Pre-tax profits hit £78m for listed kitchens supplier
Howden Joinery Group has today reported pre-tax profits of £78.1m in its half-year report, a 13.5% increase on last year’s figure of £68.8m.
The group’s revenue has also increased, by 5.4% from 619.4m in 2018 to 652.6m this year.
The business attributed its pre-tax profit rise to good sales growth with improved gross margin, partly offset by continued investment in the business. And it said £46.3m had been returned to shareholders through the firm’s share buyback programmes.
The company reported a capital expenditure of £24.1m, compared to 2018’s figure of £17.1m, adding that over the course of 2019, it plans to open around 40 depots in the UK, including five already opened in Northern Ireland.
But the firm’s half year report notes: “We remain cautious given economic uncertainties, particularly the impact that Brexit might have.
“In preparation for a ‘No-Deal’ Brexit, a number of measures have been taken. Our stocking policy for at-risk items has been adjusted to secure continuity of supply during the transition. As a result, around £12m additional inventory is being held and key suppliers are also making plans to ensure supply.
“In addition, we are looking closely at the options for our inbound supply routes and have in place appropriate logistics accreditation (Authorised Economic Operator status), to reduce potential customs delays.”
Chief Executive, Andrew Livingston, said: “Howdens delivered another positive performance in the first half of 2019, with sales increasing by 5.4%, against tough volume comparators in the prior year.
“Just as importantly, gross margin improved as we achieved a more disciplined balance between price and volume in our depots. Profit before tax was up strongly, at £78.1m and we ended the half year with £217m in cash, having invested £24m in the business and having returned £46m to shareholders.
“We have made good progress with our new initiatives, focusing on depot openings and our new format, range management and the development of our digital platform.
“We opened 15 new depots in the period, all in the new format, including five in Northern Ireland and one in France, and are reformatting a further eight of our older UK depots.
“We are encouraged by the start we have made to the year and, despite the economic uncertainties ahead, remain confident in our business model. With our peak trading period still ahead of us, we are on track with our plans for the year as a whole.”
