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Howden Joinery is still in demand

by LLB Reporter
1st Nov 21 11:11 am

Lockdowns may be consigned to history (we hope), but the freedom of being allowed out again hasn’t dampened people’s appetite for doing up their home.

The pandemic shifted the nation’s attention to the state of one’s dwellings, namely if you’re now spending more time at home, it might as well look smart.

“DIY retailers like B&Q have flourished as demand soared for paint, cement and the likes. But bigger projects have also enjoyed a tailwind and Howden Joinery’s latest update would suggest this trend remains in motion,” said AJ Bell’s Russ Mould.

“New kitchens, bathrooms and garden rooms are all the rage as many households put cash saved up during lockdown to work.

“Howden Joinery has a strong position in the kitchen segment and importantly during a period of rising inflation, it has pricing power where can pass on extra costs to the customer without damaging demand for its products. It also claims to have good stock availability, which is impressive given widespread supply chain problems across multiple industries.

“There was some fear that the end of the stamp duty holiday in England and Northern Ireland would lead to a slowdown in the property market, and have a knock-on effect for companies like Howden whose product sales are often triggered by someone moving to a different home. Yet this does not seem to be happening.

“There are still risks from tradesmen’s availability as the rush to do up one’s home has led to big queues to get experts in to do the work. Having to wait six months to get the work done might put some people off from ordering a new kitchen.

“One must also consider the risks that rising inflation across areas like energy, food and fuel is putting pressure on family finances, and so big-ticket items like new kitchens might have to be put on the backburner.

“Howden acknowledges various risks including tough comparative figures to beat in 2022, but for now it is very much on a roll and that is reflected by its share price having gone up by nearly 50% in the past 12 months.”

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