

Awards are not transferable, except on death. Awards are not pensionable.

13.5.2 Participants’ rights

Awards under the Wickes Executive Share Plans and Sharesave will not confer

any shareholder rights until the awards have vested or the options have been

exercised as relevant and the participants have received their Wickes Shares.

13.5.3 Rights attaching to Wickes Shares

Any Wickes Shares allotted will rank equally with Wickes Shares then in issue

(except for rights arising by reference to a record date prior to their allotment).

13.5.4 Variation of capital

Other than in respect of the Wickes SIP, in the event of any variation of the

Company’s share capital (or in the case of the Wickes Executive Share Plans

only, in the event of a demerger, payment of a special dividend or similar

event which materially affects the market price of the Wickes Shares), the

Remuneration Committee or Board as relevant may make such adjustment as it

considers appropriate to the number of Wickes Shares subject to an award and/

or the exercise price payable (if any).

13.5.5 Overall limits

The Wickes Share Plans may operate over new issue shares, treasury shares or

shares purchased in the market.

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In any ten calendar year period, the Company may not issue (or grant rights

to issue) more than 10 per cent. of the issued ordinary share capital of the

Company under the Wickes Share Plans and any other (executive or otherwise)

share incentive plan adopted by the Company.

Furthermore, in the same period as noted above, the Company may not issue

(or grant rights to issue) more than 5 per cent. of the shares in issue under the

Wickes Executive Share Plans and any other executive share plan adopted by

the Company.

Treasury shares will count as new issue shares for the purposes of these limits

unless institutional investor guidelines cease to require them to count.

Wickes Shares issued or to be issued under awards or options granted before

Admission will not count towards these limits.

13.5.6 Alterations

The Remuneration Committee may, at any time, amend the Wickes Share

Plans in any respect, provided that the prior approval of Wickes Shareholders is

obtained for any amendments that are to the advantage of participants in respect

of the rules governing eligibility, limits on participation, the overall limits on the

issue of shares or the transfer of treasury shares, the basis for determining a

participant’s entitlement to, and the terms of, the shares or cash to be acquired

and the adjustment of awards.

The requirement to obtain the prior approval of Wickes Shareholders will not,

however, apply to any minor alteration made to benefit the administration of the

Wickes Share Plans, to take account of a change in legislation or to obtain or

maintain favourable tax, exchange control or regulatory treatment for participants

or for any company in the Wickes Group. Shareholder approval will also not be

required for any amendments to any performance condition applying to an award

amended in line with its terms.

13.5.7 Overseas plans

The Wickes Share Plans allow the Remuneration Committee or Board, as

relevant, to establish further plans for overseas territories, any such plan to

be similar to the relevant Wickes Share Plan, but modified to take account of

local tax, exchange control or securities laws, provided that any shares made

available under such further plans are treated as counting against the limits on

individual and overall participation in the relevant Wickes Share Plan.

13.6 Employee Benet Trust

At its discretion the Company may operate the Wickes Share Plans in conjunction with a

Wickes Employee Benefit Trust (‘‘Wickes EBT’’) which includes the flexibility to acquire

shares to hold or distribute them in respect of share options and awards granted pursuant

to the Company’s share plan arrangements from time to time. Such Wickes EBT would

not, without prior Wickes Shareholder approval, acquire shares which would cause its

holding to exceed 5 per cent. of the Wickes Shares in issue.

The proposed Wickes EBT is an offshore trust and the trustees may buy shares including

from on the market or subscribe for them. It is currently intended that, for the first set

of awards, the Wickes EBT will subscribe for Wickes Shares. It is intended that the

proposed Wickes EBT would be funded by way of loans and other contributions from the

Wickes Group.

14 Pensions

The Company has agreed with Travis Perkins that the Wickes Group employees shall remain

with the Travis Perkins Group’s defined contribution pension plan (the “Travis Perkins Group

Retirement Savings Plan”) for a short period of time following completion of the Demerger.

This is because the Travis Perkins Group will be changing its pension provider and it has been

agreed that it would be more efficient to establish a new defined contribution pension plan

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operated by the Wickes Group, on terms that are materially no less favourable than the Travis

Perkins Group Retirement Savings Plan, at such time. This is expected to take place within six

months after completion of the Demerger.

15 Employees

The average number of employees employed by the Wickes Group for Financial Year 2018,

Financial Year 2019 and Financial Year 2020 (calculated on the same basis) was 7,585, 7,533

and 7,981, respectively. The following table sets forth a breakdown of the Wickes Group’s

employees across its operations during Financial Years 2020, 2019 and 2018.

Financial Year

2020 2019 2018

Administration and support .......................................... 368 386 413

Sales............................................................................ 7,613 7,147 7,172

Total ............................................................................ 7,981 7,533 7,585

16 Subsidiaries, joint ventures and associates

Following completion of the Reorganisation and the Demerger becoming effective, the Company

will be the holding company of the Wickes Group. The following table shows the list of entities

which will be the principal subsidiaries and subsidiary undertakings of the Company immediately

following the Demerger becoming effective.

Name and registration

number

Country of incorporation

and registered ofce

Percentage

of ownership

interest Principal activity

Subsidiaries

Wickes Group Holdings

Limited

12219561

Vision House,

19 Colonial Way,

Watford WD24 4JL,

United Kingdom

100% Holding Company

Wickes Building Supplies

Limited

01840419

(1)

Vision House,

19 Colonial Way,

Watford WD24 4JL,

United Kingdom

100% Retail sale of new

goods (principal

trading entity for the

Wickes Business)

Wickes Finance Limited

02070200

(1)

Vision House,

19 Colonial Way,

Watford WD24 4JL,

United Kingdom

100% Holding Company

Wickes Holdings Limited

01738919

(1)

Vision House,

19 Colonial Way,

Watford WD24 4JL,

United Kingdom

100% Holding Company

Notes:

(1) Wickes Group Holdings Limited, of which the Company is the sole shareholder, owns 100 per cent. of the issued share capital in

Wickes Finance Limited and Wickes Building Supplies Limited. Wickes Finance Limited owns 100 per cent. of the issued share

capital in Wickes Holdings Limited.

17 Statutory Auditor

The auditor of the Company since the date of its incorporation has been KPMG LLP, whose

registered office is at 15 Canada Square, Canary Wharf, London, E14 5GL. KPMG LLP is a

member of the Institute of Chartered Accountants in England and Wales and has no material

interest in the Wickes Group.

18 Material contracts

The following contracts (not being contracts entered into in the ordinary course of business)

have been entered into by the Company or another member of the Wickes Group: (a) within the

two years preceding the date of this Prospectus which are, or may be, material to the Company

172

or any member of the Wickes Group; or (b) at any time and contain any provision under which

the Company or any member of the Wickes Group has any obligation or entitlement which is,

or may be, material to the Company or any member of the Wickes Group as at the date of this

Prospectus:

18.1 The Demerger Agreement

The Demerger Agreement was entered into between the Company and Travis Perkins

on 23 March 2021 to effect the Demerger and to govern the post-Demerger obligations

of the Wickes Group and the Travis Perkins Group in respect of, among other things,

their respective indemnity obligations.

The Demerger Agreement is conditional on: (i) the passing of the Demerger Resolution;

(ii) the Demerger Dividend being made such that the Wickes Shares are transferred to

Qualifying Travis Perkins Shareholders; (iii) the FCA having acknowledged (and such

acknowledgement not having been withdrawn) that the application for Admission has

been approved; and (iv) the London Stock Exchange having acknowledged (and such

acknowledgement not having been withdrawn) that the Wickes Shares will be admitted

to trading on its main market. As a result, the Demerger will become effective, save for

Admission, immediately prior to Admission.

The Demerger Agreement contains customary mutual cross-indemnities under which

the Company indemnifies the Travis Perkins Group against liabilities of any kind arising

directly or indirectly from or in consequence of the business carried on by the Wickes

Group and the Travis Perkins Group indemnifies the Company against liabilities of any

kind arising directly or indirectly from or in consequence of the business carried on by the

Travis Perkins Group other than the Wickes Group. Claims made under these mutual

cross-indemnities by the indemnified party are, subject to the right of the indemnifying

party to defend any such claim, required to be paid by the indemnifying party. These

mutual cross-indemnities are unlimited in terms of amount and duration.

The Demerger Agreement also sets out how intragroup balances and insurance claims

will be dealt with following the Demerger. Both groups have agreed to keep certain

information on the other group confidential, subject to certain customary exemptions.

The Demerger Agreement will terminate if the conditions set out above have not been

satisfied on or before 30 June 2021 (or such other date as Travis Perkins and the

Company may agree).

18.2 The Tax Deed

The Tax Deed, which was entered into between the Company and Travis Perkins on 23

March 2021, contains provisions relating to, among other things, the allocation of tax

liabilities between the Travis Perkins Group and the Wickes Group, the manner in which

each group will prepare and agree tax computations and returns, the basis on which

certain claims and elections can be made, the conduct of negotiations and disputes with

the tax authorities, the exchange of information relating to their tax affairs and certain

other administrative matters relating to the respective groups.

The two general principles underlying the Tax Deed are that:

18.2.1 each company in the Wickes Group and the Travis Perkins Group, respectively,

will be responsible for the tax liabilities relating broadly to the assets owned by it

following the Demerger, whether arising before or after the Demerger becoming

effective, and the tax liabilities relating to its own activities following the Demerger

becoming effective; and

18.2.2 the Wickes Group and the Travis Perkins Group will co-operate in relation to any

tax matter or issue which gives rise or may give rise to a tax liability in both the

Wickes Group and the Travis Perkins Group.

173

18.3 The Transitional Services Agreement

Overview of agreement

On 23 March 2021, Wickes Building Supplies entered into a Transitional Services

Agreement with Travis Perkins Trading Company Limited (“TPTC”) under which TPTC

has agreed to provide or procure the provision of certain transitional services to the

Wickes Group for an agreed term following implementation of the Demerger. The

Transitional Services Agreement will continue until the date that the last service term

expires (envisaged to be within 24 months following implementation of the Demerger,

subject to any extension as described below). The services that are to be provided under

the Transitional Services Agreement are:

18.3.1 Human Resources: Payroll; rewards and benefits; compensation; HR information

systems access and administration; HR data management; employee relations

and legal services; management of apprenticeships levy; recruitment systems

access; company car expenses support; and, pensions services.

18.3.2 Information Technology: Wide and local area network support; telephony and

internet access; data centre, storage and computation facilities; on-premise

technology solutions (including business applications, delivery services, end-user

and platform services); Google collaboration and productivity services (G-Suite);

software as a service solution; and, technical support and maintenance services.

Overview of terms

TPTC is bound to provide or procure the provision of the services to the Wickes Group

for the relevant term. TPTC must use its best endeavours to provide the services to the

same standard to which they were provided during the twelve-month period prior to the

implementation of the Demerger.

Where Wickes Building Supplies identifies any service that was provided to it by the

Travis Perkins Group prior to the Demerger but which has been omitted from the service

descriptions, it has the right to require TPTC to provide or procure the provision of the

omitted service in the same manner and subject to the same terms as the services

included in the descriptions.

Wickes Building Supplies is obliged to pay fees for each service calculated in accordance

with the terms of the Transitional Services Agreement. The fees include charges from

TPTC for the services along with charges for certain IT security measures and any third-

party costs associated with the provision of the services or the passing on of the benefit

of group contracts. The total fees payable under the Transitional Services Agreement

during the first 12 months are estimated at approximately £6 million, which is expected

to decrease over the subsequent 12 months as the Wickes Group transitions off the

Transitional Services Agreement and reduces its levels of services and associated

costs.

Pursuant to the Transitional Services Agreement, a series of transfer plans have been

agreed between Wickes Building Supplies and TPTC, which are designed to ensure that

each service can be transitioned to the Wickes Group or a third party by the end of the

relevant transitional service term. The parties are under absolute obligations to perform

their respective tasks in accordance with the agreed transfer plan and TPTC is further

obliged to provide all reasonable assistance that Wickes Building Supplies may require

to transition off the Transitional Services Agreement.

In respect of certain elements of the services, Wickes Building Supplies has the right to

a single extension of those elements for a period of up to six months. Wickes Building

Supplies must provide three months prior notice ahead of the expiry of the relevant

services term to extend. There are some inter-dependencies between service elements.

Where this is the case, Wickes Building Supplies may only extend a service element

to the extent that any other elements on which it depends are similarly extended. To

ensure that the parties are motivated to complete the transition of the services, a ratchet

is applied to any extension of the services. The remaining elements of the services are

tied to underlying contracts with fixed terms that will be retained by the Travis Perkins

Group and cannot be extended.

174

Subject to certain conventional exceptions (e.g. in instances of fraud or personal injury

caused by negligence) where both parties liability is uncapped, the maximum liability of

either party in relation to the Transitional Services Agreement is capped at 100 per cent.

of the fees paid in the relevant contract year.

Wickes Building Supplies may terminate certain services on prior written notice. Where

services are dependent on each other, Wickes Building Supplies must terminate them

all at the same time. TPTC may only terminate the Transitional Services Agreement

for unpaid service charges if the amount remaining unpaid after 30 days written notice

to pay the unpaid sums due exceeds £250,000. Either party may terminate on written

notice if the other party becomes insolvent or if the other party fails to remedy a material

breach of the Transitional Services Agreement within 30 days of being given written

notice of the breach.

18.4 Sponsors’ Agreement

The Company, Travis Perkins and the Joint Sponsors entered into the Sponsors’

Agreement on 23 March 2021. Pursuant to the terms of the Sponsors’ Agreement:

18.4.1 the Company appoints Citi and Deutsche Bank as Joint Sponsors in connection

with the Demerger, the application for Admission, and the production and

publication of this document and the Joint Sponsors accept such appointment;

18.4.2 the Joint Sponsors have been granted all powers, authorities and discretions

which are necessary for or incidental to the performance of its responsibilities

under the Listing Rules and the Prospectus Regulation Rules;

18.4.3 the Company has agreed to deliver certain documents to the Joint Sponsors

relating to the application for Admission and the Joint Sponsors’ responsibilities

under the Listing Rules and Prospectus Regulation Rules;

18.4.4 the Company has given customary representations, warranties, undertakings

and indemnities to the Joint Sponsors; and

18.4.5 each of Citi and Deutsche Bank has the right to terminate the Sponsors’

Agreement in certain customary circumstances prior to Admission. These

circumstances include (among others): (i) any statement in this Prospectus has

become or is discovered to be untrue, inaccurate or misleading in a manner which

is material in the context of the Demerger; and (ii) the breach by the Company

of any of its warranties, representations, undertakings or obligations contained

in the Sponsors’ Agreement, this Prospectus or the Demerger Agreement where

the effect of such breach, in the opinion of either Citi or Deutsche Bank (acting in

good faith) is material in the context of the Demerger.

18.5 Revolving Credit Facility

On 23 March 2021 (the “Signing Date”), Wickes Group Holdings Limited and Wickes

Building Supplies Limited, as borrowers, and the Company, Wickes Group Holdings

Limited, Wickes Building Supplies Limited and Wickes Finance Limited as guarantors,

entered into a new £80 million revolving credit facility with National Westminster Bank

plc as agent and security agent and Barclays Bank plc, BNP Paribas, London Branch,

National Westminster Bank plc, The Governor and Company of the Bank of Ireland

as lenders (the “Lenders”) (the “Revolving Credit Facility”). Up to £20 million of the

Revolving Credit Facility may be carved out into ancillary facilities to be provided by the

Lenders and their affiliates to allow for overdrafts, short term loans, letters of credit or

other ancillary bilateral facilities customary for a facility of this nature. The Revolving

Credit Facility is intended to be used for general corporate purposes and may be drawn

in pounds sterling, Euro, US dollars or any other freely available currency approved by

all the Lenders.

The borrowers and guarantors have provided English law floating charges over all of

their assets in support of their obligations under the Revolving Credit Facility.

175

Utilisation of the Revolving Credit Facility is subject to a number of conditions precedent

typical to a revolving credit facility of this nature, including completion of the Demerger

and Admission having taken place.

All amounts outstanding under the Revolving Credit Facility shall be repaid on the date

that is three years after the Signing Date (the “Termination Date”) and the Revolving

Credit Facility shall be available for utilisation until the date falling one month prior to

the Termination Date. The Revolving Credit Facility includes options to extend the

Termination Date of the Revolving Credit Facility by one year at each of the first and/or

the second anniversary of the Signing Date. Any such extensions may only be granted

at the discretion of the Lenders and subject to the payment of any extension fee (in

an amount to be determined at the time of any extension) to the relevant extending

Lenders.

The Revolving Credit Facility also contains an uncommitted accordion mechanism, such

that the Company may request that the total commitments are increased by a maximum

amount of £20 million.

Interest in respect of loans under the Revolving Credit Facility (but not any ancillary

facility) will be payable at a rate per annum equal to the aggregate of (a) a margin of

2.25 per cent.; plus (b) a Compound Reference Rate (in relation to pounds sterling,

based on SONIA and, in relation to US dollars, based on SOFR) or, in relation to any loan

in Euro, EURIBOR (or, if the Compound Reference Rate or EURIBOR (as applicable) is

unavailable and subject to various market standard fallbacks, a replacement benchmark

agreed with certain of the Lenders). The rate and time of payment of interest, commission,

fees and any other remuneration in respect of any ancillary facility shall be determined

by agreement between the relevant ancillary lender and the borrower of that ancillary

facility based upon normal market rates and terms.

The Revolving Credit Facility has the following financial covenants, which will be tested

on a quarterly basis:

18.5.1 Gearing: the ratio of total non-property net debt to adjusted EBITDA (earnings

before interest, taxes, depreciation and amortisation) does not exceed 1.5x; and

18.5.2 Fixed charge cover: the ratio of EBITDAR (earnings before interest, taxes,

depreciation and amortisation and restructuring or rent costs) to net finance

charges and cash rental payments shall not be lower than 1.5x.

In addition, the Revolving Credit Facility contains customary covenants (including those

related to disposals, acquisitions, change of business, financial indebtedness, granting

of security, sanctions, anti-bribery, anti-corruption and anti-money laundering) subject to

customary exceptions, certain carve-outs, de minimis exemption baskets and material

adverse effect qualifications. No Lender will have the ability to cancel their commitments

under the Revolving Credit Facility in the period from the Signing Date until the date of

the admission to listing of the Company other than on the occurrence of certain significant

events or circumstances which would (with the expiry of a grace period, the giving of

notice, the making of any determination or any combination thereof) be an event of

default (including, for example, non-payment of amounts due under the Revolving Credit

Facility, insolvency or insolvency proceedings in respect of any borrower or guarantor

or the documents in respect of the Revolving Credit Facility ceasing to be legal, valid,

binding and enforceable).

The Revolving Credit Facility contains a change of control provision under which, upon

the occurrence of a change of control of the Company, the Lenders may refuse to fund

utilisations under the Revolving Credit Facility, cancel their commitments and require

repayment of all outstanding amounts. The Demerger and Admission will not constitute

a change of control under the Revolving Credit Facility.

19 Related party transactions and other arrangements

Details of related party transactions entered into by members of the Wickes Group during the

period covered by the historical financial information contained in this Prospectus are set out in

Note 25 of Section B of Part IX: “Historical Financial Information”.

176

Save as set out above, there are no related party transactions that were entered into during the

period covered by the historical financial information or since the end of Financial Year 2019 to

the date of this Prospectus.

20 Litigation

There are no governmental, legal or arbitration proceedings (including any such proceedings

which are pending or threatened or of which the Company is aware) during the 12 months

preceding the date of this Prospectus which may have, or have had, a significant effect on the

Company or the Wickes Group’s financial position or profitability.

21 Working capital

The Company is of the opinion that the Wickes Group has sufficient working capital for its

present requirements, that is for at least the next 12 months from the date of this document.

22 No signicant change

There has been no significant change in the financial position or financial performance of

the Wickes Group since 26 December 2020, being the date to which the historical financial

information in Part IX: “Historical Financial Information” has been published.

23 Consents

KPMG LLP has given and not withdrawn its written consent to the inclusion in this Prospectus

of the reports set out in Section A of Part IX: “Historical Financial Information” and Section C of

Part X: “Unaudited Pro Forma Statement of Net Assets” and has authorised those parts of the

Prospectus which comprise its reports for the purposes of Rule 5.3.2R(2)(f) of the Prospectus

Regulation Rules.

24 Takeover regulation and compulsory acquisition rules relating to Wickes Shares

Following Admission, the Company will be subject to the Takeover Code and its shareholders

will therefore be entitled to the protections afforded by the Takeover Code. The Takeover Code

is issued and administered by the Takeover Panel.

Other than as provided by the Takeover Code and Part 28 of the Companies Act, there are no

rules or provisions relating to mandatory bids and/or squeeze-out and sell-out rules that apply to

the Wickes Shares.

24.1 Mandatory bids

Under Rule 9 of the Takeover Code, when: (i) a person acquires any interest in shares

which (when taken together with shares in which such person and persons acting in

concert with such person are interested) carry 30 per cent. or more of the voting rights of

a company subject to the Takeover Code; or (ii) any person who, together with persons

acting in concert with him, is interested in shares which in the aggregate carry not less

than 30 per cent. of the voting rights of a company subject to the Takeover Code but

does not hold shares carrying more than 50 per cent. of such voting rights and such

person, or any persons acting in concert with him, acquires an interest in any other

shares which increases the percentage of the shares carrying voting rights in which

such person is interested, then, in either case, that person, together with the person

acting in concert with him, is normally required to extend offers in cash, at the highest

price paid by such person (or any persons acting in concert with such person) for shares

in the company within the preceding 12 months, to the holders of any class of equity

share capital, whether voting or non-voting, and also to the holders of any other class of

transferable securities carrying voting rights.

“Interests in shares” is defined broadly in the Takeover Code. A person who has long

economic exposure, whether absolute or conditional, to changes in the price of shares

will be treated as interested in those shares. A person who only has a short position in

shares will not be treated as interested in those shares.

“Voting rights” for these purposes means all the voting rights attributable to the share

capital of a company which are currently exercisable at a general meeting. Persons

177

acting in concert (and concert parties) comprise persons who, pursuant to an agreement

or understanding (whether formal or informal), co-operate to obtain or consolidate control

of a company or to frustrate the successful outcome of an offer for a company. Certain

categories of people are deemed under the Takeover Code to be acting in concert with

each other unless the contrary is established.

24.2 Authority of the Company to redeem or purchase its own shares

When a company redeems or purchases its own voting shares, under Rule 37 of the

Takeover Code any resulting increase in the percentage of shares carrying voting rights

in which a person or group of persons acting in concert is interested will be treated as

an acquisition for the purpose of Rule 9 of the Takeover Code. Rule 37 of the Takeover

Code provides that, subject to prior consultation, the Takeover Panel will normally

waive any resulting obligation to make a general offer if there is a vote of independent

shareholders and a procedure along the lines of that set out in Appendix 1 to the

Takeover Code is followed. Appendix 1 to the Takeover Code sets out the procedure

which should be followed in obtaining that consent of independent shareholders. Under

Note 1 on Rule 37 of the Takeover Code, a person who comes to exceed the limits in

Rule 9.1 in consequence of a company’s purchase of its own shares will not normally

incur an obligation to make a mandatory offer unless that person is a director, or the

relationship of the person with any one or more of the Directors is such that the person

is, or is presumed to be, concert parties with any of the Directors. However, there is

no presumption that all the Directors (or any two or more directors) are concert parties

solely by reason of a proposed purchase by a company of its own shares, or the decision

to seek shareholders’ authority for any such purchase.

Under Note 2 on Rule 37 of the Takeover Code, the exception in Note 1 on Rule 37 of the

Takeover Code described above will not apply, and an obligation to make a mandatory

offer may therefore be imposed, if a person (or any relevant member of a group of

persons acting in concert) has acquired an interest in shares at a time when they had

reason to believe that such a purchase of their own shares by the company would take

place. Note 2 on Rule 37 of the Takeover Code will not normally be relevant unless the

relevant person knows that a purchase for which requisite shareholder authority exists is

being, or is likely to be, implemented (whether in whole or in part).

The Takeover Panel must be consulted in advance in any case where Rule 9 of the

Takeover Code might be relevant. This will include any case where a person or group

of persons acting in concert is interested in shares carrying 30 per cent. or more but do

not hold shares carrying more than 50 per cent. of the voting rights of a company, or

may become interested in 30 per cent. or more on full implementation of the proposed

purchase by the company of its own shares. In addition, the Takeover Panel should

always be consulted if the aggregate interests in shares of the directors and any other

persons acting in concert, or presumed to be acting in concert, with any of the directors

amount to 30 per cent. or more, or may be increased to 30 per cent. or more on full

implementation of the proposed purchase by the company of its own shares.

24.3 Squeeze-out

Under the compulsory acquisition procedures set out in sections 979 to 991 of the

Companies Act, if a takeover offer (as defined in section 974 of the Companies Act) is

made for the Wickes Shares and the offeror were to acquire, or unconditionally contract

to acquire, not less than 90 per cent. in value of the shares to which the takeover offer

relates (the “Takeover Offer Shares”) and not less than 90 per cent. of the voting rights

attached to the Takeover Offer Shares within three months of the last day on which

its offer can be accepted, it could acquire compulsorily the remaining 10 per cent. It

would do so by sending a notice (pursuant to section 979 of the Companies Act) to

outstanding shareholders telling them that it will compulsorily acquire their Takeover

Offer Shares and then, six weeks later, it would execute a transfer of the outstanding

Takeover Offer Shares in its favour and pay the consideration to the Company, which

would hold the consideration on trust for outstanding shareholders. The consideration

offered to the shareholders whose Takeover Offer Shares are acquired compulsorily

178

under the Companies Act must, in general, be the same as the consideration that was

available under the takeover offer.

A minority shareholder may bring an application to the Court under section 986 of the

Companies Act within six weeks of receiving a section 979 notice. The Court may:

24.3.1 order that the offeror shall not be entitled or bound to acquire the relevant shares;

24.3.2 specify terms of acquisition different from those of the offer.

24.4 Sell-out

Section 983 of the Companies Act gives minority shareholders a right to be bought out

in certain circumstances by an offeror who has made a takeover offer. If a takeover offer

related to all the Wickes Shares and, at any time before the end of the period within

which the offer could be accepted, the offeror held or had agreed to acquire not less

than 90 per cent. of the Wickes Shares to which the offer relates, any holder of Wickes

Shares to which the offer related who had not accepted the offer could by a written

communication to the offeror require it to acquire those Wickes Shares. The offeror is

required to give any shareholder notice of such shareholder’s right to be bought out

within one month of that right arising. The offeror may impose a time limit on the rights

of the minority shareholders to be bought out, but that period cannot end less than three

months after the end of the acceptance period. If a shareholder exercises such rights,

the offeror is bound to acquire those Wickes Shares on the terms of the offer or on such

other terms as may be agreed.

If a shareholder gives notice under section 983 of the Companies Act, both the

shareholder and the offeror have the right to make an application to the Court. The Court

has the power to vary the terms of the acquisition but cannot order that the offeror shall

not be entitled or obliged to acquire the relevant shares.

25 Costs and expenses

The Company will not receive any proceeds as a result of the Demerger.

Under the Demerger Agreement, Travis Perkins and Wickes have agreed to allocate the

professional fees and charges incurred in connection with the Demerger (including Joint Sponsor

fees, structuring and separation advice and accounting fees), while the Travis Perkins Group

retained costs arising from the General Meeting and production of this document (other than

printing) and the Wickes Group all other costs. The estimated total costs and expenses for the

Wickes Group that are directly attributable to the Demerger (excluding one-off costs arising

from the separation of the Wickes Business from the Travis Perkins Group) are £5.0 million

(excluding costs incurred and reflected in prior year consolidated financial statements of the

Travis Perkins Group).

26 Third party information

Where third party information has been used in this Prospectus, the source of such information

has been identified. The Company confirms that such information has been accurately reproduced

and, so far as the Company is aware and has been able to ascertain from information published

by such third parties, no facts have been omitted which would render the reproduced information

inaccurate or misleading.

27 Documents available for inspection

The following documents are available for inspection during usual business hours on any

weekday (Saturdays, Sundays and public holidays excepted) for a period of 12 months following

the date of this Prospectus at the offices of Linklaters LLP at One Silk Street, London EC2Y 8HQ

and at the Company’s registered office at Vision House, 19 Colonial Way, Watford WD24 4JL,

United Kingdom and on the Company’s website at the following address www.wickesplc.co.uk:

27.1 the up-to-date Articles of the Company;

27.2 the consent letter referred to in section 23 (Consents) of this Part XII: “Additional

Information”;

179

27.3 the historical financial information of the Wickes Group for the three Financial Years

ended 26 December 2020, which is set out in Section B of Part IX: “Historical Financial

Information”;

27.4 the report on the historical financial information by KPMG LLP set out in Section A of

Part IX: “Historical Financial Information”;

27.5 the report on the pro forma financial information by KPMG LLP set out in Section C of

Part X: “Unaudited Pro Forma Statement of Net Assets”;

27.6 the Wickes Share Plans; and

27.7 this Prospectus.

This Prospectus will be published in electronic form and be available on the Company’s website

at www.wickesplc.co.uk.

Dated: 24 March 2021

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PART XIII

DEFINITIONS

The following definitions apply throughout this Prospectus unless the context requires otherwise:

Admission the admission of the Wickes Shares to the premium

listing segment of the Official List and to trading on the

London Stock Exchange’s main market for listed securities

becoming effective in accordance with, respectively the

Listing Rules and the Admission and Disclosure Standards

Admission and Disclosure

Standards

the current edition of the Admission and Disclosure

Standards produced by the London Stock Exchange

Articles the articles of association of the Company from time to

time

ASA Advertising Standards Authority

Audit and Risk Committee the audit and risk committee of the Company

Auditor and Reporting Accountants KPMG LLP

Board the board of directors of the Company

Chair the chair of the Board

Citi Citigroup Global Markets Limited

Companies Act the Companies Act 2006, as such act may be amended,

modified or re-enacted from time to time

Company or Wickes Wickes Group plc (incorporated in England and Wales

under the Companies Act with registered number

12189061), whose registered office is at Vision House,

19 Colonial Way, Watford WD24 4JL, United Kingdom

Consumer Credit Sourcebook the Financial Conduct Authority’s specialist sourcebook for

credit-related regulated activities

core products and/or revenue (as applicable) in relation to Local

Trade and DIY customer sales (i.e., excluding products

and/or revenue through DIFM sales)

Court the High Court of Justice in England and Wales

CREST the UK-based system for the paperless settlement of

trades in listed securities, of which Euroclear is the

operator

CREST Regulations the Uncertificated Securities Regulations 2001 (SI 2001

No. 3755) (as amended)

Demerger the proposed demerger of the Wickes Group from the

Travis Perkins Group to be implemented through the

Demerger Dividend and on the terms and subject to the

conditions set out in the Demerger Agreement

Demerger Agreement the agreement relating to the Demerger between Travis

Perkins and the Company, a summary of the principal

terms of which is set out in section 18 of Part XII:

“Additional Information”

Demerger Dividend the in-specie distribution of the Wickes Shares by Travis

Perkins as more fully described in the Travis Perkins

Circular

181

Demerger Resolution the ordinary resolution to be proposed at the General

Meeting to approve the Demerger Dividend and the

Demerger for the purposes of Chapter 10 of the Listing

Rules, as set out in the notice of General Meeting at the

end of the Travis Perkins Circular

Deutsche Bank Deutsche Bank AG, London Branch

DIFM Do-it-for-me home improvement services

Directors the Executive Directors and the Non-Executive Directors

of the Company

Disclosure Guidance and

Transparency Rules

the disclosure guidance and transparency rules produced

by the FCA and forming part of the handbook of the

FCA through which a manager derives its status as an

authorised person under the FSMA rules and guidance,

as, from time to time, amended

DIY Do-it-yourself

ESG Committee The environmental, social and governance committee of

the Company

EU the European Union

EU-UK TCA EU-UK Trade and Cooperation Agreement, entered into

between the United Kingdom and the European Union on

30 December 2020

Euroclear Euroclear UK & Ireland Limited, a company incorporated

under the laws of England and Wales

Executive Directors the executive Directors of the Company

Existing Travis Perkins Shares the existing ordinary shares of £0.10 each in the capital of

Travis Perkins

FCA the UK Financial Conduct Authority, in its capacity as

the competent authority for the purposes of Part VI of

FSMA and in the exercise of its functions in respect of the

admission to the Official List otherwise than in accordance

with Part VI of FSMA

Financial Year 2013 the 52-week period ending 28 December 2013

Financial Year 2014 the 52-week period ending 27 December 2014

Financial Year 2015 the 52-week period ending 26 December 2015

Financial Year 2016 the 52-week period ending 31 December 2016

Financial Year 2017 the 52-week period ending 30 December 2017

Financial Year 2018 the 52-week period ending 29 December 2018

Financial Year 2019 the 52-week period ending 28 December 2019

Financial Year 2020 the 52-week period ending 26 December 2020

FSMA the Financial Services and Markets Act 2000, as amended

182

General Meeting the general meeting of Travis Perkins Shareholders to

be held at Northampton Rugby Football Club, Franklin’s

Gardens, Weedon Road, Northampton NN5 5BG, United

Kingdom on 27 April 2021 at 10.45 a.m., or, if later, at

the time which is immediately after Travis Perkins’ annual

general meeting convened for 10.00 a.m. on the same

place and day shall have been concluded or adjourned, to

consider and, if thought fit, pass the Resolutions, notice of

which is set out at the end of the Travis Perkins Circular,

and any adjournment thereof

HDC the Wickes Group’s home delivery centre

HMRC Her Majesty’s Revenue and Customs

IASB the International Accounting Standards Board

IFRS the International Financial Reporting Standards, in

conformity with the requirements of the Companies Act

2006

Joint Sponsors Citi and Deutsche Bank

Latest Practicable Date 19 March 2021 (being the latest practicable date prior to

publication of this document)

Lenders Barclays Bank plc, BNP Paribas, London Branch, National

Westminster Bank plc, and The Governor and Company of

the Bank of Ireland

Listing Rules the listing rules relating to admission to the Official List

made under section 73A(2) of FSMA

London Stock Exchange London Stock Exchange plc

London Stock Exchange Daily

Ofcial List

the daily record of prices at which securities have been

traded on the London Stock Exchange

Market Abuse Regulation the EU Market Abuse Regulation (No 596/2014) and the

delegated acts, implementing acts and technical standards

thereunder as such legislation forms part of retained EU

law

Medicare the national health insurance programme in the United

States as administered by the Centers for Medicare and

Medicaid Services

New Travis Perkins Shares the proposed new ordinary shares in the capital of

Travis Perkins arising from the Travis Perkins Share

Consolidation

Nominations Committee the nominations committee of the Company

Non-Executive Directors the non-executive Directors of the Company

OCI Other Comprehensive Income

Ofcial List the official list of the FCA

OLI “online, in-store” product search and order capabilities

Ordinary Resolution a resolution of the Company passed in accordance with

the Companies Act

Overseas Shareholders holders of Travis Perkins Shares with a registered

address outside the UK or who are citizens or residents of

countries that are not the UK

183

PRA the UK Prudential Regulation Authority

Prospectus this prospectus approved by the FCA and published on 24

March 2021 as a prospectus prepared in accordance with

the Prospectus Regulation Rules made under section 73A

of FSMA

Prospectus Regulation Regulation (EU) 2017/1129 and the delegated acts,

implementing acts and technical standards thereunder as

such legislation forms part of retained EU law as defined in

the EU (Withdrawal) Act 2018

Prospectus Regulation Rules means the Prospectus Regulation Rules made by the

FCA, as from time to time amended and includes, where

appropriate, relevant provisions of the Prospectus

Regulation as referred to or incorporated within the

Prospectus Regulation Rules and “PRR” is a reference to

any one of the Prospectus Regulation Rules

Qualifying Travis Perkins

Shareholder

a Travis Perkins Shareholder recorded on the Travis

Perkins Share Register at the Record Time

Record Time 6.00 p.m. (London time) on 27 April 2021, being the time

at which the Travis Perkins Shareholders are required to

be on the Travis Perkins Share Register in order to be

entitled to the Demerger Dividend

Registrar Link Market Services Limited, trading as Link Group

Remuneration Committee the remuneration committee of the Company

Reorganisation the corporate reorganisation of the Wickes Group

described in section 4.2 of Part XII: “Additional

Information”

Resolutions the Demerger Resolution, the Share Consolidation

Resolution and the Share Plans Resolution to be proposed

at the General Meeting as set out in the notice of General

Meeting at the end of the Travis Perkins Circular

Revolving Credit Facility the revolving credit facility of £80 million entered into

between Wickes Group Holdings Limited and Wickes

Building Supplies Limited, as borrowers, and the

Company, Wickes Group Holdings Limited, Wickes

Building Supplies Limited and Wickes Finance Limited

as guarantors, with National Westminster Bank plc as

agent and security agent and the Lenders, in connection

with the Demerger on 23 March 2021, a summary of the

principal terms of which is set out in section 18 of Part XII:

“Additional Information”

SDC the Wickes Group’s store delivery centre

Senior Management or Senior

Manager

those individuals identified as such in Part V: “Directors,

Senior Management and Corporate Governance”

Share Consolidation Resolution the ordinary resolution to be proposed at the General

Meeting as set out in the notice of General Meeting at the

end of the Travis Perkins Circular in relation to the Travis

Perkins Share Consolidation

Share Plans Resolution the ordinary resolution to be proposed at the General

Meeting, as set out in the notice of General Meeting at the

end of the Travis Perkins Circular in relation to the Wickes

Share Plans

184

Sponsors’ Agreement the sponsors’ agreement between the Joint Sponsors,

Travis Perkins and the Company, a summary of the

principal terms of which is set out in section 18 of Part XII:

“Additional Information”

Subsidiary has the meaning given to it in section 1159 of the

Companies Act 2006

Takeover Code the UK City Code on Takeovers and Mergers

Takeover Panel the UK Panel on Takeovers and Mergers

Tax Deed the Tax Deed entered into by Travis Perkins and the

Company, a summary of the principal terms of which is set

out in section 18 of Part XII: “Additional Information”

Transitional Services Agreement the transitional services agreement entered into by Travis

Perkins Trading Company Limited and Wickes Building

Supplies, a summary of the principal terms of which is set

out in section 18 of Part XII: “Additional Information”

Travis Perkins Travis Perkins plc (incorporated and registered in

England and Wales with registered number 00824821),

whose registered office is at Lodge Way House, Lodge

Way, Harlestone Road, Northampton NN5 7UG,

United Kingdom

Travis Perkins Articles the articles of association of Travis Perkins from time to

time

Travis Perkins Board the board of directors of Travis Perkins

Travis Perkins Circular the circular to Travis Perkins Shareholders dated the date

of this Prospectus containing, among other things, details

of the Demerger and notice of the General Meeting

Travis Perkins Group in respect of any time prior to completion of the Demerger,

Travis Perkins and its subsidiaries and subsidiary

undertakings including those companies which form part of

the Wickes Group; and in respect of any period following

completion of the Demerger, Travis Perkins and its

subsidiaries and subsidiary undertakings excluding those

companies which form part of the Wickes Group

Travis Perkins Share Consolidation the proposed share consolidation of Existing Travis

Perkins Shares to take place following the Demerger

Travis Perkins Share Plans the Travis Perkins Co-Investment Plan, the Travis

Perkins Deferred Share Bonus Plan, the Travis Perkins

Performance Share Plan, the Travis Perkins Share

Incentive Plan and the Travis Perkins Sharesave Scheme

Travis Perkins Share Register the share register of Travis Perkins

Travis Perkins Shareholders holders of Travis Perkins Shares

Travis Perkins Shares prior to the Travis Perkins Share Consolidation, the

Existing Travis Perkins Shares and after the Travis Perkins

Share Consolidation, the New Travis Perkins Shares

UK the United Kingdom of Great Britain and Northern Ireland

UK Corporate Governance Code the UK Corporate Governance Code published by the

Financial Reporting Council and dated July 2019, as

amended from time to time

185

United States or US the United States of America, its territories and

possessions, any State of the United States of America,

and the District of Columbia

US Securities Act the US Securities Act of 1933, as amended

Wickes or Company Wickes Group plc (incorporated in England and Wales

under the Companies Act with registered number

12189061), whose registered office is at Vision House,

19 Colonial Way, Watford WD24 4JL, United Kingdom

Wickes Building Supplies Wickes Building Supplies Limited (incorporated and

registered in England and Wales with registered number

01840419), whose registered office is at Vision House,

19 Colonial Way, Watford, WD24 4JL, United Kingdom

Wickes Business prior to implementation of the Demerger, the home

improvement retail business of the Travis Perkins Group

comprising the activities of Wickes Building Supplies and

intermediate companies; or, following the implementation

of the Demerger, the home improvement retail business of

the Wickes Group, as the context requires

Wickes Group Wickes and its subsidiaries from time to time which, prior

to the date of the Demerger, shall be deemed to include

the historical activities of the Wickes Business

Wickes Share Plans the Wickes Deferred Annual Bonus Plan, the Wickes Long

Term Incentive Plan, the Wickes Share Incentive Plan, and

the Wickes Savings Related Share Option Scheme

Wickes Shareholders the holders of Wickes Shares in the capital of the

Company

Wickes Shares the ordinary shares of £0.10 each in the capital of the

Company

All times referred to are London times unless otherwise stated.

All references to legislation in this document are to the legislation of England and Wales unless otherwise

stated. Any reference to any provision of any legislation shall include any amendment, modification, re-

enactment or extension thereof.

Words importing the singular shall include the plural and vice versa, and words importing the masculine

gender shall include the feminine or neutral gender.

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