Howden Joinery Group Plc (HWDJF) Q4 2024 Earnings Call Transcript

2025-02-28 17:05:15 ET

Howden Joinery Group Plc (HWDJF)

Q4 2024 Results Conference Call

February 27, 2025 03:30 AM ET

Company Participants

Andrew Livingston - Chief Executive Officer

Paul Hayes - Chief Financial Officer

Conference Call Participants

Priyal Woolf - Jefferies

Christen Hjorth - Numis Securities

Geoff Lowery - Redburn

Benjamin Pfannes-Varrow - RBC Capital

Clyde Lewis - Peel Hunt

Charlie Campbell - Stifel

Presentation

Andrew Livingston

Good morning, and welcome to Howden's 2024 Results Presentation. I will start by introducing our performance for the year. Paul Hayes will then review our financial results for the period. I will then share my perspective on our performance and outline our plans for this year, and then we look forward to taking your questions.

The business performed well in, as we anticipated, a challenging marketplace. The results met our expectations as we continued with our investment program, which is focused on our key capabilities, which gives us end-to-end a stronger business. Group sales were ahead of those in 2023 and were 47% up on 2019 being the year prior to the onset of the COVID.

In the U.K., we believe we gained market share, which helped us mitigate a significant single-digit decline in the overall size of the kitchen market. Entry-level kitchens represented a higher proportion of the kitchens we sold with sales of product in our kitchen categories collectively outperforming those of other established categories.

We maintained an industry-leading gross margin with gross profit ahead of last year. We balanced recovery of cost rises with our commitment to providing competitive pricing across the board for our customers.

Reported profit was in line with the previous year, and we progressed with our strategic initiatives and plans for the U.K. business, which ended the year with 869 depots trading. Total sales of our international operations increased with a total of 78 depots trading at the year-end.

The business delivered strong operating cash flow, and we maintained a robust balance sheet. This gives us the flexibility to continue to invest in our growth plans for the business and provide shareholders with increased dividends for the year. Today, we have also announced a new GBP 100 million share buyback program.

The results demonstrate the strength of our local trade-only in-stock model. A strong product lineup, high stock availability, industry-leading service levels and a very engaged team have all contributed to our performance, which benefits from the ongoing investments in our strategic initiatives.

We had a record number of customer accounts as of the year-end with more accounts trading than last year. As well as managing an industry-leading gross margin, which benefits from purchasing and manufacturing efficiencies. The business continued to deliver KPI volumes well ahead of pre-COVID times.

Given the prevailing macroeconomic environment, we expect market conditions to remain challenging. We are well prepared for this and our customers, mainly self-employed builders, are adept at managing their businesses in such times....

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