Howdens: Positive Trading Momentum And Market Share Gains

• Positive trading momentum and market share gains in the first half.

• On track with the outlook for 2025.

Group results summary¹

^1. The information presented relates to the 24 weeks to 14 June 2025 and the 24 weeks to 15 June 2024 unless otherwise stated.

^2. Adjusted sales includes an adjustment for 2 fewer trading days in H1 2025 versus the prior year, worth c.£10m. Adjusted measures are non-statutory
(Alternative Performance Measures), and this is reconciled to the nearest corresponding statutory measure in note 12. 

First half highlights

• Group sales growth of 3.2%, with adjusted sales² ahead by 4.3%.
  
  
• Continued market share gains aided by ongoing investment in our strategic initiatives. There was a strong close to the period in H1 reflecting well executed promotions and sales incentives.
  
  
• Gross margins of 62.1% benefited from the price increase at the start of the period, ongoing purchasing benefits and a stronger weighting of kitchens by volume in the overall category mix in H1.
  
  
• Profit before tax of £117.2m grew 4.4%, after £11.0m investment in strategic initiatives.
  
  
• Balance sheet remains strong with £321.4m of cash at the end of the period.
  
  
• Increased interim dividend by 2.0% to 5.0 pence per share.
  
  
• Completed £31.8m of the previously announced £100m share buyback programme.
  
  
• On track with the outlook for 2025.

Andrew Livingston, Chief Executive Officer, said: 

"Howdens performed well in the first half, gaining further market share. The ongoing investment in our strategic initiatives is strengthening our competitive position, and our current trading performance gives us confidence in achieving our full year plans.

"We are well prepared for the second half, which includes our seasonally important peak trading period. This includes Howdens' best-ever line-up for kitchens, available for 2025 in more colours, styles, and finishes to suit all budgets. While market conditions remain challenging, our trade customers are highly skilled at winning work in such times backed by Howdens' well-incentivised depot teams, unrivalled product quality and industry leading stock availability."

Summary of the major strategic initiatives for 2025

• Open around 25 depots in the UK and reformat around 60 existing depots. To date, we have opened 3 and completed 14 depot reformats (including 1 relocation).
  
  
• Launch more new kitchen ranges. We are planning at least 23 this year, aimed at making more styles available at more price points. For example, our premium kitchen offer includes a greater choice of solid worksurface decors and a new in-frame style kitchen family called Ilfracombe which is exclusively available in paint to order colours.  
  
  
• Invest in our UK manufacturing capacity and capabilities, including a project to upgrade our rigid cabinet and panel lines at Runcorn. The expected costs of the line expansion and associated works are included in our medium-term capex plans (see page 7 for more details).
  
  
• Launch new account management software to improve efficiency and support depots in managing customer relationships. It automates time-consuming manual tasks in depots, providing comprehensive account data for each customer and real time overviews of accounts, leads and contacts.
  
  
• In France, we are focused on driving same depot sales through achieving the optimal mix of kitchens and joinery products. We will enhance the entrepreneurial skills in the depot teams to win more business as trade customers become more familiar with the benefits of Howdens' in-stock, trade-only model.
  
  
• The Republic of Ireland is establishing itself as a strong competitor in our categories and this year we will open another 5 depots, bringing the total to 18 by the end of the year.

Current trading and outlook for 2025

• Howdens delivered continued market share gains and there was a strong close to the first half as a result of well executed promotions and sales incentives, which landed well in UK depots.
  
  
• Our performance since the start of the second half has been in line with our expectations. Our results are second half weighted, given Howdens' autumn peak trading period.
  
  
• The strong progress of our strategic initiatives and current trading performance gives us confidence that the Group is on track with the outlook for 2025.
  
  
• The addressable value of our principal UK markets is around £11 billion. These markets are very attractive, highly fragmented and we see significant longer-term growth opportunities for us.
  
  
• We remain focused on delivering performance ahead of our markets, while generating strong cash flow, and attractive returns for shareholders over the medium-term.  

Source : Howdens

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