Howdens 'On Track' for 2026 Forecast

• First half performance demonstrates the strength of Howdens' trade-only model.
• On track with outlook for 2026. 

^1. The information presented relates to the 24 weeks to 13 June 2026 and the 24 weeks to 14 June 2025 unless otherwise stated.

^2. "Adjusted sales" reflects the impact of one less trading day than the prior year. Adjusted measures are non-statutory (Alternative Performance Measures,
  APM's), and this is reconciled to the nearest corresponding statutory measure in note 12.

^3. "Underlying results" are stated before £6.4m relating to acquisition costs. Underlying measures are non-statutory (Alternative Performance Measures, APM's), and this is reconciled to the nearest corresponding statutory measure in note 12.

First half highlights

• Group sales increased by 3.3% to £1,030.6m with adjusted sales ahead by 3.7%.
  
  o  Adjusted UK sales 3.3% ahead reflecting balanced pricing and volumes.
  
  o  Adjusted International sales up 13.0%, including the impact of foreign exchange translation.
  
  
• Gross profit margin of 62.8%, supported by price and volume growth, sourcing and manufacturing efficiencies offsetting cost inflation.
  
  
• Productivity and efficiency savings of £19m in the total cost base.
  
  
• Underlying operating profit (EBIT) up 5.5% to £128.1m, operating profit margin 20 basis points ahead.
  
  
• Underlying profit before tax of £122.2m grew 4.3%, after £9m investment in our strategic initiatives.
  
  
• Operating profit (EBIT) of £121.7m (2025: £121.4m), profit before tax of £115.8m (2025: £117.2m) and Basic earnings per share of 16.2p (2025: 16.4p) are stated after £6.4m of acquisition costs.
  
  
• Previously announced £100m share buyback programme will be completed in the second half.
  
  
• DIY Kitchens acquisition completed after the end of the period on 23 June 2026.

Chief Executive Officer statement

"Our first half performance demonstrates the strength and growth potential of our differentiated, in-stock, trade-only business model. Our underlying operating profit margin was ahead of last year as we maintained our industry-leading gross margin and remained disciplined on costs with ongoing investment in our strategic initiatives continuing to strengthen our competitive position."

"We are well prepared for our peak trading period in the Autumn, supported by our best-ever product line-up across kitchens and joinery. The combination of our highly engaged and well incentivised local depot teams, industry leading product ranges, consistently high stock availability and the skill of our trade customers at winning work, leaves us well positioned to continue to outperform in what remains a challenging marketplace."

"We recently completed the acquisition of DIY Kitchens, which is a fast-growing, online, self-service kitchen business that is complementary to our much larger full service, trade-only kitchen and joinery model."

Current trading and outlook for 2026

• Trading to date has been in line with our expectations. We are well prepared for Autumn peak trading and our full-year outlook is unchanged.
  
  
• Our planning assumption remains that the UK kitchen market will be level year-on-year in 2026.
  
  
• We have good supply chain visibility and robust contingency plans in place should there be further disruption in the Middle East.
  
  
• We remain focused on balancing price and volume, alongside disciplined cost management including working with suppliers to mitigate input cost inflation.
  
  
• Overall, we remain well placed to outperform our competitors again in 2026, while continuing to invest in our strategic initiatives.

Financial review

Financial results for H1 2026

^1. Same depot basis for any year excludes depots opened in that year and the prior year and closed depots.

^2. The International segment comprises Howdens' depots in France, Belgium and the Republic of Ireland.

^3. "Adjusted sales" reflects the impact of one less trading day than the prior year. Adjusted measures are non-statutory APM's, and this is reconciled to the nearest corresponding statutory measure in note 12. 

Group sales of £1,030.6m were 3.3% ahead of the prior year (2025: £997.6m) and 3.7% ahead when adjusted³ for the one less trading day in H1 2026 than last year. UK depot sales grew 3.0% to £990.5m (2025: £961.8m) or 3.3% on a trading day adjusted³ basis. On a same depot basis¹ sales were up 2.0% to £980.4m (2025: £961.1m) and 2.3% up on a trading day adjusted³ basis.

On a local currency basis, the international depots grew sales by 8.2% to €46.1m (2025: €42.6m) or by 8.5% on a trading day adjusted³ basis. Sales were 6.9% ahead of the prior year on a same depot basis¹. Adjusting for the impact of foreign exchange translation, reported sales were 12.0% ahead at £40.1m (2025: £35.8m) or 13.0% ahead on a trading day adjusted³ basis.

Gross profit

We maintained a sector leading gross margin by appropriately balancing pricing and volumes. Gross profit of £647.5m (2025: £619.6m) was ahead of the prior year. The higher gross margin percentage of 62.8% (2025: 62.1%) reflected the benefit of the price increase at the start of the year and increased volumes. Cost savings of £8m within cost of goods sold included sourcing benefits from raw materials and finished goods suppliers alongside further manufacturing efficiencies.

Howdens has a robust supply chain and our predominantly near sourced, vertically integrated business model is resilient across all macro-economic conditions. We are maintaining very good ongoing stock availability, despite the ongoing instability in the Middle East, as we support our trade customers to secure and deliver work, and we have hedged fuel expenses and secured its availability through to the end of the year.

Operating profit, profit before and after tax

After charging £6.4m for the acquisition costs of DIY Kitchens, the operating profit was £121.7m (2025: £121.4m) and profit before tax was £115.8m (2025: £117.2m). The tax charge on profit was £27.8m (2025: £27.6m), resulting in profit after tax of £88.0m (2025: £89.6m). Basic earnings per share were 16.2p (2025: 16.4p).

Underlying¹ operating profit of £128.1m was 5.5% ahead of last year (2025: £121.4m) and the underlying operating profit margin was 12.4% (2025: 12.2%). Our operating expenses increased by 4.3% to £519.4m (2025: £498.2m) predominantly because of £9m of planned investment in our strategic initiatives. We have continued to invest in new depots and reformats, product innovation and the development of our digital platforms to support our trade customers and depot teams. Inflationary costs of around £11m, principally payroll and property costs, were offset by continued productivity and efficiency improvements. The net interest charge was £5.9m (2025: £4.2m) and underlying profit before tax of £122.2m was 4.3% ahead of the prior year (2025: £117.2m). The underlying tax charge on profit before tax was £28.1m (2025: £27.6m) and represented an effective tax rate of 23.0% (2025: 23.5%). Underlying earnings per share were 17.3p (2025: 16.4p) an increase of 5.5%.

Operational review

Strategic initiatives

Howdens continued to make good progress on its strategic initiatives in the first half of 2026, which are aimed at achieving profitable growth and market share gains over the medium term. The four strategic initiatives are:

1. Evolving our depot model to use space more efficiently and provide the best working and trading environment for our customers and teams.
   
   
2. Improving our range and supply management to strengthen choice, value and service while enhancing productivity across manufacturing, sourcing and the supply chain.
   
   
3. Developing our digital capabilities and services to raise brand awareness, support the business model and deliver productivity gains and more leads for depots and customers.
   
   
4. Growing our international operations in markets where our differentiated model can deliver attractive long-term returns.

These ongoing investments continue to strengthen our competitive position and support execution of our growth strategy. Progress on each of these initiatives is reviewed below:

Evolving our depot model

High service levels, including local proximity and immediate availability, remain very important to our customers and we continue to see profitable opportunities to open depots. We see scope for around 1,000 depots in the UK and expect to open around 25 more depots in 2026. All new depots are being opened in our updated format, which helps provide the best working and trading environment while also delivering productivity and space utilisation benefits in a cost-effective way.

Our format innovations have strengthened our competitive position and our programme to revamp depots opened in the old format is well advanced. We plan to update the format of around 30 more depots in 2026, including relocations, and by the year end expect around 66% of depots opened in the old format, and around 75% of all UK depots, to be trading in an updated one.

Technical guidance for H2 2026

Income statement

-      By the year end there will be the same number of trading days as last year.

-      Given the ongoing disruption in the Middle East, we now expect around £40m of cost headwinds in the total cost base. As in previous years we will offset these where practicable with further productivity and efficiency savings.

-      DIY Kitchens acquisition completed on 23 June 2026 and will be included in Howdens' financial statements from that date.

-      Foreign exchange sensitivity within CoGS of Euro: +/- €0.01 = £1.9m; US Dollar: +/- $0.01 = £0.7m.

-      Full year net interest charge of c.£24m including additional net interest expense of £9m following DIY Kitchens acquisition.

-      Full year effective tax rate is expected to be around 23%-24%.

Cashflow

-      Capital expenditure is anticipated at around £125m including investments to support future growth.

-      We expect to complete the £100m share buy back in the second half.

-      Cash tax is expected to be around £60m.

-      Upon completion of the DIY Kitchens acquisition on 23 June 2026, there was a cash outflow of c.£300m and 12.7m of shares valued at £101.2m were issued to the seller. In addition, the £240m Single Currency Term Loan was fully drawn.

Source : Howdens

Image : Howdens

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