18th May 2007 07:01
Galiform PLC18 May 2007 Galiform Plc TRADING UPDATE AND AMENDMENT OF ONGOING SUPPLY AND LOGISTICS ARRANGEMENTS BETWEEN HOWDEN KITCHENS AND MFI RETAIL Following the disposal of the MFI retail business last autumn, the developmentof Galiform is continuing on track and in line with management expectations. Trading update Howden Joinery continues to trade well. In the first four periods of 2007 (to 21April), sales increased by 9.8% compared with the comparative period last year,5.9% up on a same depot basis (see note below), partly reflecting the maturingof depots opened in recent years. Gross margin was similar to that seen in 2006. So far this year, 9 Howden Joinery depots have been opened and the business ison course to open 60 depots this year, as planned. As previously indicated, the performance of our Supply business has benefitedfrom the move to greater outsourcing instigated in 2006. The transitionalarrangements with MFI, including product demand, continue to be satisfactory. Supply of products and logistics services to MFI Retail Galiform is pleased to announce that it has reached agreement with MEP MayflowerLimited ("MEP") on the terms of amendments to the ongoing supply and logisticsarrangements between Galiform's subsidiary, Howden Kitchens Limited (Supply),and MEP's subsidiary, MFI Retail Limited (MFI). These supply and logistics arrangements were agreed at the time of MEP'sacquisition of MFI in October 2006 and were due to terminate on 31 March 2008(with Galiform being required to fulfil orders placed prior to 31 March 2008 upuntil 30 June 2008). Under the agreed amendments, Supply will cease all supply and logistics servicesprovided to MFI on 21 December 2007 (with final deliveries and paymentsbeing made on that date). All other aspects of the original arrangements withMEP remain unchanged. Supply currently both manufactures and sources products externally for HowdenJoinery and third parties, primarily MFI. Since May 2006, the majority ofproducts have been sourced externally. Manufacturing is now mainly focused onthe production of rigid and flat pack kitchen carcasses. The amended terms enable us to bring forward a full review of the manufacturing,warehousing and logistics requirements of Supply after the new termination date.Details of the outcome of this review will be announced as decisions are taken. The amended terms also brings forward the time at which the Group will be ableto give greater attention to focusing on the business opportunities available toHowden Joinery and Supply. Note: The inclusion of a 53rd week in the 2006 financial year (2006) means thatsales in the first four periods of the 2007 financial year (2007) are notcomparable with sales in the first four periods of 2006. This is because thefirst week in 2007 (new year week) included 4 trading days, whereas the firstweek in 2006 (Christmas week) had no trading days. Thus, the figures quoted arebased on a comparison of sales in the first 16 weeks of 2007 with sales in weeks2 to 17 in 2006. Enquiries Investors/analysts Gary Rawlinson Head of Investor Relations, +44 (0)207 535 1127 Galiform +44 (0)7789 397527 Media Brunswick Susan Gilchrist/Fiona Laffan/Anna Jones +44 (0)207 404 5959 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Howden Joinery