Howdens lifts first-half profit as DIY Kitchens acquisition expands its growth plan

Howden Joinery Group delivered a solid first half despite what management continues to describe as a challenging marketplace. Sales, gross margin and underlying profit all moved higher, while the full-year outlook remains unchanged.

The results also arrive just after the completion of the DIY Kitchens acquisition. That deal gives Howdens a complementary route into the non-trade consumer market, although it brings additional financing costs and execution risk into the investment case.

Howdens' first-half results at a glance

The figures cover the 24 weeks to 13 June 2026.

Metric	H1 2026	H1 2025	Change
Sales	£1,030.6 million	£997.6 million	3.3%
Adjusted sales	-	-	3.7%
Gross profit margin	62.8%	62.1%	70 basis points
Underlying operating profit	£128.1 million	£121.4 million	5.5%
Underlying operating margin	12.4%	12.2%	20 basis points
Underlying profit before tax	£122.2 million	£117.2 million	4.3%
Underlying basic EPS	17.3p	16.4p	5.5%
Statutory profit before tax	£115.8 million	£117.2 million	-1.2%
Interim dividend	5.1p	5.0p	2.0%
Period-end cash	£332.8 million	£321.4 million	-

Adjusted sales account for one fewer trading day than in the prior-year period. Underlying results exclude £6.4 million of acquisition and integration costs relating to DIY Kitchens.

Sales growth looks steady rather than spectacular

Group sales increased by 3.3% to £1,030.6 million, or 3.7% after adjusting for the missing trading day.

UK depot sales rose by 3.0% to £990.5 million. On a same-depot basis, which excludes recently opened and closed locations, UK sales were 2.0% higher. Adjusted same-depot growth was 2.3%.

That is not rapid expansion, but it is a respectable result against Howdens' planning assumption that the UK kitchen market will be flat across 2026. Management believes the group remains positioned to outperform competitors.

International operations grew more quickly from a much smaller base. Reported international sales rose by 12.0% to £40.1 million and by 13.0% on an adjusted basis, including the effect of currency translation. In local currency, sales increased by 8.2% to €46.1 million.

Howdens ended the period with 893 UK depots and 82 international depots. It still sees scope for around 1,000 UK locations and expects to open approximately 25 more during 2026.

Margin improvement is the standout feature

The most encouraging feature is the improvement in profitability.

Gross profit increased to £647.5 million from £619.6 million, while gross margin rose by 70 basis points to 62.8%. A basis point is one-hundredth of a percentage point.

Howdens said pricing, higher volumes and £8 million of cost savings within cost of goods sold helped offset inflation. These savings included sourcing benefits and manufacturing efficiencies.

Across the total cost base, productivity and efficiency savings reached £19 million. This helped underlying operating profit rise faster than revenue, increasing by 5.5% to £128.1 million. The underlying operating margin improved from 12.2% to 12.4% despite £9 million of planned investment in strategic initiatives.

That combination matters. Howdens is continuing to spend on depots, product innovation, digital tools and international growth without allowing those investments to erase its underlying margin progress.

Why statutory profit moved backwards

The statutory figures are less impressive than the underlying numbers.

Operating profit edged up by just 0.2% to £121.7 million, while statutory profit before tax declined by 1.2% to £115.8 million. Basic earnings per share also fell by 1.2% to 16.2p.

The gap is largely explained by £6.4 million of costs associated with the DIY Kitchens acquisition. The higher net interest charge of £5.9 million, compared with £4.2 million previously, also weighed on profit before tax.

Investors should therefore keep both sets of numbers in view. The underlying figures provide a clearer comparison of trading performance, but the acquisition costs are still real cash and accounting expenses connected to Howdens' strategic expansion.

DIY Kitchens changes the growth story

Howdens completed the acquisition of DIY Kitchens after the half-year end on 23 June 2026.

The transaction had an enterprise value of £390 million and a total purchase price, excluding acquired cash, of approximately £400 million. This comprised around £300 million in cash and 12.7 million Howdens shares valued at £101.2 million on completion.

DIY Kitchens generated revenue of £136 million and EBIT, meaning earnings before interest and tax, of £37 million in 2025. Its revenue grew at an average annual rate of 17% over the previous five years.

The acquired company will remain an online-only, self-service operation focused mainly on non-trade consumers. This is deliberately separate from Howdens' larger trade-only depot model.

Management expects the deal to add immediately to group revenue, EBIT margin and earnings per share. The strategic logic is clear enough: Howdens gains access to a broader UK customer base without changing the core positioning of either business.

The challenge will be preserving DIY Kitchens' growth and profitability while managing two distinct routes to market. The acquisition accounting, including the provisional allocation of the purchase price across assets and liabilities, was not yet disclosed.

Cash generation remains important

Howdens generated £164.7 million of net cash from operating activities, compared with £174.7 million in the prior-year period. Period-end cash was £332.8 million, with the group's £150 million revolving credit facility undrawn.

The balance sheet changed after the reporting date. Howdens paid around £300 million in cash for DIY Kitchens and fully drew a new £240 million term loan, which matures in August 2029.

Management still expects the group to remain in a net cash position following the acquisition. However, full-year net interest is now expected to be approximately £24 million, including £9 million of additional expense related to the deal.

Capital expenditure is expected to reach around £125 million for the full year. The £100 million share buyback remains unchanged, with approximately £39 million completed by 21 July 2026. The programme is expected to finish in the second half.

The interim dividend increased by 2.0% to 5.1p per share. It is due to be paid on 20 November 2026 to shareholders on the register on 16 October.

What could shape the second half?

Howdens' full-year outlook is unchanged and trading since the period end has been in line with expectations. The key Autumn peak trading period is still ahead, with approximately 60% of sales historically generated in the second half.

Management now expects around £40 million of cost headwinds across the full-year cost base, partly reflecting disruption in the Middle East. It plans to offset these where practical through further productivity and efficiency savings.

The main positives are the stronger gross margin, disciplined cost management, international growth and continued investment in the core business. DIY Kitchens could add another source of profitable growth if it performs as expected.

The main risks are a flat and challenging UK market, input-cost inflation, supply-chain disruption and the integration and financing demands associated with a sizeable acquisition.

Autumn trading is now the key test

This was a credible first-half performance rather than a dramatic acceleration. Howdens increased sales, protected stock availability and expanded its underlying margin while continuing to invest.

Attention now turns to whether the group can maintain that discipline through peak trading, absorb the expected £40 million of cost headwinds and deliver the promised benefits from DIY Kitchens. Those factors are likely to determine whether the steady first-half progress develops into a stronger full-year result.