Galiform steps further out of the woods
Nov 12, 2009
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Joinery company Galiform took another step on the road to recovery Thursday when it said full year profit before tax will be at or above the top end of market expectations.
With trading conditions at Howden Joinery stabilising, the board has decided the time is right to resume its depot opening programme, and aims to open around eight depots by the end of this year, with another 20 to 30 depots planned for next year.
The company said that sales between the end of June and early October at the Howden Joinery depots were 3.3% lower than in the corresponding period of last year, but October saw a 3.1% year on year improvement in sales.
Meanwhile, with the pound strengthening against the US dollar in the second half of the year, purchasing costs have eased and this, along with manufacturing efficiencies, means that the group’s gross profit margin has continued to improve in the second half of the year.
In the first 44 weeks of 2009, but with the first week of the year excluded because of the distorting effect of the timing of the New Year’s Day holiday, revenue at Howden Joinery UK depots was down 4.6%, or 5.8% on a like for like basis.
In the first half of the year, sales were running 8.3% below 2008 levels.
The group has been busy renegotiating terms with the landlords of sites inherited from MFI Retail, Home Delivery Centre and Sofa Workshop.
Galiform has agreed to make cash payments to the landlords of these properties totalling £9.5m, in return for being released from all obligations in respect of these leases.
Including similar deals at two other Sofa Workshop stores, total future costs of over £40m have been mitigated, reducing current annual payments by over £4m, the company said.
Though the company remained cautious about the outlook for 2010, the prospects for the remainder of 2009 look bright, and consider it ‘unlikely that profit before tax for 2009 will be less than the top end of the current range of market expectations.’
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