Howden Joinery (HWDN) delivered a solid first-half performance, pushing UK sales ahead by 4 per cent, although headline profit for the kitchen specialist was down as a result of increased operating costs and adverse currency movements.
Higher costs reflected the opening of a new distribution centre and 11 new depots in the UK as well as the introduction of 22 new kitchen ranges. Cash inflow from operating activities fell from £35.9m to £20.3m, although this included a £9.5m cash contribution to the pension scheme where movements in the discount rate pushed the deficit out from £106m in December 2016 to £124m.
Improving sales have continued into the second half, with revenue in the first four weeks up by 6.5 per cent. However, the second half is also expected to bring additional operating expenses of around £20m as a result of higher pension and material costs. Total capital expenditure for the whole year is expected to come in at £65m.
Finances remained in good shape, with net cash of £215m. And that’s after capital expenditure of £22m and £11.3m spent on repurchasing shares as part of an £80m buyback scheme announced in February 2017.
Analysts at Numis are forecasting pre-tax profit for the year to December 2017 of £228.1m and EPS of 28.3p (from £237m and 29.4p in 2016).
| HOWDEN JOINERY (HWDN) | ||||
| ORD PRICE: | 439p | MARKET VALUE: | £ 2.76bn | |
| TOUCH: | 438.7-439p | 12-MONTH HIGH: | 480p | LOW: 346p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 59p | NET CASH: | £215m | |
| Half-year to 10 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 529 | 74.8 | 9.1 | 3.3 |
| 2017 | 553 | 65.6 | 8.4 | 3.6 |
| % change | +5 | -12 | -8 | +9 |
