News has emerged that Howden Joinery, which sells trade kitchens to builders and developers has invested £15m in a stockpile Brexit Plan.
Howdens Stockpile Brexit Plan shows its preparedness and cautious optimism about future trading post Brexit, given the continuing uncertainties for the Uk KBB sector and economy in general over what kind of Brexit we will endure.
One thing ProLeave and ProRemain can agree on is that two years of uncertainty has crippled much of the economy and KBB sector and that whatever the outcome is going to be it just needs to happen, one way or another so that British business can continue.
In what is generally astute business planning (preparing for the worst but hoping for the best) Howden's has said that it had taken a number of measures to prepare for a “worst-case scenario” no-deal Brexit, including adjusting stocking policy for “at-risk items” to secure continuity of supply during the transition.
“As a result, around £15 million additional inventory has been purchased and key suppliers are also making plans to ensure supply.
“In addition, we are looking closely at the options for our inbound supply routes and pursuing appropriate logistics accreditation, including Authorised Economic Operator status, to reduce potential customs delays.”
In a rare show of openness given the current climate, Howden was upfront about its post-Brexit planning, and in doing so told investors that the business was also reviewing contracts to make sure product supply remains sustainable in the event of a no-deal.
Additionally that Howden's was modelling the challenges and opportunities “across the entire business”, in order to make sure that strategic plans are in place for various scenarios with a “key focus” managing currency volatility and the potential for raw material cost increases.
Whilst mitigating supply disruption in implementing multiple-sourcing strategies for key products is shrewd planning continued investment in their manufacturing operation was cited as more robust preparedness to give the business an “enhanced disaster recovery capability” and new warehouse space to support distribution capabilities.
The reports of Howdens Stockpile Brexit Plan were made public just as the business reported a rise in revenue and pre-tax profit in 2018.
For the 12 months to 29 December 2018, Howden's reported profit before tax had risen 2.7% to £238.5m from a year earlier and revenues grew 7.7% to £1.051bn. Howdens UK depots' total revenue increased by 7.7% to driven mainly by volume growth,
On the 2018 financials the company said; '"Howdens delivered another good performance in 2018. We ended the year with £231m in cash, after investing £44m in the business and returning £131m to shareholders''.
There can be no argument that whilst many UK retailers are blaming Brexit Howdens has managed to outperform the current soft climate. Additionally, the business said it had pulled out of Germany and Holland in favour of growing its operations in the UK.
In 2018 and against a tumultuous environment Howden's went against the grain and opened 33 new depots in the UK bringing its total to 694. Furthermore, the business has stated that it believes there is sufficient capacity to grow to 850 depots with 40 news ones opening in the UK and Northern Ireland in 2019.