Howden Joinery Group (HWDN) H2 2008 earnings summary

Executive summary

• Howdens delivered resilient performance: revenue £782.9m, up 1.9% total YoY and down 3.1% LFL; operating profit and operating cash flow remained resilient.

• Results were affected by MFI legacy costs, guaranteed-property liabilities, supply restructuring and pension deficit funding.

Financial highlights

• Total revenue £805.7m vs £976.5m in 2007; Howden Joinery revenue £782.9m vs £768.4m.

• Operating profit before exceptionals £75.9m vs £88.1m; profit before tax before exceptionals £74.3m vs £79.8m.

• Continuing-operations profit after tax before exceptionals was £51.0m vs £54.3m; loss for the year was £51.2m vs profit of £43.9m.

• Exceptional charge to discontinued operations was £108.8m vs £11.1m in 2007.

Outlook and guidance

• Jan–Feb 2009 sales fell 9.1% total and 10.6% LFL YoY; heavy snowfall affected the period.

• The market was expected to remain challenging; operations would be managed accordingly, with prudent capex and no new depot openings in 2009.

• The longer-term objective remained 600+ depots, following 20 openings in 2008.