Made in
the UK
Annual Report and Accounts 2023 Howden Joinery Group Plc
2023
Available through
the Trade only
The UK’s number 1
trade kitchen supplier
Annual Report
Financial Statements Page Title
The UK’s #1
specialist trade-only
kitchen supplier
We make builders’ lives simpler.
We help them to achieve exceptional results
Contents
Strategic Report
How we create value
Financial Statements
Governance
How we preserve value
Additional Information
Additional information
02 Performance in 2023
04 Howdens at a glance
08 Our purpose, our culture & values,
our market, our strategy and
16 Chairman’s statement
19
28 Key performance indicators
30 Financial review
36 Risk management
38 Principal risks and uncertainties
42
69
148 Independent auditor’s report
162 Consolidated income statement
162 Consolidated statement of
comprehensive income
163
164 Consolidated statement of
changes in equity
165
166
statements
205
206 Company statement of changes in equity
207
212 Parent company and all
213 Five year record
214 Shareholder and share capital information
216 Shareholder Ranges
216
217
74 Corporate governance report
76 Board of Directors, key Board activity,
and Executive Committee and
Company Secretary
82 Directors' duties (Section 172(1) statement)
84 Stakeholder engagement
92 2018 UK Corporate Governance Code:
application and compliance
98 Nominations Committee report
108 Remuneration Committee report
132 Audit Committee report
140
143 Directors’ report, Directors’ statements
information
Financial Statements
Additional Information Governance
Howden Joinery Group Plc
Annual Report & Accounts 2023
Strategic Report
Strategic Report
Operational highlightsFinancial highlights
Near-term
Science-based
Net Zero targets
approved
Making more
products in our
Continuing to
strengthen our
Revenue
Gross
margin
£2.3bn
60.8%
Operating
Earnings
per share
£340m
46.5p
2023 FY
dividend
£328m
21.0p
£114.1m
£283m
£50m
Dividends
paid in year
Net cash
at year end
Share
buybacks
* 2021 included a special dividend of £54.1m.
2023, against record prior year comparatives
and in, as we anticipated, a more challenging
marketplace.
programme, which is focused on our key capabilities and gives us, end
to end, a stronger business.
new UK depots
32
new depots
new depots
in Republic
new kitchen
ranges
5
5
23
£2.3bn
60.9%
£415m
65.8p
£406m
£308m
£250m
£115.0m
20.6p
£2.3bn
60.8%
£340m
46.5p
£328m
£283m
£50m
£114.1m
21.0p
£1.6bn
62.3%
£260m
35.0p
£261m
£267m
£126m
£70.6m
3.9p
£1.5bn
60.1%
£196m
25.0p
£185m
£431m
£10m
£0.0m
18.2p
£2.1bn
61.6%
£402m
53.2p
£390m
£515m
£50m
£133.6m
19.5p
2023
2023
2023
2023
2023
2023
2023
2023
2023
2022
2022
2022
2022
2022
2022
2022
2022
2022
2021
2021
2021
2021
2021
2021
2021
2021*
2021
2020
2020
2020
2020
2020
2020
2020
2020
2020
2019
2019
2019
2019
2019
2019
2019
2019
2019
Financial Statements
Additional Information Governance
03
Howden Joinery Group Plc
Annual Report & Accounts 2023
02
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Annual Report & Accounts 2023
Strategic Report
Strategic Report Strategic Report Page TitleStrategic Report Page TitlePerformance in 2023Strategic Report
Strategic Report
Resources and
relationships
• Decentralised business
model
• Empowered local depot
managers, close to the
trade
• Trusted customer
relationships with around
half a million builders
• Local depot network
• The right product.
Outcomes
• Happy builders and end-users
margins and strong cash generation
• Returns to shareholders
– our employees
– new depots
– new product
– new manufacturing and logistics
– digital
• Giving back to local communities
• Science-based Net Zero targets in place
Resources and relationships
• Trade-only, with excellent service
• Helping our trade customers to succeed
– Design and planning services
– Home visits for end-users
– Marketing materials
– The right product. In-stock in local depots
• Digital tools to help the trade and end-users
Supporting
the builder
Worthwhile
UK
& distribution
Global
sourcing
Nationwide
depot network
Resources and
relationships
• Skilled and motivated
workforce
• UK’s largest kitchen
supplier – economies
• Our own factories – the
choice to make or buy
• Our own warehousing
and distribution network
Resources and
relationships
• Global supply chain
expertise
• Trusted supplier
relationships, and the
scale of our operations,
• Responsible purchasing
practices
The UK’s largest
specialist trade-only
kitchen supplier
Howdens at a glance
Financial Statements
Additional Information Governance
05
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Annual Report & Accounts 2023
04
Howden Joinery Group Plc
Annual Report & Accounts 2023
Strategic Report
Strategic Report Strategic Report Page TitleStrategic Report Strategic Report Page TitleHowdens at a glance
How we
create value
Strategic Report
Performance
and Howdens
at a glance
Chief Executive
review
Our purpose,
culture
and values,
market,
strategy and
business
model
KPIs
statement
Risk
management
and principal
risks and
uncertainties
Sustainability
matters
Going concern
and Viability
Statements
02
19
08
28
16
36 42 69
Financial
review
30
08 Our purpose, our culture & values, our market,
our strategy and our business model
16 Chairman’s statement
19
28 Key performance indicators
30
36 Risk management
38 Principal risks and uncertainties
42 Sustainability matters
69 Going concern and Viability statements
Strategic Report
Financial Statements
Additional Information
Governance
07
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06
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Annual Report & Accounts 2023
06 0706 07
Strategic Report Strategic ReportPage Title Page Title
Strategic Report
Our purpose-driven approach
Our purpose
Business model
Culture & values Sustainability Governance
Markets
Long-term value for our stakeholders
Strategy
Risks
To help our trade customers achieve exceptional results for their
Focus on climate
A clear governance
supported by UK manufacturing and
Effective risk monitoring
See page 13
See page 12
See page 10
See page 42See page 11 See page 72
See page 14
See page 36
Culture is aligned
with purpose, values
and strategy
Our business model
and strategy generate
value for a range
of stakeholders
Sustainable behaviour preserves
our culture, maintains focus on
our business model, mitigates our
risks and addresses the needs
of our stakeholders
Our governance framework
guides all decisions
and outcomes
Our purpose drives our business model and shapes our strategic decisions
We respond to external opportunities and mitigate threats
Strategic Report
Financial Statements
Additional Information
Governance
09
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Annual Report & Accounts 2023
08
Howden Joinery Group Plc
Annual Report & Accounts 2023
Strategic Report Strategic Report Page Title
Our purpose, our culture & values,
our market, our strategy and
our business model
Strategic Report
Our purpose Our culture and values
are clear that the purpose and future success of our business
Trade service and convenience
Product leadership
the right product styles that are attractive to consumers,
Trade value
Best local trade prices enabled by in-house manufacturing,
To help our trade customers
achieve exceptional results
for their customers and to
Worthwhile for our trade customers
•
•
•
•
•
•
Worthwhile for our staff
•
•
•
Worthwhile for our suppliers
•
•
•
Worthwhile for our other stakeholders
• Delivering consistent long-term value for shareholders
•
•
•
•
Customers
Environment
and communities
Shareholders Pensioners
Staff
Suppliers
and landlords
Government and
local authorities
Howdens was founded on the principle that the
business should be worthwhile for all concerned
— customers, homeowners, tenants, local
communities, our suppliers, our investors,
This founding principle has
shaped our business model
and our strategic decisions
Strategic Report
Financial Statements
Additional Information
Governance
11
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10
Howden Joinery Group Plc
Annual Report & Accounts 2023
Strategic Report Strategic ReportPage Title Page Title
Strategic Report
Our strategy
The kitchen market
1
Reach more builders
Achieved through:
Our long-term strategic objectives
Supported by:
Our medium-term strategic initiatives page 25
• Evolving our depot model
• Improving our product range
and supply management
• Developing our digital platforms
• Expanding our international
operations
Measured by:
KPIs page 28
Product innovation
The right amount of the best product,
Operational excellence
• Sales growth
•
• Cash
• Depot openings
• Health & Safety
• FSC® or PEFC
materials
• Waste recycling
Our market
UK Kitchens and joinery market is valued at £12bn
1
Structural drivers Recent trends
•
2
•
Average age of UK housing stock is around
2
•
• Builders have remained optimistic in 2023 and
1
•
parents over last 10 years
2
• Consumers are more focused on design and
1
•
Our purpose
To help our trade customers achieve
exceptional results for their customers
2023 Market Value
1
Total UK kitchens & joinery market
1
Kitchens
Joinery
£12bn
Howdens
UK
Competitors
Strategic Report
Financial Statements
Additional Information
Governance
13
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Annual Report & Accounts 2023
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Howden Joinery Group Plc
Annual Report & Accounts 2023
Strategic Report Strategic ReportPage Title Page Title
Strategic Report
and environment
• Employment opportunities
and good neighbour in over
• Supporting local and
• Responsible ESG practices
• See our Sustainability report
• Long-term value creation,
generating cash for further
business and to support a
• Surplus cash after investment
and dividends is returned
Our resilient business model
What
we do
The value
we create
• Our manufacturing and sourcing
attractive products that are trade
•
•
us to make in our UK factories
•
products from hundreds of trusted
• Our in-house distribution operation
delivers from our factories and
•
• Our 2,100 specialist kitchen
designers support the builder by
visiting the end-user’s home, or
free virtual design service, and
helping them choose, plan and
Homemakers
•
opportunities for training,
development and
•
good salary, pension and
• Strong and enduring relationships
•
products and the scale necessary
to support suppliers’ businesses
• Our business depends on
entrepreneurial depot managers and
motivated and incentivised depot
•
for trade customers, and cheaper to
• Our in-stock model means that
builders can get the products
•
excellent levels of service and trade
•
• Trusted personal relationships
providing outstanding service,
from kitchen design to delivery
•
their customer before they need to
and anytime ordering tools help the
Strategic Report
Financial Statements
Additional Information
Governance
15
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Annual Report & Accounts 2023
14
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Annual Report & Accounts 2023
Strategic Report Strategic ReportPage Title Page Title
Strategic Report
Another year of strong progress
pleased to report the Company delivered another year of
outstanding product line up, industry-leading stock availability
entrepreneurial spirit and dedication to our customers make
Financial performance
vertically integrated approach and market leading distribution
Strong cash generation remains one of the great hallmarks
Strategic initiatives
investing commensurately in our consistent and proven
Our priorities are to invest in deeper vertical integration, depot
A milestone year for ESG
The opportunity to have a positive impact on our environment,
right thing for our people, our customers, our suppliers, the
the targets underline our intent to go even further to reduce
health in the construction industry, is particularly appropriate
Governance and Board changes
As your Chair, one of my key responsibilities is to ensure
have continued to refresh the Board by rotation, ensuring
and experience in the team to complement the talents of our
maintain rigorous oversight of the strategic, operational and
nearly eight years of service, in particular as Senior
supplier of engineered components and access solutions to
Director, informed the Board of her intention to retire in
Vanda has over 20 years of senior management experience
across a range of sectors, including manufacturing, industrial,
planning to recruit more non-executives over time to ensure
Another year of
strong progress
I am pleased to report the Company
delivered another year of strong
progress supporting our trade
customers with an outstanding
product line up, industry-leading
stock availability and, as always,
Peter Ventress
Chairman
Financial Statements
Governance
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Annual Report & Accounts 2023
Strategic Report
Strategic Report Strategic Report Page TitleChairman’s statement
Strategic Report
continued
Capital allocation and returns
The Board recognises the importance of shareholder returns
Looking ahead
The Group has delivered another year of strong progress and
opportunities in our markets and our ability to generate
Peter Ventress
Chairman
28 February 2024
Page
See our Sustainability report 42
See my introduction to our Governance report 74
See our Board of Directors 76
Chief Executive
Our results demonstrate
the strengths of our
local, trade only, in-stock
business model
Andrew Livingston
Further reading
In the UK we believe we gained
market share by volume in 2023,
which helped us mitigate a
decline in the overall size of the
Q&A With Andrew Livingston,
The Group delivered a resilient performance in 2023,
against record prior year comparatives and in, as we
anticipated, a more challenging marketplace. Sales and
investment programme, which is focused on our key
capabilities and gives us, end to end, a stronger business.
All the questions in this section have been asked by
institutional investors this year.
Q
Given the external challenges of
A
to provide competitive pricing across the board for our
our strategic plans for the UK business and sales at our
Financial Statements
Governance
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Annual Report & Accounts 2023
Strategic Report
Strategic Report Strategic ReportPage Title
Strategic Report
continued
Q
this year in sustainability, where
A
External suppliers represent most of our total emissions and
be contractually obliged to have Net Zero targets in place
process, both for internally-generated products and those
also launched a plastic pledge initiative looking across all
products to remove reduce or replace plastic packaging
Q
How resilient is the business to
A
Resilience is a key strength of our local, trade only in stock
The foundation for this is our strong product line-up, high
stock availability, industry leading service levels and our
our next day ‘XDC’ delivery service to supplement in-depot
in places lacking suitable properties to accommodate the
from depot staff and customers alike and providing such an
are budgeted to pay back costs in less than four years and
Q
Over the past couple of years there
A
competitively priced product for our customers to sell to
the latest trends that keep us front of mind for both builders
kitchens continued to contribute more to our kitchen mix
business continued to deliver volumes on our core products,
Q
Are you running out of opportunities for
A
Q
Turning to growth, how are the UK
A
High service levels, including local proximity and immediate
in several forms, the format enables us to provide the best
and to make space utilisation and productivity gains in a
believe there is scope for around 1,000 depots in the UK and
reorganised our range architecture, removing duplications,
to order service is also informing our from stock ranging
available from stock comprised ranges brought to market
Price featured prominently in 2023, and given prevailing
offering in the second half of 2023, has been very favourably
Strategic Report
Financial Statements
Additional Information
Governance
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Annual Report & Accounts 2023
20
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Annual Report & Accounts 2023
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Howden Joinery Group Plc
Annual Report & Accounts 2023
Strategic ReportStrategic Report Page Title
Strategic Report
continued
Q
Solid work surfaces was a new
developed in 2023 and how has this
helped Howdens address the higher
A
strongly in 2023 and it’s been a priority for us to develop
ago and other investments, our in-house manufacturing
Q
You are continuing to invest in
goal in terms of what products you
A
second architrave and skirting line became operational this
year, enabling us to service in-house more of the substantial
Q
Being in stock is very important for
A
us that a high level of stock availability is one of the key
customer service levels and increase sales by optimising
in-depot stock holdings of best-selling SKUs and associated
Sales of these are outperforming those of non-Daily Trader
including a reduction in customer back-orders and a higher
proportion of stock being replenished via a depot’s core
utilisation of our XDC cross docking service introduced
to delivering the levels of high service and availability
replenishment enable depots to hold deeper stocks of faster
selling lines, for example Daily Traders and makes it simpler
and availability, backed by certainty over lead time to delivery
Q
What are the advantages of digital
A
frequency and ease of trading and reduce time consuming
record and pick deliveries, check allocations, and determine
By mid-2024, the online account customers of all our depots
by-depot basis and make multiple purchases of products in
to place orders for collection at a time of their choosing, and
Q
Can the Howdens model work in other
businesses in France and the Republic
A
sales in a market at least as challenging as the one in the
in France are less experienced in nurturing trusted trade
are investing in the business through enhanced offerings
the depot teams there supported by our UK infrastructure
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Strategic Report
Financial Statements
Governance
Strategic Report Strategic ReportPage Title Page Title
Evolve our depot model
Improve our range and supply management
Develop our digital capabilities and services
Expand our international operations
1
2
3
4
Strategic Report
continued
Q
What are your expectations
A
have a programme of ‘Rooster Deals’ promotions in place to
our strategic initiatives at
Results presentation on
We have made further progress on our medium-term strategic initiatives,
Our strategic initiatives
1
Evolve our depot model – we want to improve
our depot network over time to ensure we use
High service levels, including local proximity and immediate
customers, a place for them to bring their customers to see
The updated depot format
Updated front area creates the best environment for
25
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Annual Report & Accounts 2023
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Strategic Report
Financial Statements
Governance
Strategic Report Strategic ReportPage Title Page Title
Strategic Report
2
Improving our range and supply management
improve service and to enhance productivity
As product lifecycles shorten, managing the number of
are offering the right number of range families, designed to
also innovating in other product categories to expand our
high level of stock availability is one of the key reasons they
XDC’s are a key enabler to delivering the levels of high
improvements to stock replenishment enable depots to hold
deeper stocks of faster selling lines and makes it simpler and
availability, backed by certainty over lead time to delivery for
furniture, principally frontals and panels, but also skirting and
3
Digital – we are developing our digital platforms
to raise brand awareness, support the business
model and to deliver productivity gains and
Our digital strategy reinforces our model of strong local
surety this and other initiatives such as Daily Traders provide,
4
International – Expanding our presence in
attractive kitchen and joinery markets outside
trade only local business models to other markets outside the
enhanced offerings of ‘footfall-promoting’ products and a
Our strategic initiatives continued
continued
27
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Strategic Report
Financial Statements
Governance
Strategic Report Strategic ReportPage Title Page Title
Strategic Report
Key performance indicators
Strategy Risk Remuneration
Links to:
Financial Non-Financial
Sales
Why we measure it
Links to strategy, risks and remuneration
Why we measure it
as it includes all of our operating, selling and distribution, admin
Links to strategy, risks and remuneration
Depot openings
Why we measure it
to take account of economic conditions and phase the speed of
Links to strategy, risks and remuneration
Use of FSC® or PEFC
Why we measure it
®
Links to strategy, risks and remuneration
Why we measure it
Links to strategy, risks and remuneration
Health & Safety
Why we measure it
our logistics operation, our support sites and our depots and
Links to strategy, risks and remuneration
Progress
Progress
Progress
Progress
Progress
Depot staff bonuses are directly linked to their depot’s sales
Reach more builders
bonuses are directly linked to PBT
Deterioration of model & culture
£283m
year end cash
£119m
capex
£164m
dividends &
share buybacks
Return surplus cash to shareholders
Invest in our strategic priorities
Cash
Why we measure it
Links to strategy, risks and remuneration
Progress
Deterioration of model & culture
Reach more builders
Health & Safety
Product innovation
Product relevance Continuity of supply
All of chipboard
& MDF used in our
manufacturing
processes is from
FSC® or PEFC
2020 2020 20202021 2021 20212022 2022 20222023 2023 2023
£1.6bn
£261m
41
£2.1bn
£390m
40
£1.5bn
£185m
19
£2.3bn
£406m
55
£328m
42
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic Report Page TitleKey performance indicators
Strategic Report
Financial results for 2023
1
Revenue
balancing pricing and volumes in an environment of high
of higher priced kitchens, make an attractive cash margin
delivered a number of productivity improvements in our
taken throughout the year more than offsetting cost increases
enabled us to protect our ongoing investments in our strategic
initiatives including the full year impact of our investment in
earnings per share
indicated, the Group expects an ongoing reduction of around
Cash
Revenue
1
£m 2023 No. of depots 2022
2, 4
777
63
3
840
Revenue €m
2
40
2 Same depot basis for any year excludes depots opened in that year
Strategic Report
Financial review
• Maintained sector leading
environment
• Continued investment in
strategic initiatives
• 21.0p 2023 full year dividend
Paul Hayes
Tight cost control enables us
to protect our investments in
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic Report Page Title
Strategic Report
How we make cash and how we spend it
Capital allocation and
is for the Group to be able to operate through the annual
year, particularly in advance of our peak trading period in the
capital requirements and ongoing investments in our strategic
Financial review continued
Pensions
Technical guidance for 2024
Income statement
• Continued operating expense investment to support our
•
•
• Patent box impact on the Group’s effective tax rate
•
•
•
Return surplus cash
to shareholders:
• After organic investment needs
•
• Fund pension scheme
•
Modest investment
in adjacencies:
•
• Land purchases for expansion
Progressive ordinary
dividend growth:
•
Investing in organic growth:
•
• Disciplined range management
• Optimise manufacturing & logistics
•
£m
0
Operating
Opening
net cash
Closing
net cash
capital
changes
Lease
Payments
Capex Other
Cash generation and use
Uses of cash
-£107m
-£46m
-£17m
-£64m
-£119m
-£50m
-£114m
+£488m
+4m
Tax
paid
Shares
repurchased
Dividends
paid
Pension
contribution
2023
2022
DividendCapex Share buyback
£156m
£114m
£250m
£50m £114m
£115m
£283m
£308m
2322
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page Title
Strategic Report
Interest rate risk
New accounting standards
Cautionary statement
uncertainties, actual results may differ materially from those
By order of the Board
Paul Hayes
28 February 2024
Financial review continued
instruments, and exposure to
No speculative use of derivatives, currency or other
Foreign currency risk
The net adverse impact of exchange rates on currency
Counterparty risk
Group Treasury policy on investment restricts counterparties
quality of counterparties, the limits placed on individual credit
Funding and liquidity
in terms of providing long-term returns to shareholders
and safeguards the Group’s ability to continue as a going
capital structure by varying the amount of dividends paid to
shareholders, the returns of capital to shareholders, the level
The Group has a committed, multi-currency, revolving credit
stress-tested for reasonably possible adverse variations in
foreseeable future as part of our going concern assessment,
sent in advance of each of their meetings and through
their duty as set out in section 172 of the Companies Act
other factors set out on page 82 and they also consider
our pensioners, regulators and the government, and the
they have had regard to stakeholders and the other factors
information
sections 414CA and 414CB of the Companies Act 2006 in
0
Average rate
1.27
1.14
1.21
1.23
1.24
1.17
22 2223
1.15
1.15
23
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page Title
Strategic Report
Risk management
Low
If the risk presents a
hazard to our operations
or strategy
Higher
If the risk presents us
with a sale or service
improvement opportunity
Balanced
For all other risks we
carefully balance the risk
and our mitigation efforts
with the potential reward
Our approach to risk
Risk appetite
Our approach to risk, and emerging risks
Emerging risks
Short term
Medium term
Risks that are tactically important to achievement of our
Long term
Longer term trends that could impact on the development
•
•
Eastern Europe and China, and its potential impact on
The risk management process
The main steps in the process are set out below:
4 Monitoring and reporting
The Board considers and agrees the key risks, appetites
3 Response
Risks that require a response have additional
mitigation strategies agreed and a future action
2 Assessment
that considers both the likelihood of occurrence and the
and an assessment of the level of exposure against our
Functional management and leaders formally identify
Key activities People
responsible
Risk monitoring and reporting
•
• Executive Committee and Board challenge
and agree the Group’s key risks, appetites
• Key risks, assessments and responses are
Risk response
•
Risk assessment
•
scoring mechanism and are compared
•
•
Principal risks
consider could have a potentially material
Key risk report
scoring risks, emerging risk issues, the biggest
Risk register
information required to accurately capture the
risk and is maintained on our risk management
for each risk register responsible for its
Board
Executive
Committee
Audit Committee
Risk team
Functional
leaders
Operational
management
Risk team
Risk governance
Top-down
Bottom-up
Climate-related risk
Climate-related risk is an emerging risk, but is not a principal
continued to develop our climate risk approach during 2023,
and more detail on this can be found in our TCFD report at
stakeholders, including our insurers and suppliers,
Risk management
and tailored to meet our needs, so that it enables robust
Integration into our risk management
framework
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic Report Page TitleRisk management
Strategic Report
The arrows alongside each risk show the year on year change
2023 Principal risks
R
O
P
F
Risk and impact
depend on the demand for repair,
maintenance, and improvement
Mitigating factors
•
•
•
suppliers update us on their assessment of trading and market performance through
Risk appetite
R
O
P
F
Risk and impact
key suppliers, manufacturing and
distribution operations could affect
our ability to service our customers’
Mitigating factors
•
•
•
Risk appetite
R
O
P
F
Risk and impact
Failure to recognise, innovate and
exploit opportunities could impact on
model, risk appetite, structures, and
Mitigating factors
•
•
Risk appetite
R
O
P
F
Risk and impact
Our business could be adversely
Mitigating factors
•
• The Executive Committee and senior leadership team assess succession plans for
• The Remuneration Committee and Board are regularly updated on key people activity
•
Risk appetite
R
O
P
F
Risk and impact
various activities that could cause
harm to our staff, our customers,
their customers and the communities
Mitigating factors
•
•
•
Risk appetite
Principal risks and uncertainties
Reach more builders Operational excellence Product innovation
Links to strategy
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic Report Page TitlePrincipal risks and uncertainties
Strategic Report
R
O
P
F
Risk and impact
Mitigating factors
• Our product team regularly refresh our offerings to meet builders’ and end-users’
•
•
Risk appetite
R
O
P
F
Risk and impact
operations and locations in
Mitigating factors
•
•
•
•
Risk appetite
R
O
P
F
Risk and impact
could result in systems being
unavailable, causing operational
Mitigating factors
•
•
•
•
Risk appetite
R
O
P
F
Risk and impact
service the needs of the local small
builder and their customers, and our
Mitigating factors
• Our values, business model and culture are at the centre of our activities and
decision-making processes, and they are led by the actions of the Board, Executive
• The Board and Executive Committee regularly visit our depots and factories,
•
Risk appetite
Principal risks and uncertainties continued
The arrows alongside each risk show the year on year change
2023 Principal risks continued
Reach more builders Operational excellence Product innovation
Links to strategy
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page Title
Strategic Report – Sustainability Matters
Worthwhile for
all concerned
Sustainability matters
Why
Sustainability
matters to us
Our material
sustainability
issues
Our TCFD
reporting
Our ESG
strategy
Renewable
energy &
sustainable
operations
Our SECR
and Scope 3
reporting
Net Zero
Our impact on
our stakeholders
44
48
60
45
50
67
46
58
44
45 Our ESG strategy
46 Our Net Zero commitment and targets
47
48 Our material sustainability issues
49
emissions together
50
51
52 Sustainable product offer and product innovation
54
56 Health & safety, carbon neutral,
58 Our impact on stakeholders
60
67 Our SECR and Scope 3 reporting
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic Report Page TitleSustainability matters
Strategic Report – Sustainability Matters
Why Sustainability matters to us Our ESG strategy
Sustainability generates
long-term value
preserves our culture, supports our business model, increases
business resilience, mitigates our risks and addresses the
Sustainability is part of our culture
customers, our suppliers, the environment and the
Sustainability supports
Sustainable behaviour gives us a competitive advantage and
Being trusted partners to our suppliers and customers means
Sustainability mitigates our risks
this because it’s the right thing to do, but it also mitigates our
Developing and maintaining sustainable supplier relationships
considerations are built in as a pillar of the design process,
Our material sustainability areas
third party specialists, consulting both external and
pillars and foundation principles of our ESG strategy at page
Our sustainability KPIs, Our Net Zero
SBTi targets, ESG and remuneration
Our PSP share plan includes ESG-related vesting targets
ESG strategic highlights of 2023
Road to Net Zero
• Science-based targets submitted and approved
•
•
Climate resilience
•
Materiality
•
•
Charities and communities
The Board and Executive Committee
lead our commitment to sustainability
The importance of sustainable behaviour is recognised
Sustainability Committee met regularly throughout the year
Our vision
Our strategy
Our material SDGs
Climate Resilience
Strategic
Objectives
Net Zero
kitchen business
A sustainable product offering,
responsibly manufactured or sourced,
that meets the needs of the builder and
A unique and
sustainable culture
business that appeals to current and
Leader in risk and
resilience governance
An agile and resilient business,
proactively managing ESG risks,
Strategic
Pillars
Foundations
Governance
EDI: Strategic priorities & wellbeing
See pages 54 & 55
Effective reporting & disclosure
See page 57
Behavioural health & safety: Maintain & next steps
See page 56
Emissions reductions: Carbon neutral
See page 56
Sustainable
product offer
& innovation
Renewable energy
operations
Supply chain
risk mapping
& resilience
Supply chain
emissions
Decarbonise
UN SDG description and relevant targets under each SDG
‘ Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all’
‘ Take urgent action to combat climate change and its impacts’
‘ Ensure sustainable consumption and production patterns’
‘ Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests… and halt biodiversity loss’
See page 50 See page 49 See page 51 See page 52 See pages 49 & 66
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic Report Page TitleOur ESG strategyWhy Sustainability matters to us
% CO
2
Emission Reduction
10
11
16
15
13 14
12
9
7
5
8
6
4
1
2
3
Strategic Report – Sustainability Matters
Our Net Zero commitment and targets Our emissions and how we plan to reduce them
A – Distribution
Engaging logistics providers
for solutions
Scope 1 & 2 Scope 3
D – Supply chain
Capture emissions data
Establish reduction plans
B – Renewable energy
Company car transition
Costs of change
“We are developing the options
to meet our SBTi targets”
Scope 3 – Purchased
goods and services
40%
Scope 3 – Use of
sold products
34%
Scope 3 – Other
14%
Scope 3 – Investments
(Pension scheme)
8%
Scope 2 –
Market based
1%
Scope 1
4%
TARGET: Net Zero by 2050
First steps to the target – against a 2021 baseline:
•
42% reduction in Scope 1 and 2 emissions by 2030
•
25% reduction in Scope 3 emissions by 2030
•
90% reduction in all emissions by 2050
OUR JOURNEY TO
ZERO WASTE
ZERO EMISSIONS
ROAD TO
ZERO
57%
Since 2012 we have
reduced emissions by
1
Biomass boilers (in use since 1995)
2
FSC® & PEFC chain of custody introduced
3
4
Further investment in biomass for factory heating
5
Development and intro of 100% recycled and 100% recyclable cabinet legs
6
7
Introduction of renewable electricity in Supply
8
Carbon neutral status achieved at Howden and Runcorn manufacturing sites
9
Introduction of renewable electricity in depots
10
Committed to Science Based Targets initiative (SBTi) with Net Zero plan
11
Introduction of HVO alternative fuel
12
Introduction of EV trucks
13
fuels, materials and technologies
14
Approval for SBTi
15
Interim 2030 emission reduction
targets (reduce by 50% vs 2021 baseline)
16
NET ZERO
2004 2008 20132012 2018 2021 2022 2023 2024 2030 2050
Total 2021
baseline emissions:
2
e
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page TitleOur emissions and how we plan to reduce themOur Net Zero commitment and targets
Strategic Report – Sustainability Matters
Our material sustainability issues
Refreshing our ESG materiality assessment in 2023
Methodology and results of the materiality assessment and stakeholder engagement:
1. Desktop analysis
2. Stakeholder
engagement
consolidation of issues
Research into our initial internal
companies, sector guidance and
discuss the possible material issues
suppliers, depot managers, other
employees, and members of the senior
existing ESG strategic pillars and
variations in some of the terminology
Stakeholder view
managers, employees, suppliers
Howdens View
Link to our ESG strategic pillars
Link to our ESG foundation values
Correlation of material topics with our ESG strategy
Supplier engagement – addressing Scope 3
emissions together
Why supplier engagement is important
relate to goods purchased from our suppliers and the use of
Engaging with our top suppliers in 2023
most critical to our business, they also covered a variety of
Engagement in action:
supplier ESG summits
activities and to discuss solutions for future emissions
to the Tier 2 and further upstream suppliers and focus on
• Giving a strong demonstration of industry leadership
•
•
• Encouraging future investments in resource, technology
suppliers shared their ambitions and decarbonisation plans
Engagement in action: Net Zero
commitments strengthen bonds
with long-term supply partners
the data and turn it into meaningful sustainable actions
Engagement in action: ESG objectives
included in standard supplier terms
of business
to increase our understanding of the complexities around
gathering and sharing good quality data, particularly around
Agenda for the future
•
•
•
encourage actions that support our Net Zero emissions
Supply chain risk mapping and
resilience to climate change
that involves using a specialist climate diagnostic tool to
Physical climate-related risks are captured across multiple
Stakeholder view
Howdens view
Packaging Material
and Waste
Circularity
Distribution Impact
Sustainable
Product and Brand
Business Resilience
and Compliance
Climate Risk
Manufacturing Impact
Health and Safety
Transparency and Disclosure
Equality, Diversity
and Inclusion
Employee Development
Board Accountability
Employee Engagement
Communities and Charity
Employee Wellbeing
Supply Chain and
Materials Sourcing
Carbon Footprint
and GHG Emissions
Higher importance for stakeholders
Higher importance for HowdensModerate importance
Forestry and Timber Supply Chain
Waste Management
Customer Relations
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page TitleSupplier engagement – addressing Scope 3 emissions togetherOur material sustainability issues
Strategic Report – Sustainability Matters
Renewable energy & sustainable operations
Strategic importance and
a third of our Scope 1 baseline CO
2
emissions, so it’s a clear
Adopting new technologies
2
2
Sharing ideas and aims with
deliveries and is operated on our behalf by third party logistics
volume of product on each delivery and reduce the total
FSC
®
Emissions reduction developments
in 2023
Waste heat recovery
600 TCO
2
Energy monitoring
ability to see the energy consumption at an individual process
reductions of over 300 TCO
2
Solar energy investment approved
Solar panel investment has been approved in 2023 at our
2
emissions reduction is calculated to be 1,000 TCO
2
training and route planning
Metrics and targets
vesting at a total cumulative reduction from our 2021 baseline
Sustainable sourcing
All of our buyers and our compliance team have taken and
Recognising that our highest exposure to modern slavery is
All of chipboard
& MDF used in our
manufacturing
processes is from
FSC® or PEFC
2021
baseline
2022
actual
2023
actual
2024
minimum
maximum
Actuals CO
2
Target CO
2
Vesting target
Financial Statements
Governance
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Annual Report & Accounts 2023
Strategic Report
Strategic Report Strategic ReportPage Title Page TitleDecarbonising the distribution fleetRenewable energy & sustainable operations
1
2
3
4
5
Strategic Report – Sustainability Matters
Sustainable product offer
•
less CO
2
•
end-users to accept our offer of sending an engineer to repair their appliance rather than replace
When the cabinet has come to the end of its life in the home it can be recycled and broken down to produce
factories, so this is a product where our choices can make a real
1 Cabinet guarantees and recycling
2 Recycled laminate worktops
3 New developments
4 Plastic pledge
5 Eco washing machines
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page TitleSustainable product offer and product innovation
Strategic Report – Sustainability Matters
EDI & wellbeing
Case study
Women in Manufacturing and Engineering
During an event at the school, some of our female
At Howdens, we pride ourselves on being a place where
every individual is actively encouraged to succeed,
business. This ethos is deeply rooted in our inclusive
culture, which respects and values diverse backgrounds.
Our Inclusion Strategy
Accessible for ALL
help career progression through apprentice programmes
apprenticeship levy to fund construction apprenticeships
in small businesses across the UK, directly addressing a
2023 Update on Our EDI priorities
Our Executive Committee sponsors continue to lead employee
Gender
The Gender group has also organised events and educational
Ethnicity
includes guidelines for considering the diversity of local
communities in recruitment and learning resources on
Disability
Update on our wellbeing strategy
Financial Wellbeing
Mental wellbeing
Physical wellbeing
Thanks for a really great day! The students
a huge thank you to you and your teams for
Teacher at Longcroft School
Rewarding careers, opportunities to develop and thrive
valued for who you are and where you can give the best of yourself, make meaningful
Andrew Livingston – CEO
Support for ALL
Case study
Counter Talk podcast
Our Counter Talk podcast,
featuring employees telling
open conversations about
the supportive culture
known I needed to keep it to myself, because
Howdens you know that if you open up there
Worthwhile for ALL
1
2
3
Worthwhile for ALL
Support for ALL
Accessible for ALL
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page TitleEDI & wellbeing
across all UK
operations
Strategic Report – Sustainability Matters
Health & safety, carbon neutral,
safety management systems and actively encouraging the
participation of all staff to help continuously improve Health
celebrating the positive impacts of employee participation
To maintain momentum on our safety culture improvement
engagement, of the human factors and cultural elements
and logistics operations.
this in 2020 through our approach of removing or minimising
ISO 14001.
Sawdust-to-heat.
Keeping our people safe and healthy Reducing waste Use of renewable energy sources
changes to Route to Net Zero
Standard
our total Scope 1 and 2 emissions, and is entirely under our
From 2023 the Carbon Trust is no longer offering Carbon
This standard aims to ensure transparency and clarity of
ambitious requirements and a focus on language to enhance
our commitment to climate leadership, moving on from the
to achieve our targets and adopting
HSE all-industry rate
100
0
200
300
2018 2020 2021 2022 2023
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page TitleHealth & safety, carbon neutral,
Strategic Report – Sustainability Matters
100%
All of our chipboard is from
sustainably managed UK forests
Zero to
across our UK operations
10,000
to energy to heat our factories
Environment
£482m
£345m
445,000
small business customers supported by our
trade account facility in our peak trading
The wider economy
492
apprentices in training
1 in 10
of our current employees started their
263
apprentices completed programmes
in 2023
258
11%
of our highest performing kitchen
sales designers started their
Apprentices
Over 12,000
Over 900
£656m
£269m
cash contributed to our pension schemes
100%
10th
People
Shareholders
£114m
dividends paid
£50m
share buybacks
£1m
three-year ‘Game Changer’ partnership
19th
Community & charity
Strategic Report – Sustainability Matters
Financial Statements
Governance
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Strategic Report
Our impact on our stakeholders
Strategic Report Strategic ReportPage Title Page TitleOur impact on stakeholders
Strategic Report – Sustainability Matters
Task Force on Climate-Related Financial
Disclosures – building climate resilience
Our approach to TCFD
Compliance with the TCFD recommendations
TCFD recommended disclosure Our disclosure and developments in 2023 Focus areas for 2024 and beyond
GOVERNANCE
A
Describe the Board’s
oversight of climate-
related risks and
opportunities.
• This process is led by the Board’s
• The Sustainability Committee met three times
the Sustainability Committee at each meeting
and provided updates on the climate-related
• The Board considers climate risks together
•
proposition, the Board considers the likely
•
recommendations to the Board as
•
• The Board incorporated environmental
Remuneration Committee regularly monitor
Updated environmental measures are in
TCFD recommended disclosure Our disclosure and developments in 2023 Focus areas for 2024 and beyond
GOVERNANCE
B
Describe
management’s role
in assessing and
managing climate-
related risks and
opportunities.
•
responsibility to execute Group strategy and
to manage and mitigate climate risks and take
• The ExCo are responsible for delivering
• The Director of ESG advises both Board
and ExCo on progress against targets and
•
•
the year to develop strategies to manage risks
• Our supplier engagement activities in 2023
leadership and provided clear messaging
• ExCo members have been assigned key
responsibilities on managing climate risks
•
STRATEGY
A
Describe the climate-
related risks and
opportunities the
organisation has
short, medium, and
long term.
•
•
•
additional information on ESG risks and
B
Describe the impact of
climate-related risks
and opportunities on
the organisation’s
businesses, strategy,
planning.
•
over various timeframes in 2021, and
•
potential risks and opportunities into strategic
•
•
• Climate-related risk screening is being
incorporated into the due diligence process
•
suppliers should give us additional data
that may inform our strategy and
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page TitleTCFD – building climate resilience
Strategic Report – Sustainability Matters
TCFD recommended disclosure Our disclosure and developments in 2023 Focus areas for 2024 and beyond
STRATEGY
C
Describe the
resilience of the
organisation’s
strategy, taking
into consideration
different climate –
related scenarios,
including a 2°C or
lower scenario.
•
scenarios in 2021, including a scenario
•
•
short or medium-term implications for our
•
•
RISK MANAGEMENT
A
Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks.
•
and longer-term climate transitional and
•
Standards, based on risk impact and our
•
•
process for climate physical risks by using a
modelling tool, covering all operations over a
•
•
process, incorporating more data streams
• Continue to assess key metrics and targets,
•
•
B
Describe the
organisation’s
processes for
managing climate-
related risks.
•
•
leads the relevant operational teams as they
control day-to-day risk management and
• Challenge the business on the effectiveness
and accuracy of mitigation plans, including
•
C
Describe how
processes for
identifying, assessing,
and managing
climate-related risks
are integrated into the
organisation’s overall
risk management.
•
risk registers alongside our other operational,
•
•
•
• Continue to develop reporting to Exec
TCFD recommended disclosure Our disclosure and developments in 2023 Focus areas for 2024 and beyond
METRICS AND TARGETS
A
Disclose the
metrics used by
the organisation
to assess climate-
related risks and
opportunities
strategy and risk
•
•
®
•
•
B
Disclose Scope
1, Scope 2 and, if
appropriate, Scope 3
greenhouse gas (GHG)
emissions and the
related risks.
• See our emissions reporting, starting on page
•
as part of our overall climate risk reporting,
•
chain to gather additional data to inform our
C
Describe the
targets used by
the organisation to
manage climate-
related risks and
opportunities
and performance
•
•
•
• Continue to monitor performance against
targets including assessing the industry
TCFD – building climate resilience continued
Financial Statements
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Strategic Report Strategic ReportPage Title Page Title
Strategic Report – Sustainability Matters
Main risks and opportunities from our scenario modelling so far
Details of the scenarios
and time horizons
of measures aimed at achieving the Paris Agreement
level of legislation and emphasis on mechanisms
social tipping points see a response to climate change
enforced, and may sometimes be overridden by political,
commercial, or individual concerns in the short and
medium term, requiring more severe policy action and
Overview of opportunities
Most relevant
time horizons Impact Mitigation actions
OPPORTUNITY: Area of impact – Cost reduction
Continuing to focus on energy
pushing through our targeted
improvements and taking future steps on
the path to decarbonisation could lead to
• Access to grants, subsidies and
favourable tax treatment for adopting
• Absolute reductions in energy and
costs, particularly in times of rising
energy prices, extended application of
carbon pricing and an increase in the
Grants and subsidies:
short to medium term
Absolute reductions in
energy consumption:
medium to long term
Deployment of
Decarbonisation
technologies such as
hydrogen: medium to
Capitalise on energy
opportunities:
installation of solar
costs and lead to carbon
Own energy generation:
by accessing grants and
subsidies and deploying
latest decarbonisation
help mitigate the impact of rising
OPPORTUNITY: Area of impact – Access to capital
Building a climate resilient strategy
and communicating it effectively to the
market could increase the demand for our
shares and could also give us access to
Short to medium term
Access to sustainable
Clearly communicating our
sustainability and climate
OPPORTUNITY: Area of impact – Product design
Taking the lead in producing
sustainable products before our
competitors could increase our
Support the future
sustainability of
our assets and the
Sustainable design is built in
RISK: Area of impact – Sourcing
Future physical or legal barriers
arising from climate change could bring
challenges to sourcing some of our
•
• Pressure on supply chains
to decarbonise, especially in
•
could increase in cost or become
unavailable in the future, so
Carbon pricing:
medium to long term
Pressure on
supply chains to
decarbonise: medium
Raw materials
cost increase/
unavailability: medium
Carbon pricing:
2
e
Pressure on supply
chains to decarbonise:
as climate change
is a global issue, our
Raw materials
cost increase/
unavailability: there
may be adverse
Our commitment to SBTi Net Zero
the impact of future carbon prices
due to absolute reductions in our
increased understanding of
potential supply chain impacts
suppliers to mitigate the potential
For instance, the supply chain
data should give us a more
formulate mitigation strategies
TCFD – building climate resilience continued
Results and next steps
Overview of opportunities
Most relevant
time horizons Impact Mitigation actions
OPPORTUNITY: Area of impact – Brand
Delivering on our aim to be the UK’s
leading responsible kitchen business
and creating a brand that is recognised
as a leader in managing climate-related risk
could result in increased sales, greater
share and increased attractiveness to
Greater brand
Stronger employee
sustainability and Net Zero
ambitions to employees,
Sustainable customer offering
and bringing the suppliers on
the Net Zero and sustainability
Financial Statements
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Strategic Report – Sustainability Matters
Overview of opportunities
Most relevant
time horizons Impact Mitigation actions
RISK: Area of impact – Operations
The physical risk to our operations
from climate change can include
additional capital expenditure or could
The physical risk
assessment:
potential risks in the
short, medium and
the short or medium-
for more granular
Interruption to
operations: physical
impacts of climate
change could cause
physical route
potential value at risk
Phase 2 of our physical
high level of expertise in
supply chain planning
and successfully
planned for and dealt
Additional capital
physical
climate risks may require
To further understand the risks at
in the UK and our suppliers’
levels, heat stress and drought
in certain regions and locations,
resilience option assessment
our Value at Risk for physical
exposure and to understand our
RISK: Area of impact – Decarbonisation
Decarbonisation of our distribution and
could require transitional
Adjustments to
current working
practices: short
to medium term
Transitional
investment: medium to
Additional capital
to
incremental costs of meeting
three years, and neither the
Failure to meet customer demands
for sustainable products could reduce
Failure to meet
demands: medium to
Impact on future sales:
from inability to meet
Our ESG strategic ambition is to
be the UK’s leading responsible
commitment drives us to maintain
a focus on sustainable product
TCFD – building climate resilience continued Our SECR and Scope 3 reporting
Emissions reporting methodology
Total CO
2
2023 2022*
13,032
28,302
1,380
408
Scope 1 – Direct: Total
12,067
TOTAL Scope 1 and 2 absolute emissions – location-based
1,266
TOTAL Scope 1 and 2 – market-based
Turnover (£m)
Carbon intensity ratio (tCO
2
e per £m) gross, location-based
2
e per £m) gross, location-based
2
2
Proportion of CO
2
Restated data for 2022
2
2
SECR – Emissions reporting
Financial Statements
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Strategic Report
Strategic Report Strategic ReportPage Title Page TitleOur SECR and Scope 3 reporting
Strategic Report – Sustainability Matters
SECR Reporting
Category TCO
2
e %
1 Purchased goods and services
2 Capital goods 48,684
3 Fuel and energy related activities
4 Upstream transportation & distribution 43,166
6 Business travel
7 Employee commuting
8 Upstream leased assets
10 Processing of sold products
11 Use of sold products
12 End-of-life treatment
13
14 Franchises
Total
in our manufacturing and transport operations, our most
Use of renewable energy sources
Our 2023 Scope 3 emissions
Not applicable
Not applicable
Source of data Status of data
Key to Scope 3 data
1
2
3
4
7
9
11
12
sources on CO
2
Going concern and Viability statements
The Directors have adopted the going concern basis in
Going concern review period
Assessment of principal risks
The Directors have reached their conclusion on going concern
after assessing the Group’s principal risks, as set out in detail
in the ‘Principal risks and uncertainties’ section, starting on
directly affect going concern are the risks relating to
continuity of supply, changes in market conditions, and
against supply chain disruption, and the Directors consider
Review of trading results,
2023, noting that the Group is debt-free, has cash and cash
Going concern
A ‘base case’ scenario.
Group forecast, prepared in December 2023 and including
A ‘severe but plausible’ downside scenario based
This scenario models a reduction in most of the variable
manufacturing sites, investment in digital and expanding
economic conditions that the Company and its customers
A ‘reverse stress-test’ scenario. This scenario starts
Capital expenditure in this scenario has been reduced to
in proportion to the reduction in turnover on the same
Strategic Report
Our SECR and Scope 3 reporting continued
Relative importance
of Scope 3 categories
2022 2023 2020 2021
2
2
2
2
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page TitleGoing concern and Viability statements
Strategic Report
Borrowing facility and covenants
therefore included the credit available under the facility
Results of scenario testing
The likelihood of this level of fall in sales is considered to
Conclusion on going concern
Taking all the factors above into account, the Directors believe
other business risks satisfactorily and have a reasonable
Assessment of long-term prospects
The Directors have assessed the Group’s long-term
Current position
•
• Cash and cash equivalents balance at 30 December 2023
•
•
•
•
• Robust disaster recovery and business continuity
Strategy and business model
•
• Demonstrated agility and resilience of the business
•
Robust assessment of principal risks
•
•
robust assessment of the Group’s principal risks over the
viability period on the basis already described in the going
Going concern and Viability statements continued
Assessment of viability
Time period and scenario modelling
facility covenants and the facility remains available under
the credit available under the facility in our assessment
The base case scenario takes the base case described
in the discussion of going concern above and extends it
The severe but plausible downturn scenario takes the
same decline over the going concern period as described
in the discussion of going concern above, and then
assumes a phased recovery over the rest of the three-year
The reverse stress-test scenario assumes a phased
no longer have headroom at any point in the viability
The Directors consider that the reasonably foreseeable
Group’s principal risks are unlikely to be greater than those
Results of scenario testing
Conclusion on viability
Having considered the Group’s current position, strategy,
business model and principal risks in their evaluation of the
of the scenario modelling, the Directors concluded that they
to operate and to meet its liabilities in full and as they fall due
Long-term prospects and viability Long-term prospects and viability continued
Page
Principal risks and mitigations 38–41
Trading results
16–35, and the Financial
Statements
Balance sheet 163
187
conclusions on going concern and viability 148–161
Further reading relevant to
going concern and viability
Going concern continued
Financial Statements
Governance
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Strategic Report
Strategic Report Strategic ReportPage Title Page Title
How we
preserve value
Governance
Nominations
Committee
report
Board of
Directors
Remuneration
Committee
report
Sustainability
Committee
report
74 9876
108 140
Audit
Committee
report
132
Corporate
governance
report
74 Corporate governance report
76 Board of Directors
78 Key Board activity
80 Executive Committee and Company Secretary
82 Directors' duties (Section 172(1) statement)
84 Stakeholder engagement
92 2018 UK Corporate Governance Code: application
and compliance
98 Nominations Committee report
108 Remuneration Committee report
132 Audit Committee report
140 Sustainability Committee report
143 Directors’ report
144 Directors’ statements
145
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Additional Information Governance
Strategic Report
GovernanceGovernance GovernancePage Title Page Title
Governance
Introduction from the Chairman
Howdens is a resilient and well-run business. In my Chairman’s
statement at the beginning of this Annual Report and
Accounts (pages 16 to 18), I spoke of the many challenges
facing our business and the corresponding effect of these
challenges on our end markets. During such periods, it is
vital that boards provide clear and consistent leadership,
underpinned by robust corporate governance practices.
The work of this Board and its Committees are set out on the
following pages and I hope that is showcases our governance
achievements and priorities for the year ahead.
I was pleased when Howdens rejoined the FTSE 100 in
Board we recognise the additional scrutiny from a corporate
governance perspective that this will bring but we are prepared
to live into the high standards expected of us. We will also take
time to consider the revisions to the UK Corporate Governance
Code and what that will mean for us as a Board going forward.
Fundamentally, we remain committed to the high governance
standards which we have set ourselves and supporting the
fundamental principle that Howdens should be worthwhile for
all concerned.
Board succession
During the 2023 we announced the retirement of three of our
experienced Non-Executive Board members: Geoff Drabble,
Debbie White and Karen Caddick as part of our wider succession
plans to refresh the Non-Executive Board. Whilst these Directors
all contributed hugely to the success of Howdens during their
respective tenures, we have already appointed two highly
experienced Non-Executive Directors in Louis Eperjesi and
Vanda Murray who bring a vast amount of experience to the
board table as well as a fresh perspective. More information
on Louis and Vanda’s appointments can be found in the
Nominations Committee Report beginning on page 98.
We will continue to work with the Nominations Committee
during 2024 to further refresh the Board, mindful of
Strategy
The Board discussed strategy and its strategic initiatives
throughout the year. We continued to invest in deeper vertical
integration, the depot expansion and refurbishment programme,
product innovation and digital expansion, as well as supporting
continued investment into the international businesses.
ESG and the work of the Sustainability Committee were
also a key feature of the work of the Board during the year.
We continued to build out the remit of the Sustainability
Committee and were pleased to receive approval from
the Science Based Targets Initiative (SBTi) of our Net Zero
targets. Our environmental commitments are as important
strategically to the Board as our other strategic initiatives
and we will continue to monitor our performance and hold
management to account on delivery of these targets.
Roles
Further information about the
role of the Board, the Executive
and Non-Executive Directors,
external advisors and individuals
may be found on our website:
www.howdenjoinerygroupplc.
com/governance/division-of-
responsibilities
Andrew Livingston
Paul Hayes
Peter Ventress
Chairman
Louise Fowler
Non-Executive Director
Louis Eperjesi
Non-Executive Director
Vanda Murray
Non-Executive Director
Andrew Cripps
Senior Independent Director
Karen Caddick
Non-Executive Director
Forbes McNaughton
Board meeting attendance
Peter Ventress (7/7)
Karen Caddick (6/7)
1
Andrew Cripps (7/7)
Geoff Drabble (3/4)
2
Louis Eperjesi (3/3)
Louise Fowler (7/7)
Paul Hayes (7/7)
Andrew Livingston (7/7)
Debbie White (7/7)
Board of Directors
Executive Directors
Company Secretary
Executive Committee
Board and Executive Committee structure
Corporate
governance report
Stakeholders
This report details how we have engaged with our stakeholders
and how, as a Board, we balance their respective needs.
Throughout 2023, we were in regular dialogue with the Pension
the shock volatility in the gilts market in the autumn of 2022,
we engaged with the Trustees on their updated investment
plan and in November the Board and the Trustees completed
recovery plan for the next three years. The Board is looking
forward to further engagement with the Trustees, and all our
other stakeholders, in the year ahead.
Guy Eccles
Group HR Director
Julian Lee
Operations Director
David Sturdee
Theresa Keating
Group Finance Director
Stuart Livingstone
Trade Director
Richard Sutcliffe
Supply Chain Director
Andy Witts
Chair of International
The Board in 2024
I am pleased with how the Board’s agenda has developed
during 2023 and the introduction of ‘spotlight sessions’ was
widely welcomed in the Board evaluation feedback. We have a
full programme of spotlight sessions in 2024 (details of which
can be found on pages 78 and 79) which builds on the updates
presented in 2023.
The Board will also work with the Remuneration Committee on
updating the Directors Remuneration Policy and I look forward
to working with our new Remuneration Committee Chair,
Vanda Murray, in engaging with shareholders on the draft
policy in the second half of the year.
I also look forward to engaging with our shareholders at the
AGM in May.
Peter Ventress
Chairman
2024 Annual General Meeting (AGM)
Details of the 2024 AGM may be found in the
'Additional information' section on page 214.
Disclosures may be found in the ‘Additional information’
section on pages 214 and 215.
Using the corporate governance report
Board activity during the year.
Part 2: Directors' duties and section 172 disclosure.
Part 3: Stakeholder engagement.
Part 4: UK Corporate Governance Code compliance.
1 Karen was unable to attend the November Committee meeting due
2 Geoff retired from the Board following the AGM in May. The Board meeting
was held immediately before the AGM and therefore he did not attend.
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Additional Information Governance
Strategic Report
Corporate governance reportGovernance Governance Page Title
Governance
Andrew was appointed to the
on 2 April 2018.
Peter was appointed to the
Board as an independent Non-
Executive Director in July 2022
and became Chairman and
Chairman of the Nominations
and Sustainability Committees
in September 2022.
Karen was appointed to the Board
in September 2018 and became
Chair of the Remuneration
Committee in September 2019.
Louis was appointed Non-
Executive Director in June 2023.
Andrew has a strong track
record of performance,
execution and driving change
through improving digital
capability, ranges and new
site openings. He also has
knowledge of key European
geographies, is a competent
French speaker, and has an
entrepreneurial mindset. This
culture which has served
the Company well and is
fundamental to its success.
He was previously the
MBA from the London Business
School.
As former Chairman of
Galliford Try Plc and current
Chairman of Bunzl Plc, Peter
has in-depth knowledge of
UK listed companies and the
associated high corporate
governance standards required
by such companies. He was
also formerly Chief Executive
and has held several senior
executive roles including
International President of
Staples Inc and Chief Executive
NV, meaning he has extensive
experience in international
distribution businesses and
brings a wealth of relevant
level management experience
to the Board.
Karen’s professional experience
provides her with a strong
diversity of perspective and
leadership of the Howdens
business. Having served as the
Group Human Resources Director
of large listed organisations
such as Saga Plc and RSA
Insurance Group Plc (now RSA
Insurance Group Limited), Karen
has particular strengths in
organisational development,
delivery of diversity programmes,
and executive remuneration.
These attributes have stood
Karen in good stead for her role
as Chair of the Remuneration
Committee and has made
her a valuable addition to the
Nominations Committee.
Louis has a strong background
of manufacturing and supply
of building products in
international markets, together
with commercial, strategy
development, and change
management experience. He is
currently a non-executive director
of Ibstock Plc, Trifast Plc, and
AIM-listed Accsys Technologies
Plc. Louis has had a long career
in the building materials sector,
most recently serving as CEO of
Tyman Plc, a leading international
supplier of engineered
components and access
solutions to the construction
industry. He has also held senior
executive roles in Kingspan Plc,
Baxi Group Ltd, Lafarge SA and
Caradon Plc.
Paul was appointed to the
on 27 December 2020.
Andrew was appointed to the
Board in December 2015 and
became Chair of the Audit
Committee in May 2016 and
Senior Independent Director in
July 2023.
Vanda was appointed to the
Board in February 2024.
executive and has a proven
track record in consumer and
manufacturing businesses.
From 2017 until its acquisition
by Recipharm AB in February
2020, Paul was CFO of Consort
Medical Plc, a leading drug and
device manufacturing business.
Before this, he was the Group
Finance Director of Vitec Group
Plc from 2011 to 2017. Paul has
extensive experience in senior
UK and US listed companies
including Signet Jewelers, RHM
Plc and Smiths Group Plc. He is
a Chartered Accountant having
in Mechanical Engineering,
Manufacture & Management.
Andrew brings extensive
experience as a non-executive
director and audit committee
chair with particular knowledge
of branded consumer and
business-to-business products,
manufacturing and distribution
in the UK and continental
Europe. His experience of
multisite wholesale distribution
to small business customers
at Booker Group Plc is valuable
to the Board’s decision-making
process. He is a Chartered
Accountant and former
Finance Director with extensive
experience.
Vanda has over 20 years of senior
management experience across
a range of sectors, including
manufacturing, industrial, and
support services in Europe, the
USA, and Asia. She has previously
of Blick Plc, and UK Managing
Director of Ultrafame Plc, and
she is currently the Chair of
Marshalls Plc and is the Senior
Independent Director and Chair
of the Remuneration Committee
at Bunzl Plc. Vanda’s extensive
experience in both executive
Howdens from both a leadership
and a strategy perspective, and
her tenure as a remuneration
committee chair means she will
be able to transition easily into the
Howdens Remuneration Committee
Chair role when Karen Caddick
retires from the Board in May 2024.
Corporate governance report continued
Board of Directors
Non-Executive Directors
Independence
The Board considered that all of the Non-Executive Directors were independent for the full duration of the period being
reported on and that Peter Ventress was independent upon his appointment as Chairman.
Key to Board Committee membership
Andrew Livingston
Peter Ventress
Non-Executive Chairman
Karen Caddick
Independent
Non-Executive Director
Louis Eperjesi
Independent
Non-Executive Director
Paul Hayes
Andrew Cripps
Senior Independent Director
Vanda Murray OBE
Independent
Non-Executive Director
Non-Executive Director of
LondonMetric Property Plc
Chairman of Bunzl Plc None Non-Executive Director of Ibstock
Plc, Trifast Plc, and Accsys
Technologies Plc
Non-Executive Chair of
Marshalls Plc and Non-
Executive Director of Bunzl Plc
None None
Contribution to the long-term
sustainable success of the Company
Contribution to the long-term
sustainable success of the Company
Other listed company appointments
Other listed company appointments
Neither Executive Director is a member of any Board Committee.
Committee Membership Committee Membership
Appointed Appointed
Executive Directors
Audit Committee
A
Nominations Committee
N
Remuneration Committee
R
Sustainability Committee
S
Chair of Committee
S
A AAAN R RRR N NNNS S S
Louise was appointed to the
Board in November 2019.
Louise has over 25 years’
customer, brand and digital
experience at a senior level.
Her experience encompasses
publicly listed and private
businesses, the mutual sector
Louise’s strong background
in consumer experience and
reputation is valuable to the
Company as it strives to provide
a strong aftersales service
to further support the builder
customer. Her digital experience
also provides valuable insight
given the investment the
Company continues to make in
its digital programme. Louise
is an Honorary Professor
in Marketing at Lancaster
University Management School.
Louise Fowler
Independent
Non-Executive Director
Non-Executive Director
of Assura Plc
A RN SSS
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Additional Information Governance
Strategic Report
Board of DirectorsGovernance Governance Page Title
Governance
Corporate governance report continued
Key Board activity
January
• Health and safety update
• CEO and CFO updates
• Investor relations update
• 2023 Budget review
• Principal Risks review
2
• Whistleblowing update
January
• Health and safety update
• CEO and CFO updates
• 2024 Budget review
• Investor relations update
• Principal Risks review
2
• Whistleblowing report
Spotlight:
Digital Strategy
Spotlight:
Trade Service
and Convenience
Spotlight:
Product
Leadership:
Sourcing
Spotlight:
Product
Leadership:
Vertical
Integration
Spotlight:
Product
leadership
Spotlight:
Trade
Convenience
Spotlight:
Trade Service
and Convenience
April
• Health and safety update
• Board evaluation feedback
• CEO and CFO updates
• Pensions update
• Investor relations update
• Broker update
May
• Approval of Louis Eperjesi’s
appointment
April
• Health and safety update
• Pensions update
• CEO and CFO update
• Investor relations update
• Broker update
• Group policies
• Strategic planning
(separate session)
July
• Health and safety update
• CEO and CFO update
• Investor relations update
• Draft 2024 Interim results
and announcement,
including consideration
• Broker update
• Key risks review
• Whistleblowing report
• Employee engagement
update
May – AGM
• All resolutions were
passed with the requisite
majority. Further details
about the meeting may be
found on page 90.
May – AGM
• Further details can be
found on page 214
July
• Health and safety update
• CEO and CFO updates
• Investor relations update
• Draft 2023 Interim results
and announcement,
including consideration
• Key and principal risks
review
2
• Broker update
• Whistleblowing update
February
• Health and safety update
• CEO and CFO updates
• Investor relations update
• Draft 2022 preliminary
results, draft 2022 Annual
Report and Accounts and
2023 AGM documents
• Shareholder and capital
returns
• Board evaluation review
• NED fees review
• Group policies
• Principal advisors
February
• CEO and CFO updates
• Investor relations update
• Draft 2023 preliminary
results, draft 2023 Annual
Report and Accounts and
2024 AGM documents
• Shareholder and capital
returns
• Board evaluation review
• NED fees review
• Principal advisors
September
• Health and safety update
• CEO and CFO updates
• Manufacturing and
logistics capex approval
• Investor relations update
• Director training session
(provided by the Group’s
corporate lawyer)
November
• Health and safety update
• CEO and CFO updates
• Pensions update
1
• Investor relations update
• Schedule of Matters
Reserved for the Board
and Board Committee
Terms of Reference
• 2024 Board calendar
approval
• Approval of Vanda
Murray's appointment
Set out below and on the facing page are highlights of the
matters the Board considered in 2023 and will consider in
2024. Not all of the matters the Board considered or will
consider are listed, therefore this should not be considered
In addition to the matters shown on the 2023 timeline, at
each meeting the Board received strategic, operational and
considered aspects of Group culture and strategy at various
points during the year.
2023
2024
Governance and risk
The Board received governance, legal, and regulatory updates
Risk remains a matter reserved for the Board and a detailed
review of our risk management processes and principal
risks can be found on pages 36 to 41 and on page 96. We
have reviewed our risk management processes and remain
The annual review of the risk and control framework was
presented to the Audit Committee in September 2023
Reporting from our whistleblowing helpline is also considered
Shareholder engagement
Information about how we engage with shareholders can
Executive Committee presenters:
Executive Committee presenters:
Executive Committee presenters:
JL
RS
DS
DS
DS
JL RS
1 The Company’s actuaries reported to the Board on routine funding and investment matters and the Chair of the Pension Trustees attended to provide an
overview of the Trustees’ funding and investment strategy and to seek approval from the Board of its long-term strategy proposal.
2 The review includes an assessment of mitigation of the key and principal risks of the Group as appropriate and the Board provides challenge on these to the
Executive Directors. The outcomes are fed back to the Executive Committee for implementation. During 2023, the Board also considered areas of emerging risk,
such as AI governance, and provided challenge to the Executive Directors on the inclusion of these areas.
Executive Committee
presenters
Julian Lee
(Operations Director)
Richard Sutcliffe
(Supply Chain Director)
David Sturdee
Spotlight:
International
development
Spotlight:
Entrepreneurial
Culture
September
• Health and safety update
• CEO and CFO update
• Employee engagement
• Investor relations update
November
• Health and safety update
• CEO and CFO update
• Pensions update
• Related parties and
register
• Board Committees’
Terms of Reference and
the Schedule of Matters
Reserved for the Board
• 2025 Board calendar
• Employee engagement
update
Spotlight:
Trusted trade
relationships
Executive Committee presenters:
DS
Spotlight sessions
• Trade service & convenience
• Product leadership
• Trade value
• Entrepreneurial culture
• Trusted trade relationships
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Additional Information Governance
Strategic Report
Key Board activityGovernance Governance Page Title
Governance
Corporate governance report continued
Executive Committee and Company Secretary
Executive Committee members
may be found on page 76.
Theresa joined Howdens
in September 2000 and
February 2012.
Stuart joined Howdens in April
2023 and was appointed to
the Executive Committee in
September 2023.
Andy joined Howdens in July
1995 and has been a member of
the Executive Committee since
September 2008.
Theresa was appointed Group
Finance Director in May 2014,
having been Group Financial
Controller since 2007. She
joined the Group Finance team
in 2000 having previously held
roles at Waterstones, HMV and
Heals. Theresa is also a trustee
of E-Act, a multi-academy trust.
Theresa's role as Group
Finance Director includes
leading the key controls
project, which is improving the
business's capability to identify
controls which mitigate our key
and principal risks.
Prior to joining Howdens, Stuart
was Operations Director at Pets
at Home and before this he was
six years. He has also held senior
positions at American Golf, Kwik
Fit, and Whitbread.
Stuart has overall responsibility
for the performance and
culture of the depots in the UK.
He oversees the evolution of
our depot estate, including our
strategically important depot
reformatting and the opening
Andy was one of the founding
members of the Howdens depot
management team, having
joined from Magnet in 1995.
Andy was promoted to Sales
Director in January 2007 and
was appointed Chief Operating
In November 2023, following
a handover period with Stuart
Livingstone (Trade Director),
Andy became Chair of Howdens’
Andy’s main function as Chair
of the international businesses
is to provide executive
oversight of and counsel to
the maturing French, Belgian
and Irish businesses. He also
supports the Chief Executive
opportunities and other
Julian joined Howdens in
2003 and was appointed to
the Executive Committee in
Richard joined Howdens in
January 2019 and was appointed
to the Executive Committee in
July 2020.
David joined Howdens in March
2022 and was appointed to
Forbes joined Howdens in
July 2012 and was appointed
Group Company Secretary in
May 2014.
Prior to joining Howdens, Julian
worked in a number of strategic
and operational roles within
the Silentnight Group. He joined
Howdens in 2003 as a leader of
the Manufacturing Division and
from 2005 to 2009 was head of
international sourcing and supply
chain in Asia. Since 2009, Julian
has made a major contribution to
the transformation of our supply
chain and operations and in 2020,
he was appointed Operations
Director, encompassing both
manufacturing and logistics.
Julian leads our strategic
manufacturing investments,
including increased in-house
manufacturing capability
Prior to joining Howdens,
Richard was Director of Supply
he held senior supply chain
Hobbycraft, Wyevale Garden
Centres and B&Q.
Richard's role as Supply Chain
Director encompasses optimising
stock holdings across the
business and ensuring Howdens
maintains market leading stock
availability. He lead the highly
successful XDC project, which
is delivering superior service
levels and availability to depots.
Richard is also acting Commercial
Director. This role includes range
management, a key strategic
initiative. Balancing choice and
new product with disciplined
range management is crucial
Prior to joining Howdens, David
Brands, responsible for Pizza Hut
Europe across 25 countries and
over 1,500 outlets. He was with
roles in the Middle East & North
David is responsible for
developing a longer-term
customer strategy at Howdens
to support our depot teams in
managing their relationships
with customers and to deliver our
ambitious growth plans. David’s
role also encompasses leading
our IT, Digital, and Marketing
teams to continually develop
Howdens brand.
Forbes joined the Company as
Deputy Company Secretary
in 2012 following a period of
secondment from KPMG. He
is a fellow of the Chartered
Governance Institute (CGI)
and is Secretary to the
Executive Committee as well
as to the Board of Directors.
Forbes is the link between
the Executive Committee and
the Board and is responsible
for managing a number
of external stakeholder
relationships such as with
the Pensions Trustees and
external regulators. He is the
head of the legal function
in addition to his corporate
governance responsibilities.
Company Secretary
Theresa Keating
Group Finance Director
Stuart Livingstone
Trade Director
Andy Witts
Chair of International
Julian Lee
Operations Director
Richard Sutcliffe
Supply Chain Director and acting
Commercial Director
David Sturdee
Forbes McNaughton
Company Secretary
Executive Directors
Appointed
Contribution to the long-term sustainable success of the Company
Andrew Livingston
Paul Hayes
Guy joined Howdens in April
2020 and was appointed Group
HR Director and a member of
the Executive Committee in
February 2024.
Guy joined Howdens as Interim
Group HR Director in 2020.
Previously he had been running
his own consultancy providing
HR support to numerous
privately-owned and publicly-
owned companies across a
range of sectors including retail,
healthcare and hospitality. Prior
to that he was HR Director of
Guy has overall responsibility
for all HR matters.
Guy Eccles
Group HR Director
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Additional Information Governance
Strategic Report
Executive Committee and Company SecretaryGovernance Governance Page Title
Governance
Directors' duties
Corporate governance report continued
Howdens was founded on the principle that the business should be
worthwhile for all concerned. It's a principle that on the business
continues to live into today. But balancing the needs and views
of all of our stakeholders can be challenging as there are often
foremost considers our purpose, our culture, our mission and
our strategy to ensure all decisions have a clear and consistent
rationale. For details on the matters which the Board discussed
and debated during 2023, please see pages 78 and 79.
The Board regularly considers feedback from the Company’s
stakeholders. These are set out in detail on pages 84 to 91. This
engagement is effective and in keeping with the Company’s
culture. For example, much of the feedback is through face-to-face
conversations rather than being written but where there is need for
provided. Stakeholder feedback can directly affect the Board’s
decision making, such as feedback received from investors in
relation to the operation of the Directors’ Remuneration Policy for
2023 and direct employee feedback at Regional Board meetings,
but it also provides the context for decision making, particularly
where there are competing stakeholder interests.
As Directors, when we discharge our duty as set out in section
172 of the Companies Act 2006 (‘Section 172’), we have regard
to the other factors set out on the previous page. In addition to
these factors, we also consider the interests and views of other
stakeholders, including our pensioners, regulators and the
Government, and the customers of our trade customers.
We have set out some examples below of how the Directors
have had regard to the matters in section 172(1)(a)–(f) when
discharging their Section 172 duty and the effect on certain
decisions taken by them in 2023.
Shareholder returns
2022 of 15.9p per ordinary share and, in July 2023, it further
recommended an interim dividend of 4.8p per ordinary share. In
line with its capital allocations policy (more detail about which
can be found on page 32), in February 2023, the Board also
approved a £50m share buyback programme. In making its capital
returns decisions, the Board considered its long-term strategy
of continuing to invest in depots, manufacturing and logistics
capabilities, and related strategic investments whilst delivering a
progressive dividend.
The Board takes regular feedback from its shareholders on the
most appropriate method of returning capital, including at the AGM
where all shareholders, regardless of the size of their shareholding,
are invited to attend and ask questions of the Board. Our CEO and
CFO also discuss this during investor roadshows following results
announcements.
Howdens has a prudent risk appetite towards balance sheet
management, an approach which has provided a source of great
strength in challenging recent years. As markets recovered
from the shock of COVID-19, the Company prudently reinstated
its capital priorities, including the return to paying dividends in
2021, and the return of surplus capital in the second half of the
year. These returns were only initiated after having repaid all
government support received early in the pandemic.
and triennial valuation
The Board meets with the independent Chair of the Pension
Trustees at least annually and is mindful of its obligations to all
employees and former employees in all its pension arrangements.
and resilience of the Company) is the Board’s primary objective
scheme. However, the Board is also committed to supporting the
funding position of the scheme in proportion to its responsibilities
to all of its stakeholders.
Following the expiry at the end of June 2023 of the previous
payments of £1m per month until the conclusion of the triennial
actuarial valuation which was ongoing at the time. The triennial
valuation (as at 31 March 2023) was completed in November 2023.
repair contributions at the rate of £12m per year and renewed the
'switch off' mechanism if full funding on the Technical Provisions
basis was met. Full funding on this level was achieved at the date
were suspended. At the end of January 2024, the scheme was in a
suspended at that time.
The Company and Trustee Board continue to work together on
the long-term investment strategy for the scheme with the aim to
reduce reliance on the Company and the CFO reports to the Board
on these matters as appropriate.
Investment in strategic initiatives
The Board believes that it is in the best interests of all stakeholders
to invest in long-term, sustainable initiatives for the business.
This includes continued investment in the depot network
(both new depots and reformats), in digital infrastructure, and
the international business. It also includes investment in our
manufacturing and logistics capabilities.
In September 2023, the Board approved investment in panel
success of our in-stock offer and the Board keep under review
the mix of product bought-in versus that manufactured in-house,
In considering its approval of the investment, the Board considered
the payback on investment and that the investment supported
the Group’s strategic plans to support core manufacturing
processes, which in turn represented good value for shareholders.
Furthermore, it was noted that, with ever-improving machinery
safety requirements, the new machinery would possess enhanced
safety features which were in the interests of the workforce
working on the lines, and that, whilst the panel machining
investment would lead to fewer panels being bought in from
external suppliers, because demand was expected to grow, the
reduction in bought-in panels would occur over the long-term
allowing suppliers time to adjust their plans.
Section 172(1) statement
A director of a company is required to act in a way they consider, in good faith, would most likely promote the
amongst other matters, to the following:
...Customers
Reputation
The desirability
of the company
for maintaining a
reputation for high
standards of
business
conduct.
Long-term
thinking
The likely consequences
of any decision in the
long term.
Workforce
The interests of the company’s employees.
Suppliers
The need to foster
the company’s
business
relationships with
(amongst others)
suppliers and…
Investors
The need for every
member to be treated
fairly and for no member
to be favoured over
another member.
Environment and community
The impact of
the company’s
operations
on the community
and the
environment.
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GovernanceAdditional Information
Financial Statements Strategic Report
Directors' duties (Section 172(1) statement)Governance Governance Page Title
Governance
Corporate governance report continued
Stakeholder engagement
Howdens' stakeholders
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INDIRECT
DIRECT
Stakeholder and
forms of engagement
Trade cusandmers pages 84 and 85
Workforce pages 86 and 87
Suppliers pages 88 and 89
Pensioners pages 88 and 89
Shareholders pages 90 and 91
Engagement with our trade
customers includes the following:
• Local depots
• Customer research
• Customer surveys
Twice a year, to ensure we keep abreast of any emerging
(depots, builders, and end-users), we carry out 'Voice of
the Customer' research. During 2023, we received around
2,500 responses from this research. This has helped inform
the prioritisation within our brand strategy.
Brochure research focus group
In 2023, we carried out research with both end-users
and our depots to understand the purchase journey
and role of the brochure, the brochure's performance
versus competitors', and perceptions of Howdens. A mix
of qualitative and quantitative methodologies was used,
including focus groups and online surveys. Follow up
surveys were also completed to assess improvements
made in our follow-up edition of the brochure.
Cabinet research study
As part of our continual efforts to make builders' lives easier,
we undertook a cabinet research study with our builder
customers to understand the importance and perception of
our cabinet quality.
part in four focus groups across two sites – one in the North
and another in the South. The outcome focused on ensuring
Howdens' cabinets remain best in class for our customers,
with options for future improvements being investigated.
Local depots
The primary method of engaging with our trade customers
since Howdens opened its doors in 1995 has been through
conversations at the local depot. The relationship between the
depot manager and the trade customer has always been at
the heart of what we do.
Our depot managers feed back our trade customers' views
to management at Regional Board meetings (see 'Workforce'
on page 86 for further information), which the Trade Director
is present at and which the CEO and other members of the
Executive Committee frequently attend. Feedback from
decisions. However, it also reinforces our strategic decisions
on new depot openings, ensuring that we are maintaining
excellent customer service and investing in new product. From
these meetings, managers were able to feedback directly to
the CEO, Trade Director and other senior executives about any
matters affecting their depots and their customers.
Board members, Executive Committee members and senior
managers regularly visit depots to ensure they hear from
Trade customer surveys
In addition to the face-to-face conversations we have with
our customers in our depots, we run monthly trade customer
surveys to better understand our trade customers' sentiment,
price and value perceptions, purchase behaviour, business
prospects, 'cost of living impacts', and forecasted activity.
Ad hoc 'deep dive' surveys are also used to ask trade
customers about various product categories, including what
is important to them within those product categories, what
more they need from us, and what could cause them to shop
elsewhere. In 2023, we completed deep dive surveys for all of
our core categories. We received around 10,000 responses
from our customers which has helped inform category
strategy including supporting with brand and ranging
direction, and depot training.
Trade customers
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Stakeholder engagementGovernance GovernancePage Title Page Title
Workforce
Engagement with our workforce
includes the following:
• Employee engagement survey
• Regional Board meetings
• Townhalls and feedback sessions
• Trade union and works council meetings
• Whistleblowing helpline
Governance
Corporate governance report continued
Stakeholder engagement continued
Our CEO also attends a majority of these Regional Board
meetings. Certain support functions (including Supply,
Commercial, Finance, and HR) also regularly attend. Members
of the Board periodically attend Regional Board meetings.
Regional Board meetings held per region per year, providing
many opportunities each year for two-way discussions about
critical business issues.
Townhalls and feedback sessions
The Operations Director continues to hold at least two
business updates each year for all employees based at
our manufacturing and logistics locations, supported by
members of the Operations Leadership Team. The Operations
Leadership Team also hold ‘Ask away’ sessions with groups of
employees. All new starters are invited to a 'Meet and Greet'
session with members of the Operations Leadership Team and,
as part of that, all new starters are asked for their feedback
about what they are enjoying and what we could do better.
At each of our manufacturing and logistic sites regular
feedback sessions are held with employees. It was through
these channels that employees continue to express any
concerns or opportunities for improvement. Following some
of these sessions, we have committed to improving our
agreement for ‘Flexible Working Arrangements’, ensuring
people have a better balance, whilst also ensuring we continue
to maintain our excellent service levels.
Monthly townhalls are hosted by our Supply Chain Director,
who is also acting Commercial Director, and separately by
Employees are given the opportunity to ask questions and
the meetings also act as an opportunity to give recognition to
employees who are going 'above and beyond' in their work.
Informal feedback sessions are hosted by area managers to
address local issues in depots. These sessions are usually
organised by job role, but may also be organised by depot or
are resolved locally. Where there are broader issues, area
managers will liaise with the wider business for a resolution.
These forums also act as an opportunity to exchange best
practice as well as to meet colleagues from other depots.
Engagement with the Trade Union
and works councils
Howdens respects the collective bargaining of its employees
and actively engages with the Trade Union and works councils
collectively at least quarterly. Local sites host Trade Union
representative meetings and works councils meetings
monthly. Site leadership and HR attend these meetings.
In 2023, we continued to engage with the collective
groups and undertook training together, facilitated by
ACAS to help build even more productive and effective
working relationships. As a result of the feedback from
our trade union and works council groups, we have made
enhancements to payslip access and remuneration
information, launched the new in-house Occupational
Health service, expanded and developed our wellbeing
support framework including new wellbeing rep training via
and provision.
In 2023, a new Employee Engagement Forum was created
in HWS West (Normanton) to ensure that as we harmonised
terms and conditions we did it in a way that included,
involved, and had the employee voice at the heart of what
we did. This Forum meets on a regular basis to focus on the
issues and opportunities most important to our workforce.
We strongly believe direct communication is the best
method of engagement.
The Howdens Show
In January 2023, we hosted the Howdens Show, which
welcomed over 1,100 employees to the International
Convention Centre in Wales. Our CEO hosted the event,
which was a chance to set the scene for the year ahead and
it featured business, charity and community updates from
senior members of staff from across the business.
The Board's workforce engagement
arrangements
Following the retirement in 2023 of Geoff Drabble, who
was the Non-Executive Director Responsible for Workforce
Engagement, a review of workforce engagement by the
Board was undertaken. Given the complexity of Howdens
operations (when considering the variety of role types
in our vertically integrated business and its various
geographies), it was agreed by the Board that workforce
engagement would become a collective responsibility for
the all the Board members. This will ensure that the diversity
of Howdens workforce are properly and proportionately
represented. Further detail about the new arrangements is
set out on page 92.
Whistleblowing helpline
whistleblowing helpline. The helpline is multilingual and
available 24 hours a day. The Company Secretary provides
the Board with a bi-annual report which details the number
and nature of whistleblowing instances made during the
Board attention, the governance processes are in place
should this be deemed necessary.
Best Companies survey
As a result of the Best Companies survey in March 2022,
we have remained focussed on providing more support
for employee wellbeing, an area that was highlighted for
improvement. In 2023:
• We expanded our provision of employee wellbeing
representatives. Nine new representatives were trained
across our Support functions. This is in addition to those
already at our manufacturing and logistics sites.
• We have partnered with a new provider, the Retail Trust,
for our Employee Assistance Programme providing a 24/7
helpline, counselling services and signposting to other
support.
• We have continued our focus on Mental Health, working
new partnership with Movember has further bolstered this
support. As referenced on page 55, we now have a mental
health toolkit and our Counter Talk podcast on mental
about mental health and to support each other.
• Once again, in July 2023, we gave employees access to
'Know your numbers' (pre-peak blood pressure and resting
of Heart Month. 825 employees attended these sessions.
• We continued our menopause awareness training,
partnering with Wellbeing of Women and Henpicked to
give us access to a range of webinars on broader women’s
health issues and support tools. We have developed a
Menopause e-learning package which will launch in 2024.
More information is included on page 55.
employees and a further 80 attended pre-retirement sessions.
We launched a new workplace ISA, a Cycle to Work scheme
and a new retail discount platform via Retail Trust.
We have a wellbeing calendar for 2024, which continues to
build on the themes of men’s and women’s physical health,
internal comms and a hub on our intranet site.
Further information on inclusion and wellbeing may be found
on pages 54 and 55 of the Sustainability matters report.
Regional Board meetings
Regional Board meetings are a forum for the depot leadership
team and Executive Committee members to discuss strategy
and day-to-day business matters on a regular basis. Our
Trade Director (and, previously, our COO of Trade) attends all
meetings and all regional directors, area managers, and depot
managers attend the meetings applicable to their region.
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Governance
Suppliers
Category team relationships
and supplier management
Our internal commercial structure is organised into
categories. The use of categories provides clearer
accountabilities for product ranging decisions and with
greater internal accountability comes the fostering of
stronger relationships with our suppliers. Suppliers are
engaged with focused teams within the organisation
In addition, we have also partnered with SAP Ariba to further
strengthen the way we do business with our suppliers in an
Supplier Life Cycle Performance (SLP) has helped improve
the onboarding and management of our suppliers and allows
In November 2023, we applied the successful format of the
July summit to a further collaboration summit with one of
our appliance suppliers and their parent company. Further
information about the supplier engagement activities
we undertook in support of our Net Zero plans, and the
outcomes of these, can be found on page 49 within our
Supplier conferences
Maintaining strong supplier relationships based on trust is
a key facet of our resilient business model (see page 15).
Co-operative engagement with suppliers on new products
and the scale necessary to support suppliers' businesses
and investment plans helps us to ensure the relationships are
enduring and worthwhile for both parties.
Supplier engagement is also key in our plans to achieve our
Net Zero SBT Plans (further detail about our Net Zero SBT
Plans can be found on pages 46 and 47). In July 2023, we
partnership with one of our largest cabinet frontal suppliers.
Engagement with our suppliers
includes the following:
• Supplier conferences and meetings
• Category team relationships
Pensioners
Engagement with our pensioners
includes the following:
• Board engagement with the Trustee Board
• Newsletters
• Triennial valuations
‘DB Plan’) has over 10,300 members, of whom c.5,700
are deferred members, and c.4,600 are pensioners
Board engagement with the Trustee Board
The Trustee Board, chaired by an independent trustee, is
responsible for investment strategy and for the day-to-
day running of the DB Plan. There are a number of matters
reserved for the Company as sponsor under the Trust deed,
and the Board invites the Chair of the Trustees to present
affecting the membership. The Company and Trustees
reviewed annually.
In 2023, the Company engaged with the Trustee Board on a
number of matters outside of the normal engagement cycle of
investment and funding strategy, including:
•
•
•
The triennial actuarial review as at 31 March 2023 was
completed in November 2023. The Company agreed to
£12m per year and continued the ‘switch off’ mechanism if
full funding on the Technical Provisions basis is met for two
consecutive periods.
The Company and the Trustees agreed that, as the Plan was
fully funded on a Technical Provisions basis at the date the
payments should cease and resume only if there were two
Technical Provisions basis). Since November, there have not
have not resumed.
•
• enhanced monitoring of LDI collateral headroom and
•
• preparations for the pensions dashboard roll out.
Newsletters
In October 2022, a newsletter was sent to all members of the
DB Plan. The newsletter provided updates on matters such as
Trustee Board changes, appointment of a new Plan actuary,
changes to the online member portal, latest funding position
Triennial valuations
Ensuring that there is an appropriate balance between
priority for the Board.
Corporate governance report continued
Stakeholder engagement continued
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Governance
Engagement with our shareholders
includes the following:
• Annual General Meeting
• Shareholder meetings and roadshows
Annual General Meeting (AGM)
The 2023 AGM was held in-person and was an opportunity for
the Board members to be able to converse with shareholders
and to present their updates to them directly. Members of
our Executive Committee and senior leadership team were
also present to meet with shareholders outside of the formal
business of the meeting.
During the Q&A session at the AGM, the Board was asked
questions on the following topics: stock availability and team
incentives. The questions raised were answered fully on the
day and no further action or considerations were required.
In addition to the in-person meeting, shareholders were
provided with the opportunity to submit any questions they
had of their Board of Directors through a question facility on
the Company’s corporate website. This facility remained open
throughout the year following the conclusion of the AGM.
During the year the major activities were as follows:
• Engagement with the 15 sell side analysts who cover
the Company and maintenance of Company compiled
consensus forecasts.
•
shareholders and the Executive Directors and Director of
Investor Relations.
• Ad hoc in-person and virtual one-to-one meetings as
requested by shareholders and non-holders.
• Site visits to our factory in Howden and depots with
small groups of institutional holders and non holders to
highlight our key strategic initiatives.
• Site visits to London based depots to highlight the
capabilities of our new reformatted depots and small
format depots.
• Supporting industry conferences held by the major
banks selling equities.
• Targeted marketing roadshows to major investor hubs
internationally.
Shareholder meetings
During 2023, we continued to focus our approach working with
our corporate brokers to identify potential target investors
located in the major investor hubs internationally. This
included domestic investors in the UK but also international
funds buying equities in North America and Europe. For
investors, which includes a mix of both existing holders
that are underweight in our stock and non-holders who are
already invested in distribution peers. This targeting work has
been used to prioritise meetings for the investor programme
throughout the year.
Following each period end, the Board is provided with an
investor relations update, which gives an overview of investor
feedback. The Director of Investor Relations regularly
provides feedback at Board meetings on the investor
relations programme. Following the half-year and full-year
results, more detailed feedback sessions were held with the
Company’s strategy. In summary, investors continue to be
supportive of the Company’s strategic initiatives and the
resilience of Howdens' business model despite challenging
market conditions.
Shareholders
Corporate governance report continued
Stakeholder engagement continued
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Governance
Corporate governance report continued
2018 UK Corporate Governance Code: application and compliance 2018 UK Corporate Governance Code: application of Principles
The Financial Reporting Council (FRC) published the 2024
UK Corporate Governance Code on 22 January 2024. This
iteration of the UK Corporate Governance Code will, in the
commencing 1 January 2025.
This Annual Report and Accounts has been prepared under
the 2018 UK Corporate Governance Code (the ‘Code’), which
applies to accounting periods beginning on or after 1 January
2019. We are pleased to report that the Company applied
all the Principles of the Code throughout the period, and
was compliant with all Provisions of the Code, except for
Provisions 5, 12, 40, and 41.
Provision 5 provides that boards should understand the
views of the company’s other key stakeholders and that, for
engagement with the workforce, one or a combination of the
following methods should be used: (i) a director appointed
(iii) a designated non-executive director.
From the beginning of the reporting period until 4 May 2023,
the Company was compliant with Provision 5 having appointed
Geoff Drabble as the Non-Executive Director Responsible for
Workforce Engagement in 2019. Following Geoff’s retirement
from the Board, a review of workforce engagement by the
Board was undertaken and it was agreed that, given the
complexity of Howdens operations (when considering the
variety of role types in our vertically integrated business
and its various geographies), workforce engagement would
become a collective responsibility for the Board. This will
ensure that the diversity of Howdens' workforce is properly
and proportionately represented. The Board will consider
employee engagement at two dedicated sessions each year
and a dashboard of key employee engagement metrics will
be developed for these meetings. In keeping with Howdens’
culture of open and direct feedback, an annual programme
of employee engagement events will be collated, which will
listening sessions, EDI listening sessions, town hall sessions
and other engagement activities. Non-Executive Directors will
be expected to attend a minimum number of sessions each
year and to provide feedback formally after each session.
satisfy Provision 5 of the Code, and an explanation of the
effectiveness of the new arrangements will be reported in
the 2024 Annual Report and Accounts. During the period of
review of workforce engagement by the Board during 2023,
members of the Board continued to attend Regional Board
meetings across the country (further information on these
Managers were able to directly engage with the Directors
and Board members actively engage with each of these
groups. A detailed explanation of our engagement with our
shareholders and wider stakeholder base, and how this
engagement has informed the Board’s decision making
processes can be found on pages 82 to 91. How the Board
members discharged their ‘Section 172’ statutory directors'
duties is described on pages 82 and 83.
The Board and its committees review workforce policies and
practices on a regular basis. A Group policy framework has
been established and is reported on to the Board on an annual
basis, as well as any updates needed for Group policies. Part
of this review includes ensuring that policies remain aligned
to the Howdens culture and support long-term success.
One example of this is how our Remuneration Committee
considers the pay policies and practices of the wider
workforce when determining Executive reward. More
information in this regard can be found on page 122.
All employees are able to raise any matters of concern using
available 24 hours a day, it is multilingual, and it is operated
by an independent third party. The Board receives reporting
concern are escalated as appropriate by the Company
Secretary who oversees the helpline with support from the
internal audit team.
Section 1: Board leadership and company purpose
In order for the company to meet its responsibilities
to shareholders and stakeholders, the board should
ensure effective engagement with, and encourage
participation from, these parties.
The board should ensure that workforce policies
and practices are consistent with the company’s
values and support its long-term sustainable
success. The workforce should be able to raise
any matters of concern.
E
D
Howdens’ founding principle of being worthwhile for all
concerned supports the premise that its role is to ensure long-
Further information on our resilient business model and strategy
can be found on pages 8 to 15. Our contribution to wider society
and our statement of the extent of consistency with the TCFD
framework can be found in our Sustainability matters report
beginning on page 42.
Governing in an effective way ensures the framework and
controls needed to align our operations with our strategy are
in place. It is only by doing this that we can ensure long-term
strategic success of the Company for our stakeholders. We
discuss throughout the Governance section how our actions
help to preserve the value that the business generates and how
they support the strategy. For example, we have set out the
way our remuneration structure supports our strategic aims on
pages 113 to 116.
An explanation of our purpose, values and strategy are
set out in the strategic report which starts on page 8. The
Board regularly discusses the importance of Howdens’
unique culture and are mindful that it remains aligned with
its purpose, values and strategy. Workforce engagement
is also an important part of the Board’s agenda and more
information about the methods of engagement with the
workforce may be found on pages 86 and 87.
Integrity and sympathy to the Howdens culture are
paramount when the Board recruits new members to
the Board. More information about our recruitment and
inductions process can be found on page 103.
A
B
A successful company is led by an effective and entrepreneurial board, whose role is to promote the long-term
sustainable success of the company, generating value for shareholders and contributing to wider society.
The board should establish the company’s purpose,
values and strategy, and satisfy itself that these
and its culture are aligned. All directors must act
with integrity, lead by example and promote the
desired culture.
The Board considers the attendance at Regional Board
meetings (which are Howdens’ primary method for direct
effective measure of employee sentiment. The Board has also
received regular updates from management on matters such
as trade union and workers council relations.
Provision 12 provides that the board should appoint one of
the independent non-executive directors to be the senior
independent director (SID). Until 4 May 2023, Geoff Drabble
held this role. The role is now held by Andrew Cripps, who was
appointed to it on 13 July 2023. Whilst there was a technical
breach of this provision for a short period during this reporting
period, this occurred during a quiet time in both our Board
and corporate calendars and, should an urgent need have
arisen, the Board had long-serving members with previous
Provision 40 provides that when determining executive
director remuneration policy and practices, remuneration
committees should address whether remuneration
arrangements promote effective engagement with the
workforce. Provision 41 provides that the annual report of
remuneration committees should include a description of
the engagement that has taken place with the workforce
to explain how executive remuneration aligns with wider
company pay policy. The Remuneration Committee did not
directly consult with the workforce on Executive Director
across the workforce to ensure that there is good alignment
on remuneration across the organisation as a whole. In
addition, the Company's Share Incentive Plan (SIP), which
is a UK all-employee share plan, allows all employees with
shares held in the SIP trust to exercise voting rights on those
shares. This means our UK employees with SIP shares (the
majority of the workforce) are able to vote on the Directors'
remuneration report and the Directors' remuneration policy
(when applicable) at general meetings of the Company.
The UK Corporate Governance Code 2024 has removed
Provision 40 of the 2018 Code and therefore there will be no
non-compliance with this provision when the 2024 version
of the Code is adopted. The Remuneration Committee will
keep under review the need to engage the workforce more
directly on Executive remuneration arrangements. Details of
how Executive Director pay is considered in the context of the
workforce is set out on page 122.
place to ensure that the Company meets its objectives and
measures performance against them. Our KPIs and how we
have performed against them can be found on pages 28
More information on our risk processes, including our
principal and emerging risks, can be found on pages 36 to
41. Our Audit Committee report provides a summary of our
internal control framework on page 138.
The board should ensure that the necessary
resources are in place for the company to meet
its objectives and measure performance against
them. The board should also establish a framework
of prudent and effective controls, which enable risk
to be assessed and managed.
C
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Governance
Corporate governance report continued
2018 UK Corporate Governance Code: application of Principles continued
At least half of the Board was made up of Independent
Non-Executive Directors (not including the Chairman)
throughout the reporting period. The Non-Executive Directors
that the Board considered to be independent are shown
the Non-Executive Directors (excluding the Chairman)
were independent during the reporting period and that the
Chairman was independent on appointment.
There is a clear division of responsibilities between the
leadership in the organisation. The responsibilities of
the Chairman, Chief Executive, and Senior Independent
Director may be found on the Company’s website (www.
howdenjoinerygroupplc.com/governance/division-of-
responsibilities) and the function of the Board Committees
may be found in the respective committee terms of
reference, also available on the Company’s website
(www. howdenjoinerygroupplc.com/governance/tor-and-
schedule-of-matters).
All of the Directors of the Company have access to the advice
of the Company Secretary, who is responsible for advising the
Board on all governance matters.
The Board has implemented a Group policy framework which
is considered by the Board on an annual basis. Individual
policies and associated practices are considered alongside
As stated in the Schedule of Matters Reserved for the Board
(which may be found at www.howdenjoinerygroupplc.com/
governance/tor-and-schedule-of-matters) the appointment
Board as a whole.
Section 2: Division of responsibilities continued Section 2: Division of responsibilities continued
The board, supported by the company secretary, should ensure that it has the policies, processes, information,
The Nominations Committee engages external search
consultancies when searching for Board position candidates.
Further information about the appointments process is
available on page 103 of the Nominations Committee report
and the Board’s diversity policy is available on page 102.
The Nominations Committee regularly reviews the skills
matrix and the tenure of each Board member (see pages
100, 103 and 104 for further details). This ensures the Board’s
succession plan remains aligned with the natural rotation
of Directors off the Board and the strategic objectives of
The succession plans for the senior management team are
regularly reviewed by the Nominations Committee.
The Board uses a skills matrix to ensure it has the necessary
combination of skills, experience and knowledge to meet its
strategic objectives, business priorities and to ensure the
unique Howdens culture is maintained. The skills matrix may
be found on page 100.
The tenure of each Director may be found on pages 103 and
104. The Board has a good balance of new and longer-serving
Directors. As at the year end date, tenures of the Non-
Executive Directors (including the Chairman) range from 6
Section 3: Composition, succession and evaluation
Appointments to the board should be subject to a
formal, rigorous and transparent procedure, and an
effective succession plan should be maintained for
board and senior management. Both appointments
and succession plans should be based on merit and
objective criteria and, within this context, should
promote diversity of gender, social and ethnic
backgrounds, cognitive and personal strengths.
The board and its committees should have a
combination of skills, experience and knowledge.
Consideration should be given to the length of
service of the board as a whole and membership
regularly refreshed.
G
I
K
J
The board should include an appropriate
combination of executive and non-executive (and,
in particular, independent non-executive) directors,
such that no one individual or small group of
individuals dominates the board’s decision-making.
There should be a clear division of responsibilities
between the leadership of the board and the
executive leadership of the company’s business.
appointment when assessed against the circumstances set
out in Provision 10 of the Code. The roles of Chief Executive and
Chairman are not held by the same individual and the Chairman
has never held the position of Chief Executive of the Company.
These factors help ensure that the Chairman demonstrates
objective judgement throughout his tenure.
The Chairman is mindful of his role in facilitating constructive
Board relations and promoting a culture of openness and
debate amongst the Board. This in turn encourages the
The 2023 internal Board evaluation concluded that the Board
was effective, supportive of management and doing well.
Further information about the outcomes and process of the
evaluation may be found on pages 106 and 107.
The Chairman is also mindful of the need for the Directors to
receive information which is accurate, timely and clear. He is
supported in this by the Company Secretary, who ensures the
Board and senior management.
The chair leads the board and is responsible for its overall effectiveness in directing the company. They should
demonstrate objective judgement throughout their tenure and promote a culture of openness and debate. In
addition, the chair facilitates constructive board relations and the effective contribution of all non-executive
directors, and ensures that directors receive accurate, timely and clear information.
F
The number of Board meetings which were held during
the reporting period and the attendance at each of these
meetings may be found on page 74. Similarly, the number
of meetings of each Board Committee and the attendance
may be found on the following pages: 98 (Nominations
Committee), 108 (Remuneration Committee), 132 (Audit
Committee), and 140 (Sustainability Committee).
When reviewing the Nominations Committee’s
recommendation to appoint a new Director, the Board will
always assess whether the candidate is able to allocate
enough time to the role. Similarly, when assessing the
acceptability of an existing Director’s wish to take on external
appointments, the Board will assess the additional demand on
that Director’s time before authorising the appointment. This
occurs within the Board's agreed existing protocol whereby
Director of the Company must be approved by the Board
before they are entered into. This is set out in the Schedule
of Matters Reserved for the Board which may be found on
the Company’s website (www.howdenjoinerygroupplc.
com/governance/tor-and-schedule-of-matters). During the
reporting period, no existing Directors took on additional
external appointments.
Members of the senior management team regularly
presented to the Board (see pages 78 and 79 for a timeline
of Board meetings and information regarding any Executive
Committee attendees), which provided an opportunity for the
Board to constructively challenge and to provide advice to
our senior management team.
duties Directors owe the Company and either their personal
interests or other duties they owe to a third party may be
found on pages 135 and 139.
time to meet their board responsibilities. They
should provide constructive challenge, strategic
guidance, offer specialist advice and hold
management to account.
H
Details of the 2023 internal Board evaluation process
and outcomes may be found on pages 106 and 107 of the
Nominations Committee report.
Director’s contribution is, and continues to be, important to
the Company’s long-term sustainable success may be found
accompany the resolutions to elect or re-elect Directors in the
2024 AGM Notice. The Board recommends that shareholders
vote in favour of the election or re-election of all the Directors.
Annual evaluation of the board should consider
its composition, diversity and how effectively
members work together to achieve objectives.
Individual evaluation should demonstrate whether
L
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The Board has established formal and transparent policies
and procedures, which ensure the external auditor and
internal audit function are independent and effective and
are accountable to the Audit Committee. The Board also
statements of the Company through the Audit Committee.
Further information about the work of the Audit Committee,
including the subjects above, may be found in the Audit
Committee report, which begins on page 132.
A statement regarding the Directors’ responsibility for
preparing the Annual Report and Accounts and the Directors’
assessment of the Annual Report and Accounts, taken as
a whole, as being fair, balanced and understandable and
providing the necessary information for shareholders to
assess the Company’s position, performance, business
model and strategy, can be found on page 144.
The Board is responsible for the Group’s systems of internal
control and risk management, and for reviewing their
effectiveness. The Board is assisted with these responsibilities
by the Audit Committee. Such a system is designed to
manage rather than eliminate the risks of failure to achieve
business objectives, as well as to help the business take
appropriate opportunities. The Board has conducted reviews
of the effectiveness of the system of internal controls through
the processes described within the 'Risk management' and
‘Principal risks and uncertainties’ sections (see pages 36 to
the Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting. As described in the
Audit Committee report on page 138, the management team
continued to strengthen our overall control framework. This
work to further enhance internal controls will lead to better
and automate controls and improve visibility to the Executive
Committee, Audit Committee and Board in a consistent way
across the Group.
The assessment of the principal and emerging risks, the
uncertainties facing the Group, and the ongoing process for
faced by the Group is set out in the 'Risk management' and
‘Principal risks and uncertainties’ sections (see pages 36
assessment of the principal and emerging risks.
Section 4: Audit, risk and internal control
The board should establish formal and transparent
policies and procedures to ensure the
independence and effectiveness of internal and
external audit functions and satisfy itself on the
The board should present a fair, balanced and
understandable assessment of the company’s
position and prospects.
The board should establish procedures to manage
risk, oversee the internal control framework, and
determine the nature and extent of the principal
risks the company is willing to take in order to
By order of the Board
Peter Ventress
Chairman
28 February 2024
The way the Remuneration Committee has ensured our
remuneration policies and practices are aligned with our
culture, our strategy and risk management is discussed in the
The Remuneration Committee has delegated responsibility
for setting the Executive Directors’ remuneration under the
shareholder-approved Directors' remuneration policy (the
full policy is set out in full at www.howdenjoinerygroupplc.
com/governance/remuneration-policy). The Remuneration
Committee also has delegated responsibility for setting the
Chair of the Board’s remuneration and the remuneration
of senior management (i.e. the members of the Executive
Committee and the Company Secretary). No Director is able
to determine their own remuneration outcome.
The Remuneration Committee reviews workforce
remuneration and related policies when setting Executive
Director remuneration. Ensuring these factors are always
considered means our remuneration policies are clear and as
predictable as possible. Further information can be found in
the Remuneration Committee report on page 122.
The Remuneration Committee membership is made up of only
independent Non-Executive Directors.
Details of whether the Remuneration Committee exercised its
discretion during the year can be found on page 109 of the
Remuneration Committee report.
Section 5: Remuneration
Remuneration policies and practices should be
designed to support strategy and promote long-
term sustainable success. Executive remuneration
should be aligned to company purpose and values,
and be clearly linked to the successful delivery of
the company’s long-term strategy.
A formal and transparent procedure for
determining director and senior management
remuneration should be established. No director
should be involved in deciding their own
remuneration outcome.
Directors should exercise independent judgement
and discretion when authorising remuneration
outcomes, taking account of company and
individual performance, and wider circumstances.
Corporate governance report continued
2018 UK Corporate Governance Code: application of Principles continued
M
P
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GovernanceGovernance
2023 Nominations
Committee activity
Introduction from the Nominations
Committee Chair
I am pleased to present this report covering the work of the
Nominations Committee in 2023.
Committee and we have made good progress during the year.
One of the main features of the role of the Chairman of the Board
is to take a leading role in determining the composition and
structure of the board. I was very fortunate to inherit an engaged
and well-balanced Board with a good mix of skills and experience
when I took on the role in 2022, but with routine retirements
during 2023 and coming in 2024 we have an opportunity to build
a Board of Directors to support Howdens and the management
team in the next phase of its development. There is also an
opportunity to address some of the wider diversity issues that
all companies are currently facing.
The Nominations Committee primary function is to enable the
Board to put the right people in the right places, both at Board
and senior management level. It must do so in a way that is
transparent and procedurally fair to ensure the avoidance of
bias and I am pleased that the Committee has been engaged
and challenged throughout the year.
Succession
During 2023 two directors retired from the Board and two were
appointed. Geoff Drabble and Debbie White retired with nearly
15 years of Howdens’ experience between them. They have
been replaced by Louis Eperjesi and Vanda Murray who bring
a huge amount of relevant sector and executive experience
to the table. Details of the appointment processes for both
Louis and Vanda are contained in this report on page 103.
Karen Caddick also expressed her intention to retire from the
Board following the AGM in 2024 and therefore Vanda will
additionally take on the role of Remuneration Committee Chair
following Karen's retirement.
The Committee was also involved with new appointments
to the Executive Committee and received an update from
the Chief Executive on his senior management succession
strategy. We have included a case study in this report on the
induction of the new Trade Director (page 105).
Composition and diversity
The Nominations Committee remains mindful of the
that it brings to our teams. More information on Howdens’
ongoing equality, diversity and inclusion programmes can be
found on pages 54 and 55 of the Sustainability matters report.
In 2023, the Committee committed to meeting the gender
and ethnicity targets contained in the FTSE Women Leaders
Review and the Parker Review. We remain committed to
these targets but, following Howdens’ readmission to the
FTSE 100 in September 2023, we are no longer in line with the
recommendations of the Parker Review. It is our intention
to be compliant with the recommendations of the Parker
Review and appoint at least one director from an ethnic
minority background before the end of 2024. Similarly,
it is the Committee’s intention to be compliant with the
recommendations of the FTSE Women Leaders Review to have
at least 40% female representation on the Board and to have
SID, CEO and CFO) by the end of the year. I look forward to
providing an update on our progress in the 2024 Nominations
Committee Report.
Evaluation
In line with the Board’s stated practice, we conducted an
a third-party platform was used to collate more quantitative
data on the Board’s perceptions of its priorities, strategic
objectives, and leadership, as well as governance structures
and process. More information on the Board evaluation process
and outcomes is set out on pages 106 and 107.
I look forward to answering any questions on the work of the
Nominations Committee from shareholders at our AGM in May.
Peter Ventress
Nominations Committee Chair
Committee meeting (out of cycle)
• Non-Executive Director succession –
recommendation to appoint Louis Eperjesi to the
Board and the Audit, Nominations, Remuneration
and Sustainability Committees
Committee meeting
• Board evaluation process and outcomes
• Non-Executive Director succession update
• Board recommendations for AGM elections
• Draft 2022 Nominations Committee report
Committee meeting
• Senior management talent update
• Board Diversity policy
• Board succession planning, including
consideration of diversity, tenure and skills matrix
• Internally facilitated Board evaluation approval
• 2024 Nominations Committee calendar
• Nominations Committee Terms of Reference
Committee meeting (out of cycle)
• Non-Executive Director succession –
recommendation to appoint Vanda Murray to the
Board and the Audit, Nominations, Remuneration
and Sustainability Committees
Nominations
Committee report
Key activities in the year ahead
• All current Directors will stand for election or
re-election at the AGM on 2 May 2024.
• Regular updates on Executive Committee and
senior management succession and talent
planning will be provided to the Committee.
• The Committee will undertake its review of skills,
composition and size of the Board.
• Review of the Boardroom Diversity Policy.
• Board evaluation planning.
• Review of the Committee’s Terms of Reference.
Board gender split
Board ethnicity split
1 Figures correct as at 30 December 2023.
2 Figures derived from the February 2024 FTSE Women Leaders Review.
1 Figures correct as at 30 December 2023.
2 Figures derived from the March 2023 Parker Review update
'Improving the Ethnic Diversity of UK Business'.
February
May
September
November
0%
Howdens
1
director
positions
No ethnic
minority
representation
Ethnic
minority
representation
2023 meeting attendance
Peter Ventress (4/4)
Karen Caddick (3/4)
1
Andrew Cripps (4/4)
Geoff Drabble (1/2)
2
Louis Eperjesi (2/2)
Louise Fowler (4/4)
Debbie White (4/4)
Peter Ventress
Nominations Committee Chair
1 Karen was unable to attend the November Committee meeting due
2 Geoff retired from the Board following the AGM in May. The out-of-
before the AGM and therefore he did not attend.
Howdens
1
37.5%
Females:
Male
Female
FTSE 100
2
42.6%
Females:
18%
FTSE 100
2
director
positions
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Nominations Committee report continued
Composition
Skills and experience matrix
The Nominations Committee used a skills matrix when assessing its Non-Executive Director succession plans. The matrix
highlights where the skills and experience of our Non-Executive Directors are particularly strong, where there are opportunities
to further grow the Board’s collective knowledge, and to inform the Board’s future composition as Non-Executive Directors
naturally rotate off the Board.
High
Importance
Medium
Diversity
Board and Executive Committee Diversity
Listing Rule 9.8.6R(9) requires that a company state whether it has met certain targets on diversity. These targets and whether
the Company has met them as at the reference date
1
changes to the membership of the Board have occurred between the reference date and 28 February 2024 that have affected
the Company’s ability to meet one or more of the targets.
Target:
(i) At least 40% of the individuals
on the Board of Directors are
women.
(ii) At least one of the following senior
positions on the Board of Directors is held
(iii) At least one individual on the
Board of Directors is from a
minority ethnic background.
Has the target
been met by the
Company?
The Company has not yet met
target (i). The Board is made up
of 37.5% women.
The Company has not yet met target (ii). The Company has not yet met
target (iii).
If the target has
not been met,
why this is the
case:
Debbie White retired as a Non-
Executive Director at the end of
2023 after seven years on the
Board to focus on her new role as
Chair of the Co-operative Group.
Had Debbie remained on the
three-year appointment period,
the Board would have been
compliant with this target from
stated intention to meet this
target by the end of 2024.
The Board has a well established CEO and
CFO and appointed a new Chair in 2022.
Whilst the SID role became vacant during
2023, two of the female Non-Executive
Directors had indicated that they would
retire from the Board in the near future and
it was determined that Andrew Cripps had
the most relevant experience to perform this
role in the short-term whilst a longer-term
candidate for one of the roles listed above
before the end of 2024.
As part of its succession process,
the Board considered candidates
from minority ethnic backgrounds
in 2023. The Board determined
that alternative candidates were
better suited (due to relevant
sector experience, for example) for
those roles at that time. However,
the Company is committed to
the appointment of at least one
individual from an ethnic minority
background before the end of 2024.
The data below is presented in accordance with the FCA’s Listing Rule 9.8.6R(10). The applicable reference date
1
for this data is
30 December 2023. To collect this data, the Company asked members of the Board and Executive Management
2
to complete a
Gender identity or sex:
Board Members Number of senior
positions on the
board (CEO, CFO,
SID and Chair)
Executive Management
2
Number Percentage Number Percentage
Men 5 62.5% 4 6 85.7%
Women 3 37.5% – 1 14.3%
– – – – –
Ethnic background:
Board Members Number of senior
positions on the
board (CEO, CFO,
SID and Chair)
Executive Management
2
Number Percentage Number Percentage
White British or other White
(including minority white groups) 8 100% 4 7 100%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British – – – – –
Black/African/Caribbean/
Black British – – – – –
Other ethnic group, inc. Arab – – – – –
– – – – –
change year-on-year.
2 'Executive Management' means members of the Executive Committee (not including the Executive Directors) and the Company Secretary.
Skills and experience Importance
Number of Non-Executive Directors
Direct experience Indirect experience
Industry/Sector
Business-to-business
H
6 0
Manufacturing
H
5 1
Logistics, distribution and supply chain management
H
4 2
Consumer goods
H
5 1
Geographic exposure
UK
H
6 0
Europe
M
5 1
Governance
UK listed companies
H
6 0
Company chair experience
M
4 1
Remuneration committee chair experience
M
5 1
Audit committee chair experience
M
2 2
Senior independent director experience
M
4 0
Policy development
M
5 1
Technical
Accounting and Finance
H
1 5
Audit
H
1 3
Executive management
H
6 0
Risk management
H
5 1
HR/Remuneration
M
2 4
Ecommerce
M
3 3
Marketing
M
5 1
IT/Cyber security
M
0 5
Legal
M
0 4
Vertical integration
H
5 1
Multisite depot operation
H
3 3
HM
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Boardroom Diversity Policy
The Board recognises the importance of ensuring that
there is diversity of perspective, background, and
approach in its management team and on its Board. Since
the business was established in 1995, it has sought to
enable individuals to progress within the organisation
regardless of age, gender, socio-economic background,
We believe that it is in the interests of the business and of
its shareholders for us to build a Board whose membership
is diverse in perspective and experience, as this facilitates
better decision-making. We are also mindful of the outputs
and recommendations from both the Parker Review and the
FTSE Women Leaders Review when making appointments
to the Board. It is the Board’s aspiration that it will have
at least one member from an ethnic minority by year end
2024. The Board will also target having a minimum female
woman director for one of the ‘Big 4’ roles (those being
Senior Independent Director, Chair, CEO, and CFO) by year
end 2024.
The Nominations Committee will continue to seek
diversity of mindset as well as of gender, race, ethnicity,
and socio-economic background when considering
new appointments in 2024, and it will continue to review
this policy on an annual basis to ensure it remains
appropriate. This policy shall also apply to each of the
Audit, Nominations, and Remuneration Committees of the
Board and we will ensure that at least 40% of members of
each of these committees are female. More widely, we are
committed to developing a long-term pipeline of executive
its stakeholders. As at 30 December 2023, 37.5% of Board
members were women. Both of the Executive Directors
were male. There were no members of the Board from
ethnic minority groups as at 30 December 2023.
Composition continued Succession
An integral part of the work of the Nominations Committee is to establish and maintain a stable leadership framework and to
proactively manage changes and their impacts on the future leadership needs of the Company, both in terms of Executive
and Non-Executive leadership. Ensuring the correct leaders are in place enables the organisation to compete effectively in the
marketplace and therefore to meet its various obligations to its stakeholders.
As detailed in the rest of the report, the Nominations Committee has managed succession programmes for both the Board and
senior management, which have ensured that the necessary skills, expertise and experience are present in the leadership of
Board succession
The Nominations Committee regularly reviews the skills and
expertise that are present on the Board and compares these
to the expertise that it believes are required given the strategy,
business priorities and culture of the organisation.
Since Howdens began trading in 1995, its core strategy has
remained largely unchanged. The market, the size, and the
stage of maturity of our organisation however have changed,
and so our Board has needed to evolve through sensible and
well-managed succession planning that does not compromise
the stability of the Board.
The process normally used in relation to Non-Executive
Director appointments is set out below. We continue to manage
a phased succession programme for Non-Executive Directors
and are pleased with the balance of length of tenure, as well as
of diversity, background and perspective of our current Non-
Executive Directors.
Retirement
The Nominations Committee is progressing a phased
transition on Board succession and, as part of this process,
following nearly 8 years of service, Geoff Drabble retired at
the Annual General Meeting (AGM) in May 2023.
In July 2023, it was announced that Debbie White would
retire from the Board in December 2023. This followed the
announcement that Debbie would be appointed to the board
of the Co-operative Group (the 'Co-op') as an Independent
Non-Executive Director in August 2023 and in February 2024
would be appointed Chair of the Co-op board.
In November 2023, it was announced that Karen Caddick, who
currently chairs the Remuneration Committee, would retire at
the AGM in May 2024. Vanda Murray (whose appointment was
also announced in November 2023) will become Chair of the
Remuneration Committee following the 2024 AGM.
Appointment
that a Non-Executive appointment is required to the Board,
the Nominations Committee will engage an external search
consultancy to undertake the process of recruiting a
new Non-Executive Director.
The external search consultancy would be made aware of our
Boardroom Diversity Policy (if they were not already) and the
producing a diverse shortlist of candidates for the position.
The skills matrix (the current version of which may be found on
page 100), together with the collective knowledge, experience
and diversity of the Board and the length of service of the
Directors, would be used by the Committee to highlight where
there were opportunities for a new Non-Executive Director to
contribute to the skillset of the Board and would inform the
search that external search consultancy undertake.
Following longlisting and shortlisting processes, and prior
to any recommendation being made by the Nominations
Committee to the Board, the preferred candidate would meet
with each existing member of the Board.
During the year, the Nominations Committee recommended
the appointment of Louis Eperjesi and Vanda Murray to
Group Diversity Policy
We want Howdens to be a place where everyone is
welcomed and has the opportunity to thrive, being
Worthwhile for ALL concerned. We’re committed to
encouraging diversity, inclusion and equality amongst our
workforce and to eliminating unlawful discrimination. We
value the difference a diverse workforce brings and want
each employee to be respected, able to be themself and
give their best. Howdens will aim to:
• Create a working environment free of bullying,
harassment, victimisation and unlawful discrimination,
promoting dignity and respect for all, and where
individual differences and the contributions of all
workers are recognised and valued regardless of
background.
• Seek to ensure that no one is unlawfully discriminated
against or harassed inside or outside the workplace
(when dealing with customers, suppliers or other
business contacts or when wearing Howdens branded
clothing) and on work related trips or events, including
social events.
• Encourage equality, diversity, and inclusion in the
workplace by providing training opportunities, booklets
and toolkits and facilitating open conversations.
• Take seriously complaints of bullying, harassment,
victimisation and unlawful discrimination by employees
and other workers, customers, suppliers, visitors, the
public and any others during the organisation’s work
activities.
• Make opportunities for training, development and
progress available to all staff, who will be helped and
encouraged to develop to their full potential, so their
talents and resources can be fully utilised to maximise
• Make decisions concerning employees based on merit,
apart from those limited exemptions and exceptions set
out under Equality Act 2010.
• Ensure recruitment practices are fair and transparent,
• Monitor the make-up of the workforce regarding
information such as age, sex, ethnic background, sexual
orientation, religion, or belief, so that we continue to meet
the aims and commitments set out in this policy.
Nominations Committee report continued
Group Gender Diversity
The Nominations Committee reviews the gender statistics shown in the table below. Where other data is available, this is
presented to the Committee in order to determine whether there are any implicit diversity issues. The reference date for the data
below is 30 December 2023.
Board of Directors Senior Management
1
Grades 1 to 3
2
Group
3
Number % Number % Number % Number %
Men 5 62.5% 6 85.7% 131 74.4% 8,438 69.5%
Women 3 37.5% 1 14.3% 45 25.6% 3,705 30.5%
1 Members of the Executive Committee, excluding Executive Directors and including the Company Secretary.
2 These are generally the direct reports of Senior Management and includes Grades 1 to 3 equivalents.
3 Calculated on an individual basis, not on an FTE basis. Includes UK, France, Belgium, the Republic of Ireland, and the Isle of Man.
Non-Executive tenure as at 30 December 2023
8 976543210
Karen Caddick
Andrew Cripps
Debbie White
Peter Ventress
Louis Eperjesi
Louise Fowler
Years
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Nominations Committee report continued
Induction
Working with the Company Secretary, new Directors
undertake an induction programme tailored to the needs of
the individual. However, they will generally include a number
of site visits and meetings with members of the Executive
Committee, key employees and advisors. Site visits include our
manufacturing sites, our distribution centre and depots. New
Directors will also be provided with a mixture of documentation
including Company publications, Board materials and some
formal information on the role and responsibilities of UK-listed
company directors.
The Group’s induction programme for newly appointed
Directors will continue to be centred on familiarisation with
the Group’s operations, key individuals and external advisors.
Succession continued
Senior management succession
The Committee received regular updates regarding senior
management
1
succession planning. These updates included
the planning and processes involved with the appointment
of a new Trade Director.
Trade Director
Stuart Livingstone joined Howdens as Trade Director in April
2023 and was appointed to the Executive Committee in
September 2023. A detailed case study on his induction into
the business is set out on the opposite page.
The Nominations Committee will continue to work with the CEO
and Group HR Director on senior management succession and
development in 2024.
Case study
Trade Director appointment
As reported in the 2022 Nominations Committee Report,
Stuart Livingstone was appointed Trade Director in early
2023 with a view to taking over key aspects of Andy Witts’
following a thorough induction and handover process.
Below, we set out further detail on the selection process
for the role and the tailored induction and handover
programme put in place for Stuart.
Recruitment
and rigorous given the strategic importance of the role.
From the outset of the recruitment process, we were clear
that candidates needed to possess broad leadership skills,
a strong sense of the importance of Howdens’ unique
culture and the ability to build long term relationships
During the recruitment process, a diverse pool of
candidates was considered. Short-listed candidates were
the process, both in depot and manufacturing operations.
In addition to the CEO’s and Andy Witts’ involvement,
selected members of the Board and Executive team
met with candidates to provide better understanding
candidates performed a psychometric assessment.
Stuart has a strong track record of running large scale
multi-site operations in a wide range of businesses. Prior
to joining Howdens, he was Operations Director at Pets at
for six years. Stuart has also held senior positions at
American Golf, Kwik Fit, and Whitbread.
Induction and handover
When Stuart joined Howdens, he immediately began his
of his induction was divided into three distinct phases,
centred around the Trade team:
1. Time in depots
in a range of depots shadowing all depot roles. A key
objective of this time was to ensure that he understood
manager autonomy and entrepreneurialism, and high-
quality, local trade relationships play in our business
model. Another key objective was to ensure that Stuart
understood the value and part each depot role plays in
contributing to the success of that depot.
directors and area managers visiting around 200 depots
and attending Regional Board meetings (more information
about Regional Board meetings can be found on page
strategically important metrics within their teams.
3. Time with Andy Witts
Over his more than 28-year tenure, Andy has amassed
a vast knowledge and experience of matters relating to
Howdens’ culture, the workings of the Trade team, our
of Stuart’s induction in Trade was therefore spent working
shoulder-to-shoulder with Andy Witts. Stuart also closely
shadowed Andy in the lead up to, and throughout, our
crucial peak trading period during the autumn.
In addition to his time spent with the Trade team, Stuart
spent time with our Supply team. As our Supply team’s
only customer is our Trade team, it was important that
Stuart was able to gain a thorough understanding of how
the relationship between the teams works, and that he
could gain an appreciation for the scale and capabilities of
the in-house manufacturing facilities as well as the goods
and materials which are brought in from external partners.
Stuart spent several days visiting our manufacturing and
logistics sites across UK.
Stuart continues to build and forge relationships with
leaders across the business, including within the
commercial, property and corporate teams. Since
September 2023, Stuart has been an Executive Committee
member and has attended the fortnightly meetings of
the Committee. At the end of October 2023, following the
autumn peak trading period, he fully took over primary
responsibility for the Trade Division from Andy Witts.
Andy remains a member of the Executive Committee in
his new role as Chair of the International Businesses but
he remains on hand to provide counsel to Stuart and the
business as and when required.
2824 2620 2216 1812 144 620 8 10
Executive CommitteeExecutive Directors
Years
Company Tenure Executive Committee Tenure
Andrew Livingston
Paul Hayes
Company and Executive Committee tenure as at 30 December 2023
David Sturdee
Julian Lee
Andy Witts
Theresa Keating
Richard Sutcliffe
Stuart Livingstone
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Evaluation
Nominations Committee report continued
Methodology
The process is outlined below:
• Instructions were sent to Board members on how to create
an account and access the platform.
• All Directors were invited to provide feedback on the Board
and the Committees of the Board of which they were
members. Each section contained a mix of rating questions
based on scale of 1 to 7 as to how much the participant
agreed or disagreed with a particular statement and free
text questions where the participant could provide an
answer in their own words. Some roles were automatically
excluded from participating in certain questions (generally
where this pertained to their own role, such as the Chair).
Following the external Board effectiveness review in 2022, and in line with the Board’s policy to undertake an external
effectiveness review every three years, the 2023 Board effectiveness review was conducted internally. Whilst previous internal
reviews had been conducted by the Senior Independent Director with support from the Company Secretary, the Nominations
Committee agreed to use a third-party platform (BoardClic) to facilitate the review.
Unlike previous internal reviews which relied heavily on the qualitative data provided through interviews with each of the
Board members, Executive Committee members and advisors, the BoardClic platform enabled the Committee to collate more
quantitative data on the Board’s perceptions of its priorities, strategic objectives, and leadership, as well as governance
structures and process. The new platform also greatly streamlined the board evaluation review process and enables the
Committee to benchmark its review data against other boards. It is intended to use the platform in future years (both for internal
and supporting external reviews) and thereby create a more iterative process, with trends from prior years being available in
future years.
• Directors were also invited to provide their observations
of the Board evaluation review and any other points they
wanted to raise outside of the platform.
• The observations and conclusions of the evaluation were
presented to the Chairman and the detailed report was
presented to the Nominations Committee and the Board at
their meeting in February 2024.
• The Chairman, CEO, and Company Secretary prepared
recommendations for development and actions to be
presented to the Nominations Committee at a future meeting.
Conclusions and recommendations
Feedback from the Board was positive overall and reiterated
that Howdens is a high-functioning, high-performing Board
with strong individual committees. The overall conclusion
was that the Howdens Board has the requisite knowledge and
experience required to support the Group’s strategy and to
monitor crucial operations and manages risk well.
The Board’s ‘BoardClic Value Benchmark’ (a score that
encompasses a number of key aspects of value-creating
performance) was higher than the value benchmark and the
Board also achieved above benchmark scores in relation to
the strategy index and ESG index.
The highest scores (indicating areas of particular strength)
were received for questions relating to whether the Board
capacity and the prioritisation of the most important strategic
topics during board meetings.
Recommended areas for development
and actions going forward
The Chair, CEO and Company Secretary are developing a list
development highlighted by the review. These will include
recommendations relating to:
• Diversity. Building on the review of the talent pipeline
by the Nominations Committee in 2023, the diversity
opportunities at both Board and senior management
data sets.
• Employee engagement. To be reviewed and a refreshed
approach to employee engagement at board-level to be
implemented during the year.
• Board composition and culture. Initiatives to
be considered to better leverage the aggregated
competencies of the Board effectively.
• Board succession. Prioritising the appointment of a high-
calibre replacement for the Audit Committee Chair and
ensuring a smooth transition at the end of 2024.
Members of the Board discussed the updated recommendations
of the Parker and FTSE Women Leaders Reviews.
In 2024, the Nominations Committee will continue its focus on
Board and senior management succession planning and will
ensure that when it looks to recommend new appointments
to the Board, that the process has been inclusive not only of
a broad range of mindsets, but also a variety of age, gender,
socio-economic background, sexual orientation, disability and
on page 102.
Nominations Committee evaluation
Feedback from the Nominations Committee evaluation
demonstrated that the Committee continues to deliver on
its objectives and role. The Committee receives effective
support as and when required from the Company Secretary
and other advisors and it liaises well with the Board and
In line with the Board evaluation feedback, Committee
members believe that more time should be spent on the
equality, diversity and inclusion agenda. A more structured
and pro-active approach to Board-level succession planning
was also cited as being helpful to increasing the diversity and
skills base of the Board.
By order of the Board
Peter Ventress
Nominations Committee Chair
28 February 2024
Purpose and strategy Chair
Talent and culture Risk management
Board composition and dynamics Information and reporting
Board agenda and meetings Relationship with senior management
Evaluation areas of focus
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GovernanceGovernance
I am pleased to present the Howden Joinery Group Plc
Remuneration Committee report for 2023. The report has
been prepared in compliance with the requirements of the
Large and Medium-sized Companies and Groups Regulations
2013 and incorporates changes made under the updated EU
Shareholder Rights Directive (SRD II).
Using this report
We have sought to make our Remuneration Committee
report as straightforward to access as possible. The content
of the report is governed by various legislation and listed
company disclosure requirements and, on occasion, this
results in duplication of information. We have tried to reduce
this wherever possible and present the information in an
accessible and more intuitive way. The report is split into
1. This Committee Chair’s statement
2. Summary of the Directors’ remuneration policy
3. The Directors’ remuneration report
We have divided the Directors’ remuneration report into
four parts:
Part 1 Company performance and stakeholder
experience
Part 2 Application of policy in 2023
Part 3 Implementation of policy in 2024
Part 4 Additional disclosures
We believe that this format clearly differentiates each of the
relevant sections of the Remuneration Committee report,
directs users to the sections relevant to their use, and is also
fully compliant with all applicable rules.
2023
2023 was a challenging year for Howdens. Relative
performance was strong and the Remuneration Committee
were particularly pleased with management’s performance
that were in line with market expectations, increased market
share and continued to invest in strategic initiatives.
It was a quieter year for the Remuneration Committee, with the
changes announced in 2022 to annual bonus and long-term
incentives now embedded in our annual cycle of work. There
Committee continued to monitor changes in average FTE
salaries and bonuses across all operational and support roles
to ensure that there remained alignment on pay between our
senior management and that of the wider workforce.
to Howdens’ unique incentive culture across all roles and
a number of factors, which include pay across the wider
workforce, CEO and gender pay gap ratios and the experience
of our shareholders.
As in previous years, the Committee also received updates
Group pension scheme. Given the importance of alignment
on pensions between senior management and the wider
workforce, we have included a case study on our Group
pension scheme. It can be found on page 121.
Howdens’ gender pay gap increased year on year from 3.9%
to 5.1%. The gender pay gap report can be found on www.
howdenjoinerygroupplc.com/governance/gender-pay-gap-
reports. The Committee continued to challenge management
to address this further. More information on our broader
diversity and inclusion priorities can be found on pages 54
One area of change during 2023 was signposted in the
case study in last year’s report on our review of incentives
below Executive Committee level. Following the review, the
Committee agreed to replace the long-term incentive plan
for Grade 1s and 2s with a deferred bonus share award. This
award replaced the PSP and was intended to remove some of
the complexity in measures being included in the Executive
awards and to result in greater retention for this group of
key employees. Disappointingly, due to challenging market
conditions, the performance conditions for this award were
not met and as such did not result in the purchase of any
deferred bonus shares. However, the Committee remains
this important cohort.
Annual Remuneration
Committee Chair’s statement
As in previous years and reported on page 92, the
Remuneration Committee did not consult with the wider
workforce on Executive Director pay arrangements in 2023.
The Committee has safeguards in place (as considered in this
report), which ensure good alignment on remuneration across
the organisation as a whole. It is worth remembering that all
eligible employees with shares in the Share Incentive Plan,
Free Shares are granted to all UK employees each year, have a
de facto say on Executive Director pay when such matters are
considered at general meetings.
2023 reward outcomes
Annual bonus
Consistent with prior years, the 2023 annual bonus
As previously mentioned, market conditions were challenging
had been forecast when the budget had been determined.
Despite this, PBT performance for the bonus has resulted in
an above threshold outcome. In considering this outcome,
the Committee noted that expenditure during the year on
strategic initiatives continued and will generate future growth.
The part of this expenditure that was invested in future growth
rather than into 2023 PBT, attributable to the market reducing
as it is considered an exceptional cost.
exceptional expenditure and the strong overall performance
Howdens has delivered relative to market. Having considered
these factors, the Committee concluded that a fair and
appropriate outcome under the PBT element in these
circumstances would be to exercise discretion to reduce the
outcome to threshold performance, which delivers 10% of the
part of the bonus weighted to PBT.
The Committee applied judgment in considering whether this
outcome under the PBT element was appropriate, taking into
the total cost of the expenditure and the strong overall
performance Howdens has delivered relative to market.
The Committee concluded that a fair and appropriate
outcome under the PBT element in these circumstances
would be threshold performance which delivers 10% of the
exercised discretion to reduce the payout under the PBT
element to threshold.
Remuneration
Committee report
2023 meeting attendance
Karen Caddick (4/5)
1
Andrew Cripps (5/5)
Geoff Drabble (2/2)
Louis Eperjesi (3/3)
Louise Fowler (5/5)
Debbie White (5/5)
Key activities in the year ahead
• Governance updates from advisors.
•
• Agree fees for Chair of the Board.
•
• Review the Group’s Gender Pay Gap data and
action plans.
• Planning for 2025 incentives (taking into account
risk and other matters).
• Review of the Directors’ Remuneration Policy
2025 AGM.
• Review of the Remuneration Committee Terms
• Approval of the 2025 Remuneration Committee
calendar.
Karen Caddick
Remuneration Committee Chair
1 Karen was unable to attend the November Committee meeting due to
illness. Andrew Cripps chaired the Committee in Karen's absence.
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Remuneration Committee report continued
the continued focus of management on this key measure. The
target for this measure resulting in a bonus of 15% of the
maximum annual bonus opportunity being achieved.
This strong relative performance meant that a total annual
bonus of 24% of the maximum annual bonus opportunity for
our Executive Directors was earned.
Performance Share Plan (PSP)
The 2021 PSP was based on the delivery of both a three-year
PBT growth measure and a relative total shareholder returns
(TSR) measure. The weightings for the two performance
measures were 67% PBT and 33% TSR.
PBT performance targets for the period required 5% per
annum PBT growth to achieve threshold vesting and 15% per
annum PBT growth to achieve maximum vesting. The 2021 PSP
year period, PBT increased by 21% per annum, which equated
to vesting at 100% of the total opportunity for this measure.
To determine TSR performance, Howdens is ranked against
a comparator group of similar sized companies, those being
50 above and 50 below Howdens by market capitalisation in
the FTSE All Share index at or shortly before the start of the
performance period (excluding Investment Trusts). There is
zero pay out for below median performance and threshold
vesting at 15% of the maximum opportunity at median. 100%
of the opportunity is paid out when performance is equal
to or more than upper quartile performance and there is
straight-line vesting between the threshold and maximum
opportunities. Howdens TSR performance during the three-
year period equated to vesting at 100% of the total opportunity
for this measure.
In aggregate, the 2021 PSP will vest at 100% of the maximum
opportunity.
2024 reward and incentives
Our approach to executive remuneration recognises the need
to balance the views of our shareholders with our ambitions
to retain and incentivise a strong performing Executive team
over the economic cycle and to live into our remuneration
philosophy to pay above-market levels of reward for above-
market levels of performance.
In 2024, we have maintained the principles, measures and
quantums used in 2023. We believe that consistency through
the remuneration cycle is important for both shareholders and
Executives and we are pleased that this year we have been
able to maintain our core methodologies.
Salary
Salary increases for the Executive Directors will be no higher
than the wider workforce. These will be effective from 1 April
effective date of 1 January. This timing is also aligned to
increases for the wider workforce.
The Committee continues to review the Executive Director
remuneration packages annually against companies that
operate in the same or similar sectors to Howdens and
companies of a similar size and complexity.
Annual bonus
The Committee has maintained the annual bonus opportunity
of 200% of base salary for Executive Directors. The Committee
believes that this remains appropriate having reviewed the
position, taking into account market data for companies
that operate in the same or similar industries and UK listed
companies of a similar size and complexity.
For the 2024 annual bonus, we replicated the methodology
bonus. The measures retain their previous weighting of
85% of maximum opportunity for PBT and 15% of maximum
incentives and alignment with the depots, whilst maintaining a
healthy stretch between target and maximum bonus levels to
ensure strong shareholder alignment.
annual bonus in 2024.
PSP
In 2023, two new measures were introduced to the PSP
in addition to the existing performance measures. The
four measures: PBT, relative total shareholder returns
(TSR), Return on Capital Employed (ROCE) and a basket of
complementary Environmental (ESG) measures were intended
with Howdens’ culture and depot incentives), whilst adding
additional focus on returns and strategically important
environmental goals. The Committee also wanted to retain a
relative measure that aligned Executives’ experience with that
of our shareholders. The weightings were PBT 60%, TSR 20%,
ROCE 10% and ESG 10% of the maximum opportunity.
The Committee believes that these measures and their
respective weightings remained appropriate for the 2024
addition, the Committee retained the methodology for
Annual Remuneration Committee Chair’s statement continued
We signposted in last year’s report that we would be moving
the base for targets for future grants. Instead, the Committee
has adopted a methodology for the PBT target range which
internal forecasts and our long-term strategic goals. We
believe that this approach provides better alignment between
vesting outcomes and performance and reduces the risk of
volatility in the payment cycle.
To ensure that our remuneration philosophy is upheld, the
Committee will continue to ensure that all performance
targets are suitably stretching for the level of remuneration
available within the context of our internal expectations and
external forecasts. Further details of the measures, targets
and weightings are set out on page 127.
No changes are proposed to long-term incentive opportunity
for 2024, and therefore the CEO will receive an award
equivalent to 270% of salary and the CFO will receive an award
of 220% of salary.
Pensions
have been aligned with the wider workforce. This was in
line with the Committee’s commitment that there would be
alignment by the time of the Company’s next policy cycle.
The Directors' remuneration policy provides that new
Executive Directors will only participate in the Company’s
pension arrangements with contributions in line with those of
the wider workforce.
A case study on pension arrangements at Howdens can be
found on page 121.
Senior management and
the wider workforce
In addition to the Executive Directors, the Howdens
Remuneration Committee also sets remuneration for senior
management. We classify ‘senior management’ as members
of the Executive Committee (excluding Executive Directors),
the Company Secretary and the Head of Internal Audit
The Committee also received updates on all-employee
remuneration related policies in order to provide the context
for, and to ensure alignment with, the policy on Executive
Director remuneration. In 2019, the Committee adopted
a dashboard in line with Provision 33 of the UK Corporate
Governance Code 2018, which shows some of the key internal
and external measures that the Committee members are
aware of when determining Executive Director and senior
management remuneration (further detail on the dashboard
may be found on page 122).
I hope the information presented within this report
provides a clear explanation as to how we have operated
our Directors' remuneration policy over 2023 and how we
that the policy has operated as intended in terms of pay for
performance, taking into account the exercise of Committee
discretion in relation to the 2023 annual bonus outcome. We
continue to be committed to an open and transparent dialogue
with our stakeholders, and the Committee would welcome any
feedback or comments you have on this report, our policy or
how we implement the policy in 2024.
We are due to review our Directors’ remuneration policy during
2024 and our new Committee Chair, Vanda Murray, will be
consulting with shareholders in the second half of the year. In
the meantime, I look forward to answering any questions on
the work of the Remuneration Committee from shareholders at
our AGM in May.
Karen Caddick
Remuneration Committee Chair
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Summary of the Directors’ remuneration policy
Fixed Variable
Howdens’ Directors' remuneration policy, as it is set out in our 2021 Annual Report and Accounts, was approved by shareholders
at our 2022 AGM. Below is a summary of that policy, how that policy links to strategy, and consideration of some of the factors
the Committee addressed when formulating the policy. How the policy has been applied during 2023 and will be applied during
2024 can be found on subsequent pages in the report.
The full Directors' remuneration policy can be viewed at www.howdenjoinerygroupplc.com/governance/remuneration-policy.
Executive Directors
The table below sets out the key components of Executive Directors’ pay packages, including why they are used and how they
are operated in practice.
Remuneration is benchmarked against rewards available for equivalent roles in a suitable comparator group. In addition to
benchmarking, the Committee considers general pay and employment conditions of all employees within the Group and is
sensitive to these, to prevailing market conditions, and to governance requirements.
Element and how
it supports our
strategy Operation Opportunity
Performance
measures
Base salary
Recognises the
market value of
the Executive
Director’s
role, skill,
responsibilities,
performance and
experience.
Salaries are reviewed
annually, and are effective
from 1 January each
year. Salaries will not
be changed outside
of the annual review,
except for in exceptional
circumstances, such as a
mid-year change in role.
wider employee population.
Salaries are set with consideration of each Executive Director's
performance in role and responsibilities, and within a range
comparable size operating in a similar sector. The peer group
used is reviewed whenever benchmarking is performed, and
the Committee applies judgement in identifying appropriate
peer group constituent companies. The individual’s level of total
remuneration against the market is considered at the same time.
Reviews will also take into account the performance of the
individuals, any changes in their responsibilities, pay increases for
the wider workforce and internal relativities.
2023 and 2024 salary levels are detailed on page 126.
None.
Provides a
competitive level
Howdens pays the cost
on a monthly basis or
as required for one-off
events.
car allowance, health insurance and death-in-service insurance
payable by the Company.
None.
Share award grants
• Replacement share award made to incoming
senior manager
• PSP grant to Executive Directors and selected
senior management
• Grant of retention awards for certain Executive
Committee members (not Executive Directors)
Committee meeting
•
• Annual bonus outcome and performance update on
awards vesting in 2022
• Shareholder feedback on proposed changes to
Executive Directors’ Remuneration not necessitating
a change to Directors’ Remuneration Policy
• 2023 incentive considerations (including workforce
reward, shareholder alignment, CEO pay ratio and
gender pay gap)
• Approval of an alternative equity structure for
senior managers below Executive Committee level
• Draft 2022 Directors’ remuneration report
• 2023 share awards planning
• Chair fee review
AGM
• 2022 Directors' remuneration report approved by
shareholders
Committee meeting
•
awards
• Governance update
• Review of the treatment of post-vesting holding
period for Good Leavers
Committee meeting
•
awards
• Risk and rewards consideration
• 2024 incentives
• Review of LTIP measures
• 2024 Remuneration Committee calendar
• Review of Committee’s terms of reference
Committee meeting
• Review of Annual Bonus and LTIP measures
• Review of package for incoming Executive
Committee member
Committee meeting
• Shareholder feedback on proposed changes to
Executive Directors’ Remuneration not necessitating
a change to Directors’ Remuneration Policy
• Executive Director and senior management salary
review
• Approval of additional retention awards for certain
Executive Committee members (not Executive
Directors)
Shareholder communication
• Conclusions of the Remuneration Committee in
relation to proposed changes to Executive Directors’
Remuneration not necessitating a change to
Directors’ Remuneration Policy
January
February
May
July
November
September
March/April
Remuneration Committee report continued
Annual Remuneration Committee Chair’s statement continued
Share award grants
• SIP Free Shares grant to all eligible UK employees
• Retention award granted for senior manager
(not Executive Director)
August
2023 Remuneration Committee activity
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Element and how
it supports our
strategy Operation Opportunity
Performance
measures
Annual bonus
Incentivises
annual
performance
year.
Deferral links
bonus payout
to share price
performance
over the
medium-term.
Performance is assessed annually against targets made up of
At least 30% of any bonus earned is deferred into shares.
Shares are paid out on the second anniversary of deferral date.
The Committee has the discretion to adjust the bonus outcome
in light of overall underlying performance. Any adjustment
made using this discretion will be explained in the following
Annual Report on Remuneration.
Payment is subject to continued employment.
Malus provisions apply for the duration of the performance
period and to shares held under deferral.
Clawback provisions apply to cash amounts paid for two years
following payment. Therefore clawback and/or malus will
operate on the award for a total period of up to two years after
the performance period.
Clawback may be applied in the following scenarios:
•
•
• where the number of plan shares under an award was
• gross misconduct by a Director.
The threshold for the
annual bonus will be
dependent on the
individual measures
used each year. For
2024, the annual bonus
will be based on PBT and
payout being 20% of
salary.
The maximum
opportunity under the
annual bonus is 200% of
salary.
bonus level will be 200%
of salary, with the position
reviewed each year.
For 2024 the
annual bonus will
be based on PBT
measures.
The Committee
retains the
use alternative
measures during
the life of this
policy, subject
to at least 75%
of the bonus
being based on
Performance Share Plan (PSP)
Focuses
management
on longer-term
than addressed
by the annual
bonus. Long-
growth is key to
the generation
of shareholder
value.
Executives have the opportunity to participate in the PSP on an
annual basis. The PSP operates over a three-year vesting cycle.
Under the PSP, awards will generally be granted towards
the beginning of the performance period and vest based on
performance over the following three-year performance
period. Malus provisions apply for the duration of the
The Committee has the discretion to adjust the PSP outcome in
light of overall underlying performance. Any adjustment made
using this discretion will be explained in the following Annual
Report on Remuneration.
Vested awards are subject to a two-year holding
period following vesting, during which no performance
Clawback provisions apply for the duration of the holding
period, through which vested awards maybe reclaimed in the
event of:
•
•
• where the number of plan shares under an award was
• gross misconduct by a Director.
No dividends accrue on unvested shares.
The threshold for the PSP
will be 15% of maximum.
This may be amended
by the Committee
dependent on the
maximum opportunity
The maximum
opportunity under the
PSP is 270%
of salary and the grant
level for the CEO will be
270% and for the CFO will
be 220%.
For 2024, the
PSP will be based
on PBT growth,
relative TSR,
return on capital
employed, and
an environmental
measure.
The Committee
retains the
use alternative
measures during
the life of this
policy, subject
to at least 75%
of the PSP
being based on
Summary of the Directors’ remuneration policy continued
Remuneration Committee report continued
Element and how
it supports our
strategy Operation Opportunity
Performance
measures
Shareholding requirement
Shareholding
requirement
strengthens
alignment of
interests between
participants and
shareholders.
Executive Directors are expected to retain vested shares from
deferred bonus and long-term incentive awards (net of income
tax and national insurance contributions) until they reach the
minimum requirements.
Unvested deferred bonus and long-term incentive shares are
not taken into account. PSP shares within a holding period are
counted towards the requirement.
Executive Directors will be
required to retain 100%
of their shareholding
requirement (i.e. 200% of
base salary or full actual
holding if lower) for two
years post-cessation
from the Board of Howden
Joinery Group Plc.
Pension
Provides
competitive long-
term savings
opportunities.
Executive Directors will be entitled to participate in the Howdens Retirement Savings Plan
with contribution rates in line with the wider workforce. The level of salary supplement is
None.
All-employee share incentive plan
To encourage
employee share
ownership.
Executive Directors are able to participate in the tax-
advantaged Share Incentive Plan available to
all eligible UK employees.
The maximum
participation levels
will be set based on
the applicable limits
set by HMRC.
None.
Remuneration policy for other employees
Committee believes it is appropriate that all reward received by senior management is directly linked to the performance of
the Company and aligned with shareholder value. Accordingly, Executive Committee members and selected senior managers
participate in the same incentive schemes as the Executive Directors, at a reduced level, to ensure alignment between the
Below Executive Committee level, certain senior management grade participate in a similar annual bonus plan that is linked to
a deferred bonus share arrangement replaced the PSP for these employees. Given the variable pay-outs of the LTIP in recent
years and the increasing complex measures being introduced for the Executive award, it was felt that an alternative structure
would be more effective, providing a greater level of understanding and engagement, and therefore retention, among this cohort
of employees.
Free shares grants are made at a reduced level to a wider population within Howdens that do not use performance conditions to
encourage share ownership throughout the Company. Employees can also purchase additional shares in the Company in a tax
Fixed Variable
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Governance
Non-Executive Directors' remuneration policy
Element and how
it supports our strategy Operation Opportunity
Performance
Measures
Fees
To attract NEDs who
have a broad range
of experience and
skills to oversee the
implementation of
The fees for the Non-Executive
Directors are determined by
the Board Chair and Chief
Executive and approved by
the Board.
The fee for the Board
Chair is determined
No other services are
provided to the Group by
Non-Executive Directors.
Fees for Non-Executive Directors are set out
in the statement of implementation of policy
on page 126.
responsibilities of the roles. Accordingly,
committee chair, Senior Independent Director
(SID) and the Non-Executive Director responsible
for employee engagement fees are paid in
addition to the NEDs’ basic fee. Committee chair
fees apply only to the Audit and Remuneration
Committees. The Board Chair receives no fees in
addition to the Chairman’s fee.
Fees may be reviewed every year, and are set
comparably sized companies and having regard
to the base salary increase payable to the wider
workforce. Benchmarking is typically undertaken
every three years.
NEDs are not
eligible to
participate in
any performance
related
arrangements.
To attract NEDs who
have a broad range
of experience and
skills to oversee the
implementation of
Non-Executive Directors are entitled to receive expenses in respect of reasonable
travel and accommodation costs.
None.
Underlying principles
When determining the Directors' remuneration policy, the Committee was mindful of its obligations under Provision 40 of the
UK Corporate Governance Code to ensure that the policy and other remuneration practices were clear, simple, predictable,
proportionate, safeguarded the reputation of the Company and were aligned to Company culture and strategy. Set out on the
following page are examples of how the Committee addressed the factors.
Summary of the Directors’ remuneration policy continued
Remuneration Committee report continued
Clarity
Remuneration arrangements
should be transparent
and promote effective
engagement with
shareholders and
the workforce.
In 2021, the Company invited its principal shareholders and shareholder representative groups
contacted its principal shareholders to consider various changes to remuneration practice
All UK employees are awarded Free Shares in the Company through the Share Incentive
Plan (SIP). UK employees are also able to participate in a partnership and matching shares
programme which also operates through the SIP. All employees with shares held in the SIP trust
are able to exercise voting rights on those shares and vote on the Directors' remuneration report
and the Directors' remuneration policy (when applicable) at general meetings of the Company.
Further information on workforce engagement can be found on pages 86 and 87.
Simplicity
Remuneration structures
should avoid complexity
and their rationale and
operation should be easy
to understand.
The Directors' remuneration policy has received positive feedback from stakeholders in relation
to its simplicity.
The Committee’s approach to performance measures had always been that they must be
understandable for participants in the schemes in order to ensure they are effective.
Risk
Remuneration arrangements
should ensure reputational
and other risks from
excessive rewards, and
behavioural risks that can
arise from target-based
and mitigated.
Whilst the Committee has consciously not set an absolute annual quantum on Executive
remuneration, this is something that the Committee will keep under review. The total pay of
the Executive Directors is considered by the Committee as well as pay ratios with the wider
workforce and shareholder returns.
Predictability
The range of possible values
of rewards to individual
directors and any other
limits or discretions should
at the time of approving
The range of possible values of rewards for the Executive Directors is considered on page 125.
The range of possible values of rewards for the Executive Directors was also communicated in
the 2021 Remuneration Committee report when a revised Directors' remuneration policy was
communicated to shareholders.
The Committee has a wide range of discretion in relation to variable pay awards, new joiners,
Proportionality
The link between individual
awards, the delivery of
strategy and the long-term
performance of the company
should be clear. Outcomes
should not reward poor
performance.
and long-term performance are working as intended and that they are delivering outcomes in line
with our wider stakeholder experience.
vesting percentage for the long-term incentive share plan was 100%, which was due to the strong
good alignment of Executive Director remuneration with the long-term performance of the Group.
Alignment to culture
Incentive schemes should
drive behaviours consistent
with company purpose,
values and strategy.
remuneration policy are aligned with purpose, values and strategy.
Directors and senior management.
Fixed Variable
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Governance
In this section of the Directors’ remuneration report, we detail some of the considerations the Committee has regard to when
Director remuneration relative to average employees.
The graph below illustrates the Company’s historical
PBT performance.
Howdens historical PBT (£m)Howdens historical TSR
Total shareholder return (TSR)
The graph below illustrates the Company’s TSR
performance relative to the constituents of the FTSE 350
(excluding investment trusts) of which the Company is a
constituent. It shows that over the past 10 years Howdens
350 (excluding Investment Trusts).
Group performance
1 See consolidated income statement on page 162.
Relative importance of spend on pay
The graph below sets out the change in the Group’s total remuneration spend from 2022 to 2023 compared to
Director pay
Our corporate performance and remuneration
From 2016 to 2022, the maximum bonus opportunity reduced from 200% of basic salary to 150%. In 2023, following consultation
with shareholders, the maximum bonus opportunity returned to 200% of basic salary.
Year 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
6,221 5,225 3,098 1,268 2,569 1,391 816 3,951 2,571 2,517
Annual bonus (% of maximum) 64% 56% 48% 35% 75% 76% 0% 100% 100% 24%
LTIP vest (% of maximum) 100% 100% 100% 0% 0% 0%
1
0% 100% 43% 100%
1 Andrew Livingston was appointed as CEO in April 2018 and therefore he was not granted an award under the LTIP in 2017.
Remuneration Committee report continued
Directors’ remuneration report – Part 1: Company performance and stakeholder experience
250
400
450
350
300
200
100
50
0
Howdens FTSE 350 (excluding Investment Trusts)
2013 201620152014 20 17 2018 2019 2020 2021 2022 2023
50
350
300
250
100
150
200
0
400
500
700
600
300
100
200
0
Total spend on pay
23
£656.0m
PBT
1
-19.3%
2
-9.6%
£m
Total returns to shareholders
-55.0%
£164.1m
23
2322
£327.6m
£405.8m
Annual bonus (% of maximum) LTIP vest (% of maximum)
Single Figure (£’000s)
% of maximum
1,000
2,000
3,000
6,000
7,000
5,000
4,000
0
20
40
100
80
60
0
2016 2017 2019201820152014 2020 2021 2022 2023
£188.8m
£219.6m
£237.0m
£232.2m
£238.5m
£260.7m
£185.3m
£390.3m
£405.8m
£327.6m
201620152014 20 17 2018 2019 2020 2021 2022 2023
22
£498.0m
£452.7m
22
£624.1m
£365.0m
22
23
+5.1%
150
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Governance
CEO pay ratio table
Howdens has calculated the CEO pay ratio for 2023 in line with the Directors’ Remuneration Reporting Regulations. The data
used to calculate the CEO pay ratio was accurate as at 31 December 2023. In accordance with section 17 of The Companies
statistically accurate method for identifying the pay ratios.
Year Method 25th percentile pay ratio 50th percentile pay ratio 75th percentile pay ratio
2023 A 76:1 65:1 54:1
2022 A 74:1 64:1 53:1
2021 A 135:1 113:1 93:1
2020
A 31:1 25:1 21:1
2019 A 71:1 58:1 48:1
2018 A 122:1 100:1 81:1
It should be noted that the CEO did not receive any remuneration relating to long-term incentive share awards in 2019 or 2020 as
he was appointed to the Board in 2018. He also did not receive any annual bonus in 2020 during which time all other employees
received variable performance bonus pay. The combination of these factors resulted in a lower than anticipated CEO pay ratio
in 2019 and 2020. In 2021, the CEO pay ratio increased due to the vesting in full of the 2019 long-term incentive share award. In
2022, the ratio reduced as the 2020 long-term incentive share award vested at 43% of maximum and the share price upon which
the award was valued was lower than in 2021. As the total incentive payout level for 2023 performance is broadly similar to 2022,
and there was no share price appreciation in relation to the 2021 LTIP vesting, the 2023 ratio represents only a slight increase
from the prior year's ratio.
25th percentile 50th percentile 75th percentile
£33,278 £38,735 £46,836
Salary (including overtime) (FTE) £23,916 £28,055 £34,694
calculations we used actual pay from 1 January 2023 to 31 December 2023. Joiners, leavers and part time employees’ earnings
have been annualised on an FTE basis (excluding any payments of a one-off nature). Where bonus payments are made on a
payments, we estimated the bonus due to employees for the 2023 compensation year (payment is due in March 2024). P11D
values are based on the 2022/23 reportable values, however, they have been annualised accordingly.
Howdens’ vertically integrated business means that our workforce is made up of a wide range of roles from kitchen designers
to skilled engineers, from warehouse staff to senior management. We work on the premise that Howdens must be worthwhile
outperformance we expect from every individual. Our pay structures vary between roles to deliver an appropriate balance
to provide some alignment of reward across the business.
It is a feature of our pay structure that senior management often receive a larger proportion of their total pay through incentives
and the outcome of incentives is likely to be the main cause of variability in the ratio in future years. The Remuneration
and fairness are two key principles and important drivers for change.
Case study
Pensions at Howdens
Alignment of Executive remuneration with our depot staff
has always been culturally important at Howdens. This
First and foremost, Howdens should be worthwhile for
pension in 2020 (it had been closed to new members
since 2012), it recognised that there was an opportunity
to improve the fairness of pension provision at Howdens
Remuneration Committee also recognised that, following
the decision taken in the 2019 remuneration policy to
those of the wider workforce, there was an opportunity
Retirement Savings Plan or HRSP). The resulting HRSP
Executives but also throughout the whole of Howdens.
In 2023, Howdens contributed £42m towards employee
pensions. This was more than any other incentive
during the year. Participation in the HRSP is high with
opt-out levels at 2% at the end of December 2023. One
feature of the HRSP is that it enables employees to
reduce their contributions below the default contribution
This has been particularly important with household
incomes squeezed in recent years and means that
employees can continue to increase their retirement
savings without compromising their take-home pay.
Employees are encouraged to contribute themselves
and are annually enrolled back on the default
employee contribution but they have the option to
resulted in very low opt-out levels. At the end of December
level below the default contribution level. Employees
paying more than the default employee contribution
level is high at 45%, with 27% maximising their employer
contribution of 12%.
62% of employees who were not automatically enrolled
opted to join and 32% of those are contributing more than
the default contribution level.
The Remuneration Committee will continue to receive
regular updates from management on participation
and employee engagement with the HRSP in the coming
year and continue to ensure alignment with the wider
workforce and fairness remain central tenets when
determining Executive pay.
Remuneration Committee report continued
Directors’ remuneration report – Part 1: Company performance and stakeholder experience continued
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Governance
Directors’ Remuneration Report – Part 2: Application of policy in 2023
In this section of the Directors’ remuneration report we set out how the Committee has executed policy for 2023. Disclosures in
this section are retrospective and where applicable are shown against prior year comparator.
All-Director remuneration relative to average employees
Listed companies are required to disclose the annual change in each director’s pay in comparison to the average change
there is only a requirement for a listed entity to provide employee pay information for that entity (i.e. not on a group-wide basis),
a ‘Group’ comparator has also been included in the table below as this provides a more representative comparison, noting that
Howden Joinery Group Plc did not employ any individuals during 2019 to 2023.
Footnotes have been included beneath the table in relation to the 2022 to 2023 period. Footnotes relating to prior years can be
found in the previous applicable annual report.
% change in Basic Salary % change in Bonus
2022–23 2021–22 2020–21 2019–20 2022–23 2021–22 2020–21 2019–20 2022–23 2021–22 2020–21 2019–20
Average Howdens
Group employee
remuneration
9% 5% 1% 4% 5% (9)% (15)% 9% (18)% (4)% 38% 12%
Executive
Directors
Andrew
Livingston
1
6% 3% 12% 3% 40% 5% (85)% 84% (67)% 3% 100% (100)%
Paul Hayes 6% 3% – – (6)% 80% – – (67)% 3% – –
Non-Executive
Directors
Karen Caddick 4% 6% 3% 18% 0% 100% 0% (89)% – – – –
Andrew Cripps
2
11% 6% 3% 5% 0% 0% 0% 0% – – – –
Louis Eperjesi
3
– – – – – – – – – – – –
Louise Fowler 0% 3% 4% 515% 25% 300% 0% 100% – – – –
Peter Ventress
4
101% – – – 0% – – – – – – –
Debbie White
1
0% 3% 4% 3% 600% (100)% (50)% 390% – – – –
Former Directors
Geoff Drabble
5
(64)% 4% 3% 22% 100% 0% 0% 0% – – – –
expectations in absolute terms.
2 Andrew Cripps was appointed Senior Independent Director in July 2023 and therefore received an additional pro-rated fee for this role in 2023. The increase
shown in his fees for '2022 to 2023' is due to this change.
4 Peter Ventress was appointed to the Board in July 2022 and therefore did not receive a full year of fees until 2023. The percentage change between 2022 and
5 Geoff Drabble retired from the Board in May 2023 and therefore did not receive a full year of fees in respect of 2023. The percentage change between 2022 and
Wider workforce considerations
The Remuneration Committee received updates from the interim Group HR Director in respect of average salary of an employee
and variable pay awards for the Executive Directors and senior management, the Committee had regard to the information
contained in a Provision 33 Dashboard, which includes information such as the CEO pay ratio, gender pay gap statistics, and
Remuneration Committee report continued
£000s
Fixed Variable
Total
RemunerationSalary/Fees
Taxable
Pension Total Fixed Bonus LTIP
Total
Variable
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022* 2023 2022* 2023 2022*
Executive
Directors:
Andrew Livingston 710 670 28 20 85 84 823 774 334 1,004 1,360 793 1,694 1,797 2,517 2,571
Paul Hayes 464 438 34 36 56 48 554 522 218 657 889 – 1,107 657 1,661 1,179
Total 1,174 1,108 62 56 141 132 1,377 1,296 552 1,661 2,249 793 2,801 2,454 4,178 3,750
Non–Executive
Directors:
Karen Caddick 77 74 2 2 – – 79 76 – – – – – – 79 76
Andrew Cripps 82 74 0 0 – – 82 74 – – – – – – 82 74
Geoff Drabble
Retired May 2023 27 76 1 0 – – 28 76 – – – – – – 28 76
Louis Eperjesi
Appointed June 2023 36 – 0 – – – 36 – – – – – – – 36 –
Louise Fowler 60 60 5 4 – – 65 64 – – – – – – 65 64
Peter Ventress
Appointed July 2022
325 162 0 0 – – 325 162 – – – – – – 325 162
Debbie White 60 60 6 0 – – 66 60 – – – – – – 66 60
Total 667 506 14 6 – – 681 512 – – – – – – 681 512
Executive Directors
Salary
Salaries will not be changed outside of the annual review,
unless there are exceptional circumstances, such as a
mid-year change in role. Increases will normally be only for
derived from companies in a similar sector. Salaries for
2024 can be found on page 126. The peer group used is
reviewed whenever benchmarking is performed, and the
Committee applies judgement in identifying appropriate peer
group constituent companies. The individual’s level of total
remuneration against the market is considered at the same time.
and include receipt of a car allowance, health insurance, and
Executive Directors are entitled to receive expenses in respect
of reasonable travel and accommodation costs.
Pension
of pension during the year. More information about Executive
study on pensions may be found on page 121.
Directors’ remuneration report – Part 1: Company performance and stakeholder experience continued
Fixed Variable
36%
64%
33%
67%
Fixed
Variable
2022
2023
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P
B
T
8
5
%
Governance
Remuneration Committee report continued
Fixed elements of remuneration consist of the annual salary that the Executive Director will receive for 2024, alongside their 2024 pension entitlement, and actual
Annual bonus is based on a maximum opportunity of 200% of salary and an on-target opportunity of 100% of salary.
LTIP is based on a maximum opportunity of 270% of salary for Andrew Livingston and 220% of salary for Paul Hayes. The overall policy maximum is 270% of salary.
Target opportunity is calculated as 50% of maximum (135% of salary for Andrew Livingston and 110% of salary for Paul Hayes).
The ‘maximum +’ includes share price appreciation of 50%. This column is calculated on the same basis as the maximum column however includes an uplift of 50%
total over three years for the PSP.
Directors’ remuneration report – Part 2: Application of policy in 2023 continued
Annual bonus (audited)
Targets
Our annual bonus for 2023 was based on PBT and cash
weighted as follows (percentages are of salary):
PBT component
Threshold £340m (17%) £407m (3%)
Target £350m (85%) £419m (15%)
Outperformance £389m (170%) £431m (30%)
70% of any annual bonus is paid in cash and 30% is
deferred as shares, which vest two years following the
deferral date (subject to continued employment).
Outcomes for the year
is £340m. As explained in the Chair's annual statement,
the Committee applied judgment in reviewing whether
the PBT outcome was appropriate taking into account
all relevant factors, and it determined that it would be
appropriate to exercise discretion to reduce the outcome
for the PBT component to threshold performance. The
was £452.7m. In aggregate, the Executive Directors will
receive an annual bonus of 47% of salary for 2023, which
is equivalent to 24% of the maximum bonus opportunity.
30% of the bonus will be deferred into Company shares for
two years.
Andrew Livingston Paul Hayes
PBT (% of salary) 17% 17%
Cash Flow (% of salary) 30% 30%
Total Bonus (% of salary) 47% 47%
Total Bonus (£'000) 334 218
Opportunity (% of salary)Opportunity (% of salary)
Target reachedTarget reached Target not reachedTarget not reached
Performance Share Plan (PSP) (audited)
Targets
The 2021 PSP award is measured against PBT growth and
relative total shareholder returns (TSR) over a three-year
under the PSP award are subject to a two-year post-vest
holding period for serving Executive Directors.
Outcomes for the year
67% of the 2021 PSP award was based on a PBT growth
threshold requirement of 5% p.a. and a maximum
requirement of 15% p.a. At the threshold requirement, 15%
of the PBT growth component of the award would vest.
The PBT for 2023, calculated on an unadjusted basis,
p.a. This component of the award will vest at 100% of
maximum opportunity.
33% of the 2021 PSP award was based on a relative TSR
measure. The threshold vesting for the TSR component of
the award was where the Company was ranked 'median'
compared to the comparator group of companies. The
maximum vesting was where the Company ranked 'at
or above upper quartile'. At threshold, 15% of the TSR
2023, the Company was ranked 'upper quartile' compared
to the comparator group and therefore 100% of the TSR
component of the award will vest.
of the maximum opportunity. The share price at the date
of grant was 745.4p and the three month average to
30 December 2023, the price on which the value of the
award is calculated, was 708.9p. Therefore, none of the
attributable to share price appreciation.
Directors’ remuneration report – Part 3: Implementation of policy in 2024
In this section of the Directors’ remuneration report we set out how the Committee has implemented policy for 2024.
Disclosures in this section are forward looking. The outcome of any variable award for Executive Directors will be reported
2024 remuneration scenarios
supports the Company’s strategic ambitions and does not incentivise inappropriate risk-taking. The Committee reviews this on
an annual basis.
The composition and value of the Executive Directors’ remuneration packages in a range of performance scenarios are set out
in the charts below. These show that the proportion of the package delivered through long-term performance is in line with our
the achievement of superior long-term performance and aligns the interests of the Executive Directors with those of other
shareholders. A brief description of each remuneration scenario is set out beneath the charts.
continued
Fixed Variable
Paul HayesAndrew Livingston
Value of package
£’000
2,000 2,5001,500
3,001
5,108
4,150
2,305
815
2,491
1,400
542
1,000500
Fixed elements of remuneration Annual bonus LTIP LTIP (attributable to 50% share price appreciation)
0
Maximum
Maximum +
On-target
Minimum
£’000
4,000 6,0005,0003,0002,0001,0000
Maximum
Maximum +
On-target
Minimum
3,5003,000
T
S
R
P
B
T
g
r
o
w
t
h
3
3
%
6
7
%
6
7
%
PSP
outcome
3
3
%
6
7
%
C
a
s
h
F
l
o
w
1
5
%
16%
20%
35%
100%
28%
34%
23% 42%
37%
46%
19%
18%
39%
22%
100%
31%
37%
25% 37%
33%
41%
17%
7
6
.
5
%
1
5
%
Annual
bonus
outcome
8
.
5
%
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Remuneration Committee report continued
Directors’ remuneration report – Part 3: Implementation of policy in 2024 continued
Performance Share Plan (PSP) measures
Set out below are the performance measures and relative weightings for each of the measures. Further detail about the
Annual Report and Accounts. The maximum opportunity under the PSP is 270% of base salary for Andrew Livingston (CEO)
years. See page 130 for scheme interests awarded in 2023. Under the terms of the Directors' remuneration policy approved by
shareholders at the 2022 AGM, the 2024 PSP awards will be subject to a two-year post-vesting holding period.
PBT – 60% weighting
PBT component
vesting schedule
PBT performance condition Payout level
£420m 100% of maximum
Straight-line vesting between these points
£340m 15% of maximum
Less than £340m 0% of maximum
Relative TSR – 20% weighting
Comparator group
and averaging period
for TSR performance
• Companies ranked up to 50 above and 50 below Howdens by market capitalisation in the FTSE All Share index
•
Performance
assessment
Performance against comparator group Payout level
Equal to or above upper quartile 100% of maximum
Straight-line vesting between these points
Equal to median 15% of maximum
Below median 0% of maximum
Return on Capital Employed (ROCE) – 10% weighting
ROCE component
measurement details
expressed as a percentage. The capital employed will include investments in assets, working capital and related
Performance
assessment
ROCE performance condition Payout level
28% 100% of maximum
Straight-line vesting between these points
23% 15% of maximum
Less than 23% 0% of maximum
Environmental measure – 10% weighting
Environmental component
measurement details
All carbon emission and waste targets to be achieved by 31 December 2026. Base year for all targets is 2021.
Performance condition Payout level
Improving our carbon
intensity ratio
Scopes 1 and 2 carbon emissions
reduction, based on tCO
2
e per £m
4.2% p.a. reduction 50% of maximum
Straight-line vesting between these points
4.0% p.a. reduction 7.5% of maximum
Below 4.0% p.a. reduction 0% of maximum
Fleet emissions reduction
CO
2
KG/km
15% reduction 50% of maximum
Straight-line vesting between these points
12% reduction 7.5% of maximum
Below 12% reduction 0% of maximum
Non-Executive Director fees
Current fee levels for Non-Executive Directors are set out in the table below. They will next be reviewed during 2024 with any
increase taking effect from 1 April 2024.
Basic
NED fee
1
Chair
fee
SID
fee
NED Responsible
for Workforce
Engagement fee
Committee
Chair fee
2024
Annual Fee £60,250 £325,000 £10,600 N/A £17,000
Effective date Until 31 March 2024
2023
Annual Fee £60,250 £325,000 £10,600 £5,400 £17,000
Effective date 1 January 2023
1 The Chair of the Board of Directors does not receive the basic Non-Executive Director fee or an additional fee for chairing the Nominations and Sustainability
Committees.
Executive Director base salaries
Executive Directors' base salary increases from 1 April 2024 are set out in the table below. The rationale for the increases may be
found in the Annual Remuneration Committee Chair statement on page 110. For 2024, salary increases for the wider workforce
will be, on average across the Group, 3% of salary.
Executive Directors
2024 2023
Salary (£'000) Effective date Salary (£'000) Effective date
Andrew Livingston 731 1 April 2024 710 1 January 2023
Paul Hayes 478 1 April 2024 464 1 January 2023
Annual bonus measures
The table below sets out annual bonus measures for 2024. Targets for these measures are considered commercially sensitive by
the Board and so are not disclosed here. Performance targets, together with achievement against them, will be set out in full in
the 2024 Remuneration Committee report.
Bonus measure Performance level Pay out level
PBT Threshold
Target
Maximum
17% of salary
85% of salary
170% of salary
Cash
Flow
adjusted for exceptional items
Threshold
Target
Maximum
3% of salary
15% of salary
30% of salary
Fixed Variable
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Strategic Report
Governance GovernancePage Title Page Title
Governance
Remuneration Committee report continued
In this section of the Directors' remuneration report, more detail is provided in respect of a number of key disclosures.
These disclosures include Executive Director pension entitlements, shareholdings, external appointments and contractual
arrangements. More detail is also provided on the operation of the Remuneration Committee and AGM voting performance.
Consideration by the Directors of matters relating to Directors’ remuneration
of reference, which are reviewed on an annual basis, the Committee is responsible for determining the broad policy and
Committee, the Company Secretary and the Head of Internal Audit and Risk), including pension rights and, where applicable,
any compensation payments. The Committee is also regularly updated on pay and conditions applying to other employees
Service contracts and letters of appointment
be paid monthly for a maximum of twelve months. Such payments will be equivalent to the monthly salary that the Executive
Director would have received if still in employment with the Company. Executive Directors will be expected to mitigate their loss
within a twelve month period of their departure from the Company.
In their service contracts, Executive Directors have the following remuneration-related contractual provisions:
• Receipt of a salary, which is subject to annual review.
• Receipt of a car allowance.
• Health insurance and death-in-service insurance payable by the Group.
• Eligibility to participate in any bonus scheme or arrangement which the Company may operate from time to time, subject to
the plan’s rules.
• Participation in the Company’s pension plan.
Non-Executive Director appointments are for an initial period of three years. They are subject to re-appointment annually at
the Annual General Meeting in accordance with the UK Corporate Governance Code. Non-Executive Directors are not entitled to
any form of compensation in the event of early termination for whatever reason. Copies of the Directors’ service contracts and
External appointments
It is recognised that Executive Directors may be invited to become non-executive directors of other companies and that
Directors and other appropriate senior employees to accept a maximum of one external non-executive appointment outside
the Company, subject to permission from the Committee, provided this is not with a competing company nor likely to lead to
Andrew received £58,687 in fees in respect of his role as Non-Executive Director. Andrew held this position upon appointment.
Paul Hayes does not have any external appointments. Executive Directors may retain the fees paid to them in respect of their
non-executive duties.
Directors’ remuneration report – Part 4: Additional disclosures
Total pension entitlements (audited)
Executive Directors are invited to participate in the Howdens Retirement Savings Plan (the 'Plan') or receive an amount in lieu
of membership of the Plan. More information on pension entitlements for Executive Directors can be found on pages 111 and
115 and in the Directors' remuneration policy at www.howdenjoinerygroupplc.com/governance/remuneration-policy. The table
below sets out the payments made in lieu of membership of the Plan for the Executive Directors who served during the year.
Executive Directors
Andrew Livingston Paul Hayes
Accrued pension at 30 December 2023 (£'000) – –
Normal retirement date – –
– –
– –
Pension value in the year from cash allowance (£'000) 85 56
Total 85 56
Director shareholdings (audited)
In order that their interests are aligned with those of shareholders, Executive Directors are expected to build up and maintain
unvested Performance Share Plan awards and those held subject to deferral conditions. Neither of the Executive Directors held
share options that were subject to performance conditions or held share options that were vested but unexercised.
Current Executive Directors
Andrew Livingston Paul Hayes
Shareholding requirement (% of salary) 200% 200%
Shareholding requirement (number of shares)
1
200,226 130,907
Shares owned outright (including by connected persons)
2,5
387,863 23,694
Current shareholding (% of salary)¹ 387% 36%
Guideline met N
Unvested deferred bonus shares 42,968 28,094
Share awards subject only to continued employment
3
181 153
Share awards subject to performance conditions and continued employment
4
714,669 403,978
1 Based on a share price of £7.089, being the three-month average price to 30 December 2023, and basic salary as at 30 December 2023. This is calculated by
using only those shares owned outright by the Executive Directors and their connected persons at 30 December 2023 and the Executive Director’s salary at
2 Includes Share Incentive Plan (SIP) partnership and dividend shares.
3 Includes only SIP free and matching shares.
4 Performance Share Plan awards under the Long-Term Incentive Plan.
5 Between 30 December 2023 (the end of the period) and 28 February 2024, Andrew Livingston has acquired 38 SIP Partnership Shares. No other changes to the
Executive Directors' total shareholdings (including any holdings of their connected persons) have occurred between the end of the period and 28 February 2024.
Non-Executive Director shareholdings (audited)
by connected persons. With the exception of Debbie White and Geoff Drabble, who were not members of the Board as at
1
Non-Executive Director
Karen
Caddick
Andrew
Cripps
Geoff
Drabble
1
Louis
Eperjesi
Louise
Fowler
Peter
Ventress
Debbie
White
1
Shareholding: 6,000 7,500 3,000 3,100 470 20,316 4,562
1 Geoff Drabble retired from the Board on 4 May 2023 and Debbie White retired from the Board on 30 December 2023. Their respective reported shareholdings are
therefore given as at the date they each retired from the Board.
Fixed Variable
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Additional Information Governance
Strategic Report
Governance GovernancePage Title Page Title
Governance
Remuneration Committee report continued
During 2023, the Executive Directors were invited to participate in the Performance Share Plan (PSP) and Share Incentive Plan
note 23 beginning on page 199:
Nature of award: Conditional Shares under the PSP
CEO CFO
Number of shares under award: 288,310 153,601
Face value of award
1
: £1,916,108 £1,020,832
Performance Period Grant Date Vest Date Additional Holding Period
See individual Performance
Conditions below
6 April 2023 6 April 2026 Two years
Performance Conditions:
vesting schedule
(60% weighting)
Performance Period:
PBT at end of Performance Period Proportion of PBT component of Award that may vest
£484m 100%
Straight line vesting between these two points
£400m 15%
Less than £400m 0%
Relative Total Shareholder
Returns (TSR) vesting schedule
(20% weighting)
Performance Period:
Howdens' rank versus comparator group Proportion of TSR component of Award that may vest
At or above upper quartile 100%
Straight line vesting between these two points
At median 15%
Below median 0%
Return on Capital Employed
(ROCE) vesting schedule (10%
weighting)
Performance Period:
ROCE achieved
Proportion of ROCE component
of Award that may vest
30% 100%
Straight line vesting between these two points
25% 15%
Less than 25% 0%
Environmental measure
(EM) vesting schedule (10%
weighting)
Performance Period:
All carbon emission and waste
targets to be achieved by 31
December 2025. Base year for
all targets is 2021.
Improving our carbon
intensity ratio
Fleet emissions
reduction
Carbon neutral status of
manufacturing sites
Waste avoiding
Per annum
reduction
Proportion
of EM that
may vest Reduction
Proportion
of EM that
may vest
Number of
sites
Proportion
of EM that
may vest
A target of a minimum
average over three years of
across UK operations
will apply which, if not
achieved, will result in
the outcome under this
Environmental measure.
4.2% 33.3% 15% 33.3% Four 33.3%
Straight-line vesting
between these points
Straight-line vesting
between these points
Straight-line vesting
between these points
4.0% 7.5% 12% 7.5%
Below 4.0% 0% Below 12% 0% Two 0%
1 Based on a share price of £6.646, being the closing price on 5 April 2023.
Nature of award: Free and Matching Shares under the SIP
1
Award type Award date Vest date
Number of shares
under award Award price
2
Face value
of award
2
CEO Matching Shares 19 May 2023 19 May 2026 7 £6.880 £48.16
Matching Shares 19 Jun 2023 19 Jun 2026 7 £6.832 £47.82
Matching Shares 19 Jul 2023 19 Jul 2026 7 £6.798 £47.59
Matching Shares 18 Aug 2023 18 Aug 2026 6 £7.392 £44.35
Free Shares 29 Aug 2023 29 Aug 2026 35 £7.030 £246.05
CFO Free Shares 29 Aug 2023 29 Aug 2026 35 £7.030 £246.05
during which time the participant must remain employed by a UK Howdens Group company to avoid forfeiting the award.
2 The face value of the award is calculated using the share price at grant (the 'Award price').
Directors’ remuneration report – Part 4: Additional disclosures continued
Advisors to the Committee
The Committee regularly consults with the CEO, CFO and the Interim Group HR Director on matters concerning remuneration,
although they are never present when their own reward is under discussion. The Company Chair attends the Remuneration
Committee by invitation except when his own remuneration is determined. The Company Secretary acts as secretary to the
Committee but is never present when his own reward is determined.
The Committee also has access to detailed external information and research on market data and trends from independent
consultants. A representative from the Committee's independent advisor usually attends each meeting of the Remuneration
Committee. Korn Ferry was appointed by the Committee as its retained independent advisor in September 2022. Korn Ferry is
a member of the Remuneration Consultants’ Group, which operates a code of conduct in relation to executive remuneration
consulting, and it does not provide any other services to the Group.
year for the Committee included updating the Committee on trends in compensation and governance matters and advising the
Committee in connection with benchmarking of the total reward packages for the Executive Directors and other senior members
of staff. Total fees paid to Korn Ferry in relation to remuneration services provided to the Committee totalled £77,388 with fee
levels based on the quantity and complexity of work undertaken.
Voting at the 2023 AGM
The results of the advisory vote in respect of the Directors’ remuneration report ('Report') at the 2023 AGM is shown in the chart
below. The 2021 AGM results and the 2022 AGM results (which included a binding vote on the Directors’ remuneration policy
('Policy')) are also shown in the chart below.
By order of the Board
Karen Caddick
Remuneration Committee Chair
28 February 2024
Fixed Variable
2022
Report
Policy
For 90.72%
For 90.67%
Against 9.28%
Against 9.33%
Withheld
2
55,715
Withheld
2
3,928,507
AGM voting outcomes
For¹ Against
1 A vote 'for' includes those votes giving the Chair discretion.
2 A vote 'withheld' is not a vote in law.
2021
2023
For 95.36%
For 86.06%
Against 4.64%
Against 13.94%
Withheld
2
147,941
Withheld
2
2,392,924
Report
Report
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Additional Information Governance
Strategic Report
Governance GovernancePage Title Page Title
GovernanceGovernance
Introduction from the Audit
Committee Chair
I am pleased to present this report covering the work of the
Audit Committee.
late. There have been differences in opinion as to whether the
UK Corporate Governance Code should focus on promoting
jurisdictions, or as has happened, on broader operational
controls over the whole business. Over the last several years
Howdens has been working hard to enhance controls on a
number of fronts. This year's progress includes improving
The Committee has been overseeing these activities closely
and providing appropriate support. Next steps will include
identifying which of the large number of controls are most
that reporting is appropriately prioritised.
The Committee has also been encouraging the Company’s
already had a strong foundation, as is appropriate in the
current economic climate.
We have included a case study in this report on the Audit
Committee’s role in overseeing the controls that mitigate our
cyber and information security risk, one of our principal risks.
The case study can be found on page 136. Receiving updates
from management and the security team has become a
regular feature of the Committee as the Company adapts to
this increasing and evolving risk. I hope that the case study
provides some insight into the Committee’s level of oversight
and some of the important work we consider.
The Audit Committee also continued its programme of inviting
business. In April 2023, we received an update from the
Supply Operations Finance Director. The Committee were
able to gain valuable insight into not just Supply Operations'
investment plan. The annual update from the Head of
safety, inventory management, and fraud. The HR Director
presented to the Committee on the evolution of HR controls
These updates from operational management are vital
The Committee received updates on compliance in our French
business and we have invited the Finance Director in France
to present to the Committee in 2024. The Committee also
undertook its regular governance reviews, reviewing external
the effectiveness of the external audit process.
Audit Committee report
2023 Audit Committee activity
AGM
• The re-appointment of KPMG LLP as the external
auditor and authority for the Directors to determine
the auditor’s remuneration were approved by
shareholders
Committee meeting
• Cyber security update
• Internal audit report
• Effectiveness of the
external auditor and
audit processes
• 2023 external
• Supply Operations
Finance Director
update
• Discussion with Head of
Internal Audit (without
management present)
Committee meeting
•
including going
concern considerations
• External auditor Half
• Key controls and Half
update
• Internal audit report
•
review
• Discussion with
external auditor
(without management
present)
Committee meeting
• Cyber security update
• Internal audit report
• HR controls update
• Depot compliance
update
• 2023 Annual Report
timetable
• Lead audit partner
succession
• Key controls and fraud
controls
• Annual review of risk
and control framework
• Discussion with Head of
Internal Audit (without
management present)
Committee meeting
• 2022 draft Annual
Report and Accounts
Announcement
• External audit report
• External audit policies
• Internal audit report
• Key controls
• Audit Committee
effectiveness
• Discussion with
external auditor
(without management
present)
Committee meeting
•
• External Audit update
• Key controls: year end assurance
April
September
May
Our external reporting continued to receive external
accolades and we were particularly pleased that the
Corporate and Financial Awards commended Howdens on its
authentic communication that was aligned with our culture.
As I stated in last year’s report, receiving external recognition
is gratifying, and in some respects reassuring, but the Audit
Committee recognises the primary importance of maintaining
gives our stakeholders. The Committee is committed to
Robert Brent, our audit partner, is retiring at the end of this
audit cycle. I would like to take this opportunity to thank Robert
for his efforts and for overseeing the transition from Deloitte to
KPMG. We look forward to working with our new audit partner,
Kamran Walji, who shadowed Robert through this year’s audit.
I also look forward to answering any questions on the work of
the Audit Committee from shareholders at our AGM.
Andrew Cripps
Audit Committee Chair
Committee meeting
• External audit plan
update
• Internal audit charter
• Internal audit report
• 2024 Internal audit plan
and budget
• Key controls and fraud
controls
• Terms of reference
review
• 2024 Audit Committee
calendar
November
2023 meeting attendance
Andrew Cripps (6/6)
Karen Caddick (5/6)
1
Geoff Drabble (3/3)
Louis Eperjesi (3/3)
Louise Fowler (6/6)
Debbie White (6/6)
Key activities in the year ahead
• Review of the Annual Report and Accounts
• Review of Audit Committee effectiveness.
• KPMG’s reappointment as auditor to be
recommended to shareholders at the Annual
General Meeting (AGM).
• Review of the 2024 interim results.
• Consideration of internal audit’s annual plan,
• Review of key controls.
• Approval of the 2025 Audit Committee calendar.
Andrew Cripps
Audit Committee Chair
1 Karen was unable to attend the November Committee meeting
due to illness.
February
January July
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Additional Information Governance
Strategic Report
Audit Committee reportGovernance GovernancePage Title Page Title
Governance
Financial reporting
Results review
The Audit Committee reviewed the Group’s 2023 Annual
Report and Accounts published in March 2023 and the half-
As part of these reviews, the Committee scrutinised papers
judgement, the Group's key risks, going concern considerations
and longer-term viability. The Committee also discussed
reports from KPMG on their audit of the Annual Report and
The Committee considered whether the Annual Report and
Accounts were fair, balanced and understandable and
contained the information necessary for shareholders to
assess the Company’s position, performance, business model,
and strategy.
The Committee received the results of management's key
control assessments prepared by Group and Divisional
management half yearly as well as a report from the Head
of Internal Audit and Risk on the scope of those controls and
adequacy of evidence retained. The effectiveness of the
to controls in place on a divisional basis) and the disclosures
made in the Annual Report and Accounts on this matter were
reviewed by the Audit Committee.
The Committee also debated regular updates in respect of
the wider key controls programme during the year. More
information on the key controls programme can be found
The Committee exercises its judgement in deciding the areas
external auditor's report details the results of their procedures
in relation to these areas to the Committee.
The matters shown below have been discussed with the Chief
auditor. The Committee has challenged the underlying
and adequately addressed by the Executive Committee,
appropriately tested, and reviewed by the external auditor,
and the disclosures made in the 2023 Annual Report and
Accounts are appropriate.
Inventory obsolescence provisioning
Inventory obsolescence provisioning
The Group’s in-stock model (further information about which
can be found in the Strategic report beginning on page
2) and the scale of our product range necessitates tight
management of inventory to ensure local availability of stock
while at the same time minimising obsolescence and wastage.
In 2023, management continued to take a strategic position
on stock holding. The Committee reviewed management's
conclusions on stock valuation and provisioning.
The external auditor provided reports to the Committee which
considered the appropriateness of provisions held against
the carrying value of inventory, while also having regard to
the age of discontinued lines and volumes of continuing lines
relative to the expected usage and the levels of historical
write-offs.
The Committee considered the processes used to value
each category of inventory, including the assumptions
judgements made.
Actuarial valuation of pension fund liabilities
As part of the triennial actuarial valuation of the pension plan,
changes were made to demographic assumptions, including
those for mortality assumptions. The methodology for all other
assumptions remained the same.
The Committee met with the Company's actuaries and
carefully reviewed their report, concluding that:
• the actuarial assumptions applied to pension fund
• they concurred with the views of the external auditors.
Other key judgements
Valuation of pension fund assets
The Audit Committee also considered processes to value
pension fund assets. At 30 December 2023, 57% of total
pension fund assets (2022: 76%) were assets for which there
is no observable market value (see note 22 on page 195).
Some of the asset valuations required judgement because
manager valuations at the balance sheet date were not
report. To minimise the risk that the valuations were not in
line with assumptions, the asset managers were contacted to
check for indicators of impairment or expected impairments,
in fund composition which would lead them to think that there
had been any impairment since the most recent valuation
date. The Committee concurred with the approach taken.
Audit Committee report continued
Governance
Governance updates
Updates on the latest governance practices for audit
committees and changes in reporting requirements were
reviewed with the external auditor. This included the FRC's
minimum standard guidance for audit committees' oversight
responsibilities for the external audit. In addition to other
resources, members of the Audit Committee are members of
the KPMG Board Leadership Centre and other bodies, which
During the year, the Committee received regular updates
on the proposed corporate governance reforms. This
included the withdrawal of proposed secondary legislation
‘Restoring trust in audit and corporate governance’ in October
and the publication of the updated UK Corporate Governance
Code 2024 by the FRC in January 2024. External audit and
internal controls remain live topics and the Committee will
continue to monitor any proposed audit or wider corporate
governance reforms.
Committee effectiveness
An effectiveness review was carried out on the Committee
and its members as part of the wider internal Board evaluation
process. The review concluded that the current mix of
Audit Committee, and that of its advisors, was such that the
Committee could effectively exercise its responsibilities
to the Group in relation to risk and controls.
The Committee reviewed its policies in relation to allocation
of non-audit work (further detail on this policy may be found
interest register. Further information about the Committee's
Competition and Markets Authority Order
Audit Committees and the External Audit:
Minimum Standard (the 'Minimum Standard')
Since the introduction of the FRC's Minimum Standard in May
2023, and in undertaking its role and responsibilities during
the year, the Audit Committee has complied with the Minimum
Standard throughout the year.
Committee membership
Independence is critical for fair assessment of the
management team and the external and internal audit
functions. The Committee is composed entirely of independent
Non-Executive Directors.
Committee Chair
Andrew Cripps was appointed Audit Committee Chair in May
2016. He is responsible for determining the Committee’s
agenda and for maintaining the key relationships between
the Group’s senior management, Head of Internal Audit and
Risk, the Company Secretary and senior representatives of
the external auditor. He is also responsible for ensuring that
timely manner and that they are reported to shareholders in
the Annual Report.
has held executive director roles in the UK and Europe with
Rothmans International, where he was Corporate Finance
Director. More recently, Andrew has been Audit Committee
Chair of a number of FTSE 250 and other public companies.
Competence relevant to the sector
The unique business model of Howdens means it does not
undertook an assessment of its skills and experience it
assessed them against a number of sectors relevant to the
Company. These included building and construction, multi-
site wholesale, manufacturing and logistics, and service
The Committee concluded that competence relevant to these
sectors was well represented within the current membership.
Thorough inductions are provided to the Committee members
and opportunities to meet with senior management and
Executives further enhance their working knowledge of the
way the Company operates.
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Additional Information Governance
Strategic Report
Governance GovernancePage Title Page Title
Governance
Case study
Cyber Security and Information Security Risk Governance
As is the case for the majority of companies, cyber
security is treated as one of Howdens’ principal risks (see
page 40). Howdens’ systems are fundamental to the day-
to-day secure running of the business and the Board has
set a very low risk appetite for cyber security risk. As such,
one of the key roles of the Audit Committee during the
annual cycle is to evaluate updates from management on
the threat landscape and the actions take to mitigate this
risk as far as possible.
The Audit Committee received two updates on cyber
and information security during 2023 (at the April and
Director of Infrastructure and Service Delivery, and Head
of Information Security.
The security team updated the Committee at its meeting
in April on progress to date against strategic deliverables.
These included an update on cyber security strategy
and control governance, progress towards securing
the ISO27001 Information Security Management
standard and aligning to the IEC62443 Cyber Security in
Operational Technology standard. The Committee were
also briefed on the successful implementation of multi-
factor authentication which had been introduced for all
remote users and the outcome of simulated phishing
exercises that had been undertaken involving over 11,000
employees. Details of a full cyber crisis management
simulation (conducted during the year) with the Group
Crisis Management teams were also considered.
The September meeting was provided with further updates
on the strategic roadmap activities (control governance,
phishing exercises and user awareness) and also a review
of the transition of the French server infrastructure to the
UK datacentre.
At both meetings, the Audit Committee considered
a publicly available security scorecard, which is an
independent benchmark of the Company’s external
website. This data provides useful insight into the external
security of howdens.com which was visited c.20 million
times in 2023.
The Committee will continue to receive updates on cyber
and information security in 2024, including on progress
towards control governance standards and initiatives to
reinforce cyber security culture at Howdens.
Audit Committee report continued
External auditor independence
Auditor independence is an essential part of the audit
framework and the assurance it provides. The Committee
therefore undertook a comprehensive review of auditor
independence prior to appointment and during 2023,
• A review of the independence of the external auditor and
the arrangements which they have in place to restrict,
• A review of the changes in key external audit staff for the
current year and the arrangements for the day-to-day
management of the audit relationship.
• Consideration of the overall extent of non-audit services
provided by the external auditor, in addition to case-by-
case approval of the provision of non-audit services
• Deliberation of the likelihood of a withdrawal of the auditor
from the market and note taken of the fact that there
are no contractual obligations to restrict the choice of
that they had complied with the requirements of the FRC
Ethical Standard as well as internal requirements and their
independence and objectivity had been maintained. The Audit
Committee also has a policy in relation to the employment of
former members of the external audit team.
External auditor effectiveness
To assess the effectiveness of the external auditor,
• The proposed plan of work presented by the external
auditor, including audit risks, materiality, terms of
engagement and fees prior to commencement of the
•
and any variations from the plan.
• Evaluation from key management personnel and members
of the Committee of the external auditor’s exercise of
professional scepticism and challenge.
• Robustness and perceptiveness of the auditor in their
handling of the key accounting and audit judgements.
• Internal control and risk content of the external
•
The Lead Audit Partner also met with all members of the
The Committee concluded that the external auditor remained
effective and audit quality remained high.
Performance expectations
for the external auditor
• Discuss the audit plan, materiality, and areas of
focus in advance.
• Report issues at all levels within the Company in a
timely fashion.
• Ensure clarity of roles and responsibilities between
local KPMG and Howdens’ Finance teams.
• Respond to any issues raised by management on a
timely basis.
• Meet agreed deadlines.
• Provide continuity and succession planning of key
staff members of KPMG.
•
draft auditor's reports and respond to requests
• Ensure consistent communication between local
and central audit teams.
Wider responsibilities
• Provide timely up-to-date knowledge of technical
and governance issues.
• Serve as an industry resource, communicating
best practice trends in reporting.
• Adhere to all independence policies.
• Deliver a focused and consistent audit approach
materiality.
• Liaise with the Howdens Internal Audit and Risk
team to avoid duplication of work.
• Provide consistency in advice at all levels.
• Ultimately, provide a high-quality service to the
Board, be scrupulous in their scrutiny of the Group
and act with utmost integrity.
Independence
The Committee reviews the independence of
the external auditor bi-annually. This includes
as well as the auditor's internal procedures to ensure
independence of its staff.
External auditor
1
External auditor KPMG LLP ('KPMG')
External auditor appointed 12 May 2022
Lead audit partner Robert Brent
2
Lead audit partner tenure
Total fees paid to the
auditor in the year
£1.4m (audit related assurance
services accounted for £0.1m of
the total fee)
1 The information above is correct as at 30 December 2023.
2 Robert Brent will be retiring following the completion of the 2023 audit. He will
be succeeded as lead audit partner by Kamran Walji.
External audit tender
Following a comprehensive external audit tender process, the
Board recommended KPMG's appointment to its shareholders
at the 2022 AGM and shareholders approved the appointment
with 98.8% of votes in favour. The Board recommended
KPMG's re-appointment to shareholders at the 2023 AGM and
shareholders approved the re-appointment with 98.9% of
votes in favour. The Board will once again recommend KPMG's
re-appointment to shareholders at the 2024 AGM.
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Additional Information Governance
Strategic Report
Governance GovernancePage Title Page Title
Governance
Audit Committee report continued
Controls and internal audit
Internal control framework
The Group has an established framework of internal controls,
which includes the following key elements:
• The Board approves the Group’s strategy and annual
performance within these.
• The Group and its subsidiaries operate control procedures
designed to ensure complete and accurate accounting
assets or fraud.
• The Audit Committee meets regularly and its
responsibilities are set out in the Audit Committee Terms
of Reference (which can be found on the Company’s
website at www.howdenjoinerygroupplc.com/governance/
corporate-governance-report/terms-of-reference-of-the-
audit-committee). It receives reports from the Internal
Audit function on the results of work carried out under
an annually agreed audit programme. Operational and
compliance controls are considered when the Committee
reviews the annual Internal Audit programme. The Audit
Committee has full and unfettered access to the internal
and external auditors.
•
aligned with principal risks. These include IT and cyber
controls, supplier management, ESG, health & safety and
data protection as well as other operational areas. These
controls are cyclically tested by Internal Audit to ensure
they remain effective and are being consistently applied.
• The Audit Committee annually assesses the effectiveness
of the assurance provided by the internal and external
auditors.
Key Controls
As previously reported, management have challenged and
reviewed key controls across the business to focus and further
strengthen our overall control framework. Sponsored by the
CEO and CFO, and reporting regularly to the Audit Committee,
this work is improving our capability over our operational, IT
risks and evidence their effective implementation.
Good progress continued throughout 2023 with regular
updates being provided to the Audit Committee. Internal
project management and governance frameworks were
determined to be working effectively and the Committee was
The Committee remains committed to the activities to
strengthen the control environment across the business.
External auditor fees
All relevant fees proposed by the external auditor must be
reported to and approved by the Audit Committee. Details of
external audit fees may be found in the table on page 136 and
Policy for non-audit services provided by
The main aims of this policy are to:
• Ensure the independence of the auditor in performing
•
of work that the auditor can and cannot undertake.
The Audit Committee has reviewed the policy for non-audit
services to ensure that it is in line with the FRC’s Revised
Ethical Standards 2019 (which took effect from 15 March
2020) and the FRC’s Audit Quality Practice Aid 2019.
The policy, in line with regulation, substantially limits the non-
audit services which can be provided by the external auditor.
The policy provides:
• A 70% cap of the value of the audit fee for all non-audit
services calculated on a rolling three-year basis.
• Categories of service that are prohibited from being
carried out by the auditor.
non-audit work that the auditor may be engaged in without
considers each referral on a case-by-case basis.
The policy ensures that the auditor does not audit its own work
or make management decisions for the Company or any of its
agreement of fees payable for non-audit work.
No non-audit services, apart from interim review services,
were provided by KPMG during the year.
Internal audit
The Internal Audit team has continued to develop its
capabilities during the year. Building on the development of
data analytics and systemisation of controls, members of he
team also undertook ISO-accredited lead auditor training and
achieved Chartered IIA status, or equivalent.
An updated Internal Audit Charter has been approved by the
Committee and communicated to management, thereby
refreshing understanding of responsibilities for internal
defence model. The Committee reviewed and challenged:
• Internal Audit’s programme of work and resources and
approved its annual plan and budget.
• The level and nature of assurance activity performed by
Internal Audit.
•
the adequacy and timeliness of management’s response.
•
Independent assurance
The Committee assessed the coverage of independent
assurance by reviewing the annual internal audit plan against
the Group’s key controls.
Internal audit effectiveness
The Committee considered that the Internal Audit function
remained effective and provided a comprehensive level of
assurance through its programme of work.
The Internal Audit team continues to comply with the IPPF.
These standards set out the expectations of the Global
Institute of Internal Auditors (IIA) for best practice. In Q4
2023 the IIA announced revised Global IIA Standards which
become mandatory in 2025. The Internal Audit team has
revised working practices and is now aligned with these new
standards in advance of mandatory implementation.
The Audit Committee has commissioned an external
to assess the performance and effectiveness of the Internal
Audit department.
In 2021, the Audit Committee commissioned an external
quality assessment (EQA) readiness assessment, provided by
the IIA. An EQA evaluates conformance with the International
Professional Practices Framework (IPPF) outlined above.
The readiness assessment concluded that the function’s
to meet the requirements of a full EQA.
No areas reviewed were considered to be of concern,
although a small number of best practice improvement
recommendations were made and have been implemented.
The next effectiveness review will be considered in 2025,
outlined above.
Fraud risk
The Committee considered the controls in place to mitigate
fraud risk and received a report from Internal Audit
Committee report, is now complete. There will be further
testing and assessments undertaken during 2024 to ensure
that the Group is in line with best practice.
Cyber and information security risk
The risk of a cyber security incident is considered to be one
of the Group’s principal risks. A case study on cyber and
information security can be found on page 136.
during the year and there have been no such breaches during
the preceding three-year period.
Divisional controls
Senior management from the business are invited to discuss
the controls in their business areas. The Supply Operations
Finance Director and the Head of Compliance for the Trade
division gave presentations on the key risks and control
environments in their area. In September, the HR Director also
presented to the Committee.
Whistleblowing
Complaints on accounting, risk issues, internal controls,
auditing issues and related matters are reported to the Audit
Committee as appropriate. Oversight of the Company’s
whistleblowing policy is a matter considered by the Board. The
Board receives biannual updates on whistleblowing statistics
and trends (see pages 78 and 79).
The Companies Act 2006 places a duty upon Directors to
ensure that they do not, without the Company’s prior consent,
and either their personal interests or other duties they owe to
a third party.
If any Director becomes aware that they, or any party
connected to them, have an interest in an existing or proposed
transaction with the Company, they must notify the Board
as soon as practicable. The Board has the authority to
in the best interests of the Company. The Audit Committee
reviews the output of this process annually to ensure it is
By order of the Board
Andrew Cripps
Audit Committee Chair
28 February 2024
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Additional Information Governance
Strategic Report
Governance GovernancePage Title Page Title
GovernanceGovernance
Introduction from the Sustainability
Committee Chair
Having a sustainable business is a strategic priority for the
Howdens Board and the reference to our work in this area can
be found in almost all other parts of this Annual Report, from
the CEO statement to the Governance reports. It is central to
everything we do and the Sustainability Committee, now in
its fourth year, helps to ensure that it is given as much of the
Board’s time and attention as our other business priorities.
greenhouse gas emission targets had been validated by SBTi
(the Science Based Targets initiative) with SBTi classifying
Howdens’ scope 1 and 2 target ambition as in line with a 1.5°C
trajectory. Validated targets include to reduce absolute scope
1 and 2 GHG emissions 42% by 2030 and our scope 3 supply
chain emissions by 25% by 2030 from a 2021 base year, and to
increase sourcing of renewable electricity from 30% in 2021 to
100% by 2027. The Committee will regularly monitor progress
against these targets in the coming years.
Sustainability in our workforce was also a key focus for
the Committee during the year and we have detailed some
of our key activities later in the report. I was pleased that
the Remuneration Committee introduced environmental
remuneration measures for the Executive long-term incentive
them to build on these further in the future.
Many of the items considered and approved at the
Sustainability Committee are considered in detail in the
sustainability matters report (which begins on page 42),
part of the strategic report, so this Committee report is
necessarily shorter than other Committee reports to avoid
duplication. However, it is important to detail the role, remit,
and responsibilities of the Committee, to highlight some of the
key work of the Committee during the year, and to consider the
work of the Committee in the year ahead.
Role, remit and responsibilities
The primary purpose of the Howdens Sustainability
Committee is to assist the Board in articulating and developing
its sustainability strategy and providing oversight of
sustainability initiatives across the business, in line with the
purpose, values, and strategy of Howdens as established
by the Board. This includes monitoring the content and
completeness of Howdens’ external statements, disclosures,
and other reporting on sustainability matters.
Setting the tone from the top on environmental and social
matters, ensuring that these priorities are embedded in wider
strategy, and developing robust KPIs are key functions of the
Committee.
Sustainability
Committee report
The key duties the Committee carries out in relation to any
environment and climate action and Howdens’ contribution
to society are set out in the Committee’s Terms of Reference,
which are reviewed annually and can be accessed on our
corporate website (https://www.howdenjoinerygroupplc.
com/governance/corporate-governance-report/terms-of-
reference-of-the-sustainability-committee). However, it will
also consider any other matters referred by the Board or its
Committees relevant to sustainability.
The remit of the Sustainability Committee does not cover
governance matters per se and these remain a matter for the
Board and its Committees. The Committee will also liaise as
necessary with all other Board Committees as required.
The work of the Committee in 2023
Environmental sustainability
The Committee received updates at all its meetings from
the Director of Sustainability and remain committed to
management’s goal of becoming the UK’s leading responsible
kitchen and joinery business.
considering the initiatives and engagement necessary to
help reduce the Group’s indirect, scope 3 carbon emissions
undertaking involves aligning our global supply base with our
emissions objectives across all product categories. In 2023, a
new supplier code of conduct was introduced which included
obligations for emissions reductions and sustainability
targets. The Committee also received updates on supplier
visits and the ESG supplier conference held in July. This
workshop-style conference was held jointly with one of our
key kitchen frontal suppliers, Friul, with the objective to send
a strong message to our tier 2 supplier and focus them on our
objectives.
in addition to reducing direct carbon emissions from our
business, is key to supporting our validated SBTi carbon
reduction targets.
The Committee also received regular updates on waste and
more widely on the product and packaging programme. There
were regular demonstrations of packaging innovation and new
technologies and the Head of Design updated the Committee
on innovations from the teams at Howdens, demonstrating
that sustainability by design had become embedded in our
product development processes.
More information on our environmental sustainability can be
found in the sustainability matters report (which begins on
page 42).
2023 Sustainability Committee
activity
Committee meeting
• Sustainability strategy update
• Progress against SBT Net Zero Plans
Committee meeting
• Sustainability strategy update
• EDI update
• 2024 Sustainability Committee calendar
• Committee Terms of Reference
Committee meeting
• Sustainability strategy update
• EDI and workforce skills
• 2022 Sustainability Report
February
April
September
TCFD – business resilience
The Sustainability Committee is mindful to understand key
climate risks and opportunities. We do this through our
business resilience framework, which is documented through
our TCFD disclosures.
These disclosures are contained in the strategic report on
pages 60 to 66. The Committee has encouraged a simple and
pragmatic approach to business resilience. Building on the
disclosures in 2022, the Committee considered three model
scenarios, a materiality impact assessment and associated
action plan. These are integrated with the Science Based
Targets Net Zero Plans, which include comprehensive supply
chain mapping, a compelling customer sustainability offer
and regular review of Howdens sustainability strategy.
2023 meeting attendance
Peter Ventress (3/3)
Karen Caddick (3/3)
Andrew Cripps (3/3)
Geoff Drabble (2/2)
Louis Eperjesi (1/1)
Louise Fowler (3/3)
Debbie White (3/3)
Key activities in the year ahead
• Receive updates on execution of the Group’s
sustainability strategy, including the roadmap for
SBTi net zero targets.
• Receive updates on the Group’s equality, diversity
and inclusion priorities, workforce skills and
development.
• Review the Sustainability Committee’s Report and
Terms of Reference.
• Approval of the 2024 Sustainability Committee
calendar.
Peter Ventress
Sustainability Committee Chair
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Additional Information Governance
Strategic Report
Governance GovernancePage Title Page TitleSustainability Committee report
Governance
Sustainability Committee report continued
Skills
A key area of focus for the Sustainability Committee during
the year was employee skills and development. Updates on
developing core skill frameworks and training for critical roles
were provided in addition to updates on apprenticeships and
core skills training.
A new Kitchen Sales Designer 'Better Buy Design' training
programme has been piloted and launched with 21 designers
in the initial trial. We have also trained 284 managers in our
leadership programme 'Leading the Way'. Both programmes
will be rolled out across our Depots in 2024.
Sustainability in 2024
The Committee will continue to focus on the core
environmental and social matters that matter the most to our
stakeholders. This will include further monitoring of our SBTi
Net Zero carbon reduction strategy and promoting our EDI
agenda. We will continue to communicate our progress and
priorities as part of Howdens wider strategy.
By order of the Board
Peter Ventress
Sustainability Committee Chair
28 February 2024
Supported by external consultancy, ESG360, the Group
utilised the following methodology for TCFD implementation:
• Governance and oversight: Board and management
oversight to ensure that climate issues are embedded in
the strategic planning/ enterprise risk management.
• Assess materiality of climate-related risks: Understand
potential climate related risks and opportunities for
Howdens’ business involving all relevant internal
stakeholders.
• : Construct appropriate
scenarios to develop relevant narratives according to
Howdens’ context and business model.
• Evaluate business impacts: For each scenario (three
qualitative to quantitative.
• Identify potential responses: Use the results to identify
realistic strategic responses to manage risks and
opportunities.
• Document and disclose: Communicate to relevant parties
– the inputs, assumptions, methods, outputs, and potential
management responses.
Equality, diversity and inclusion (EDI)
The Sustainability Committee received updates from the
senior HR team on the progress made during the year in
respect of the EDI strategy, noting that management had
reframed its inclusion strategy around three key areas:
• Being ‘worthwhile for all’ – providing clarity on its approach
to inclusion.
• Support for all – helping managers to get the best out of all
their people.
• Accessible for all – broadening our reach and being
accessible to all.
The Committee considered communication strategies and
events undertaken during the year and how better-quality
quantitative data was being collected and used to promote
better inclusion across the business.
To make our Annual Report and Accounts more accessible, a number of the sections traditionally found in this report can be
found in other sections of this Annual Report and Accounts where it is deemed that the information is presented in a more
connected and accessible way. The Directors’ report comprises the sections detailed below, including the statement on political
donations and research and development (‘R&D’). Any sections that have been moved have been cross-referenced below:
Located in the sustainability report:
Greenhouse gas emissions and streamlined energy and
carbon reporting (SECR): Details of the Group’s greenhouse gas
emissions, as required by Sch. 7 of the Large and Medium-Sized
Companies and Groups (Accounts and Reports) Regulation
2008 as amended by the Companies Act 2006 (Strategic Report
and Directors’ Report) Regulations 2013, are set out on page 67.
Information required by the Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008 as
amended by the Companies (Directors' Report) and Limited
Liability Partnerships (Energy and Carbon Report) Regulations
2018 (SI 2018/1155), can be found on pages 67 and 68.
Located in the additional information section:
Annual General Meeting (AGM): Information about the AGM
can be found on page 214. The recommendation to reappoint
KPMG LLP as the Group’s auditor, can be found on page 136.
Share capital, substantial shareholdings and acquisition
of the Company’s own shares (including nominal value of
shares purchased): pages 214 and 215.
Directors' Indemnity and Insurance: page 215.
terminate upon a change of control: page 215.
Disclosure required under Listing Rule 9.8.4R:
• Dividend waivers: page 214.
•
to 30 December 2023: page 215.
Employees: The average number of employees and their
remuneration are shown in note 21. Details of the SIP can be
found in note 23.
Financial risk management (relating to SI 2008/410
Schedule 7 Part 1.6): note 20.
Disclosure required under Listing Rule 9.8.4R:
• Details of long-term incentive schemes: note 23.
• Details of any tax relief, including amount and treatment:
note 7.
The remaining disclosures required by LR 9.8.4R (with the
exception of those described above under subheading
'Located in the additional information section') are not
applicable to the Company.
Dividend: note 17.
Located in the strategic report:
Principal Group activities, business review and results:
pages 2 to 35.
Dividend: pages 18 and 32.
Located in the governance section:
Directors of Howden Joinery Group Plc: The names of anyone
who served as a Director during the period can be found on
page 74 under 'Board meeting attendance'.
2018 UK Corporate Governance Code (the ‘Code’): How
the Company applied the Principles and complied with the
Provisions of the Code can be found on pages 92 to 97. A copy
of the Code can be accessed via www.frc.org.uk.
Internal control and risk management arrangements: Internal
control arrangements information can be found in the Audit
Committee report on page 138. Risk management arrangements
information can be found on pages 36 to 37 and in the Principal
risks and uncertainties section beginning on page 38.
Board and Group Diversity policies: page 102.
Stakeholder engagement: Details regarding the engagement
with suppliers, customers, and others in business relationships
with the Company, as required by Sch. 7 to the Large and
Medium-Sized Companies and Groups (Accounts and Reports)
Regulations 2008 (as amended by the Companies (Miscellaneous
Reporting) Regulations 2018), can be found on pages 84 to 91.
Employees: The total number of employees and gender
diversity statistics are located on page 102. The methods of
engaging with the workforce can be found on pages 86 and
87. All eligible UK employees have been invited to participate
in a Free Shares award under the Company’s Share Incentive
Plan (SIP) each year since 2015, and since 2021 were invited to
participate in a SIP Partnership and Matching Shares plan.
Directors’ statement of disclosure of information to the
auditor: page 144.
Directors’ report
Political donations and R&D
The Group made no political donations during the current and
to any non-UK political party during the current or previous
By order of the Board
Forbes McNaughton
Company Secretary
28 February 2024
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Strategic Report
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Governance Page TitleGovernance Page Title Directors’ report
Governance
Directors’ statements
Disclosure of information to the auditor
section 418 of the Companies Act 2006) of which the Group’s
auditor is unaware, and each of the Directors has taken all the
steps they ought to have taken as a Director to make themself
aware of any relevant audit information and to establish
that the Group’s auditor is aware of that information. This
with the provisions of section 418 of the Companies Act 2006.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual
Report and Accounts and the Group and parent Company
regulations. Company law requires the Directors to prepare
adopted international accounting standards and applicable
law and have elected to prepare the parent Company
standards and applicable law, including FRS 101 Reduced
Under company law the Directors must not approve the
a true and fair view of the state of affairs of the Group and
period. In preparing each of the Group and parent Company
• select suitable accounting policies and then apply them
• make judgements and estimates that are reasonable,
relevant, reliable and, in respect of the parent Company
•
have been prepared in accordance with UK-adopted
•
whether applicable UK accounting standards have been
followed, subject to any material departures disclosed and
• assess the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters
• use the going concern basis of accounting unless they
either intend to liquidate the Group or the parent Company
or to cease operations, or have no realistic alternative but
to do so.
The Directors are responsible for keeping adequate
the parent Company’s transactions and disclose with
statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is
that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’
Report, Directors’ Remuneration Report and Corporate
Governance Statement that complies with that law and
those regulations. The Directors are responsible for the
information included on the Company’s website. Legislation
in the UK governing the preparation and dissemination of
jurisdictions.
In accordance with Disclosure Guidance and Transparency
statements provides no assurance over whether the annual
requirements.
Directors’ responsibility statement
•
applicable set of accounting standards, give a true and fair
or loss of the Group and Company, and the undertakings
• the Annual Report and Accounts includes a fair review of
the development and performance of the business and the
position of the Group and Company and the undertakings
including the consolidation taken as a whole, together with
a description of the principal risks and uncertainties they
• the Annual Report and Accounts, taken as a whole, is
fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Group’s position and performance, business model
and strategy.
This responsibility statement was approved by the Board of
Directors and is signed on its behalf by:
Andrew Livingston Paul Hayes
28 February 2024
information in our annual reports for many years. The Board is committed to acting responsibly and working with our
stakeholders to manage the social and ethical impact of our activities. The Howdens culture is to be ‘worthwhile for all
concerned’ and so we aim to treat all our stakeholders fairly and with integrity.
We have a number of Group policies to provide guidance to our employees. The policies are designed to be easily
understood and they generally include examples of acceptable and unacceptable behaviours.
To consolidate our reporting requirements under sections 414CA and 414CB of the Companies Act 2006 in respect of non-
each of the disclosure requirements.
Focus area Policies and statements More information and outcomes
Environmental
matters
Sustainability and
Corporate Social
Responsibility Statement of
Intent (see Group website).
• Greenhouse gas emissions and streamlined energy and carbon reporting
(pages 67 and 68).
• Discussion about the Company's SBT Net Zero commitment and targets (pages 46
and 47).
•
– (g) and (h) on page 63).
• Discussion of the Company’s progress on implementing the recommendations of the
Task Force on Climate-Related Financial Disclosures (pages 60 to 66).
• Discussion of the UN Sustainable Development Goals (UN SDGs) (page 45).
•
standard (page 56), and our use of renewable energy sources (page 57).
• KPIs on production waste reuse, recovery, and recycling (page 57) and our target of
100% of wood-based material used in manufacturing processes being made from
•
sustainable product offer and product innovation (pages 52 to 53).
Social matters Sustainability and
Corporate Social
Responsibility Statement of
Intent (see Group website).
• Our impact on our stakeholders (pages 58 and 58) and engagement
with stakeholders (starting on page 84).
• Our progress on equality, diversity and inclusion and wellbeing matters (pages 54
and 55) and our work with local and national charities (page 17).
• Our Boardroom and Group Diversity Policies (page 102).
Respect for
human rights
Human Rights Policy and
Modern Slavery Statement
(see Group website).
• Discussion of the UN SDG Goal 8 (Decent Work and Economic Growth) (pages 54 and 55).
• Our Modern Slavery Statement (see Group website) sets out how we actively monitor
suppliers and train our procurement staff.
• Internationally recognised labour standards form part of our contracts of employment.
Anti-bribery
and corruption
Anti-bribery and
interest, corporate gifts
and hospitality, anti-money
laundering, anti-tax evasion
and competition law.
• The Board considers and approves the following Group policies: anti-bribery and
corruption, anti-money laundering, anti-tax evasion, competition law policy, market
abuse compliance and the Modern Slavery Statement and whistleblowing.
• We have a rolling programme of refresher training on modern slavery and anti-
bribery for our compliance team and buyers.
• Further information about our whistleblowing facility may be found on page 87.
Employees Health & Safety Statement
of Intent (see Group
website), market abuse
compliance, data
protection and privacy, and
whistleblowing.
• KPI on Health and Safety and discussion of Health and Safety performance and
initiatives (page 56).
•
apprentice schemes (pages 51 and 55).
• Diversity policies and statistics (pages 101 and 102).
• Workforce engagement (pages 86 and 87).
• Directors’ remuneration policy (see Group website for the full policy or pages 113 to
116 for a summary of the policy).
A discussion of our principal and emerging risks, including those related to our business relationships, products and
services, as well as a description of our risk management process, starts at page 36.
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Financial Statements
Additional Information Governance
Strategic Report
Governance Governance Non-financial and sustainability informationDirectors’ statements
Dividends paid
£114m paid in 2023
Revenue
£2,311m (2022: £2,319m)
EPS
46.5p (2022: 65.8p)
Net cash
£283m (2022: £308m)
£328m (2022: £406m)
£340m (2022: £415m)
2023 2023 46.5p
2023 2023 2023
2019 2019 2019
2020 2020
2022 2022 2022
2021 2021
£415m 65.8p £115.0m
£260m 35p £70.6m
2021
(inc. £54.1m special dividend) £133.6m
£196m 25p
£402m 53.2p
2020 £0.0m
£406m £308m
2019 20192019
2020 20202020
2022 2022 2022
2021 2021
2021
£1,584m
£1,548m
£2,319m
£2,094m
£261m
£185m
£390m
£267m
£431m
£515m
2023
146 147
Annual Report & Accounts 2023
Annual Report & Accounts 2023
Additional Information Governance
Strategic Report
148 Independent auditor’s report
162 Consolidated income statement
162 Consolidated statement of comprehensive income
163 Consolidated balance sheet
164 Consolidated statement of changes in equity
165
166
205 Company balance sheet
206 Company statement of changes in equity
207
Financial Statements Financial StatementsPage Title Page Title
Our independence
applied to listed public interest entities.
We have not performed any non-audit services during
periods ended 30 December 2023.
The Group engagement partner is required to rotate every
£1.3m
Other services £0.1m
Non-audit fee as a % of total audit and audit
related fee % £nil
n/a
12 May 2022
2 years
Tenure of Group engagement partner 2032
Tenure of Group engagement partner 2 years
In our opinion:
•
•
•
•
Companies Act 2006.
What our opinion covers
• Consolidated income statement
• Consolidated statement of comprehensive income
• Consolidated balance sheet
• Consolidates statement of changes in equity
•
•
• Company balance sheet
• Company statement of changes in equity
•
Independent auditor’s report
To the members of Howden Joinery Group Plc
relation to these, as in the prior year.
We have determined that accounting for inventory is of
in determining the adequacy and completeness of the
inventory obsolescence provision. Inventory provisioning
includes estimation based on both historic usage and
deterioration in the macro-economic environment during
our audit effort.
the prior year.
The recoverability of the Parent Company’s investment in
subsidiaries and debt due from group entities is not at a
Key Audit Matters Vs FY22 Item
Accounting for inventory (Group) 4.1
(Group)
4.2
Recoverability of Parent Company’s
investment in subsidiaries and debt due
from group entities (Parent Company)
4.3
148 149
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Independent auditor’s reportFinancial Statements Financial Statements Page Title
or the Parent Company or to cease their operations, and as they have concluded that the Group’s and the Parent Company’s
Going concern
•
living challenges, and the possibility of this negatively
•
supply chain.
liquidity or covenant compliance in the going concern period
individually and collectively, could result in a liquidity issue,
projected cash and facilities (a reverse stress test).
We assessed the completeness of the going concern
Directors’ use of the going concern basis of accounting
all future events or conditions and as subsequent
made, the above conclusions are not a guarantee that the
• We consider that the Directors’ use of the going concern
•
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
Parent Company’s ability to continue as a going concern
•
in relation to the Directors’ statement in note 1 to the
Company’s use of that basis for the going concern period,
• The related statement under the Listing Rules set out
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
of procedures to be performed at these components. The audit of all
by the Group team.
The Group has 14 reporting components. We determined individually
total revenue or total assets. We selected these because these are the
performed full scope audits on these components.
audit team.
We consider the scope of our audit, as communicated to the Audit
Committee, to be an appropriate basis for our audit opinion.
We have considered the potential impacts of climate change
described on page 46.
audit. This included enquiries of management, consideration
of the Group’s processes for assessing the potential impact of
We have read the Group’s disclosure of climate related
information in the front half of the annual report as set out
We have determined overall materiality for the Group
Group Group Materiality
GPM Group Performance Materiality
HCM
PLC Parent Company Materiality
LCM
AMPT Audit Misstatement Posting Threshold
Residual components
Group
GPM
PLC
LCM
AMPT
12
9.8
2.4
2.5
1
0.9
19
17.5
12.3
13.1
18
16.6
93%
97%
94%
7%
3%
6%
before tax
Total assets
Revenue
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the greatest effect on our overall audit strategy. As at 30
December 2023, net inventory, after recognising relevant
The scale of the Group’s product range means there is
completeness of the inventory obsolescence provision,
in particular the provision applied to discontinued and
The deterioration in the macro-economic environment
on the already high estimation uncertainty associated
The effect of these matters is that, as part of our
obsolescence provision has a high degree of estimation
range, typically held in large quantities. The Group
of the counts.
is updated annually. Variances to standard cost are
analysed and apportioned to inventory at the period end.
Whilst the quantities and cost of inventory is not
misstatement, it is one of the matters that has the greatest
engagement team in order to conclude.
• Count attendance:
effectiveness of the inventory cycle counts control. We counted a sample
of inventory lines and assessed the accuracy of the Group’s inventory
quantities through comparing the results to the Group’s inventory records.
• Tests of detail:
tested any movements in inventory quantities by comparing to relevant
using statistical routines.
• Tests of detail:
testing a sample of inventory lines to relevant source data.
• Our sector experience:
of inventory that may not be in demand and respective sales prices, against
• Historical comparisons:
in the inventory obsolescence provision by comparing to the historical
utilisation.
• Test of detail:
the Directors to discontinued items.
• Test of detail:
• Assessing transparency:
statement disclosures about the degree of estimation uncertainty in arriving
at the net realisable value.
We performed the detailed tests above over inventory provisioning rather than
detailed procedures described.
•
• Our conclusions on the appropriateness of the Group’s inventory provisioning methodology, accounting policies and disclosures.
•
relation to:
•
•
•
and meet its liabilities as they fall due over the period of their assessment, including any
page 70 under the Listing Rules.
statements is not a guarantee as to the Group’s and Parent Company’s longer-term viability.
Our reporting
We have nothing material
to in relation to these
disclosures.
We have concluded that
these disclosures are
•
•
• directing the efforts of the engagement team.
on these matters.
FY23 FY22
Our assessment is that
FY23: Acceptable
Inventories gross value £432.4m £426.8m
Inventory provision £49.6m £53.5m
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
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Financial Statements Financial StatementsPage Title Page Title
FY23 FY22
Our assessment is that
FY23: Acceptable
Investments in subsidiaries £699.0m £699.0m
companies £69.4m £103.3m
The carrying amount of the Parent Company’s investment
in subsidiaries and intra-group debtor balance represents
is considered to be the area that had the greatest effect on our
• Tests of detail: Assessing 100% of the investment in subsidiaries
• Comparing valuations:
of the business based on forecasted dividends to ultimately be
the Company’s controls because the nature of the balance is such
detailed procedures described.
• Our approach to the audit of parent company investments in subsidiaries and intra-Group receivables including details of our planned
• Our conclusions on the recoverability of the Parent Company’s investment in subsidiaries and intra-group debtor balances.
•
parent company from other Group entities.
the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. Accordingly,
FY23 FY22
FY23: Acceptable
£913.6m £930.5m
and mortality rates) can have a material impact on the amount
the Group.
• Benchmarking assumptions:
the estimation of the pension liability, being the discount rate,
• Actuary’s credentials:
• Assessing transparency:
Group’s disclosures in respect of the sensitivity of the pension
of the Group’s controls because the nature of the balance is such
•
•
• The adequacy of the disclosures, particularly as it relates to the sensitivities disclosed by the Group.
•
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
154 155
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Financial Statements Financial StatementsPage Title Page Title
compliance throughout the audit.
of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit
procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud
•
level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel
• Reading Board and Audit Committee meeting minutes.
• Considering remuneration incentive schemes and performance targets for management and Directors including the long-
term incentive plan for management remuneration.
•
the audit.
related to revenue recognition because there are limited opportunities to fraudulently adjust revenue recognition given the
this report.
We performed procedures including:
•
•
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
156 157
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Financial Statements Financial StatementsPage Title Page Title
misstatements are considered to be clearly
indicators of fraud.
qualitative grounds.
statement caption amounts:
Total Group Revenue Total Group Assets
FY23 FY22 FY23 FY22 FY23 FY22
£2,310.9m £2,319.0m £327.6m £405.8m £2,064.5m £2,032.7m
Group Materiality as % of caption 0.8% 0.8% 5.3% 4.7% 0.8% 0.9%
Group scope
Scope
Number of
components
Range of
materiality
applied
Group
revenue
losses that made
up Group PBT
Group
total assets
5 (5) £2.5m – £16.6m
(£2.4m – £18.0m)
97% (97%) 93% (96%) 94% (95%)
Residual components 9 (9) 3% (3%) 7% (4%) 6% (5%)
Total 14 (14) 100% 100% 100%
A quantitative reference for the purpose of
planning and performing our audit.
interest entities considers a guideline range of 3% – 5% of the measure. In
appropriate.
Our procedures on individual account
that individually immaterial misstatements
in individual account balances add up to
We have considered performance materiality at a level of 75%
We applied this percentage in our determination of performance
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
158 159
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Financial Statements Financial StatementsPage Title Page Title
Our reporting
•
•
•
•
We have nothing to report in these
respects.
assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
Company or to cease operations, or have no realistic alternative but to do so.
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
Our reporting
misstatements or inconsistencies
in the other information.
Strategic Report and Directors’ Report
•
•
•
Our reporting
Remuneration Report to be audited has been properly prepared in accordance
In our opinion the part of the
Directors’ Remuneration Report
to be audited has been properly
Companies Act 2006.
Our reporting
•
the information necessary for shareholders to assess the Group’s position and
•
•
have concluded that each of these
disclosures is materially consistent
We have nothing to report
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
160 161
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Financial Statements Financial StatementsPage Title Page Title
Notes
| 30 December 2023 | 24 December 2022 | ||
| £m | £m | ||
| Non-current assets | |||
Intangible assets | 9 | ||
Property, plant and equipment | 10 | ||
Lease right-of-use assets | 11 | ||
| 7 | ||
Prepaid credit facility fees | |||
| Current assets | |||
Inventories | 12 | ||
| 7 | ||
Trade and other receivables | 13 | ||
Cash and cash equivalents | 18 | ||
Total assets | |||
| Current liabilities | |||
Lease liabilities | 11 | ( | ( |
Trade and other payables | 14 | ( | ( |
Provisions | 15 | ( | ( |
( | ( | ||
| Non-current liabilities | |||
Pension liability | 22 | ( | ( |
Lease liabilities | 11 | ( | ( |
| 7 | ( | ( |
Provisions | 15 | ( | ( |
( | ( | ||
Total liabilities | ( | ( | |
Net assets | |||
| Equity | |||
Share capital | 16 | ||
Capital redemption reserve | 16 | ||
Share premium | 16 | ||
| 16 | ||
Treasury shares | 16 | ( | ( |
Retained earnings | 16 | ||
Total equity |
behalf by
Notes
| 53 weeks to | 52 weeks to | ||
| 30 December 2023 | 24 December 2022 | ||
| £m | £m | ||
| Continuing operation: | |||
Revenue | 2 | ||
Cost of sales | ( | ( | |
| |||
| ( | ( | |
| 4 | ||
| 5 | ||
| 6 | ( | ( |
| |||
| 7 | ( | ( |
| |||
| Earnings per share: | |||
Basic earnings per 10p share | 8 | ||
Diluted earnings per 10p share | 8 |
Notes
| 53 weeks to | 52 weeks to | ||
| 30 December 2023 | 24 December 2022 | ||
| £m | £m | ||
| |||
| Items of other comprehensive income: | |||
| | |||
| 22 | ( | |
| 7 | ( | |
| 7 | ( | |
| | |||
Currency translation differences | ( | ||
Other comprehensive income for the period | ( | ||
Total comprehensive income for the period attributable to equity holders of the parent |
162 163
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Consolidated balance sheetConsolidated income statement Consolidated statement of comprehensive incomeFinancial Statements Financial Statements
Notes
| 53 weeks to | 52 weeks to | ||
| 30 December 2023 | 24 December 2022 | ||
| £m | £m | ||
| |||
| Adjustments for: | |||
| ( | ( | |
| |||
| 9, 10 | ||
Depreciation, impairment and loss on termination of leased assets | 11 | ||
Share-based payments charge | |||
Decrease/(increase) in prepaid credit facility fees | ( | ||
| ( | ||
| ( | ||
| |||
| Movements in working capital | |||
Increase in inventories | ( | ( | |
Decrease/(increase) in trade and other receivables | ( | ||
(Decrease)/increase in trade and other payables and provisions | ( | ||
( | ( | ||
Cash generated from operations | |||
| ( | ( | |
| |||
| | |||
Payments to acquire property, plant and equipment and intangible assets | ( | ( | |
Receipts from sale of property, plant and equipment and intangible assets | |||
Acquisition of subsidiary – net of cash acquired | ( | ||
Interest received | |||
Net cash used in investing activities | ( | ( | |
| | |||
| ( | ( | |
Receipts from release of shares from share trust | |||
Dividends paid to Group shareholders | ( | ( | |
Interest paid – including on lease liabilities | ( | ( | |
Repayment of capital on lease liabilities | ( | ( | |
| ( | ( | |
Net decrease in cash and cash equivalents | ( | ( | |
Cash and cash equivalents at beginning of period | |||
| ( | ||
Cash and cash equivalents at end of period | 18 |
1
| Capital | Share | ESOP and | |||||
| Share | redemption | premium | share-based | Treasury | Retained | ||
| capital | reserve | account | payments | shares | earnings | Total | |
| £m | £m | £m | £m | £m | £m | £m | |
At 25 December 2021 | ( | ||||||
| |||||||
Other comprehensive income for the period | ( | ( | |||||
Total comprehensive income for the period | |||||||
| |||||||
| ( | ( | |||||
| |||||||
| ( | ( | ( | ||||
Transfer of shares from treasury into share trust | ( | ||||||
Dividends | ( | ( | |||||
At 24 December 2022 | ( | ||||||
| |||||||
Other comprehensive income for the period | |||||||
Total comprehensive income for the period | |||||||
| |||||||
| |||||||
| |||||||
| ( | ( | ( | ||||
Transfer of shares from treasury into share trust | ( | ||||||
Dividends | ( | ( | |||||
At 30 December 2023 | ( |
5,237,907 shares of 10p each).
We present a description of the nature and purpose of each reserve at note 16.
164 165
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Consolidated statement of changes in equityFinancial Statements Financial Statements
stated in the accounting policies.
of the Company and all entities controlled by the Company (its
control commences until the date that control ceases.
Going concern
statements on the going concern basis. They have not
statements. The Board has considered the trading results and
at 30 December 2023, noting that the Group is debt-free, has
cash and cash equivalents of £283m, and appropriate levels
• A ‘ba se c ase’ s cen ario. T his i s ba sed o n the fin al 20 23
Group forecast, prepared in November 2023 and including
• A ‘severe bu t plau sib le’ dow nsi de sc ena rio ba se d on the
performance. In this scenario the Board considered
the current economic conditions that the company and
• A ‘revers e stres s-tes t’ s cen ario .
Company and currency details
Accounting period
Impairment of assets
Statement of compliance and basis of preparation
Going concern
Standards in issue but not yet effective
Earnings
2 Revenue
6 Finance costs
8 Earnings per share
12 Inventories
15 Provisions
17 Dividends
Other supporting notes
166 167
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Notes to the consolidated financial statementsFinancial Statements Financial Statements Page Title
continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
2,241.1 | 2,256.1 | |
69.8 | 62.9 | |
2,310.9 | 2,319.0 |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
1,935.6 | 1,903.1 | |
128.9 | 129.6 | |
2,064.5 | 2,032.7 |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
1,068.3 | 975.4 | |
80.8 | 74.5 | |
1,149.1 | 1,049.9 |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
108.3 | 122.7 | |
9.1 | 24.5 | |
117.4 | 147.2 |
Earnings
168 169
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Financial Statements Financial StatementsPage Title Page Title
continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
(16.8) | (13.1) | |
(1.3) | – | |
Other interest | – | (0.1) |
(18.1) | (13.2) |
Earnings continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
(8.2) | (0.7) | |
(892.8) | (893.1) | |
(6.1) | (14.0) | |
(0.3) | 0.1 | |
Auditor’s remuneration for audit services | (1.4) | (1.1) |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
| Audit services: | ||
statements | (0.3) | (0.2) |
– the audit of the subsidiary companies pursuant to legislation | (1.0) | (0.9) |
Total audit fees | (1.3) | (1.1) |
| Other services: | ||
(0.1) | (0.1) | |
Total non-audit fees | (0.1) | (0.1) |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
5.5 | 1.1 | |
– | 2.7 | |
5.5 | 3.8 |
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continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
327.6 | 405.8 | |
77.0 | 77.1 | |
0.5 | 0.3 | |
2.9 | 1.0 | |
Overseas losses not utilised | 6.2 | 2.7 |
Non-qualifying depreciation | 1.0 | 1.6 |
– | (2.4) | |
Rate change | 0.7 | 0.6 |
(8.0) | (9.0) | |
(7.3) | (40.3) | |
Total tax charged in the income statement | 73.0 | 31.6 |
| Retirement | Accelerated | Company | Other | |||
| capital | share | temporary | ||||
| obligations | allowances | schemes | Leasing | differences | Total | |
| £m | £m | £m | £m | £m | £m | |
At 25 December 2021 | (35.2) | 0.2 | 3.5 | 3.3 | 3.9 | (24.3) |
(Charge)/credit to income statement | – | 12.9 | – | 0.2 | (0.6) | 12.5 |
(Charge) to the income statement – change of rate | – | (0.4) | – | – | (0.2) | (0.6) |
Credit outside the income statement – change of rate | 11.0 | – | 0.2 | – | – | 11.2 |
(Charge)/credit outside the income statement | 34.8 | – | (1.5) | – | – | 33.3 |
At 24 December 2022 | 10.6 | 12.7 | 2.2 | 3.5 | 3.1 | 32.1 |
(Charge)/credit to income statement | (4.1) | (11.6) | – | (0.6) | 0.5 | (15.8) |
(Charge) to the income statement – change of rate | – | (0.7) | – | – | – | (0.7) |
(Charge) outside the income statement – change of rate | (0.4) | – | – | – | – | (0.4) |
(Charge)/credit outside the income statement | (2.9) | – | – | – | – | (2.9) |
At 30 December 2023 | 3.2 | 0.4 | 2.2 | 2.9 | 3.6 | 12.3 |
Earnings continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
| Current tax: | ||
Current year | 64.7 | 77.2 |
Adjustments in respect of previous periods | (8.2) | (33.6) |
Total current tax | 56.5 | 43.6 |
| Deferred tax: | ||
Current year | 14.9 | 2.1 |
Adjustments in respect of previous periods | 0.9 | (14.7) |
0.7 | 0.6 | |
Total deferred tax | 16.5 | (12.0) |
Total tax charged in the income statement | 73.0 | 31.6 |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
on actuarial difference on pension scheme | 2.9 | (34.8) |
0.4 | (11.0) | |
– | 1.3 | |
(0.3) | (0.4) | |
Total charge/(credit) to other comprehensive income or changes in equity | 2.9 | (44.9) |
172 173
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Financial Statements Financial StatementsPage Title Page Title
continued
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
12.4 | 12.4 | |
31.1 | 23.5 | |
43.5 | 35.9 |
Earnings continued
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
15.6 | 35.9 | |
(3.3) | (3.8) | |
12.3 | 32.1 |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
Trading losses | 100 | 77 |
Non-trading losses | 20 | 20 |
Capital losses | 86 | 86 |
Total losses | 206 | 183 |
8 Earnings per share
From continuing operations
53 weeks to 30 December 2023 | 52 weeks to 24 December 2022 | |||||
| Weighted | Weighted | |||||
| average | average | |||||
| number of | Earnings per | number of | Earnings per | |||
| Earnings | shares | share | Earnings | shares | share | |
| £m | m | p | £m | m | p | |
Basic earnings per share | 254.6 | 548.1 | 46.5 | 374.2 | 568.6 | 65.8 |
– | 2.1 | (0.2) | – | 2.1 | (0.2) | |
Diluted earnings per share | 254.6 | 550.2 | 46.3 | 374.2 | 570.7 | 65.6 |
number of shares in issue at the period end is due to the net effect of time-apportioned adjustments for shares held in treasury,
174 175
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Financial Statements Financial StatementsPage Title Page Title
continued
| Leasehold | Plant, | |||||
| Freehold | property | machinery | Fixtures & | Assets under | ||
| property | improvements | & vehicles | construction | TOTAL | ||
| £m | £m | £m | £m | £m | £m | |
At 25 December 2021 | 55.1 | 92.1 | 191.0 | 207.1 | 33.1 | 578.4 |
– | – | 0.1 | 0.5 | – | 0.6 | |
Additions | 16.2 | 16.5 | 12.2 | 49.6 | 44.4 | 138.9 |
Acquisition of subsidiary | 0.1 | – | 0.3 | 0.1 | – | 0.5 |
Disposals | – | (0.3) | (5.3) | (1.3) | – | (6.9) |
1.7 | (0.2) | 8.1 | 8.2 | (17.8) | – | |
At 24 December 2022 | 73.1 | 108.1 | 206.4 | 264.2 | 59.7 | 711.5 |
– | – | (0.1) | (0.4) | (0.1) | (0.6) | |
Additions | 2.1 | 12.0 | 17.6 | 39.1 | 33.0 | 103.8 |
Disposals | – | (1.7) | (12.2) | (2.3) | – | (16.2) |
1.8 | 3.4 | 19.4 | 6.6 | (31.2) | – | |
At 30 December 2023 | 77.0 | 121.8 | 231.1 | 307.2 | 61.4 | 798.5 |
| Accumulated depreciation | ||||||
At 25 December 2021 | (9.1) | (29.6) | (125.5) | (118.4) | – | (282.6) |
– | – | (0.1) | (0.1) | – | (0.2) | |
Charge for the period | (1.7) | (5.1) | (12.3) | (17.4) | – | (36.5) |
Disposals | – | 0.3 | 4.9 | 1.3 | – | 6.5 |
At 24 December 2022 | (10.8) | (34.4) | (133.0) | (134.6) | – | (312.8) |
– | – | – | 0.1 | – | 0.1 | |
Charge for the period | (1.9) | (6.2) | (13.9) | (22.8) | – | (44.8) |
Disposals | – | 1.6 | 12.1 | 2.2 | – | 15.9 |
At 30 December 2023 | (12.7) | (39.0) | (134.8) | (155.1) | – | (341.6) |
Net book value at 30 December 2023 | 64.3 | 82.8 | 96.3 | 152.1 | 61.4 | 456.9 |
62.3 | 73.7 | 73.4 | 129.6 | 59.7 | 398.7 |
continued
| Intangible assets | Assets under | ||
| in use | construction | TOTAL | |
| £m | £m | £m | |
| Cost | |||
At 25 December 2021 | 46.3 | 3.9 | 50.2 |
0.1 | – | 0.1 | |
Additions | 1.8 | 6.5 | 8.3 |
Acquisition of subsidiary | 0.3 | – | 0.3 |
Disposals | (5.2) | (0.1) | (5.3) |
2.5 | (2.5) | – | |
At 24 December 2022 | 45.8 | 7.8 | 53.6 |
Additions | 3.0 | 10.6 | 13.6 |
Disposals | (1.4) | – | (1.4) |
4.9 | (4.9) | – | |
At 30 December 2023 | 52.3 | 13.5 | 65.8 |
| Accumulated depreciation | |||
At 25 December 2021 | (27.6) | – | (27.6) |
(0.1) | – | (0.1) | |
Charge for the period | (7.5) | – | (7.5) |
Disposals | 5.1 | – | 5.1 |
At 24 December 2022 | (30.1) | – | (30.1) |
Charge for the period | (6.0) | – | (6.0) |
Disposals | 1.4 | – | 1.4 |
At 30 December 2023 | (34.7) | – | (34.7) |
Net book value at 30 December 2023 | 17.6 | 13.5 | 31.1 |
15.7 | 7.8 | 23.5 |
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| 30 December 2023 | 24 December 2022 | |
| Right-of-use assets | £m | £m |
Property | 591.7 | 565.6 |
Vehicles, plant & machinery | 56.2 | 48.7 |
647.9 | 614.3 | |
Additions to right-of-use assets in the period | 122.9 | 141.6 |
| 30 December 2023 | 24 December 2022 | |
| Lease liabilities | £m | £m |
Current | (85.3) | (95.3) |
Non-current | (599.2) | (570.0) |
(684.5) | (665.3) |
continued
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| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
28.0 | 24.3 | |
9.5 | 6.2 | |
394.9 | 396.3 | |
(49.6) | (53.5) | |
382.8 | 373.3 |
2023 | 2022 | |||
| Gross value | Allowance against | Gross value | Allowance against | |
| of stock | carrying value | of stock | carrying value | |
| £m | £m | £m | £m | |
338.3 | – | 323.3 | – | |
94.1 | (49.6) | 103.5 | (53.5) | |
432.4 | (49.6) | 426.8 | (53.5) |
continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
| Included in net operating expenses | ||
| Depreciation of right-of-use assets: | ||
– property | 72.7 | 65.4 |
– vehicles, plant & machinery | 17.8 | 16.3 |
Impairment and net gain on lease termination | (0.4) | (0.9) |
Total – recognised in net operating costs | 90.1 | 80.8 |
4.8 | 5.4 | |
Variable lease payments, not included in the measurement of lease liabilities | 2.6 | 2.9 |
16.8 | 13.1 |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
121.8 | 79.2 |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
| Maturity analysis of lease liabilities | ||
102.9 | 109.9 | |
– 1 to 5 years | 316.5 | 285.4 |
– more than 5 years | 382.6 | 371.6 |
802.0 | 766.9 |
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| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
1–30 days past due | 21.4 | 22.6 |
31–60 days past due | 6.8 | 6.1 |
61–90 days past due | 3.9 | 3.8 |
90+ days past due | 14.0 | 12.2 |
46.1 | 44.7 |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
Trade payables | 174.5 | 189.5 |
70.4 | 91.9 | |
Other payables | 29.8 | 37.2 |
Accruals and deferred income | 98.5 | 115.3 |
373.2 | 433.9 |
continued
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
159.5 | 173.5 | |
Prepayments | 29.2 | 55.2 |
Other receivables | 5.8 | 4.6 |
194.5 | 233.3 |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
Balance at start of period | 17.6 | 15.8 |
– | 0.2 | |
0.4 | 1.6 | |
Balance at end of period | 18.0 | 17.6 |
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| 52 weeks to 24 | 52 weeks to 24 | |||
| 30 December 2023 | December 2022 | 30 December 2023 | December 2022 | |
| No. | No. | £m | £m | |
| Allotted, called up and fully paid | ||||
Balance at the beginning of the period | 560,916,049 | 597,573,827 | 56.1 | 59.8 |
(7,324,329) | (36,657,778) | (0.7) | (3.7) | |
Balance at the end of the period | 553,591,720 | 560,916,049 | 55.4 | 56.1 |
continued
| French post- | |||||
| employment | |||||
| Property | Warranty | Other | Total | ||
| £m | £m | £m | £m | £m | |
At 25 December 2021 | 7.0 | 10.9 | 2.2 | 0.3 | 20.4 |
Additional provision in the period | 1.3 | 7.0 | – | – | 8.3 |
Provision released in the period | (1.6) | – | (1.4) | – | (3.0) |
(1.7) | (6.7) | (0.8) | – | (9.2) | |
At 24 December 2022 | 5.0 | 11.2 | – | 0.3 | 16.5 |
Additional provision in the period | 1.5 | 4.0 | 0.2 | – | 5.7 |
Provision released in the period | (1.6) | – | – | – | (1.6) |
(1.1) | (7.0) | – | – | (8.1) | |
At 30 December 2023 | 3.8 | 8.2 | 0.2 | 0.3 | 12.5 |
Presented as current liabilities | 3.1 | 6.4 | – | – | 9.5 |
Presented as non-current liabilities | 0.7 | 1.8 | 0.2 | 0.3 | 3.0 |
At 30 December 2023 | 3.8 | 8.2 | 0.2 | 0.3 | 12.5 |
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| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
| Financial assets (current and non-current) | ||
Trade receivables | 159.5 | 173.5 |
Cash and cash equivalents | 282.8 | 308.0 |
| Financial liabilities (current and non-current) | ||
Trade payables | 174.5 | 189.5 |
continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
– | 88.9 | |
– | 26.1 | |
87.8 | – | |
26.3 | – | |
114.1 | 115.0 |
| 53 weeks to | |
| 30 December 2023 | |
| £m | |
88.4 |
| Cash and cash | |||
| Cash at bank | Current asset | equivalents, | |
| and in hand | investments £m | and net cash | |
| £m | £m | ||
At 24 December 2022 | 308.0 | – | 308.0 |
(25.2) | – | (25.2) | |
At 30 December 2023 | 282.8 | – | 282.8 |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
Opening balance | (665.3) | (591.2) |
Cash movement: repayment of principal on lease liabilities | 105.0 | 66.1 |
Cash movement: lease interest paid | 16.8 | 13.1 |
Non cash movement: net additions to lease liabilities | (141.0) | (153.3) |
Closing balance | (684.5) | (665.3) |
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| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
| Euro | ||
Trade receivables | 8.4 | 9.4 |
Other receivables | 3.1 | 3.9 |
Cash and cash equivalents | 57.7 | 56.7 |
Trade payables | (35.4) | (43.4) |
Other payables | (4.6) | (7.3) |
29.2 | 19.3 | |
| US Dollar | ||
Other receivables | – | 1.1 |
Cash and cash equivalents | 19.7 | 25.3 |
Trade payables | (0.8) | (1.1) |
18.9 | 25.3 | |
TOTAL | 48.1 | 44.6 |
continued
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
159.5 | 173.5 | |
Cash | 282.8 | 308.0 |
442.3 | 481.5 |
188 189
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continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
Wages and salaries | (561.4) | (536.3) |
Social security costs | (49.8) | (47.8) |
Pension operating costs (note 22) | (44.8) | (40.0) |
(656.0) | (624.1) |
Wages and salaries includes a charge in respect of share-based payments of £6.0m (2022: £7.3m).
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| No. | No. | |
9,417 | 9,581 | |
Manufacturing and logistics | 2,288 | 2,262 |
International | 707 | 565 |
12,412 | 12,408 |
continued
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
3.2 | 2.1 | |
(2.7) | (1.7) | |
2.1 | 2.8 | |
(1.7) | (2.3) |
190 191
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continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
| Charged to the income statement: | ||
2.3 | 2.4 | |
2.3 | 2.4 | |
1.3 | (2.7) | |
42.5 | 37.6 | |
46.1 | 37.3 | |
| Charged to equity: | ||
(13.3) | 183.0 | |
Total charge/(credit) | 32.8 | 220.3 |
continued
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30 December 2023 | 24 December 2022 | |||
| No quoted market | No quoted market | |||
| Quoted market price | price in an active | Quoted market price | price in an active | |
| in an active market | market | in an active market | market | |
| £m | £m | £m | £m | |
| LDI* | ||||
282.9 | – | 270.0 | – | |
– derivatives | 20.5 | – | (268.7) | – |
– cash | 12.7 | – | 172.8 | – |
– passive equities | – | 49.8 | – | – |
Private equity | – | – | – | 0.6 |
– fund of hedge funds | – | – | – | 152.4 |
– absolute return fund | – | – | 1.0 | – |
– | 70.8 | – | 105.2 | |
Corporate bonds | 0.1 | – | 1.8 | – |
Commercial property funds | – | 233.4 | 7.7 | 239.9 |
Other secure income | 60.0 | 161.9 | 1.2 | 179.3 |
0.5 | – | 0.5 | – | |
Cash and cash equivalents | 8.3 | – | 25.3 | – |
Total | 385.1 | 515.9 | 211.6 | 677.4 |
continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
Discount rate | 4.55% | 4.70% |
3.05% | 3.15% | |
2.60% | 2.70% | |
2.60% | 2.70% | |
2.40% | 2.45% | |
| Rate of increase of pensions in payment: | ||
2.60% | 2.65% | |
3.40% | 3.45% | |
2.15% | 2.15% | |
2.20% | 2.25% | |
– male | 85.7 | 86.6 |
– female | 88.0 | 88.4 |
– male | 86.7 | 87.6 |
– female | 89.6 | 90.2 |
| Projected 2024 pension cost | ||||
| Present value of | ||||
| scheme liabilities at | Net interest | Net pension | ||
| 30 December 2023 | Total service cost | (credit)/cost | (credit)/expense | |
| £m | £m | £m | £m | |
| Assumption | ||||
Current valuation, using the assumptions above | 914 | 2.1 | 0.3 | 2.4 |
0.5% decrease in discount rate | 979 | 2.1 | 2.9 | 5.0 |
945 | 2.1 | 1.7 | 3.8 | |
1 year increase in longevity | 946 | 2.1 | 1.7 | 3.8 |
194 195
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continued
| 2023 | |||
No. of members | % of total liability | Duration (years) | |
Deferred members | 5,905 | 52% | 17 |
Pensioners | 4,428 | 48% | 11 |
Total No./average duration | 10,333 | 100% | 14 |
| 2022 | |||
No. of members | % of total liability | Duration (years) | |
Deferred members | 6,236 | 63% | 19 |
Pensioners | 4,233 | 37% | 11 |
Total No./average duration | 10,469 | 100% | 16 |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
(913.6) | (930.5) | |
901.0 | 889.0 | |
(12.6) | (41.5) |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
Present value at start of period | 930.5 | 1,512.5 |
Administration cost | 2.3 | 2.4 |
Interest on obligation | 42.8 | 28.3 |
| Actuarial losses/(gains): | ||
14.2 | (622.8) | |
– changes in demographic assumptions | (26.5) | (3.5) |
(9.2) | 55.8 | |
(40.5) | (42.2) | |
Present value at end of period | 913.6 | 930.5 |
continued
| Initial weighting | Target weighting | Range | |
| % | % | % | |
RETURN-SEEKING ASSETS | 65 | 60 | 50–70 |
– Global equities | 5 | 5 | 0–10 |
– Absolute return | 7 | 7 | 2–12 |
– Multi-asset credit | 3 | 8 | 0–13 |
– Secure income assets | 50 | 40 | 30–50 |
RISK-REDUCING ASSETS | 35 | 40 | 30–50 |
196 197
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continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
Actuarial loss on plan assets | (8.2) | (753.5) |
(14.2) | 622.8 | |
9.2 | (55.8) | |
Decrease in plan liabilities due to demographic assumptions | 26.5 | 3.5 |
13.3 | (183.0) |
continued
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
889.0 | 1,653.3 | |
Interest income on plan assets | 41.5 | 31.0 |
19.2 | 0.4 | |
(8.2) | (753.5) | |
(40.5) | (42.2) | |
901.0 | 889.0 |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
(41.5) | 140.8 | |
Administration cost | (2.3) | (2.4) |
19.2 | 0.4 | |
(1.3) | 2.7 | |
Total remeasurements recognised in other comprehensive income | 13.3 | (183.0) |
(12.6) | (41.5) |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
Current service cost | – | – |
Administration cost | 2.3 | 2.4 |
Total pensions cost | 2.3 | 2.4 |
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
Interest income on plan assets | (41.5) | (31.0) |
42.8 | 28.3 | |
1.3 | (2.7) |
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continued
| Date of award 2023 | |
| Performance Conditions: | |
20% | |
The TSR tranche Performance Period is from year ended December 2022 to year ended December 2025. | |
60% | |
– PBT tranche vests at 15% if PBT for year ended 2025 is | £400m |
– PBT tranche vests at 100% if PBT for year ended 2025 is The PBT tranche Performance Period is from year ended December 2022 to year ended December 2025. | £484m |
10% | |
25% | |
30% | |
10% | |
| – Reducing Scope 1 and Scope 2 carbon emissions relative to PBT performance: | |
and 31 December 2025 are reduced by | 4.0% |
and 31 December 2025 are reduced by | 4.2% |
25 December 2021 and 27 December 2025 by | 12% |
25 December 2021 and 27 December 2025 by – Achieving carbon neutral status across manufacturing sites: | 15% |
sites achieve carbon neutral status by 31 December 2025 | |
(iv) Restricted Share Awards , whe re the pa rtic ipa nt rece ives b enefi cia l entitl eme nt to share s upo n grant of the aw ard. Th e le gal
cease to apply. The shares are not subject to any performance conditions other than continued employment. Dividends are
payable during the vesting period.
continued
(i) Conditional Share Awards , the vesti ng pe riod f or whi ch is u sual ly thre e years c omm enc ing on th e date of grant a nd sub ject
to continued employment. The shares are not subject to any other performance conditions.
(ii) Market value options , the vestin g peri od fo r whic h was thre e year s comm enc ing fro m the date of gra nt with an exerci se
| Date of award 2013 | |
2012 | |
– to year ended December | 2015 |
6% | |
12% |
| Date of award 2014 | |
2013 | |
– to year ended December | 2016 |
8% | |
20% |
(iii) Performance Share Plan , the vestin g per iod fo r whic h is no rmall y three ye ars c omme nci ng from th e date of grant . The
Date of award 2018 | 2019 | |
2017 | 2018 | |
– to year ended December | 2020 | 2021 |
5% | 5% | |
15% | 15% |
Date of award 2020 | 2021 | 2022 | |
Performance Period – from year ended December | 2019 | 2020 | 2021 |
– to year ended December | 2022 | 2023 | 2024 |
| Performance Conditions: | |||
67% | 33% | 33% | |
compared to comparators at | Median | Median | Median |
compared to comparators in the | |||
33% | 67% | 67% | |
5% | 5% | 5% | |
15% | 15% | 15% |
200 201
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continued
| SIP (i) | LTIP (i) | LTIP (iii) | LTIP (iv) | |
| Number | Number | Number | Number | |
In issue at start of period | 2,253,629 | – | 3,324,679 | 13,646 |
Granted in period | 359,104 | 382,200 | 1,080,204 | – |
Lapsed in period | (102,785) | – | (38,868) | – |
(436,287) | – | (1,299,808) | (13,646) | |
In issue at end of period | 2,073,661 | 382,200 | 3,066,207 | – |
1,130,011 | – | 67 | – | |
| Number of options in the closing balance | ||||
granted before 7 November 2002 | 14,028 | – | – | – |
| Weighted average share price for options | ||||
7.10 | N/A | 6.92 | 7.79 | |
| Weighted average life remaining for options | ||||
outstanding at the period end (years) | 1.27 | 2.73 | 1.41 | N/A |
| Weighted average fair value of options | ||||
granted during the period (£) | 7.71 | 5.27 | 6.24 | N/A |
0.00 | 0.00 | 0.00 | 0.00 |
| LTIP (ii) | SIP (iii) | ||
Number | WAEP (£) | Number | |
In issue at beginning of period | 307,429 | 3.17 | 18,577 |
Granted in period | – | N/A | 73,576 |
Lapsed in period | – | N/A | (12,324) |
(67,083) | 2.04 | (558) | |
In issue at end of period | 240,346 | 3.48 | 79,271 |
240,346 | 3.48 | – | |
| Number of options in the closing balance | |||
granted before 7 November 2002 | – | – | – |
| Weighted average share price for options | |||
7.62 | – | 6.34 | |
| Weighted average life remaining for options | |||
outstanding at the period end (years) | 0.00 | – | 2.42 |
| Weighted average fair value of options | |||
granted during the period (£) | N/A | – | 6.50 |
2.38 to 3.79 | – | 0.00 |
Carlo option valuation model.
| 53 weeks to | 52 weeks to | |
| 30 December 2023 | 24 December 2022 | |
Dividend yield (%) | 3.4 | 1.8 to 3.4 |
3 | 3 | |
30.5 | 32.2 to 32.3 |
continued
| SIP (i) | LTIP (i) | LTIP (iii) | LTIP (iv) | |
| Number | Number | Number | Number | |
In issue at start of period | 2,073,661 | 382,200 | 3,066,207 | – |
Granted in period | 393,295 | 105,000 | 953,327 | 12,854 |
Lapsed in period | (74,665) | (25,423) | (777,627) | – |
(467,695) | – | (448,629) | – | |
In issue at end of period | 1,924,596 | 461,777 | 2,793,278 | 12,854 |
1,009,826 | – | 67 | – | |
| Number of options in the closing balance | ||||
granted before 7 November 2002 | 12,692 | – | – | – |
| Weighted average share price for options | ||||
6.96 | N/A | 7.37 | N/A | |
| Weighted average life remaining for options | ||||
outstanding at the period end (years) | 1.0 | 1.8 | 1.3 | 0.6 |
| Weighted average fair value of options | ||||
granted during the period (£) | 7.03 | 6.70 | 5.70 | 7.05 |
0.00 | 0.00 | 0.00 | 0.00 |
| LTIP (ii) | WAEP | SIP (iii) | |
| Number | (£) | Number | |
In issue at beginning of period | 240,346 | 3.48 | 79,271 |
Granted in period | – | N/A | 58,928 |
Lapsed in period | – | N/A | (29,814) |
(139,447) | 3.26 | (1,644) | |
In issue at end of period | 100,899 | 3.79 | 106,741 |
100,899 | 3.79 | – | |
| Number of options in the closing balance | |||
granted before 7 November 2002 | – | – | – |
| Weighted average share price for options | |||
7.11 | – | 6.87 | |
| Weighted average life remaining for options | |||
outstanding at the period end (years) | – | – | 1.9 |
| Weighted average fair value of options | |||
granted during the period (£) | N/A | – | 7.04 |
3.79 | – | – |
202 203
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continued
Other supporting notes
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
– Tangible assets | 15.2 | 16.1 |
– | 0.7 | |
15.2 | 16.8 |
| 30 December 2023 | 24 December 2022 | |
| £m | £m | |
10.2 | 10.5 | |
0.5 | 0.8 | |
Share-based payments | 2.3 | 4.2 |
13.0 | 15.5 |
Notes
30 December 2023
£m
24 December 2022
£m
Non-current assets
Investments in subsidiaries 3 699.0 699.0
Property, plant and equipment 6 37.4 –
Lease right-of-use assets 5 179.1 175.5
69.4 103.3
0.9 1.0
Prepaid credit facility fees 0.7 1.0
986.5 979.8
Current assets
Other debtors 0.3 9.9
Cash and cash equivalents – 218.2
0.3 228.1
Total assets 986.8 1,207.9
Current liabilities
Lease liabilities 5 (6.8) (10.2)
Trade and other payables (0.4) –
– (326.8)
(7.2) (337.0)
Non-current liabilities
Lease liabilities 5 (197.1) (192.1)
Total liabilities (204.3) (529.1)
Net assets 782.5 678.8
Equity
Called up share capital 6 55.4 56.1
Capital redemption reserve 9.8 9.1
Share premium 87.5 87.5
Treasury shares (24.0) (25.5)
Retained earnings 653.8 551.6
Total equity 782.5 678.8
behalf by
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Financial StatementsFinancial Statements Page Title Company balance sheet
Called up
share capital
£m
Capital
redemption
reserve
£m
Share
premium
account
£m
Treasury
shares
£m
Retained
earnings
£m
Total
£m
At 25 December 2021 59.8 5.4 87.5 (27.1) 623.3 748.9
– – – – 293.8 293.8
(3.7) 3.7 – – (250.5) (250.5)
Transfer of shares from treasury into share trust – – – 1.6 – 1.6
Dividends declared and paid – – – – (115.0) (115.0)
At 24 December 2022 56.1 9.1 87.5 (25.5) 551.6 678.8
– – – – 266.2 266.2
(0.7) 0.7 – – (50.0) (50.0)
Transfer of shares from treasury into share trust – – – 1.5 – 1.5
Dividends declared and paid – – – – (114.1) (114.1)
At 30 December 2023 55.4 9.8 87.5 (24.0) 653.8 782.5
30 December 2023
£m
The Company’s distributable reserves at period end are:
Retained earnings 653.8
Treasury shares (24.0)
Distributable reserves 629.8
at page 212.
24 December 2022.
disclosures:
•
•
•
•
•
•
• disclosures in respect of Key Management Personnel.
Instruments.
The Company has no employees (2022: none). Directors’ emoluments and the fees payable to the Company’s auditor for the
206 207
Annual Report & Accounts 2023
Annual Report & Accounts 2023
Additional Information Governance
Strategic Report
Financial Statements Financial StatementsCompany statement of changes in equity Notes to the Company financial statements
Total
£m
Cost and carrying value:
At 24 December 2022 and 30 December 2023 699.0
Other than a small amount of interest receivable on cash and cash equivalents, the Company has no income receivable other
indicator of any impairment in the Company’s investment in subsidiaries.
Details of all Group subsidiaries are given on page 212.
Leasehold property
improvements
£m
Assets under
construction
£m
Total
£m
Cost
At 25 December 2021 and 24 December 2022 – – –
Additions 44.6 1.7 46.3
At 30 December 2023 44.6 1.7 46.3
Accumulated depreciation
At 25 December 2021 and 24 December 2022 – – –
Charge for the period (8.9) – (8.9)
At 30 December 2023 (8.9) – (8.9)
Net book value at 30 December 2023 35.7 1.7 37.4
– – –
continued
Right-of-use assets
30 December 2023
£m
24 December 2022
£m
Property 179.1 175.5
Additions to right-of-use assets in the period 12.9 3.1
30 December 2023
£m
24 December 2022
£m
Lease liabilities
Current (6.8) (10.2)
Non-current (197.1) (192.1)
(203.9) (202.3)
53 weeks to
30 December 2023
£m
52 weeks to
24 December 2022
£m
Included in net operating expenses
Depreciation of property right-of-use assets 8.6 7.9
4.6 4.5
53 weeks to
30 December 2023
£m
52 weeks to
24 December 2022
£m
14.7 8.7
Maturity analysis of lease liabilities
30 December 2023
£m
24 December 2022
£m
11.1 14.6
– 2 to 5 years 46.7 42.7
– more than 5 years 204.5 204.6
262.3 261.9
208 209
Annual Report & Accounts 2023
Annual Report & Accounts 2023
Additional Information Governance
Strategic Report
Financial Statements Financial StatementsPage Title Page Title
Ordinary shares of 10p each:
53 weeks to
30 December 2023
No.
52 weeks to
24 December 2022
No.
53 weeks to
30 December 2023
£m
52 weeks to
24 December 2022
£m
Allotted, called up and fully paid
Balance at the beginning of the period 560,916,049 597,573,827 56.1 59.8
(7,324,329) (36,657,778) (0.7) (3.7)
Balance at the end of the period 553,591,720 560,916,049 55.4 56.1
continued
210
Annual Report & Accounts 2023
211
Annual Report & Accounts 2023
Governance
Strategic Report
Additional Information
212
213
214 Shareholder and share capital information
216 Shareholder Ranges
216 Corporate timetable
217
Financial StatementsPage Title Page Title Page Title
Additional Information
Five year record
December 2023
52 weeks
£m
December 2022
52 weeks
£m
December 2021
52 weeks
£m
December 2020
52 weeks
£m
December 2019
52 weeks
£m
Summarised Income Statement
Revenue 2,310.9 2,319.0 2,093.7 1,547.5 1,583.6
340.2 415.2 401.7 195.7 260.0
327.6 405.8 390.3 185.3 260.7
Full year dividend per share (pence)
1
21.0 20.6 19.5 18.2 3.9
Basic EPS (pence) 46.5 65.8 53.2 24.9 35.0
Summarised Balance Sheet
leases and pension 516.8 471.5 332.1 290.7 251.7
Non-current lease right-of-use assets 647.9 614.3 555.8 544.2 –
Inventories 382.8 373.3 301.6 255.0 231.8
234.2 265.6 205.8 166.6 193.1
Payables and provisions (389.0) (454.2) (468.7) (338.2) (272.2)
Pension (liability)/asset (12.6) (41.5) 140.8 (47.7) (56.6)
Total lease liabilities (684.5) (665.3) (591.2) (580.5) –
(469.1) (522.1) (411.7) (544.8) 96.1
Net cash & short-term investments 282.8 308.0 515.3 430.7 267.4
Total net assets 978.4 871.7 991.5 720.8 615.2
Number of depots at end of year
UK 840 808 778 748 732
France & Belgium 65 60 40 30 27
Republic of Ireland 10 5 – – –
TOTAL 915 873 818 778 759
Capital expenditure 119 141 86 70 61
18.2p/share for 2020.
Parent company and all subsidiary undertakings
At 30 December 2023
Country of registration
Parent company
England and Wales 105 Wigmore Street, London, England, W1U 1QY
All subsidiary undertakings
Intermediate Holding Companies:
England and Wales 105 Wigmore Street, London, W1U 1QY
England and Wales 105 Wigmore Street, London, W1U 1QY
Trading:
England and Wales 105 Wigmore Street, London, W1U 1QY
France 1 Rue Calmette, ZA Du Bois Rigault Nord,
62880 Vendin-Le-Vieil
Belgium Rue du Cerisier 05-12, 6041 Gosselies
Republic of Ireland Suite 3, One Earlsfort Centre, Earlsfort Terrace,
Dublin 2, Ireland
Sheridan Fabrications Limited England and Wales 105 Wigmore Street, London, W1U 1QY
Property Management:
England and Wales 105 Wigmore Street, London, W1U 1QY
England and Wales 105 Wigmore Street, London, W1U 1QY
Administration and Employee Services:
England and Wales 105 Wigmore Street, London, W1U 1QY
England and Wales 105 Wigmore Street, London, W1U 1QY
Dormant:
England and Wales 105 Wigmore Street, London, W1U 1QY
Foreign Company Registrations:
Isle of Man 33–37 Athol Street, Douglas, Isle of Man, IM1 1LB
105 Wigmore Street, London, W1U 1QY
Isle of Man 33–37 Athol Street, Douglas, Isle of Man, IM1 1LB
212 213
Howden Joinery Group Plc
Annual Report & Accounts 2023
Howden Joinery Group Plc
Annual Report & Accounts 2023
Financial Statements
Additional Information Governance
Strategic Report
Five year recordParent company and all subsidiary undertakingsFinancial Statements Financial Statements
Additional Information
authority by shareholders to purchase up to 55,455,816 of
the Company’s ordinary shares through the market
1
. The
is earlier).
Rights and restrictions
Issued share classes: Ordinary only (fully paid)
Voting rights at general meetings: One vote per share
None
Individual special rights of control: None
2
: None
Transfer restrictions
2
: None
holders of the Company’s shares that may result in
restrictions on the transfer of shares or on voting rights.
Substantial shareholdings
Substantial
Shareholder
% of total
voting rights
Date of last
BlackRock, Inc
3
13 October 2023
The percentage interest is as stated by the shareholder at the
There are a number of agreements that take effect, alter
or terminate upon a change of control such as commercial
contracts, bank loan agreements and employee share plans.
is the bank facility (as described on page 70 and in note 19
a change of control, a mandatory repayment of the entire
Company and its Directors or employees that provide for
because of a takeover bid.
Provision for indemnity against
liability incurred by a Director
The Company has provided indemnities to the Directors (to
indemnity nor any insurance provides cover in the event
that the Director is proven to have acted dishonestly
Listing Rule 9.8.4R(2) disclosure
“ Given the Group’s continued resilient trading, the
recognising a more uncertain macro-economic outlook
analysts’ consensus forecasts.”
A footnote to the statement above read:
30 December 2023 is set out in the consolidated income
statement on page 162.
Shareholder and share capital information
Annual General Meeting
EC2P 2SR on 2 May 2024 at 11.00am.
to be voted on.
Dividend
2023 Final Dividend
11 April 2024
Record Date 12 April 2024
Payment Date 24 May 2024
Dividend reinvestment plan (‘DRIP’)
shares, rather than receive a cash payment. The DRIP is
Dividend payments directly to a bank
have dividends paid directly to your account using a bank or
building society mandate. You can arrange this by completing
dividends paid to a different UK bank or building society
account. Dividend mandate details can also be de-selected
Share Capital
As at 30 December 2023, the Company had only fully paid
out the share capital position at 30 December 2023 and at
24 December 2022:
% change
Number of Shares
30 Dec 2023 24 Dec 2022
Total Shares in issue 553,591,720 560,916,049
Treasury Shares 4,918,375 5,237,907
548,673,345 555,678,142
Shares held in Treasury have no voting or dividend rights and
Details of employee share schemes are set out in note 23 to
the Financial Statements beginning on page 199.
through UK all-employee share plans, have both voting and
dividend rights.
Shares in public hands
1
Directors, persons discharging managerial responsibility
(PDMRs), or connected persons of those Directors or PDMRs,
Company’s issued share capital at the 30 December 2023.
Acquisition of the Company’s own shares
During 2023, the Company repurchased and cancelled just
share repurchase programme. The repurchased shares
more information) the Company returns surplus capital to
shareholders. In 2023, the Board considered that a share
buy back programme, in addition to paying a dividend,
214 215
Howden Joinery Group Plc
Annual Report & Accounts 2023
Howden Joinery Group Plc
Annual Report & Accounts 2023
Financial Statements
Additional Information Governance
Strategic Report
Shareholder and share capital informationFinancial Statements Financial Statements Page Title
Financial Statements
Additional Information Governance
Strategic Report
Principal Banker
Lloyds
25 Gresham Street
London
EC2V 7HN
Joint Financial Advisers
and Stockbrokers
Deutsche Numis Securities
45 Gresham Street
London
EC2V 7BF
Barclays
1 Churchill Place
Canary Wharf
London
E14 5HP
Solicitors
100 Bishopsgate
London
EC2P 2SR
Auditor
KPMG
15 Canada Square
London
E14 5GL
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
105 Wigmore Street
London
W1U 1QY
Additional Information
Corporate holders
0 to 1,000 59 23,160
1,001 to 5,000 81 206,300
5,001 to 10,000 40 307,235
10,001 to 50,000 131 3,374,415
50,001 to 100,000 65 4,794,872
100,001 to 250,000 115 18,360,299
Over 250,000 211 519,741,201
702 546,807,482
Individual holders
0 to 1,000 4,933 1,728,901
1,001 to 5,000 965 2,190,971
5,001 to 10,000 102 723,528
10,001 to 50,000 59 1,112,255
50,001 to 100,000 3 211,989
100,001 to 250,000 1 124,594
Over 250,000 2 693,000
6,065 6,785,238
Total 6,767 553,592,720 100.00 100.00
2024
Trading update 30 April
Annual General Meeting 2 May
Half-Yearly Report 25 July
Trading update
Shareholder ranges as at 30 December 2023
Corporate timetable
Howden Joinery Group Plc
Annual Report & Accounts 2023
217
Howden Joinery Group Plc
Annual Report & Accounts 2023
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