10 November 2011
Howden Joinery Group Plc ('the Group') is today publishing its Interim Management Statement covering the period from the end of the first half of the year (12th June 2011) to date.
The Board is pleased to report that the business has continued to perform well, particularly during the crucial October trading period (period 11). In addition, further 'legacy' property agreements have reduced aggregate future costs by £19m.
Trading conditions have continued to be demanding since the end of the first half of the year.
Between the end of the first half of the year and the end of October (periods 7 to 11), revenue from Howden Joinery UK depots was 6.2% higher than the corresponding periods last year. The increase in revenue was higher than the underlying increase seen in first half of the year1, reflecting the benefit of a price increase initiated at the start of the second half.
In the first 11 periods (44 weeks) of 2011, ending 29th October, Howden Joinery UK depots' revenue was up 5.6%, rising 3.2% on a same depot basis.
Our gross margin performance is in line with market expectations for the year2.
Since we released our 2011 Half Yearly Report in July 2011, we have opened six new depots, resulting in eleven depots being opened so far this year and bringing the total to 500. We are on course to open 20 in the whole of 2011.
We continue to invest in our product offering and marketing, having recently rolled-out two new kitchen ranges, introduced a two-year guarantee on all our Lamona appliances and doubled the size of our fleet of hardware and flooring sales vans, to more than 110.
The Group continues to manage proactively its 'legacy property' portfolio, the liability for four properties having been removed since the publication of the Half Yearly Report. These transactions involved making cash payments to the landlords of the properties totalling £5.6m, in return for being released from all obligations in respect of the leases. In so doing, total future costs of £19m have been mitigated.
For the year to date, the number of legacy properties has fallen by 18 to 22, involving cash payments to the landlords totalling £17.0m, thereby mitigating total future costs of over £55m and reducing the remaining net annual rent and rates liability to £7m.
There have been no other material changes to the financial position of the Group in the period save as a result of the usual impact of the level of trading and those other matters disclosed herein.
We are encouraged by the strength of our performance this year but remain cautious about the outlook for 2012, given the continuing uncertainty about the prospects for the economy.
In respect of the remainder of this year, sales in the last two periods are generally lower than other periods. Even so, sales in those periods are usually in excess of 10 per cent of annual turnover.
Note 1: In our 2011 Half Yearly Report, we said that sales since mid-March had increased by 3.7%, the sales comparison for the early part of the year having been distorted by the impact of cold weather in 2010.
Note 2: The current range of market expectations is believed to be 59.1% to 59.9%.
Next scheduled announcementThe Group will release its 2011 Preliminary Results on 1 March 2012.
|Gary Rawlinson||+44 (0)207 535 1127|
|Head of Investor Relations||+44 (0)7989 397527|
|Brunswick||+44 (0)207 404 5959|