The owner of building trade supplier Howden Joinery said it could resume its expansion of this year after a “resilient” first-half performance.
Galiform – which has 452 Howden outlets – put new openings on hold in March in the tough market conditions but would “consider opening a small number of depots” if trading improved in October.
Howden’s like-for-like depot sales were down 9.8 per cent in the 24 weeks to June 13 although this decline has since eased to 5.2 per cent as the group faces easier trading comparisons with last year.
Galiform’s pre-tax profits for the first half slumped to £4.7 million from £20.1 million, reflecting weaker trading and higher pension contributions. Chief executive Matthew Ingle said: “We are encouraged by the resilient operating and financial performance of the business in a challenging environment.”
The group was called MFI before shedding the ailing retail business in 2006. MFI went into administration in November last year.
Despite difficult conditions, Galiform has long-term plans to expand Howden – a supplier of kitchens and joinery products to builders – to 600 sites.
Mr Ingle said the impact of a weaker pound had been offset by cost savings elsewhere, such as driving a tougher deal with suppliers and a new IT system at its base in Runcorn. But Howden’s performance for the rest of this year depended on the economy. “The key risk...is the continuing uncertainty surrounding the general economic environment.”
Galiform wants to extricate itself from financial commitments on lease payments on 46 outlets of the former MFI business, forcing a £108 million provision in last year’s results. Following payments to landlords it is exposed to 32 properties commanding annual rents and rate bills of £14.7 million.