Galiform builds on Howden growth

British kitchen manufacturer Galiform reported strong sales growth at Howden Joinery today and said it was on course to deliver profits in line with market expectations.

Galiform, which split from the MFI furniture retail business last month amid spiralling losses, said sales at Howden were up 8.6% in the 44 weeks to October 28.

Growth was even stronger in the period since June 10 with sales up 11.7% as Galiform took advantage of Howden’s busiest month, October.

On a like-for-like basis, Howden sales were up 5.2% over the 44 weeks and 8% since June 10. Howden sells to small building firms fitting kitchens and bedrooms for customers in the “done for you” market.

Shares in Galiform lifted 3% today, although not all analysts were enthused by the update as doubts remained over the future of the its White Space Furniture supply arm, which manufactures kitchens and bedrooms for the now disposed of MFI.

Galiform was created last month when the old MFI business sold its loss-making retail arm of 200 stores for just £1 to Merchant Equity Partners.

The retail arm retained the MFI brand and the remainder of the company changed its name to Galiform with a deal for White Space to supply MFI in the short-term before taking on Howden as its sole customer.

Panmure Gordon analyst Christian Koefoed-Nielsen said: “While the Howden like-for-likes are undeniably impressive we expect these to slow in the year ahead.

“It remains to be seen how quickly losses at the supply division can be reduced next year, and the extent to which Howden can take up any slack should MFI drop Galiform as a supplier in two years time.”

Despite the concerns, Galiform today said it expected pre-tax profits to be “in line with market expectations” for the full year.

Evolution Securities is forecasting pre-tax profits of £46 million, while Numis Securities predicts £46.5m (€68.7m).

Evolution analyst Nick Bubb said the 8% like-for-like sales figures since June were “much better” than the 4% expected and added that £46m (€68m) of profits looked to be “in the bag”.