Kitchen products supplier Howden Joinery (HWDN) is up 2% to 495.6p as investors welcome indications that the company is coping well with currency pressures. UK revenue rose 8.7%, increasing by 6.4% on a same depot basis, in the four months to 16 April 2016.
Howden says that although foreign exchange rates have affected the cost of its goods, it has successfully pushed up selling prices. It imports approximately one third of input materials/finished goods and is battling weaker sterling rates.
Davy Research analyst Michael Mitchell gives Howden an ‘outperform’ rating, saying recent share price weakness is a good buying opportunity.
He says the shares have been hit by concerns that the UK voting to leave the European Union would have a negative impact on the company’s trading.
The analyst reckons Brexit is looking less likely now, and so believes that Howden ‘can still post another strong year’.
Irish stockbroker Davy said earlier this week that Howden would be high on its shopping list of stocks to buy in the event of a ‘Remain’ vote with the EU referendum in June.
N+1 Singer Research says it expects to upgrade its earnings forecasts on the back of today’s trading update.
Aynsley Lammin from Canaccord Genuity notes the pace of revenue has accelerated 10% over the last two months, but only has a ‘hold’ rating. The analyst believes that Howden will merely perform in line with market expectations.
Howden is on track to open 30 new depots in the UK this year and currently trades from 625 depots.