Howdens Joinery UK revenue grew by 5.4% in the first half of the year, despite economic uncertainties surrounding Brexit.
Even with the growth, the company said it remained cautious and had stockpiled £12 million of additional inventory in preparation for a “no-deal Brexit”.
The company announced that its profit before tax of £78.1m (2018: £68.8m), due to good sales growth with improved gross margin, partly offset by continued investment in the business. The gross profit margin of 61.9% (2018: 61.3%), reflected by a price increase in January and a more disciplined balance between volumes and price achieved in depots.
Howdens also revealed its plans to open a total of 40 new depots in 2019, including five in Northern Ireland and five in France. Fifteen of those planned new depots were launched in the first half of the year and included the five new Irish depots as well as one of the five French depots.
Howdens CEO, Andrew Livingston, said: “Howdens delivered another positive performance in the first half of 2019, with sales increasing by 5.4%, against tough volume comparators in the prior year. Just as importantly, gross margin improved as we achieved a more disciplined balance between price and volume in our depots. Profit before tax was up strongly, at £78.1m and we ended the half-year with £217m in cash, having invested £24m in the business and having returned £46m to shareholders.
“We have made good progress with our new initiatives, focussing on depot openings and our new format, range management and the development of our digital platform. We opened 15 new depots in the period, all in the new format, including five in Northern Ireland and one in France, and are reformatting a further eight of our older UK depots.
“We are encouraged by the start we have made to the year and, despite the economic uncertainties ahead, remain confident in our business model. With our peak trading period still ahead of us, we are on track with our plans for the year as a whole.”