* 2012 pretax profit 112 mln pounds, vs forecast 98-109 mln
* 2012 UK depot revenue 872.5 mln pounds, up 4 pct
* UK depot revenue up 17 pct in 2013 so far
* Full-year dividend 3 pence vs 0.5 pence
* Shares up 8 pct
(Adds comments by CEO, analyst; share price reaction)
By James Davey
LONDON, Feb 28 Britain's army of small builders
is helping kitchens supplier Howden Joinery buck the
economic downturn and increase profits, the surviving remnant of
the MFI furniture empire said on Thursday.
Reporting better than expected profits and a big dividend
hike, Howden said it has fared well despite a subdued housing
market by selling its kitchens from 529 depots to trade buyers,
rather than directly to home owners.
"We have got 270,000 small builder account customers. The
truth is if they do not sell they do not eat," Chief Executive
Matthew Ingle said.
"These are entrepreneurs, absolutely focused people ... They
will be serving whatever market they can serve and we are right
behind them," he said after Howden beat forecasts with a 1
percent rise in 2012 profit and reported a good start to 2013.
The company ended 2012 with net cash of 96.4 million pounds
and said it will pay a dividend for the year of 3 pence, up from
0.5 pence last time.
By 1105 GMT the share price was up 15.7 pence at 206.1
pence, valuing the business at 1.3 billion pounds.
"With the risk to consensus (forecasts) on the upside and
continued strong cash generation, the investment case remains
strong," said Espirito Santo Investment Bank analyst Sanjay
With Britain facing a possible triple-dip recession many
retailers have been finding the going tough as consumers fret
over job security and a squeeze on incomes, but Howden's shares
have increased by over 60 percent in the last year as it has
traded robustly and property liabilities relating to its
previous ownership under MFI have been mitigated.
Howden sells around 400,000 kitchens a year at prices
ranging from 2,000-15,000 pounds ($3,000-$22,700).
"Whilst people might not be able to move or they don't want
to move they certainly want to improve what they have got," said
Ingle. "Kitchens are increasingly the centre of a home."
Howden made a pretax profit of 112.1 million pounds in the
53 weeks to Dec. 29, which compared with analysts' forecasts of
98-109 million pounds and 111 million pounds made in 2011, which
was a 52-week financial year. The impact of the extra week was
to reduce pretax profit by about 5 million pounds.
UK depot revenue increased 4 percent to 872.5 million
pounds, with sales at depots open over a year up 1.9 percent and
gross margin up 1.8 percentage points to 61.5 percent.
So far in 2013 UK depot revenue is up 17 percent, reflecting
an additional week of trading and the timing of price increases.
The firm, which sees scope for 700 UK depots, expects
revenue growth to normalise as the year progresses.
($1=0.6608 British pounds)
(Reporting by James Davey; Editing by Hans-Juergen Peters and