Howden Joinery (10J) Q2 2026 Earnings Report

The call presented a constructive set of half-year results: sales, margins and profits grew (EPS +5.5%, PBT +4.3%), the balance sheet and cash generation remain strong (GBP 333m cash) and management is progressing strategic investments (Runcorn, depot reformats, digital) and an accretive acquisition (DIY Kitchens). Key challenges were highlighted — notably higher inflationary headwinds (GBP 40m), wage and operating cost pressures, and the need to optimize some international depots (France). Management emphasized disciplined cost actions (GBP 19m savings in H1), resilience of the in-stock trade model, and unchanged full-year outlook. Overall, positives around profitability, cash returns and strategic positioning outweigh the near-term cost pressures and market headwinds.

Guidance was unchanged for FY2026: management expects the U.K. kitchen market to be broadly flat year‑on‑year on a value basis (slightly down on volume) and remains on track to meet current market expectations; inflationary headwinds of c.£40m in the total cost base (c.£10m higher than prior guidance due to the Middle East) are being mitigated (H1 delivered c.£19m of cost savings), gross margin was +70bps y/y and H1 underlying PBT was £122m (+4.3%) with an underlying EBIT margin of 12.4% and underlying EPS +5.5%; group H1 sales were +3.3% (3.7% trading‑adjusted), U.K. revenue £991m (+3.3%, +2.3% same depot), international depot revenue €46m (+8.5% adj, +7% same depot); cash was £333m at H1, working capital investment c.£12m, capex H1 £41m (normalized ~£125m p.a., maintenance ~£30m), Runcorn expansion will add ~1m rigid cabinets capacity, the group plans ~25 U.K. depot openings and ~30 reformats in 2026 (medium‑term U.K. scope ~1,000 depots; ~75% of U.K. depots expected in the updated format by year‑end), expect ~80 depots trading across France/Belgium/Republic of Ireland by year‑end, cash tax c.£60m p.a. with an effective tax rate ~23–24%, interim dividend 5.1p (+2%), and the £100m share buyback is underway (£39m completed to 21 July, £7m in H1) with the group expecting to remain net cash.