First dividend in four years from Howden

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Howden Joinery, which sells 400,000 kitchens a year through the building trade, bucked tough market conditions yesterday by reporting higher profits and its first shareholder dividend in four years.

The group’s revenues increased by 5.5 per cent to £838.7m in 2011, an increase of 3.1 per cent on a comparable basis with a year earlier, and said pre-tax profits improved by £9m to £110m.

It opened 20 new depots during the year, taking the current total to 509, and said it believes there is room for another 200.

The company, which makes a third of its products at factories in Runcorn, Cheshire and Howden, East Yorkshire, benefited from a significant increase in its number of customer accounts.

The value of kitchen sales rose due to a higher proportion of mid and higher priced ranges being sold, while selling prices were raised in order to offset higher input costs.

Chief executive Matthew Ingle said yesterday’s results improvement reflected the company’s “relentless focus” on its core strengths.

He added: “We are recommending a dividend for the first time in four years, reflecting the robust financial position of the group and our confidence in Howden’s successful future.”

Analysts had been hoping for a dividend higher than 0.5p a share but Howden said it had “significant” ongoing legacy commitments, such as its pension deficit, and required a strong balance sheet given current conditions.

“The group still has the opportunity to expand its branch network, and these take a number of years to mature which provides some visibility,” said Panmure analyst Andy Brown.

As Galiform, the group was the former owner of flat-pack furniture firm MFI but it sold the business – which has since folded – to private equity in October 2006.