Howdens delivers 8th consecutive year of growth

Howdens Joinery Group announced their full year results earlier today and have achieved their eight consecutive year of sales growth, with a new record turnover of £1.37bn, an increase of 7.1% over last year.

Financial highlights:-

• Howden Joinery UK depot revenue increased by 7.1% to £1,372.0m (up 5.2% on same depot basis). Group revenue was £1,403.8m (2016: £1,307.3m).
• Gross profit margin 63.3% (2016: 64.2%), including £15m of currency impact.
• Operating profit £234.4m (2016: £237.2m), reflecting expected additional costs due to new product introductions, our new distribution centre at Raunds, additional depreciation, pensions and 53rd week operating costs.
• Profit before tax £232.2m (2016: £237.0m).
• Basic earnings per share of 29.9p (2016: 29.5p).
• Net cash of £241.1m at year-end (24 December 2016: £226.6m), after £116.3m was returned to shareholders by way of a share repurchase programme and dividends.
• A further £60m share repurchase programme to take place during next two years.
• Final dividend of 7.5p recommended, with full year dividend of 11.1p per share (2016: 10.7p) an increase of 3.7% year-on-year.

Chief Executive, Matthew Ingle, said:

“Howdens delivered a positive set of results in 2017, with sales increasing by 7.4% to £1.4bn. Although gross profit increased year-on-year, as expected, we saw currency headwinds and additional operating costs, including those related to a 53rd week, impact year-on-year profitability.

“The service proposition that Howdens provides to our small builder customers is supported by the unique combination of our locally empowered depots and our supply operations. In 2017, our supply chain enabled us to bring 26 new kitchen ranges to market and refresh our ranges of appliances and fittings, providing a key driver for our sales growth in our depots during the year. We also saw a strong volume response to our sales initiatives as we continue to adapt our pricing to meet a changing market.

“We continue to invest in all aspects of the business to ensure their resilience and in order to have sufficient capacity to take advantage of the opportunities we see before us. We upgraded our manufacturing capabilities in Howden and Runcorn during the year. Our new distribution facility at Raunds was operational for bulk storage in our key trading period in October and will be fully ready for our peak trading period this year. We will continue to refresh our product offering and expect to bring 19 new ranges to market during 2018.

“At present, we see the robust sales performance of the second half of 2017 continuing into 2018. We believe that current market conditions are stable, although we remain watchful given continuing economic uncertainties.”

Download the Howdens 2017 Preliminary Results Presentation here.

Business developments 

A total of 19 new depots opened in the UK during 2017, with one opened in early 2018, bringing total to 662. The company invested capital expenditure of £48.5m (2016: £63.5m) as they continued to invest in supply operations to support further growth and increase resilience.

Commentary on current trading

Howden Joinery UK depots have seen a continuing good sales performance in the first two periods of their new financial year. 

Analysis & Commentary - Steve Collinge

Another strong set of results and the eighth consecutive year of turnover growth to a record £1.37bn and ahead of forecasts. Despite the recent poor results seen by other big ticket retailers, UK sales growth for Howdens has accelerated in the first two months of 2018, by a significant 12.5%. The Howdens management team believe market conditions in the UK are stable.

Source: Insight DIY Team

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