Howdens Factsheet
Our purpose is to help our trade customers achieve exceptional results for their customers and to profit from doing so. When our customers succeed, we succeed. Our purpose drives our business model and shapes our strategic decisions.
UK's Number 1 Trade Kitchen Supplier*
Howdens was founded in 1995 and has grown rapidly. In 2021 Howdens reported annual sales of around £2.1bn, with profit before tax of £390m. Howdens operates nearly 800 depots across the UK and sees scope for up to 950 depots.
We address the 'done for you' market, selling kitchens and joinery from local depots exclusively to trade professionals, who then install them for end-users in all parts of the UK market - owner occupiers, private landlords, local authorities, housing trusts and small developers.
We design and manufacture all our own cabinets, over 4.5 million in 2021, as well as some cabinet frontals, worktops, and skirting boards. We’re agile and we keep the make vs. buy decision under review.
Our business depends on entrepreneurial depot managers and the relationships between our highly motivated and incentivised depot teams and their local builders. A typical Howdens depot is in an edge-of-town location – more convenient for our trade customers, and cheaper to rent. Around 85% of our UK customers live within 5 miles of a Howdens depot.
Our in-stock model means that builders can get the products they need at short notice, even when plans change part way through a job. We offer the builder quality products, excellent levels of service, and trade accounts that allow them up to eight weeks to pay. We focus on helping our customers succeed. When they make money, we make money.
Our 1,600 specialist kitchen designers support the builder by visiting the end-user’s home, or work with them remotely using our new virtual design service, and helping them choose, plan, and design their dream kitchens.
We offer around 80 kitchen ranges organised into nine design 'families' for easy comparison and selection. As well as kitchen cabinets and frontals, Howdens sells appliances, sinks, taps, worktops, flooring, hardware, lighting, and a wide range of joinery doors, skirting and architraves that co-ordinate with the different ranges.
*Source: Mintel, Kitchens and Kitchen Furniture, UK September 2020
873
Depots
(including 58 in France, 2 in Belgium and 5 in Republic of Ireland)
£390m
2021 Profit before tax
(2020: £185m)
£2.1bn
2021 Revenue
(2020: £1.5bn)
A foundation for success
Our business thrives on three core principles that are underpinned by our entrepreneurial culture. These include our trade service and convenience, product leadership, and trade value.
2021 Performance
2021 was a very successful year for Howdens as we both delivered record financial results and progressed our strategic plans for the business. Our performance demonstrates the strength of our trade only, in-stock local business model and our ability to meet heightened demand for our products. Our 11,000 employees have been, and continue to be, dedicated to delivering outstanding service to our customers against a continued backdrop of COVID-19 and supply chain challenges.
We believe there is now potential for at least 950 depots in the UK, and we are expanding our presence in France and the Republic of Ireland. We continue to invest in our depot network, market leading products, manufacturing and supply chain, and digital capabilities, all of which improve service to our customers and help us take advantage of market opportunities. Our robust balance sheet gives us the flexibility to continue to invest in our growth plans for the business at the same time as delivering enhanced returns to shareholders through ordinary dividends and share buy-backs.
During 2021:
- Opened 31 new depots in the UK, bringing the total to 778 at period end, and we revamped 62 older UK depots in the year. By the end of 2021 we had 210 UK depots trading in the updated format.
- Opened 10 new depots in France, bringing total to 40 at the period end.
- Introduced 17 new kitchen ranges and grew higher priced kitchen ranges strongly in the year.
- Continued to invest in upgrading our manufacturing capacity and capabilities to support future growth which included investment in capacity for kitchen frontals, solid work surfaces, architrave, and skirting products.
- Invested in regional cross docking facilities (XDCs) with 6 operating at the end of the period supporting around 400 depots. XDCs enable improvements in customer service and product availability by optimising inventory and delivering patterns of product to depots across the full product range.
- Invested in our digital platform which amongst other things saves our trade customers time and money and supports them in optimising the procurement process for end users.
Financial highlights
| £m unless stated | FY21 | FY20 | FY19 |
|---|---|---|---|
| Continuing operations (before exceptional items) | |||
| Revenue - Group | 2,093.7 | 1,547.5 | 1,583.6 |
| Revenue - UK depots | 2,043.3 | 1,509.6 | 1,550.3 |
| Gross margin | 61.6% | 60.1% | 62.3% |
| Operating profit | 401.7 | 195.7 | 260.0 |
| Profit before tax | 390.3 | 185.3 | 260.7 |
| Basic earnings per share | 53.2p | 24.9p | 35.0 |
| Dividend per share | 19.5p | 9.1p | 13.0p |
| Special dividend per share | - | 9.1p | - |
| Net cash at year-end | 515.3 | 430.7 | 267.4 |
| Number of depots (UK) | 778 | 748 | 732 |
1. Focus on one customer
Howdens is focused solely on the small builder and everything the business does is geared towards making the builder's life easier. Howdens offers builders a relevant, well-designed, high-quality range of kitchens, together with appliances, joinery, flooring, and hardware, through trade-only depots that are always in stock. Our trade customers benefit from a confidential discount and account terms that allow them to manage their business and determine an appropriate margin for each job they undertake.
2. Entrepreneurialism, accountability and control
Each of our local depots are dedicated to helping local trade customers build their businesses. The depot manager’s autonomy is a key element of Howdens’ business model. Depot managers hire their own staff, do their own local marketing, set local pricing, manage the level of discount applied to their account holders and manage their own stock levels to suit their own local customers.
3. Manufacturing and Design
Our in-house distribution operation delivers from our factories and central warehouses to our network of over 800 depots. No two deliveries are alike, and each one must be correct, complete and on time. We can guarantee this because we control our own distribution.
Trusted supplier relationships and efficient, sustainable UK manufacturing and distribution helps ensure consistent product quality and availability at the lowest cost. We make what it makes sense to make, and we buy what it makes sense to buy.
Contacts
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Investor Relations
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Howden Joinery Group Plc
40 Portman Square
London
W1H 6LT
Email: [email protected]