Howden Joinery Group PLC (LON:HWDN) has announced its 2022 half year results.
Results summary
| £ millions (unless stated) | 20221 | 2021 | Changevs 2021 | Change3vs 2019 |
| Group revenue | 913.1 | 784.9 | +16.3% | +39.9% |
| UK revenue | 889.3 | 764.1 | +16.4% | |
| Gross profit | 565.0 | 481.0 | +17.5% | |
| Gross profit margin, % | 61.9% | 61.3% | +60bps | |
| Operating profit | 149.1 | 124.3 | +20.0% | +91.9% |
| Operating profit margin, % | 16.3% | 15.8% | +50bps | |
| Profit before tax | 145.0 | 119.2 | +21.6% | +85.7% |
| Basic earnings per share, p | 19.6p | 16.4p | +19.5% | |
| Interim dividend per share, p | 4.7p | 4.3p | +9.3% | |
| Cash at end of period | 249.7 | 476.2 |
1 The information presented relates to the 24 weeks to 11 June 2022, and the 24 weeks to 12 June 2021, unless otherwise stated. The 2022 and 2021 results are presented under IFRS 16, 2019 results have not been restated for IFRS 16.
2 Same depot basis for any year excludes depots opened in that year and the prior year. See Financial Review on page 4.
3 2019 included to show pre-COVID-19 financial performance.
Highlights1
– Group revenue of £913.1m was 16.3% ahead of last year and 39.9% ahead of pre-COVID levels in 2019.
– UK revenue 16.4% up on last year and 13.5% ahead on a same depot basis2. UK revenue in P7 grew by 8% against tough prior year comparatives and was 44% ahead of 2019.
– Gross margins ahead of last year at 61.9% with disciplined pricing recovering input cost increases.
– Profit before tax of £145.0m, up 21.6% on 2021 and 85.7% on 2019, outpaced revenue growth.
– Strong cash generation with cash at end of period of £249.7m.
– Continued investment in our strategic initiatives. Brought forward investment in some strategically important projects into 2022 with capex guidance for the current year increased by £20m to £130m.
– Management believes that the addressable market for UK kitchen and joinery products is larger than previous estimates at around £11bn, providing Howdens with significant future growth opportunities.
– Strong returns to shareholders. Interim dividend up 9.3% to 4.7p per share (2021:4.3p) and £139.5m of the previously announced £250m share buy back completed in the period.
– In May 2022, Howdens committed to the Science Based Targets Initiative signifying our intention to significantly reduce our emissions throughout the supply chain and to achieve net-zero by 2050.
Operational developments
– Opened 10 new depots and revamped 34 older depots in the UK, with 7 new depots in France and 1 in the Republic of Ireland (ROI). Operating with 788 UK depots, 42 in France and Belgium and 1 in ROI.
– Launched 19 new kitchen ranges in the first half with more emphasis on higher priced kitchen ranges and ensuring our most popular styles are accessible to all budgets.
– Further investment in manufacturing with new frontal lines and a second architrave and skirting line at our Howdens factory to be operational in the second half. Continued investment in upgrading our solid surface worktop capabilities alongside greater capacity.
– Rolled out our regional cross docking centres (XDCs) which are now supporting around 530 depots providing industry leading product availability and improved stock management.
– Invested in our digital platform which amongst other things saves our trade customers time and money and supports them in optimising the procurement process for end users.
Current trading and outlook for 2022
The following table shows sales in the first four week period of the second half in absolute terms, on a same depot (LFL) basis2.
| Revenue growth (%) | Period 71 vs 2021 | Period 71 vs 2019 | ||
| % | LFL% | % | LFL % | |
| UK revenue | +8% | +6% | +44% | +36% |
| International revenue2 | +20% | +13% | +166% | +108% |
1 same depot basis (LFL) for any year excludes depots opened in that year and the prior year.
2 excludes 5 French depots which were closed in H1 2022.
We are making good progress on our strategic initiatives and will continue to invest in these and bring forward some capital investments that underpin our leading market positions and that will drive future earnings. Our capex guidance for the current year increased by £20m to £130m, including the previously announced £10m of one-off costs relating to the purchase of additional land at our Howden manufacturing site.
Howdens has good momentum going into the second half of the year which includes our all-important peak trading period. We will continue to manage inflationary pressures according to market conditions to achieve the right balance between pricing and volume. We are confident in our resilient business model while recognising that we will be trading against record revenue comparatives. While watchful of market conditions and consumer sentiment, the Group remains on track with its outlook for the full year.
Notes to editors:
1. About Howden Joinery Group Plc
Howden Joinery Group Plc is the parent company of Howden Joinery (Howdens). In the UK, Howdens sells kitchens and joinery products to trade customers, primarily small local builders, through 788 depots. In 2021, the business generated revenues of around £2.1 billion and profit before tax of £390.3 million. Around one-third of the products it sells are manufactured in house at its principal factories in Runcorn, Cheshire, and Howden, East Yorkshire both of which recently achieved carbon neutral status. The business also operates a total of 43 depots in France, Belgium and the Republic of Ireland.
2. Timetable for the interim dividend
The timetable for payment of the proposed interim dividend of 4.7p per ordinary share is as follows:
| Ex-dividend date: | 13 October 2022 |
| Record date: | 14 October 2022 |
| Payment date: | 18 November 2022 |
3. Provisional financial calendar
| 2022 | |
| Trading update | 3 November 2022 |
| End of financial year | 24 December 2022 |
| 2023 | |
| Full year results | 23 February 2023 |
Andrew Livingston, Chief Executive said:
“Howdens delivered a strong financial performance in the first half, well ahead of pre-COVID levels in 2019, as we continued to manage effectively ongoing inflationary and supply chain pressures. Our sector leading service and well-established and focused growth strategy ensured we continued to outperform the market. Our kitchen and joinery markets are large and attractive and we are prioritising investment in future growth through execution of our strategic initiatives.
“Howdens has good momentum going into the second half of the year which includes our all-important peak trading period. We will continue to manage inflationary pressures according to market conditions to achieve the right balance between pricing and volume. We are confident in our resilient business model while recognising that we will be trading against record revenue comparatives. While watchful of market conditions and consumer sentiment, the Group remains on track with its outlook for the full year.”
