29 April 2010
Galiform Plc, the owner of Howden Joinery, is today publishing its Interim Management Statement covering the year to date. Financial information is in relation to the first four trading periods of 2010 (ending 17th April).
The Board is pleased to report that the business has performed well after the slow start to the year that arose from prolonged cold weather. In addition, further 'legacy' property agreements have reduced future liabilities by more than £18m.
In the first four periods (16 weeks) of 2010, Howden Joinery UK depot revenue (1) was up 1.0%, increasing 0.5% on a same depot basis. This performance reflects the previously reported impact of the cold weather seen in the first two periods of the year (to 20th February). Since then, trading has returned to more stable conditions, with total sales increasing by 4.9% in the most recent two periods. This year-on-year improvement was in line with that seen in the last quarter of 2009.
We are seeing the impact of the weakening of the pound against the US dollar and other input cost pressures. However, we continue to look for sourcing opportunities to offset these cost pressures, where possible. In addition, we continue to focus on gross margin in all of our depots and have recently introduced a small price increase, although it should be noted that the price increase has only been in place for a short period and that over 70% of annual turnover typically occurs in the remainder of the year. Overall, the Board is satisfied with the Group's gross margin performance.
The Group continues to manage proactively its 'legacy property' portfolio. Since the release of our 2009 Preliminary Results, agreement has been reached with landlords of three properties that will further reduce Galiform's financial exposure. These transactions involve Galiform making cash payments to the landlords of these properties totalling £4.3m, in return for being released from all obligations in respect of the leases. In so doing, future liabilities of over £18m have been mitigated. This reduces the number of legacy properties to 51, the current net annual rent and rates of which total approximately £16.5m.
With five depots having been opened so far this year, Howden Joinery is now trading from 467 depots.
There have been no material changes to the financial position of the Group since the end of the 2009 financial year.
Half Yearly Report
Galiform will release its 2010 Half Yearly Report on 21st July 2010.
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(1) Week 1 sales excluded because of distortion arising from New Year's Day falling on different days of the week (Thursday in 2008, Friday in 2009) which meant there was no trading in the first week of this year (2009: £0.8m).