Building up business
Last updated 11:36, Friday, 02 May 2008
THE owner of building trade supplier Howden Joinery, which has workshops in Workington, Whitehaven and Barrow, saw shares jump today after it pulled off a “minor miracle” with a 5.9 per cent rise in sales.
Owners Galiform, which used to be called MFI before shedding the ailing retail business in 2006, said Howden continued to perform well after benefiting from five new kitchen ranges and the launch of a catalogue and DVD.
Retail analyst Nick Bubb, of Pali International, said January and February same-depot sales were up 7.1 per cent, meaning today’s figure of 5.9 per cent for the first four months of the year indicated growth of just under five per cent in March and April.
In light of falling sales at Homebase and pressure at furniture retailers, Mr Bubb said this was a “minor miracle” which showed the resilience of the trade sector and the success of Howden in growing its range and market share.
The company, which posted a 39 per cent jump in annual profits in March, saw its share price leap seven per cent .
Despite the trading boost so far this year, analysts, including Mr Bubb, said it was hard to believe that kitchen sales would continue to hold up as the consumer environment toughened.
Christian Koefoed-Nielsen, of Panmure Gordon stockbrokers, said he feared Galiform may be exposed to the downturn later in the economic cycle.
He added: “Although a falling interest rate environment in 2008 should help, we believe that public expenditure is likely to be under pressure in 2008, negatively impacting local authority contracts, and credit for householders will be harder to come by, negatively impacting consumer demand.”
Galiform said it had opened eight Howden Joinery depots so far this year, taking its total portfolio to 444 depots.
Galiform chief executive Matthew Ingle said: ``In a less certain economic environment, I am pleased to report that Howdens has continued to trade well.
“The group continues to focus on opportunities to grow sales.”
