A 7 per cent increase in Howden Joinery 's (HWDN) January sales certainly sounds like a robust start to the year. But in the outlook that accompanied the kitchen specialist's full-year results, chief executive Matthew Ingle sounded a note of caution. Mr Ingle is now "watchful, given the increased uncertainty surrounding the economic outlook", despite overseeing a 13 per cent increase in gross profit in 2015.
That could help to explain a somewhat defensive plan to retire an extra £55m-worth of shares, on top of the £70m share repurchase programme announced last February. Peel Hunt analysts described Howden's preference for share buybacks over more dividends as "stingy", pointing to the increasing cash pile and a 2.75 times payout cover that is well within the company's stated range.
The company cannot be accused of a lack of investment, however: another 30 depots are planned for the UK this year, as well as a pilot depot in Germany. That outlay, along with inflation, investments in manufacturing operations and higher operating costs should increase capital expenditure to around £75m.
Peel Hunt expects adjusted EPS of 30.5p this year, and pre-tax profit of £244m, up from 27.2p and £219m in 2015.
HOWDEN JOINERY (HWDN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 499p | MARKET VALUE: | £3.21bn | |
| TOUCH: | 499-499.9p | 12-MONTH HIGH: | 539p | LOW: 435p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 66p | NET CASH: | £226m | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 0.85 | 111 | 13.5 | 0.5 |
| 2012 | 0.89 | 112 | 14.0 | 3.0 |
| 2013 | 0.96 | 135 | 15.9 | 5.5 |
| 2014 | 1.09 | 189 | 23.2 | 8.4 |
| 2015 | 1.22 | 220 | 27.3 | 9.9 |
| % change | +21 | +16 | +18 | +18 |
Ex-div: 19 May Payment: 17 Jun | ||||
