26th Jul 2018 09:55
LONDON (Alliance News) - Howden Joinery Group PLC said Thursday that new product initiatives and higher costs of goods dented first half profit growth.
The kitchens supplier also said revenue for the core UK division in the first four weeks of second half to July 14 increased by 5.3% and overall expectations for the full year remain unchanged.
Shares in the company were trading 3.9% lower at 493.10 pence on Thursday morning.
For the 24 weeks to June 16, the company recorded pretax profit of GBP68.8 million, up from GBP65.6 million in the year ago period, on a revenue of GBP619.4 million and GBP553.0 million, respectively. The core UK unit delivered revenue of GBP604.7 million, up from GBP539.5 million a year ago.
Gross profit margin fell to 61.3% from 64.1% due to sales initiatives and increases in costs of goods sold. The company expects inflationary pressures on the costs of goods sold to continue for the remaining part of 2018.
The company opened seven new depots in the first half and plans to open around 30 UK depots in total during 2018. It expects cost impact of new depots in 2018 to increase year-on-year and further intends to record around GBP20 million in costs from ongoing investments.
Howden Joinery has lifted its interim dividend to 3.7 pence from 3.6p paid a year ago.
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