Howden Joinery posted a fall in full-year profit and revenue on Thursday as the Covid-19 pandemic had a “significant” impact on its business.
Full-year pre-tax profit came in at £185.3m, down 28.9% on 2019, reflecting lower gross profit and a modest increase in operating costs, with group revenue 2.3% lower at £1.55bn.
In response to the Covid crisis, Howdens temporarily closed all of its UK depots and most of its manufacturing and distribution centres on 24 March. From late April, in line with government guidance and with additional safety processes in place, the company began a phased reopening of its depots, manufacturing and distribution facilities.
By the end of the first half, all sites were open and Howdens said “the strong second half benefitted from our ability to meet pent-up demand and the consumer’s desire to invest in their homes”.
Howdens declared a final dividend of 9.1p a share for 2020, up from 3.9p the year before and a special dividend of 9.1p a share to be paid in lieu of the cancelled final dividend for 2019.
Chief executive officer Andrew Livingston said: “Our performance demonstrates the strength of our trade only business model and our ability to evolve the business while prioritising the health and wellbeing of our staff and customers.
“Following a sharp drop in sales in quarter two when the UK entered its first national lockdown, our performance improved significantly in the second half, with sales up 16% compared to the equivalent period in 2019, as we benefitted from pent-up demand and the consumer’s desire to invest in their homes.
“The year ended strongly with profit and cash flow ahead of expectations and we were able to repay the government furlough and other support taken earlier in the year. We are also pleased to be resuming dividend payments.”
The company struck a more cautious note on the outlook, saying that so far this year, it is experiencing pressure from commodity prices, increasing freight costs and product mix, with a higher than usual proportion of sales coming from lower margin products.
