Saturday, July 13, 2024

Wickes Ventures into Solar Panel Sector with Acquisition

A Yorkshire-based solar panel installation company has basked in the spotlight as DIY chain Wickes has agreed to acquire the business for up to £36 million.

Solar Fast, founded less than five years ago, emerged as a natural progression for a household boiler installation enterprise established by Castleford plumber David Draper.

Wickes has secured a 51 per cent stake in Solar Fast for an initial investment of at least £5 million, with the potential to value the entire Solar Fast business at £36 million based on its performance this year. The remaining 49 per cent can be acquired by Wickes in 2025.

The future financial outlook for Solar Fast remains uncertain.

During 2022-23, Solar Fast completed over 3,700 solar projects in customers’ homes, generating pre-tax profits of £3.9 million on revenues of £33.1 million for the fiscal year ending April 30.

However, Wickes acknowledged in a statement that the solar market experienced a surge in demand during the energy crisis of 2022-23, implying that both market demand and Solar Fast’s revenue might decline in 2024 before rebounding thereafter.

Nonetheless, Wickes sees potential in the solar sector. Citing a report by Wood Mackenzie, Wickes predicts that the UK market for domestic solar installations will reach £1.1 billion this year and escalate to £1.5 billion by 2028, driven by homeowners and landlords retrofitting properties to save energy costs and reduce environmental impact.

David Draper, 44, CEO of Solar Fast, expressed enthusiasm about the acquisition, stating, “This is fantastic news. As a family-run enterprise, our goal has always been to become the leading provider of quality domestic solar installations in the UK. With the support of the Wickes brand, we are closer to realising that vision.”

Following the announcement, Wickes’ shares experienced a slight decline of 3½p on Tuesday, settling at 146½p, after the company reported a 31 per cent decrease in profits to £52 million on flat revenues of £1.55 billion for 2023.