Howden Joinery Group (HWDN) H2 2009 earnings summary

Executive summary

• Resilient 2009 performance: gross margin rose, stock levels fell, costs were managed and cash generation strengthened despite lower revenue.

• Stronger margins and operating cash flow supported Howdens through a challenging market; legacy property and pension commitments remained significant cash demands.

Financial highlights

• Howden Joinery revenue was £756.4m in 2009 vs £782.9m in 2008; Group revenue was £769.5m vs £805.7m.

• Gross profit margin increased to 56.2% from 53.1%; operating profit before exceptionals rose to £79.5m from £75.9m.

• Continuing operations PBT before exceptionals was £68.7m vs £74.3m; profit after tax before exceptionals was £50.2m vs £51.0m.

• Profit for the year was £45.7m vs a loss of £51.2m in 2008; discontinued operations recorded a £4.4m loss vs £106.2m.

Outlook and guidance

• 2010 sales through 20 February were down 3.7% total and 4.1% LFL, affected by weather; the market was expected to remain challenging.

• Planned 20–30 depot openings in 2010, with prudent management and further actions as needed.

• New product ranges were planned for H1; over 600 prospective depot locations were identified.