Primary Recommendation

Howden Joinery - Low cost, high returns model for supplier of kitchens to local builders

August 2012

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

With consumers cautious about spending it might seem odd that shares in Howden Joinery, a supplier of kitchen cabinets to local builders, are trading close to their all-time high of 131p set in March. Many investors may not have heard of Howden as its depots, which supply items from stock, are typically hidden away in back streets and in industrial sheds and you also won't find it advertising its wares in glossy magazines. But the companyâ€™s low-cost model is exactly why the business is in good stead and at a time when its main rivals, Magnet and B&Q, have weak operating margins of 4.9% and 6.2% respectively, Howden can boast margins of 13.2%. Another benefit of its no-frills model is that it can offer local builders low price ...

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Howden Joinery - Kitchen supplier enjoys third broker upgrade in 8 months (September 2014)

Howden Joinery - 8.5% growth in like-for-like sales (June 2014)

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Howden Joinery - Housing boom lifts demand for kitchens (January 2014)

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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