Performance in line with
expectations, with further market share gains.
Investing to drive future growth.
Results summary
£
millions (unless stated)
|
20231
|
20221
|
Change
vs 2022
|
Change
vs 2019
|
Group revenue
|
2,310.9
|
2,319.0
|
-0.3%
|
+45.9%
|
-
UK
|
2,241.1
|
2,256.1
|
-0.7%
|
+44.6%
|
-
International2
|
69.8
|
62.9
|
+11.0%
|
|
Gross profit margin, %
|
60.8%
|
60.9%
|
|
|
Operating profit
|
340.2
|
415.2
|
-18.1%
|
+30.8%
|
Profit before tax
|
327.6
|
405.8
|
-19.3%
|
+25.7%
|
Basic earnings per share,
p
|
46.5p
|
65.8p
|
-29.3%
|
|
Total ordinary dividend per share,
p
|
21.0p
|
20.6p
|
+1.9%
|
|
Cash at end of period
|
282.8
|
308.0
|
|
|
1 The information presented relates to the 53 weeks to 30
December 2023, the 52 weeks to 24 December 2022 and the 52 weeks to
28 December 2019, unless otherwise stated. The 2023 and 2022
results are presented under IFRS 16, 2019 results have not been
restated.
2 Comprises Howdens' depots in France, Belgium and the Republic
of Ireland (ROI)
Highlights1
- Group revenue of
£2,310.9m in line with last year's record performance.
o UK revenue was
0.7% below last year or level after excluding £14.4m of third-party
sales associated with the acquisition of Sheridans in 2022, not
repeated in 2023.
o International
revenue was 11.0% ahead of last year with continued expansion in
France and the Republic of Ireland.
- Gross margins
broadly maintained at 60.8% despite higher cost inflation and the
dilutive impact of growing the sales of everyday joinery products
and solid work surfaces which both performed strongly.
- Operating costs
well controlled at prior year levels, with cost inflation of around
£50m more than offset through efficiencies. This protected our
investment of another £53m in our strategic initiatives.
- Strategic
initiatives included 43 new depots across the Group, 89 depot
reformats in the UK, 23 new product ranges, further development of
digital and upgrades to manufacturing and supply chain.
- Profit before tax
was £327.6m and included £17m of additional costs relating to a
53rd week. Before these costs profit before tax was down
15.0%.
- Strong cash
generation supported by a robust balance sheet with period end cash
at £282.8m.
o £50m share buy
back completed in the first half.
o Proposed final
dividend of 16.2p, bringing the total for the year to 21.0p, up
1.9%.
- The Science-Based
Targets initiative recently approved our 2030 carbon emissions
reduction target. We have also committed to set long-term targets
consistent with our intention to reach net-zero by 2050.
- Encouraging
revenue trends since the period end. The Group is on track with its
outlook for 2024.
Commenting on the results Andrew Livingston, Chief Executive
said:
"The combination of a strong product line-up,
high stock availability and outstanding customer service, alongside
investments to drive future growth, all contributed to further
market share gains in 2023.
"Our established markets for kitchens and
joinery in the UK are now estimated to be around £12 billion and we
continue to seek further opportunities in adjacent markets. The
focus remains on executing our strategic initiatives at pace to
capitalise on this attractive, long-term growth opportunity, while
selectively expanding Howdens' differentiated, trade-only business
model internationally.
"Our robust balance sheet underpins our
strategy as we invest in growth, including expanding our
manufacturing and supply chain capabilities, and returning surplus
capital to shareholders. While we are cautious about the
macro-economic and geo-political environment, given the encouraging
start to the year and the agility of our business model, the Board
is confident in the outlook for 2024."
Operational developments in the
year
- Opened 33 new
depots, bringing the total in the UK to 840. Revamped 89 older
depots during the year, including relocations, having now upgraded
274 of the 670 UK depots opened in the old format.
- Opened 10
international depots with 65 trading in France & Belgium and 10
in the Republic of Ireland.
- Introduced 23 new
kitchen ranges predominantly aimed at entry and mid-price
ranges.
- Launched a new
'paint-to-order' service for our best timber kitchen ranges and
successfully trialled a new fitted bedroom range during peak
trading. Both initiatives achieving encouraging results.
- Expanded our
joinery ranges, which represented a greater proportion of the sales
mix in 2023.
- Invested in
upgrading our manufacturing operations. Howdens now manufactures
35% of its cost of goods sold (COGS) in-house compared to 28% in
2021.
- Completed the
roll-out of the cross-docking logistics network (XDC) in early
2023, enabling us to deliver even higher levels of service and
availability and further differentiating our offer and scale
advantages.
- Retained our #1
position in the digital search market with nearly 20m visits to
Howdens.com and grew
unprompted brand awareness by end-users to around 31%.
Outlook and summary of planned major strategic
initiatives
While it is still early in the new financial
year, revenue growth in the new financial year has been encouraging
and compared to last year has increased in all the countries in
which we operate. We anticipate that market conditions in 2024 will
be broadly unchanged and we are well prepared for the challenges
and opportunities that this may present. We aim to maintain a
profitable balance between margin and volume and we have aligned
our operating costs to expected market conditions. We will work
with our suppliers to keep product and input costs well
controlled.
We will continue to invest in our strategic
initiatives to strengthen our differentiated business model and
capitalise on the significant growth opportunities in our
attractive markets. This is supported by our strong balance sheet
and sustained cash generation. Howdens is well placed to continue
to outperform its competitors and the Board is confident in its
outlook for 2024.
Summary of major strategic initiatives for
2024 (see pages 6 to 10 for more details)
- We plan to open
around 30 new depots, revamp 85 in the UK and open 10 new
international depots.
- We are expanding
our manufacturing capability and capacity including new kitchen
furniture and range expansion in solid work surfaces, alongside
more joinery products.
- We will launch
nine new product ranges with more looks and styles accessible to
all budgets with a continued focus on our premium kitchen ranges
where we are under-represented.
- We will continue
to develop our competitively priced paint-to-order service launched
last year.
- Our new fitted
bedroom ranges will feature in all our depots for the first
time.
- We are refreshing
our joinery offerings including doors, flooring and skirting, which
generate more depot footfall. We are also extending these offerings
in France where the category is under-represented.
- We are
introducing a new 'click and collect' service with an in-depot
stock management system alongside initiatives to optimise depot
product availability. This time-saving feature will also enable
customers to see live-stock information at their local depot
through the trade app.
Technical guidance for
2024
Income
statement
- Continued
operating expense investment to support our strategic initiatives
including new depots, manufacturing and supply chain and digital
investments.
- Higher freight
costs are expected to result in additional costs of around £5m in
2024, at current pricing.
- Foreign exchange
sensitivity in COGS of Euro: +/- €0.01 = £1.8m; US Dollar: +/-
$0.01 = £0.8m.
- Patent box impact
on the Group's effective tax rate around 3% lower to
c.23%.
Cashflow
- Receivables
expected to increase by around £50m due to the later calendar end
of our autumn peak trading period, with a higher proportion of
customer payments not being due until after the
year-end.
- Capital
expenditure anticipated at around £125m including investments to
support future growth.
- Following the
triennial valuation in 2023, cash contribution to the Group pension
scheme reduced to
£1m per month, should the scheme be in deficit for more than two
consecutive months.
For further information please
contact
|
|
Howden Joinery Group
Plc
|
Media Enquiries
|
Paul
Hayes, CFO
Tel: +44 (0) 207 535 1162
|
Nina
Coad, David Litterick (Brunswick)
Tel: +44 (0) 207 404 5959
|
Mark
Fearon, Director of IR and Communications
Mobile: +44 (0)7711 875070
|
|
Results presentation:
There will be an in-person analyst
and investor presentation at 0830 today hosted by Andrew
Livingston, Howdens' CEO, and Paul Hayes, Howdens' CFO
at:
Deutsche Numis, 45 Gresham St London
EC2V 7BF, with light refreshments served from 0800.
A live video webcast will be
available on https://brrmedia.news/HWDN_FY.
For more
information see: www.howdenjoinerygroupplc.com.
The presentation can also be heard
by dialling the phone numbers below:
|
Location United Kingdom,
Local
United States, Local
|
Phone Number
+44 (0) 33 0551 0200
+1 786 697 3501
|
Confirmation code:
Please quote 'Howdens Full
Year Results'
|
The
webcast will be recorded and available on our website after the
event has finished at:
www.howdenjoinerygroupplc.com
|
|
| |
Note to editors:
1. About Howden Joinery
Group Plc
Howdens is the UK's number one specialist
kitchen and joinery supplier. In the UK, the company sells kitchens
and joinery products to trade customers, primarily local builders,
through 840 depots. In 2023, the Group generated revenues of around
£2.3 billion and profit before tax of £327.6 million. Around 35% of
Howdens' cost of goods sold are products manufactured in-house at
its two principal factories in Runcorn, Cheshire, and Howden, East
Yorkshire both of which have achieved carbon neutral status. At the
end of 2023, Howdens operated from 65 depots in France and Belgium
and 10 depots in the Republic of Ireland.
2. Timetable for the
final dividend
The timetable for payment of the proposed final
dividend is shown below. A Dividend Reinvestment Plan ("DRIP") is
provided by Equiniti Financial Services Limited. The DRIP enables
the Company's shareholders to elect to have their cash dividend
payments used to purchase the Company's shares. More information
can be found at www.shareview.co.uk/info/drip
Ex-dividend date:
|
11 April 2024
|
Record date:
|
12 April 2024
|
Payment date:
|
24 May 2024
|
3. Provisional
financial calendar for 2024
Trading update
|
30 April
|
Annual General Meeting
|
2 May
|
Half Year Results
|
25 July
|
Trading update
|
7 November
|
End of financial year
|
28 December
|
Financial review
Financial results for
20231
Revenue £m (unless stated)
|
2023
|
2022
|
Change
|
# of depots 2023
|
UK depots - same depot
basis2,4
|
2,195.3
|
2,232.8
|
-1.7%
|
777
|
UK depots opened in previous two
years
|
45.8
|
23.33
|
|
63
|
Total - UK depots
|
2,241.1
|
2,256.1
|
-0.7%
|
840
|
Total - International depots
|
69.8
|
62.9
|
+11.0%
|
75
|
Total -
Group
|
2,310.9
|
2,319.0
|
-0.3%
|
915
|
Local currency revenue €m (unless stated)
|
2023
|
20225
|
Change
|
# of depots
20235
|
International - same depot
basis2
|
58.4
|
66.8
|
-12.6%
|
35
|
Depots opened in previous two
years
|
21.9
|
6.9
|
|
40
|
Total - International depots
|
80.3
|
73.7
|
+8.9%
|
75
|
1 The information presented relates to the 53 weeks to 30
December 2023 and the 52 weeks to 24 December 2022 unless otherwise
stated.
2 Same depot basis for any year excludes depots opened in that
year and the prior year.
3 2022 includes additional third party sales generated by the
Sheridans solid work surface business acquired in the
period.
4 One depot was closed in the UK at the end of 2023.
5 During 2022, 25 depots were opened and five depots were closed
in France.
Group revenue of £2,310.9m was in line with
last year (2022: £2,319.0m) and 45.9% ahead of the same period in
2019. UK depot revenue of £2,241.1m (2022: £2,256.1m) was broadly
consistent with last year's record performance and 1.7% lower on a
same depot basis. Revenue in the international depots was 11.0%
ahead of the prior year at £69.8m (2022: £62.9m) and included sales
in the Republic of Ireland, where we opened depots for the first
time last year. We continued to expand our international depot
network with ten openings in the year, bringing the total to
75.
Gross profit
We maintained our sector leading margins by
appropriately balancing pricing and volumes in a high inflation
environment. Gross profit was broadly similar to last year at
£1,403.9m (2022: £1,411.2m). The slightly lower gross margin
percentage of 60.8% (2022: 60.9%) reflected the dilutive impact of
a higher mix of everyday joinery products and growth of our solid
work surfaces offering, which performed strongly in its first full
year of trading. Solid work surfaces, often associated with sales
of higher priced kitchens, make an attractive cash margin
contribution but have a lower gross margin percentage than most of
Howdens' kitchen products. During the year we also delivered a
number of productivity improvements in our manufacturing
operations, which partially offset increases in commodities, wage
inflation and energy costs.
Operating profit and profit before
tax
Operating profit was below last year at £340.2m
(2022: £415.2m) given the continued investment in the strategic
initiatives and £17m of additional costs arising from an additional
53rd week. It was, however, 30.8% ahead of pre-COVID
profit levels in 2019 of £260.0m.
Operating expenses increased by £67.7m to
£1,063.7m (2022: £996.0m) with productivity and efficiency actions
taken throughout the year more than offsetting cost increases of
around £50m relating to inflation. This tight cost control enabled
us to protect our ongoing investments in our strategic initiatives
across the business. The £53m of strategic investments this year
included £16m on new UK depots opened in 2022 and 2023 and £12m on
international depots opened in the period and prior year. We also
invested £25m in warehouse and transportation initiatives including
the full year impact of our investment in our regional cross
docking facilities (XDCs).
The net interest charge was £12.6m (2022:
£9.4m). Profit before tax of £327.6m was £78.2m below the prior
year (2022: £405.8m) and 25.7% ahead of 2019 (2019:
£260.7m).
Tax, profit after tax and basic earnings per
share
The tax charge on profit before tax was £73.0m
(2022: £31.6m) and represented an effective tax rate of 22.3%
(2022: 7.8%). This includes a higher corporation tax rate for
businesses introduced in the UK from April 2023. The lower tax rate
in the prior year reflected the previously announced backdated tax
credit relating to the patent box claim, which was included in
Howdens' financial statements last year. While always subject to
review by HMRC, as previously indicated, the Group expects an
ongoing reduction of around 3% to Howdens' effective tax
rate.
Profit after tax was £254.6m (2022: £374.2m).
Reflecting the above and the benefit of the reduced share count
following the share buyback, basic earnings per share were lower at
46.5p (2022: 65.8p).
Cash
The net cash inflow before movements in working
capital was £470.8m (2022: £548.5m). Overall working capital
increased by £35.0m with stock £9.5m higher as a result of
inflation. Debtors at the end of the period were £38.8m lower than
at the end of the previous period with ageing in good shape and
benefitting from the later timing of the year end. Creditors were
£64.3m lower. Capital expenditure cash payments were below the
prior year at £118.9m (2022: £140.8m). Corporation tax payments
were £63.5m (2022: £101.5m), and dividends amounted to £114.1m
(2022: £115.0m). Share buy backs totalled £50.0m (2022: £250.5m).
The interest and principal paid on lease liabilities totalled
£121.8m (2022: £79.2m).
Reflecting the above, there was a net cash
outflow of £23.1m, or £25.2m including foreign exchange movements,
(2022: outflow of £207.3m), leaving the Group with cash at the year
end of £282.8m
(24 December 2022: £308.0m).
Capital allocation and returns to
shareholders
We have a well-established policy for capital
allocation. We focus on achieving sustainable profit growth by
investing in and developing our business. We also want to maintain
and grow our ordinary dividend in line with earnings to reward
shareholders with an attractive ongoing income stream. After
allowing for these uses of cash, Howdens remains committed to
returning any surplus capital to shareholders.
Within its definition of surplus capital, the
Board's objective is for the Group to be able to operate through
the annual working capital cycle without incurring bank debt,
noting that there is seasonality in working capital balances
through the year, particularly in advance of our peak trading
period in the second half. We also take into account that the Group
has a significant property lease exposure for the depot network,
and a large defined benefit pension scheme. Our policy remains that
when period-end cash is in excess of £250m we expect to return
surplus cash to shareholders. This provides sufficient headroom to
support organic growth, our seasonal working capital requirements,
and ongoing investments in our strategic initiatives, while
maintaining a strong balance sheet.
Considering the Group's prospects and strong
financial position, in July 2023 the Board declared an interim
dividend of 4.8p per ordinary share (2022: 4.7p per ordinary
share). The Board is recommending a final dividend for 2023 of
16.2p per ordinary share (2022: 15.9p per ordinary share),
resulting in a total dividend of 21.0p per ordinary share (2022:
20.6p per ordinary share). The total dividend represents a
year-over-year increase of 1.9% and if approved by shareholders at
the AGM in May the final dividend will be paid on 24 May 2024 to
shareholders on the register on 12 April 2024.
Pensions
At 30 December 2023, the defined benefit pension
scheme was in a deficit position of £12.6m on an IAS 19 basis compared to a
deficit of £41.5m on 24 December 2022. The scheme
is closed for future accrual.
The triennial actuarial valuation of
the scheme was conducted as at 31 March 2023 and the scheme was in
a surplus position on a technical provisions basis. The Company and
Trustee agreed a new recovery plan in November 2023, should the
scheme move into a technical deficit, and this agreement will run
until 31 May 2026. This recognises the improvement in the pension
scheme funding since it was last set in 2020. Under this agreement
deficit contributions of £1m a month will be made if there is a
deficit, on a technical provisions basis, for more than two
consecutive months. This compares to the previous rate of £2.5m per
month. In the year to 30 December 2023 deficit payments totalled
£19m.
Board changes
In May, Andrew Cripps was appointed as the
Senior Independent Director in addition to his responsibilities as
Audit Committee Chair. He replaced Geoff Drabble who stepped down
from the Board during the year.
In May, we announced the appointment of Louis
Eperjesi as a Non-Executive Director with effect from 1 June 2023.
In July, we announced that Debbie White, Non-Executive Director,
had informed the Board of her intention to retire on 30 December
2023 in order to take up a new position as a Non-Executive Director
and Chair of the Co-operative Group.
In November, we announced that Karen Caddick,
Non-Executive Director and Remuneration Committee Chair, will step
down from the Howdens Board at the end of the Annual General
Meeting on 2 May 2024. Vanda Murray was recently appointed as a
Non-Executive Director with effect from 1 February 2024 and will
succeed Karen as Remuneration Committee Chair from 2 May
2024.
The Board thanks all those directors who have
stepped down in the year for their valuable contributions and,
welcomes the incoming new directors to Howdens.
Operational Review
Update on the UK kitchen and joinery
markets
Howdens conducts its own research analysis into
the size and structure of the UK kitchen and joinery markets. The
work undertaken is based on existing third-party sources
supplemented by management estimates. The findings show that the UK
kitchen and joinery markets are large and fragmented with a
significant opportunity for Howdens to continue to grow its market
share. Management believes that based on this research the value of
the kitchen market was around £6.6bn as at the end of
2023.
The UK joinery market is also large and very
fragmented at around £5.4bn across the four segments that Howdens
supplies; joinery, doors, flooring, and hardware. During the year
the Company entered the fitted bedroom market in the UK with a
market value of around £1.2bn.
Consequently, we believe Howdens' established
markets for kitchens and joinery (excluding fitted bedrooms) totals
around £12bn for the UK which compares with Howdens' UK revenue of
£2.2bn last year. We continue to look to expand into adjacent
markets which suit our competitive strengths and given the
significant market opportunity in the UK we are investing
commensurately in our strategic initiatives as outlined
below.
Strategic initiatives
Howdens has made further progress on its
strategic initiatives, and we expect to deliver profitable growth
and market share gains over the medium term. The four strategic
initiatives are:
1. Evolving our depot model by
using space more efficiently to provide the best environment in
which to do business.
2. Improving our range and
supply management to help customers' buying decisions, to improve
service and choice and to enhance productivity in our
manufacturing, sourcing, and supply chain activities.
3. Developing our digital
platforms to raise brand awareness, support the business model and
to deliver productivity gains and leads for depots and
customers.
4. Expanding our presence
selectively in kitchen and joinery markets outside the
UK.
Progress on each of these initiatives is
reviewed below:
Evolving our depot model
In the UK, since the start of the year we made
good progress in finding new depot sites and we opened 33 new
depots in 2023. We are opening all new depots in our updated
format, which is designed to provide the best environment in which
to do business with our customers. At maturity, we expect to
operate with around 1,000 depots in the UK, versus the 840 trading
at the end of 2023. This will be supported by our newly established
network of 12 XDC facilities which enable depots to optimise their
stock holdings and provide high levels of availability across the
product range.
We have also continued with our reformatting
programme for existing depots. Depot reformats have a pay back of
around four years. The programme is delivering incremental sales
and has received very positive feedback from depot teams and
customers. In the year, including relocations, we reformatted 89
depots. By the end of 2023, we had reformatted around 274 of the
670 depots which were opened in the old format. During 2024, we
expect to open around 30 new depots and reformat around 85 sites in
the UK.
Improving our product range and supply
management
Range Management
In recent years we have reorganised our range
architecture to support growth and improve the balance between new
kitchen introductions and timely discontinuations. At a time when
many competitors are paring back their range offerings, Howdens has
accelerated new product introductions to ensure we are leading the
industry and inspiring our customers and end-users with the latest
trends. In 2023, we increased the net number of ranges aimed at the
entry and the mid-market segments, making more kitchen styles
accessible to all budgets. Value for money is a consistent feature
of buying decisions, particularly given current pressures on
household budgets. We have also continued to develop our offering
of higher priced kitchens, a significant segment of the market
where we are under-represented.
In 2023 we launched 23 new kitchen ranges
including:
- Seven new entry
level ranges, where we added more colour options. We introduced new
colours to our Greenwich and Witney families to match the new Croft
Grey cabinet platform we introduced during the year. We have
refreshed the look of our bestselling shaker family, which we have
named Halesworth, and we have added a new mid-priced beaded shaker
family, Bridgemere.
- The integration
of Sheridans is now largely complete and we have overhauled our
work surfaces business to align it with our 'customer-first'
approach. For example, during the year we re-engineered the
template to fit process to improve the service for customers, with
typical lead times for jobs reduced from 10 days to 5 days
nationally. Our in-house solid surface capacity is now amongst the
largest in the UK and the number of solid surface worktop orders
taken by depots has increased significantly as we continue to
improve our offer and expand our range.
- In the second
half we launched a premium paint to order service for our 'Best'
timber kitchen ranges in the Chilcomb and Elmbridge
families initially in 15 new colours. The offer
supports requirements for a bespoke look, which is priced at a
premium to the colours available from stock. Dedicated
manufacturing ensures a short lead time between order placement and
delivery, which is attractive for our trade customers. Initial
sales have been encouraging and there is a range of 24 colours
available for 2024.
- We continue to
invest in our joinery business, for example in doors, where we have
introduced more colours and bolder styles at all price points, and
in flooring, where we have launched a new in-house brand, "Oake
& Gray". We have added to our private label Lamona appliance
brand, which is now the leading integrated appliance brand in the
UK and extended our range of third-party branded
appliances.
- This year, ahead
of our peak trading period, we also developed an in-house
manufactured fitted bedroom range, testing the concept in 200
depots nationally. Initial uptake has been encouraging and the
fitted bedrooms are now available in all UK depots in four styles
drawn from our kitchen platform and matched with new internal
accessories to suit all tastes and budgets.
Manufacturing and supply chain
Howdens is an in-stock business, and a high
level of stock availability is one of the key reasons our customers
buy from us. Our dedicated manufacturing and supply chain is
critical to the success of our in-stock offer. We supply all
product, whether manufactured or sourced, to all depots. We keep
under review what we believe it is best to make or buy, balancing
cost, overall supply chain availability, resilience, and
flexibility. Over time we continue to see opportunities to increase
the proportion of products we make and during the year we increased
this to around 35% of COGS from 28% in 2021.
We have continued to invest in new lines at our
Howden site, which are amongst the most advanced of their type in
Europe. These give us the ability to make a variety of kitchen
furniture, principally doors and panels, for more of our ranges, at
the same quality as we can source externally but at a lower cost
and at a reduced lead time to delivery. More than 1,000 in-house
manufactured SKUs were introduced in the period including bedrooms,
a new croft grey cabinet, worktops, and more volumes of skirting
and architrave products.
Our "Daily Traders" initiative was rolled out
to all UK depots this year. This improves customer service and
increases sales by optimising in-depot stock holdings of the
bestselling SKUs and associated "range completers" in a depot.
Sales of these products outperformed those of non-Daily Trader SKUs
in the period and we are seeing improvements to other key metrics
including a reduction in customer back-orders and a higher
proportion of stock being replenished via a depot's core weekly
delivery order. This gives us efficiencies as it reduces
utilisation of our XDC service.
XDC provides market-leading
product availability to our depots and with mainland
XDC coverage now completed, our focus has been on using these
assets most efficiently. The improved depot stock mix following the
introduction of a new re-ordering system and the Daily Traders
initiative have enabled us to reduce annualised XDC capacity,
leading to lower operating costs.
Developing our digital platform
Our digital strategy reinforces our model of
strong local relationships between depots and their customers by
raising brand awareness, supporting the business model with new
services and ways to trade with us and delivering productivity
benefits for depot employees and customers. In 2023, usage of our
online account facilities, which benefits customers and depots, has
continued to increase and we now have around 48% of our customers
with an on-line account.
In 2023, we added new services and capabilities
to our trade platform which collectively improve stock and account
knowledge, promote frequency, and ease of trading and reduce
time-consuming manual tasks in depots, including stock allocation.
These include a new "multi-list" feature, which gives visibility of
dates saved for future projects enabling depots to prioritise leads
daily and customers to manage all their jobs efficiently in one
place. We have commenced the roll out of a digitised in-depot stock
management system to record and pick deliveries, check allocations,
and determine depot stock levels. We expect the new system to be
rolled out to all our UK depot network in 2024. 'Live-stock' will
enable a better service to our customers which will save them time
as they will see real time stock availability live on the trade
app.
We are also continuing to focus on helping
end-users interact with Howdens online at each stage of their
buying decision, creating higher quality leads for our designers
and customers. In June, we added more prominent 'Book a Design
Appointment' signposting on our website which since launch has
generated over 60,000 depot contacts. Our market-leading search
functionality enables users, including our teams, to find what they
are looking for much more efficiently.
As our digital presence has grown, awareness of
Howdens amongst end-consumers has increased. According to our
in-house research, our unprompted brand awareness amongst
end-consumers is now at around 31%, which has nearly tripled since
2019, and we see the potential to raise awareness to higher levels.
We ended the year with 554,000 followers across the major social
media platforms.
Developing our international
operations
Our international operations, predominantly
based in France, continued to make good progress. The business
model for France is similar to the UK with a market size in
kitchens of c.€4.0bn, excluding appliances. The French market has
low penetration rates of integrated kitchens, and most are
purchased through DIY outlets and specialist small independent
businesses. We believe appreciation of the advantages of our
trade-only in-stock model, our service levels and competitive
pricing is growing. In addition, most of the product range is
common versus our UK ranges, which helps us realise scale
benefits.
Since 2019, we have been opening
depots in small clusters within cities which benefit from word of
mouth between customers and our ability to build a local and
trusted brand. Clustering also helps to build the Howdens culture
within our business teams, and we now have 65 depots in France and
Belgium and expect to open around five this year.
During 2024 after significant depot expansion in recent years,
including 35 new depots in the past 24 months we are focusing on
developing our existing depot teams and we are investing behind our
joinery offerings to drive greater footfall into the depot
network.
We continue to invest in
establishing our presence in the Republic of Ireland adding a
further 5 depots in 2023 to bring the total in the region to 10.
The reaction from local trade customers has been very positive and
we expect to have 15 or so trading by the end of the
year.
Environment, social and governance (ESG)
We want to create an inclusive
environment and make a positive contribution to all our
stakeholders, including our customers, staff, communities,
suppliers, and shareholders. We believe that our business needs to
be worthwhile for all concerned and Howdens' ambition
remains to be the UK's leading responsible kitchen and joinery
business. We actively manage risks and
identify opportunities across the business to improve our
environmental, social and governance performance to minimise our
impact on the environment.
Summary of 2023 performance
People
Howdens' key asset is its workforce, and we
want to attract, train, and retain great people from the widest
possible pool of talent as well as keep them safe and healthy while
at work. Howdens is committed to ensuring that safety is embedded
as a core value in everything we do. Our safety KPI
has remained low at 153 RIDDOR (Reporting of Injuries Diseases and
Dangerous Occurrences Regulation) reportable injuries per 100,000
employees in 2023. This is 29% below the 2022/2023 HSE All-Industry
rate of 215. Our accident severity rate has also remained low at
33.4 hours lost to accidents per 100,000 hours worked.
We are particularly proud of our
longstanding commitment to apprenticeships and the development of
homegrown talent, which is essential to our entrepreneurial model.
In 2023, we recruited 362 apprentices, and we ended the year with
492 on various programmes across the business. We are particularly
proud of the fact that today over one-in-ten of our current
workforce started their career with Howdens as an
apprentice.
Howdens is committed to maintaining a corporate
culture that respects the principles aimed at promoting,
protecting, and supporting all internationally recognised human
rights. We recognise the Company's responsibility to respect human
rights and avoid complicity in human rights abuses. During 2023, we
have developed and introduced a new Human Rights policy for the
Company, which supports all of our locations, staff, suppliers,
customers and key stakeholders in achieving this aim. This
programme will be rolled out fully throughout 2024 to all relevant
stakeholders.
In 2023, we have also partnered with specialist
organisations including Wellbeing for Women and 'ANDY'SMANCLUB' to
provide workplace support and webinars for mental health and
women's health issues. So far, we have 31 trained wellbeing reps
and have plans to increase this further to widen the reach across
the business. We have a calendar of wellbeing events throughout the
year to ensure we give these issues appropriate focus amongst our
employees.
Environment
Our focus remains on:
- reducing direct
emissions in our own manufacturing and logistics
operations.
- working closely
with suppliers to reduce emissions throughout our external supply
chain.
- accelerating our
product and packaging sustainability programme.
We remain well-placed to achieve this given our
UK manufacturing focus, our trusted supplier partnerships and
Science Based Net Zero targets commitment. We submitted our Net
Zero Plan to Science Based Targets Initiative (SBTi) in April 2023
and received approval early in 2024. This commits us to reducing
our Scope 1 and 2 emissions by 42% and our Scope 3 supply chain
emissions by 25% by 2030 and targeting a 90% reduction by 2050
against a baseline year of 2021.
In 2023, we made further progress to
reduce our Scope 1 and 2 emissions. Over the past
decade we have driven continuous improvements to reducing emissions
in manufacturing, including achieving carbon neutral status in our
two major factories in Howden and Runcorn two years ago. We are now
transitioning from Carbon Neutral Status to the Route to Net Zero
Standard Certification with the Carbon Trust. This moves us from
site-based accreditation to whole organisation certification and is
aligned to SBTi.
We have also continued our focus on eliminating
waste, including again achieving zero to landfill in our
manufacturing operations, and 99.7% avoiding landfill in our depot
network. Some of our waste timber is now recycled back to our major
supplier for chipboard helping with the recycled content which
stands at c.35%. Most waste material is now being recycled into
more plastic, cardboard, or metal and our waste sawdust is used for
biomass and heating our own factories and warehouses. We are also
using quartz offcuts from our solid surface factories as hardcore
for building roads.
Following the move to purchasing renewable
energy for all our UK sites, we are planning the first phase
installation of solar panels on our Primary Distribution Centre at
our Howden factory site. Solar panels will cover 350k
ft2 and reduce our carbon emissions by c.1,000
tonnes/year once the installation is completed at the end of 2024.
We are now using 100% renewable energy in manufacturing and 96% in
our depots.
With respect to fleet management, we
have also recently committed to expanding our trial of Hydrotreated
Vegetable Oil (HVO) in our vehicle fleet as an alternative to
diesel, which is a major contributor to our Scope 1 greenhouse gas
emissions. We now have around 5% of the fleet running on HVO and
replacing diesel in this way will significantly reduce our own
fleet emissions. This will have no negative impact on fuel
efficiency or maintenance costs. We continue to trial electric
vehicles (EVs) within the overall fleet and are operating our first
two EVs as part of a trial in our XDC network. XDC deliveries tend
to be within a region and therefore more suited to the range
limitations of current battery technology.
95% of our total emissions are Scope 3, with
76% of these relating to goods purchased from our suppliers and the
use of products that we source from our suppliers. As a result,
aligning the supply base with our emissions reduction targets is a
key priority, and during the year we have focused engagement on the
top 6 suppliers who represent 25% of overall emissions. All
suppliers are actively engaging, and a programme of work continues
to secure real (rather than estimated) supplier emissions data and
reduction targets with commitments. In addition to our suppliers
Code of Conduct, we have now updated our purchased goods trading
terms and conditions to make Net Zero targets a contractual
obligation.
Finally, we are incorporating sustainability as
a key part of the design process and building it into our product
ranges. This year, an important step was achieved to improve our
bestselling Greenwich Matt Kitchen frontals so that they are now
100% recyclable. We have launched a Plastic Pledge initiative
looking across all products to remove, reduce, or replace plastic
packaging where possible. For example, we continue to remove
polystyrene packaging from our drawer boxes and look to more
recyclable alternatives such as carboard. We have also removed it
from cooker hoods and set targets to remove all polystyrene from
our Lamona appliance range by the end of 2025. We are also
reviewing alternatives to plastic materials such as in our cabinet
leg, which will reduce energy consumption therefore saving
CO2 emissions.
GOING CONCERN
The Directors have adopted the going concern
basis in preparing the financial statements and have concluded that
there are no material uncertainties leading to significant doubt
about the Group's going concern status. The reasons for this are
explained below.
Going concern review
period
This going concern review period covers the
period of at least 12 months after the date of approval of these
financial statements. The Directors consider that this period
continues to be suitable for the Group.
Assessment of principal
risks
The Directors have reached their
conclusion on going concern after assessing the Group's principal
risks, as set out in detail in the "Principal risks and
uncertainties" section, starting on page 14. While all
the principal risks could have an impact on the Group's
performance, the specific risks which could most directly affect
going concern are the risks relating to continuity of supply,
changes in market conditions, and product relevance. The Group is
currently holding additional amounts of faster-moving inventory as
a specific mitigation against supply chain disruption, and the
Directors consider that the effects of the other risks could result
in lower sales and/or lower margins, both of which are built into
the financial scenario modelling described below.
Review of trading results, future
trading forecasts and financial scenario modelling
The Directors have reviewed trading
results and financial performance in 2023, as well as early weeks'
trading in 2024. They have reviewed the Group balance sheet at 30
December 2023, noting that the Group is debt-free, has cash and
cash equivalents of £283m, and appropriate levels of working
capital. They have also considered three financial modelling
scenarios prepared by management:
1. A "base
case" scenario. This is based on the final 2023 Group forecast,
prepared in December 2023, and including the actual results of the
2023 peak sales period. This scenario assumes future revenue and
profit in line with management and market expectations as well as
investments in capital expenditure and cash outflows for dividends
and share buybacks in accordance with our capital allocation
model.
2.
A "severe but plausible" downside scenario based
on the worst 12 month year-on-year actual fall ever experienced in
the Group's history. For additional context, this is more
significant than the combined effect of COVID and Brexit on 2020
actual performance. This scenario models a reduction in most of the
variable cost base proportionate to the reduction in turnover. It
includes capital expenditure at a lower level than in the base
case, but which is still in line with our announced strategic
priorities for growth, namely: new depot openings and
refurbishments, investment in our manufacturing sites, investment
in digital and expanding our international operations. It also
includes dividends and share buybacks in line with the Group's
capital allocation model. In this scenario, the Board considered
the current economic conditions that the Group and its customers
are facing and noted that the downside scenario included allowances
for reduced demand and increased costs to reflect such adverse
conditions.
3.
A "reverse stress-test" scenario. This scenario
starts with the severe but plausible downside model and reduces
sales even further, to find the maximum reduction in sales that
could occur with the Group still having headroom over the whole
going concern period, without the need to take further mitigating
actions. Capital expenditure in this
scenario has been reduced to a "maintenance" level. Variable costs
have been reduced in proportion to the reduction in turnover on the
same basis as described in the severe but plausible downside
scenario. It assumes no dividends or share buybacks.
Borrowing facility and covenants
The Group has a five-year, committed,
multi-currency revolving credit facility of up to £150m, which
expires in September 2027 and which was not drawn at the period
end.
As part of the scenario modelling described
above, we have tested the borrowing facility covenants and the
facility remains available under all the scenarios. We have
therefore included the credit available under the facility in our
assessment of headroom.
Results of scenario modelling
In the base case and the severe but plausible
downside scenarios, the Group has significant headroom throughout
the going concern period after meeting its commitments.
In the reverse stress-test scenario, the
results show that sales would have to fall by a significant amount
over and above the fall modelled in the severe but plausible
downside scenario before the Group would have to take further
mitigating actions. The likelihood of this level of fall in sales
is considered to be remote.
Conclusion on going concern
Taking all the factors above into account, the
Directors believe that the Group is well placed to manage its
financing and other business risks satisfactorily and have a
reasonable expectation that the Group will have adequate resources
to remain in operational existence for the going concern review
period set out above. Accordingly, they continue to adopt the going
concern basis in preparing these financial statements.
LONG-TERM PROSPECTS AND VIABILITY
Assessment of long-term prospects
The Directors have assessed the Group's
long-term prospects, solvency, and liquidity, with particular
reference to the factors below:
Current position
-
History of profitable trading, with strong net
profit margins.
-
Cash and cash equivalents balance at 30 December
2023 of £283m.
-
Debt-free. Consistently cash-generative. Proven
ability to maintain strong cash balances whilst also investing for
growth and returning cash to shareholders.
-
£150m committed borrowing facility, due to expire
in September 2027. Unused, but available if needed.
-
Strong relationships with suppliers and
customers.
-
Proven ability to flex the operating cost base in
a severe economic downturn.
-
Robust disaster recovery and business continuity
framework.
Strategy and business model
-
Proven, successful business model.
-
Demonstrated agility and resilience of the
business model to adverse economic conditions.
-
Clear strategic direction.
Robust assessment of principal
risks
-
The Directors' role in the risk identification,
management, and assessment process is outlined on pages 13 to 17,
together with details of the principal risks and
mitigations.
-
The Directors are satisfied that they have carried
out a robust assessment of the Group's principal risks over the
viability period on the basis already described in the going
concern disclosure directly above.
ASSESSMENT OF VIABILITY
Time period and scenario modelling
The Directors' review of the Group's long-term
viability used a three-year period to December 2026. This was
considered to be the most suitable period as it aligns with the
Group's strategic planning process.
The financial modelling to support the
assessment of viability was based on the three scenarios used for
the going concern assessment and detailed on pages 11 to 12.
We have tested the borrowing facility covenants and the facility
remains available under all of the viability scenarios. We have
therefore included the credit available under the facility in our
assessment of headroom.
1) The base
case scenario takes the base case described in the discussion of
going concern on pages 11 to 12 and extends it over the viability
assessment period. It assumes future revenue and profit in line
with management expectations, investments in capital expenditure,
and cash outflows for dividends and share buybacks in accordance
with our capital allocation model on page 5.
2)
The severe but plausible downside scenario takes
the same decline over the going concern period as described in the
discussion of going concern on pages 11 to 12, and then assumes a
phased recovery over the rest of the three-year period. It assumes
capex at a lower level than in the base case but which is still in
line with our announced strategic priorities for growth, and
dividends and share buybacks in line with our capital allocation
model.
3)
In the reverse stress-test scenario, the model
assumes a phased recovery of margin and profit on the same bases as
for the severe but plausible downturn scenario. This is then
stress-tested to find the maximum amount by which sales in the
first year would have to fall before the Group would no longer have
headroom at any point in the viability assessment period, without
taking further mitigating actions. It assumes capex at a
maintenance level and no dividends or share buybacks.
The Directors consider that the reasonably
foreseeable financial effects of any reasonably likely combination
of the Group's principal risks are unlikely to be greater than
those effects which were modelled in the severe but plausible
downside and reverse stress-test scenarios.
Results of scenario modelling
The results of the base case and plausible
downside scenario modelling showed that the Group would have
sufficient headroom over the viability assessment
period.
The reverse stress-test showed that the level
of fall in sales required in the first year of the viability
assessment period was significantly more than the fall modelled in
the severe but plausible downturn scenario before the Group would
have to take further mitigating actions. The likelihood of this
level of fall in sales is considered to be remote.
Conclusion on long-term prospects and
viability
Having considered the Group's current position,
strategy, business model and principal risks in their evaluation of
the prospects of the business, and having reviewed the outputs of
the scenario modelling, the Directors concluded that they have a
reasonable expectation that the Group will continue to operate and
to meet its liabilities in full and as they fall due during the
three-year period to December 2026.
Principal Risks and Uncertainties
When we look at risks, we
specifically think about internal and external drivers of
operational, hazard, financial and strategic risk areas over short,
medium, and long-term timescales.
Our
principal risks
The following
describes our principal risks, the possible impact arising from
them, what we do to mitigate them and our risk appetite.
1. Market Conditions
Risk and impact
We sell our products to small
builders who install them in different types of housing. Our sales
depend on the demand for repair, maintenance, and improvement
services. If activity falls in these areas, it can affect our
sales.
Mitigating factors
§ We have
proven expertise in managing both selling prices and costs. This
continues to be a major focus.
§ We are
good at adapting to market changes. We keep a close eye on our
supply chain and depots
and use our good relationships to alert us of any changes. This
helps us to act quickly to reduce market risks.
§ We manage
this risk through market analysis, competitor review, price, and
cost optimisation, and
close relationships with the small builder.
Risk appetite
We have a low appetite for market
condition risks and leverage our relationships to identify
movements early to enable appropriate action to be
taken.
2. Maximising Growth
Risk and impact
Failure to recognise, innovate and
exploit opportunities could impact on growth, we must align our
business model, risk appetite, structures, and skills with
opportunities to maximise our growth potential.
Mitigating factors
§ We
continue to invest in our depot environment, people, services and
systems, and our manufacturing and distribution capabilities to
equip them for growth.
§ Growth
activities are reviewed in the light of our risk appetite, values,
business model and culture.
Risk appetite
We have a balanced appetite for risk
when it comes to growth, and we are willing to accept some risk
where we see opportunity but carefully balance that risk with the
potential reward presented.
3. People
Risk and impact
Our business could be adversely
affected if we were unable to attract, retain and develop our
staff, or if we lost a key member of our team.
Mitigating factors
§ We invest
in our employee value proposition, striving to provide the best
possible working environment and growth opportunities for all our
colleagues.
§ We support
our colleagues with a wide variety of apprenticeships,
accreditations, and development programmes across all areas of our
business.
§ Our
Remuneration Committee ensures that key team members are
appropriately compensated for their contributions and incentivised
to continue their careers with us.
§ We work
continuously to ensure that appropriate continuity and succession
plans are in place.
Risk appetite
We have a low appetite for people
risk and work hard in ensuring that they feel valued, rewarded
appropriately, and have opportunities to develop and progress in
their Howdens career.
4. Supply Chain
Over 2023, the scoring of this risk
has decreased as our supply base continues to improve and return to
a more pre-pandemic environment. While further
escalation of the conflict in the Middle East could have a knock-on
impact for shipping transit times and freight costs, the direct
impact for Howdens is currently limited. As a precaution we are
holding additional safety stocks to manage any extended lead times
and support market leading product availability.
Risk and impact
Disruption to our supply chain,
relationship with key suppliers, or manufacturing and distribution
operations could affect our ability to service our customers'
needs. If this happened, we could lose customers and
sales.
Mitigating factors
§ We
maintain strong supplier relationships which are focussed on being
worthwhile for all concerned.
§ We adopt
secure supply chain strategies such as long-term contracts and
multiple sourcing to safeguard the supply of key
products.
§ We invest
in our supply chain and distribution to secure capacity and agility
when it is required.
§ We
optimise our stock levels to reduce impact of supply chain
constraints.
Risk appetite
We have a very low appetite for
supply chain risk and will put effort in identifying them early to
enable us to prevent stock issues at our depots.
5. Health & Safety
Risk and impact
We have a large estate which employ
various activities that could cause harm to our staff, our
customers, their customers, and the communities around
us.
Mitigating factors
§ We have
invested in safe ways of working. We have developed dedicated
health and safety teams and formalised systems that help us stay
safe.
§ We
monitor, review, and update our practices to take account of
changes in our environment or operations and in line with best
practice and changing legislation.
§ We make
sure we keep talking about health and safety at every level of the
business, led by the Executive Committee.
Risk appetite
We put a great deal of effort into
identifying and managing health and safety issues before they occur
and have a very low appetite for health and safety
risks.
6. Cyber Security
Risk and impact
A major cyber security breach could
result in systems being unavailable, causing operational
difficulties, and/or sensitive data to be unavailable or
compromised.
Mitigating factors
§ We place
continuous focus on training our people in cyber security, as we
recognise that these risks are dynamic, not always technical and
awareness is our first point of mitigation.
§ We employ
industry standard IT security controls and regularly engage
external specialists to validate the effectiveness of our controls
against best practice.
§ We have
robust disaster recovery and business continuity plans that are
tested regularly.
§ We adopt a
continuous improvement approach to IT security and continue to
invest in the security of our systems.
Risk appetite
We have a very low appetite for
cyber security risk and manage IT security closely to secure the
confidentiality, integrity, and availability of our
systems.
7. Business Model and Culture
Risk and impact
If we lose sight of our values,
model, or culture we will not successfully service the needs of the
local small builder and their customers, and our long-term
profitability may suffer.
Mitigating factors
§ Our
values, business model and culture are at the centre of our
activities and decision-making processes, and they are led by the
actions of the Board, Executive Committee, and senior
management.
§ The Board
and Executive Committee regularly visit our depots and factories,
our logistics and support locations and hold events to reinforce
the importance of our values, model, and culture.
§ Regular
'Town Hall' meetings, Regional Board meetings and Staff Forums are
held to bring together teams and discuss our successes and
challenges ahead.
Risk appetite
We have a very low appetite for
risks that can adversely impact on our business model and culture
and put great emphasis on identifying issues and addressing them
early.
8. Product
Risk and impact
If we do not support the builder
with products that they, and their customers, want we could lose
their loyalty and sales could diminish.
Mitigating Factors
§ Our
product team regularly refresh our offerings to meet builders' and
end-users' expectations for design, price, quality, availability,
and sustainability.
§ We work
with our suppliers, external design and brand specialists and
attend product design fairs to monitor likely future
trends.
§ Our local
depot staff have close relationships with their customers and
end-users, and we actively gather feedback from them about changes
in trends.
Risk appetite
We have a balanced appetite for
product risk and are willing to take some calculated risks when
selecting new products to continue to meet the needs of our
customers.
9. Business Continuity &
Resilience
Risk and impact
We have some key business operations
and locations in our infrastructure that are critical to the
continuity of our business operations.
Mitigating factors
§ We
maintain and regularly review our understanding of what our
critical operations are.
§ We ensure
resilience by design, building high levels of protection into key
operations and spreading risk across multiple sites where
possible.
§ We ensure
appropriate business continuity plans are in place for these and
have a Group-wide incident management team and procedures
established.
§ We
regularly review our continuity plans covering our sourcing and
logistics to support peak trading.
Risk appetite
We have a very low appetite for
business continuity risk, ensuring that critical functions are
resilient and appropriate plans are in place to protect
them.
Cautionary Statement
Certain statements in this Full Year
results announcement are forward-looking. Although the Group
believes that the expectations reflected in these forward-looking
statements are reasonable, we can give no assurance that these
expectations will prove to have been correct. Because these
statements contain risks and uncertainties, actual results may
differ materially from those expressed or implied by these
forward-looking statements. We undertake no obligation to update
any forward-looking statements whether as a result of new
information, future events or otherwise.
Directors' Responsibility
Statement
The 2023 Annual Report and Accounts,
which will be issued in March 2023, will contain a responsibility
statement in compliance with DTR 4.1.12 of the Listing Rules which
sets out that as at the date of approval of the Annual Report and
Accounts the Directors confirm to the best of their
knowledge:
- the
financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the
assets, liabilities, financial position and profit or loss of the
Group and Company, and the undertakings included in the
consolidation taken as a whole;
- the
Annual Report and Accounts includes a fair review of the
development and performance of the business and the position of the
Group and the undertakings including the consolidation taken as a
whole, together with a description of the principal risks and
uncertainties they face; and
- the
Annual Report and Accounts, taken as a whole, is fair, balanced,
and understandable and provides the information necessary for
shareholders to assess the Group's position and performance,
business model and strategy.
Thie responsibility statement was
approved by the Board of Directors and is signed on its behalf
by:
Andrew Livingston
|
Paul Hayes
|
Chief Executive Officer
|
Chief Financial Officer
|
28
February 2024
Consolidated income statement
|
Notes
|
53 weeks to
30 December
2023
£m
|
52 weeks to
24 December
2022
£m
|
Continuing operations:
|
|
|
|
Revenue
|
2
|
2,310.9
|
2,319.0
|
Cost of sales
|
|
(907.0)
|
(907.8)
|
Gross profit
|
|
1,403.9
|
1,411.2
|
Operating expenses
|
|
(1,063.7)
|
(996.0)
|
Operating profit
|
3
|
340.2
|
415.2
|
Finance income
|
|
5.5
|
3.8
|
Finance costs
|
|
(18.1)
|
(13.2)
|
Profit before tax
|
|
327.6
|
405.8
|
Tax on profit
|
4
|
(73.0)
|
(31.6)
|
Profit for the period attributable to the equity holders of
the parent
|
|
254.6
|
374.2
|
|
|
|
|
Earnings per share:
|
|
|
|
Basic earnings per 10p
share
|
5
|
46.5p
|
65.8p
|
Diluted earnings per 10p
share
|
5
|
46.3p
|
65.6p
|
Consolidated statement of comprehensive
income
|
Notes
|
53 weeks to
30 December 2023
£m
|
52 weeks to
24 December 2022
£m
|
Profit for the period
|
|
254.6
|
374.2
|
Items of other comprehensive income:
|
|
|
|
Items that will not be reclassified subsequently to profit or
loss:
|
|
|
|
Actuarial gains /(losses) on defined
benefit pension scheme
|
|
13.3
|
(183.0)
|
Deferred tax on actuarial gains and
losses on defined benefit pension scheme
|
|
(2.9)
|
34.8
|
Change of tax rate on deferred
tax
|
|
(0.4)
|
11.0
|
Items that may be reclassified subsequently to profit or
loss:
|
|
|
|
Currency translation
differences
|
|
(0.5)
|
2.1
|
Other comprehensive income for the period
|
|
9.5
|
(135.1)
|
Total comprehensive income for the period attributable
to equity holders of the parent
|
|
264.1
|
239.1
|
Consolidated balance sheet
|
Notes
|
30 December
2023
£m
|
24 December
2022
£m
|
Non-current assets
|
|
|
|
Intangible assets
|
|
43.5
|
35.9
|
Property, plant and
equipment
|
|
456.9
|
398.7
|
Lease right-of-use assets
|
|
647.9
|
614.3
|
Deferred tax asset
|
|
15.6
|
35.9
|
Prepaid credit facility
fees
|
|
0.8
|
1.0
|
|
|
1,164.7
|
1,085.8
|
|
|
|
|
Current assets
|
|
|
|
Inventories
|
|
382.8
|
373.3
|
Corporation tax
|
4
|
39.7
|
32.3
|
Trade and other
receivables
|
|
194.5
|
233.3
|
Cash and cash equivalents
|
|
282.8
|
308.0
|
|
|
899.8
|
946.9
|
|
|
|
|
Total assets
|
|
2,064.5
|
2,032.7
|
|
|
|
|
Current liabilities
|
|
|
|
Lease liabilities
|
|
(85.3)
|
(95.3)
|
Trade and other payables
|
|
(373.2)
|
(433.9)
|
Provisions
|
|
(9.5)
|
(12.0)
|
|
|
(468.0)
|
(541.2)
|
|
|
|
|
Non-current liabilities
|
|
|
|
Pension liability
|
7
|
(12.6)
|
(41.5)
|
Lease liabilities
|
|
(599.2)
|
(570.0)
|
Deferred tax liability
|
|
(3.3)
|
(3.8)
|
Provisions
|
|
(3.0)
|
(4.5)
|
|
|
(618.1)
|
(619.8)
|
|
|
|
|
Total liabilities
|
|
(1,086.1)
|
(1,161.0)
|
Net
assets
|
|
978.4
|
871.7
|
|
|
|
|
Equity
|
|
|
|
Share capital
|
|
55.4
|
56.1
|
Capital redemption reserve
|
|
9.8
|
9.1
|
Share premium
|
|
87.5
|
87.5
|
ESOP and share-based
payments
|
|
16.6
|
11.7
|
Treasury shares
|
|
(24.0)
|
(25.5)
|
Retained earnings
|
|
833.1
|
732.8
|
Total equity
|
|
978.4
|
871.7
|
The financial statements were approved by the
Board and authorised for issue on 28 February 2024 and were signed
on its behalf by
Paul Hayes
Chief
Financial Officer
Consolidated statement of changes in equity
|
Share
capital
£m
|
Capital redemption
reserve
£m
|
Share premium
account
£m
|
ESOP and share-based
payments
£m
|
Treasury
shares
£m
|
Retained
earnings
£m
|
Total
£m
|
At
25 December 2021
|
59.8
|
5.4
|
87.5
|
5.9
|
(27.1)
|
860.0
|
991.5
|
Accumulated profit for the
period
|
|
-
|
-
|
-
|
-
|
374.2
|
374.2
|
Other comprehensive income for the
period
|
-
|
-
|
-
|
-
|
-
|
(135.1)
|
(135.1)
|
Total comprehensive income for the
period
|
-
|
-
|
-
|
-
|
-
|
239.1
|
239.1
|
Current tax on share
schemes
|
-
|
-
|
-
|
-
|
-
|
0.4
|
0.4
|
Deferred tax on share
schemes
|
-
|
-
|
-
|
-
|
-
|
(1.3)
|
(1.3)
|
Movement in ESOP
|
-
|
-
|
-
|
7.4
|
-
|
-
|
7.4
|
Buyback and cancellation of
shares
|
(3.7)
|
3.7
|
-
|
-
|
-
|
(250.5)
|
(250.5)
|
Transfer of shares from treasury into
share trust
|
-
|
-
|
-
|
(1.6)
|
1.6
|
-
|
-
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(115.0)
|
(115.0)
|
At
24 December 2022
|
56.1
|
9.1
|
87.5
|
11.7
|
(25.5)
|
732.8
|
871.7
|
|
|
|
|
|
|
|
|
Accumulated profit for the
period
|
|
-
|
-
|
-
|
-
|
254.6
|
254.6
|
Other comprehensive income for the
period
|
-
|
-
|
-
|
-
|
-
|
9.5
|
9.5
|
Total comprehensive income for the
period
|
-
|
-
|
-
|
-
|
-
|
264.1
|
264.1
|
Current tax on share
schemes
|
-
|
-
|
-
|
-
|
-
|
0.3
|
0.3
|
Deferred tax on share
schemes
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Movement in ESOP
|
-
|
-
|
-
|
6.4
|
-
|
-
|
6.4
|
Buyback and cancellation of
shares
|
(0.7)
|
0.7
|
-
|
-
|
-
|
(50.0)
|
(50.0)
|
Transfer of shares from treasury into
share trust
|
-
|
-
|
-
|
(1.5)
|
1.5
|
-
|
-
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
(114.1)
|
(114.1)
|
At
30 December 2023
|
55.4
|
9.8
|
87.5
|
16.6
|
(24.0)
|
833.1
|
978.4
|
The item "Movement in ESOP" consists
of the share-based payment charge in the year, together with any
receipts of cash from employees on exercise of share
options.
At the current period end there were
4,918,375 ordinary shares held in treasury, each with a nominal
value of 10p (2022: 5,237,907 shares of 10p each).
Consolidated cash flow statement
|
Notes
|
53 weeks to
30 December 2023
£m
|
52 weeks to
24 December 2022
£m1
|
Profit before tax
|
|
327.6
|
405.8
|
Adjustments for:
|
|
|
|
Finance income
|
|
(5.5)
|
(3.8)
|
Finance costs
|
|
18.1
|
13.2
|
Depreciation and amortisation of
owned assets
|
|
50.8
|
44.0
|
Depreciation, impairment and loss on
termination of leased assets
|
|
90.1
|
80.8
|
Share-based payments
charge
|
|
6.0
|
7.3
|
Decrease/(increase) in prepaid credit
facility fees
|
|
0.3
|
(0.7)
|
Difference between pensions operating
charge and cash paid
|
|
(16.9)
|
2.0
|
Loss/(profit) on disposal of
property, plant and equipment and intangible assets
|
|
0.3
|
(0.1)
|
Operating cash flows before movements in working
capital
|
|
470.8
|
548.5
|
|
|
|
|
Movements in working capital
|
|
|
|
Increase in inventories
|
|
(9.5)
|
(69.8)
|
Decrease/(increase) in trade and
other receivables
|
|
38.8
|
(23.7)
|
(Decrease)/increase in trade and
other payables and provisions
|
|
(64.3)
|
41.8
|
|
|
(35.0)
|
(51.7)
|
|
|
|
|
Cash
generated from operations
|
|
435.8
|
496.8
|
Tax paid
|
|
(63.5)
|
(101.5)
|
Net
cash flow from operating activities
|
|
372.3
|
395.3
|
|
|
|
|
Cash
flows used in investing activities
|
|
|
|
Payments to acquire property, plant
and equipment and intangible assets
|
|
(118.9)
|
(140.8)
|
Receipts from sale of property, plant
and equipment and intangible assets
|
|
-
|
0.7
|
Acquisition of subsidiary - net of
cash acquired
|
|
-
|
(14.6)
|
Interest received
|
|
4.7
|
1.1
|
Net
cash used in investing activities
|
|
(114.2)
|
(153.6)
|
|
|
|
|
Cash
flows used in financing activities
|
|
|
|
Payments to acquire own
shares
|
|
(50.0)
|
(250.5)
|
Receipts from release of shares from
share trust
|
|
0.5
|
0.1
|
Dividends paid to Group
shareholders
|
6
|
(114.1)
|
(115.0)
|
Interest paid - including on lease
liabilities
|
|
(16.8)
|
(13.1)
|
Repayment of capital on lease
liabilities
|
|
(105.0)
|
(66.1)
|
Net
cash used in financing activities
|
|
(285.4)
|
(444.6)
|
Net
decrease in cash and cash equivalents
|
|
(27.3)
|
(202.9)
|
Cash
and cash equivalents at beginning of period
|
|
308.0
|
515.3
|
Effect of movements in exchange rates
on cash held
|
|
2.1
|
(4.4)
|
Cash
and cash equivalents at end of period
|
|
282.8
|
308.0
|
1 In 2023 the Directors
have determined that is appropriate for the consolidated cash flow
statement to start from profit before tax and to present
'Difference between pension operating charge and cash
paid' as an adjustment to profit before tax. 2022 has been
represented on this basis.
Notes to the consolidated financial
statements
1 General Information
Accounting period
The Group's accounting period covers the 53
weeks to 30 December 2023. The comparative period covered the 52
weeks to 24 December 2022.
Statement of compliance and basis of
preparation
The Group financial statements have been
prepared in accordance with UK-adopted international accounting
standards.
The financial statements have been prepared on
the historical cost basis, modified for certain items carried at
fair value, as stated in the accounting policies.
These consolidated financial statements include
the accounts of the Company and all entities controlled by the
Company (its subsidiaries, together referred to as "the Group")
from the date control commences until the date that control
ceases.
"Control" is defined as the Group having power
over the subsidiary, exposure or rights to variable returns from
the subsidiary, and the ability to use its power to affect the
amount of returns from the subsidiary. Further details of all
subsidiaries are given in the "Additional Information" section at
the back of the Annual Report and Accounts. All subsidiaries are
100% owned and the Group considers that it has control over them
all.
2 Segmental reporting
(a) Basis of segmentation, and other general
information
Information reported to the Group's Executive
Committee, which is regarded as the chief operating decision maker,
is focused on one operating segment, Howden Joinery. Thus, the
information required in respect of profit or loss, assets and
liabilities, can all be found in the relevant primary statements
and notes of these consolidated financial statements.
The Howden Joinery business derives its revenue
from the sale of kitchens and joinery products, and related
services.
(b) Geographical information
The Group's operations are mainly located in the
UK, with a smaller presence in France, Belgium and the Republic of
Ireland. The Group has depots in each of these locations. The
number of depots in each location at the current and prior period
ends is shown in the five year record which is located towards the
back of the Annual Report and Accounts. The Group's manufacturing
and sourcing operations are located in the UK.
The following table analyses the Group's
revenues from external customers by geographical market,
irrespective of the origin of the goods:
Revenues from external customers
|
53 weeks to
30 December 2023
£m
|
52 weeks to
24 December 2022
£m
|
UK
|
2,241.1
|
2,256.1
|
France, Belgium and the Republic of
Ireland
|
69.8
|
62.9
|
|
2,310.9
|
2,319.0
|
The following is an analysis of the carrying
amount of assets, and additions to property, plant and equipment
and intangible assets, analysed by the geographical area in which
the assets are located.
Carrying amount of assets
|
30 December
2023
£m
|
24 December
2022
£m
|
UK
|
1,935.6
|
1,903.1
|
France, Belgium and
Ireland
|
128.9
|
129.6
|
|
2,064.5
|
2,032.7
|
Non-current assets (excluding deferred tax)
|
30 December
2023
£m
|
24 December
2022
£m
|
UK
|
1,068.3
|
975.4
|
France, Belgium and
Ireland
|
80.8
|
74.5
|
|
1,149.1
|
1,049.9
|
Additions to property plant and equipment and intangible
assets
|
53 weeks to
30 December 2023
£m
|
52 weeks to
24 December 2022
£m
|
UK
|
108.3
|
122.7
|
France, Belgium and
Ireland
|
9.1
|
24.5
|
|
117.4
|
147.2
|
3 Operating profit
Operating profit has been arrived at after
(charging)/crediting:
|
53 weeks to
30 December
2023
£m
|
52 weeks to
24 December
2022
£m
|
Net foreign exchange
(loss)/gain
|
(8.2)
|
(0.7)
|
Cost of inventories recognised as an
expense
|
(892.8)
|
(893.1)
|
Write down of inventories
|
(6.1)
|
(14.0)
|
(Loss)/profit on disposal of fixed
assets
|
(0.3)
|
0.1
|
Auditor's remuneration for audit
services
|
(1.4)
|
(1.1)
|
All of the items above relate to continuing
operations.
4 Current tax
(a)
Tax in the income statement
|
53 weeks to
30 December
2023
£m
|
52 weeks to
24 December
2022
£m
|
Current tax:
|
|
|
Current year
|
64.7
|
77.2
|
Adjustments in respect of previous
periods
|
(8.2)
|
(33.6)
|
Total current tax
|
56.5
|
43.6
|
|
|
|
Deferred tax:
|
|
|
Current year
|
14.9
|
2.1
|
Adjustments in respect of previous
periods
|
0.9
|
(14.7)
|
Effect of changes in tax
rate
|
0.7
|
0.6
|
Total deferred tax
|
16.5
|
(12.0)
|
|
|
|
Total tax charged in the income statement
|
73.0
|
31.6
|
UK Corporation tax is calculated at 23.5%
(2022: 19%) of the estimated assessable profit for the period. Tax
for other countries is calculated at the rates prevailing in the
respective jurisdictions.
(b)
Tax relating to items of other comprehensive income or changes in
equity
|
53 weeks to
30 December 2023
£m
|
52 weeks to
24 December 2022
£m
|
Deferred tax charge/(credit) to other
comprehensive income on actuarial difference on pension
scheme
|
2.9
|
(34.8)
|
Change of rate effect on deferred
tax
|
0.4
|
(11.0)
|
Deferred tax (credit)/charge to
equity on share schemes
|
-
|
1.3
|
Current tax (credit) to equity on
share schemes
|
(0.3)
|
(0.4)
|
Total charge/(credit) to other comprehensive income or changes
in equity
|
2.9
|
(44.9)
|
(c)
Reconciliation of the total tax charge
The total tax charge for the period can be
reconciled to the result per the income statement as
follows:
|
53 weeks to
30 December
2023
£m
|
52 weeks to
24 December
2022
£m
|
Profit before tax
|
327.6
|
405.8
|
|
|
|
Tax at the UK corporation tax rate of
23.5% (2022: 19%)
|
77.0
|
77.1
|
IFRS2 share scheme charge
|
0.5
|
0.3
|
Expenses not deductible for tax
purposes
|
2.9
|
1.0
|
Overseas losses not
utilised
|
6.2
|
2.7
|
Non-qualifying
depreciation
|
1.0
|
1.6
|
Super deduction - capital
allowances
|
-
|
(2.4)
|
Rate change
|
0.7
|
0.6
|
Patent box claim
|
(8.0)
|
(9.0)
|
Other tax adjustments in respect of
previous years
|
(7.3)
|
(40.3)
|
Total tax charged in the income statement
|
73.0
|
31.6
|
The Group's effective rate of tax is 22.3%
(2022: 7.8%). The difference in the effective tax rate from prior
year is driven by the effect of the Patent Box deduction claims for
2017-2021, which were realised during 2022 as a prior year
adjustment along with the increase in headline corporation tax as
of 1 April 2023.
5 Earnings per share
From
continuing operations
|
53 weeks to 30 December
2023
|
52 weeks to 24 December
2022
|
Earnings
£m
|
Weighted average number of
shares
m
|
Earnings
per share
p
|
Earnings
£m
|
Weighted average number of
shares
m
|
Earnings
per share
p
|
Basic earnings per share
|
254.6
|
548.1
|
46.5
|
374.2
|
568.6
|
65.8
|
Effect of dilutive share
options
|
-
|
2.1
|
(0.2)
|
-
|
2.1
|
(0.2)
|
Diluted earnings per share
|
254.6
|
550.2
|
46.3
|
374.2
|
570.7
|
65.6
|
The difference between the weighted average number of shares used
in the calculation of basic earnings per share and the total number
of shares in issue at the period end is due to the net effect of
time-apportioned adjustments for shares held in treasury, shares
held in trust which are not unconditionally vested, and shares
bought back and cancelled in the period.
6 Dividends
Amounts recognised as distributions to equity holders in the
period:
|
53 weeks to
30 December
2023
£m
|
52 weeks to
24 December
2022
£m
|
Final dividend for the 52 weeks to 25
December 2021 - 15.2p/share
|
-
|
88.9
|
Interim dividend for the 52 weeks to
24 December 2022 - 4.7p/share
|
-
|
26.1
|
Final dividend for the 52 weeks to 24
December 2022 - 15.9p/share
|
87.8
|
-
|
Interim dividend for the 53 weeks to
30 December 2023 - 4.8p/share
|
26.3
|
-
|
|
114.1
|
115.0
|
Dividends proposed at the end of the period (but not
recognised in the period):
|
53 weeks to
30 December
2023
£m
|
Proposed final dividend for the 53
weeks to 30 December 2023 - (16.2p/share)
|
88.4
|
|
88.4
|
The Directors propose a final dividend in
respect of the 53 weeks to 30 December 2023 of 16.2p per share,
payable to ordinary shareholders who are on the register of
shareholders at 12 April 2024, and payable on 24 May
2024.
The proposed final dividend for the current
period is subject to the approval of the shareholders at the 2024
Annual General Meeting, and have not been included as a liability
in these financial statements.
Dividends have been waived indefinitely on all
shares held by the Group's employee share trusts which have not yet
been awarded to employees.
7 Retirement benefit
obligations
The Group operates a funded pension plan which
provides benefits based on the career average pensionable pay of
participating employees. This plan was closed to new entrants from
April 2013, and closed to future accrual on 31 March
2021.
(a) Total amounts charged in respect of pensions in the
period
|
53 weeks to
30 December
2023
£m
|
52 weeks to
24 December
2022
£m
|
Charged to the income statement:
|
|
|
Defined benefit plan - administration
cost
|
2.3
|
2.4
|
Defined benefit plan - total service
cost
|
2.3
|
2.4
|
Defined benefit plan - net finance
charge/(credit)
|
1.3
|
(2.7)
|
Defined contribution plans - total
operating charge
|
42.5
|
37.6
|
Total net amount charged to profit before
tax
|
46.1
|
37.3
|
Charged to equity:
|
|
|
Defined benefit plan - actuarial
(gains)/losses
|
(13.3)
|
183.0
|
Total charge/(credit)
|
32.8
|
220.3
|
(b) Other information - defined benefit pension
plan
Key
assumptions used in the valuation of the plan
|
53 weeks to
30 December
2023
|
52 weeks to
24 December
2022
|
Discount rate
|
4.55%
|
4.70%
|
Inflation assumption - RPI
|
3.05%
|
3.15%
|
Inflation assumption - CPI
|
2.60%
|
2.70%
|
Rate of increase of pensions in
deferment capped at lower of CPI and 5%
|
2.60%
|
2.70%
|
Rate of CARE revaluation capped at
lower of RPI and 3%
|
2.40%
|
2.45%
|
Rate of increase of pensions in
payment:
|
|
|
- pensions with increases
capped at lower of CPI and 5%
|
2.60%
|
2.65%
|
- pensions with increases
capped at lower of CPI and 5%, with a 3% minimum
|
3.40%
|
3.45%
|
- pensions with increases
capped at the lower of LPI and 2.5%
|
2.15%
|
2.15%
|
- pensions with increases
capped at the lower of CPI and 3%
|
2.20%
|
2.25%
|
Life expectancy (yrs): pensioner aged
65
|
|
|
-
male
|
85.7
|
86.6
|
-
female
|
88.0
|
88.4
|
Life expectancy (yrs): non-pensioner
aged 45
|
|
|
-
male
|
86.7
|
87.6
|
-
female
|
89.6
|
90.2
|
Sensitivities
|
Present value of
scheme liabilities at
30 December 2023
|
Projected 2024 pension
cost
|
Total service
cost
£m
|
Net interest
(credit)/cost
£m
|
Net pension
(credit)/
expense
£m
|
Assumption
|
|
|
|
|
Current valuation, using the
assumptions above
|
914
|
2.1
|
0.3
|
2.4
|
0.5% decrease in discount
rate
|
979
|
2.1
|
2.9
|
5.0
|
0.5% increase in inflation
|
945
|
2.1
|
1.7
|
3.8
|
1 year increase in
longevity
|
946
|
2.1
|
1.7
|
3.8
|
The sensitivities above are applied to the
defined benefit obligation at the end of the reporting period, and
the projected total service cost for 2024. While the analysis does
not take account of the full distribution of cash flows expected
under the scheme, it does provide a reasonable approximation. The
same amount of movement in the opposite direction would produce a
broadly equal and opposite effect.
To address the requirements of both IAS 1 and
IAS 19, we note that the effect on the discount rate and inflation
sensitivities of flexing them down by 0.25% or up by 1% in a linear
manner would give materially correct results.
|
30 December
2023
|
24 December
2022
|
Analysis of plan assets
|
Quoted market price in an
active market
£m
|
No quoted market price in an
active market
£m
|
Quoted market price in an
active market
£m
|
No quoted market price in an
active market
£m
|
LDI*
|
|
-
|
|
-
|
- fixed income
|
282.9
|
|
270.0
|
|
- derivatives
|
20.5
|
|
(268.7)
|
|
- cash
|
12.7
|
|
172.8
|
|
Equities
|
|
|
|
|
- passive equities
|
|
49.8
|
-
|
-
|
Private equity
|
-
|
-
|
-
|
0.6
|
Alternative growth assets
|
|
|
|
|
- fund of hedge
funds
|
-
|
-
|
-
|
152.4
|
- absolute return
fund
|
-
|
-
|
1.0
|
-
|
Insurance-linked
securities
|
-
|
70.8
|
-
|
105.2
|
Corporate bonds
|
0.1
|
-
|
1.8
|
-
|
Commercial property funds
|
-
|
233.4
|
7.7
|
239.9
|
Other secure income
|
60.0
|
161.9
|
1.2
|
179.3
|
Asset-backed securities
|
0.5
|
-
|
0.5
|
-
|
Cash and cash equivalents
|
8.3
|
-
|
25.3
|
-
|
Total
|
385.1
|
515.9
|
211.6
|
677.4
|
The plan assets do not include any of the Group's own financial
instruments nor any property occupied by, or other assets used by,
the Group.
*LDI - Liability Driven Investments
- is a portfolio of investments chosen with the aim that its value
is expected to move in line with movements in the value of the
underlying liabilities. The LDI portfolio can include a variety of
investments, the simplest being conventional and index-linked gilts
with appropriate maturities. LDI portfolios often use a degree of
leverage to achieve the same aim but to allow more return-seeking
assets to be invested in at the same time. Derivatives and
repurchase agreements are the main tools used to employ
leverage.
Balance sheet
The amount included in the balance sheet arising
from the Group's obligations in respect of defined benefit
retirement benefit plan is as follows:
|
30 December
2023
£m
|
24 December
2022
£m
|
Present value of defined benefit
obligations
|
(913.6)
|
(930.5)
|
Fair value of scheme
assets
|
901.0
|
889.0
|
Deficit in the scheme, recognised in
the balance sheet
|
(12.6)
|
(41.5)
|
Movements in the present value of defined
benefit obligations were as follows:
|
53 weeks to
30 December 2023
£m
|
52 weeks to
24 December 2022
£m
|
Present value at start of
period
|
930.5
|
1,512.5
|
Administration cost
|
2.3
|
2.4
|
Interest on obligation
|
42.8
|
28.3
|
Actuarial losses/(gains):
|
|
|
- changes in financial
assumptions
|
14.2
|
(622.8)
|
- changes in demographic
assumptions
|
(26.5)
|
(3.5)
|
- experience
|
(9.2)
|
55.8
|
Benefits paid, including
expenses
|
(40.5)
|
(42.2)
|
Present value at end of period
|
913.6
|
930.5
|
Movements in the fair value of the plan's assets
is as follows:
|
53 weeks to
30 December
2023
£m
|
52 weeks to
24 December 2022
£m
|
Fair value at start of
period
|
889.0
|
1,653.3
|
Interest income on plan
assets
|
41.5
|
31.0
|
Employer contributions
|
19.2
|
0.4
|
(Loss)/return on assets excluding
amounts included in net interest
|
(8.2)
|
(753.5)
|
Benefits paid, including
expenses
|
(40.5)
|
(42.2)
|
Fair
value at end of period
|
901.0
|
889.0
|
Movements in the deficit during the period are
as follows:
|
53 weeks to
30 December
2023
£m
|
52 weeks to
24 December
2022
£m
|
Deficit at start of period
|
(41.5)
|
140.8
|
Administration cost
|
(2.3)
|
(2.4)
|
Employer contributions
|
19.2
|
0.4
|
Other finance
(charge)/income
|
(1.3)
|
2.7
|
Total remeasurements recognised in
other comprehensive income
|
13.3
|
(183.0)
|
Deficit at end of period
|
(12.6)
|
(41.5)
|
Income statement
Amounts recognised in the income statement
arising from the Group's obligations in respect of the defined
benefit plan are shown below.
Amount charged to operating profit:
|
53 weeks to
30 December 2023
£m
|
52 weeks to
24 December 2022
£m
|
Current service cost
|
-
|
-
|
Administration cost
|
2.3
|
2.4
|
Total pensions cost
|
2.3
|
2.4
|
The total pensions cost is included in Staff
Costs.
Amount credited to other finance income or
expense:
|
53 weeks to
30 December 2023
£m
|
52 weeks to
24 December 2022
£m
|
Interest income on plan
assets
|
(41.5)
|
(31.0)
|
Interest cost on defined benefit
obligation
|
42.8
|
28.3
|
Net
finance expense/(income)
|
1.3
|
(2.7)
|
The actual return on plan assets was a gain of
£33.5m (52 weeks to 24 December 2022: loss of £722.5m).