Howden Joinery Group (HWDN) H2 2024 earnings summary

Executive summary

• Delivered solid performance in a challenging market, with group sales up 0.5% year-over-year and profit in line with 2023, gaining market share and maintaining industry-leading gross margin.

• Entry-level kitchens grew as a share of sales, and kitchen categories outperformed other segments.

• Maintained strong operating cash flow and robust balance sheet, supporting continued investment and increased dividends, with a new £100 million share buyback announced.

• Record number of customer accounts and high engagement with digital platforms.

Financial highlights

• Revenue rose to £2,322.1m (+0.5% year-over-year); gross profit increased to £1,431.1m with a sector-leading gross margin of 61.6%.

• Operating profit was £339.2m, broadly in line with last year; profit before tax held at £328.1m.

• UK revenue up 0.3% to £2,247.4m; international revenue up 9.7% to €88.1m, with 78 depots trading at year-end.

• Strong cash generation: closing cash £343.6m, up from £282.8m; operating cash flows £504.6m.

• Total dividend for the year up 1% to 21.2p; £100m share buyback announced.

Outlook and guidance

• Market conditions expected to remain challenging, with the kitchen market likely to contract in 2025.

• Plans to open around 20 new UK depots and refurbish 60 more, aiming for 1,000 UK depots long-term.

• International expansion continues, targeting 65 depots in France/Belgium and 18 in Ireland by year-end.

• Effective tax rate expected around 24%; capital expenditure guidance at £125 million.

• Focus on competitive pricing, cost control, and maintaining a profitable balance between price and volume.