In an unscheduled trading update, up-market kitchen supplier Howden Joinery (HWDN) raised its full year earnings estimate after first half sales not only topped 2020 but also beat its 2019 sales record.
Group revenues for the first six months of the year were almost £785 million against a pandemic-affected £465 million last year and £653 million in the same period of 2019.
The firm, which sells to trade customers including house builders, said trading had remained at elevated levels since the end of June and it was ‘cautiously optimistic in our outlook for the second half and our all-important peak trading period’.
While acknowledging it faced a tough second-half comparison, the company said it expected pre-tax profits for the full year of around £300 million compared with forecasts of £260 million and 2020 profits of £185 million.
Howden has been a big winner from both the boom in demand for new houses, aided by Help To Buy and the stamp duty holiday introduced last year, and from the increase in people making home improvements.
The Office for National Statistics estimates that the repair, maintenance and improvement or RMI market in the UK is worth close to £27 billion in revenues per year.
The stock gained 4% to a new all-time high of 886p. Shares tipped Howden at 829p less than a fortnight ago due to its high gross margin and return on capital and its reasonable valuation.
