July 20, 2017 / 6:47 AM / 4 months ago

UPDATE 1-UK kitchen maker Howden Joinery's H1 revenue rises

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By Noor Zainab Hussain

July 20 (Reuters) - British kitchen supplier Howden Joinery reported higher revenue in the first half, despite wider concerns about weaker consumer confidence among Britons after the country voted to leave the European Union and held an inconclusive election.

Britain’s largest manufacturer and supplier of fitted kitchens, appliances and joinery products to small builders said group revenue rose to 553 million pounds ($720.34 million) in the 24 weeks to June 10 from 528.9 million pounds a year earlier.

Pretax profit fell to 65.6 million pounds from 74.8 million pounds, hurt mainly by higher expenses related to pensions.

“We believe that current market conditions are stable, although we remain watchful given continuing economic uncertainties,” said Chief Executive Matthew Ingle, who founded the firm in 1995 and retires in the first half of 2018.

The company said it would pay an interim dividend of 3.6 pence per share, up from 3.3 pence per share a year earlier.

Revenue from Howden Joinery’s British depots rose 4 percent to 539.5 million pounds.

In the first four weeks of the second half of the year, total sales at these depots rose by 6.5 percent year-on-year.

Howden Joinery operates more than 650 depots, supplying more than 400,000 kitchens a year. The depots include 20 in France, one in Germany, another in the Netherlands and two in Belgium.

Howden has banked on consumer spending on big-ticket purchases like home improvements to drive its growth, with sales rising nearly 50 percent in the past five years.

But British retailers are facing a tough time as a Brexit-driven jump in inflation and low wage growth puts pressure on consumers. An election that left the ruling Conservative party without an outright majority has added to political uncertainty.

Last month furniture seller DFS warned on profit, blaming a weaker trading environment.

Howden Joinery said on Thursday it continued to expect additional foreign exchange costs in 2017 of about 20 million pounds and added operating costs of the same amount because of pension related and other expenses.

To offset ongoing cost pressures, Howden increased prices towards the end of 2016.

$1 = 0.7677 pounds Reporting by Noor Zainab Hussain and Rahul B in Bengaluru; Editing by Edmund Blair

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