22 November 2007
The trading and development of Galiform has continued on track, with the improved sales performance of Howden Joinery evident in the summer continuing throughout the autumn. The performance across the Group reflects the benefit of the refocusing of effort that has been achieved following the disposal of MFI last year.
At the time of the announcement of our 2007 Interim Results (6th September), we reported that there had been an upturn in trading over the summer. Although the wet weather may have had some positive impact in July and August, as our primary customer - the small local builder - chose to work indoors, good trading has continued throughout the autumn, and in particular, the important October trading period, when sales are typically more than double the level seen in other periods.
Total sales for the first eleven periods of the year, to 3 November, were 13.9%* higher than last year, 9.3%* up on a same depot basis. The Howden Joinery gross margin for the year to date remained in line with that seen in 2006 as a whole.
The increase in sales reflects the benefit of improvements to the product range sold, both in terms of the scope of the kitchens offered, and new products introduced to meet the ever-higher aspirations of all end-consumers, such as 'range' cookers. This has led to both increased volume and additional 'add-on' sales, increasing the average value of kitchen sales.
Also reflected in this performance, and of particular importance in our key October trading period, were the improvements that have been made in the supply chain over the last year or so. As well as contributing to the development of the product range, these also meant that confidence about product availability has risen, enabling depot staff to set ambitious targets for the period and more aggressively pursue sales opportunities.
The business is now trading from 426 depots. With 10 depots currently being fitted out, it is expected that 54 depots will open in 2007, bringing the total to 436 by the end of the year.
Arrangements for the termination of product supply and logistics services to MFI are proceeding to plan, with final deliveries scheduled for just over four weeks time, on 21 December. The restructuring of Supply is progressing to plan and a full update on the restructuring will be provided in the 2007 Preliminary Results, to be announced on 6 March 2008.
Financial performance for the year is expected to be in line with management's previous expectations.
* Note The inclusion of a 53rd week in 2006 means that the business traded for all of the year-to-date in 2007, whereas in 2006 the depots were closed for the first week, which covered the Christmas shutdown. These figures have been calculated by comparing the first eleven periods in 2007 with the same calendar period in 2006.
|Gary Rawlinson||+44 (0)207 535 1127|
|Head of Investor Relations||+44 (0)7989 397527|
|Susan Gilchrist/Fiona Laffan/Nebat Suker||+44 (0)207 404 5959|