|£ millions (unless stated)||H1 20231||H1 2022||Change|
vs H1 2022
vs H1 2019
|Gross profit margin, %||61.0%||61.9%|
|Profit before tax (PBT)||111.9||145.0||(22.8%)||+43.3%|
|Basic earnings per share, p||15.4p||19.6p||(21.4%)|
|Interim dividend per share, p||4.8p||4.7p||+2.1%|
|Cash at end of period||117.8||249.7|
1 The information presented relates to the 24 weeks to 10 June 2023, and the 24 weeks to 11 June 2022, unless otherwise stated. The 2022 and 2021 results are presented under IFRS 16, 2019 results have not been restated for IFRS 16.
2 2019 included to show pre-COVID-19 financial performance.
Andrew Livingston, Chief Executive said:
“Howdens performed well in the first half in a more challenging marketplace, making progress on the record year we delivered in 2022. Our trade-only, in-stock model is hard to replicate and compete with, and we are continuing to invest in our strategic initiatives to drive growth.
“We are delivering value to our customers at all price-points as we continue to gain market share and we are well set up for further success in the second half, which includes our Autumn peak trading period. The combination of more local depots in convenient locations, an ever-stronger product line-up, first-class service and high stock availability, continues to represent a compelling proposition for our customers. While we are cautious about the short-term macroeconomic outlook for our markets, we remain confident that Howdens will make good progress in 2023 and our full year expectations are unchanged.”
Despite the continued challenging macroeconomic backdrop, our builder customers remain busy, with activity levels normalising from the exceptional levels of a year ago. Across the Group, we are maintaining our focus on competitive pricing to support our customers, while balancing inflationary pressures to optimise volumes. Our inventory remains healthy underpinning our in-stock model and, in aggregate, is reducing in line with our expectations as we normalise the levels of safety-stock utilised during the pandemic.
In the current environment, we are maintaining a disciplined approach to managing our cost base to optimise operational performance, while leveraging our robust balance sheet to effectively implement our strategic initiatives. Our results are strongly second half weighted, given the Autumn peak trading period and, since the start of H2, overall revenue trends have been similar to the first half. We are on track with our plans for the business and our expectations for 2023 are unchanged. We remain confident of delivering growth ahead of our markets, while generating strong cash flow, and attractive returns for shareholders over the medium-term.
Due to the rail strike on 20 July, an in-person presentation is not taking place. A conference call and webcast covering the results and including a Q&A with Andrew Livingston (CEO) and Paul Hayes (CFO) will be held starting at 0830. Dial in numbers are below and the event webcast links are below. www.howdenjoinerygroupplc.com or on https://brrmedia.news/HWDN_HY23.
Dial in phone numbers:
UK-Wide: +44 (0) 33 0551 0200UK Toll Free: +44 (0) 808 109 0700
USA: +1 786 697 3501
|Quote HOWDENS’ HALF YEAR RESULTS when prompted by the operator.|
|The webcast will be recorded and available on our website after the event at: www.howdenjoinerygroupplc.com|
Notes to editors:
1. About Howden Joinery Group Plc
Howdens is the UK’s number one specialist kitchen and joinery supplier. In the UK, the company sells kitchens and joinery products to trade customers, primarily local builders, through 808 depots at the end of 2022. In 2022, the business generated revenues of around £2.3 billion and profit before tax of £405.8 million. Around one-third of Howdens’ cost of goods sold are products manufactured in house at its two principal factories in Runcorn, Cheshire, and Howden, East Yorkshire both of which have achieved carbon neutral status. At the end of 2022 Howdens operated 60 depots in France and Belgium and five depots in the Republic of Ireland.
2. Timetable for the interim dividend
The timetable for payment of the proposed interim dividend of 4.8p per ordinary share is as follows:
|Ex-dividend date:||12 October 2023|
|Record date:||13 October 2023|
|Payment date:||17 November 2023|
3. Provisional financial calendar
|Trading update||2 November 2023|
|End of financial year||30 December 2023|
|Full year results||29 February 2024|
|Revenue £m (unless stated)||H1 2023||# of depots at period end||H1 2022|
|Howden Joinery UK - same depot basis2||881.1||778||880.6|
|UK depots opened in previous two years||14.0||38||8.73|
|Howden Joinery UK depots||895.1||816||889.3|
|Howden Joinery International depots||31.8||66||23.8|
|Local currency revenue €m (unless stated)||H1 2023||# of depots at period end||H1 2022|
|International – same depot basis2||27.9||354||27.2|
|Depots opened in previous two years||8.4||31||0.3|
|Revenue from closed depots||-||-||0.7|
1 The information presented relates to the 24 weeks to 10 June 2023, and the 24 weeks to 11 June 2022, unless otherwise stated.
2 Same depot basis for any year excludes depots opened in that year and the prior year and accordingly at present it excludes the Republic of Ireland
3 2022 includes £8.3m of additional third-party sales generated by the Sheridans solid work surface business acquired in the first half.
4 Five French depots were closed in the first half of 2022.
Total Group revenue of £926.9m was 1.5% ahead of the prior year (2022: £913.1m) and 42.0% ahead of 2019, which was a good performance against a tough prior year comparator of +16.3%. UK depot revenue grew 0.6% to £895.1m (2022: £889.3m) and was ahead by 1.6% before £8.3m of additional external third-party sales generated last year by the Sheridans solid work surface business. Revenue was in line with the prior year on a same depot basis2 at £881.1m (2022: £880.6m), this excludes the additional revenue from depots opened in 2023 and 2022 of £14.0m (2022: £8.7m).
Revenue in our International depots was ahead by 33.6% at £31.8m (2022: £23.8m). On a local currency basis, revenue generated by the International depots increased by 2.6% on a same depot basis2.
Gross profit of £565.4m (2022: £565.0m) was in line with the prior year as we maintained a sharp focus on competitive pricing to support our customers while balancing ongoing inflationary pressures. Gross margin of 61.0% (2022: 61.9%) was in line with our plans, with last year being particularly strong due to early implementation of price increases ahead of commodity cost rises.
Operating profit of £117.0m was £32.1m below last year (2021: £149.1m) and the operating profit margin was 12.6% (2022: 16.3%). Selling and distribution costs and administrative expenses (SD&A) increased to £448.4m (2022: £415.9m) which was predominantly as a result of planned investment in our strategic initiatives. This included new depots and reformats, range optimisation, distribution and digital expansion. Productivity and efficiency actions were taken in the first half which fully offset inflationary cost increases of £23m, most notably higher labour and energy costs.
The net interest charge was £5.1m (2022: £4.1m). Profit before tax of £111.9m was £33.1m below the exceptional performance in the prior year (2022: £145.0m).
The tax charge on profit before tax was £27.3m (2022: £30.7m) and represented an effective tax rate of 24.4% (2022: 21.2%). The increase in the rate is mainly as a result of the movement to a higher corporation tax rate for businesses in the UK which came into effect from 6 April 2023. In addition, the Group continues to prepare its financial statements to include the impact of the previously announced claim under the Patent Box Tax Relief Scheme which allows companies to benefit from investments made in intellectual property including new product innovations. The success of the claim is subject to review by HMRC. The Company expects, assuming prevailing marginal tax rates, a benefit to the underlying effective tax rate of around 3% in subsequent years. The cash benefit will be realised following approval by HMRC.
As a result, profit after tax was £84.6m (2022: £114.3m). Basic earnings per share were 15.4p (2022: 19.6p) and include the benefit of the share buy back programme.
The net cash inflow from operating activities was £182.3m (2022: £209.2m). Net working capital increased by £108.9m. Receivables at the end of the period were £5.8m higher than at the beginning of the period, with good ageing, and we continue to monitor this closely. Payables were £62.9m higher and stock was £40.2m higher mainly as a result of inventory build ahead of the peak trading period, and commodity cost increases. The difference between the pension operating charge and cash paid was £11.5m (2022: £0.1m) which includes £12.5m of contributions paid into the scheme. Capital expenditure was £46.7m (2022: £46.0m) as we continued to focus on the execution of our strategic initiatives to support growth. Corporation tax payments were £21.2m (2022: £42.4m), and dividends amounted to £87.8m (2022: £88.9m). Share buy backs were £50.0m (2022: £139.5m). The interest and principal paid on lease liabilities totalled £50.5m (2022: £30.9m).
As a result, there was a net cash outflow of £191.6m (2022: outflow of £265.6m), leaving the Group with cash at the period end of £117.8m (10 June 2022: £249.7m). The Group has in place a £150m multi-currency, revolving credit facility which remained undrawn at the balance sheet date.
Our approach to capital allocation continues to focus on achieving sustainable profit growth by investing in and developing our vertically integrated business. We also want to maintain and grow our ordinary dividend in line with earnings growth to reward shareholders with an attractive ongoing income stream. After allowing for these uses of cash, Howdens remains committed to returning any surplus capital to shareholders.
Our capital allocation policy is that where year-end cash is in excess of £250m we expect to return surplus cash to shareholders. This provides sufficient headroom to support organic growth, our working capital requirements and ongoing investments in our strategic priorities. At this level of cash, the balance sheet will remain strong.
The Board announced a £50m share buyback programme with the Full Year results earlier this year. During the period, we completed the programme buying 7.3m shares, at an average purchase price of 682.5 pence per share. The interim dividend for 2023 of 4.8p per ordinary share (2022: 4.7p per share) represents an increase of 2.1% and will be paid on 17 November 2023 to shareholders on the register on 13 October 2023.
At 10 June 2023, the defined benefit pension scheme had a deficit of £15m (24 December 2022: deficit of £42m) on an IAS 19 basis. The scheme was closed for future accrual on 31 March 2021.
The Recovery Plan sets out that if the funding level on a Technical Provisions (TP) basis is above 100% for two consecutive months then deficit contributions cease and if they are below 100% for two consecutive months then contributions of £2.5m per month recommence. Consequently, payments into the scheme of £2.5m commenced in January 2023. The triennial valuation is being carried as at 31 March 2023 and we are currently working with the Trustees to agree a new Recovery Plan. The Company will provide an update on the scheme funding position once this has been completed.
Howdens has made good progress on its strategic initiatives, which are aimed at achieving profitable growth and market share gains over the medium term. The four strategic initiatives are:
These ongoing investments support the execution of our growth strategy and are within our overall capital expenditure guidance. Progress on each of these initiatives is reviewed below:
Since the start of the year, we have made good progress in finding new depot sites and we are now planning to open 33 new depots in 2023, ahead of our previous guidance, having opened eight in the first half. We are opening all new depots in our updated format which is designed to provide the best environment in which to do business with our customers. At maturity, we expect to operate with around 1,000 depots in the UK, versus the 808 trading at the end of 2022. This will be supported by our cross docking (XDC) facility which enables depots to optimise their stock holdings and provide high levels of service across the product range. It also enables us to operate out of depots with smaller footprints, without impacting sales, service, or product availability. This is particularly useful for infills in metropolitan districts where lease costs are relatively higher than in less populated areas.
We have also continued with our reformatting programme for existing depots. Depot reformats have a pay back of around four years and the programme is delivering incremental sales and has received very positive feedback from depot teams and customers. In the first half, including relocations, we have we reformatted 28 depots, and we now plan to reformat 90 depots in 2023, 10 more than our previous guidance. By the end of 2023, we expect to have reformatted around 275 of the 671 depots which were opened in the old format.
In recent years we have reorganised our range architecture to support growth and improve the balance between new kitchen introductions and timely discontinuations. This year, our range count will be around 90, organised in 10 families. At a time when many competitors are paring back their range offerings, Howdens has accelerated new product introductions to ensure we are at the forefront of the industry, inspiring our customers with the latest trends and design highlights. For 2023, we have increased the net number of ranges aimed at the entry and the mid-market segments, making more kitchen looks and styles accessible to all budgets. Value for money is a consistent feature of buying decisions, particularly given current pressures on household budgets. We have continued to develop our offering of higher priced kitchens, a significant segment of the market where we are under-represented.
This year we have launched 23 new kitchen ranges including:
Manufacturing and supply chain
Howdens is an in-stock business and a high level of stock availability is one of the key reasons our customers buy from us. Our dedicated manufacturing and supply chain is critical to the success of our in-stock offer. We supply all product, whether manufactured or sourced, to all depots. We keep under review what we believe it is best to make or buy, balancing cost, overall supply chain availability, resilience and flexibility. Over time we continue to see opportunities to increase the proportion of products we make. As a result of improving supply chain stability, we will continue to operate with enhanced safety stocks in 2023 as a contingency against unexpected demand patterns and interruptions to supply, but at more normalised levels by volume than in recent years.
In 2019, investment in manufacturing technology enabled us to make the doors for our popular Hockley kitchen ranges. Since then, we have invested in new lines at our Howden site, which are amongst the most advanced of their type in Europe. These give us the ability to make a variety of kitchen furniture, principally doors and panels, for more of our ranges, at the same quality as we can source externally but at a lower cost and at a reduced lead time to delivery. Our second architrave and skirting line is operational, enabling us to service in-house more of the substantial increase in demand we have seen for these products and for which we are extending our offering in 2023.
At the end of 2022, in tandem with the implementation of a new stock management system, we trialled a new initiative, “Daily Traders”, which we have subsequently rolled-out to all UK depots. This improves customer service and increases sales by optimising in-depot stock holdings of the best-selling SKUs and associated “range completers” in a depot. Sales of these products are outperforming those of non-Daily Trader SKUs and we are seeing improvements to other key metrics including a reduction in customer back-orders and a higher proportion of stock being replenished via a depot’s core weekly delivery order. This gives us efficiencies as it reduces utilisation of our XDC regional cross docking service.
With the extension of the XDC service to Scotland in January 2023, it is now operating across all mainland regions, supplied by a network of 12 regional hubs. With mainland XDC coverage completed, our focus is now on using these assets most efficiently. The improved depot stock mix following the introduction of a new re-ordering system and the Daily Traders initiative have enabled us to reduce annualised XDC capacity, leading to lower operating costs.
Our digital strategy reinforces our model of strong local relationships between depots and their customers by raising brand awareness, supporting the business model with new services and ways to trade with us and delivering productivity benefits for depot employees and customers. In 2023, usage of our online account facilities, which benefits customers and depots, has continued to increase and we now have around 45% of our customers using our digital platform.
In 2023 we are adding new services and capabilities to our trade platform which collectively improve stock and account knowledge, promote frequency and ease of trading and reduce time consuming manual tasks in depots, including stock allocation. These include a new “multi-list” feature which gives visibility of dates saved for future projects enabling depots to prioritise leads on a daily basis and customers to manage all their jobs efficiently in one place. We have commenced first phase testing of a digitised in-depot stock management system to record and pick deliveries, check allocations and determine depot stock levels.
We are also continuing to focus on helping end-users interact with Howdens on line at each stage of their buying decision, creating higher quality leads for our designers and customers. Our “Kitchen Visualiser” is raising end-user familiarity with our kitchens, including how our solutions meet their needs, as well as our appreciation of their priorities. Our market leading search functionality enables users, including our teams, to find what they are looking for much more efficiently. We have also equipped our kitchen designers with an upgraded CAD tool which features faster rendering, photo realistic imagery and is easier to use than the previous version. As our digital presence has grown, awareness of Howdens amongst end-consumers has increased. Our unprompted brand awareness amongst end-consumers is now at 25%, which has more than doubled since 2019, and we see the potential to raise awareness to higher levels.
Our International operations, predominantly based in France, continue to make good progress. The business model for France is similar to the UK with a market size in kitchens of around €4.3bn, excluding appliances. The French market has low penetration rates of integrated kitchens and most are purchased through DIY outlets and specialist small independent businesses. The maturity profile of new depots, which is similar to new depots in the UK. We believe appreciation of the advantages of our trade-only in-stock model, our service levels and competitive pricing is growing and with around 90% of common product versus our UK ranges this helps us realise scale benefits.
Since 2019, we have been opening depots in small clusters within cities which benefit from word of mouth between customers and our ability to build a local and trusted brand. Clustering also helps to build the Howdens culture within our business teams. Over the next eighteen months, we expect to open up to 20 more depots, including five or so this year. This would take the number trading to around 80 by the end of 2024 with around 35 located in Paris.
We also opened for business in the Republic of Ireland in 2022 and we are using a similar approach to that in France. Our initial phase opening five depots was clustered around Dublin, and the reaction from trade customers has been very positive. We have opened two depots so far this year, including our first located in Cork in the West of Ireland, and we expect to have 10 or so trading by the end of the year.
We want to create an inclusive environment and make a positive contribution to all our stakeholders, including our customers, staff, communities, suppliers and shareholders. We believe that our business needs to be worthwhile for all concerned. We actively manage risks and identify opportunities across the business to improve our environmental, social and governance performance to minimise our impact on the environment.
Our focus remains on:
Our top 30 suppliers account for over 80% of our total emissions and we continue to engage with them to work together to minimise emissions in the supply chain. An early priority has been accurate measurement of emissions which will help us prioritise activities and make better informed decisions. Since the start of the year, we have been logging Scope 1, 2 and 3 emissions through our ESG 360 online system in the supply base.
Several significant milestones were reached in the period. First, we submitted our Net Zero plan to SBTi for their approval, 12 months ahead of schedule, with an objective to achieve net zero carbon emissions by 2050, having halved our direct emissions by 2030. Second, we want to continue to be a carbon neutral manufacturer and our main factories in Howden and Runcorn have been recertified this year. We recently received carbon neutral accreditation for one of our new solid surface facilities at Spaldington and we are continuing to work towards achieving accreditation for Normanton (formerly the Sheridan site). Finally, we achieved our objective to ensure that 100% of our kitchen range SKUs are FSCÒ or PEFCÔ certified by the end of 2022, which independently certifies that the wood comes from responsibly managed forests.
Our network of over 816 UK depots has also been running on sustainable energy sources for over six months. We are also making good progress with our waste reduction initiatives with our factories achieving zero waste to landfill again this year. We have now achieved 99.7% zero waste to landfill in our depot network. With respect to fleet management, we have also recently committed to expanding our trial of Hydrotreated Vegetable Oil (HVO) in our vehicle fleet as an alternative to diesel, which is a major contributor to our Scope 1 greenhouse gas emissions. We now have around 5% of the fleet running on HVO and replacing diesel in this way will significantly reduce our own fleet emissions. This will have no negative impact on fuel efficiency or maintenance costs. We continue to trial electric vehicles (EVs) within the overall fleet and are operating our first two EVs as part of a trial in our XDC network. XDC deliveries tend to be within a region and therefore more suited to the range limitations of current battery technology.
The directors have adopted the going concern basis in preparing these half-yearly condensed financial statements and have concluded that there are no material uncertainties leading to significant doubt about the Group’s going concern status. The reasons for this are explained below.
Going concern review period
This going concern review period covers the period of 12 months after the date of approval of these financial statements. The directors consider that this period continues to be suitable for the Group.
Assessment of principal risks
The directors have reached their conclusion on going concern after assessing the Group’s principal risks, as set out immediately below this going concern statement. While all the principal risks could have an impact on the Group’s performance, the specific risks which could most directly affect going concern are the risks relating to continuity of supply, changes in market conditions, and product relevance. The Group is currently holding additional amounts of fast-moving inventory as a specific mitigation against supply chain disruption, and considers that the other effects of these risks would be reflected in lower sales and/or lower margins, both of which are built into the financial scenario modelling described below.
Review of trading results, future trading forecasts and financial scenario modelling
The directors have reviewed trading results and financial performance in the first half of 2023, as well as trading in the weeks between the half-year end and the date of approval of the half-year results. They have reviewed the Group’s balance sheet at the half-year end, noting that the Group is debt-free, has cash and cash equivalents of £118m, and appropriate levels of working capital.
They have also considered three financial modelling scenarios prepared by management:
The Group has a five-year, committed, multi-currency revolving credit facility of up to £150m, which expires in July 2027 and which was not drawn at the half-year end. A summary of the main terms of the facility is set out in note 19 to the December 2022 Group financial statements.
As part of the scenario modelling described above, we have tested the borrowing facility covenants and the facility remains available under all of the scenarios. We have therefore included the credit available under the facility in our assessment of headroom.
In the base case and the severe but plausible downside scenarios, the Group has significant headroom throughout the going concern period after meeting its commitments.
In the reverse stress-test scenario, the results show that sales would have to fall by a significant amount over and above the fall modelled in the severe but plausible downside scenario before the Group would have to take further mitigating actions. The likelihood of this level of fall in sales is considered to be remote.
Taking all the factors above into account, the directors believe that the Group is well placed to manage its financing and other business risks satisfactorily and they have a reasonable expectation that the Group will have adequate resources to continue in operational existence for the going concern review period set out above. Accordingly, they continue to adopt the going concern basis in preparing these half-yearly condensed financial statements.
The principal risks and uncertainties that could have a material impact on the Group’s performance over the remaining half of the financial year have not changed from those which are set out in detail in the Group's 2022 Annual Report and Accounts. One risk has decreased - ‘Supply chain’.
Certain statements in this Half Year results announcement are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements contain risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.
We confirm that, to the best of our knowledge:
(a) the condensed consolidated set of financial statements has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’;
(b) the interim management report includes a fair review of the information required by DTR 4.2.7R
(indication of important events during the first 24 weeks and description of principal risks and uncertainties for the remaining 29 weeks of the year); and
(c) the interim management report includes a fair review of the information required by DTR 4.2.8R
(disclosure of related parties’ transactions and changes therein).
The directors are responsible for the maintenance and integrity of the corporate and financial information included in the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial information differs from legislation in other jurisdictions.
By order of the Board
Andrew Livingston Paul Hayes
Chief Executive Officer Chief Financial Officer
19 July 2023
We have been engaged by Howden Joinery Group Plc (“the Company”) to review the condensed set of financial statements in the half-yearly financial report for the 24 weeks ended 10 June 2023 which comprises the condensed consolidated balance sheet of Howden Joinery Group Plc and the related condensed consolidated income statement, condensed consolidated statement of other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated cash flow statement and the related explanatory notes.
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 24 weeks ended 10 June 2023 is not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK and the Disclosure Guidance and Transparency Rules (“the DTR”) of the UK’s Financial Conduct Authority (“the UK FCA”).
We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity (“ISRE (UK) 2410”) issued for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. We read the other information contained in the half-yearly financial report and consider whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention that causes us to believe that the directors have inappropriately adopted the going concern basis of accounting, or that the directors have identified material uncertainties relating to going concern that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410. However, future events or conditions may cause the Group/Company to cease to continue as a going concern, and the above conclusions are not a guarantee that the Group will continue in operation.
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with UK-adopted international accounting standards.
The directors are responsible for preparing the condensed set of financial statements included in the half-yearly financial report in accordance with IAS 34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. Our conclusion, including our conclusions relating to going concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for conclusion section of this report.
This report is made solely to the Company in accordance with the terms of our engagement to assist the Company in meeting the requirements of the DTR of the UK FCA. Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.
for and on behalf of KPMG LLP
15 Canada Square
19 July 2023
|Notes||24 weeks to |
10 June 2023
|24 weeks to|
11 June 2022
|52 weeks to 24|
|Revenue - sale of goods||4||926.9||913.1||2,319.0|
|Cost of sales||(361.5)||(348.1)||(907.8)|
|Profit before tax||111.9||145.0||405.8|
|Profit for the period attributable to the equity holders of the parent||84.6||114.3||374.2|
|Earnings per share||pence||pence||pence|
|Basic earnings per 10p share||8||15.4||19.6||65.8|
|Diluted earnings per 10p share||8||15.3||19.5||65.6|
|Notes||24 weeks to|
10 June 2023
|24 weeks to|
11 June 2022
|52 weeks to 24|
|Profit for the period||84.6||114.3||374.2|
|Items of other comprehensive income:|
|Items that will not be reclassified subsequently to profit or loss:|
|Actuarial gains/(losses) on defined benefit pension plan||11||15.5||2.8||(183.0)|
|Deferred tax on actuarial gains/(losses)||(3.7)||(0.5)||34.8|
|Change of rate on deferred tax||(0.2)||(0.2)||11.0|
|Items that may be reclassified subsequently to profit or loss:|
|Currency translation differences||(0.7)||0.3||2.1|
|Other comprehensive income for the period||10.9||2.4||(135.1)|
|Total comprehensive income for the period, attributable to equity holders of the parent||95.5||116.7||239.1|
|Notes||10 June 2023|
|11 June 2022|
|24 December 2022|
|Property, plant and equipment||10||410.6||329.5||398.7|
|Lease right-of-use assets||624.4||576.3||614.3|
|Deferred tax asset||23.4||-||35.9|
|Prepaid credit facility fees||-||-||1.0|
|Trade and other receivables||239.1||223.8||233.3|
|Cash and cash equivalents||117.8||249.7||308.0|
|Current tax asset||34.9||-||32.3|
|Trade and other payables||(367.4)||(409.0)||(433.9)|
|Deferred tax liability||(3.8)||(30.1)||(3.8)|
|Capital redemption reserve||9.8||7.3||9.1|
|ESOP and share-based payments||14.6||8.5||11.7|
|24 weeks to 10 June 2023||Share capital|
|Capital redemption reserve|
|Share premium account|
|ESOP and share-based payments|
|As at 24 December 2022 - audited||56.1||9.1||87.5||11.7||(25.5)||732.8||871.7|
|Profit for the period||-||-||-||-||84.6||84.6|
|Other comprehensive income in the period||-||-||-||10.9||10.9|
|Total comprehensive income for the period||-||-||-||-||-||95.5||95.5|
|Movement in ESOP||-||-||-||2.9||-||-||2.9|
|Buyback and cancellation |
|As at 10 June 2023 - unaudited||55.4||9.8||87.5||14.6||(25.5)||690.5||832.3|
The item "Movement in ESOP" consists of the share-based payment charge in the period, together with any receipts of cash from employees on exercise of share options.
At the current period end there were 5.2 million ordinary shares held in treasury, each with a nominal value of 10p (June 2022: 5.2 million shares, December 2022: 5.2 million shares).
|24 weeks to 11 June 2022||Share capital|
|Capital redemption reserve|
|Share premium account|
|ESOP and share-based payments|
|As at 25 December 2021 - audited||59.8||5.4||87.5||5.9||(27.1)||860.0||991.5|
|Profit for the period||-||-||-||-||-||114.3||114.3|
|Other comprehensive income in the period||-||-||-||-||-||2.4||2.4|
|Total comprehensive income for the period||-||-||-||-||-||116.7||116.7|
|Current tax on share schemes||-||-||-||-||-||0.5||0.5|
|Deferred tax on share schemes||-||-||-||-||-||0.7||0.7|
|Movement in ESOP||-||-||-||4.2||-||-||4.2|
|Buyback and cancellation of shares||(1.9)||1.9||-||-||-||(139.5)||(139.5)|
|Transfer of shares from treasury into share trust||-||-||-||(1.6)||1.6||-||-|
|As at 11 June 2022 - unaudited||57.9||7.3||87.5||8.5||(25.5)||749.5||885.2|
|52 weeks to 24 December 2022||Share capital|
|Capital redemption reserve|
|Share premium account|
|ESOP and share-based payments|
|As at 25 December 2021 - audited||59.8||5.4||87.5||5.9||(27.1)||860.0||991.5|
|Profit for the period||-||-||-||374.2||374.2|
|Other comprehensive income for the period||-||-||-||-||(135.1)||(135.1)|
|Total comprehensive income for the period||-||-||-||-||-||239.1||239.1|
|Current tax on share schemes||0.4||0.4|
|Deferred tax on share schemes||-||-||-||-||(1.3)||(1.3)|
|Movement in ESOP||-||-||7.4||-||-||7.4|
|Buyback and cancellation of shares||(3.7)||3.7||-||-||-||(250.5)||(250.5)|
|Transfer of shares from treasury into share trust||-||-||(1.6)||1.6||-||-|
|At 24 December 2022 - audited||56.1||9.1||87.5||11.7||(25.5)||732.8||871.7|
|Notes||24 weeks to|
10 June 2023
|24 weeks to|
11 June 2022
|52 weeks to|
24 December 2022
|Group operating profit before tax and interest||117.0||149.1||415.2|
|Depreciation and amortisation of owned assets||21.6||19.6||44.0|
|Depreciation, impairment and loss on termination of leased assets||40.0||36.3||80.8|
|Share-based payments charge||2.7||4.2||7.3|
|Decrease in prepaid credit facility fees||1.0||0.3||(0.7)|
|Profit on disposal of property plant & equipment||-||(0.3)||(0.1)|
|Operating cash flows before movements in working capital||182.3||209.2||546.5|
Movements in working capital
|Increase in inventories||(40.2)||(112.1)||(69.8)|
|Increase in trade and other receivables||(5.8)||(14.1)||(23.7)|
|Increase in trade and other payables and provisions||(62.9)||22.3||41.8|
|Difference between pension operating charge and cash paid||(11.5)||(0.1)||2.0|
Cash generated from operations
|Net cash flows from operating activities||40.7||62.8||395.3|
Cash flows used in investing activities
|Payments to acquire property, plant and equipment and intangible assets|| |
|Receipts from sale of property, plant and equipment and intangible assets|| |
|Acquisition of subsidiary - net of cash acquired||-||(14.6)||(14.6)|
|Net cash used in investing activities||(44.3)||(69.2)||(153.6)|
Cash flows from financing activities
|Payments to acquire own shares||(50.0)||(139.5)||(250.5)|
|Receipts from release of shares from share trust||0.3||0.1||0.1|
|Dividends paid to Group shareholders||9||(87.8)||(88.9)||(115.0)|
|Repayment of principal on lease liabilities||(43.6)||(25.3)||(66.1)|
|Interest paid - including on lease liabilities||(6.9)||(5.6)||(13.1)|
|Net cash used in financing activities||(188.0)||(259.2)||(444.6)|
|Net decrease in cash and cash equivalents||(191.6)||(265.6)||(202.9)|
|Cash and cash equivalents at beginning of period||308.0||515.3||515.3|
|Currency translation differences||1.4||-||(4.4)|
|Cash and cash equivalents at end of period||117.8||249.7||308.0|