Howden Joinery ramps up dividend after solid year

Howden Joinery beefed up annual earnings and underlined its confidence in future trading with a six fold increase in its full year dividend.

Howden, whose products are predominantly sold to small local builders for installation in public and private housing, said group revenue rose to £887.1m from £853.8m in 2011.

The kitchen supplier said pre-tax profit climbed to £112.1m from £111.0m previously. Gross profit margin increased to 61.5% from 59.7% before. Operating profit rose from £115.3m to £119.8m.

"Although there was a modest decline in the volume of kitchen cabinets sold, the impact of this was offset by an improved gross profit margin and changes in the mix of kitchen ranges sold," the group explained.

Revenue at Howden Joinery UK depots increased by 4% to £872.5m or 1.9% on same depot basis. Sales from its French depots rose 5% to £14.6m on a same depot basis in constant currency terms.

Looking ahead, Howden said its outlook for the business remains unchanged and it is well placed to respond to the ongoing challenging conditions.

Net cash at end of period surged to £96.4m from £57.1m.

"For the rest of 2013, we expect market conditions to continue to be challenging and we remain cautious about the outlook. As in recent years, we will quickly and appropriately adapt our business model to the market and economic conditions we encounter," it added.

A full year dividend of 3p per share has been recommended, up from 0.5p in 2011.

CJ