Howden Joinery pushed half-year operating profits up 14 per cent year-on-year to £29.1m which, given the relentless squeeze on disposable incomes, is an impressive performance from a company that makes and sells kitchen units. But management retains a cautious stance and, with little improvement in the trading climate expected yet, the shares are up with events.
Still, same depot sales grew 5 per cent in the UK and in France, and total sales received an additional boost from the opening of eight new depots in the UK and one in France. This was achieved without compromising gross margins, which rose from 59.3 per cent to 60.1 per cent.
However, a net cash inflow from operating activities was turned into a £19.7m outflow after the termination of leases on a further five legacy properties cost £15.5m, while additional contributions to the pension scheme swallowed £20.1m. Accordingly, the pension deficit fell from £136.9m at end-2011 to £122.1m. A further £20m has been invested in a two-year programme to build a new production facility, too – the first part of which is currently being commissioned.
Peel Hunt expects full-year adjusted pre-tax profit of £110m, giving EPS of 12.3p (2011: £110m/13p).
| HOWDEN JOINERY (HWDN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 130p | MARKET VALUE: | £832m | |
| TOUCH: | 129-130p | 12-MONTH HIGH: | 132p | LOW: 89p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 9 | |
| NET ASSET VALUE: | 13p | NET CASH: | £37.4m | |
| Half-year to 9 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 342 | 23.5 | 2.8 | nil |
| 2012* | 365 | 25.4 | 3.2 | 0.3 |
| % change | +7 | +8 | +14 | - |
Ex-div: 31 Oct Payment: 30 Nov *24-week period | ||||
