After a 13% decline this high income share yields 7.25% with a P/E of just 10.1!

Home improvement chain The Wicks team (LSE: WIX) is probably not the first name that comes to mind when looking for a top FTSE income share. But it caught my eye in September.

I was looking for stocks that I thought might benefit from the new Labor government, especially its plans to get Britain back to building again, with proposals to build 1.5m new homes over five years.

I’ve been doer-uping myself, and where have all my vendors gone? They are not bad.

A desirable FTSE stock with a well-established yield

Although I never believed Labor would build 300,000 homes a year – something we haven’t done since the 1950s – I thought it showed determination. So I bought Wickes shares on September 13th only to see them fall within days.

Year-to-date, it is down 13.11%, but some investors will be very happy as the Wickes share price is up 22.89% in 12 months.

I buy stocks with a long-term view, so I’ll take this short-term dip on the chin. My Wickes shares have been falling for the same reason as mine Taylor Wimpey stocks are falling.

Prospects for a series of interest rate cuts next year have dimmed as the Bank of England warned that the Labor Budget could rise. So is the presidency of Donald Trump. This will put pressure on landlords, property buyers and buyers, meaning my brokers won’t be spending as much time in Wickes.

Budget hit Wickes in the second. Chancellor Rachel Reeves increased the rate of national insurance for employers from 13.8% to 15%, reduced the NI salary threshold from £9,100 a year to £5,000, and increased the minimum wage by 6.7%.

Wickes operates over 8,000 units in 233 stores, which is not as many as I expected. But higher labor costs will squeeze a business that operates on margins as low as 4%.

Wickes shares will be reduced by falling interest rates

The board released its Q3 trading update on 22 October confirming that the full-year profit outlook was unchanged, boosted by falling costs. That was released before the Budget on 30 October though.

While retail revenue rose by 2.2% to £945.3m in the nine months to 28 September, design and installation revenue fell by 14.1% to £245.9m as buyers refrained from spending big on bathrooms and kitchens. Total group revenue fell 1.6% to £1.19bn.

Building a seasonal business. In Q3, Wickes benefited from clients receiving outdoor projects that were delayed by a wet spring and early summer, but expects this pent up demand to subside in Q4.

The eight analysts providing one-year share price forecasts for Wickes have set an average target of 176.6p. If so, that’s a 15.36% increase from today.

The trailing yield is now 7.12% and the cover is slightly thinner at 1.4. The board has held the dividend at 10.9p for three years now, which is also unfair.

Shares look cheap to trade at 10.1 times trailing earnings but I wouldn’t buy more today. I will stay strong and look forward to my next profit, and I hope we are all wrong about interest rates.