Howden benefits from the home improvement trend

The group, formerly known as Galiform, said sales rose and margins improved in the second half of the year.

Its shares closed the day up 10.6p at 116.1p, an increase of 10 per cent.

Howden, which sells to the building trade, has continued to benefit from the trend of home improvement as householders postpone moving.

Total sales from its depots for the year ended December 25 rose 5.1 per cent to 795.1m, compared with 2009, or 3.6 per cent on a same-depot basis, the company said.

In the period from October 4 to December 25, the company said sales rose more than six per cent versus the same period a year earlier, once the benefit of an extra day's Christmas trading was included.

"The business has continued to perform resiliently and has seen strong performance on all key measures for the year as a whole," said the company.

"The gross margin performance in the second half of the year continued to progress and it is now expected that profit before tax for the year will be comfortably above the current range of market expectations."

Analysts were expecting the group to report pre-tax profits ranging from 88m to 94m, it added.

Howden was founded in 1995 and employs more than 5,500 people in manufacturing, sourcing, logistics and depots. It makes kitchen units at its factories in Howden and Cheshire. The group also has 462 depots across the UK, and believes there is scope for 600.

Howden supplies around 230,000 builders with around 3.5 million kitchen cabinets, two million doors and 400,000 complete kitchens annually.

The business, headed by chief executive Matthew Ingle, split from its ailing sister company, retailer MFI, in 2006.

It sold MFI for a nominal 1 to private equity firm Merchant Equity Partners to focus on the Howden business.

"This is a quality business with plenty more to go for," said Espirito Santo Investment Bank analyst Sanjay Vidyarthi.

"The recent share price rise still leaves the shares on just nine times calendar 2011 price-to-earnings ratio before (the) upgrade."

The analyst, who has a "strong buy" rating on the stock, said Howden Joinery is his top mid-cap retail pick of the year again for 2011.

The company is due to release full-year results on March 3.