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 2022, Howdens reported annual sales of around £2.3bn, with profit before tax of £406m. Howdens operates over 870 depots across the UK and sees scope for c.1,000 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 each year, 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 specialist kitchen designers support builders by visiting end-users’ homes, or work with them remotely using our virtual design service, and helping them choose, plan, and design their dream kitchens.
We offer more than 75 kitchen designs, including shaker, slab, integrated and handle-free designs, plus more than 10,000 products across kitchens, joinery, flooring, doors, skirting, architraves and hardware, so there is plenty of choice to find the right style and design for any space.
*Source: Mintel, Kitchens and Kitchen Furniture, UK September 2020
880
Depots
(including 58 in France, 2 in Belgium and 6 in Republic of Ireland)
£406m
2022 profit before tax
(2021: £390m)
£2.3bn
2022 revenue
(2021: £2.1bn)
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.
2022 Performance
Howdens delivered a strong performance in 2022, with good progress on executing our strategic priorities and further market share gains. During the year our teams have been adept at navigating the challenges of high inflation and supply chain disruption, while supporting our customers with a market leading product range, high stock availability and outstanding customer service.
Our markets are large and fragmented which gives us a long-term opportunity for growth. In response, we are continuing to expand our depot network, improve our product range, optimise our manufacturing and supply chain, and develop our digital capabilities. We see potential for around 1,000 depots in the UK and we are now selectively expanding our business model internationally in France and the Republic of Ireland.
Our robust financial position underpins our strategy, funding investment in our growth initiatives, expanding our manufacturing and supply chain capabilities, and supporting ongoing cash returns for shareholders.
2022 operational highlights
- Achieved another record sales performance in our peak trading period in the autumn.
- Opened 30 new depots in the UK, bringing the total to 808 at the end of 2022.
- Revamped 82 older UK depots, with around 50% of UK depots now trading in the updated format.
- Opened 25 new depots in France (and closed 5) bringing the total to 60 at the end of 2022.
- Established 5 new depots in the Republic of Ireland.
- Further progress on new product introductions including 21 new kitchen ranges. Sales of new products introduced in 2021 and 2022 represented 22% of UK product sales in 2022.
- Invested in upgrading our manufacturing capacity and capabilities to support future growth, including in solid work surfaces, architrave and skirting products.
- Largely completed the roll-out of the regional cross-docking network (XDC) serving most of our UK mainland depots, improving product availability.
- Invested in our digital platform which saves our trade customers time and money and supports them in optimising the procurement process for end users.
- Achieved 99.7% of depot waste avoiding landfill at our UK depots and switched substantially all them to renewable energy sources. Our top 27 suppliers comprise around 80% of all of our carbon emissions and we are engaging directly with them to reduce our Scope 3 emissions.
2022 results summary
| £ millions (unless stated) | 20221 (unaudited) | 20211 | Change vs 2021 | Change vs 20193 |
| Group revenue | 2,319.0 | 2,093.7 | +10.8% | +46.4% |
| UK depot revenue | 2,256.1 | 2,043.3 | +10.4% | +45.5% |
| Gross profit | 1,411.2 | 1,289.0 | +9.5% | +43.1% |
| Gross profit margin, % | 60.9% | 61.6% | -70bps | -140bps |
| Operating profit | 415.2 | 401.7 | +3.4% | +59.7% |
| Operating profit margin, % | 17.9% | 19.2% | -130bps | +150bps |
| Profit before tax | 405.8 | 390.3 | +4.0% | +55.7% |
| Basic earnings per share, p | 65.8p | 53.2p | +23.7% | +88.0% |
| Total ordinary dividend per share, p | 20.6p | 19.5p | +5.6% | |
| Cash at end of period | 308.0 | 515.3 |
- The information presented relates to the 52 weeks to 24 December 2022, the 52 weeks to 25 December 2021 and the 52 weeks to 28 December 2019, unless otherwise stated. The 2022 and 2021 results are presented under IFRS 16, 2019 results have not been restated.
- Same depot basis for any year excludes depots opened in that year and the prior year.
- 2019 results included due to the significant impact of COVID-19 on the 2020 results.
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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Howden Joinery Group Plc
40 Portman Square
London
W1H 6LT
Email: [email protected]