Chief Executive, Matthew Ingle, said:
"Howdens has delivered another good set of results in 2013, making further progress on sales and profitability. We have generated strong cash flow, enabling us to recommend a substantial increase in our dividend.
"We have also continued to invest in all aspects of the business, as we improve our operations and pursue the growth opportunities before us. This included opening new depots, investment in new manufacturing capacity and the service which our existing depots provide, as well as introducing new products.
"The service proposition that Howdens provides its small builder customers is supported by our locally empowered depots and our supply operations. The strength of this has enabled us to continue to increase the number of account holders, who form the bedrock of our business.
"Trading conditions improved in the second half of year. This improvement has continued in the early part of 2014".
Financial results (continuing operations)
The information presented here relates to the 52 weeks to 28 December 2013 and the 53 weeks to 29 December 2012, unless otherwise stated. The inclusion of a 53rd week in 2012 (23 - 29 December) had no impact on revenue, as the business did not trade that week. It is estimated to have increased operating costs by around £5m, reducing 2012 operating profit and profit before tax by the same amount, and reducing profit after tax by around £4m.
Howden Joinery UK depot revenue increased by 7.8% to £940.7m (up 5.6% on same depot basis), growing around 10% in the second half of the year. Group revenue was £956.5m (2012: £887.1m);
Gross profit margin was 61.7% (2012: 61.5%);
Operating profit pre exceptional items rose from £119.8m to £142.5m;
Profit before tax and exceptional items increased to £138.4m (2012: £112.1m), the net interest charge falling by £3.6m (due to a decrease in the pensions finance expense);
Basic earnings per share pre exceptional items increased from 14.0p to 16.3p;
Net cash of £140.5m at year-end (29 December 2012: £96.4m net cash);
Final dividend of 4.5p recommended, giving full year dividend of 5.5p per share (2012: 3p).
Business developments
Investment in the future growth of the business continues:
- 30 new depots opened in 2013, bringing total to 559;
- capital expenditure totalled £24.7m: two-year programme of investment in our two manufacturing sites completed, 'virtual showroom' implemented in over half of depots;
Leases on seven legacy properties terminated in 2013, and one 'early release' since then, bringing total remaining to eight.
Current trading
Howden Joinery UK depot revenue in the first two periods of 2014 rose by 7.3%, in line with our expectations;
Our outlook for the business for 2014 remains unchanged.
