Howden has been supporting MFI as the chain weathered a sales slump in a slowing housing market. MFI warned today: 'Howden Joinery is likely to deliver an operating profit towards the lower end of current market estimates.'
The group announced it is scaling back operations and disposing of three businesses, resulting in an exceptional loss of about£16 million in the current year.
US business Howden Millworks will be closed, a retail joint venture in Taiwan will be exited and operations at Ethan Allen in the UK will cease by the end of March next year. The company warned: 'The trading environment has become increasingly demanding and is expected to remain so.'
In UK retail, orders were down 15 per cent in the eight weeks to November 26, an improvement from the drop of 31 per cent reported in September.
Numis retail analyst Steve Davies said: 'The company expects to hit current market expectations (we are expecting a loss of£6.4 million). The retail division is less bad than it was - this lower figure [of 15 per cent] reflects the unwinding of the order book and a better ratio of orders to sales compared with last year, when IT systems were falling apart.'
MFI chief executive Matthew Ingle added this morning: 'In UK retail we are now undertaking a fundamental review and, in the short term, are managing the business for margin, cost control and cash. We have also taken a number of steps to simplify the group and improve profitability by exiting a number of non-core activities.'
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