Sales down as Heywood Williams feels full impact of crunch
BUILDING materials supplier Heywood Williams said sales were down today as it continues to feel the “unprecendeted impact” of the credit crunch on the residential new build and home improvement markets in North America, the UK and Europe.
In an interim management statement the Huddersfield-based firm said in the four month period from July to October 2008, sales were down 17% to £75m compared to 2007.
Like for like sales in the period, excluding the Avenco acquisition, were down 18%. Net borrowings at period end remain in line with expectations.
Cumulatively, sales for the ten months to October 2008 were down 12% to £192m compared to 2007.
The North American and European new build markets account for approximately 80% of the group’s sales, with the remainder split between door and window hardware to the UK commercial property market, and building products to the recreational vehicle market in North America.
As a result of the downturn the group said it expects the outcome for the full year to be below current market expectations, with the degree to which its American customers decide to operate in November and December expected to influence the final result.
Chief executive Robert Barr said: “Trading conditions continue to be very challenging and are likely to remain so, both for the rest of this year and throughout 2009. The unprecedented issues in the global financial markets over the last two months have significantly reduced consumer confidence and this, in turn, has weakened residential building products and recreational vehicle markets even further. In the UK and Europe, residential new build activity is typically down around 50% and home improvement activity is down 15-20% year on year.”
In response to the market challenges Mr Barr said that it was implementing a “self help” programme and remains focused on maximising cash generation. The group also expects to reduce staff numbers across the group by 20%.
Mr Barr added: “The group has a supportive and continuing close working relationship with its banking syndicate. They are fully appraised of the market challenges facing the group. As previously announced, discussions are currently underway to establish appropriate covenants for 2009-10.”
