Trade kitchen giant Howdens has reported a decline in both sales and profits in its 2023 financial year.
After reporting a strong first half for sales in 2023 (although pre-tax profits were down by around 22%), over the 53 weeks to December 30, 2023 the kitchen giant recorded a 0.3% drop in sales to £2.31 billion and an 19.3% dip in pre-tax profits from £405.8 million in 2022 to £327.6m in 2023.
This comes after chief executive Andrew Livingston had predicted in July last year that the kitchen market would be down by between 10% and 15% in the first half of 2023.
The fall in UK sales was attributed to the exclusion of £14.4m of third-party sales associated with the acquisition of worktop specialist Sheridans and not repeated in 2023. Its profits before tax were also hit by £17m of additional costs relating to a 53rd week in that financial year. Excluding those factors, pre-tax profits were down by 15% year on year. It pointed out that operating profit was, however, 30.8% ahead of pre-Covid levels in 2019.
International sales did rather better, with the company seeing an 11% leap over 2022 with continued expansion in France and the Republic of Ireland.
Commenting on the full-year results, Livingston said Howdens had seen market share gains in 2023 and that its “established markets for kitchens and joinery in the UK are now estimated to be around £12bn”.
He added: “We continue to seek further opportunities in adjacent markets. The focus remains on executing our strategic initiatives at pace to capitalise on this attractive, long-term growth opportunity, while selectively expanding Howdens’ differentiated, trade-only business model internationally.
“Our robust balance sheet underpins our strategy as we invest in growth, including expanding our manufacturing and supply chain capabilities, and returning surplus capital to shareholders. While we are cautious about the macroeconomic and geopolitical environment, given the encouraging start to the year and the agility of our business model, the board is confident in the outlook for 2024.”
The acquisition of Sheridans last year marked a bid from Howdens to expand its mid- to upper-end offering – a move that Livingston said has been very successful.
He said at the time: “A strategic priority for us is the development of a market leading supply and fit capability for premium work surfaces. Solid surfaces worktops are often, but not exclusively, associated with the sale of higher priced kitchens and this product category is a growing segment of the market and a significant opportunity for us.”
In its trading update last November, the company said that it had seen a 2% dip in revenue for the period ending October 28, 2023, compared with the same period in 2022, with like-for-like sales down 3.3%.
In 2023, Howdens opened 33 new depots, bring the total to 840, and revamped 89 older depots. It also opened 10 international depots with 65 trading in France and 10 in the Republic of Ireland. It plans to open 30 more UK and 10 more international depots in 2024 and revamp 85.
In the summary of its FY2023 results, Howdens said it expected market conditions to continue broadly unchanged in 2024 that the board was confident in its outlook for the year.