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Howden Joinery - Accelerating investment pegs back shares

September 2015

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.

Having hit a high of 526p the shares pulled back after Howden’s interims revealed it would undertake greater investment particularly in more complex kitchens, which will involve increased capital spend on people, property, product and continuity of supply. While it should ultimately boost sales it will impact on margins in the short-term.This increased investment meant that while revenue increased 11% to almost £476m (8.6% like-for-like sales growth) H1 operating profit rose just 5.7% with operating margins down from 13.2% to 12.8%. Eps rose 7.6% to 7.1p.£4.1m was spent buying back shares (part of a £70m program) and £16.7m on capital investment but net cash rose sharply to £223m (H1:&rsquo ...

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