Howden Joinery Group (HWDN) H1 2024 earnings summary

Executive summary

• Group sales rose 4.3% year-over-year to £966.3m, with market share gains in the UK kitchen segment despite a declining market.

• Profit before tax was stable at £112.3m, with sector-leading gross margin at 60.8%.

• Maintained strong cash generation, supporting increased interim dividend and ongoing share buybacks.

• Advanced strategic initiatives in depot expansion, product innovation, digital upgrades, and sustainability, including Net Zero plan approval.

• Record customer engagement with digital platforms and new product launches in entry and mid-price segments.

Financial highlights

• Group revenue reached £966.3m (+4.3% year-over-year); UK revenue £933.7m (+4.3%); International revenue €38m (+4.7%).

• Gross profit was £587.3m (gross margin 60.8%); operating profit £117.2m; profit before tax £112.3m.

• Basic EPS for H1 was 15.4p, flat year-over-year; interim dividend increased by 2.1% to 4.9p.

• Net cash at period end was £165.5m, after £89m in dividends and £40m in capex.

• Net cash inflow from operations was £189.5m; undrawn £150m revolving credit facility.

Outlook and guidance

• Full-year expectations and outlook remain unchanged; market conditions expected to be similar to 2023.

• Capital expenditure for 2024 expected to be £125m; year-end receivables to rise by £50m due to trading calendar.

• Confident in delivering growth ahead of markets, maintaining strong cash flow, and balancing price and volume.

• H2 to benefit from non-repeat of 2023's 53rd week costs (£17m); higher freight costs expected (+£5m in H2).