Shares in kitchen supplier Howden Joinery (HWDN) climbed 1.9% to 937p after the company raised its full year earnings guidance, triggering double-digit analyst upgrades.
In a trading update covering the four and a half months from the middle of June to the end of October, the firm said the strong momentum it enjoyed in the second quarter had continued into the second half of the year, ‘resulting in strong sales and profits’.
Total revenue at UK depots rose by 20.8% on the same period last year, of which 19.2% was like for like growth demonstrating the strength of the UK new build and repair, maintenance and improvement markets.
Compared with the same period of 2019, total revenue was up 35.7% and like-for-likes were up 30.5%, with most of the growth coming from increased volumes topped up by price increases.
As a result of what it called an ‘exceptionally strong’ trading performance so far, the firm raised its forecast for full year pre-tax profits to the top of the current estimate range of £298 million to £360 million.
Given the average estimate is £319 million, with a lot of analysts only forecasting around £310 million, today’s comment has prompted a rush of earnings upgrades in the 10% to 15% range.
Tempering the good news, the company said it expected trading to return to ‘a more normalised’ pattern next year, making comparison with this year’s growth harder, but it remained positive on the outlook.
Stockbroker Davy commented: ‘It is probably no major surprise that Howdens has once again upgraded its full year profit expectations. However, the scale of the revision is a stand-out. Howdens is simply a brilliant business enjoying a fantastic year and living up to its rating.’
