Annual Report and Accounts 2024 Howden Joinery Group Plc
2024
The UK’s number 1
trade kitchen supplier
Annual Report
andAccounts 2024
The UK’s #1
specialist trade-only
kitchen supplier
A well-established
strategyto deliver
profitable growth
Leading positions in
attractive markets
withopportunities
to gainshare
A differentiated business
model with benefits
of scale and local
trade relationships
Sustainable growth,
sector-leading
margins andstrong
cash generation
Contents
Strategic Report
How we create value
Financial Statements
Our financial performance
Governance
How we preserve value
Additional Information
Additional information
02 Performance in 2024
04 Howdens at a glance
08 Our purpose, our culture & values,
our market, our strategy and
our business model
16 Chairman’s statement
19 Chief Executive Officer’s review
28 Key performance indicators
30 Financial review
36 Risk management
37 Principal risks and uncertainties
42 Sustainability matters
69 Going concern and Viability statements
160 Independent auditor’s report
175 Consolidated income statement
175 Consolidated statement of
comprehensive income
176 Consolidated balance sheet
177 Consolidated statement of
changes in equity
178 Consolidated cash flow statement
179 Notes to the consolidated financial
statements
216 Company balance sheet
217 Company statement of changes in equity
218 Notes to the Company financial statements
223 Parent company and subsidiaries
224 Five year record
225 Shareholder and share capital information
227 Shareholder ranges
227 Corporate timetable
228 Advisors and registered office
74 Corporate governance report
76 Board of Directors
80 Executive Committee and
Company Secretary
82 Key Board activity
84 Directors' duties (Section 172(1) Statement)
86 Stakeholder engagement
94 UK Corporate Governance Code:
application and compliance
100 Nominations Committee report
110 Remuneration Committee report
142 Audit Committee report
150 Sustainability Committee report
154 Directors’ report, Directors’ statements
and Non-financial and sustainability
information
Financial Statements
Additional Information
Governance
01
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Strategic Report
Performance in 2024
Operational highlights
Continued
progress against
our ESG goals
Making more
products in our
own UK factories
Continuing to
strengthen our
digital offering
Howdens performed well in 2024, delivering
another year of significant market share gains.
Through our strategic initiatives, we continue to support our trade
customers to win business with market-leading kitchen and joinery
ranges, an excellent upgraded local depot service and digital tools.
We are also improving the manufacturing and supply chain to ensure
we deliver high-quality, easy-to-fit products that are always in stock.
new UK depots
29
new depots
in Republic
of Ireland
new kitchen
ranges
3
11
02
Howden Joinery Group Plc
Annual Report & Accounts 2024
Chairman’s statementStrategic Report Page TitleStrategic Report Page Title
Financial highlights
Revenue
£2.3bn
Gross
margin
Operating
profit
Earnings
per share
Profit
before tax
£339m
£328m
61.6%
45.6p
Dividends
per share
21.2p
£115.9m
£344m
£122m
Dividends
paid in year
Net cash
at year end
Investment in
assets – capex
2024 £2.3bn
2024 £328m
2024 £344m
2024 45.6p
2024 £115.9m
2024 21.2p
2024 £122m
2024 61.6% 2024 £339m
2023 £2.3bn
2023 £328m
2023 £283m
2023 46.5p
2023 £114.1m
2023 21.0p
2023 £119m
2023 60.8% 2023 £340m
2021 £2.1bn
2021 £390m
2021 £515m
2021 53.2p
2021 £133.6m
2021 19.5p
2021 £86m
2021 61.6% 2021 £402m
2022 £2.3bn
2022 £406m
2022 £308m
2022 65.8p
2022 £115.0m
2022 20.6p
2022 £141m
2022 60.9%
2020 £1.5bn
2020 £185m
2020 £431m
2020 24.9p
2020 £0.0m
2020 18.2p
2020 £70m
2020 £196m 2020 60.1%
2022 £415m
03
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic ReportStrategic Report
Strategic Report Page Title
Additional Information
Financial Statements
Governance
Strategic Report Page Title
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
witha nationwide reach
• The right product.
Instockin local depots
at best localprice
UK
manufacturing
& distribution
Global
sourcing
Nationwide
depot network
Resources and
relationships
• Skilled and motivated
workforce
• UK’s largest trade kitchen
supplier – economies
ofscale
• Our own UK factories –
the choice to make or buy
• Our own warehousing
and distribution network
enables our in-stock
business model
Resources and
relationships
• Global supply chain
expertise
• Trusted supplier
relationships, and the
scale of our operations,
give usaccess to the
latestproducts at the
bestprices
• Responsible purchasing
practices
The UK’s largest
specialist trade-only
kitchen supplier
Howdens at a glance
04
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleHowdens at a glance
Outcomes
• Happy builders and end-users
• Sustainable profit growth, sector-leading
margins and strong cash generation
• Returns to shareholders
• Investment for growth:
– Our employees
– New depots
– New product
– New manufacturing and logistics
– Digital assets to support the business model
• 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
inselling to their customers:
– Trade accounts support the builder’s cashflow
– Design and planning services
– Home visits for end-users
– Marketing materials
– The right product. In-stock in local depots
• Competitive confidential pricing
• Digital tools to help the trade and end-users
Supporting
the builder
Worthwhile
for all concerned
05
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Additional Information
Financial Statements
Governance
Strategic Report Page Title
Strategic Report
How we
create value
Strategic Report
Howdens
at a glance
CEO’s
review
Purpose,
culture, market,
strategy and
business
model
KPIs
Chairman’s
statement
Risks and
uncertainties
Sustainability Going
concern
Financial
review
08 Our purpose, our culture & values, our market,
our strategy and our business model
16 Chairman’s statement
19 Chief Executive Officer’s review
28 Key performance indicators
30 Financial review
36 Risk management
37 Principal risks and uncertainties
42 Sustainability matters
69 Going concern and Viability statements
04
19
36
08
28
42
16
30
69
06
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Strategic Report
07
Howden Joinery Group Plc
Annual Report & Accounts 2024
Additional Information
Financial Statements
Governance
Strategic Report Page Title
Strategic Report
Our purpose
Business model
Markets
Strategy
Risks
To help our trade customers achieve exceptional results for
their customers and to profit from doing so. When our customers
succeed, we succeed and our stakeholders succeed.
Trade only. In stock from local depots
at best local price. Entrepreneurial
depots supported by UK manufacturing
and efficient sourcing and distribution.
Reach more builders. Offer them the best
product, pricing, service and support.
Generate profits for reinvestment and
shareholderreturns.
Competing at all price points.
Gaining market share.
Effective risk monitoring
and mitigation.
See page 13
See page 12
See page 10
See page 14
See page 36
Our purpose drives our business model
and shapes our strategic decisions
We respond to external opportunities and mitigate threats
How we create value
08
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Our purpose, our culture & values,
our market, our strategy and
our business model
Culture & values Sustainability Governance
Long-term value for our stakeholders
Long-term, sustainable growth and value for all stakeholders.
Worthwhile for all concerned.
Worthwhile for
all concerned.
Focus on climate
resilience and Net Zero.
A clear governance
framework. Operating
with integrity.
See page 42See page 11 See page 72
Our business model and strategy generate
value for a range of stakeholders
Culture is aligned
with purpose, values
and strategy
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
09
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Additional Information
Financial Statements
Governance
Strategic Report Page Title
Strategic Report
Howdens’ focus on serving our trade customers is at the heart
of everything we do. We believe the best way to source and
install a kitchen is to work with your local tradesperson, and we
are clear that the purpose and future success of our business
lies in serving the trade market to the highest standards.
Our relationship with our trade customers has three key
facets, each supported by our entrepreneurial culture.
Trade service and convenience
Depots located where our customers need them; monthly
account facilities; product in-stock to get the job done –
including appliances, joinery, doors, flooring, hardware
and bedrooms. A free design service to help customers
and end-users choose and plan their kitchens.
Product leadership
Product design and testing facilities ensure that we offer
the right product styles that are attractive to consumers,
designed to be trade quality and easy for builders to fit,
givingthem more time.
Trade value
Best local trade prices enabled by in house manufacturing,
long-term key supplier agreements and a low-cost depot
operating model.
To help our trade customers
achieve exceptional results
for their customers and to
profit from it.
Our purpose
10
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Worthwhile for our trade customers
• Profitability, convenience, service, support.
• Great product range for them to offer to their customers.
• Outstanding service.
• Trusted personal relationships – we do what we say.
• Trade accounts and confidential discounts.
• Design, planning and marketing support.
Worthwhile for our staff
• A good wage, plus local profit-sharing and incentives,
excellent rewards and recognition for outstanding
performance.
• An entrepreneurial culture, with central support.
• A growing company with opportunities to develop and
progress. Structured career development programmes.
Worthwhile for our suppliers
• Strong and enduring relationships based on trust.
• Working together to develop new products and deliver
bestservice.
• Our scale provides good opportunities for suppliers
to build a profitable business by working with us.
Worthwhile for our other stakeholders
• Delivering consistent long-term value for shareholders
with a growing dividend and return of surplus cash
through share buy-backs.
• Helping end-users at each stage of their buying decision.
• Important local employer in over 950 communities.
• Giving back to charities and local communities.
• Responsible purchasing and environmental policies.
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,
our staff and their families.
This founding principle has
shaped our business model
and our strategic decisions
since 1995, and it continues
to be at the heart of what
we do.
Our culture and values
11
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Additional Information
Financial Statements
Governance
Strategic Report Page Title
Strategic Report
UK market by revenue
1
UK market revenue by vendor category
1
Trade specialists
27%
Contract specialists
10%
Independents
34%
Retail
29%
1 Howdens’ estimates based on proprietary data.
The kitchen market
• 28 million households in the UK; 18 million owned and 10 million rented.
• UK kitchen and joinery market of £11.2bn
1
.
• ‘Do It For Me’ and the trade market continue to be strong.
• Howdens sells to trade customers who work flexibly across a broad range of markets,
including owner occupied homes, private rentals and social housing.
• Our Contracts division supports the increasing demands of the new build market.
Our market
Structural drivers Recent trends
• The UK population could reach nearly 74 million
by 2036, with net migration fuelling the rise. The
UK population will increase by 6.6 million people
(9.9%) between 2021 and 2036. – ONS, 2024).
• Ageing UK housing stock will drive renovation
(ave. age of UK stock is 70 years – ONS, 2022).
• Increased end user interest in sustainable
products (44% of households are switching
off or moving to more energy efficient
appliances – NatWest, 2022).
• Entrepreneurial builders are well placed
to win kitchens and joinery work as part
of wider home refurbishment projects.
They are supported by Howdens’ in-stock,
trade-only business model.
• More than a quarter of working adults in
Great Britain (28%) were hybrid working in the
Autumn of 2024 (ONS). This leads to greater
wear and tear on kitchens and appliances.
• Consumer mindset more focused on design
and use of kitchen space to maximise
flexibility (Howdens’ proprietary data).
• Ageing population – by 2066 there will be
a further 8.6 million projected UK residents
aged 65 years and over, taking the total
number in this group to 20.4 million and
making up 26% of the total population
(UK Govt, 2021). Increasingly this will drive
renovation activity as many choose to age
in their place of residence.
Large and attractive markets with
significant growth potential
£6.0bn
£5.2bn
+
£1.2bn
Kitchens Joinery Bedrooms
NEW in 2024
£11.2bn*
* Established kitchens
and joinery markets only
(excludes bedrooms)
12
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Our strategy
Reach more
builders
Grow market share.
Increase trade convenience.
Achieved through:
Our long-term strategic objectives
Supported by:
Our medium-term strategic initiatives page 25
Evolving our depot model
• Rolling out updated depot reformat
• Using space more efficiently
• Creating a better place for our customers
todobusiness in
Improving our product range
andsupply management
• Helping customers’ buying decisions
• Improving service and productivity
Developing our digital platforms
• Supporting our business model
• Raising brand awareness
• Delivering productivity gains andsalesleads
Expanding our international
operations
• Attractive markets outside the UK
• Expanding to deliver further shareholderreturns
Measured by:
KPIs page 28
Product innovation
The right amount of the best product,
at the best price.
Operational
excellence
Increase customer service, efficiency,
trade value and profitability.
• Sales growth
• Profit before tax
• Cash
• Depot openings
• Health & Safety
• FSC® or PEFC
certified raw
materials
• Waste recycling
Prudent financial
management
Giving us the tools to do the job.
Our purpose
To help our trade customers achieve exceptional results
for their customers and to profit from them.
13
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Additional Information
Financial Statements
Governance
Strategic Report Page Title
Strategic Report
Our resilient business model
What we do
The value we create
1 2
StaffCustomers
1 2
The UK’s leading specialist kitchen supplier,
selling only through trade customers.
• Our expert teams make and source
attractive products that are trade
quality and easy to fit.
• We design and manufacture all of
our own cabinets, as well as some
cabinet frontals, worktops and
skirting boards.
• We’re agile and we keep the make vs.
buy decision under review. We make
what it makes sense for us to make
in our UK factories, and we buy other
product in from our suppliers.
• We buy in thousands of different
products from hundreds of trusted
suppliers around the world, including
appliances, joinery, flooring and
hardware. We offer everything
necessary tocomplete any kitchen.
• Our in-house distribution
operation delivers from
our factories and central
warehouses to our network
of almost 950 depots.
• No two deliveries are alike,
andeachone must be correct,
complete and on time. We can
guarantee this because we
controlour own distribution.
Distribution
• A growing company with
opportunities for training,
development and
career progression.
• A safe working environment,
good salary, pension and
benefits,with local profit-
sharingand incentives.
• Builders save time and money
with Howdens. Trade quality,
full productrange forthe complete
kitchen, available from stock
atcompetitive, confidential prices.
• Trusted personal relationships
providing outstanding service.
From free design and planning to
delivery andaftersales support.
• Trade accounts allow the builder to
finish their project and get paid by
their customer before they need to
pay us.
• Online account management, click
and collect and anytime ordering
tools help the busy builder.
Product manufacturing and sourcing
14
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Depots designed for our trade customers
3 4
3 4 5
Suppliers Investors
Communities
and environment
Consumers/
homemakers
• Employment opportunities
and a good neighbour in over
950 communities.
• Supporting local and
nationalcharities.
• Responsible ESG practices
andpolicies.
• See our Sustainability report
onpage 42.
• Long-term value creation,
generating cash for further
profitable investment in the
business and to support a
growing dividend.
• Surplus cash after investment
and dividends is returned
toshareholders through
sharebuybacks.
• We have over 2,000 specialist
kitchen designers who support
the builder by visiting the end
user’s home, or work with them
remotely using our free virtual
design service, and help them
choose, plan and design their
dream kitchens.
• Strong and enduring
relationships based on trust.
• Co-operative engagement
on new products and the
scale necessary to support
suppliers’ businesses and
their investment plans.
• Entrepreneurial depot managers
leading highly motivated and
incentivised depot teams.
Trusted relationships with their
local builders.
• A typical Howdens depot is in an
edge-of-town location – more
convenient for trade customers,
and cheaper to rent. 88%
of our UK customers live within
5 miles of a Howdens depot.
• Our in-stock model means that
builders can get the products
theyneed at short notice, even when
plans change part way through a job.
• We offer the builder quality products,
excellent levels of service and trade
accounts that allow them up to eight
weeks to pay. We focus on helping
our customers succeed. When they
make money, we make money.
15
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Additional Information
Financial Statements
Governance
Strategic Report Page Title
During the year Howdens continued to face into an uncertain
geopolitical and macroeconomic environment, which
remained a significant headwind in our end-markets.
In particular, during 2024 the kitchen market in the UK fell for
a third successive year and remains at cyclical lows versus
long-term average volumes.
Despite these challenges we continued to serve our trade
customers well and delivered another good operating
performance. The strengths of our differentiated, in-stock,
local business model again resulted in another year of
market share gains. At the same time, given the market
headwinds, we have continued to drive efficiency savings
to protect profitability.
During the year, the Executive team under the leadership of
Andrew Livingston has continued to focus on investing in
our strategic initiatives to drive future growth. Our strategy is
working well as we focus on refining our strong product line up,
high stock availability, and industry leading service levels to
best support the day-to-day needs of our trade customers.
Central to the execution of our business model is, of course,
the dedication and commitment of our 12,000 people, whose
entrepreneurial spirit, knowledge and dedication to make life
easier for our customers make the business all that it is today.
On behalf of the Board, I’d like to thank them wholeheartedly
for all their dedication and unwavering support. I firmly believe
the actions we are taking will stand us in good stead as our
markets recover.
Financial performance
Group revenue in 2024 grew by 0.5% to £2,322m, in very
challenging kitchen and joinery markets. We continued to
operate the business with sector leading gross margins
of 61.6% (2023: 60.8%), made possible by our vertically
integrated approach and market leading distribution and
supply chain network which are key differentiators of the
Howdens ‘in-stock’ model.
The majority of cost increases this year were due to higher
inflation and were broadly offset by productivity and efficiency
actions taken in the year. This is in addition to the £50m of cost
reductions achieved in 2023 as we continued to protect depot
profitability and investment in future growth. Overall, Group
profit before tax was £328.1m (2023: £327.6m) and basic
earnings per share for the year were 45.6p per ordinary share
(2023: 46.5p).
Chairman’s statement
Howdens performed well
in challenging market
conditions
Strategic Report
Peter Ventress
Chairman
Our strategy is working well as we
focus on refining our strong product
line up, high stock availability, and
industry leading service levels to
best support the day-to-day needs
of our trade customers.
16
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Chairman’s statement
Cash generation remains the hallmark of every good business
and Howdens delivered strong operating cashflow in the year.
We also maintained a robust balance sheet, which supports
our growth investments through the cycle. In 2024, we
invested in further revamps to the mature depot network,
manufacturing upgrades and further vertical integration and
digital investments to support our customers. During the year
we returned £115.9m of cash to shareholders in ordinary
dividends ending 2024 with cash of £343.6m.
Strategic initiatives
Our kitchen and joinery markets are large and fragmented,
which present an attractive long-term growth opportunity
for Howdens. We believe our addressable kitchen and joinery
markets in the UK are around £11.2 billion compared with the
Company’s UK revenue of around £2.2 billion.
We are investing commensurately in our consistent and
proven growth strategy, which is now well established.
Our priorities are to invest in deeper vertical integration, depot
expansion in the UK, product innovation and digital expansion.
We are also investing in our international businesses in France,
Belgium and more recently the Republic of Ireland, which all
present further growth opportunities. You can read more
about our progress on many fronts this year in Andrew’s
review, starting on page 19.
Sustainability
Our ambition remains to be the UK’s leading responsible
kitchen and joinery business. We are well placed to achieve
this with our UK manufacturing focus, trusted supplier
partnerships and our publicly-committed Net Zero plans
approved by the Science Based Targets Initiative. 2024 was
another year of strong progress, and you can read about
this in the sustainability report starting on page 42.
Governance and Board changes
Good governance is vital for all businesses. At times of
geopolitical and economic instability like this, it plays a
particularly important role in building and retaining trust
among a diverse base of stakeholders. Howdens operates
to a high level of governance and the Board will maintain
this approach going forward.
Responsibility for driving Howdens’ above market
performance is driven by Andrew Livingston and his Executive
team. The Board’s role is to provide appropriate support and
challenge to Andrew and his team to ensure we capitalise
on the significant opportunities for profitable growth in
our markets. Ensuring we have a high calibre Board that
approaches this task with energy and conviction remained a
key priority for me in 2024, and will continue to be so during
2025 and beyond.
2024 saw us build on our Board refreshment programme,
initiated in 2023. During the year we welcomed three new
independent Non-Executive Directors to the Board: Vanda
Murray, Roisin Currie and Suzy Neubert. These new Directors
bring a wealth of strategic, operational and financial experience
to the Board, which complements our existing skill set.
We also announced the appointment of Tim Lodge who
joined the Board in January 2025. This followed an extensive
search to identify the replacement of Andrew Cripps as Audit
Committee Chair when he retires from the Board at the AGM
in May. Tim is an experienced CFO and Audit Committee Chair
and has enjoyed a handover period with Andrew during the
2024 year end. I am also pleased to confirm that Vanda Murray
will take over from Andrew Cripps as Senior Independent
Director. Vanda’s experience of such roles and excellent
interpersonal skills makes her an attractive candidate for this
role. Andrew was appointed to the Board in December 2015
and has served as Audit Committee Chair since May 2016.
We thank him for his wise counsel and significant contribution
to Howdens and wish him all the very best for the future.
More information on all new appointments to the Board can
be found in the Nominations Committee Report beginning
on page 100.
Following consultation with institutional shareholders,
we will table a revised Remuneration Policy for shareholders
to consider at the 2025 AGM. Our proposals address the
constructive feedback we have received and will form an
important part of the measures being taken to drive Howdens’
future performance while ensuring we provide appropriate
rewards that reflect the scale of our business, the important
focus on our strategic objectives to drive growth and,
of course, to reflect normal market practice.
Financial Statements
Additional Information
Governance
17
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Strategic Report
Chairman’s statement continued
Capital allocation and returns
toshareholders
Our approach to capital allocation continues to focus on
achieving sustainable profit growth by investing in and
developing our vertically integrated business. We also want
to maintain and grow our ordinary dividend in line with
earnings growth to reward shareholders with an attractive
ongoing income stream. After allowing for these uses of cash,
Howdens remains committed to returning any surplus capital
to shareholders. Our capital allocation policy is that where
year end cash is more than £250m we expect to return surplus
cash to shareholders. This provides sufficient headroom to
support organic growth, our working capital requirements and
ongoing investments in our strategic priorities. At this level of
cash, the balance sheet will remain strong.
In July 2024 the Board declared an interim dividend of 4.9p per
ordinary share (2023: 4.8p per ordinary share). The Board is
recommending a final dividend for 2024 of 16.3p per ordinary
share (2023: 16.2p per ordinary share), resulting in a total
dividend of 21.2p per ordinary share (2023: 21.0p per ordinary
share). The total dividend represents a year-over-year increase
of 1.0% and the final dividend will be paid on 23May 2025 to
shareholders on the register on 11 April 2025, ifapproved by
shareholders. Considering the Group’s prospects and strong
financial position, the Board is announcing today a £100m
share buyback programme which will be completed over the
next 12 months.
Looking ahead
The Group has delivered another year of strong progress and
while the macroeconomic and geopolitical environment
remains uncertain, our business model is resilient, and we
continue to look to the future with confidence.
We are well prepared for the challenges and opportunities that
such market conditions may present and we are confident
that our business model is the right one to address the
opportunities in our markets. In summary we are well placed
to continue to make good progress in 2025 as we invest in our
key capabilities and growth opportunities which are pivotal to
the longer-term development of the business. Looking ahead,
we remain excited about the significant structural growth
opportunities in our markets and our ability to generate further
sustainable long-term value for our stakeholders.
Peter Ventress
Chairman
26 February 2025
Page
Our Sustainability report 42
My introduction to our Governance report 74
Our Board of Directors 76
Further reading
18
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Chief Executive
Officer’s review
Further market share gains
in 2024
Andrew Livingston
Chief Executive Officer
The business delivered strong
operating cashflow and we
maintained a robust balance
sheet. This gives us the flexibility
to continue to invest in our growth
plans for the business and provide
shareholders with increased
returns for this year and a £100m
share buyback programme.
Q&A with Andrew Livingston,
Chief Executive Officer
We delivered a robust performance in
2024, achieving another year of market
share gains in tough markets. Despite the
headwinds we have remained committed
to developing our differentiated business
model to support our trade customers.
In doing so, we are well positioned to
capitalise when our markets turn.
Q
Andrew, 2024 has been another year
of headwinds from a macroeconomic
perspective but how would you assess
Howdens’ fortunes given the challenging
market backdrop?
A
Yes, I don’t think the external market has done us any favours
in 2024. However, we had planned for that and we delivered
a good performance. Group sales were just ahead of those in
2023. In the UK, we believe we gained kitchen market share,
which helped us mitigate a decline in the overall size of the
kitchen market. We maintained an industry leading gross
margin with gross profit ahead of last year, as we balanced
recovery of cost rises with our commitment to provide
competitive pricing across the board for our customers.
Profit before tax was in line with last year at £328.1m.
The business delivered strong operating cashflow and we
maintained a robust balance sheet. This gives us the flexibility
to continue to invest in our growth plans for the business and
provide shareholders with increased dividends for this year.
We have also announced a further £100m share buy-back
programme. Put simply, the results demonstrate the strength
of our local, trade only in-stock model.
Financial Statements
Additional Information
Governance
19
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Annual Report & Accounts 2024
Strategic Report
Strategic Report Chief Executive Officer’s review
Strategic Report
Chief Executive Officer’s review continued
Q
You are making good progress with your
sustainability programme. What are the
areas you are focusing on?
A
Our ambition remains to be the UK’s leading responsible
kitchen and joinery business. We are well placed to achieve
this with our UK manufacturing focus, trusted supplier
partnerships, and our publicly committed Net Zero plan
approved by the Science Based Targets initiative (SBTi) in
January 2024. Our plan commits us to reducing our Scope
1 and 2 emissions by 42% and our Scope 3 supply chain
emissions by 25% by 2030, targeting Net Zero by 2050,
against a baseline year of 2021.
We are making progress on lots of fronts, and you can read all
about our focus areas this year in the Sustainability section
on pages 42 to 68. I would highlight that the major thrust of
the strategy remains on our Scope 3 emissions. As a vertically
integrated business these emissions account for 95% of our
total emissions, with 40% being emitted indirectly by suppliers.
We have therefore focused heavily on supplier engagement.
Initially targeting our top six suppliers, we have since
expanded our program to include the top 30 and onboarded
an additional 70 suppliers throughout 2024. We have therefore
engaged over 100 suppliers, with over 50% submitting
emissions data for the last three years and we continue
supplier and industry collaboration to ensure decarbonisation.
Net Zero obligations are now mandated in all our supplier
trading terms and conditions.
Q
Are your aspirations for growth now
somewhat diminished given the tougher
markets? Are you scaling back your plans
for the business?
A
Quite the contrary, our strategy is working well and we are
gaining market share which tells us that our trade only,
in-stock model is the right one to support our customers.
In 2025, we expect market conditions to be broadly unchanged
from the challenging ones seen in 2024. We are well prepared
for this and our customers, mainly self employed people,
are adept at managing their business in such times.
Our model is hard to replicate and difficult to compete with,
and we have initiatives in place to make it more so. Delivered
by our highly entrepreneurial and well incentivised teams
across the business, I believe that our service orientated,
trade only, in-stock, local model is the right one to deliver
sustainable market share gains.
The addressable value of the UK markets in which we have
an established presence is some £11.2 billion and there
are significant longer-term growth opportunities for us.
We continue to prioritise investment in the business on this
basis and if anything we are accelerating our plans, as we
can see that our strategy is working well.
Q
How would you summarise the initiatives
and does this mean more money will be
invested over the next few years?
A
The strategic initiatives are well understood in the business.
First, we want to evolve our depot model by using space more
efficiently to provide the best environment in which to do
business with our customers. We also want to continuously
improve our range and supply management to improve
choice and service while enhancing productivity in our
manufacturing, sourcing and supply chain activities. We are
developing new digital platforms to raise brand awareness,
support the business model and deliver productivity gains
and more leads for depots and customers. Finally, I strongly
believe that the Howdens model can be successful outside of
the UK, so we are expanding our presence in selective countries
with attractive kitchen and joinery markets. All these ongoing
investments support the execution of our growth strategy and
are within our overall capital expenditure guidance.
Q
You’re continuing to invest in both
new depots and revamps. Why is this
so important?
A
High service levels, including local proximity and
immediateavailability are very important to our customers
and we continue to see profitable opportunities to open depots.
We are using our updated format for all depot openings, which
enables us to provide the best depotenvironment in which
to work and conduct businessand to make space utilisation
and productivity gains in a cost-effective way.
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Strategic Report Page Title
We opened 29 UK depots during the year with a total of 869
trading at the yearend. Overall, we have a line of sight to
around 1,000 depots in the UK, and we expect to open around
20 more depots in 2025 as we continue to take a highly
disciplined approach to depot openings.
We have progressed our revamp programme for existing
depots. This continues to receive very positive feedback from
depot staff and customers alike and providing such a trading
and working environment is important to our competitive
position. In 2024 we completed a further 76 revamps including
relocations, taking the total revamped to 350 depots. This
year, including relocations, we plan to reformat around 60
depots, which means by the end of 2025 we expect to have
revamped around 70% of the estate.
Q
It feels like over the past 2-3 years there’s
been a real step change in the rate and
speed of innovation with respect to
Howdens bringing new looks and styles
to market. Is this necessary in the kitchen
market and how would you assess
your progress?
A
You’re right, we’ve really upped our game in the speed with
which we bring new New Product Introductions (“NPI” as we
call them) to market. We can see that sales of new product make
a significant contribution to our performance, and we have
upgraded our NPI programme in recent years. For example,
total sales of new product introduced in 2023 and 2024
represented around 20% of total UK product sales, with
new product introduced in 2024 and the two prior years
representing 30% of UK product sales.
Managing our kitchen portfolio efficiently is crucial for both
best availability, which is highly valued by our customers, and
for profitability. The more efficient ways of testing new kitchen
colours and finishes we now have mean we can bring more
proven new kitchen styles to market more quickly and our
new Paint To Order service is also informing our “from stock”
ranging decisions. Some platform sharing within and across
families gives us the ability to introduce new kitchen options
cost effectively, and the enhancements we have made to stock
management and replenishment enable us to provide best
availability on a larger offering at an economic cost. Excluding
Paint To Order options, we have 23 new “from stock” kitchens
confirmed for 2025, compared to 11 in 2024 and 23 in 2023.
For 2025, our entire “from stock” kitchen offering will be
organised into eleven families; one more than 2024.
Q
So where are you focusing your
efforts across the range?
A
We are committed to providing market leading and
competitively priced product for our customers to sell to
theirs, to suit all budgets. Value for money is a consistent
feature of purchasers’ buying decisions. Given pressures on
household budgets, price featured very prominently in 2024,
and we expect it to do so again this year. With an emphasis on
value for money and choice at all price points, our offering,
as enhanced by our 2025 NPI programme, is well positioned to
take advantage of this. Our kitchen NPI for 2025 makes more
colours, styles and finishes available to more budgets. We are
innovating in our other established product categories and are
adding significantly to our fitted bedroom offering, which was
sold from all depots for the first time last year.
We also continue to develop our higher priced kitchen
portfolio, which is a large segment of the market, where we are
underrepresented, and the one most associated with the high
street independents. For our contemporary style premium
kitchen family, Hockley, we have five new colours scheduled
for launch in 2025. The Paint To Order service for customers
buying our shaker style timber ranges performed well in its
first year and the service continues to be very favourably
received by customers and depots alike. For buyers looking for
a more bespoke look, we believe the Paint To Order service is
very competitively priced with, by market standards, a short
lead time between the order being placed and the kitchen
being ready for delivery.
A strategic priority for us is the development of a market-
leading supply and fit capability for premium work surfaces.
Having increased significantly in 2023, the number of orders
taken by depots increased again in 2024 as we continued to
improve our offer and service levels. In total, for 2025 we will
have a comprehensive offering of 63 decors to suit all budgets
in place well ahead of our peak Autumn trading period, during
which kitchen sales represent an above average proportion
of the mix.
Financial Statements
Additional Information
Governance
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Strategic Report
Strategic Report Page Title
Strategic Report
Chief Executive Officer’s review continued
Q
You introduced fitted bedrooms to the
range last year. How have customers
reacted and what are your plans
going forward?
A
In 2024, our new fitted bedroom ranges contributed a full
year’s trading for the first time. Sales for the year matched
our expectations and this year we are upscaling our offer.
Installing fitted bedrooms suits the skills of customers who
fit kitchens and they have a high cabinetry content, which
matches our manufacturing capabilities. We develop our
bedroom ranges in-house, utilising our existing manufacturing
and supply infrastructure.
Ahead of 2024 peak trading our offering comprised 19
bedroom ranges in four leading family designs drawn from our
kitchen portfolio, matched with internal accessories including
pull-down rails, mirrors and internal storage solutions.
Launches scheduled for 2025 will take our offering to 29
bedrooms with six more colour options for our 2024 families.
Q
One of the key differentiators of the
Howdens model is being in stock for the
trade. How are you ensuring that this is
always the case and that you stay ahead
of the competition?
A
You’re right, Howdens is an in-stock business, and the trade
tell us that a high level of stock availability is one of the key
reasons they buy from us. In 2024 our service level from
primary to depots was 99.98%, a world class performance
by any standard. Our Daily Traders initiative is a means
to improve customer service levels, promote footfall and
increase sales by optimising in-depot stock holdings of
bestselling SKUs and associated “range completers”. We are
also using the insights from Daily Traders to help optimise a
new depot’s opening stock and to provide stocking guidance
for depot revamps and relocations so that these are
configured to hold the right stock in the right depth.
This year we have seen improvements in key metrics,
including a higher proportion of stock being replenished via
a depot’s core weekly delivery order than previously. This
gives us efficiencies as it helps optimise utilisation of our
cross docking service. In recent times, we have improved
stock replenishment by supplementing a depot’s core weekly
delivery order with investment in a next day service via a
network of 12 regional cross docking centres (or “XDCs”)
combined with a rebalancing of where we hold stock. XDCs
are a key enabler to delivering the levels of high service and
availability which differentiate our offer and with mainland
coverage in place, our focus is now on using these assets most
efficiently. We can also utilise XDCs to bring new products
such as bedrooms to market quicker and more efficiently,
as we can build stocks as demand increases rather than
being fully stocked for a full rollout at launch.
Q
One of the other central aspects of the
model is vertical integration and UK
manufacturing has historically been your
chosen route. Is that still the case?
A
Yes, we are really proud to be a UK-based manufacturer and it
remains a source of competitive advantage for us in several
ways. We manufacture all the cabinets for our kitchen ranges
in-house. We can make a variety of kitchen furniture and
some of the other kitchen products we sell, and we are using
our manufacturing infrastructure to support our bedrooms
initiative. We are continuing to invest in both capability and
capacity to drive productivity and to support future growth.
For example, production on the new furniture lines at our
Howden site, which are amongst the most advanced of their
type in Europe, totalled around 1.7 million pieces in 2024, and
have a total capacity of around 2 million pieces. These give
us the ability to make a variety of kitchen furniture, principally
frontals and panels, for more of our ranges, at the same
quality as we can source externally but at a lower cost and
at a reduced lead time to delivery.
In 2024, our new Paint To Order lines, which facilitate our
premium kitchens initiative, ran smoothly, supplying product
for a full year for the first time. We achieved the order
turnaround time we set ourselves, with demand more than
doubling during our peak trading period. Located in a purpose
built facility near our Howden site, the lines give us an industry
leading production capability in this area.
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Annual Report & Accounts 2024
Strategic Report Page Title
Q
You have recently announced new plans
to invest in your site at Runcorn. What’s
behind that initiative?
A
Cabinet and panel manufacturing underpins our entire kitchen
offering, which constitutes the principal source of Group
sales and a higher proportion of gross profit. Our Runcorn
factory with its high volume, low cost panel making capability
has always been an integral part of our manufacturing and
logistics strategy. In line with our growth and investment
ambitions for the business, we are in discussions with all
interested parties to redevelop the site to increase capacity
and broaden its capabilities.
Following successful outcomes to the planning process,
we expect the works will take several years to complete.
We are also negotiating to acquire the freehold of the
Runcorn site which may or may not lead to a transaction.
Q
Digital was an area where perhaps a
few years ago Howdens was in the pack
but you’ve stepped on here. Why is it
important to a kitchen business?
A
We use digital to reinforce our model of strong local
relationships between depots and their customers by raising
brand awareness, to support the business model with new
services and ways to trade with us. We also want to deliver
productivity benefits and more leads for our depot teams
and our customers. Use of our online account facilities,
which provide efficiencies and benefits for customers and
depots alike, has continued to increase. New registrations
totalled some 111,000 and around 50% of customers had
an online account at the year end. Customers with an online
account have on average continued to trade with us more
frequently and spent significantly more than non-users,
and proportionately more of them bought across our
product categories.
In 2024, our new digitised in-depot stock management system
or “Live Stock” as we call it, commenced operating in all UK
depots. The system helps depots to record and pick deliveries,
check allocations, and determine depot stock levels. Amongst
other benefits the system frees up time for depots to use more
productively. It also enables us to have complete visibility of
the location of stock holdings by SKU, across our factories,
primary warehouses and depots. The stock surety Live Stock
and other initiatives such as Daily Traders provide, also
enabled us in 2024 to offer an upgraded Click and Collect
service to our trade customers. Amongst other benefits, this
lets them see and buy live depot stock in real time, which is
useful for busy trades on the move.
Q
You are pushing ahead on two fronts,
in France and the Republic of Ireland.
Are you seeing evidence you can lift the
Howdens model into other markets or is it
something that ultimately will only work
in the UK?
A
As longer-term followers of Howdens will know, we tested our
ability to access the French market and adopted “a city-
based” approach, serving solely trade customers, led and
staffed by people who embrace the Howdens way of doing
business. The kitchen market in France is attractive and
estimated to be worth around €4 billion, excluding appliances,
with most kitchens purchased through kitchen specialists and
DIY stores.
Between 2021 to 2023 we more than doubled the depots
trading in France and Belgium, with 65 trading at the end
of 2023. In part due to the rate of expansion, our teams in
France are, collectively, relatively inexperienced in doing
business the Howdens way. So, in 2024 we focused on team
development, initiating a programme to give our teams the
skills and confidence to sell our model to best advantage and
in the latter part of the year the performance of the business
improved. Overall sales of our operations based in France
increased in 2024, in a market at least as challenging as the
one in the UK, with second half sales improving significantly
year on year. In 2025, we expect to maintain the number of
depots trading at around last year’s 65, and then recommence
depot openings in future years, as our talent pool grows.
Financial Statements
Additional Information
Governance
23
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Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Strategic Report
Chief Executive Officer’s review continued
Q
How is the Howdens kitchen and joinery
business developing in the Irish market?
A
In 2024, sales in the Republic of Ireland continued to be
encouraging, and we intend to open more depots there in
2025. We identified the Republic of Ireland as a market which
suits our differentiated model, and one which sets us apart
from the incumbents. We commenced trading in the Republic
of Ireland in 2022, using a similar depot location strategy
to that in France, with the local team supported by our UK
infrastructure and our digital platform.
By the end of 2023 we had ten depots trading with eight of
these clustered around Dublin and two serving the Cork area.
In 2024 we opened three new depots, taking the total trading
to 13 at the year-end. Our growing presence in the Irish market
continues to attract much attention locally and in 2025,
we expect to open around five more depots, which would give
us a total of 18 trading by the end of this year.
Q
Finally Andrew, what are your thoughts
on Howdens’ prospects in 2025?
A
Given the prevailing macroeconomic environment, we expect
market conditions to remain challenging and we anticipate
that the total kitchen market may contract again this year.
However we are well prepared for the challenges and
opportunities that lie ahead. We will aim to retain a profitable
balance between price and volume, as we continue to protect
our margins whilst aligning operating costs and working with
suppliers to keep product and input costs controlled.
We are confident that our business model is the right one
to address the opportunities in our markets and we think
we remain well placed to outperform our competitors in
2025 as we continue to invest in our key capabilities and
growth opportunities, which are pivotal to the longer-term
development of the business.
Finally, I would like to take this opportunity to thank everyone
who works at Howdens whether in our depots, our factories,
our commercial operations, or support functions for their
extraordinary commitment to providing exceptional service
to our customers, which is a key component in what sets this
business apart from so many others.
Watch Andrew’s update
onour strategic initiatives
at Howdens’ Full Year
Results presentation
on27February2025.
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Annual Report & Accounts 2024
Strategic Report 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
We have made further progress on our medium-term strategic initiatives,
and we expect to deliver profitable growth and market share gains over
the medium term. The four strategic initiatives are:
Our strategic initiatives
1
Evolve our depot model – we want to improve
our depot network over time to ensure we
use space more efficiently, and to provide
the best environment for our customers to
do business in.
High service levels, including local proximity and immediate
availability, are very important to our customers and we have
continued to extend our depot footprint to support growth.
Overall, we believe that there is an opportunity to open around
1,000 depots in the UK over time. At the end of 2024 there
were 869 depots trading and our historic run rate is of opening
around 25–30 a year in the most attractive local regions.
In 2018 we developed an updated depot format and have
been rolling it out across our depot estate. It provides
an attractive space for us to do business with our Trade
customers, and a place for them to bring their customers
to see our product range and to work with our kitchen
designers. It also has an improved warehouse space that
makes space utilisation and productivity gains in a cost-
effective way by using vertical racking. The reformats are
budgeted to pay back costs in less than four years.
Depot P&Ls are charged a reformat cost which ensures
depot teams are motivated todeliver incremental sales.
The updated depot format
Updated front area creates the best environment for
ourcustomersto do business in. Better warehouse racking
deliversmore stock, in less space, with reduced picking times.
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Strategic Report
Additional Information
Financial Statements
Governance
Strategic Report Page Title
Strategic Report
2
Improving our range and supply management
–to help customers’ buying decisions, to
improve service and to enhance productivity
inour manufacturing, sourcing and supply
chain activities.
As product lifecycles shorten, managing the number of
kitchen ranges efficiently is crucial for both our customers,
who want best availability, and for profitability. We are
managing range introductions and clearances so that we
are offering the right number of range families, designed to
fit all budgets. More recently we have placed more emphasis
on building out our share of higher priced kitchens where we
have been historically underrepresented. This has included
expanding our offering to encompass template to fit solid
worksurfaces, a wider range of appliances (including own
label) and premium services such as Paint To Order. We are
also innovating in other product categories to expand our
share of attractive niche markets in joinery.
Howdens is an in-stock business and the trade tell us that
a high level of stock availability is one of the key reasons
they buy from us.
We protect stock availability in several ways, which helps
us deal with supply chain disruption and maintain our
servicelevels. We have improved stock replenishment
by supplementing the depots’ core weekly delivery
order with investment in a next day service via
a network of 12regionalcross docking centres
(or ‘XDCs’) which wascompleted in 2023.
XDCs are a key enabler to delivering the levels of high service
and availability which differentiate our offer. The improvements
to stock replenishment enable depots to hold deeper stocks of
faster selling lines and makes it simpler and more efficient for
them to deliver superior service levels and availability, backed
by certainty over lead time to delivery for items not held at
depot level.
We make all the kitchen cabinets and some of the other
kitchenand joinery products we sell, which is the source of
competitive advantage for us in several ways. We keep under
review what we believe is best to make or buy, balancing cost
and overall supply chain availability, resilience and flexibility.
We have invested in new furniture lines at our Howden site,
which are amongst the most advanced of their type in Europe,
with a full year capacity of around 2 million pieces going
forward. These give us the ability to make a variety of kitchen
and bedroom furniture, principally frontals and panels, but
also skirting and architraves, for more of our ranges, at the
same quality as we can source externally but at a lower cost
and at a reduced lead time to delivery. We have also invested
in two lines to facilitate our Paint to Order initiative. Located in a
purpose-built facility near our Howden site, the lines give us an
industry leading production capability.
Our strategic initiatives continued
Chief Executive Officer’s review continued
26
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
3
Digital – we are developing our digital platforms
to raise brand awareness, support the business
model and to deliver productivity gains and
leads for depots and customers.
Our digital strategy reinforces our model of strong local
relationships between depots and their customers by raising
brand awareness and further supports the business model
with new services and ways to trade. It also frees up time for
depot staff and customers to use more productively.
Our online account facilities provide benefits for both
customers and depots. Use continues to increase. Customers
with an online account have, on average, continued to trade
with us more frequently, spent significantly more, and bought
across more product categories.
As our digital presence has grown, awareness of Howdens
amongst end users has increased. We have added new
features to our trade platform which improve stock and
account knowledge, promote frequency and ease of trading
and reduce time consuming manual tasks in depots. The stock
surety this and other initiatives such as Daily Traders provide,
now enable us to upgrade significantly the Click and Collect
service we offer.
We have also invested in capabilities which help end users
interact with Howdens online at each stage of their buying
decision. As our digital presence has grown, awareness of
Howdens amongst end users has increased. We ended the year
with 719,000 followers across the major social media channels
with a significant rise in the number of engagements.
4
International – Expanding our presence in
attractive kitchen and joinery markets outside
the UK.
While the UK market for kitchens and joinery is large,
fragmented and attractive, we believe that there is an
opportunity to take Howdens’ highly differentiated in-stock,
trade only, local business models to other markets outside
the UK. For example, the Company has established 66 depots
in France and Belgium and in 2022 we opened for business
in the Republic of Ireland where we now have 13 depots.
A good example is France, where we believe the kitchen
market is worth around €3.7 billion, excluding appliances,
with most kitchens purchased through kitchen specialists
and DIY stores. Currently there is limited choice locally for
builders to be served by a dedicated supplier where products
are available from stock either same day or next day. We have
tested our ability to access this sizeable market in several
ways before adopting ‘a city-based’ approach, serving solely
trade customers, led and staffed by people who embrace the
Howdens way of doing business. Alongside team development,
we are also investing in the business through enhanced
offerings of ‘footfall-promoting’ products and a regular
schedule of ‘trade days’ at all depots with aligned promotional
activity and more supplier support. Our current strategy is to
establish profitable businesses in these regions which deliver
attractive returns for our shareholders.
Financial Statements
Additional Information
Governance
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Strategic Report
Strategic Report Page Title
Strategic Report
Key performance indicators
Strategy Risk Remuneration
Links to:
Financial
Sales
Why we measure it
We believe that there are considerable opportunities to grow
sales. As sales grow, we believe there are economies of scale
which will also allow us to grow long-term profitability.
Links to strategy, risks and remuneration
Profit before tax
Why we measure it
Profit before tax is a simple and widely understood measure.
We consider that it gives a complete picture of our performance
as it includes all of our operating, selling and distribution, admin
and financing expenses.
Links to strategy, risks and remuneration
Progress
Total Group sales of £2.3bn in 2024, in line with market expectations.
Progress
Profit before tax of £328m in 2024.
Depot staff bonuses are directly linked to their depot’s sales
Reach more builders Failure to maximise growth potential
Executive Committee and senior management
bonuses are directly linked to PBT
Operational excellence
Failure to maximise growth potential
Prudent financial management
Deterioration of model & culture
Executive Committee and senior management
bonuses are directly linked to cash generationtargets
Return surplus cash to shareholders
Invest in our strategic priorities
Prudent financial management
Cash
Why we measure it
We aim to cover our investment needs, to retain at least one
year’s working capital requirement, to pay a progressive dividend
and to return surplus cash to shareholders (see page33for
details of our capital allocation model).
Links to strategy, risks and remuneration
Progress
We have invested £122m in capital expenditure for future
growth and have also returned £116m in dividends, ending
the year with £344m cash.
£344m
year end cash
£122m
capex
£116m
dividends paid
2020 20202021 20212022 20222023 2024 2023 2024
£2.1bn
£390m
£1.5bn
£185m
£2.3bn
£406m
£2.3bn
£2.3bn
£328m
£328m
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Annual Report & Accounts 2024
Strategic Report Page TitleKey performance indicators
Non-Financial
Depot openings
Why we measure it
We believe that there is some way to go before the UK market is
saturated. We continue to identify possible sites for new depots
whilst at the same time keeping our model flexible, and allowing
us to take account of economic conditions and phase the speed
of our growthaccordingly. We are also developing a presence in
France, Belgium and the Republic of Ireland. We plan to expand
our depot network again in 2025.
Links to strategy, risks and remuneration
Use of FSC® or PEFC
certified materials
Why we measure it
We use almost a third of a million cubic metres of chipboard and
MDF in our factories. FSC
®
and PEFC are the two maincertification
bodies. Ensuring that all our MDF and chipboard is certified by
them gives us assurance over their provenance. See page 50 for
more details.
Links to strategy, risks and remuneration
Zero to landfill
Why we measure it
One of the pillars of our business model is our efficient production,
which gives us a significant cost advantage. Reusing, recovering
or recycling as much of our waste as we can benefit stakeholders
as it reduces both our emissions and our costs.
Links to strategy, risks and remuneration
Health & Safety
Why we measure it
We have over 12,000 employees working in our factories,
our logistics operation, our support sites and our depots and
we need to keep them all safe at work.
Links to strategy, risks and remuneration
Progress
We ended 2024 with 29 more depots in the UK and an additional 3
in the Republic of Ireland.
Progress
Our rate of RIDDOR-reportable injuries has remained low and is
also significantly below the HSE all-industry average for the year.
Seepage 56 for more detail.
Progress
We are pleased to announce that in 2024 we have maintained zero
to landfill across our whole UK operations. We are now exploring
ways in which we can maintain this performance and increase the
proportions of our waste which we reuse or recycle. Seepage 56
for moredetails.
Failure to maximise growth potential
Deterioration of model & culture
Reach more builders
Operational excellence
Health & Safety
Product innovation
Product relevance Continuity of supply
Prudent financial management
LTIP performance measure
Operational excellence
All of chipboard
& MDF used in our
manufacturing
processes is from
FSC® or PEFC
certified sources
2020 2021 2022 2023 2024
818
778
873
915
947
Financial Statements
Additional Information
Governance
29
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Strategic Report
Financial results for 2024
1
Revenue
Group revenue was in line with last year at £2,322.1m
(2023: £2,310.9m). UK depot revenue was £2,247.4m (2023:
£2,241.1m) and was 1.2% lower on a same depot basis.
Our strong competitive position in the UK enabled the business
to continue to gain market share despite a further volume
contraction in the kitchen market. Local currency revenue
in the international depots was 9.7% ahead of the prior year
and grew 3.7% on a same depot basis. While we continued to
build out our depot network in the Republic of Ireland, we are
focused on driving the performance of the existing estate
in France and Belgium. As a result of these actions revenue
growth in France sequentially improved in the second half,
compared to the first half.
Gross profit
We maintained our sector leading margins by appropriately
balancing pricing and volumes. Gross profit was ahead of last
year at £1,431.1m (2023: £1,403.9m).
The higher gross margin percentage of 61.6% (2023: 60.8%)
reflected the benefit of the price increase at the start of the
year and ongoing purchasing benefits. During the year we
also delivered a number of productivity improvements in our
manufacturing operations. Together, these offset inflationary
pressures, particularly in commodities, wages and energy costs.
Operating profit and profit before tax
Operating expenses increased by £28.2m to £1,091.9m
(2023: £1,063.7m) and included our ongoing investment in
our strategic initiatives. These investments included £16m on
new UK depots opened in 2023 and 2024 and £16m of other
investments including warehouse and transportation initiatives,
digital upgrades and expanding our international operations.
Higher salary and inflationary costs of around £25m were
partially offset by productivity and efficiency actions. There
was a benefit of around £14m arising from the non-repeat of
the additional costs associated with the 53rd week last year
when the depots were closed.
Overall, operating profit was in line with last year at £339.2m
(2023: £340.2m).
The net interest charge was £11.1m (2023: £12.6m).
Profit before tax of £328.1m was in line with the prior year
(2023: £327.6m).
1 The information presented relates to the 52 weeks to 28 December 2024
andthe 53 weeks to 30 December 2023 unless otherwise stated.
2 Same depot basis excludes depots opened in 2023 and 2024 and closed
depots.
Financial review
• Maintained sector leading
margins in higher inflationary
environment
• Continued investment in
strategic initiatives
• 21.2p 2024 full year dividend
Paul Hayes
Chief Financial Officer
Our strong competitive position
in the UK enabled the business
to continue to gain market
share despite a further volume
contraction in the kitchen
market growth.
30
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page TitleFinancial review
Revenue
1
£m 2024 No. of depots 2023
4
Group: 2,322.1 947 2,310.9
UK depots – same depot basis
2, 4
2,204.9 807 2,231.8
UK depots opened in previous two years 42.5 62 9.3
Howden Joinery UK depots – total sales 2, 247.4 869 2,241.1
International depots 74.7 78 69.8
Revenue €m
International – same depot basis
2
81.3 64 78.4
Depots opened in previous two years 6.8 14 1.9
Total – international depots 88.1 78 80.3
1 The information presented relates to the 52 weeks to 28 December 2024 and the 53 weeks to 30 December 2023 unless otherwise stated.
2 Same depot basis excludes depots opened in 2023 and 2024 and closed depots.
3 One depot was closed in the UK at the end of 2023.
4 During 2022, 25 depots were opened and 5 depots were closed in France.
Profit before tax
£325
£300
£m
£400
£200
Price
(revenue)
Volume
and mix
Sourcing and
manufacturing
efficiencies
£225
£275
£250
£375
£350
Disciplined pricing management and purchasing efficiencies delivered higher gross margins
-£19m
-£28m
+£35m
+£11m
+£1m
Operating
costs
Interest
£328
£328
2423
Gross Profit + £27m
Financial Statements
Additional Information
Governance
31
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Strategic Report
We have a strong track record of cash generation,
investment, and capital returns
£3.5bn
Generated in operating cashflow after
changes in working capital
£790m
Invested in capex
£811m
Returned in ordinary and special dividends
£651m
Returned in buybacks
Over the past 10 years:
Strong cash
generation supports
investments
and returns to
shareholders
2024
£284m
£238m
£495m
£270m
£80m
£187m
£175m
£164m
£209m
£151m
202320222021202020192018201720162015
Capex Ordinary dividends
Share buybacks Special dividends
* The special dividend paid in 2021 was a catch-up, given
the suspension of dividends in 2020 due to COVID-19.
Financial review continued
How we make cash and how we spend it
£600
£500
£m
£900
0
Operating
cash flows
– pre working
capital
Opening
net cash
Closing
net cash
Working
capital
changes
Capex Other
£200
£100
£400
£300
£800
£700
Changes in net cash
Uses of cash
-£65m
-£122m
-£39m
-£116m
-£113m
+£505m
+£12m
Tax
paid
Lease
payments
Dividends
paid
2024
2023
DividendCapex Share buyback
£122m
£119m £50m
£116m
£115m
£344m
£283m
2423
32
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Tax, profit after tax and basic
earnings per share
The tax charge was £78.8m (2023: £73.0m) which represented
an effective tax rate of 24.0% (2023: 22.3%) reflecting the first
full year of the increase in the UK corporate tax rate to 25.0%.
Profit after tax was £249.3m (2023: £254.6m). Basic earnings
per share was 45.6p (2023: 46.5p).
Cash
The net cash inflow before movements in working capital was
strong at £504.6m (2023: £470.8m). Overall working capital
increased by £65.3m as expected, with stock £8m higher as
a result of depot openings and new product introductions.
Receivables at the end of the period were £70m higher than at
the end of the previous period and included £58m of additional
trade receivables, mainly as a result of the later calendar end
of our peak trading period. This position has already unwound
since the start of the new financial year.
Payables were £13m higher. Capital expenditure was at a
similar level to the prior year at £122.0m (2023: £118.9m) as
we continued to invest in growth. Corporation tax payments
were lower at £39.2m (2023: £63.5m), net of a previously
announced backdated tax credit relating to the patent box
claim. Dividends amounted to £115.9m (2023: £114.1m). There
were no share buybacks in the year. The interest andprincipal
paid on lease liabilities totalled £113.4m (2023:£121.8m).
Reflecting the above, cash increased by £60.8m (2023:
decrease of £25.2m), leaving the Group with cash at the year
end of £343.6m (30 December 2023: £282.8m).
Capital allocation and
returns toshareholders
We have a well-established policy for capital allocation.
We focus on achieving sustainable profit growth by investing
in and developing our business model. We aim to maintain
and grow our ordinary dividend in line with earnings to reward
shareholders with an attractive ongoing income stream.
After allowing for these uses of cash, Howdens remains
committed to returning any surplus capital to shareholders.
Within its definition of surplus capital, the Board’s objective
is for the Group to be able to operate through the annual
working capital cycle without incurring bank debt, noting that
there is seasonality in working capital balances through the
year, particularly in advance of our peak trading period in the
second half. We also take into account that the Group has a
significant property lease exposure for the depot network,
and a large defined benefit pension scheme. Our policy
remains that when year-end cash is in excess of £250m we
expect to return surplus cash to shareholders. This provides
sufficient headroom to support organic growth, our seasonal
working capital requirements, and ongoing investments in our
strategic initiatives, while maintaining a strong balance sheet.
Return surplus cash
to shareholders:
• After organic investment needs
• Seasonal working capital movements
• Fund pension scheme
• Distribute cash >£250m
Modest investment
in adjacencies:
• Vertical integration e.g. solid surfaces
• Land purchases for expansion
Progressive ordinary
dividend growth:
• Sustainable growth through the cycle
Investing in organic growth:
• Open new and revamp existing depots
• Disciplined range management
• Optimise manufacturing & logistics
• Grow digital platform
Howdens’ approach to capital structure
Financial Statements
Additional Information
Governance
33
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Strategic Report
Financial review continued
In July 2024 the Board declared an interim dividend of 4.9p per
ordinary share (2023: 4.8p per ordinary share). The Board is
recommending a final dividend for 2024 of 16.3p per ordinary
share (2023: 16.2p per ordinary share), resulting in a total
dividend of 21.2p per ordinary share (2023: 21.0p per ordinary
share). The total dividend represents a year-on-year increase
of 1.0% and, if approved by shareholders at the AGM in May the
final dividend will be paid on 23 May 2025 to shareholders on
the register on 11 April 2025.
Reflecting the Group’s strong financial position, the Board is
announcing today a new £100m share buyback programme
which will be completed over the next 12 months.
Pensions
At 28 December 2024, the deficit on the defined benefit
pension scheme reduced to £2.1m on an IAS 19 basis (2023:
deficit of £12.6m). The scheme is closed for futureaccrual.
The last triennial actuarial valuation of the scheme was
conducted as at 31 March 2023 and the scheme was in surplus
on a technical provisions basis. The Company and Trustee
agreed a new recovery plan in November 2023, should the
scheme move into a technical deficit. This agreement will run
until 31 May 2026. Under this agreement deficit contributions
of £1m a month will be made if the scheme is in a deficit
position, on a technical provisions basis, for more than two
consecutive months. In the year to 28 December 2024 there
were no deficit payments.
Technical guidance for 2025
Income statement
• The expected annualised cost impact of higher
contributions to employers’ National Insurance and the
increase in the National Minimum Wage which come into
effect in April 2025 is around £18m.
• Foreign exchange sensitivity in cost of goods sold of Euro:
+/- €0.01 = £1.8m; US Dollar: +/- $0.01 = £0.8m.
• H1 2024 benefited from an additional 2 trading days which
is not repeated in H1 2025.
Cashflow
• Capital expenditure is anticipated at around £125m,
including investments to support future growth.
Use and management of financial
instruments, and exposure to
financial risk
The Group holds financial instruments for one principal
purpose: to finance its operations. The Group does not
currently use derivative financial instruments to reduce
its exposure to interest or exchange rate movements.
The Group finances its operations by using cash flows from
operations, and it has access to a £150m revolving credit
facility if additional financing is required. Treasury operations
are managed within policies and procedures approved by
the Board. The main potential risks arising from the Group’s
financial instruments are foreign currency risk, counterparty
risk, funding and liquidity risk and interest rate risk, which are
discussed below.
No speculative use of derivatives, currency or other
instruments is permitted. The Treasury function does not
operate as a profit centre and transacts only in relation
to theunderlying business requirements.
Foreign currency risk
The most significant currencies for the Group are the US
dollar and the euro. It is the Group’s current policy that routine
transactional conversion between currencies is completed at
the relevant spot exchange rate. This policy is reviewed on a
regular basis.
The net positive impact of exchange rates on currency
transactions in the year was £4.0m. The principal exchange
rates affecting the profits of the Group are the Euro and the US
Dollar. Sensitivity to movements in these currencies is given in
the “Technical guidance for 2025” section above.
Counterparty risk
Group Treasury policy on investment restricts counterparties
to those with a short-term credit rating at least equivalent to
Standard and Poor’s A-1 or Moody’s P-1. It also places limits
on the maximum amount which can be invested with a single
counterparty. The Group continuously reviews the credit
quality of counterparties, the limits placed on individual credit
exposures and categories of investments.
34
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Funding and liquidity
The Group’s objective with respect to managing capital is
to maintain a balance sheet structure that is both efficient
in terms of providing long-term returns to shareholders
and safeguards the Group’s ability to continue as a going
concern. As appropriate, the Group can choose to adjust its
capital structure by varying the amount of dividends paid to
shareholders, the returns of capital to shareholders, the level
of capital expenditure, or by issuing new shares.
The Group has a committed, multi-currency, revolving credit
facility which allows borrowing of up to a maximum of £150m.
The facility was not used at any point during 2024 and is in
place until September 2029. More details of this facility are
given in note 19 to the financial statements.
The Group’s latest forecasts and projections have been
stress-tested for reasonably possible adverse variations in
trading performance and show that the Group will operate
within the terms of its borrowing facility and covenants for the
foreseeable future as part of our going concern assessment,
which is further detailed beginning at page 69.
At the 2024 year end, the Group had £344m of net cash and
£150m of funds available to borrow under the committed
borrowing facility.
Section 172(1) statement
The Board reviews all matters and decisions through
the consideration and discussion of reports which are
sent in advance of each of their meetings and through
presentations to the Board. When the Directors discharge
their duty as set out in section 172 of the Companies Act
2006 (“section 172” or “s.172”), they have regard to the
other factors set out on page 84 and they also consider
the interests and views of other stakeholders, including
our pensioners, regulators and the government, and the
customers of our trade customers.
The Directors are required to include a statement of how
they have had regard to stakeholders and the other factors
set out in section 172(1)(a) to (f) when performing their duty.
The full s.172(1) statement may be found on pages 84 and
85. On pages 86 to 93, we have set out examples of how the
Directors have had regard to the matters in s.172(1)(a) to (f)
when discharging their section 172 duty.
Non-financial and sustainability
information
In order to consolidate our reporting requirements under
sections 414CA and 414CB of the Companies Act 2006 in
respect of Non-Financial Reporting, the table on page 157
shows where in this Annual Report and Accounts to find
each of the disclosure requirements.
Gender diversity information for the Group can also be
found on page 104 of the Nominations Committee Report.
Interest rate risk
The Group has not had any borrowings during 2024 and does
not consider interest rate risk to be significant atpresent.
New accounting standards
None of the new accounting standards that came into effect
during 2024 had a material implication for the Group.
Cautionary statement
Certain statements in this Annual Report are forward-looking.
Although the Group believes that the expectations reflected
in these forward-looking statements are reasonable, we can
give no assurance that these expectations will prove to have
been correct. Because these statements contain risks and
uncertainties, actual results may differ materially from those
expressed or implied by these forward-looking statements.
We undertake no obligation to update any forward-looking
statements whether as a result of new information, future
events or otherwise.
By order of the Board
Paul Hayes
Chief Financial Officer
Financial Statements
Additional Information
Governance
35
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Strategic Report
Risk management
Our approach to risk
When we look at risks, we specifically think about internal and external drivers of operational, reputational, compliance, financial and
strategic risk areas over short, medium and long-term timescales. We consider the effects they could have on our business model,
our culture and our strategy which we set out starting at page 8, and which we encourage you to refer to as you read thissection.
The risk management process
The main steps in the process are set out below:
4 Monitoring and reporting
We provide formal updates twice a year to the
Executive Committee and Board for review, using
escalation criteria previously set by them. Mitigation plans
and the progress against them are also reported. The Board
considers and agrees the key risks, appetites and mitigation
strategies which are fed back to risk owners. We conduct
thisexercise twice yearly and it is used to determine the
Group’s principal risks.
3 Response
Risks that require a response have additional
mitigation strategies agreed and a future action
plandrawn up together with a timeframe. We assign
responsibility for implementation of action plans.
2 Assessment
We assess risks using a Group-wide scoring mechanism
that considers both the likelihood of occurrence and the
potential impact. We prioritise them by their risk score and
an assessment of the level of exposure against our risk
appetite is conducted. Risks that exceed our appetite
may require additional risk response.
1 Identification
Functional management and leaders formally identify risks
twice a year providing both a bottom-up and a top-down
perspective. We also conduct ad hoc reviews of new and
emerging risks throughout the year as theyarise.
Key activities People
responsible
Reports/documents
Risk monitoring and reporting
We determine our principal risks from thekeyrisk
report and agree them with Executive Committee
and Board.
Executive Committee and Board challenge
and agree the Group’s key risks, appetites and
mitigation strategies twice yearly.
Key risks, assessments and responses are
consolidated into a key risk report.
Risk response
Where risks exceed our appetite, mitigation plans
are drawn up by functional leaders andagreed
with the Executive Committee.
Risk assessment
Risks are prioritised using a Group-wide scoring
mechanism and are compared toourriskappetite.
Risk identification
We conduct operational risk register reviewsregularly
to monitor current andemerging risks.
We review internal/external emerging issuesprior
to each register review.
Principal risks
We consolidate the principal risks from the
key risk report. These are those risks that we
consider could have a potentially material impact
on our operations and/or achievement ofour
strategicobjectives.
Key risk report
We consolidate our key risk report from the
risk registers. This report outlines the highest
scoring risks, emerging risk issues, the biggest
influences to our risk profile and changes to the
risks reported. The key risk report also provides
a Group-wide perspective on risks escalated.
Risk register
We record risk registers for each functional area,
aligned with the operating model of the business.
The register includes all of the information
required to accurately capture the risk and is
maintained on our risk management information
system. We identify an owner for each risk register
responsible for its maintenance as well as the risks
it contains.
Board
Executive
Committee
Audit Committee
Risk team
Functional
leaders
Operational
management
Risk team
Risk governance
Top-down
Bottom-up
36
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleRisk management
Low
If the risk presents a hazard
to our people 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
Risk appetite
‘Risk appetite’ describes the amount of risk we are willing to tolerate, accept or seek. Our risk appetite is determined by the nature
of the risk and how that risk could affect us.
Reach more builders
Operational excellence
Product innovation Prudent financial management
Links to strategy
1. Market conditions
R
O
P
F
Risk and impact
We sell our products to
independent builders who install
them in different types of housing.
Our sales depend on the demand
for repair, maintenance, and
improvement services. If activity
falls in these areas, it can affect
our sales.
Mitigating factors
• We have proven expertise in managing selling prices and costs. Data on competitors,
depot activity and pricing is discussed by the Executive Committee at each meeting.
• We use insights from our depot network, our builders’ forums and other channels.
This is reviewed regularly by the Executive Committee and the Board.
• We use our good relationships with our suppliers to alert us of any changes.
Our suppliers update us on their assessment of trading and market performance
through regular reviews with our leadership team. We also gather insights from
supplier visits and our Supplier Conference.
Risk appetite
We have a low appetite for market
conditions risks and we maintain
close relationships with our
customers and suppliers toidentify
movements early to enable
appropriate action to be taken.
Trend
Cost of living, political change and ongoing inflationary pressures all continue to impact
on our end-users’ confidence. Whilst some factors of this risk have reduced slightly
over the year, the economic uncertainty has remained throughout 2024.
Emerging risks
We conduct periodic ‘horizon scans’ with the Executive Committee to understand our long-term emerging risk profile.
This process considers risks over three timescales:
• Short term – Current and near future risks that are strategically and operationally important, and are already covered
in the operational risk register.
• Medium term – Risks important for achieving long term objectives, development and growth plans.
• Long term – Trends that could impact the development or success of achieving strategic objectives.
If a specific emerging risk requires a more immediate response, we discuss it with the Business Continuity and/or Executive
Committee as appropriate. Emerging risks currently being considered can be found on page 41.
Compliance risks
We conduct regular assessments of specific risk areas to help identify key compliance exposures to the business (for example
anti-bribery and corruption, fraud and tax compliance). The output of these are embedded in our operational risk process to
ensure clear ownership and action plans across the business. These risks are prioritised and escalated where appropriate to
the Executive Committee and Board.
2024 Principal risks and uncertainties
The arrows alongside each risk show the year on year change
Financial Statements
Additional Information
Governance
37
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Strategic Report
Risk management
The arrows alongside each risk show the year on year change
2024 Principal risks and uncertainties continued
2. Supply chain
R
O
P
F
Risk and impact
A failure in governance or
disruption to our relationship with
key suppliers, manufacturing
and distribution operations could
affect our ability to service our
customers’ needs. If this happened,
we could lose customers and sales.
Mitigating factors
• We maintain strong relationships with our suppliers. We use long-term contracts
and multiple sourcing to safeguard the supply of key products.
• We have invested in our supply chain and distribution to secure capacity and agility
when it is required. We have optimised our stock levels.
• Supplier reviews are discussed regularly with the Executive Committee. In addition,
a sub-committee monitors governance of supplier risk and considers potential issues.
Risk appetite
We have a low appetite for supply
chain risks and put considerable
effort into identifying them early to
enable us toprevent stock issues at
our depots.
Trend
Whilst our supply base has returned to a more pre-pandemic environment, changing
legislation, ongoing geopolitical issues and extreme weather events continue to
challenge the continuity of our supply-chain and impact cost of freight.
3. Maximising growth
R
O
P
F
Risk and impact
Failure to recognise, innovate
and exploit opportunities could
impact on growth, we must
align our business model, risk
appetite, structures, and skills
with opportunities to maximise
our growth potential.
Mitigating factors
• We continue to invest in our depot environment, people, services, and systems,
and our manufacturing and distribution capabilities to equip them for growth.
• Growth activities are reviewed in the light of our risk appetite, values, business model
and culture.
• Our strategic priorities are actively discussed at the senior leadership, Executive
Committee and Board level.
• The Board is updated on the strategic plan regularly, and there is a regular
programme of ‘Spotlight’ sessions which examine specific areas of the strategy.
Risk appetite
We have a balanced appetite for
risk when it comes to growth. We
are willing to accept some risk
where we see opportunity but we
carefully balance that risk with
the potential reward presented.
Trend
An ongoing unpredictable economic environment and continued uncertainty for
consumers, has resulted in tough trading, however our strategy has continued to grow
our share of the kitchens market.
38
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitlePrincipal risks and uncertaintiesPrincipal risks and uncertainties
4. People
R
O
P
F
Risk and impact
Our business could be adversely
affected if we were unable to
attract, retain and develop our
staff, or if we lost a key member
ofour team.
Mitigating factors
• We continue to invest in our employee value proposition, striving to provide the best
possible working environment and growth opportunities for our employees.
• The Executive Committee and senior leadership team assess succession plans
for key roles regularly to ensure that appropriate continuity is in place.
• The Remuneration Committee and Board are regularly updated on key people activity
such as our internal projects to improve diversity as well as programmes such as
employee financial education.
• We continue to support a wide variety of apprenticeships, accreditations and
development programmes across all areas of our business.
Risk appetite
We have a low appetite for
people risk and work hard in
ensuring that they feel valued,
rewarded appropriately, and have
opportunities to develop and
progress in their Howdens career.
Trend
Ongoing cost of living, wages and inflationary pressures, management of hybrid
working practices and changes of working laws and rights has created a challenging
environment for our people and management teams. Maintaining the wellbeing and
motivation of our people has been a focus area across the entirebusiness.
5. Health and safety
R
O
P
F
Risk and impact
We have a large estate which
employs various activities that
could cause harm to our staff,
our customers, their customers
and the communities around us.
Mitigating factors
• We have invested in safe ways of working. We have developed dedicated health
andsafety teams and formalised systems that help us stay safe.
• We monitor, review and update our practices to take account of changes in our
environment or operations and in line with best practice and changing legislation.
• We make sure we keep talking about health and safety at every level of the business,
led by the Executive Committee.
Risk appetite
We put a great deal of effort into
identifying and managing health
and safety issues before they occur
and have a low appetite for
health and safety risks.
Trend
A well-established health and safety framework manages this risk effectively. We have
continued to learn from constantly monitoring near misses, changes to our operating
environment and changing legislation, ensuring this risk remains stable.
Reach more builders Operational excellence Product innovation Prudent financial management
Links to strategy
Financial Statements
Additional Information
Governance
39
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Strategic Report
6. Cyber security
R
O
P
F
Risk and impact
A major cyber security breach
could result in systems being
unavailable, causing operational
difficulties, and/or sensitive data
to be unavailable or compromised.
Mitigating factors
• We place continuous focus on training our people in cyber security, as we recognise
that these risks are dynamic, not always technical and awareness is our first point
ofmitigation.
• We employ industry standard IT security controls and regularly engage external
specialists to validate the effectiveness of our controls against best practice.
• We have robust disaster recovery and business continuity plans that are
testedregularly.
• We adopt a continuous improvement approach to IT security and continue to invest
in the security of our systems.
Risk appetite
We have a low appetite for cyber
security risk and manage IT
security closely to secure the
confidentiality, integrity and
availability of these systems.
Trend
Cyber security threats continue to develop globally through the combined use
of emerging technologies such as artificial intelligence, increasingly dynamic
use of social engineering techniques and gaining physical access.
7. Business model & culture
R
O
P
F
Risk and impact
If we lose sight of our values, model,
or culture we will not successfully
service the needs of the local
independent builder and their
customers, and our long-term
profitability may suffer.
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 Committee, and senior management.
• The Board and Executive Committee regularly visit our depots and factories,
ourlogistics and support locations and hold events to reinforce the importance
ofour values, model, and culture.
• Regular ‘Town Hall’ meetings are held to bring together teams and discuss our
successes and challenges ahead.
Risk appetite
We have a low appetite for risks
that can adversely impact on our
business model and culture and
put great emphasis on identifying
issues and addressing them early.
Trend
Growing international operations, bringing in many new people, has required increased
focus on ensuring the Howdens culture is maintained across all areas of the business.
UK operations remained stable with established management teams’ consistent focus
on our core principles and business model.
We consider tax risks and our tax strategy as part of our operational risk management. We operate a specific tax risk register
with risks owned by seniorstaff members and with Executive oversight. We do not consider taxation as a principal risk to
Howdens. Our Group UK tax strategy may be found atwww.howdenjoinerygroupplc.com/governance/group-uk-tax-strategy
Risk management
The arrows alongside each risk show the year on year change
2024 Principal risks and uncertainties continued
40
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
8. Product
R
O
P
F
Risk and impact
If we do not support the builder
with products that they and
theircustomers want, we could
lose their loyalty and sales
coulddiminish.
Mitigating factors
• Our product team regularly refresh our offerings to meet builders’ and end-users’
expectations for design, price, quality, availability and sustainability.
• We work with our suppliers, external design and brand specialists and attend product
design fairs to monitor likely future trends.
• Our local depot staff have close relationships with their customers and end-users,
and we actively gather feedback from them about changes in trends.
Risk appetite
We have a balanced appetite for
product risk and are willing to
take some calculated risks when
selecting new products to continue
to meet the need of our customers.
Trend
Over the year we have continued to work on understanding our customers’ and end-
consumers’ wants and needs, regularly reviewing our product offering to ensure
we continue to meet them.
9. Business continuity & resilience
R
O
P
F
Risk and impact
We have some key business
operations and locations in
ourinfrastructure that are critical
to the continuity of ourbusiness
operations.
Mitigating factors
• We maintain and regularly review our understanding of what our critical operations are.
• We ensure resilience by design, building high levels of protection into key operations
and spreading risk across multiple sites where possible.
• We ensure appropriate business continuity plans are in place for these and have
a Group wide incident management team and procedures established.
• We regularly review our continuity plans covering our sourcing and logistics
approaches to support peak trading.
Risk appetite
We have a low appetite for business
continuity risk, ensuring that
critical functions are resilient and
appropriate business continuity
plans are in place to protect them.
Trend
Though we have not experienced any significant events we continue to develop and test
our business continuity capabilities, whilst ensuring resilience by design as we continue
to grow.
Reach more builders Operational excellence Product innovation Prudent financial management
Links to strategy
Emerging risk
Geopolitical risk
The changing political situation in the Middle East,
Eastern Europe and China, coupled with major changes
in governments at home and abroad continue to have the
potential to impact our supply base and the economies we
operate in. We monitor the situation in the relevant territories
and take a risk-based approach to any identified exposures.
Legislative environment
Increasing legislative requirements around climate andcorporate
governance have the potential to impact ouroperations at
home and abroad and/or to distract ourfocus on our customer.
We review emerging legislative requirements as well as
ourcompliance with existing legislation to understand
howand when they could impact on us and what we need
todo to comply.
Climate-related risk
Climate-related risk is an emerging risk, but is not a principal
risk for us. We handle climate risk in the same way as our
other risks, albeit that time horizons may be longer. We have
continued to develop our climate risk approach during 2024,
and more detail on this can be found in our TCFD report at
pages 63 and 66.
Financial Statements
Additional Information
Governance
41
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
Worthwhile for
all concerned
Sustainability Matters
Why
sustainability
matters to us
Our material
sustainability
issues
Our impact
on our
stakeholders
Our
sustainability
strategy
Progress
in2024
Our carbon
emissions
reporting
Net Zero
Our TCFD
reporting
44 Why sustainability matters to us
45 Our sustainability strategy
46 Our Net Zero commitment and targets
48 Our material sustainability issues
49 Supplier engagement – addressing Scope 3
emissions together
50 Renewable energy & sustainable operations
51 Decarbonising the distribution fleet
52 Sustainable product offer and product innovation
54 EDI & wellbeing
56 Health & safety, carbon neutral,
renewableenergy and waste
57 TCFD – building climate resilience
64 Our impact on stakeholders
66 2024 physical climate risk assessment
67 Our SECR and Scope 3 reporting
44
48
64
45
49-56
67
46
57
Strategic Report Page Title
42
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleStrategic ReportStrategic Report Sustainability matters
42
Howden Joinery Group Plc
Annual Report & Accounts 2024
Financial Statements
Additional Information
Governance
Strategic Report
Strategic Report Page Title
Howden Joinery Group Plc
Annual Report & Accounts 2024
43
Strategic Report Page Title
43
Why Sustainability matters to us
Sustainability generates long-term value
• Helps to preserve our culture, supports our business model,
increases business resilience, mitigates our risks and
addresses the material needs of our stakeholders.
Sustainability is part of our culture
• Our culture is to be ‘worthwhile for all concerned’. For our
staff, our customers, our suppliers, the environment and
the communities we work in.
Sustainability supports our business
model
• Gives us a competitive advantage and builds business
resilience.
• Lowest cost production in our own UK factories leads us
naturally to minimising waste, energy and raw materials.
• Being trusted partners to our suppliers and customers
means that our relationships need to be worthwhile for
all over the long term.
• Each of our depots relies on strong local relationships to
trade profitably, so we need to be a good neighbour in each
of those communities.
Sustainability mitigates our risks
We discuss our principal risks beginning on page 37.
Sustainable behaviour helps us to address some of
those risks.
• Investing in keeping our people safe, developing their skills,
and offering them a great place to work is the right thing to
do, but it also mitigates our ‘Health & Safety’ and ‘Loss of
key personnel’ risks.
• Developing and maintaining sustainable supplier
relationships mitigates our ‘Interruption to continuity
of supply’ risk.
• Sustainability is a core principle of our new product design.
This gives us energy-efficient, safe and durable product,
and mitigates our ‘Product design relevance’ risk.
Our material sustainability areas
andour ESG strategy
We last refreshed our ESG materiality assessment in 2023
by commissioning an independent review with third party
specialists, consulting both external and internal stakeholders.
We present the findings of the materiality assessment and
show how the material topics are aligned to the strategic
pillars and foundation principles of our ESG strategy at page
48. Our ESG strategy is summarised on the next page.
ESG strategic highlights of 2024
Investment in solar power
£3.5m solar panel investment almost
completed – expected to go live in H1 2025
(page 50).
Supplier engagement
Extensive supplier engagement – linked
toour SBTs and increasing the accuracy
ofour Scope 3 data (page49).
Climate resilience
Climate physical risk assessment
updated (pages 49, 66).
Materiality
Double materiality assessment begun
in readiness for CSRD reporting (page 48).
Our sustainability KPIs, Our Net Zero
SBTi targets, ESG and remuneration
Our sustainability KPIs cover safety, use of wood from certified
sources, and avoiding sending waste to landfill. You can find
them on pages 50 and 56.
Our SBTi Net Zero targets were submitted in the first half of
2023 and were approved in January 2024. We present these
targets on page 47 and will be tracking progress against their
first 6-year phase in future reports.
Our PSP share plan includes ESG-related vesting targets,
whichare aligned with our Net Zero goal. Please see page 137
and 140 fordetails of the targets.
The Board and Executive Committee
lead our commitment to sustainability
The importance of sustainable behaviour is recognised
right through the business. You can see the Board’s
Statements of Intent on Health & Safety and Sustainability
at: w ww. howdenjoiner ygroupplc.com/sustainability/group-
health-safety-and-sustainability-policies. The Board’s
Sustainability Committee met regularly throughout the year
and their report begins on page 150.
Strategic Report Page Title
Strategic Report – Sustainability Matters
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Annual Report & Accounts 2024
Strategic Report Page Title
Strategic Report – Sustainability Matters
Why Sustainability matters to us
SDG targets 15.1, 15.2: conservation and sustainable use of forests.
SDG targets 13.1, 13.2: strengthen resilience to climate-related hazards; integrate climate change and
emission reduction measures into strategic planning.
SDG targets 12.2, 12.5, 12.6, 12.7: sustainable management and efficient use of natural resources; reduce
waste, increase recycling and reuse; publish sustainability information; sustainable procurement.
SDG targets 8.4, 8.5, 8.6, 8.7, 8.8: resource efficiency; sustainable growth; full, productive and worthwhile
employment; equal pay for work of equal value; youth training; eradicate modern slavery and child labour;
safe and secure working environments.
Our sustainability strategy
Our sustainability vision
Our sustainability strategy
Our material SDGs
Climate resilience
Strategic
objectives
Net Zero
UK’s leading responsible
kitchen business
A sustainable product offering,
responsibly manufactured or sourced,
that meets the needs of the builder and
the end consumer.
A unique and
sustainable culture
Maintaining and building on our culture
of being worthwhile for all concerned.
Continuing to grow a sustainable
business that appeals to current and
future stakeholders.
Leader in risk and
resilience governance
An agile and resilient business,
proactively managing ESG risks,
with transparent high-quality
stakeholderreporting.
Strategic
pillars
Foundations
Governance
EDI: Strategic priorities & wellbeing
See pages 54 & 55
Effective reporting & disclosure
Effective waste management: Zero to landfill
See page 56
Behavioural health & safety: Maintain & next steps
See page 56
Emissions reductions: Carbon neutral
See page 56
Sustainable
product offer
& innovation
Supply chain
emissions
Supply chain
risk mapping
& resilience
Renewable energy
/sustainable
operations
Decarbonise
the fleet
UN SDG description and relevant targets under each SDG
See page 49 See page 50 See page 51 See page 52 See pages 49 & 66
Financial Statements
Additional Information
Governance
Strategic Report
Strategic Report Page Title
45
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleOur ESG strategy
* In our Howden and Runcorn factories.
** (t CO
2
per £m).
3()&
ZZZSHIFFRXN
6
1
2
3
4
5
7
8
Our Net Zero commitment and targets
1
Biomass boilers (in use since 1995)
2
FSC
®
and PEFC chain of custody introduced
3
Carbon Trust standard (first carbon
reduction plan)
4
Further investment in biomass for
factory heating
5
Development and introduction of 100%
recycled and 100% recyclable cabinet legs
6
Zero to landfill achieved from
manufacturing
7
Introduction of renewable electricity inour
supply operations
8
Carbon neutral status achieved*
9
Introduction of renewable electricity
indepots
% CO
2
Emission Reduction
2004 2012 2018 2021
2013
2008
Our history of positive action Our SBTi targets to 2030
Strategic Report Page Title
Strategic Report – Sustainability Matters
46
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleOur Net Zero commitment and targets
12
16
19
17
13
14
15
10
11
9
18
How we plan to reduce our emissions
42%
25%
Reduction in
Scope 1+2 emissions
Reduction in
Scope 3 emissions
SBTi targets: 2021 –
2030 (against a 2021 baseline)
10
Committed to Science Based Targets initiative
(SBTi) with NET ZERO plan
11
Introduction of HVO alternative fuel
12
Introduction of EV trucks in our XDC network
13
Long-term exploration of alternative fuels,
materials & technologies
14
Approval of our SBTi targets
15
Solar panels start to generate energy at our
Howden factory
16
Increased use of HVO and solar
17
Interim 2030 emission reduction
targets (reduce by 50%)**
18
Monitoring and using new
technologies, where appropriate
for our business
19
NET ZERO – 90% reduction in
emissions against a 2021 baseline
2023 2030 20502024 20252022
2030–2050Our SBTi targets to 2030
Our definition of the term “Net Zero” is
the same as the definition used by the
Science-Based Targets initiative and
means reducing GHG emissions by at least
90% and neutralizing any residual GHG
emissions on an ongoing basis.
What does Net Zero mean?
Financial Statements
Additional Information
Governance
Strategic Report
Strategic Report Page Title
47
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleOur emissions and how we plan to reduce them
Our material sustainability issues
Our ESG materiality assessment
In 2023 we refreshed our existing ESG materiality assessment by commissioning an independent specialist review and carrying
out interviews with both internal and external stakeholders. The results are below.
Results of the materiality assessment and stakeholder engagement:
Stakeholder views are gathered from interviews with depot managers,
employees, suppliers and investors. Howdens views are gathered from
interviews with the senior leadership team.
When examining the answers from both sets of interviews, we found that
the scoring for some topics was being given on a net basis, because the
interviewees were aware that the Group had effective plans of action in
place for these topics and were taking account of this in their answers.
Aligns to our ESG strategic pillars
Environment
Aligns to our ESG foundation values
Social
Aligns to wider business strategy and governance
Governance
Correlation of material topics with our
ESGstrategy
As well as showing the relative importance of each of the
topics that arose in our stakeholder interviews, the diagram
above shows how they link to our ESG strategic pillars and
foundation values, set out at page 45, or in some cases, how
they link with our wider business strategy and our governance.
Double materiality
We have started work in 2024 on a double materiality
assessment, which we hope will give us further strategic
insight and will also prepare us for reporting under the
European Corporate Sustainability Reporting Directive
(“CSRD”) in the future. The requirement to report under CSRD
will apply first in our French subsidiary in FY2025, and then will
apply later on a Group basis.
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
E
E
E
G
G
G
E
E
E
E
E
E
S
S
S
S
S
S
S
E
E
S
G
Strategic Report Page Title
Strategic Report – Sustainability Matters
48
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleOur material sustainability issues
Supplier engagement – addressing Scope 3
emissions together
Why supplier engagement is important
95% of our baseline total emissions are Scope 3, i.e.
they are incurred by our suppliers. Threequarters of
these relate to goods purchased from oursuppliers
and the use of products that we source from
oursuppliers.
We can only achieve our Net Zero SBTi targets
bycollaboratingwith our key suppliers.
1. Continued increase in supplier commitment to providing
more accurate emissions data.
Our history of supplier engagement
See our website:
www.howdenjoinerygroupplc.com/
sustainability/supplier-engagement
4. Supply chain
risk mapping and
resilience to climate
change.
We have included key supplier
operations in our updated 2024
physical climate risk exercise –
see page 66.
3. ESG objectives now
included in standard
supplier terms of
business.
Defined targets in line with our
SBTi objectives, and commitment
to provide carbon reporting data.
2. Our CEO’s message
to suppliers at
our 2024 Supplier
Conference: “ESG is
non-negotiable”.
A clear message to our suppliers
that they need to be aligned with
our Net Zero plan.
8 suppliers with approved SBTi
plans (meeting our SBTi target)
264 delegates from suppliers
attended Howdens sustainability
training webinars in 2024
Supplier engagement headlines in 2024
Suppliers signed up to Howdens’
decarbonisation programme
Number of our top 30 suppliers who
have submitted finalised emissions
data for 2021–2023
Suppliers who have submitted
decarbonisation plans
80
60
0
20
40
100
120
2023
30
2024
115
8
6
0
2
4
10
2023
6
2024
9
20
0
10
30
25
15
5
2023
6
2024
29
Scope 3 – Use of
sold products
34%
Scope 3 – Other
22%
Scope 3 – Purchased
goods and services
40%
Scope 1 & 2
5%
Total 2021
baseline emissions:
1.2m TCO
2
e
(estimated)
Financial Statements
Additional Information
Governance
Strategic Report
Strategic Report Page Title
49
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleSupplier engagement – addressing Scope 3 emissions together
Renewable energy & sustainable operations
Renewable energy headlines in 2024
Solar energy investment at Howden
The Board approved an investment of £3.5m at our
manufacturing site in Howden to put PV panels on our main
warehouse roof, covering an area of 350,000ft
2
. The work
began in 2024 and we expect to see the benefits start in 2025.
Whilst dependent on the sun, the emissions reduction is
calculated to be in the region of 1,000 TCO
2
e/year, with an 8%
reduction in purchased energy. The investment is expected to
pay back within 5 years. We intend to install more solar panels
across our estate in the future.
All chipboard
& MDF used in our
manufacturing
processes is from
FSC® or PEFC
certified
sources
KPI – FSC®/PEFC
We used 265,000 cubic metres of chipboard and 48,000
cubic metres of MDF in our factories in 2024 – enough
to fill theAlbert Hall more than 3 times – so it’s natural
that we havea long-standing KPI requiring all wood to
befrom certifiedsources.
FSC
®
or PEFC certification means that the wood comes
from responsibly managed sources and that we have
independent documented evidence of an unbroken
chain of ownership all the way from the forest to us –
viathe mill, the importer and oursuppliers.
Policies
Read our Modern slavery statement:
www.howdenjoinerygroupplc.com/
governance/modern-slavery-statement
Read our human rights policy:
https://investorcom.sitefinity.cloud/docs/
librariesprovider25/archives/governance/
human-rights-policy.pdf
More information
More information on renewable energy and
sustainable operations on our website:
www.howdenjoinerygroupplc.com/
sustainability/renewable-energy-and-
sustainable-operations
panels on one roof will
provide c.8% of total
site energy
needs
7,000
Reducing
reliance on energy
currently generated
from gas. Saving...
c.£0.6m
p.a.
Strategic Report Page Title
Strategic Report – Sustainability Matters
50
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleRenewable energy & sustainable operations
Decarbonising the distribution fleet
Strategic importance and
currentposition
We operate our own transport fleet, and it accounts for around
a third of our Scope 1 baseline CO
2
emissions, so it’s a clear
ESG strategic priority area for us, as well as being a key part
of our SBTi 2030 emission reduction target.
The scope for step changes in a fleet that’s already operating
at a high level of efficiency is small but our fleet drove over 19
million miles in 2024, so every incremental gain is worthwhile.
Fleet decarbonisation headlines in 2024
Doubling the use of HVO in our fleet vs 2023
Hydrotreated vegetable oil (“HVO”) is a sustainably sourced
biofuel. It is plant based and can replace diesel without
requiring engine modifications. It reduces CO
2
by 90%
compared to diesel, and also has lower nitrogen oxide and
particulate emissions. We doubled our 2023 usage in 2024,
and we plan to increase HVO usage further in 2025.
Trialling LNG lorries in our fleet
Bio-LNG is produced by anaerobic digestion of organic waste,
manure and sewage and produces 80% less CO
2
than diesel.
We have 15 LNG vehicles in the fleet at the end of 2024.
Electric vehicles in our XDC network
With current technology, there isn’t a viable electric vehicle
with the range to replace our long haul fleet. Our XDC network,
described at page 26, involves shorter range deliveries and
is operated on our behalf by third party logistics partners.
We have engaged with one of our partners and between us
we are now operating four electric vehicles at the end of 2024.
Metrics and targets: link to LTIPs
Our distribution fleet has a 2030 emissions reduction
plan, aligned with our SBTi Net Zero commitments.
The first step of this is the emissions reduction
targets,which are built into our PSP share awards
(page 137) and are aligned with the first 5-year
targets in our SBTs, giving minimum vesting at a total
cumulative reduction from our 2021 baseline of12%,
and a maximum payout at 15%.
Progress against these targets is show below:
More information
More information on reducing fleet emissions,
on our website:
www.howdenjoinerygroupplc.com/
sustainability/decarbonising-the-
distribution-fleet
Further
investment
in solar
planned for
the future
0.65
0.60
0.45
0.50
0.55
0.70
0.75
2021
baseline
2022
actual
2023
actual
2024
actual
2025 –
minimum
2025 –
maximum
Actuals CO
2
KG/Km
Target CO
2
KG/Km
Vesting target
Financial Statements
Additional Information
Governance
Strategic Report
Strategic Report Page Title
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Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleDecarbonising the distribution fleet
1
Sustainable product offer andproduct innovation
The product that sits at the heart of our business, all our cabinets come with a 25-year guarantee.
We can offer that because we know quality and longevity are built into the design. We hold the
furniture industry (FIRA) gold award for product excellence for our rigid cabinets. They are also
90% recyclable at end of life.
The chipboard in our cabinets is made using 30% recycled content. The cabinet feet are made
of 100% recycled plastic and are 100% recyclable at end of life.
Our own-manufactured laminate worktops are now made using 87% recycled content,
a 10% increase from 2023.
Our ‘Plastic Pledge’ is an initiative looking across all the products we sell, and aiming to reduce,
remove, and replace plastic in our packaging wherever possible.
Finding plastic-free replacements for some packaging can be difficult because the products
have to be protected all the way through the supply chain from manufacture to end user.
Last year we launched our first Lamona own-brand appliances with polystyrene-free packaging.
We have continued this in 2024 and 7% of Lamona volume now has completely polystyrene-free
packaging. We have also reduced the amount of polystyrene used in packaging our other product
by a further 11% in 2024.
We have redesigned our tower cabinets in 2024, removing the need for a fifth leg, which reduces
our annual plastic use by around 39 tonnes and our annual emissions by 110 tonnes of CO
2
.
We have introduced a new dishwasher in 2024 which uses grey water for the start of a wash,
reducing average water use by 50%.
Energy efficiency improvements in cooling, our performance on cooling products has improved
with reduction equivalent to 9,656 tonnes of CO
2
over the lifetime of the products.
We work hard to build reliability into all our own brand Lamona appliances and we’re proud to
back that up with a 3-year warranty as standard. Where we have warranty claims we encourage
end users to accept our offer of sending an engineer to repair their appliance rather than replace
it under the terms of the warranty. This happens in 97% of claims.
As we continue to improve the high quality of our Lamona products, we saw 4,600 fewer engineer
visits in 2024 than in 2023. Each engineer visit for a simple repair emits 2.4Kg of CO
2
so this is an
annual reduction of 11 tonnes of CO
2
.
When the cabinet has come to the end of its life in the home it can be recycled and broken down to produce
morechipboard, which can be used tomake more cabinets in the future.
We don’t only want to do things to an incredibly high standard – wewant them to be sustainable too. Sustainability isbuilt
into our product design process and is one of the five pillars that webase new product design and sourcing decisions on,
sitting on an equal footing alongside quality, design, cost and availability.
Some recent examples of building sustainable considerations into new product are shown below.
We want to create sustainable products that we’re proud of.
We make almost 5 million cabinets a year in our own UK factories,
so our choices here can make a real difference. We buy our chipboard
from sustainably managed UK forests. For every acre of trees used,
an acre or more is planted.
1 Cabinets
2 Worktops
3 Plastic pledge and packaging
4 Appliances
Strategic Report Page Title
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Strategic Report Page TitleSustainable product offer and product innovation
2
1
3
4
Financial Statements
Additional Information
Governance
Strategic Report
Strategic Report Page Title
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Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
EDI & wellbeing
Headlines from 2024
Employee inclusion survey
We conducted our first employee inclusion survey
measuring our ambition to be “Worthwhile for
ALLconcerned”:
Worthwhile careers, opportunities to develop and thrive
“ I want Howdens to always be a ‘home from home’ place to work, where you arevaluedfor who
you are and where you can give the best of yourself, make meaningful contributions and build
lifelong friendships.”
Andrew Livingston – CEO
Worthwhile careers forALL
Our refreshed careers website is now live (Nov 2024),
highlighting the variety of opportunities we offer to attract
diverse talent. For more info see careers.howdens.com
Building manager capability
We ensure we maintain our inclusive culture by developing
better leaders. Over 550 managers have completed our
bespoke development programme this year, and we’ve had
feedback from both managers and team members that the
training has resulted in tangible increases in performance.
Apprentice levy transfer –
training tomorrow’s
customers
There is a recognised shortage of
tradespeople in the construction
industry. Since starting a small
trial in 2021 we have committed
to transferring up to 20% of
our apprentice levy to small
construction related businesses
so that they can bring on the new
generation of skilled tradespeople.
To date this levy transfer has
resulted in over 140
apprenticeships, and we hope
to see it continue in the future.
Developing skills to
sellmore kitchens
Our externally accredited Kitchen Sales Designer (KSD)
programme saw over 500 KSD’s develop skills to sell more
kitchens by building stronger relationships, understanding
customer needs and converting more opportunities. 92% of
new designers have said there has been a positive impact on
their performance as a result.
Our Inclusion Strategy: Worthwhile
for ALL, Support for ALL, Accessible
for ALL.
See our website: www.howdenjoinerygroupplc.
com/sustainability/people-edi-and-wellbeing
73%
said Howdens is a great place to work.
70%
of respondents said Howdens is a place
where everyone has the opportunity and
isencouraged tosucceed at work.
68%
said they were proud to work for Howdens.
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Strategic Report Page TitleEDI & wellbeing
Wellbeing headlines in 2024
Supporting mental wellbeing
We have a range of initiatives to support mental wellbeing
forall our employees.
Mental wellbeing is a known issue in the building trade.
According to the British Safety Council, workers in the
construction industry are 4 times more likely to take their
ownlives.
We also know that men are considerably less likely than
women to seek support when they are worried or feeling low
(according to Mind, the mental health charity), so one of the
initiatives we support is Andy’s Man Club, who run regular
talking groups and places for men to come together in a safe
environment to talk about issues and problems they have
faced or are currently facing.
This year, we ran a mock session in our Howden and Raunds
sites – a first for Andy’s Man Club and for Howdens – to give
employees a taste of what they could expect from attending
an external Andy’s Man Club meeting. Over 80 employees
attended and at least 3 men from Howden visited an external
Monday night club after attending the mock session.
Our EDI priority areas
Our Executive Committee sponsors continue to
lead employee working groups focusing on gender,
disability and ethnicity.
More information
More information on our EDI priorities:
www.howdenjoinerygroupplc.com/
sustainability/people-edi-and-wellbeing
Our wellbeing strategy
Our Wellbeing strategy has 3 key elements:
Financial, Mentaland Physical.
More information
More information on our Wellbeing strategy:
www.howdenjoinerygroupplc.com/
sustainability/people-edi-and-wellbeing
Financial Statements
Additional Information
Governance
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EDI headlines in 2024
Menopause Friendly and Wellbeing of Women
We are proud to have achieved Menopause Friendly
Workplace accreditation in April and we are also a founding
member of Wellbeing of Women Employer’s Programme.
Zero to landfill
across all UK
operations
Health & safety, carbon neutral,
renewableenergy and waste
• Our safety KPI has remained low at 176 RIDDOR reportable
injuries per 100,000 employees in 2024. This is 19% below
the2023/2024 HSE All-Industry rate of 217. We continue
to be vigilant on all aspects of health and safety.
• Our accident severity rate has also remained low at
28.8 hours lost to accidents per 100,000 hours worked.
• We continue to hold ISO 45001 Health & Safety management
certification across our UK and Republic of Ireland depots
and our manufacturing and distribution network.
Developments in 2024
• Partnership with University of Hull. We have partnered
with the Centre for Human Factors (CFHF) at the University
of Hull to help benchmark our safety culture maturity and
identify possible action plans for the future.
Successfully achieving the
Carbon Trust Route to Net
ZeroStandard in 2024
We previously achieved carbon neutral manufacturing at our
Howden and Runcorn sites in 2021, which we had certified by
the Carbon Trust, an independent global climate consultancy.
Since 2023, the Carbon Trust no longer offers Carbon Neutral
verification at a site level and is transitioning to a more demanding
certification – the Route to Net Zero Standard. This standard has
an expectation of high ambition from participating companies,
along with a greater emphasis on reduction and more rigorous
and ambitious requirements. The scope of the Net Zero Standard
is wider than the previous Carbon Neutral certification as it covers
the whole Group’s operations.
Our baseline: zero to landfill across all UK
operations
Effective waste management is one of our longstanding ESG
foundation activities. We were pleased to achieved zero waste
to landfill across all UK operations in 2023, we’ve maintained
that in 2024, and we see that as our baseline for the future.
Future challenges for our waste management
Our waste management performance is strong, but we want
to keep on improving. We are now working to develop more
challenging targets for the future, which concentrate on
opportunities for reuse and recycling of waste streams that
have previously gone to energy recovery.
Keeping our people safe and healthy
Reducing waste
We were very pleased to achieve the Route to Net Zero
Standard at the Taking Action tier in 2024. This tier is the first
of three tiers, and it required us to show historical reduction in
operational emissions, greenhouse gas emissions reduction
targets, and foundational CO
2
e management practices.
We look on this achievement as an important step in our Net
Zero journey and a way to demonstrate our commitment
to climate leadership, moving on from the achievement of
Carbon Neutrality. The standard is aligned with our science-
based carbon reduction targets and provides assurance
that we are on track to achieve our targets and are adopting
sustainability best practices.
More information
More information on our approach to
Health & Safety on our website:
www.howdenjoinerygroupplc.com/
sustainability/health-safety
More information
More information on our approach
to reducing waste on our website:
www.howdenjoinerygroupplc.com/
sustainability/waste-management
Reportable injuries/100k employees –
Reportable injury rates remain low
HSE all-industry rate Howdens
100
0
200
300
20202019 2021 2022 2023 2024
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Strategic Report Page TitleHealth & safety, carbon neutral,
renewableenergy and waste
Task Force on Climate-Related Financial
Disclosures – building climate resilience
Our approach to TCFD
We see the TCFD reporting process as a useful framework to help us assess our climate resilience, to identify our climate risks and opportunities,
to build them into our strategy and to measure our progress.
We have made good progress in 2024. Mainly in working with suppliers to collect more, and more accurate, Scope 3 data page 68, and also in
updating our physical risk assessment page 66.
No identified material climate-related risks in the medium term
The results of our scenario modelling agree with the results of our existing business risk management process (described starting on page 36),
in that they did not identify any material climate-related risks in the medium term. This also agrees to the results of the work done in 2024 on
assessing physical climate risks (page 66).
No identified material financial impact of meeting our SBTi targets in the medium term
We have examined the estimated incremental costs of meeting our SBTi targets over the next three years, and neither the incremental capex
requirement nor the net annual effect on operating profit is material.
Confirming compliance with the TCFD recommendations
The following pages set out the 11 TCFD recommended disclosures, showing where we are now, the progress we’ve made this year, and our main
areas of focus for the future.
We consider that we’re fully compliant with Listing Rule 6.6.6R (8) (UK Listing Rules), i.e. that we are fully compliant with all 11 of the TCFD
recommendations, and that we have taken into account all relevant and material elements of the recommended TCFD disclosures – including the
TCFD’s all-sector guidance and, where appropriate, the supplemental guidance for non-financial groups. The statement includes the climate-
related financial disclosures required by section 414CB(A1) and (2A) of the Companies Act 2006.
TCFD recommended disclosure Our disclosure and developments in 2024 Focus areas for 2025 and beyond
GOVERNANCE
A
Describe the Board’s
oversight of climate-
related risks and
opportunities.
• This process is led by the Board’s Sustainability
Committee, whose report is at page 150.
• The Sustainability Committee met three times
during 2024. The Director of ESG* reported to
the Sustainability Committee at each meeting
and provided updates on the climate-related
risks and opportunities.
• The Board considers climate risks together
with other risks as part of its overall risk
review processes described in detail starting
at page 36.
• When considering any material investment
proposition, the Board considers the likely
climate-related consequences.
• The Sustainability Committee will
meet regularly in 2025 and will make
recommendations to the Board
asappropriate.
• The Director of ESG will provide regular
progress updates.
• The Board incorporated environmental
measures for the 2024 executive share plan.
The Remuneration Committee regularly
monitor progress against each of these
measures. Updated environmental measures
are in place for the 2025 plan – see page 137.
Financial Statements
Additional Information
Governance
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TCFD recommended disclosure Our disclosure and developments in 2024 Focus areas for 2025 and beyond
GOVERNANCE CONTINUED
B
Describe
management’s role
in assessing and
managing climate-
related risks and
opportunities.
• It is the Executive Committee’s (ExCo)
responsibility to execute Group strategy and
to manage and mitigate climate risks and take
advantage of opportunities. The role of the
ExCo is set out on pages 80 and 81.
• The ExCo are responsible for delivering
the climate-related targets determined
by theBoard.
• In 2024, the ExCo established a Sustainability
Steering Group (SSG) which is chaired by
the Supply Chain Director. The role of the
SSG is to monitor progress against our
2030 SBTi targets, including costs and data
requirements to achieve those targets.
The SSG met 5 times in 2024.
• The Director of ESG advises both Board
and ExCo on progress against targets and
other initiatives. He presented at all of the
Sustainability meetings in 2024.
• ExCo reviewed the TCFD materiality impact
assessments and scenario analysis in 2023,
when they were last refreshed.
• The Director of ESG worked with ExCo during
the year to develop strategies to manage risks
and pursue opportunities.
• Our supplier engagement activities in 2024
(pages 49, 90 and 91) demonstrated industry
leadership and provided clear messaging
that our suppliers need to be active on
emissions reductions.
• ExCo members have been assigned key
responsibilities on managing climate risks
and opportunities.
• The SSG will meet regularly in 2025 and
will make recommendations to the ExCo
asappropriate.
• Management will continue to engage with
our supply chain in 2025.
STRATEGY
A
Describe the climate-
related risks and
opportunities the
organisation has
identified over the
short, medium,
and long term.
• Our climate risk assessment identified no
significant short or medium-term climate-
related risks.
• We give more detail on the potential risks
and opportunities starting at page 61.
• Continuing to engage with our supply chain
to obtain further data, which may also give
additional information on ESG risks and
opportunities as they evolve.
B
Describe the impact of
climate-related risks
and opportunities on
the organisation’s
businesses, strategy,
and financial planning.
• We updated our physical climate risk
assessment over various timeframes and
pathways in 2024. No significant short or
medium-term risks were identified.
• We have continued to explore ways of building
potential risks and opportunities into strategic
and financial planning.
• We give more detail on possible impacts
starting on page 61.
• We discuss our Net Zero commitment
on page 46.
• Climate-related risk screening is being
incorporated into the due diligence process
for major capital expenditure decisions.
• As we continue to collect data from more of
our suppliers (page 49), this will increase
our knowledge on specific climate risks and
opportunities that may inform our strategy
and financial planning.
• The outputs of our double materiality
assessment (page 48) will inform our strategy.
* The Director of ESG is a management role and is not a Director of the Board of Howden Joinery Group Plc.
TCFD – building climate resilience continued
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Strategic Report Page TitleTCFD – building climate resilience
TCFD recommended disclosure Our disclosure and developments in 2024 Focus areas for 2025 and beyond
STRATEGY CONTINUED
C
Describe the
resilience of the
organisation’s
strategy, taking
into consideration
different climate–
related scenarios,
including a 2°C or
lower scenario.
• We constructed draft climate impact
scenarios in 2021, including a scenario
aligned with below 2°C. These were
scrutinised by management, ExCo and Board
in 2022 and are described on page 61. They
did not identify any material challenges to
strategy in the short or medium term.
• In 2023, we established a TCFD working group
to review the Net Zero strategy. No significant
short or medium-term implications for our
strategy were identified. In 2024 this group’s
role was expanded and it now has an ExCo
owner (SupplyChainDirector).
• We intend to refresh our scenario analysis
in 2025.
• We will continue to review various options for
decarbonisation, including new technology,
as and when it becomes available, and to
consider whether there are any emerging
implications for our future strategy.
RISK MANAGEMENT
A
Describe the
organisation’s
processes for
identifying and
assessing climate-
related risks.
• We use the same approach as for other risks
(see pages 36 – 37), combined with horizon
scanning to improve identification of medium
and longer-term climate transition and
physical risks.
• We use an approach modelled on British
Standards, based on risk impact and our
adaptive capacity.
• We have built the outputs of our climate risk
assessment into operational risk registers.
• We updated our climate physical risks
assessment in 2024 using our modelling tool
that covers all of our operations over a short,
medium and long term for three different
recognised climate pathways see page 66.
• We have engaged with our stakeholders,
including our insurers, to understand how
their focus on climate risk is likely to develop.
• Continue to improve our risk identification
process, incorporating more data streams
and trends.
• Review the external environment for changes
in climate risks and new mitigation strategies
(e.g. through our brokers, insurers, external
professional bodies and forums).
B
Describe the
organisation’s
processes for
managing climate-
related risks.
• We manage climate-related risks in the same
way as our other risks (see pages 36–37),
albeit that time horizons may be longer.
• A member of the ExCo owns each risk and
leads the relevant operational teams as
they control day-to-day risk management
andmitigation.
• Challenge the business on the effectiveness
and accuracy of mitigation plans, including
evidence of progress.
• We continue to have no climate risk which we
treat as a principal risk, and to view potential
climate risks as emerging risks (see page 41).
C
Describe how
processes for
identifying, assessing,
and managing
climate-related risks
are integrated into the
organisation’s overall
risk management.
• We use the same approach as for other risks
(see pages 36–37). We record them in our risk
registers alongside our other operational,
financial and strategic risks, albeit that we
typically use longer time horizons when
looking at climate risks.
• We review and update them twice a year.
• We have an emerging risk identification and
management approach, with dedicated
reporting to Exec and Board.
• Continue with specific climate-focused risk
register reviews.
• Continue to develop reporting to Exec
andBoard.
Financial Statements
Additional Information
Governance
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TCFD recommended disclosure Our disclosure and developments in 2024 Focus areas for 2025 and beyond
METRICS AND TARGETS
A
Disclose the
metrics used by
the organisation
to assess climate-
related risks and
opportunities in line
with its strategy and
risk management
process.
• Our emissions reporting starts at page
67. This is central to our SBTi targets (42%
reduction in Scope 1 and 2 emissions, and
25% reduction in Scope 3 emissions by 2030.
90% reduction in all emissions by 2050 –
all against a 2021 baseline), which were
approved in January 2024, and which will be
key metrics for the future.
• We have long-standing KPIs on use of FSC®
and PEFC raw materials (target of 100% of all
wood used in manufacturing to be certified)
and on production waste recycling (target of
100% of waste not going to landfill). We report
on these on pages 50 and 56.
• We have amended our standard contract
terms with all direct suppliers to make it clear
that we expect them to set SBTi targets or a
clear and validated Net Zero plan.
• As we continue with supplier engagement,
we will collect further supply chain emissions
data, which will allow us to encourage
suppliers to set SBTi targets and Net Zero
plans (page 49).
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
67. We have disclosed estimated Scope 3
emissions for the first time in 2023.
• We consider the risks relating to emissions
as part of our overall climate risk reporting,
summarised above.
• We will continue to work with our supply chain
to gather additional data to inform our Scope
3 emissions reporting and progress against
our SBTi targets.
C
Describe the
targets used by
the organisation to
manage climate-
related risks and
opportunities and
performance against
targets.
• Performance against non-financial KPIs is
shown on pages 29, 50, 56 and 57.
• Our SBTi Net Zero targets are shown at
page47.
• We have incorporated environmental targets,
aligned with our SBTi Net Zero targets, into the
terms of our employee share awards since
2022. More details are given on pages 137
and 140.
• Continue to monitor performance against
targets, including assessing the industry
specific metrics and targets introduced by
latest frameworks and standards such as TPT
(Transition Plan Taskforce) and ISSB.
• We plan to publish our Transition Plan in 2025.
TCFD – building climate resilience continued
* The Director of ESG is a management role and is not a Director of the Board of Howden Joinery Group Plc.
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Main risks and opportunities from our scenario modelling so far
Details of the scenarios and time horizons
We did our first climate scenario planning in 2021. We looked
at both physical and transition risks and held a series of
workshops with stakeholders across the business to identify
and discuss potential significant risks and opportunities.
Our discussions concentrated on the time period to 2030 for
transition risks and opportunities, which we further split into
time horizons, which we classified as short-term (to 2024),
medium-term (to 2026) and long-term (to 2030). We chose the
long-term horizon as it aligned with our first major milestone
in our Net Zero plans (see page 46). We chose the duration of
the short and medium terms because they aligned with the
Group’s strategic business and financial planning cycle time
horizons at the time we carried out our initial exercise in 2021.
Physical risks are assessed using longer time horizons, as
explained at page 66.
We had planned to refresh our scenario analysis in 2024,
which would have included an exercise to review and refresh
the time horizons. However we have chosen to prioritise our
resources in 2024 to work on our CSRD readiness (see page
48), our Transition Plan, and on further detailed work on our
physical climate risk assessment (see page 66). We intend to
refresh our climate scenario modelling in 2025 and will revise
our time horizons as part of that exercise.
We developed three scenarios to frame our discussions of
potential climate risks and opportunities. These scenarios
were based on the well regarded and widely used scenarios
developed by Inevitable Policy Response, and were then
enhanced to include additional factors specific to Howdens.
The scenarios are:
1) Less than 2ºC scenario: Where governments and
regulators act quickly and take the lead with a series
of measures aimed at achieving the Paris Agreement
targets. This scenario envisages swift action, a high
level of legislation and emphasis on mechanisms
such as carbon pricing and financial incentives for
decarbonisation.
2) Where lack of agreement between governments leads
to an initially slow pace of change, but where a series of
social tipping points see a response to climate change
which is led by citizens putting pressure onto governments
and companies toact.
3) Where there is some commitment from governments,
companies and citizens to a Net Zero transition, but where
these commitments aren’t always fully developed or
enforced, and may sometimes be overridden by political,
commercial, or individual concerns in the short and
medium term, requiring more severe policy action and
enforcement in the longer term.
Results and next steps
Our initial scenario modelling work has given us an increased
understanding of the qualitative impacts of climate change
on our business across various time horizons, although
we recognise that it is an iterative and dynamic process.
The results of our scenario modelling agreed with the results of
our existing business risk management process (pages 36 to
41) and also indicated the resilience of our current strategy,
in that they did not identify any material climate-related risks.
Under each scenario there were several possible short,
medium and long-term risks and opportunities. We have
summarised the most likely ones below. Whilst we have
indicated the most relevant time horizon(s) for each risk and
opportunity, there is inevitably significant crossover between
the outputs of the different scenarios and time horizons, so
our description of each risk and opportunity, as well as of the
related impact, contains an element of aggregation.
Over time we will continue to refresh and develop our
scenario analysis. Our intention is to refresh the scenario
calculations in2025.
Financial Statements
Additional Information
Governance
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Overview of opportunities
Most relevant
time horizons Impact Potential outcomes/enabling actions
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
lower-cost financing.
Short to medium term
(2024–2026)
Increased demand for
shares.
Access to sustainable
finance opportunities.
Clearly communicating our
sustainability and climate resilient
actions to our existing and
futureinvestors.
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 brand
awareness, increased market share and
increased attractiveness to current and
futureemployees.
Medium to long term
(2026–2030)
Increased sales.
Greater brand
awareness.
Increased market share.
Stronger employee
retention/relations.
Promoting awareness of our
sustainability and Net Zero
ambitions to employees,
customers and end users.
Sustainable customer offering
and bringing the suppliers on
the Net Zero and sustainability
journey with us.
OPPORTUNITY: Area of impact – Cost reduction
Continuing to focus on energy
efficiency, pushing through our targeted
improvements and taking future steps on
the path to decarbonisation could lead to
a lower cost base.
Relevant factors could be things such as:
• Access to grants, subsidies and
favourable tax treatment for adopting
decarbonisation technologies.
• Absolute reductions in energy and
materials consumption will lower
costs, particularly in times of rising
energy prices, extended application of
carbon pricing and an increase in the
underlying carbon price.
Grants and subsidies:
short to medium term
(2024–2026)
Absolute reductions in
energy consumption:
medium to long term
(2026–2030)
Deployment of
decarbonisation
technologies such as
hydrogen: medium to
long term (2026–2030)
Capitalise on energy
opportunities:
installation of solar
panels/wind turbines
etc., will help in reducing
costs and lead to carbon
emission savings.
Own energy generation:
by accessing grants and
subsidies and deploying
latest decarbonisation
technologies.
Reducing energy consumption will
help mitigate the impact of rising
energy prices/carbon pricing.
Deploying new renewable
technologies with grants will lower
the own capex requirements and
improve energy security.
OPPORTUNITY: Area of impact – Product design
Taking the lead in producing sustainable
products before our competitors could
increase our competitive advantage and
marketshare.
Medium to long term
(2026–2030)
Support the future
sustainability of
our assets and the
Howdensbrand.
Sustainable design is built in
as a pillar of our new product
development process.
TCFD – building climate resilience continued
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Overview of risks
Most relevant
time horizons Impact Mitigation actions
RISK: Area of impact – Sourcing
Future physical or legal
barriers arising from
climate change could bring
challenges to sourcing some
of our products in the future
– principally items which we
currently source from overseas.
Causes could be things suchas:
• Carbon pricing.
• Pressure on supply chains
to decarbonise, especially
in emergingmarkets.
• Some current raw materials
could increase in cost or
become unavailable in
the future, so alternatives
wouldhave to be found.
Carbon pricing:
medium to long
term (2026–2030)
Pressure on
supply chains to
decarbonise:
medium to long
term (2026–2030)
Raw materials
cost increase/
unavailability:
medium to long
term (2026–2030)
Carbon pricing: £2.9m – £5.1m
(assumption of £50 per tonne of CO
2
e
carbon price).
Pressure on supply chains to
decarbonise: as climate change is a
global issue, our supplier base will also be
impacted with the drive to decarbonise.
Raw materials cost increase/
unavailability: there may be adverse
impacton availability ofcertain raw
materials in the future.
Our commitment to SBTi Net Zero
targets will help with mitigating
the impact of future carbon prices
due to absolute reductions in
ouremissions.
We are using technology to collect
data directly from our suppliers,
which will give us an increased
understanding of potential supply
chain impacts and allow us to
collaborate with suppliers to
mitigate the potential futureeffects.
For instance, the supply chain data
should give us a more detailed view of
potential effects on key raw materials
and help us formulate mitigation
strategies where necessary.
RISK: Area of impact – Operations
The physical risk to our
operations from climate
change can include extreme
weather events and rising
sea levels. These risks
could require additional
capital expenditure or could
interruptoperations.
The physical risk
assessment:
identifies potential
risks in the short,
medium and
long term for
three separate
recognised
pathways (RCPs
2.6, 4.5 and 8.5).
Interruption to operations: No
significant inherent physical climate risk
has been forecasted in our modelling
for any of our critical infrastructure,
distribution, and/or manufacturing
locations over short, medium or long term
perspectives for any climate pathway.
No significant inherent climate risk to our
global depot network with just 2% of sites
potentially affected by climate risk in the
poorest case pathway by 2100.
No significant climate risk exposures
in the short or medium term for our key
suppliers with an increasing potential
exposure to drought across some
European suppliers in the long term (by
2100) in the worst climate scenario.
We have modelled our exposure
to physical climate risk over
short, medium and long term
perspectives for three separate
recognised climate pathways.
We will conduct further detailed
validation workshops on key assets
to understand specific climate risks,
local mitigations andplans.
(See Physical Climate Risk Case
Study on page 66 for moredetails).
RISK: Area of impact – Decarbonisation
Decarbonisation of our
distribution and depot
fleets could require
transitional investment and/
or adjustments to current
working practices.
Adjustments to
current working
practices: short
to medium term
(2024–2026)
Transitional
investment:
medium to long
term (2026–2030)
Additional capital expenditure:
to decarbonise our own operations,
e.g. our buildings and fleet.
We are currently carrying out a
study, which will clarify levers of
decarbonisation available to us.
We have estimated the incremental
costs of meeting our SBTi targets
over the next three years, and
neither the capex requirements nor
the net annual effect on operating
profit arematerial.
RISK: Area of impact – Customer expectations
Failure to meet customer
demands for sustainable
products could reduce
market share.
Failure to meet
demands:
medium to long
term (2026–2030)
Impact on future sales: from inability
to meet customer needs.
Our ESG strategic ambition is to
be the UK’s leading responsible
kitchen business. This
commitment drives us to maintain
a focus on sustainable product
(pages 52 and 53).
Financial Statements
Additional Information
Governance
Strategic Report
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Strategic Report Page Title
100%
All of our chipboard is from
sustainably managed UK forests
Zero to
landfill
across our UK operations
£3.5m
invested in solar energy generation at
our Howden factory. Short payback
period. Further investment planned.
82%
of company cars are PHEV/EV as we
move away from fossil fuels
Environment
603
apprentices in training
1 1%
of our current employees started their
Howdens career as an apprentice
229
apprentices completed programmes
in 2024
9%
of our highest performing kitchen
sales designers started their
Howdens career as an apprentice
Apprentices
Our impact on our stakeholders
Strategic Report Page Title
Strategic Report – Sustainability Matters
64
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleOur impact on stakeholders
£453m
of tax generated or collected.
Corporation tax, NI PAYE and VAT
£343m
of working capital extended to our
customersin our peak trading period
Over
550,000
small business customers supported by our
trade account facility in our peak trading
period. No fees, up to 8 weeks to pay
The wider economy
Over 12,000
full-time jobs with prospects. In manufacturing, in almost
950 local depots, and in distribution, systems and support
Over 950
local communities where we employ people
£688m
salaries and benefits paid to our employees in 2024
£255m
cash contributed to our pension schemes
in the last 5 years
100%
of UK employees in share ownership schemes
10th
in the 2022 Best Big Companies to work for awards
People
Shareholders
£116m
dividends paid
in 2024
£839m
returned to
shareholders in
5 years 2020 –
2024
147
kitchens, worth c.£1m, donated and installed in
grassroots football clubs as part of the ‘Game
Changer’ programme
£100K
two-year partnership with National Parks
launched
Community & charity
Financial Statements
Additional Information
Governance
Strategic Report
Strategic Report Page Title
65
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
2024 Physical Climate Risk assessment
We have done detailed work in 2024 to assess our physical
climate risks. This helps us understand the parts of our
business most at risk from physical climate change and
assess the potential financial impact.
We’ve used a third-party physical risk assessment tool built on
the Intergovernmental Panel on Climate Change’s Recognised
Climate Pathways (RCPs). We’ve used the tool to analyse the
risk of rain, river floods, storms, sea level rises, heat, fire and
drought. We assessed potential risks for:
• Our depots, including those in our international operations,
manufacturing and distribution sites, and other critical
infrastructure locations.
• All suppliers across the world where we rely upon their
products to derive £2.5m or more of our profit.
• Planned major future investment locations with the
capability to check down to individual new depot locations.
The tool shows us our current exposure, and also provides
insight on short (to 2030), medium (to 2050) and long (to
2100) term time horizons. These time horizons extend further
than in our original physical risk assessment, done in 2021,
because of the passage of time and access to modelling tools
which can model further into the future. This insight is given
against climate scenarios covering three separate pathways,
(RCPs 2.6, 4.5 and 8.5) providing good, intermediate and poor
climate change scenario perspectives. The tool is updated
regularly to ensure perspectives take advantage of latest
climate projections.
Carrying out this analysis involved a lot of detailed work.
For instance, we had to get accurate geolocational data for:
• 915 depots in the UK and Europe.
• Each individual major building at each of our 4
manufacturing plants across the UK.
• 43 of our suppliers’ factories.
• 12 major distribution sites across the UK and Europe.
• 12 other critical infrastructure locations, including our
major IT hubs and office locations.
For each of these locations we identified both the value of the
contribution they make to our profit and the value of the assets
at each location and entered them into our climate diagnostics
tool so that we could assess the scale of any potential
climate risks.
The work that we have done in 2024 What our analysis identified
Future actions
Our current modelling outcomes forecast:
• No significant inherent physical climate risk to our
critical infrastructure, manufacturing or distribution
locations over short, medium or long term perspectives for
any climate pathway.
• No significant inherent climate risk to our global
depot network with just 2% of sites potentially affected by
climate risk in the poorest case pathway by 2100.
• No significant climate risk exposures in the short or
medium term for our key suppliers with an increasing
potential exposure to drought across some European
suppliers in the long term (by 2100) in the worst climate
scenario.
• Some flooding risks were identified in the medium term to
sites planned for new development, which will be discussed
with the developer to ensure adequate mitigation is
inplace.
• Conduct detailed validation workshops on key assets
to understand specific climate risks, local mitigations
and plans.
• Addition of non-Howden assets to the risk assessment
tool to further understand how climate change may
impact on the business, for example adding key ports
in our supply chain.
• Continue to use the physical risk assessment tool to
refresh the view periodically to ensure we capture the
changing climate scenarios and how they may affect
the business.
Strategic Report Page Title
Strategic Report – Sustainability Matters
66
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Our SECR and Scope 3 reporting
Absolute carbon emissions reduced 1.7% against 2023
Emissions reporting methodology
Footprint calculations performed in accordance with the WRI GHG Protocol and market-based emissions are reported in
accordance with the GHG Protocol Scope 2 Guidance – An amendment to the GHG Protocol. This report is produced in accordance
with HMG Environmental Reporting Guidelines, including Streamlined Energy and Carbon Reporting (SECR). Allfootprint
calculations are subject to internal quality checks at source data and final report stages. The intensity measure waschosen
because it was felt most relevant to show changes in emissions relative to changes in turnover.
We have used the Operational Control boundary, which includes all UK and International operations. There are no process
emissions within Howdens, as defined in the GHG protocol, and fugitive emissions from air conditioning systems are omitted
due to insignificant materiality to the overall footprint.
Total emissions (tonnes CO
2
equivalent)
2024 2023
Scope 1 – Direct: Gas 11,489 13,075
Scope 1 – Direct: Owned Transport (LGV/Van/Car) 24,356 24,665
Scope 1 – Direct: Other fuels 1,225 1,380
Scope 1 – Direct: Biomass 408 408
Scope 1 – Direct: Total 37,478 39,528
Scope 2 – Indirect: purchase of electricity, heat, steam or cooling – location-based 14,857 13,725
TOTAL Scope 1 and 2 absolute emissions – location-based 52,335 53,253
Scope 2 – Indirect: Electricity – market-based* 1,205 1,266
TOTAL Scope 1 and 2 – market-based 38,683 40,794
Turnover (£m) 2,322.1 2,310.9
Carbon intensity ratio (tCO
2
e per £m) gross, location-based 22.5 23.0
Inflation adjusted intensity ratio (tCO
2
e per £m) gross, location-based 29.1 28.7
Additional carbon intensity ratio (tCO
2
e per £m) net, market-based 16.7 17.7
Additional inflation adjusted intensity ratio (tCO
2
e per £m) net, market-based 21.5 22.0
Energy consumption used to calculate above emissions (kWh) 287,276,782 290,613,944
Proportion of Scope 1 CO
2
e emissions generated in the UK 98.5% 97.9%
Proportion of Scope 2 CO
2
emissions generated in the UK 98.8% 98.9%
Proportion of total energy consumed (kWh) in the UK 98.2 98.3%
SECR – Emissions reporting
Financial Statements
Additional Information
Governance
Strategic Report
Strategic Report Page Title
67
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleOur SECR and Scope 3 reporting
SECR Reporting
Category
2024
2023 –
restated*
TCO
2
eTCO
2
e %
1 Purchased goods and services 381,127 50% 493,845
2 Capital goods 10,292 1% 6,270
3 Fuel and energy related activities 13,228 2% 10,856
4 Upstream transportation and distribution 38,800 5% 38,319
5 Waste 1,020 0% 945
6 Business travel 2,703 0% 2,391
7 Employee commuting 23,779 3% 25,907
8 Upstream leased assets – 0% –
9 Downstream transportation 31,417 4% 34,858
10 Processing of sold products – 0% –
11 Use of sold products 229,607 30% 233,242
12 End-of-life treatment 30,094 4% 34,608
13 Downstream leased assets – 0% –
14 Franchises – 0% –
15 Investments – 0% –
Total 762,068 100% 881,241
Energy efficiency initiatives
See pages 50 and 51 for examples of developments in
2024 in our manufacturing and transport operations,
our most significant sources of Scope 1 and 2 emissions.
Use of renewable energy sources
We discuss this on pages 50 and 51.
Our Scope 3 emissions
Key to Scope 3 data
Source of data
Derived from data that is within our direct
control or that we can more easily verify
Not applicable
Derived from data that is not within our direct
control or that is more difficult to verify
Status of data
Most secure – Good quality data/
confidence in estimations
Least secure – more work to do to verify
data quality/higher reliance on industry
estimation/assumption
Not applicable
Less secure – some work to do to verify
data quality/reasonable reliance on
Industry estimations
As shown below and on page 49, around 95% of our emissions fall outside of our direct control and are reported as Scope 3
emissions. Renowned for being a more difficult area to gather consistent and quality data, we are continuing to make good
progress with improving the integrity of our Scope 3 numbers and, for example, are working with our largest suppliers initially
tocollate and improve the quality of data on the emissions associated with our purchased goods and services (see page 49).
Our record over the past five years is shown on the chart below:
Our SECR and Scope 3 reporting continued
1
2
3
4
7
9
11
12
Relative importance
of Scope 3 categories
* 2023 restatement: During 2024 we discovered that some
ofthepublished 2023 Scope 3 emissions data was inaccurate
and so it has been restated accordingly. Total Scope 3
emissions were overstated by 55,857 tCO
2
e. Category 2 was
overstated by 42,414 tCO
2
due to double-counting of certain
parts of the input information. Category 11 was overstated
by 24,569 tCO
2
e as a result of incorrect emissions factors
being applied. Categories 4, 7 and 12 required restatement
due to the inconsistent application of estimates on which they
were based, resulting in an understatement of 12,946 tCO
2
e
and 3,027 tCO
2
e in categories 7 and 12 respectively, and an
overstatement of 4,847 tCO
2
e in Category 4.
The processes for capturing Scope 3 information continue to evolve
as the Group is working on making further improvements. The root
causes of the data quality issues identified in 2023 data have been
taken into consideration when preparing 2024 information.
The majority of our Scope 3 data has been calculated
using available primary data. Where necessary,
estimates have been used for some categories and
therefore are subject to change. In accordance
with the GHG Protocol and the Science Based Target
Initiative’s recalculation policy, updated data
willbe published when available.
40.0
30.0
0.0
10.0
20.0
50.0
60.0
2023 20242020 2021 2022
Carbon intensity ratio (tCO
2
e per £m) (location based)
Total carbon emissions (‘000s tCO
2
e) (market based)
Total absolute carbon emissions (‘000s tCO
2
e) (location based)
Additional carbon intensity ratio (tCO
2
e per £m) net (market based)
Strategic Report Page Title
Strategic Report – Sustainability Matters
68
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Strategic Report – Sustainability Matters
Going concern and Viability statements
The Directors have adopted the going concern basis in
preparing the financial statements and have concluded that
there are no material uncertainties leading to significant doubt
about the Group’s going concern status, and that there were no
significant judgements involved in coming to this conclusion.
The reasons for this are explained below.
Going concern review period
The going concern review period covers the period of at
least 12 months after the date of approval of these financial
statements. The Directors consider that this period continues
to be suitable for the Group as it is the period for which the
Group prepares the most frequently revised forecasts,
and which is most regularly scrutinised by the Executive
Committee and Board.
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
page 37.
Whilst all the principal risks could have an impact on the
Group’s performance, the specific risks which could most
directly affect going concern are the risks relating to
continuity of supply, changes in market conditions, and
product relevance. The Group is currently holding additional
amounts of faster-moving inventory as a specific mitigation
against supply chain disruption, and the Directors consider
that the effects of the other risks could result in lower sales
and/or lower margins, both of which are built into the financial
scenario modelling described below.
Review of trading results, future trading
forecasts and financial scenario
modelling
The Directors have reviewed trading results and financial
performance in 2024, as well as early weeks’ trading in 2025.
They have reviewed the Group balance sheet at 28 December
2024, noting that the Group is debt-free, has cash and cash
equivalents of £344m, and appropriate levels of working
capital. They have also considered three financial modelling
scenarios prepared by management:
1. A ‘base case’ scenario. This is based on the final 2024
Group forecast, prepared in December 2024 and including
the actual results of the 2024 peak sales period.
This scenario assumes future revenue and profit in line
with management and market expectations as well as
investments in capital expenditure and cash outflows for
dividends and share buybacks in accordance with our
capital allocation model (see pages 33 and 34).
Going concern
2. A ‘severe but plausible’ downside scenario based
on theworst 12-month year-on-year actual fall ever
experienced in the Group’s history. For additional context,
this is more significant than the combined effect of COVID
and Brexit on 2020 actual performance.
This scenario models a reduction in most of the
variable cost base proportionate to the reduction in
turnover. It includes capital expenditure at a lower level
than in the base case, but which is still in line with our
announced strategic priorities for growth, namely: new
depot openings and refurbishments; investment in our
manufacturing sites, investment in digital and expanding
our international operations. It also includes dividends
and share buybacks in line with the Group’s stated capital
allocation model.
In this scenario the Board considered the current
economic conditions that the Company and its customers
are facing, and noted that the downside scenario included
allowances for reduced demand and increased costs to
reflect such adverse conditions.
3. A ‘reverse stress-test’ scenario. This scenario starts
with the severe but plausible downside model and reduces
sales even further, to find the maximum reduction in sales
that could occur with the Group still having headroom over
the whole going concern period, without the need to take
further mitigating actions.
Capital expenditure in this scenario has been reduced to
a ‘maintenance’ level. Variable costs have been reduced
in proportion to the reduction in turnover on the same
basis as described in the severe but plausible downside
scenario. It assumes no dividends or share buybacks.
Borrowing facility and covenants
The Group has a five-year, committed, multi-currency
revolving credit facility of up to £150m which expires in
September 2029 and which was not drawn at the period end.
A summary of the facility is set out in note 19 to the December
2024 Group financial statements.
As part of the scenario modelling described above, we have
tested the borrowing facility covenants and the facility
remains available under all of the scenarios. We have
therefore included the credit available under the facility
in our assessment of headroom.
Strategic Report
Financial Statements
Additional Information
Governance
Strategic Report
Strategic Report Page Title
69
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page TitleGoing concern and Viability statements
Strategic Report
Results of scenario testing
In the base case and the severe but plausible downside
scenarios, the Group has significant headroom throughout
thegoing concern period after meeting its commitments.
In the reverse stress-test scenario, the results show that sales
would have to fall by a significant amount over and above the
fall modelled in the severe but plausible downside scenario
before the Group would have to take further mitigating actions.
The likelihood of this level of fall in sales is considered to
beremote.
Conclusion on going concern
Taking all the factors above into account, the Directors believe
that the Group is well placed to manage its financing and
other business risks satisfactorily and have a reasonable
expectation that the Group will continue to operate and to
meet its liabilities in full and as they fall due for the going
concern review period set out above. Accordingly, they
continue to adopt the going concern basis in preparing
thesefinancial statements.
Assessment of long-term prospects
The Directors have assessed the Group’s long-term
prospects,solvency and liquidity, with particular reference
tothe factors below:
Current position
• History of profitable trading, with strong net profit margins.
• Cash and cash equivalents balance at 28 December 2024
of £344m.
• Debt-free. Consistently cash-generative. Proven ability
tomaintain strong cash balances whilst also investing
forgrowth and returning cash to shareholders.
• £150m committed borrowing facility, due to expire in
September 2029. Unused, but available if needed.
• Strong relationships with suppliers and customers.
• Proven ability to flex the operating cost base in a severe
economic downturn.
• Robust disaster recovery and business continuity
framework.
Strategy and business model
• Proven, successful business model.
• Demonstrated agility and resilience of the business
model to adverse economic conditions.
• Clear strategic direction.
Robust assessment of principal risks
• The Directors’ role in the risk identification, management,
and assessment process is outlined on page 36, followed
by details of the principal risks and mitigations.
• The Directors are satisfied that they have carried out a
robust assessment of the Group’s principal risks over the
viability period on the basis already described in the going
concern disclosure directly above.
Going concern and Viability statements continued
Long-term prospects and viabilityGoing concern continued
70
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report Page Title
Assessment of viability
Time period and scenario modelling
The Directors’ review of the Group’s long-term viability used
a three-year period to December 2027. This was considered
to be the most suitable period as it aligns with the Group’s
strategic planning process.
The financial modelling to support the assessment of viability
was based on the three scenarios used for the going concern
assessment and detailed above. We have tested the borrowing
facility covenants and the facility remains available under
all of the viability scenarios. We have therefore included
the credit available under the facility in our assessment
ofheadroom.
1. The base case scenario takes the base case described
in the discussion of going concern above and extends it
over the viability assessment period. It assumes future
revenue and profit in line with management expectations,
investments in capital expenditure and cash outflows for
dividends and share buybacks in accordance with our
capital allocation model (see pages 33 and 34).
2. 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
period. It assumes capex at a lower level than in the base
case but which is still in line with our announced strategic
priorities for growth, and dividends and share buybacks in
line with our capital allocation model.
3. The reverse stress-test scenario assumes a phased
recovery of margin and profit on the same bases as for
the severe but plausible downturn scenario. This is then
stress-tested to find the maximum amount by which sales
in the first year would have to fall before the Group would
no longer have headroom at any point in the viability
assessment period, without taking further mitigating
actions. It assumes capex at a maintenance level and
no dividends or share buybacks.
The Directors consider that the reasonably foreseeable
financial effects of any reasonably likely combination of the
Group’s principal risks are unlikely to be greater than those
effects which were modelled in the severe but plausible
downside and reverse stress-test scenarios.
Results of scenario testing
The results of the base case and plausible downside scenario
modelling showed that the Group would have sufficient
headroom over the viability assessment period.
The reverse stress-test showed that the level of fall in sales
required in the first year of the viability assessment period
was significantly more than the fall modelled in the severe but
plausible downturn scenario before the Group would have to
take further mitigating actions. The likelihood of this level of fall
in sales is considered to be remote.
Conclusion on viability
Having considered the Group’s current position, strategy,
business model and principal risks in their evaluation of the
prospects of the business, and having reviewed the outputs
of the scenario modelling, the Directors concluded that they
have a reasonable expectation that the Group will continue
to operate and to meet its liabilities in full and as they fall due
during the three-year period to December 2027.
Long-term prospects and viability continued
Page
Principal risks and mitigations 37–41
Trading results
16–35, and the Financial
Statements
Balance sheet 176
Details of our £150m borrowingfacility 199
Auditor’s report, with details of their work and
conclusions on going concern and viability 160–174
Further reading relevant to
going concern and viability
Financial Statements
Additional Information
Governance
71
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategic Report
Strategic Report Page Title
How we
preserve value
Executive
Committee
& Company
Secretary
Board of
Directors
Directors’
duties
Remuneration
Committee
report
Nominations
Committee
report
Sustainability
Committee
report
74 8076
84
110
100
150
Stakeholder
engagement
Audit
Committee
report
86
142
Chairman’s
introduction
74 Corporate governance report
76 Board of Directors
80 Executive Committee and Company Secretary
84 Directors' duties (Section 172(1) Statement)
86 Stakeholder engagement
94 UK Corporate Governance Code:
application and compliance
100 Nominations Committee report
110 Remuneration Committee report
142 Audit Committee report
150 Sustainability Committee report
154 Directors’ report
156 Directors’ statements
157 Non-financial and sustainability information
Governance
Governance
72
Howden Joinery Group Plc
Annual Report & Accounts 2024
Governance Page Title
73
Howden Joinery Group Plc
Annual Report & Accounts 2024
Financial Statements
Additional Information
Governance
Strategic Report
73
Howden Joinery Group Plc
Annual Report & Accounts 2024
Governance Page Title
74
Howden Joinery Group Plc
Annual Report & Accounts 2024
Introduction from the Chairman
2024 was a busy year for the Howdens Board and its
Committees. Against an uncertain and challenging
macroeconomic backdrop, operational and trading matters
remained high on the Board’s agenda. But testament to the
resilient nature of the business and its employees, there was
also full consideration of strategic opportunities, capital
allocation and good governance considerations.
We have built on our existing processes for determining risks
and opportunities (more detail on which can be found in the
Strategic Report on pages 36 to 41) and worked more closely
as a Board on the matters most fundamental to the Howdens
business. The Board spent time with divisional management
on areas of key risk such as health & safety and cyber security
and worked with senior management on Executive succession
and talent.
From a corporate governance perspective, we made good
progress in boardroom diversity and monitoring our progress
against our SBTi approved Net Zero targets. We updated and
consulted with shareholders on the Directors’ Remuneration
Policy and progressed plans towards further reliance on key
controls. The Board has already begun work to address the
changes in the updated UK Corporate Governance Code and
more detail is provided in the following reports on how it will
affect the work of the Board in 2025.
However, the central tenet of leadership at Howdens remains
that the business must be worthwhile for all concerned.
I hope that the reports that follow showcase our governance
achievements and some of our priorities for the year ahead.
Board succession
Having an effective and collegiate Board is vital for Howdens to
deliver its growth strategy, provide support and challenge for
the Executive team and maintain proper governance practices.
2024 saw us build on our Board refreshment programme
initiated in 2023 and during the year we welcomed three new
independent Non-Executive Directors to the Board: Vanda
Murray, Roisin Currie and Suzy Neubert. These new Directors
bring a wealth of strategic, operational and financial experience
to the Board, which complements our existing skill set.
We also announced the appointment of Tim Lodge who
joined the Board in January 2025. This followed an extensive
search to identify the replacement of Andrew Cripps as Audit
Committee Chair when he retires from the Board at the AGM
in May. Tim is an experienced CFO and Audit Committee
Chair and has enjoyed a handover period with Andrew
during the 2024 year-end. I am also pleased to confirm that
Vanda Murray will take over from Andrew Cripps as Senior
Independent Director. Vanda’s experience of such roles and
excellent interpersonal skills makes her a perfect candidate
for this role.
More information on all new appointments to the Board can
be found in the Nominations Committee report beginning
on page 100.
Corporate
governance report
Peter Ventress
Chairman of the Board
Using the Corporate
governancereport
The following sections may be found in this corporate
governance report:
Page 74: Chairman's Introduction
Page 76: Board of Directors profiles
Page 80: Executive Committee & Company
Secretary profiles
Page 82: Key Board activity during the year and for
the year ahead
Page 84: Directors' duties and s.172 disclosure
Page 86: Stakeholder engagement
Page 94: UK Corporate Governance Code application
and compliance
Governance
Corporate governance reportGovernance
75
Howden Joinery Group Plc
Annual Report & Accounts 2024
Strategy
It is one of the Principles of the UK Corporate Governance
Code that boards should establish the company’s purpose,
values and strategy.
The Board discussed strategy and strategic initiatives
throughout the year. In November, we approved a £128m
capital investment plan for the purchase (subject to planning)
and redevelopment of the Runcorn manufacturing site.
The Runcorn factory is the Group’s high-volume, low-cost
cabinet manufacturing site and is a critical part of our
business. Something of an unsung hero, Runcorn helps us
achieve lower costs, higher quality, and improved service
and resilience. I look forward to the Board visiting the site as
part of our 2025 calendar.
During 2024, the Board held a meeting in Dublin to showcase
the Irish business. International growth remains an important
lever of strategic growth for Howdens and the Board has
continued to invest away from the UK during 2024. While in
Ireland, the Board received presentations from management
on the local market and the long-term opportunity. Following
the meeting, the Board visited a number of depots and had the
opportunity to meet local employees.
Stakeholders and culture
The Code also provides that boards must satisfy themselves
that a company’s purpose, values and strategy are aligned
to its culture. Howdens has a unique, entrepreneurial culture
but one that is underpinned by high quality controls and an
ethos of personal accountability. Proximity to the business
and stakeholder engagement is fundamental to really
understanding the Howdens culture.
The Board is collectively responsible for engagement with our
stakeholders and therefore we have removed the role of the
Non-Executive Director responsible for employee engagement.
We have replaced it with a programme of employee events with
Non-Executive Directors expected to attend a minimum number
of dedicated sessions each year and to provide feedback on
all sessions attended. These have included (but are not limited
to) Regional Board meetings, depot visits, town hall briefings,
site visits and incentive events. Feedback from members of the
Board on the new programme, which was in full effect for the
duration of 2024, has been universally positive.
The shareholder consultation in respect of our Directors’
Remuneration Policy has been another key stakeholder
engagement during the year. Vanda Murray has led the
consultation in her new role as Remuneration Committee Chair
and more information on how we engaged with shareholders is set
out in detail in the Remuneration Committee report on page 110.
More information on the employee engagement programme
and other stakeholder engagement is set out in detail in this
report, starting on page 86.
Peter Ventress (6/6)
Karen Caddick (3/3) Retired 2 May 2024
Andrew Cripps (6/6)
Roisin Currie (3/3) Appointed 1 July 2024
Louis Eperjesi (6/6)
Louise Fowler (6/6)
Paul Hayes (6/6)
Andrew Livingston (6/6)
Vanda Murray (5/5) Appointed 1 February 2024
Suzy Neubert (2/3)
1
Appointed 1 July 2024
1 Suzy was appointed to the Board on 1 July 2024 and was unable to
attend the September meeting due to a commitment made prior to her
appointment. She was provided with all the Committee papers ahead of the
meeting and provided her feedback to the Chair and Company Secretary.
The disclosures and information shown below may be
found in the Additional Information section beginning on
page 222:
• 2025 Annual General Meeting (AGM) details
• 2024 Final Dividend timetable
• Share capital information
• Significant agreements disclosure
Board meeting
attendance in2024
Additional information
The Board in 2025
We will continue to build on the ‘spotlight sessions’ held during
2024, which have provided the Board with opportunities to speak
to management below the Executive Committee. Details of the
Board’s programme for 2025 can be found on pages 82 and 83.
I also look forward to engaging with our shareholders at the
AGM in May.
Peter Ventress
Chairman of the Board
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
Governance
76
Howden Joinery Group Plc
Annual Report & Accounts 2024
Corporate governance report continued
Board of Directors
A AA RN NN S SS RR
Andrew Livingston
Chief Executive Officer
Paul Hayes
Chief Financial Officer
Peter Ventress
Chairman
Andrew Cripps
Senior Independent Director
Forbes McNaughton
Board of Directors
Executive Directors
Company Secretary
Executive Committee
Board and Executive Committee structure
Guy Eccles
Group HR Director
Julian Lee
Operations Director
Richard Sutcliffe
Supply Chain Director
Theresa Keating
Group Finance Director
Andy Witts
Chief Operating Officer:
Trade Division
Roisin Currie
Non-Executive Director
Louise Fowler
Non-Executive Director
Louis Eperjesi
Non-Executive Director
Tim Lodge
Non-Executive Director
Vanda Murray
Non-Executive Director
Suzy Neubert
Non-Executive Director
Pages
76 to 79
Pages
80 to 81
Andrew Livingston
Chief Executive Officer
Peter Ventress
Non-Executive Chairman
Louis Eperjesi
Independent
Non-Executive Director
Paul Hayes
Chief Financial Officer
Andrew Cripps
Senior Independent Director
Vanda Murray OBE
Independent
Non-Executive Director
Suzy Neubert
Independent
Non-Executive Director
Tim Lodge
Independent
Non-Executive Director
Roisin Currie
Independent
Non-Executive Director
Louise Fowler
Independent
Non-Executive Director
N S A R
N S
A N S A RR N S
A RN S
Key to Board Committee membership
Audit Committee
A
Nominations Committee
N
Remuneration Committee
R
Sustainability Committee
S
Chair of Committee
C
Governance Page Title
77
Howden Joinery Group Plc
Annual Report & Accounts 2024
Roles
Further information about the role of the Board, the Executive and Non-Executive Directors, the Company Secretary, and external
advisors can be found on our website: www.howdenjoinerygroupplc.com/governance/division-of-responsibilities
Financial Statements
Additional Information
Governance
Strategic Report
Andrew Livingston
Chief Executive Officer
Paul Hayes
Chief Financial Officer
Appointed Appointed
Andrew was appointed to the Board as Chief Executive Officer
on 2 April 2018.
Paul was appointed to the Board as Chief Financial Officer
on 27 December 2020.
Contribution to the long-term sustainable
success of the Company
Contribution to the long-term sustainable
success of the Company
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 mindset fits the Howdens culture which has served the Company
well and is fundamental to its success. He was previously the
CEOofScrewfix and has an MBA from the London Business School.
Paul is an experienced finance 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 finance
roles at a number of UK and US listed companies, including Signet
Jewelers, RHM Plc and Smiths Group Plc. He is a Chartered Accountant
having qualified with Ernst & Young and has a first class masters
degree in Mechanical Engineering, Manufacture & Management.
Other listed company appointments Other listed company appointments
Non-Executive Director of LondonMetric Property Plc None
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.
Peter Ventress
Non-Executive Chairman
Andrew Cripps
Senior Independent Director
Appointed Appointed
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.
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. He will retire from the Board following the
conclusion of the 2025 AGM.
Contribution to the long-term sustainable
success of the Company
Contribution to the long-term sustainable
success of the Company
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 Officer of Berendsen
Plc and has held several senior executive roles, including International
President of Staples Inc and Chief Executive Officer of Corporate
Express NV, meaning he has extensive experience in international
distribution businesses and brings a wealth of relevant commercial,
financial and high-level management experience to the Board.
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 recent and
relevant financial experience.
Other listed company appointments Other listed company appointments
Non-Executive Chairman of Bunzl Plc None
Governance Page Title
Governance
78
Howden Joinery Group Plc
Annual Report & Accounts 2024
Corporate governance report continued
Board of Directors continued
Roisin Currie
Independent Non-Executive Director
Louis Eperjesi
Independent Non-Executive Director
Appointed Appointed
Roisin was appointed Non-Executive Director in July 2024. Louis was appointed Non-Executive Director in June 2023.
Contribution to the long-term sustainable
success of the Company
Contribution to the long-term sustainable
success of the Company
Roisin’s experience in a number of senior executive roles within the
consumer sector provides her with a strong diversity of perspective
and customer-centric focus. She has been the Chief Executive of
Greggs Plc since May 2022 having joined as Group People Director
in 2010. During her tenure she was also Retail and Property Director.
This breadth of experience means Roisin has a comprehensive
understanding of vertically integrated and multi-site businesses, and
she has experience working at both a strategic and operational level.
Roisin began her career at Asda where she spent 20 years, latterly
as Retail People Director and then Distribution People Director. She is
currently Chair of the Employers Forum for Reducing Re-offending,
a voluntary role working with the Ministry of Justice and New Futures
Network, and she is a Trustee of the Duke of Edinburgh Awards Scheme.
Her HR and people background brings valuable perspectives on
culture, talent and reward.
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.
Other listed company appointments Other listed company appointments
Chief Executive Officer of Greggs Plc Non-Executive Director of Ibstock Plc, Trifast Plc, and Accsys
Technologies Plc
Louise Fowler
Independent Non-Executive Director
Tim Lodge
Independent Non-Executive Director
Appointed Appointed
Louise was appointed to the Board in November 2019. Tim was appointed to the Board in January 2025. He will become Audit
Committee Chair in May 2025 upon Andrew Cripps' retirement.
Contribution to the long-term sustainable
success of the Company
Contribution to the long-term sustainable
success of the Company
Louise has over 25 years of customer, brand and digital experience at
a senior level. Her experience encompasses publicly listed and private
businesses, the mutual sector and not-for-profit organisations.
Louise’s 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.
Tim has substantial recent and relevant financial experience, having
spent over 30 years in finance and accounting roles. He is a fellow
of the Chartered Institute of Management Accountants and spent
26 years at Tate & Lyle Plc in various finance and commercial roles,
including six years as Chief Financial Officer. He has also held Chief
Financial Officer roles at the COFCO International group and the role
of Non-Executive Director and Audit Committee Chair at Aryzta AG.
Tim is currently independent Non-Executive Director and Audit
Committee Chair of both SSP Group Plc and Serco Group Plc,
and Senior Independent Director of Arco Limited. He is also a trustee
of the charity Gambia School Support and a Director of An African
Canvas (UK) Limited.
Other listed company appointments Other listed company appointments
Non-Executive Director of Assura Plc Non-Executive Director and Audit Committee Chair of both SSP Group
Plc and Serco Group Plc
Governance Page Title
79
Howden Joinery Group Plc
Annual Report & Accounts 2024
Financial Statements
Additional Information
Governance
Strategic Report
Vanda Murray OBE
Independent Non-Executive Director
Suzy Neubert
Independent Non-Executive Director
Appointed Appointed
Vanda was appointed to the Board in February 2024 and became
Remuneration Committee Chair in May 2024. She will become Senior
Independent Director (SID) in May 2025 upon Andrew Cripps' retirement.
Suzy was appointed Non-Executive Director in July 2024.
Contribution to the long-term sustainable
success of the Company
Contribution to the long-term sustainable
success of the Company
Vanda has over 25 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 served as
Senior Independent Director and Chair of the Remuneration Committee
at Bunzl Plc, Chief Executive Officer of Blick Plc, and UK Managing
Director of Ultrafame Plc, and she is currently the Chair of Marshalls Plc.
Vanda’s extensive experience in both executive and non-executive
roles benefit Howdens from both a leadership and a strategy
perspective, and her tenure as a remuneration committee chair means
she transitioned easily into the Howdens Remuneration Committee
Chair role in May 2024. Vanda's experience as a SID also stands her in
good stead to succeed Andrew Cripps in this role in May 2025.
Suzy’s experience in sell-side equity research at Merrill Lynch, and
additionally on the buy-side in her role at JO Hambro, has given her a
thorough understanding of capital markets and the expectations of
institutional investors. She has worked for large organisations but also
in more dynamic environments, which is a valuable mix of experience
for Howdens as a FTSE 100 business with a strong entrepreneurial
culture. She is a qualified barrister and brings valuable legal insight
and experience to the Board.
Suzy is also an experienced non-executive director. She served as
Non-Executive Director, and latterly as Senior Independent Director,
of Witan Investment Trust plc until 2023, and is currently a Non-
Executive Director of LondonMetric Property Plc, Liverpool Victoria
Financial Services Limited (where she is also Chair of the Investment
Committee), and Jupiter Fund Management Plc. Alongside her
commercial board roles, Suzy is also a trustee and council member
at the Prince’s Trust.
Other listed company appointments
Non-Executive Chair of Marshalls Plc
Other listed company appointments
Non-Executive Director of LondonMetric Property Plc and Jupiter Fund
Management Plc
Governance Page Title
Governance
80
Howden Joinery Group Plc
Annual Report & Accounts 2024
Andy Witts
Chief Operating Officer: Trade
Richard Sutcliffe
Supply Chain Director
Forbes McNaughton
Company Secretary
Theresa Keating
Group Finance Director
Guy Eccles
Group HR Director
Julian Lee
Operations Director
Corporate governance report continued
Executive Committee and Company Secretary
Executive Directors*
Andrew Livingston
Chief Executive Officer
Paul Hayes
Chief Financial Officer
* Andrew and Paul's profiles can be found on page 77.
Board of Directors
Executive Directors
Company Secretary
Executive Committee
Board and Executive Committee structure
Pages
76 to 79
Pages
80 to 81
Executive Committee and Company Secretary tenure as at 28 December 2024
302824 2620 2216 1812 144 620 8 10
Years
Company Secretary Tenure
Executive Committee and
Company Secretary
Guy Eccles
Forbes McNaughton
Richard Sutcliffe
Andy Witts
Theresa Keating
Julian Lee
Executive Directors
Andrew Livingston
Paul Hayes
Executive Committee Tenure Company Tenure
Governance Page Title
81
Howden Joinery Group Plc
Annual Report & Accounts 2024
Guy Eccles
Group HR Director
Theresa Keating
Group Finance Director
Appointed Appointed
Guy joined Howdens in April 2020 and was appointed Group HR Director
and a member of the Executive Committee in February 2024.
Theresa joined Howdens in September 2000 and has beena member
of the ExecutiveCommittee since February 2012. She will retire from
Howdens in March 2025.
Contribution to the long-term sustainable
success of the Company
Contribution to the long-term sustainable
success of the Company
Guy joined Howdens as Interim Group HR Director in 2020. Previously
he had been running his own consultancy, providing HR support to
numerous privately and publicly owned companies across a range of
sectors, including retail, healthcare and hospitality. Prior to that he was
HR Director of B&Q and Screwfix.
Guy has overall responsibility for all HR matters.
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 various commercial
finance roles at Waterstones, HMV and Heals.
Theresa also oversaw the key controls project, which identified
operational, IT and financial controls to mitigate our key business risks.
Julian Lee
Operations Director
Andy Witts
Chief Operating Officer: Trade
Appointed Appointed
Julian joined Howdens in 2003 and was appointed to the Executive
Committee in July2020.
Andy joined Howdens in July 1995 and has been a member of the
Executive Committee since September 2008.
Contribution to the long-term sustainable
success of the Company
Contribution to the long-term sustainable
success of the Company
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 andcapacity.
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 Officer of Trade in January 2014.
Andy 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 ofnew depots.
Richard Sutcliffe
Supply Chain Director
Forbes McNaughton
Company Secretary
Appointed
Appointed
Richard joined Howdens in January 2019 and was appointed
to theExecutive Committee in July 2020.
Forbes joined Howdens in July 2012 and was appointed Group
Company Secretary in May 2014.
Contribution to the long-term sustainable
success of the Company
Contribution to the long-term sustainable
success of the Company
Prior to joining Howdens, Richard was Director of Supply Chain at Screwfix.
Before this, he held senior supply chain and businessplanning roles at
Hobbycraft, Wyevale Garden Centres andB&Q.
Richard's role as Supply Chain Director encompasses optimising stock
holdings across the business and ensuring Howdens maintains market
leading stock availability. He led the highly successful XDC project,
which is delivering superior service levels and availability to depots.
Richard's role also encompasses leading our IT team.
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 and is Chair of the Howdens
Worthwhile Foundation.
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
Governance
82
Howden Joinery Group Plc
Annual Report & Accounts 2024
May – AGM
• Further details can be
found on page 225.
Corporate governance report continued
Key Board activity
January
• Health and safety update
• CEO and CFO updates
• Investor relations update
• 2024 Budget review
• Principal Risks review
• Whistleblowing update
January
• Health and safety update
• CEO and CFO updates
• Update from Chair of the
Pension Trustees
• Product update
• Investor relations update
• 2025 Budget review
• Principal Risks review
• Whistleblowing update
• Board evaluation feedback
Spotlight:
Trade Service
and Convenience
Spotlight session
Spotlight:
Product
Leadership
April
• Health and safety update
• Board evaluation feedback
• CEO and CFO updates
• Pensions update
• Investor relations update
• Broker update
• NED appointments
consideration
• NED fees review
• Group policies approval
April
• Health and safety update
• CEO and CFO updates
• Pensions update
• Employee engagement
• Investor relations and
Broker update
• Group policies approval
• UK Tax Strategy approval
May – AGM
• All resolutions were
passed with the requisite
majority. Further details
about the meeting may be
found on page 92.
February
• Health and safety update
• CEO and CFO updates
• Investor relations update
• Draft 2023 Full Year
Results announcement,
draft 2023 Annual Report
and Accounts and 2024
AGM documents
• Shareholder and capital
returns consideration
• Principal advisors review
February
• Health and safety update
• CEO and CFO updates
• Draft 2024 Full Year
Results announcement,
draft 2024 Annual Report
and Accounts and 2025
AGM documents
• Shareholder and capital
returns consideration
• Review of risk
management framework
• NED fees review
• Principal advisors review
Set out below and on the facing page are highlights of the matters the Board considered in 2024 and will consider in 2025. Not all
of the matters the Board considered or will consider are listed, so this should not be taken as anexhaustive list ofactivities.
In addition to the matters shown on the 2024 timeline, at each meeting the Board received strategic, operational and financial
updates from the CEO and CFO. The Board also considered aspects of Group culture and strategy at various points during the year.
2024
2025
Executive Committee presenters:
SL DS
Key Board activityGovernance
83
Howden Joinery Group Plc
Annual Report & Accounts 2024
Spotlight session
Spotlight:
Development of
the business in the
Republic of Ireland
Spotlight:
Technology
Roadmap
July
• Health and safety update
• CEO and CFO updates
• Investor relations update
• Draft 2025 Half Year results
and announcement,
including consideration
ofan interim dividend
• Market update
• Key and Principal risks
review and review of risk
management framework
• Whistleblowing update
July
• Health and safety update
• Board engagement with
employees
• CEO and CFO updates
• Supply investment
consideration
• Business continuity
management
• Investor relations update
• Draft 2024 Half Year results
and announcement,
including consideration
ofan interim dividend
• Key and Principal risks review
• Whistleblowing update
September
• Health and safety update
• CEO and CFO updates
• ‘Make vs Buy’ update
• Investor relations update
• 2024 Board evaluation
planning
November
• Health and safety update
• CEO and CFO updates
• Manufacturing site
development plan
• Pensions update
1
• Investor relations update
• Employee engagement
update
• Corporate conflicts
register review
• Schedule of Matters
Reserved for the Board
andBoard Committee
Terms of Reference
• 2025 Board calendar
approval
Governance and risk
The Board received governance, legal, and regulatory updates atregular intervals from the Company Secretary and the Board’sadvisors.
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 98. We have reviewed our risk management processes and remain satisfied that they are
robust and effective. The annual review of the risk and control framework was presented to the Audit Committee in November 2024.
Reporting from our whistleblowing helpline is also considered by the Board on a bi-annualbasis.
Executive Committee presenters:
Executive Committee presenters:
JL
DS
AW
SL
DS
AW
1 The Company’s actuaries reported to the Board on routine funding and investment matters.
Executive Committee
presenters
Julian Lee
(Operations Director)
David Sturdee
(Chief Customer Officer)
Andy Witts
(COO: Trade)
Stuart Livingstone
(Trade Director)
Spotlight session
Spotlight session
September
• Health and safety update
• CEO and CFO updates
• Investor relations update
• Employee engagement
• 2025 Board evaluation
planning
November
• Health and safety update
• CEO and CFO updates
• Pensions update
• Investor relations update
• Corporate conflicts
register review
• Schedule of Matters
Reserved for the Board
andBoard Committee
Terms of Reference
• 2026 Board calendar
approval
• Director training
Spotlight:
Period 21
Readiness
Executive Committee presenters:
AW JL
Spotlight sessions
Spotlight sessions are
sessions with the wider
Executive team and their
direct reports to discuss the
fundamentals ofthebusiness
model, strategy and future
plans. Sessions focus on
topics within the five pillars
of the business:
• Trade service and
convenience
• Product leadership
• Trade value
• Entrepreneurial culture
• Trusted trade
relationships
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
Governance
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Directors' duties
Corporate governance report continued
Section 172(1) of the Companies Act 2006
A director of a company is required to act in a way they
consider, in good faith, would most likely promote the success
of the company for the benefit of its members as a whole.
In doing this, the director must have regard, amongst other
matters, to the following:
• Environment and community:
the impact of the company's operations on the community
and the environment.
• Long-term thinking:
the likely consequences of any decision in the long term.
• Reputation:
the desirability of the company for maintaining a reputation
for high standards of business conduct.
• Investors:
the need for every member to be treated fairly and for no
member to be favoured over another member.
• Workforce:
the interests of the company's employees.
• Suppliers and customers:
the need to foster the company's business relationships
with (amongst others) suppliers and customers.
Section 172(1) Statement
Howdens was founded on the principle that the business
should be worthwhile for all concerned. It's a principle that the
business continues to live into today. Balancing the needs and
views of all our stakeholders can be challenging as there are
often competing interests at stake, and this is why the Board
first and foremost considers our purpose, our culture, and our
strategy to ensure all decisions have a clear and consistent
rationale. For details on the matters which the Board discussed
and considered during 2024, please see pages 82 and 83.
The Board regularly considers feedback from the Company’s
stakeholders. These are set out in detail on pages 86 to 93.
This engagement is effective and in keeping with the
Company’s culture. For example, much of the feedback is
through face-to-face conversations, but where there is need
for formality and confidentiality, such as whistleblowing,
this is also provided. Stakeholder feedback can directly affect
the Board’s decision making, such as feedback received from
investors in relation to the proposed Directors’ Remuneration
Policy 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 factors set out on the left side of this
page beneath the heading ' Section 172(1) of the Companies
Act 2006'. 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 2024.
Investment in vertical integration
Vertical integration in manufacturing and logistics is a critical
part of our business model, providing low cost and high-quality
products, exemplary service to our depots to fulfil our in-stock
offer, and better resilience. This creates a significant and
sustainable competitive advantage.
During 2024, the Board considered manufacturing and
logistics investments to underpin long-term growth and
security of supply, which would benefit the Company’s
investors, the workforce and its customers and further bolster
its reputation as the UK’s number one trade kitchen supplier.
Directors' duties (Section 172(1) statement)Governance Page Title
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Runcorn site development
In November, the Board approved up to £128m capital
expenditure for the Runcorn manufacturing site to replace our
high-volume panel machining line, to expand our warehousing
facilities, and to enter into negotiations to procure the freehold
of the site. This investment will enhance Howdens' agility and
mitigate our supply risks as demand continues to grow, which
in turn represents good value for shareholders.
The Board considered the business case for each aspect
of the Runcorn site investment, including the payback on
investment. For the replacement of the panel machining line,
the Board considered how the investment compared to the
cost premium for buying panels in from third party providers
and concluded that manufacturing a core product such as
panels would ultimately represent better value for our depots
and therefore our customers.
Purchase of land
In July, the Board considered the purchase of additional land
close to one of our existing manufacturing facilities. It was
noted that the land could not be used for warehousing but,
in time, could be used to extend manufacturing capacity and/
or capability, or to build a large-scale solar farm, which would
further support the business’ environmental sustainability
plans as well as providing energy cost savings. Although other
strategic opportunities would also be considered, the Board
agreed that the purchase of the land would provide optionality.
The Board therefore approved the proposal to purchase the
land, subject to requisite planning approval.
Consolidation of warehousing
In July, the Board considered a proposal to enter into a long-
term lease of a new purpose-built warehouse in Doncaster.
It was noted that temporary warehousing solutions had led to
network inefficiencies with increased transport movements
between locations and that the current setup would not
support projected demand. The Board approved the leasing of
the new site as it was noted that, in addition to the cost benefits
of a simplified and less complex logistics network, the site was
located near to a rail head, which could release further benefits
for both inbound and outbound freight costs, as well as reduce
emissions by reducing transportation from spot warehousing.
The Board also noted that environmental due diligence had
been undertaken on the site and that the labour requirements
at the new site were similar to existing requirements, so there
would be no material reduction in staff numbers.
Shareholder returns
In February, the Board recommended a final dividend for
2023 of 16.2p per ordinary share and, in July, it further
recommended an interim dividend for 2024 of 4.9p per
ordinary share.
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 (further
information about investor engagement can be found on
page 93).
Howdens has a prudent risk appetite towards balance sheet
management, an approach which has provided a source of
great strength in challenging past years, for example during
the Covid-19 pandemic.
Share Incentive Plan extension
The Company believes that share plans are an effective way
to help employees engage with the business and to benefit
from its success. For many years, the Company has offered
free shares to its UK employees, with the only condition being
that they remained employed by the business for three years.
Since 2015, the Company awarded free shares under a UK tax-
advantaged Share Incentive Plan (SIP), meaning free shares
awarded under the SIP would not be liable to income tax and
National Insurance contributions after being held in the SIP
trust for five years.
In 2024, following feedback from our colleagues working in
our Isle of Man depot, who expressed a keen interest in share
plans, the Isle of Man Tax Office was engaged to find out if
it would be willing to allow those employees to be offered
free shares on the same tax-advantaged basis as our UK
employees. The Isle of Man Tax Office granted this concession.
In July, the Board formally nominated the Isle of Man
employees as eligible to be offered free shares under the SIP
and, in August, the Isle of Man employees were awarded SIP
free shares for the first time.
The Company has been an advocate of employee share plans
for many years. In 2023, it supported an industry response
to a call for evidence on tax-advantaged employee share
plans. The response urged the Chancellor of the Exchequer
to consider the reform of SIPs by reducing the holding period
from five years to two years to make the SIP more relevant
for more employees, especially those in younger and lower
paid groups. Participation in a SIP increases employee
engagement and allows employees to benefit from the
success of the companies they work for.
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
Governance
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Annual Report & Accounts 2024
Trade customers
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INDIRECT
DIRECT
Engagement with our trade
customers included the following:
1
Local depots
2
Builder forums
3
Customer surveys and research
Key outcomes of engagement:
• We have continued to refine our rigid cabinet
design with the technical and manufacturing
teams, and we have invested in new equipment
to ensure a high minimum standard of quality.
• We have given depots the tools to be more
competitive on the pricing of several products
following customer feedback.
• Our strategy for depot improvements has also
been informed by feedback from builder forums,
including developing our product scanning system.
• Extended gable and panels for kitchens have
been made available through our depot network
as a result of the feedback from builder forums.
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Corporate governance report continued
Stakeholder engagement
Howdens' stakeholders
Stakeholder and
forms of engagement
Trade customers pages 86 and 87
Workforce pages 88 and 89
Suppliers pages 90 and 91
Shareholders pages 92 and 93
Pensioners pages 92 and 93
Stakeholder engagementGovernance Page Title
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Internal bi-monthly meetings are held to discuss the current
'live actions' monitor maintained by the depot support team
and progress made to date. This progress is communicated
to regional and depot teams where appropriate and to the
Trade Director and, latterly, the COO of Trade.
Trade customer surveys
In addition to the frequent face-to-face conversations
we have with our customers in our depots, we run
monthly trade customer surveys to better understand
our customers' sentiment, price and value perceptions,
purchase behaviour, business prospects, 'cost of living
impacts' and planned 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 trade elsewhere. In 2024, we completed these
surveys across all of our core categories. We received
over 10,000 responses from our customers which has
informed category strategy, brand and ranging plans and
depoteducation.
Each month we conduct research to monitor customer
satisfaction levels, as part of our Voice of the Customer
research, receiving an average of around 1,000 responses
per month. This, combined with our external brand tracking
activity amongst the wider trade audience (including non-
customers), helps Howdens ensure that we are delivering
strong customer service and succeeding in making life
easier for tradespeople.
Brochure research focus group
In 2024, we carried out research with both depots and
end users to understand the purchase journey and the
role of the brochure, the brochure's performance versus
our competitor set, and perceptions of Howdens. A mix
of qualitative and quantitative methodologies was used,
including focus groups, online and face-to-face interviews,
and online surveys. The research findings highlighted
potential improvements that could be made to the purchase
journey for all of our key stakeholders.
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
depot managers and trade customers 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 88 for further information), which the COO of Trade
is present at and which the CEO and other members of the
Executive Committee frequently attend. Feedback from
regional board meetings influences product and pricing
decisions. However, it also reinforces our strategic decisions
on new depot openings, and ensures that we are maintaining
high standards of customer service and investing in new
products. From these meetings, managers were able to feed
back directly to the CEO, the COO of Trade, and other senior
executives about any matters affecting their customers.
Board members, Executive Committee members and senior
managers regularly visit depots to ensure they hear from
trade customers and the depot teams first hand. Depot visits
also form a key aspect of new Board members' inductions.
Builder forums
Around 20 builder forums were held during 2024. These are
arranged by area managers or regional directors with depots
inviting their regular customers to attend and to provide their
views on the business, our products, and particular initiatives.
Most forums will have the area manager present and a regional
director may also attend. Depot managers may also be
invited. The COO of Trade, CEO, and other members of the
Executive Committee may also attend forums. Typically,
six to eight customers participate in each forum.
Feedback from the forums is disseminated to the leaders
of the appropriate teams, including commercial, digital,
marketing, quality assurance and aftersales, finance,
customer services and credit control. Once an identified
action has been discussed and a way forward agreed,
regional teams and depots receive communications about
the feedback and any resulting actions. Where it is decided
that changes should be made, this is also fed back to our
customers in future forums to demonstrate the impact that
their feedback can have.
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
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Engagement with our workforce
included the following:
1
The Board's engagement arrangements
2
Regional board meetings
3
CEO focus groups
4
Town halls and feedback sessions
5
Trade union and works council meetings
6
Surveys
7
The Howdens Show
8
Whistleblowing helpline
Key outcomes of engagement:
• As a result of regional board meetings and CEO
focus groups, a new pricing and margin tool has
been developed and is being tested for roll-out
across the depot estate.
• Depots were given the tools to be more competitive
locally on entry-level solid surface worktops
following feedback at regional board meetings.
• A new extra tall larder cabinet was designed and
rolled out to depots following feedback at regional
board meetings that the previous system should
be simplified to save our customers time when
fitting them.
• The number of ‘flex hours’ employees were
expected to work in our supply operations teams
was reduced as a result of feedback sessions.
• We have expanded and developed our wellbeing
support framework in supply operations,
including through training new wellbeing
representatives, as a result of engagement
with our trade union and works council group.
Workforce
Corporate governance report continued
Stakeholder engagement continued
Board workforce engagement arrangements
In 2023, 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
all the Non-Executive Directors (rather than one member
of the Board being designated as being responsible for
workforce engagement) to ensure that the diversity of
Howdens' workforce was properly and proportionately
represented. Non-Executive Directors are expected to
attend at least two employee engagement sessions each
year and to provide feedback after each session, focusing
on positive themes emerging from the session, any issues
raised, and whether any follow-up actions are needed.
In 2024, Non-Executive Directors attended regional
board meetings (see below), visited depots, attended
The Howdens Show (see opposite page), and visited
manufacturing sites. Most of the issues raised as a result
of the engagement sessions were focused around local
operational and market challenges, but there was also
feedback that the culture of the business came through
strongly, especially at regional board meetings, and there
was a lot of motivation and positivity in the depot teams
ahead of the peak autumn sales period.
Regional board meetings
Regional board meetings are a forum for the depot
leadership team and management to discuss strategy and
day-to-day business matters on a regular basis. Our Chief
Operating Officer of Trade attends nearly all meetings and
regional directors, area managers, and depot managers
are expected to attend the meetings applicable to their
region. Our CEO also attends a majority of these meetings
and other members of the Executive Committee attend on
an ad hoc or as-required basis. Certain support functions
(including credit control, product development, quality
& assurance, finance, and HR) also regularly attend.
Members of the Board attend regional board meetings
as part of their induction and periodically thereafter
as part of their ongoing collective responsibility for
workforce engagement.
In 2024, a total of 54 meetings were held across the nine
UK regions. Notes of each meeting are taken and sent to
the regional team the same day following the meeting.
Where issues have been raised, relevant teams are
notified and requested to find a solution or to provide an
answer. Updated notes are then sent out again within 10
days of the meeting, which contain updated information
on actions being taken to issues raised.
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CEO focus groups
Our CEO, holds face-to-face monthly CEO focus meetings with
depot managers in different regions. These focus groups
provide a forum for managers to have a two-way conversation
with the CEO and to discuss new ideas within a smaller group
setting than Regional Board meetings.
As a result of one of these focus groups in Scotland (as well
as feedback in regional board meetings), a new discount
management tool was developed and is being rolled out
across the depot estate to help depot managers to improve
their competitiveness and margin management.
Town halls 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 in 2023, we committed to improving our
agreement for flexible working arrangements, ensuring people
have a better balance, while also ensuring we continue to
maintain our excellent service levels. In 2024, we reduced
the number of ‘flex hours’ people were expected to work in
response to that feedback.
Monthly town halls are hosted by our Supply Chain Director,
who is also acting Commercial Director, and separately by our
Chief Customer Officer, our HR Director and our Chief Financial
Officer. The town halls focus on business updates and updates
on work ongoing within specific teams. 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.
Trade union and works councils meetings
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 2024, we continued to engage with the collective groups
and undertook further training through ACAS to wider
groups of our management teams. This helped us 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 some
of our flexibility arrangements, continued to embed the
new in-house occupational health service, expanded and
developed our wellbeing support framework, including
new wellbeing representative training, and continued to
enhance benefits access and provision.
Employees and trade union representatives were also
involved in the selection process for a new HR and payroll
system, the aim of which is to enhance overall functionality
and employee accessibility. Following selection of a
provider, employees and trade unions representatives will
continue to be involved during the implementation phase.
Surveys
During 2024, we conducted an inclusion survey to establish
how close we were to meeting our ambition of being famous
for being 'worthwhile for all concerned'. The results of this
survey can be found on page 54.
Our supply operations team also conducted a pulse survey
during the year. Overall, 75% of respondents stated that
they are proud to work for Howdens. Line managers shared
their results with their teams and committed to one or two
things that they would put in place to help make Howdens
an even better place to work.
The Howdens Show
In January 2024, 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.
A number of other Board members also attended the event
and were able to engage with a significant cross-section
of the workforce.
Whistleblowing helpline
The Company uses a third-party operated, confidential
whistleblowing helpline, which is multilingual and available
24 hours a day. The Board receives a bi-annual report
detailing the number and nature of whistleblowing instances
made during the period. Although no specific complaints
were escalated for Board attention, the governance
processes are in place should this be necessary.
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
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Engagement with our suppliers
included the following:
1
Suppliers conference
2
Category team relationships
Key outcomes of engagement:
• An increased number of suppliers committed to
submitting their emissions data to our platform
and over 260 supplier representatives attended
training on emission data submission.
• Targeted commercial support was provided
by suppliers to the Frenchbusiness.
Suppliers
Maintaining strong supplier relationships based on
trust is a key facet of our resilient business model. Co-
operative engagement with suppliers on sustainability,
new products and the scale necessary to support
suppliers' businesses and investment plans helps us to
ensure the relationships are enduring and worthwhile
forbothparties.
Suppliers conference
Supplier conferences are an important way of helping
us maintain enduring relationships with our supply base.
At the conferences, which usually occur once every other
year, we celebrate our successful partnerships and
ensure that suppliers understand, and can align with,
our priorities in the short, medium and long term. 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 to 49).
In March 2024, around 150 supplier representatives joined
us for a conference in Scotland. The CEO, Group Finance
Director, Supply Chain Director and acting Commercial
Director, Supply Operations Director, Trade Director, HR
DIrector, Chief Customer Officer and Company Secretary
were all present at the conference.
The conference, held over two days, saw presentations
being given by senior leaders across Howdens and a
chance for questions to be asked by the suppliers. Over the
two days, there was also ample opportunity for Howdens'
senior leaders to have face-to-face discussions with
supplier representatives.
The key messages from Howdens to its suppliers at the
conference were as follows:
• Suppliers must sign up to Howdens' Net Zero targets
and to support the Company's environmental ambitions
with regular and accurate sustainability reporting. Our
CEO stated that ESG is a "non-negotiable" and supplier
plans needed to align with our Net Zero plan.
Corporate governance report continued
Stakeholder engagement continued
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Category team relationships
and supplier management
Howdens benefits from deep and long-standing
relationships with many of our suppliers, to the mutual
benefit of both parties and, ultimately, our trade customers.
Product design and innovation is central to our success.
Suppliers understand this and support us by responding
quickly to new product initiatives and coming to Howdens
first with their own innovations. This is a virtuous circle:
lessons learned when dealing with Howdens flow back into
our suppliers’ own plans and initiatives. These lessons are
not restricted to product innovation but may also include
quality processes, packaging improvements (typically with
environmental benefits) and insight into market trends.
At Howdens we work with our suppliers to identify
promotional opportunities, typically marketed through our
popular Rooster Deals publications. These promote footfall
into depots, create a talking point between depot staff and
customers, and offer exceptional value to our customers.
Our internal commercial structure is organised into
categories. The use of categories provides clear
accountabilities for product range decisions and with
greater internal accountability comes the fostering of
stronger relationships with our suppliers. Suppliers are
engaged with focused teams within the organisation
andthisclarity brings the opportunity for even more
valuablediscussions.
In addition, we are partnered with SAP Ariba to further
strengthen the way we do business with our suppliers in an
efficient and more sustainable (paperless) way. SAP Ariba
Supplier Life Cycle Performance (SLP) has helped improve
the onboarding and management of our suppliers and
allows them to transact and communicate with usdigitally.
• Suppliers need to design and supply more products that
reduce workload for our builder customers and maintain
our 'no call-back' quality standards.
• Suppliers are invited to attend builder forums hosted
by Howdens so that they can hear first hand from our
customers what works well and what needs improving
from a product perspective.
• Suppliers should engage more with the needs of the
Howdens business in France.
Following the conference, a number of suppliers provided
assistance to the French business. The major kitchen frontals
suppliers visited the team in France and assisted with market
and competitor intelligence and improved pricing on France-
specific ranges. Suppliers have also provided commercial
support for a flooring promotion, helped us launch a new
range of budget taps made specifically for France, and helped
us successfully launch tools in the French market.
Also, following the conference, 115 suppliers signed up to
submitting their emissions data to our ESG platform. At the
end of 2024, around 50% of our suppliers had submitted
dataagainst our baseline year of 2021.
Four training webinar sessions were also held with suppliers
during the year to help suppliers to submit their emissions data
correctly. Over 260 delegates in total attended the sessions.
Further information about supplier engagement in relation to
Scope 3 emissions can be found in the Sustainability report on
page 49.
Internal training sessions were also held for our Commercial
teams to help ensure they could support their suppliers with
the data collection.
Financial Statements
Additional Information
Governance
Strategic Report
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Shareholders
Pensioners
Engagement with our shareholders
included the following:
1
Annual General Meeting
2
Remuneration consultation
3
Investor relations programme
Key outcomes of engagement:
• The Executive Directors' shareholding requirement
has been increased as a result of the Directors'
Remuneration Policy shareholder consultation.
• Relative total shareholder returns (TSR) has
been retained as a performance measure for
2025 following engagement with shareholders
as part of the wider Directors' Remuneration
Policy consultation.
Engagement with the members
of our pension plans includes the
following:
1
Board engagement with the TrusteeBoard
2
Newsletters
3
Factor reviews
Annual General Meeting (AGM)
The 2024 AGM was held in-person and was an opportunity
for the Board members to speak 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 question and answer session at the AGM,
the Board was asked questions on the following topics:
• shareholder returns;
• performance in France and the Republic of Ireland
and potential further international expansion;
• expansion of product range into bedrooms; and
• cyber security preparedness and internal skills,
and the use of artificial intelligence in the business.
The questions raised were answered fully on the day and
no further action or considerations were required.
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, which remained open throughout the year.
Corporate governance report continued
Stakeholder engagement continued
The Howden Joinery Defined Benefit Pension Plan
(the "DB Plan") has over 10,200 members, of whom
c.5,500 are deferred members, and c.4,700 are
pensioners and dependants.
The DB Plan is governed by a Trustee Board who is
responsible for the Plan's administration and for the
investment of its assets. While pensioners (as former
employees and their dependants) are an important
stakeholder group for the Company, Howdens' primary
engagement is with the Trustee Board.
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 Trustee to
present to the Board every year and provide an update
on matters affecting the membership. The Company and
Trustee have an information sharing protocol in place
which is reviewed annually.
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investor relations programme. Following the half-year and
full-year results, more detailed feedback sessions were
held with the Board to discuss shareholder views on the
results and the Company’s strategy. Overall, investors
continue to be supportive of the Company’s strategic
initiatives and the resilience of Howdens' business model
despite challenging market conditions.
Howdens also hosted four small group site visits with
investors to showcase both revamped depots and our
operations. The visits combined tours of our facilities
(for example, our major manufacturing site in Howden)
and short presentations. The visits were hosted by the CEO
and Finance Director alongside other senior managers.
The visits enabled investors to see Howdens' strategic
initiatives first hand, and to give them a better idea of the
significant growth opportunities in our markets and how we
are addressing them. The feedback from attendees of the
visits was very positive and so we will continue to run these
meetings in 2025.
Executive remuneration consultation
In July and November 2024, the Remuneration Committee
consulted with the Company's top 30 shareholders and proxy
advisory agencies on proposed changes to our Executive
Director remuneration. Details of these consultations are set
out in the Remuneration Committee report on page 113.
The Remuneration Committee received a high level of support
for its proposals but, following shareholder feedback at
meetings with the Remuneration Committee Chair, it agreed
to increase the Executive Director shareholding requirement
in the updated Directors' Remuneration Policy. It was further
agreed to retain relative TSR as a performance measure
for the 2025 Performance Share Plan award, albeit at a
reduced weighting.
Investor relations programme
During 2024, we supported our Institutional shareholders with
regular meetings and updates both face-to-face and virtually.
The Board is provided with an investor relations update each
period, which gives an overview of investor feedback and
the Director of Investor Relations and the Company's brokers
regularly provide verbal feedback at Board meetings on the
Plan factor review
The Plan has in place various actuarial factors which are
used to calculate and adjust the benefits of Plan members
under different scenarios. It is good practice to review the
actuarial factors on a regular basis, to ensure that they
still meet the requirements of legislation and the Plan rules.
These factors determine the value and cost of various
member options. Following completion of the 2023 triennial
valuation, the Trustee agreed to undertake a factor review
(last updated in 2021).
The Trustee is ultimately responsible for setting the
factors but engaged the Company for its feedback.
The updated factors were agreed and implemented
from 1 September 2024.
In 2024, the Company engaged with the Trustee Board
on a number of matters outside of the normal engagement
cycle of investment and funding strategy, including:
• collaboration on the Plan factor review;
• review of the Plan’s endgame strategy;
• enhanced monitoring of LDI collateral headroom and
overall liquidity;
• progressing the GMP equalisation project following the
Lloyds bank judgement;
• review and approval of information sharing protocols; and
• preparations for the pensions dashboard roll out.
Newsletters
In March and December 2024, Plan newsletters were sent
by the Trustee Board to all members of the DB Plan. The
newsletter provided updates on matters such as Pension
team changes, enhancements to the online member portal,
latest funding position and financial review, and an update
on the DB Plan’s climate governance work in the year.
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
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Corporate governance report continued
UK Corporate Governance Code: application and compliance
This Annual Report and Accounts has been prepared under
the 2018 version of the UK Corporate Governance Code (the
"2018 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 2018 Code
throughout the period, and we have reported in summary
over the next few pages how we have done so. Throughout the
financial period under review, the Company was compliant
with all Provisions of the 2018 Code, except for Provisions 40
and 41.
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 pay arrangements
during 2024; however, the Committee receives reports from
management on pay and benefits across the workforce to
ensure that there is good alignment on remuneration across
the organisation. In addition, through the Company's Share
Incentive Plan (SIP), nearly all employees in the UK and
the Isle of Man (the majority of our workforce) have been
awarded free shares, which gives them voting rights on
those shares from the day they are awarded. This means
they can vote on the Directors' remuneration report and the
Directors' remuneration policy (when applicable) at general
meetings of the Company. 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 pages 115 and 123.
Provision 5 of the 2018 Code states that one or a combination
of the methods listed below should be used for engaging with
the workforce or an explanation provided for the alternative
arrangements that are in place and why they are considered
effective:
• a director appointed from the workforce;
• a formal workforce advisory panel;
• a designated non-executive director.
For the reporting period, the Board chose to put in place
alternative arrangements and workforce engagement was
a matter for which all the Non-Executive Directors were
responsible. A full explanation of how these arrangements
work and why they are considered effective for Howdens
may be found on pages 75 and 88.
The Financial Reporting Council (FRC) published the 2024
version of the UK Corporate Governance Code on 22 January
2024 (the "2024 Code"). That iteration of the UK Corporate
Governance Code applies to all companies listed in the
commercial companies category or the closed ended
investment funds category, whether incorporated in the UK
or elsewhere. The 2024 Code applies to accounting periods
beginning on or after 1 January 2025, except for Provision
29, which is applicable for accounting periods beginning on
or after 1 January 2026. It is anticipated that Howdens will
prepare its Annual Report and Accounts for the financial year
ending 27 December 2025 under the 2024 Code, with the
exception of Provision 29.
2018 UK Corporate Governance Code: application and complianceGovernance Page Title
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UK Corporate Governance Code: application of Principles
An explanation of our purpose, values and strategy are set out in
the Strategic Report which starts on page 2. The Board regularly
discusses the importance of Howdens’ unique culture and is
mindful that it remains aligned with its purpose, values and
strategy. Direct engagement with the workforce is a key part of
the Board’s agenda. Since 2024, all Non-Executive Directors share
the responsibility of workforce engagement, allowing the Board to
experience and monitor the culture first hand.
More information about the Board's engagement with the
workforce may be found on pages 88 and 89.
Integrity and sympathy to the Howdens culture are paramount
when the Board appoints new members of the Board. More
information about our recruitment and inductions process can
be found on pages 105 to 107.
Howdens has a broad group of clearly defined stakeholders and
Board members actively engage with each of these groups.
A detailed explanation of our engagement with our shareholders
and wider stakeholder base, and where this engagement has
informed the Board’s decision making processes, can be found on
pages 84 to 93. How the Board members discharged their 'Section
172' statutory directors' duties is set out on pages 84 and 85.
Section 1: Board leadership and company purpose
B
D
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.
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.
Howdens’ founding principle of being worthwhile for all concerned
supports the premise that its role is to ensure long-term,
sustainable growth and value for all its stakeholders.
Further information on our resilient business model and strategy
can be found in the Strategic Report beginning on page 2.
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 Executive remuneration
structure supports our strategic aims on pages 118 to 121.
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.
A
The Board is satisfied that the necessary resources are in 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 and 29.
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 pages 147 to 148.
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 pages 115, 123, and 131.
All employees are able to raise any matters of concern using the
confidential whistleblowing helpline. The helpline is available 24
hours a day, it is multilingual, and it is operated by an independent
third party. The Board receives reporting from the helpline twice
a year and any matters of significant concern are escalated as
appropriate by the Company Secretary who oversees the helpline
with support from the internal audit team.
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.
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.
C
E
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Corporate governance report continued
UK Corporate Governance Code: application of Principles continued
Section 2: Division of responsibilities
The Board confirms that Peter Ventress was independent on
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 effective
contribution of all the Non-Executive Directors.
The 2024 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 108 and 109.
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
effective flow of information in a timely manner between the
Board and senior management.
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 as such on page 76. The Board confirms
that all 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).
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 75. Similarly, the number of meetings of each Board
Committee and the attendance may be found on the following pages:
100 (Nominations Committee), 110 (Remuneration Committee),
142 (Audit Committee), and 150 (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 any significant appointments taken on while
serving as a 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 82 and 83 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.
Information about the management of conflicts between the duties
Directors owe the Company and either their personal interests or
other duties they owe to a third party may be found on pages 145
and 149.
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.
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.
Non-executive directors should have sufficient time to meet their board responsibilities. They should provide
constructive challenge, strategic guidance, offer specialist advice and hold management to account.
F
G
H
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Section 2: Division of responsibilities continued
Section 3: Composition, succession and evaluation
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 theframework
review process.
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 andremoval of the
Company Secretary is a decision for the Board as a whole.
The Nominations Committee engages external search consultancies
when searching for Board position candidates. Further information
about the appointments process is available on page 105 of the
Nominations Committee report and the Board’s diversity policy is
available on page 104.
The Nominations Committee regularly reviews the skills matrix and
the tenure of each Board member (see pages 102, 105 and 107 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 thebusiness.
The succession plans for the senior management team are also
regularly considered by the Board.
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 102. The tenure of each Director can be found on pages 80
(Executive Directors) and 105 (Non-Executive Directors). 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 six months to just over 9years, and the
average tenure is just under three years.
Details of the 2024 internal Board evaluation process and
outcomes may be found on pages 108 and 109.
The specific reasons why the Board considers that each Director’s
contribution is, and continues to be, important to the Company’s
long-term sustainable success may be found on pages 77 to 79.
Reference to the specific reasons and where to find them in the
Annual Report and Accounts will accompany the resolutions
to elect or re-elect Directors in the 2025 AGM Notice. The Board
recommends that shareholders vote in favour of the election
or re-election of all the Directors standing.
The board, supported by the company secretary, should ensure that it has the policies, processes, information, time
and resources it needs in order to function effectively and efficiently.
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.
Annual evaluation of the board should consider its composition, diversity and how effectively members work
together to achieve objectives. Individual evaluation should demonstrate whether each director continues to
contributeeffectively.
I
J
K
L
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Section 4: Audit, risk and internal control
The Board has established formal and transparent policies
andprocedures, which ensure the external auditor and internal audit
function are independent and effective and are accountableto the
Audit Committee.
The Board also monitored the integrity of the annual and interim
financial 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 142.
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 in the
Strategic Report beginning on page 2.
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' section (see pages 36 to 41) and is satisfied
that it accords with the Code and with the Guidance on Risk
Management, Internal Control and Related Financial and Business
Reporting. As described in the Audit Committee report on pages 147
to 148, the management team continued to strengthen our overall
control framework.
This work to further enhance internal controls will lead to better
assurance and efficiencies through opportunities to formalise
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
identifying, evaluating and managing the significant risks faced
by the Group is set out in the 'Risk management' section
(see pages 36 to 41). The Board confirms that it has conducted
a robust assessment of the principal and emerging risks.
The board should establish formal and transparent policies and procedures to ensure the independence
andeffectiveness of internal and external audit functions and satisfy itself on the integrity of financial
andnarrativestatements.
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 achieve its long-term
strategicobjectives.
M
N
O
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Section 5: Remuneration
The way the Remuneration Committee has ensured our remuneration
policies and practices are aligned with our culture, our strategy,
our KPIs and risk management is discussed in the Remuneration
Committee report, which starts on page110.
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 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, the Company
Secretary and the Director of Risk and Assurance). 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, which starts on page 110.
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 in the Annual
Remuneration Committee Chair's Statement (pages 112 to 116).
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 developing policy on executive remuneration and 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.
P
Q
R
By order of the Board
Peter Ventress
Chairman
26 February 2025
Financial Statements
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Governance
Key information ata glance
Nominations
Committee report
Board gender diversity
Board ethnicity
1 Figures correct as at 28 December 2024.
2 Figures derived from the FTSE Women Leaders Review
(published February 2025).
Board average age
1 Figures correct as at 28 December 2024.
2 Figures derived from the 2024 UK Spencer Stuart Board Index.
1 Figures correct as at 28 December 2024.
2 Figures derived from the March 2024 Parker Review update
'Improving the Ethnic Diversity of UK Business'.
No ethnic minority representation
Ethnic minority representation
Peter Ventress
Nominations Committee Chair
Introduction
I am pleased to present the Howden Joinery Group Plc
Nominations Committee report for 2024. This report is
divided into the following sections:
1. Key information ataglance
2. Activities of the Committee in 2024 and
keyactivities in the year ahead
3. Composition and diversity
4. Succession (including a case study on
Non- Executive Director succession)
5. Evaluation
The Nominations Committee has been progressing a
phased transition on Board succession and is pleased
with the balance of gender, skills, experience, and
background that the Board and its Committees now
have. We have moved forward in terms of diversity
of ethnicity but continue to keep our targets under
review. A case study on Non-Executive Director
succession can be found on page 107.
I look forward to answering any questions on the work
of the Nominations Committee from shareholders at
the AGM in May.
Peter Ventress
Nominations Committee Chair
Top 150 FTSE companies
2
Howdens
1
Howdens
1
director
positions
11%
Howdens
1
44.4%
females:
Male Female
FTSE 100
2
44.7%
females:
19%
FTSE 100
2
director
positions
40
50
70
60
30
10
20
0
60.6
years
61.6
Nominations Committee reportGovernance Page Title
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Strategic Report
Committee evaluation
in2024
Key Committee activities
in2024
Non-Executive Director retirement
• Karen Caddick
Non-Executive Director appointments
• Roisin Currie
• Suzy Neubert
Committee meeting
• Board evaluation process and outcomes
• Non-Executive Director succession update
• Board recommendations for AGM elections
• Boardroom diversity policy approval
Non-Executive Director appointment
• Vanda Murray
Committee meeting
• Non-Executive Director succession, including
consideration of diversity, tenure and skills matrix
• Internally facilitated Board evaluation approval
• Review of Board diversity policy
• 2025 Nominations Committee calendar
• Nominations Committee Terms of Reference
February
February
May
July
November
Peter Ventress (2/2)
Karen Caddick (1/1) Retired 2 May 2024
Andrew Cripps (2/2)
Roisin Currie (1/1) Appointed 1 July 2024
Louis Eperjesi (2/2)
Louise Fowler (2/2)
Vanda Murray (2/2) Appointed 1 February 2024
Suzy Neubert (1/1) Appointed 1 July 2024
• The Committee to recommend the election and
re-election of all current Directors at the AGM on
1 May 2025, with the exception of Andrew Cripps
who is due to retire at the AGM.
• Executive Committee and senior management
succession and talent planning.
• The Committee will undertake its review of skills,
composition and size of the Board.
• Review of the Boardroom Diversity Policy.
• Board external evaluation planning.
• Review of the Committee’s Terms of Reference.
Areas of focus:
• Role and operations of the Committee
• Composition
• Leadership
• Process and procedures
Methodology:
See page 108.
Outcomes:
In all areas of focus (see above), the Committee's
scores were above the benchmark
1
. Feedback from the
Committee members was positive on the whole, with the
leadership of the Committee being cited as "effective"
and the culture of the Committee being described
overall as "collaborative". In the year ahead, members
commented that the key priorities for the Committee
should be to focus on senior management succession
planning and processes and to improve diversity.
1 Benchmark is derived from over 1,000 board evaluations, which
include feedback from more than 3,000 board members across
400organisations.
Committee meeting
attendance in2024
Key Committee activities
inthe year ahead
Financial Statements
Additional Information
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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. The information below is correct at 26 February 2025.
High
Importance
Medium
Skills and experience Importance
Number of Non-Executive Directors
Direct experience Indirect experience
Industry/Sector
Business-to-business
H
7 1
Manufacturing
H
6 1
Logistics, distribution and supply chain management
H
5 3
Consumer goods
H
6 1
Geographic exposure
UK
H
8 0
Europe
M
6 1
Governance
UK listed companies
H
8 0
Company chair experience
M
4 1
Remuneration committee chair experience
M
4 3
Audit committee chair experience
M
3 3
Senior independent director experience
M
6 0
Policy development
M
7 1
Technical
Accounting and Finance
H
3 4
Audit
H
2 4
Executive management
H
8 0
Risk management
H
7 1
HR/Remuneration
M
3 5
Ecommerce
M
2 5
Marketing
M
5 2
IT/Cyber security
M
0 6
Legal
M
1 4
Howdens-specific considerations
Vertical integration
H
6 1
Multisite depot operation
H
3 3
HM
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Strategic Report
Diversity
Board and Executive Committee diversity
UK Listing Rule (UKLR) 6.6.6R(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
of 28 December 2024 are set out below. The Board confirms
that no changes to the membership of the Board have occurred between the reference date and 26 February 2025 that have
affected the Company’s ability to meet one or more of the targets. The appointment of Tim Lodge as Non-Executive Director
on 1 January 2025 reduces the proportion of women on the Board to 40%, which remains in line with target (i) below; however,
this will increase back to 44.4% following the retirement of Andrew Cripps on 1 May 2025.
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
by a woman: (a) the Chair; (b) the Chief
Executive; (c) the Senior Independent
Director; or (d) the Chief Financial Officer.
(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 met target (i).
The Board is made up of 44%
women at the reference date.
The Company has not yet met target (ii). The Company has met target (iii).
Suzy Neubert is from an ethnic
minority background.
If the target has
not been met,
why this is the
case:
The Company has a well established CEO
and CFO and appointed a new Chair in 2022.
However, while the Company has not met this
target at the reference date, upon Andrew
Cripps's retirement on 1 May 2025, Vanda
Murray will be appointed Senior Independent
Director. The Company therefore expects to
meet this target at the next reference date.
The data below is presented in accordance with UKLR 6.6.6R(10). The applicable reference date
1
for this data is 28 December 2024.
To collect this data, the Company asked members of the Board and Executive Management
2
to complete a confidential and
anonymous online survey.
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 55.6% 4 5 83.3%
Women 4 44.4% – 1 16.6%
Not specified/prefer not to say – – – – –
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 88.9% 4 6 100%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British – – – – –
Black/African/Caribbean/
Black British 1 11.1% – – –
Other ethnic group, inc. Arab – – – – –
Not specified / prefer not to say – – – – –
1 The reference date follows the Company’s year end date. The Company operates a financial reporting calendar of 13 periods and therefore the year end date will
change year-on-year.
2 'Executive Management' means members of the Executive Committee (not including the Executive Directors) and the Company Secretary.
Financial Statements
Additional Information
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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, sexual orientation, disability,
or formal qualifications.
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 intention that it will continue
to have at least one member from an ethnic minority and
will maintain a minimum female membership of 40% going
forward. The Board will also aim to have at least one woman
director for one of the ‘Big 4’ roles (those being Senior
Independent Director, Chair, CEO, and CFO) at any time.
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 2025, 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
talent that reflects the diversity of Howdens’ business and
its stakeholders. As at 28 December 2024, 44.4% of Board
members were women. Both of the Executive Directors
were male. There was one member of the Board from an
ethnic minority group as at 28 December 2024.
Composition continued
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
the efficiency of the organisation.
• Make decisions concerning employees based on merit,
apart from those limited exemptions and exceptions set
out under the Equality Act 2010.
• Ensure recruitment practices are fair and transparent
and regularly updated to reflect changes in the law.
• 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
28 December 2024.
Board of Directors Senior Management
1
Grades 1 to 3
2
Group
3
Number % Number % Number % Number %
Men 5 55.6% 5 83.3% 141 75.4% 8,426 69.0%
Women 4 44.4% 1 16.6% 46 24.6% 3,780 31.0%
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, the Isle of Man, Jersey, and Guernsey.
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Strategic Report
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, in terms of both 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
theorganisation.
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 and this year we have also
included a case study on page 107, which sets out in more
detail the succession planning that has been undertaken
since Peter Ventress was appointed Chair.
Retirement
During the year, Karen Caddick retired from the Board at
the Annual General Meeting (AGM) in May 2024. She was
succeeded in her role as Remuneration Committee Chair
by Vanda Murray.
Following just over 9 years of service, Andrew Cripps will retire
at the AGM in May 2025. Prior to his retirement, Andrew will
complete a thorough handover of his Audit Committee duties
with Tim Lodge and of his Senior Independent Director duties
with Vanda Murray.
Appointment
During the year, the Nominations Committee recommended the
appointments of Vanda Murray, Roisin Currie, Suzy Neubert,
and Tim Lodge to theBoard.
The Nominations Committee engaged Russell Reynolds
1
,
an external search consultancy, to undertake the process
of recruiting the new Non-Executive Directors.
The Russell Reynolds is aware of our Boardroom Diversity
Policy and the Nominations Committee specifically tasked
them with producing a diverse shortlist of candidates for all
the positions.
The skills matrix (the current version of which may be found on
page 102), together with the collective knowledge, experience
and diversity of the Board and the length of service of the
Directors, was used by the Committee to highlight where
there were opportunities for new Non-Executive Directors to
contribute to the skillset of the Board and informed the search
that Russell Reynolds undertook.
Following longlisting and shortlisting processes, and prior
to any recommendation being made by the Nominations
Committee to the Board, the preferred candidates for each
position met with existing members of the Board.
1 The Committee confirms that Russell Reynolds has no other connection
with the Company or its Directors other than in relation to the recruitment
of members of the Board.
Non-Executive tenure as at 28 December 2024
8 9 1076543210
Louis Eperjesi
Louise Fowler
Andrew Cripps
Peter Ventress
Suzy Neubert
Roisin Currie
Vanda Murray
Years
Financial Statements
Additional Information
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Nominations Committee report continued
Inductions
Over 2024 and early 2025, four Non-Executive Directors were
appointed to the Board: Vanda Murray, Roisin Currie, Suzy
Neubert, and Tim Lodge. All our new Non-Executive Directors
received (or are receiving, in the case of Tim Lodge) a full,
formal, and tailored induction upon joining the Board.
There are a number of crucial areas that all inductions cover.
One of these areas is meeting key senior managers (such
as members of the Executive Committee, the Director of
Investor Relations, and Director of Risk and Assurance) and
key advisors to the Company (such as the Board's pension
advisors and external audit partner).
Vanda Murray, who was appointed as the Remuneration
Committee Chair successor, also spent additional time in
her induction familiarising herself with Howdens-specific
remuneration matters, which included time spent with the
Company's Remuneration Committee advisors. She also
spent additional time with Karen Caddick, the now retired
Remuneration Committee Chair, to ensure there was a
thorough handover of responsibilities.
Tim Lodge, who has been appointed as the Audit Committee
Chair successor, has spent additional time with the Company's
external audit team, the Director of Risk and Assurance,
the Group Director of Finance, and the Board's pension
advisors. He will also spend additional time with Andrew
Cripps, the retiring Audit Committee Chair, as part of the
handover of Audit Committee responsibilities.
Furthering understanding of our enduring and resilient
business model is another crucial part of all our induction
programmes (see pages 14 and 15 for full detail of our
business model). Our business model can be grouped into
four key sections: 'Product manufacturing and sourcing',
'Distribution', 'Depots designed for our trade customers',
and 'Consumers / homemakers'. Details of how the business
model is covered in inductions is set out below.
Product manufacturing and sourcing
New Directors visit one or more of our manufacturing facilities
as part of their induction. Our manufacturing is based in
Runcorn, Cheshire, and at sites in and around Yorkshire
(Howden, Thorne, Holme-on-Spalding-Moor).
Our in-house manufacturing capacity and capabilities are of
significant strategic importance (see 'Our strategy' on page
13) and has always been a feature of our business model.
Ensuring our Directors experience first hand the scale of our
manufacturing and the culture at the sites is crucial early in
their tenure.
Succession continued
As part of their inductions, the Non-Executive Directors below
visited the following sites:
• Vanda Murray: Howden, Runcorn
• Suzy Neubert: Howden, Holme-on-Spalding-Moor
(Howdens Work Surfaces facility), and Runcorn
• Roisin Currie: Howden, Thorne (Paint to Order facility)
• Tim Lodge: Howden
1
All of the above met with the Director of Supply Operations, the
Supply Operations senior leadership team, and with graduates
and apprentices
2
. They also toured the Expo facility in Howden,
which is open to the public and showcases our products.
Distribution
Our in-house distribution operation is another key aspect
of our enduring business model.
While Directors visit our manufacturing sites, we also ensure
they see our logistics facilities at those sites. Where possible,
Directors are also encouraged to visit our primary distribution
site in Raunds.
In April, Vanda Murray visited the Raunds site as part of
the Board’s meetings which were held there. Suzy Neubert
also joined an investor visit to the site in November (further
information about investor site visits can be found on
page 93), which included a comprehensive tour covering
warehousing, inbound product, outbound product,
XDC services, and transport.
Depots designed for our trade customers
A fundamental part of any Directors’ induction is visiting
our depots as this is where our depot teams build trusted
relationships with their local builder customers.
Our Directors are able to choose a geographic area that suits
them and the Howdens Regional Director responsible for that
area will take the Director to a number of depots within it.
Our Directors live and travel round to a broad range of
areas where we have depots, so the Board as a whole has
diverse experience of depots as a result. This is particularly
important as our depot locales can, and do, vary enormously
– a key reason why we ensure our depot managers are
entrepreneurial and are empowered to offer best local pricing.
As part of their inductions, the Non-Executive Directors visited
depots in the following regions: South West, North West,
London and the Republic of Ireland.
1 Tim Lodge was appointed on 1 January 2025 and his induction is therefore
still underway at the date of this report.
2 Further information about our Chartered Manager Degree Apprenticeships
can be found on page 153.
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Case study
Non-Executive Director succession
When I took over as Chair of the Board in September 2022,
I committed to spending more time reviewing the make-up
of the Board in order to align it to Howdens’ long-term
growth prospects.
I inherited a Board with a good mix of skills and experience,
but it was apparent that we needed to accelerate
recruitment to replace a number of our most experienced
Non-Executive Directors, including the Senior Independent
Director and Audit Committee Chair. In addition, we had
additional vacancies from Non-Executive Directors
moving into other roles away from Howdens. In fact, since
September 2022, Non-Executive Directors with more than
38 years of experience at Howdens have retired (or have
announced their retirement) from the Board.
When refreshing membership of the Board, I was mindful
to ensure that we retain the skills required to support
Howdens’ continued growth, its strategic activities and its
ever broadening commitments on environmental, social
and governance matters. Partnering with Russell Reynolds
(with whom the Company has no other connection),
the Nominations Committee undertook an appointment
programme which built on the existing strengths of the
Board, but also looked to build out particular areas of skills
to support business performance.
Over the past two years we have supplemented our skill
set by adding experience specific to:
• manufacturing and supply of building products
in international markets;
• vertically integrated and multi-site businesses;
• extensive non-executive experience, including current
experience in Audit, Remuneration Committee and
Senior Independent Director roles;
• leadership and strategy;
• commercial markets and finance;
• commercial property; and
• accounting and governance.
We also wanted to improve the diversity of the Board and
to bring Howdens in line with the recommendations of the
FTSE Women Leaders Review and Parker Review. I am
satisfied that following the AGM in 2025 we will have met
these requirements and will look to maintain them going
forward. It was also important to us to increase the mix of
current executive talent and I am very pleased with how
we have progressed this.
Most importantly, Non-Executive Directors at Howdens
need to have a deep understanding of the unique culture
of the business, its business model and people. I’m pleased
(but not surprised) that we have attracted a high calibre of
Non-Executive Directors and I look forward to leading this
Board in the next stage of Howdens’ development.
Peter Ventress
Board and Nominations Committee Chair
Consumers / homemakers
Our purpose is to help our trade customers achieve
exceptional results for their customers and to profit from it –
when our customers succeed, we succeed. So, it is important
that new Directors understand the needs of our trade
customers’ customers (‘end users’).
As part of their inductions, Directors meet our kitchen
designers while undertaking depot tours. Our specialist
kitchen designers support our trade customers by working
with end users to plan and design their kitchens free of charge.
Directors also tour one of our Expo spaces in Howden or
Raunds. The Expos showcase our kitchens, joinery and
bedroom products, providing inspiration for our customers
and end users.
Financial Statements
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Governance
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, both the 2023 and 2024 Board effectiveness reviews were conducted internally using third-party platform,
BoardClic, to facilitate the review.
The BoardClic platform has streamlined the Board evaluation review process compared to previous years where the evaluations
had relied heavily on quantitative data gathered through interviews with the Board members. The platform allows collation of
more quantitative data on the Board’s perceptions of its priorities, strategic objectives, and leadership, as well as governance
structures and process, and also enables the Committee to benchmark its review data against other boards.
• 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 Board at their meeting in January 2025.
• The Chairman, CEO, and Company Secretary prepared
recommendations for development and actions to be
presented to the Nominations Committee at a future meeting.
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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Conclusions and recommendations
The report showed an improvement on prior year scores, with
the Board's overall 'Value Index' increasing by 7%. This score
was ahead of the 'Value Benchmark' provided by the platform.
Areas of particular strength included:
• Confidence in the CEO's execution capability;
• Alignment of strategy with purpose; and
• Prioritisation of the most important strategic topics
covered at Board meetings.
The individual Committee effectiveness reviews also
demonstrated that good progress continued to be made
across all of the Board's Committees. Details of each of
these effectiveness reviews can be found in the individual
Committee reports.
Recommended areas for development
and actions going forward
Following the review, the Board will:
• Allow more time in the agenda for 2025 to further consider
the impacts of artificial intelligence on the overall strategy;
• Undertake a strategy review day in 2025/2026; and
• Dedicate more of the Board's time to business intelligence.
The Nominations Committee will also undertake a 'deep dive'
into senior management talent and succession.
Influence on Board composition
There were no matters arising from the evaluation which will
influence the composition of the Board in the short term.
By order of the Board
Peter Ventress
Nominations Committee Chair
26 February 2025
Financial Statements
Additional Information
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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 threesections:
1. This Committee Chair’s Statement
2. The Directors’ Remuneration Policy
(to be proposed to shareholders at the 2025 AGM)
3. The Directors’ Remuneration Report
Part 1 Company performance and
stakeholder experience
Part 2 Application of policy in 2024
Part 3 Implementation of policy in 2025
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 allapplicable rules.
Remuneration
Committee report
Vanda Murray OBE
Remuneration Committee Chair
1 Suzy was unable to attend the September meeting due to
commitments entered into before her appointment. She was provided
with all the Committee papers ahead of the meeting and provided her
feedback to the Committee Chair and Company Secretary.
• Governance updates from advisors.
• Performance updates on in-flight awards.
• Agree fees for Chair of the Board.
• Review the UK defined contribution pension benefits.
• Agree 2025 annual bonus and LTIP targets.
• Review of the Remuneration Committee Terms
ofReference.
• Approval of the 2026 Remuneration Committee
calendar.
• Planning for 2026 incentives (taking into account
risk and other matters).
Areas of focus:
• Role and operations
• Composition
• Leadership
• Process and procedures
Methodology:
See page 108 of the Nominations Committee report.
Outcomes:
The Remuneration Committee evaluation showed that good
progress had been made across all areas. The Committee
consistently surpassed external benchmarks and the
performance of the Committee Chair was highlighted as
a particular strength. Areas of focus for the Committee in
2025 include performance target setting and maintaining
an engaged dialogue with management.
Key Committee activities
inthe year ahead
Committee evaluation
in 2024
Vanda Murray (5/5) Appointed 1 February 2024
Karen Caddick (3/3) Retired 2 May 2024
Andrew Cripps (6/6)
Roisin Currie (3/3) Appointed 1 July 2024
Louis Eperjesi (6/6)
Louise Fowler (6/6)
Suzy Neubert (2/3)
1
Appointed 1 July 2024
Committee meeting
attendance in2024
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Committee meeting
• Agreement of Chairman's fee
Share award grant
• Replacement share awards made to incoming
seniormanagers
Committee meeting
• Update on UK defined contribution pension benefits
• Governance update
• Annual bonus outcome and performance update
on awards vesting in 2024
• 2024 salary and incentives considerations
(including workforce reward, shareholder
alignment, CEO pay ratio and gender pay gap)
• Approval of 2024 bonus and PSP targets
• 2024 share awards planning
• Draft 2023 Directors’ Remuneration Report
• Post-vest holding period for leavers
• Remuneration Committee effectiveness review
AGM
• 2023 Directors' Remuneration Report approved
byshareholders
Shareholder communication
• Proposed Directors' Remuneration Policy changes
Committee meeting
• Performance update on in-flight variable
incentive awards
• Governance update
• Review of Executive Director remuneration and
Directors' Remuneration Policy review planning
Committee meeting
• Performance update on in-flight variable
incentive awards
• Risk and rewards consideration
• Review of draft updated Directors' Remuneration
Policy and shareholder communication
• Review of LTIP measures
• Governance update
• 2025 Remuneration Committee calendar
• Review of Committee’s Terms of Reference
Committee meeting
• Feedback on shareholder communication
• Directors' Remuneration Policy potential updates
Committee meeting
• Consideration of preliminary 2023 annual bonus outcome
• Consideration of 2024 annual bonus targets and
2024Performance Share Plan (PSP) measures and
target ranges
January
February
May
November
July
November
September
April
April
Share award grants
• SIP Free Shares grant to all eligible UK and
Isle of Man employees
• PSP grant to Executive Committee members
(including Executive Directors)
• Retention awards granted to selected senior
managers (not including Executive Directors)
Shareholder communication
• Proposed Executive Director salary changes
August
July
2024 Remuneration Committee activity
Financial Statements
Additional Information
Governance
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Remuneration Committee report continued
I am pleased to present the Howden Joinery Group Plc
Remuneration Committee report for 2024. 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).
I took over as Chair of the Howdens Remuneration Committee
at the AGM in May 2024 and it’s fair to say that it has been a
busy time for the Committee since then. We have onboarded
three new Committee members, undertaken a root-and-
branch review of Executive Director remuneration and
refreshed and consulted with shareholders on our proposed
updates to the Directors’ Remuneration Policy. I would like to
take this opportunity to thank Karen Caddick, the previous
Chair, for her handover to me and for all her work with the
Committee over the previous five years. I would also like to
thank Korn Ferry, our Committee advisors, who also ensured
a smooth handover and who provided important support
throughout the year.
Review of Executive remuneration at Howdens
Our remuneration philosophy at Howdens is to pay
above-market levels of reward for above-market levels of
performance, and we were concerned that a disconnect
had developed between the remuneration experience of
our CEO and CFO and the overall shareholder experience
in recent years. Howdens has now firmly established its
position in the FTSE 100 index and is a larger and more
complex business, having grown organically in the UK and
through complementary acquisitions, expanded into the
Republic of Ireland and France and increased the number of
manufacturing sites from two to five. The strong foundations
laid in recent years by our Executive team mean we are well
set for future growth.
The Committee’s detailed review of Executive pay, and our
subsequent review of the Directors' Remuneration Policy,
considered this growth as well as the Company’s strategic
objectives going forward. To ensure we realign with our stated
remuneration philosophy, the Committee is implementing
increases to the Executive Directors’ salaries and proposing
to increase the maximum opportunity available under the
Performance Share Plan (PSP). We consulted with our largest
shareholders on these changes in July and November 2024
and received a high level of support.
Further details of these changes are set out later in this
statement and in the report, but the Committee firmly believes
that market-aligned salary levels and stretching variable
incentives are required for the Executive Committee, including
the Executive Directors, to ensure our policy supports our
stated philosophy with future growth.
2024 reward outcomes
2024 was another challenging year for Howdens, but the
business continued to demonstrate its resilience by
outperforming its competitor set. Relative performance was
strong and there was further consolidation of Howdens’
position as the leader in the trade kitchen sector.
Management delivered profits that were in line with market
expectations and the Company continued to invest in strategic
initiatives. The increase in market share and investment in
strategic initiatives means that Howdens is well placed to take
advantage of any market opportunities that arise.
During the year, the Committee received updates on the wider
employee benefit landscape, including on the Group pension
scheme and Howdens’ gender pay gap. The gender pay gap
report can be found on www.howdenjoinerygroupplc.com/
governance/gender-pay-gap-reports.
Annual bonus
Consistent with prior years, the 2024 annual bonus performance
was based on the delivery of both profit and cash flow targets.
2024 followed a similar trading pattern to 2023, with the
kitchen market contracting more than had been forecast
when the budget was agreed with management. Despite
this, adjusted PBT performance has resulted in an above
target level of achievement across bonus plans for Executive
Directors and across the Company more widely where
employees are incentivised on Group performance. In
considering this outcome, the Committee noted expenditure
that was incurred during the year on strategic senior
personnel changes designed to generate future growth,
for example in France. The part of this expenditure that was
invested in driving future growth and profitability rather
than into 2024 PBT was excluded from the PBT figure for the
purposes of the annual bonus.
The Committee reflected on the formulaic outcome alongside
the level of expenditure and the strong overall performance
Howdens has delivered relative to the 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 target performance, which delivers 50% of the
part of the bonus weighted to PBT.
Cash flow performance remained robust and demonstrated the
continued focus of management on this key measure. The cash
flow outturn was above the maximum outperformance target for
this measure, resulting in a bonus of 15% of the maximum annual
bonus opportunity being achieved.
This strong performance meant that a total annual bonus
of 57.5% of the maximum annual bonus opportunity for our
Executive Directors was earned. Further details of the annual
bonus outturn for 2024 can be found on page 133.
Performance Share Plan (PSP)
The 2022 PSP was based on the delivery of both a three-
year adjusted PBT growth measure and a relative total
shareholder returns (TSR) measure. The weightings for the
two performance measures were 67% PBT and 33% TSR.
The calculation of adjusted PBT excludes any costs or income
that the Remuneration Committee assesses to be exceptional
in nature so that the vesting outcome results in a fair reflection
of the performance achieved over the period.
Annual Remuneration Committee Chair’s Statement
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PBT performance targets for the period required 5% per
annum PBT growth to achieve threshold vesting and 12% per
annum PBT growth to achieve maximum vesting. The 2022
PSP performance was measured to FY 2024.
Over the three-year period, adjusted PBT increased by 11.1%
per annum, which equated to vesting at 88.9% of the total
opportunity for this measure.
To determine TSR performance, Howdens was 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
vests 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 44.6% of the total
opportunity for this measure.
In aggregate, the 2022 PSP will vest at 74.3% of the maximum
opportunity. The Committee assessed this outcome in the
context of the overall performance of the Company, including
the gaining of market share over the year and, until shortly
before the TSR end averaging period, strong share price growth
over the three year period and determined that the outcome
was an appropriate and fair reflection of performance.
Updated Directors' Remuneration Policy
Our proposed updated Directors' Remuneration Policy
(the "Proposed Policy") will be put to shareholders for
approval at the AGM in May 2025. The Proposed Policy
is set out in full on pages 117 to 126.
We undertook an extensive shareholder consultation on
the Proposed Policy, details of which can be found in a case
study on page 116. There were high levels of engagement and
support for our proposals, and I enjoyed my conversations
with our shareholders who are clearly supportive of
management and what the Remuneration Committee is trying
to achieve. We listened to the views of our shareholders and
amended our proposals to incorporate their feedback in
relation to increasing Executive Director share ownership
requirements to take account of the increase to PSP
opportunity and the retention of TSR as a measure for the PSP.
Our review of the current Directors’ Remuneration Policy
(the "Current Policy") concluded that it is generally working
effectively and is well aligned with institutional investors’
‘best practice’ expectations. Therefore, there are no wholesale
changes to the Directors’ Remuneration Policy proposed.
However, we are recommending updates which afford the
Remuneration Committee greater flexibility in the granting of
awards to Executive Directors, which provide better alignment
of Executive remuneration with the current and near-term
scale of our business, alongside our strategic objectives and
to reflect normal market practice.
The main changes we are proposing are:
• The maximum PSP limit will be increased to 300% of salary
from 270%;
• Dividend equivalents will be payable on vested PSP awards;
and
• Increasing the Executive Director share ownership
requirement to 300% of salary.
PSP maximum
The increase to the PSP maximum opportunity recognises
the growth in Howdens since the last policy review and will
enable the Committee to provide a market competitive total
remuneration package to the Executive Directors that can
deliver above-market levels of reward for above-market levels
of performance. As part of our due diligence on the operation
of the PSP, we looked at how it has vested over recent years
compared to levels for the FTSE 100 and companies in our
broad sector. Howdens’ long-term incentives have vested at
around the median level for both groups, notwithstanding the
strong performance that has been delivered. This confirmed
our view that stretching targets have been set for these
awards historically.
The new maximum opportunity will not apply for the PSP
award for 2025. However, the PSP opportunity for 2025 for
the CEO will be increased to 285% of salary (2024: 270%), and
for the CFO to 235% of salary (2024: 220%). The performance
measures have been reviewed for 2025 and further details
of these are set out later in this statement. In line with ‘best
practice’, in operating the Proposed Policy, the Committee will
take account of the increased PSP opportunity when it sets
the performance targets and will have the ability to adjust
remuneration outcomes if it feels that the formulaic outcome
is not reflective of overall underlying performance and the
experience of its shareholders.
Dividend equivalents
In relation to the accrual of dividend equivalents, the Current
Policy is unusual in not permitting the value of dividends to
accrue to vested performance shares. This has always been
permitted under the rules of the Long Term Incentive Plan (under
which the Performance Share Plan is awarded) and creates
a strong alignment with shareholders when determining both
dividend and share buyback policies. Dividends will be added at
the point of vesting, normally in shares.
Share ownership requirements
Following feedback from shareholders, the Committee is
proposing to increase the share ownership requirement for the
Executive Directors from 200% to 300% of salary. This reflects
the increased Proposed Policy PSP maximum award and will
further align the experience of the Executive DIrectors with
that of our shareholders.
Financial Statements
Additional Information
Governance
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Remuneration Committee report continued
Annual Remuneration Committee Chair’s Statement continued
Other updates
No changes to the operation or measures associated with
the annual bonus are being proposed, including the level of
deferral. Unvested deferred bonus shares (net of income tax
and national insurance contributions) will now be counted
towards the shareholdings of the Executive Directors in
line with normal market practice. The annual bonus payout
at threshold performance will be changed from 20% of
salary to “up to” 20% of salary to afford the Remuneration
Committee more flexibility when setting targets. Similarly,
the achievement of the threshold performance targets for
the PSP will now result in “up to” 15% of each element vesting
(previously 15%).
Clawback and malus provisions have been expanded to
include corporate failure and serious reputational damage.
The full range of circumstances provided for in the Group
Malus and Clawback Policy is now aligned with those set out
in the 2024 version of the UK Corporate Governance Code.
We believe that the proposed changes detailed above will
enable the Remuneration Committee to effectively retain and
attract Executive talent as we continue to execute our strategy
in 2025 and beyond. I would again like to thank shareholders for
the engagement and support of the Proposed Policy process.
2025 reward and incentives
Our approach to Executive remuneration continues to
recognise 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 2025, we will rebase our Executive Director salaries to
better reflect the experience and expertise of our top team,
as well as providing closer alignment with the median peer
group position. We will also implement, subject to shareholder
approval at the 2025 AGM, the updates within the Proposed
Policy. These changes, taken in aggregate, position the
Remuneration Committee well for the next three years of the
reward cycle.
Salary
In July 2024, I wrote to Howdens’ 30 largest shareholders
to inform them of a root-and-branch review of Executive
remuneration that I undertook when I assumed the position of
Remuneration Committee Chair in May 2024. Central to this
review was a reassessment of the salaries of the Executive
Directors, which it transpired had fallen too far behind market
levels. Salaries are the cornerstone of our reward framework
with all variable pay and other benefits derived directly from it.
Therefore, the Remuneration Committee feel that it is important
that we establish the right base level from 2025 as failing
to do so risks undermining the effectiveness of our reward
framework as a tool to motivate and retain our top talent.
The Committee firmly believes that the Executive Directors
should receive a fair and appropriate level of remuneration for
their role and contribution to the business and are awarding
one-off salary increases for the CEO and CFO. The Committee
annually reviews salary levels against the market and has
previously communicated that Executive Director salary levels
have been assessed to be below mid-market by c.10%. On
that basis, the CEO’s full-year annual salary will be increased
by 17% to £855,000, effective from 1 January 2025. The CFO’s
full-year salary will be increased by 7.7% to £515,000, effective
from 1 January 2025.
These increases reflect the increased size and complexity of
the business, higher revenues, and increased international
exposure, and they better reflect the excellent past
performance, experience, and skills of our Executive
team. These increases to salary are supported by
external benchmarking. As part of my review of Executive
Remuneration, I engaged two separate advisors (Korn Ferry,
the Committee’s existing advisor, and FIT Remuneration
Consultants, who had no previous connection to Howdens)
to undertake this review.
The Committee considered market benchmarking for
companies of a comparable size and/or operating in a
similar sector in determining what it feels is mid-market.
The Committee considered the FTSE 61 – 100 (excluding banks
and investment trusts) as the primary reference point, which
we feel is an appropriate size of group based on Howdens’
market capitalisation. Revenues and profits are also broadly
comparable with this group of companies.
The increases will position the CEO and CFO around the median
of the peer groups and are inclusive of an estimate for the
general market salary increase in 2025 of 3%. It is expected
that, other than in the event of a future material change in the
size or complexity of the Group, that salary increases during
the three-year lifecycle of the Directors’ Remuneration Policy
will be limited to annual general workforce increases.
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 with reference to market data for companies
that operate in the same or similar industries and UK listed
companies of a similar size and complexity.
For the 2025 annual bonus, we replicated the methodology of
PBT and cash flow measures used in the 2024 annual bonus.
The measures retain their previous weighting: PBT represents
85% of maximum opportunity and cash flow represents 15%
of maximum opportunity. This maintains the focus on profit in
incentives and alignment with our depot teams, while maintaining
a healthy stretch between ‘target’ and ‘maximum’ bonus levels
to ensure strong shareholder alignment. These targets will
be disclosed in the 2025 Annual Report and Accounts.
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PSP
As set out above, in 2025 we intend to increase the long-term
incentive opportunity for the Executive Directors. Our proposal,
which is subject to shareholder approval of the Proposed Policy,
is for the CEO to receive an award equivalent to 285% of salary
and for the CFO to receive an award of 235% of salary. This is
less than the Proposed Policy maximum of 300% of salary.
Since 2023, the four performance measures for the PSP
have been: PBT, TSR, Return on Capital Employed (ROCE)
and a basket of complementary environmental measures.
The Remuneration Committee has reviewed the performance
measures for the 2025 PSP and will introduce strategic
performance measures.
The TSR measure has been down-weighted to 10% of the award
reflecting views expressed by some shareholders during our
consultation that they wished to see it retained as a measure.
The strategic performance measures will improve the line of
sight for PSP participants and provides additional focus on the
execution of the Company’s long-term growth strategy.
The new strategic performance measures, with a total weighting
of 10%, are based on the achievement of quantifiable targets over
the three-year performance period and include:
(i) international sales growth;
(ii) the % of sales we generate from new product initiatives; and
(iii) vertical integration (measuring the % of our sales that
are manufactured in-house).
For the 2025 award, performance will also continue to be
measured against PBT (60% of total award), TSR (10%), ROCE
(10%), and environmental measures (10%). The new strategic
measures will be 10% of the total award in aggregate, 3.3%
for each strategic metric. The Committee believes that these
measures and their respective weightings are appropriate for
the 2025 PSP award, but this will be kept under review by the
Committee in future years. The Committee has retained the
methodology for calculating the PBT targets (first adopted
in 2023), that being that the PBT target range reflects
a combination of analyst consensus estimates, internal
forecasts and our long-term strategic goals.
The Committee considered the impact on the weighting of
financial and non-financial measures when selecting the
new strategic measures. The metrics used are either entirely
financial or based heavily on financial information and
therefore the Committee is satisfied that the weighting of
financial measures remains comfortably above the Current
Policy and Proposed Policy minimum of 75% financial
measures for the PSP.
Achievement of the threshold performance targets would
result in 15% of each element vesting, rising to 100% for
achieving the maximum target or better. The Committee
has set targets in the context of the higher proposed
incentive opportunity and will also consider external market
expectations for our future performance.
Performance targets for the 2025 PSP are set out on pages
136 and 137 of this report.
Senior management and the wider workforce
In addition to the Executive Directors, the 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 Director of Risk and Assurance.
The Committee also received updates on all-employee
remuneration policies to provide the context for, and to ensure
alignment with, the Proposed Policy. In 2019, the Committee
adopted a dashboard in line with Provision 33 of the 2018
version of the UK Corporate Governance Code, which shows
some of the key internal and external measures that the
Committee is aware of when determining Executive Director
and senior management remuneration (further detail on the
dashboard may be found on page 131).
The Committee did not consult with the wider workforce on
Executive Director pay arrangements in 2024 (as in previous
years). The Committee has safeguards in place (as considered
in this report), which ensure good alignment on remuneration
across the organisation. All employees with shares in the
Share Incentive Plan (SIP) – the significant majority of
employees as SIP free shares have been granted to all UK
employees since 2015 – have a de facto say on Executive
Director pay at general meetings.
We are satisfied there remains strong alignment between
Executive remuneration and that of the wider workforce due to
Howdens’ unique incentive culture across all roles and, when
setting Executive pay, the Committee has regard to factors
including wider workforce pay, CEO and gender pay gap ratios,
and the experience of our shareholders. The Committee was
pleased to note the reduction in contractual hours from 44
hours to 40 hours per week for employees in UK depots from
1 January 2025. This change benefitted 7,189 employees,
61.2% of the total UK workforce.
The Committee considers that the policy has operated as
intended in terms of pay for performance for 2024, taking
into account the exercise of Committee discretion in relation
to the PBT element of the 2024 annual bonus outcome.
The Committee firmly believes the changes to policy, and
the approach to implementation for 2025, are considered
necessary to realign our executive packages with our stated
philosophy and strategy.
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 Proposed Policy, or how we intend to implement the
Proposed Policy in 2025. In the meantime, I look forward to
answering any questions on the work of the Committee from
shareholders at our AGM in May.
Vanda Murray OBE
Remuneration Committee Chair
Financial Statements
Additional Information
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Annual Remuneration Committee Chair’s Statement continued
Case study
Directors' Remuneration Policy process review
The current Directors' Remuneration Policy received shareholder approval at the 2022 AGM with 90.67% votes in favour.
In line with Companies Act 2006 requirements that the policy be put to a binding shareholder vote at least every three
years, a revised policy will be put to a binding shareholder vote at the 2025 AGM.
This case study documents the end-to-end process for the formulation of the updated Policy and the shareholder
consultation that took place prior to final approval by the Remuneration Committee in February 2025.
Working Group established.
Working Group undertook review
of effectiveness of existing policy.
Working Group continued review
of the policy, focusing on potential
changes to the PSP.
Based on Committee feedback,
the Working Group drafted:
• an updated policy; and
• shareholder communications.
Meeting
Preliminary findings of the Working
Group were reported to Committee.
The Committee agreed that the
primary focus was the Performance
Share Plan (PSP).
Meeting
Detailed findings of the review were
considered by the Committee and
proposed changes to the policy were
further refined.
Meeting
Draft changes to the policy and draft
shareholder communications were
presented to the Committee and
considered in detail.
The Committee agreed the proposed
policy changes and shareholder
communications.
Meeting
Shareholder feedback was reported to
and considered by the Committee, and
further refinements to the proposed
policy were made as a result.
Meeting
Final consideration and approval
of the policy to be published in
the annual report and put to a
shareholder vote at the AGM.
Shareholder engagement
Shareholder communications were
sent to the top 30 investors and
shareholder advisory groups. The
consultation period commenced,
and meetings were held with
investors that requestedone.
AGM
Shareholders will have a
bindingvote on the proposed
updated policy.
May to July
July to Sept
2025
2024
Sept to Nov
July
September
November
January
February
Nov to Jan
May
May
Working Group
Remuneration Committee
Shareholders
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Directors’ Remuneration Policy
Our current Directors’ Remuneration Policy expires at the 2025 AGM and therefore, following careful review, a revised
policy is presented below with the intention that it will apply for three years from the date of the 2025 AGM.
The key changes to the policy are detailed in the summary below and demonstrate that the overall structure of the policy
remains unchanged from the version approved by shareholders in 2022. In addition to these changes, a small number
of minor revisions are proposed to provide some additional flexibility and clarity to the policy.
Decision-making process for the determination, review and implementation of the
Remuneration Policy
The review of the policy is carried out by the Remuneration Committee, in the absence of the Executive Directors,
where appropriate, to manage potential conflicts of interest, and with the advice of our remuneration consultant.
The Committee’s review process includes consideration of how the current policy aligns to and supports the business strategy,
market practice, regulation and governance developments as well as wider workforce reward arrangements. The Committee
also considers the guidelines of proxy voting agencies and investors, with our largest shareholders consulted as part of the
review process.
The implementation of the policy is considered annually by the Remuneration Committee for the year ahead in light of the strategic
priorities. Incentive metrics and target scales are also reviewed and recalibrated as necessary based on a number of internal and
external reference points to ensure that they remain appropriate.
Summary of main changes to the Remuneration Policy
Remuneration element Method
Annual bonus The new policy will permit up to 20% of salary to be payable for threshold performance. Under the
current policy, the payout at threshold is 20% of salary.
The circumstances for which clawback and malus may be applied have been expanded to include
corporate failure and serious reputational damage. The range of circumstances now aligns with the
updated UK Corporate Governance Code.
Performance Share
Plan (PSP)
The policy maximum under the PSP will be increased to 300% of salary. For FY25, the PSP opportunity
for the CEO will be increased to 285% of salary from 270% of salary and for the CFO will be increased
to 235% of salary from 220% of salary.
In line with the rules of the PSP, a payment equivalent to the dividends accrued on vesting performance
shares may be made at the point of vesting, normally in shares.
Up to 15% of maximum will be payable for achieving threshold performance. Under the current policy,
the payout at threshold is 15% of maximum.
The malus and clawback provisions will be updated to align with the changes set out under the
annual bonus.
Shareholding
requirement
The shareholding requirement for the Executive Directors will be increased under the new policy
to 300% of salary. Under the current policy, the requirement is 200% of salary.
Unvested deferred bonus shares (net of income tax and National Insurance contributions) will be taken
into account in calculating Executive Directors’ shareholdings.
Recruitment The new policy clarifies the approach for each element of remuneration for the recruitment
of a new Director.
Change of control A new section has been added to clarify the approach on a change of control. There are no enhanced
provisions on a change of control, but the Committee can exercise judgement and discretion in line with
the respective incentive plan rules.
Non-Executive Director
fees and benefits
The policy will allow, in exceptional circumstances, additional fees to be paid where there is a
substantial increase in the temporary time commitment required of Non-Executive Directors.
The Company will pay taxes on expenses in respect of reasonable travel and accommodation costs.
Fixed Variable
Financial Statements
Additional Information
Governance
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Directors’ Remuneration Policy continued
Remuneration Committee report continued
Underlying principles
When determining the Directors' Remuneration Policy, the Committee was mindful of its obligations under Provision 40 of the
2018 version 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 below are examples of how the Committee addressed these factors:
Clarity
Remuneration arrangements should be transparent and promote effective engagement with shareholders and the workforce.
The Company invited its principal shareholders and shareholder representative groups to consult on the updated Directors'
Remuneration Policy and received supportive feedback. The draft policy was updated following feedback from shareholders,
details of which can be found on pages 113, 114, and 123.
All UK and Isle of Man 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 (known as the "Buy As You Earn" Plan or "BAYE"), which
also operates through the SIP. Employees with shares held in the SIP trust may exercise voting rights at general meetings, including
on resolutions relating to the Directors' Remuneration Report and Directors' Remuneration Policy. Further information on workforce
engagement can be found on pages 88 and 89.
Simplicity
Remuneration structures should avoid complexity and their rationale and operation should be easy to understand.
The 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 incentive plans, are identified and mitigated.
While the Committee has consciously not set an absolute annual quantum on Executive Director 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 be identified and
explained at the time of approving the policy.
The range of possible rewards for the Executive Directors is considered on page 123 as part of the proposed Directors' Remuneration
Policy. The Committee has a wide range of discretion in relation to variable pay awards, new joiners, and leavers, which are identified
and explained in the Remuneration Policy.
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.
The Committee remains confident that the awards used to ensure continued delivery of strategy and long-term performance are
working as intended.
Alignment to culture
Incentive schemes should drive behaviours consistent with company purpose, values and strategy.
The Committee remains confident that the incentive schemes operated under the Remuneration Policy are aligned with purpose,
values and strategy.
Howdens staff are paid on the performance of their local depot or on the profitability of the Group as a whole. This has created an
autonomous, entrepreneurial, profit-focused culture and is reflected in the heavy weighting given to profit measures in our incentive
schemes for Executive Directors and senior management.
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Future policy table – 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.
Base salary
How this element of
remuneration supports
our strategy
Recognises the market value of the Executive Director’s role, skill, responsibilities, performance
and experience.
Operation Salaries are normally reviewed annually, and are generally effective from 1 January each year.
Opportunity Increases will normally be only for inflation and/or in line with the wider employee population. Salaries are
set with consideration of each Executive Director's performance in role and responsibilities, and within
a range defined by a market benchmark derived from companies of a comparable size, including those
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 individual, any changes in their responsibilities,
pay increases for the wider workforce and internal relativities.
Performance measures None.
Benefits
How this element of
remuneration supports
our strategy
Provides a competitive level of benefits.
Operation Howdens pays the cost of providing the benefits on a monthly basis or as required for one-off events.
Opportunity Benefits are based upon market rates and currently include receipt of a company car or car allowance,
health insurance and death-in-service insurance payable by the Company.
Other benefits may be provided where appropriate and reasonable business-related expenses can be
reimbursed if determined to be a taxable benefit.
Performance measures None.
Pension
How this element of
remuneration supports
our strategy
Provides competitive long-term savings opportunities.
Operation and
opportunity
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 aligned to the
maximum pension benefit available to the Executive Director.
Performance measures None.
Fixed Variable
Financial Statements
Additional Information
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Annual bonus
How this element of
remuneration supports
our strategy
Incentivises performance over the financial year.
Deferral links bonus payout to share price performance over the medium term.
Operation 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 if it feels that the formulaic outcome is not
reflective of overall underlying performance. Any adjustment made using this discretion will be explained
in the following Annual Report on Remuneration.
Payment is normally 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:
• material misstatement of accounts;
• erroneous assessment of a performance target;
• where the number of plan shares under an award was incorrectly determined;
• gross misconduct by a Director;
• corporate failure; or
• serious reputational damage.
Opportunity The threshold payout for the annual bonus will be up to 20% of salary. The maximum opportunity
under the annual bonus is 200% of salary.
Performance measures At least 75% of the bonus will be based on financial metrics.
Performance Share Plan (PSP)
How this element of
remuneration supports
our strategy
Focuses management on longer-term financial growth than addressed by the annual bonus.
Long-term financial growth is key to the generation of shareholder value.
Operation Executives have the opportunity to participate in the PSP on an annual basis. The PSP operates over
a three-year vesting cycle.
Awards will generally be granted towards the beginning of the performance period and vest based
on performance over a three-year performance period.
The Committee has the discretion to adjust the PSP outcome if it feels that the formulaic outcome is
not reflective 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
measures apply. The holding period continues to apply post-employment.
Malus provisions apply for the duration of the vesting period.
Clawback provisions apply for the duration of the holding period, through which vested awards may
be reclaimed in the event of:
• material misstatement of accounts;
• erroneous assessment of a performance target;
• where the number of plan shares under an award was incorrectly determined;
• gross misconduct by a Director;
• corporate failure; or
• serious reputational damage.
A payment equivalent to the dividends accrued on vesting performance shares may be made at the
point of vesting, normally in shares.
Opportunity The threshold vesting for the PSP will be up to 15% of maximum. The maximum opportunity under the PSP
is 300% of salary.
Performance measures At least 75% of the PSP will be based on financial metrics.
Directors’ Remuneration Policy continued
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Shareholding requirement
How this element of
remuneration supports
our strategy
Shareholding requirement strengthens alignment of interests between participants and shareholders.
Operation 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 long-term incentive shares are not taken into account. PSP shares and deferred bonus shares
(net of income tax and National Insurance contributions) within a holding period are counted towards
the requirement.
Opportunity The Executive Directors will be required to retain a minimum shareholding of 300% of base salary.
Post-cessation of employment, Executive Directors will be required to retain 300% of base salary, or full
actual holding if lower, for two years post-cessation from the Board of Howden Joinery Group Plc.
All-employee share incentive plan
How this element of
remuneration supports
our strategy
To encourage employee share ownership.
Operation Executive Directors are able to participate in the tax-advantaged Share Incentive Plan available to all
eligible UK employees.
Opportunity The maximum participation levels will be set based on the applicable limits set by HMRC.
Performance measures None.
Performance measures and targets
As part of the Committee’s review of our remuneration arrangements, we have reviewed the appropriateness of the
performance measures that we have historically used and considered whether any changes to performance measures
are required in light of the strategy over the next three years.
The Committee has agreed to introduce strategic measures alongside the existing PSP performance measures (PBT, relative
TSR, ROCE and environmental measures). This change recognises that strategic measures will drive the delivery of our strategy
over the next three-year period and provide a strong line of sight for LTIP participants throughout the business. Therefore, for
2025, PBT and cash flow will continue to be the measures used for the annual bonus, and PBT, relative TSR, ROCE, environmental
measures, and strategic measures will be used for the PSP.
We want to continue to ensure that the Committee is positioned to maintain alignment between incentives and the challenges
facing the business. As such, during the life of this policy it may become appropriate to amend the performance measures used
for our future incentives. It is for this reason that we safeguard the flexibility in our policy to change performance measures,
subject to at least 75% of the annual bonus and 75% of the PSP being based on financial metrics.
Annual bonus
The table below sets out additional information on performance conditions relating to the 2025 annual bonus:
Measure Definition How targets are set
PBT Pre-exceptional profit before tax from continuing
operations.
Set by the Remuneration Committee with reference to
Howdens’ Budget and analysts’ consensus forecasts.
Cash flow Net cash flow from operating activities, taking into
account the efficiency with which working capital
is used, and adjusted for exceptional items.
Cash flow targets generated by Howdens’ financial
model, based on modelled scenarios under which
threshold, target and outperformance levels of PBT
are achieved.
Commercial sensitivity precludes the advance publication of bonus targets, but targets will be disclosed retrospectively in the
Remuneration Committee report.
Fixed Variable
Financial Statements
Additional Information
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Performance Share Plan (PSP)
The PSP will be based on PBT performance, relative TSR, ROCE, environmental measures and strategic measures for the 2025
award. Targets are considered by the Remuneration Committee to provide a range that represents long-term success for
Howdens and are set taking into account analysts’ consensus forecasts and inflation forecasts. The targets for the 2025 PSP
grants are detailed on pages 136 and 137.
Remuneration policy for other employees
The remuneration policy described above applies specifically to Executive Directors of the Group. However, the Remuneration
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 participate in the same
incentive schemes as the Executive Directors at a reduced level to ensure alignment between the leadership team and with
our shareholders.
Below the Executive Committee level, the promotion of share ownership is cascaded through all tiers of management. Individuals
within the upper tiers of the organisation participate in a similar bonus plan that is linked to PBT and cash flow. These individuals
also participate in a long-term plan, which vests dependent on PBT performance. Share grants are made at a reduced level to a
wider population within Howdens that do not use performance conditions. These awards are made in order to encourage share
ownership throughout the Company.
Non-Executive Directors' Remuneration Policy
The Group’s policy on Non-Executive Director (NED) and Chairman fees and benefits is set out below.
Fees
How this element of
remuneration supports
our strategy
To attract NEDs who have a broad range of experience and skills to oversee the implementation
of our strategy.
Operation
The fees for the Non-Executive Directors are determined by the Chairman and Chief Executive and
approved by the Board.
The fee for the Chairman is determined by the Remuneration Committee while the Chairman is absent.
No other services are provided to the Group by Non-Executive Directors.
Opportunity
Fees for Non-Executive Directors are set out in the statement of implementation of policy on page 135.
The fees reflect the time commitment and responsibilities of the roles. Accordingly, committee
chairmanship and the Senior Independent Director (SID) are paid in addition to the NEDs’ basic fee.
Committee chairmanship fees currently apply only to the Audit and Remuneration Committees.
The Chairman receives no fees in addition to the Chairman’s fee. In exceptional circumstances,
additional fees may be paid where there is a substantial increase in the temporary time commitment
required of NEDs.
Fees may be reviewed every year and are set within a range defined by a market benchmark
of comparably sized companies and having regard to the base salary increase payable to the
wider workforce.
Performance measures
NEDs are not eligible to participate in any performance-related arrangements.
Benefits
How this element of
remuneration supports
our strategy
To attract NEDs who have a broad range of experience and skills to oversee the implementation
of ourstrategy.
Operation and opportunity
NEDs are entitled to receive expenses in respect of reasonable travel and accommodation costs and
any income taxes charged on these.
Performance measures
None.
Directors’ Remuneration Policy continued
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Statement of consideration of employment conditions elsewhere in the Group
When making decisions on Executive reward, the Remuneration Committee considers the pay arrangements across the
wider Group, the wider economic environment and conditions within the Company. In particular, the Committee considers pay
conditions for the wider workforce when reviewing base salaries for Executive Directors in addition to a range of applicable
pay ratios.
Additionally, some of the Company’s workforce are unionised or belong to a works council. Howdens maintains open lines
of communication with these bodies and the Committee is always made aware of any relevant information in relation to
remuneration policy.
Statement of consideration of shareholder views
The Committee remains committed to maintaining an ongoing and transparent dialogue with its shareholders. The Committee
undertook a shareholder consultation in 2024 on Executive Director remuneration and the proposed new Directors'
Remuneration Policy. The proposed policy was shared with our major shareholders and shareholder representation bodies.
Following the consultation and feedback from shareholders, the Committee agreed to increase the Executive Directors'
shareholding requirement to 300% of salary in the new policy and to retain relative TSR as a performance measure for the
2025 PSP. This consultation was carried out in advance of the publication of this report.
2025 remuneration scenarios
The remuneration package for the Executive Directors is designed to provide an appropriate balance between fixed and variable
performance-related components, with a significant proportion of the package weighted towards long-term variable pay. The
Committee remains satisfied that the composition and structure of the remuneration packages is appropriate, clearly 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 charts show that the proportion of the package delivered through long-term performance is in line
with our proposed new Remuneration Policy and changes significantly across the performance scenarios. As a result, the
package promotes the achievement of superior long-term performance and aligns the interests of the Executive Directors with
those of other shareholders. A brief description of the remuneration scenarios and the elements they are made up of is set out
below the charts.
Fixed elements of remuneration consist of the annual salary that the Executive Director will receive for 2025, alongside their 2025 pension entitlement,
and actual benefits received in 2024 (as a proxy for 2025).
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 285% of salary for Andrew Livingston and 235% of salary for Paul Hayes. Target opportunity is calculated as 50%
of maximum (142.5% of salary for Andrew Livingston and 117.5% 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, it includes an uplift
of 50% total over three years for the PSP.
Fixed Variable
Paul HayesAndrew Livingston
Value of package
£’000
2,000 2,5001,500
6,332
5,114
3,040
967
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 6,000 7,000 8,0005,0003,0002,0001,0000
Maximum
Maximum +
On-target
Minimum
3,500 4,0003,000
19%39%27%15%
48%33%19%
40%28%32%
100%
3,44217% 30% 35% 18%
2,836
21% 36% 43%
1,71635% 30% 35%
596100%
Financial Statements
Additional Information
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Remuneration Committee report continued
Approach to recruitment remuneration
The treatment and design of the various elements of remuneration paid to new recruits is set out in the table below.
The Committee’s policy is to pay no more than is necessary to attract appropriate candidates to the role. However, in unusual
circumstances, an arrangement may be established specifically to facilitate recruitment of a particular individual. Any such
arrangement would be made only where critical to the recruitment of an exceptional candidate, and within the context of
minimising the cost to the Company.
Component Policy
General The Committee’s approach to recruitment remuneration is to pay no more than is necessary to attract
appropriate candidates to the role. Any new Executive Director’s ongoing package would be consistent with
our remuneration policy as set out in this report.
Salary The Committee will take into consideration a number of factors, including the skills and experience of the
individual and the current market rate for the role in determining the salary level.
The Committee may consider it appropriate to set salary below the market rate, and award phased increases
over a period of time to bring it to the desired positioning, subject to individual performance in role.
Pension and
benefits
The Executive Director will be able to participate in the defined contribution scheme or to receive a
supplemental cash payment in lieu in line with the wider workforce.
Benefits will be provided in line with policy. The Committee may agree that the Company will meet appropriate
relocation costs and tax thereon.
Annual bonus The Executive Director will be eligible to participate in the annual bonus scheme as set out in the remuneration
policy table. The maximum potential opportunity under this scheme is 200% of salary.
Depending on the timing of the appointment, the Committee may deem it appropriate to set different annual
bonus performance metrics to the existing Executive Directors for the performance year of appointment.
Long-term
incentives
The Executive Director will be eligible to participate in the PSP set out in the remuneration policy table.
Accordingly, the Executive Director may be offered a maximum opportunity under the PSP of up to 300% of
salary in performance shares.
Replacement
awards
The Committee may grant the Executive Director awards to replace awards from a previous employment
that are forfeited. Should replacement awards be made, any awards granted would be no more generous
overall in terms of quantum or vesting period than the awards due to be forfeited. In determining the quantum
and structure of these commitments, the Committee will take into account the fair value and, as far as
practicable, the timing and performance requirements of remuneration foregone.
For an internal candidate appointed as an Executive Director, any variable pay element awarded in respect
of the prior role may be allowed to pay out according to its terms.
Directors’ Remuneration Policy continued
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Strategic Report
Service contracts and letters of appointment
Executive Directors
Executive Directors' employment contracts are not fixed term, but have a maximum of twelve months’ notice of termination on
both sides. In the event of termination by the Company, there will be no compensation for loss of office due to misconduct or
normal resignation. In other circumstances, Executive Directors may be entitled to receive compensation for loss of office, which
will 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 maximum twelve month period, as appropriate, of their departure from the Company.
Executive Director Date of service contract Notice from the Company Notice from the individual
Andrew Livingston 6 July 2017 12 months 12 months
Paul Hayes 15 October 2020 12 months 12 months
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; and
• participation in the Company’s pension plan.
Non-Executive Directors
Non-Executive Director appointments are for an initial period of three years. They are subject to re-appointment annually 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 letters of appointment
are available at the Company’s registered office during usual business hours.
Director Original date of appointment
Effective date of appointment
in most recent letter
Unexpired term at
28 December 2024
Peter Ventress 1 July 2022 1 July 2022 0.5 years
Andrew Cripps 1 December 2015 1 December 2024 0.9 years
Roisin Currie 1 July 2024 1 July 2024 2.5 years
Louis Eperjesi 1 June 2023 1 June 2023 1.4 years
Louise Fowler 1 November 2019 1 November 2022 0.8 years
Tim Lodge 1 January 2025 1 January 2025 N/A
Vanda Murray 1 February 2024 1 February 2024 2.1 years
Suzy Neubert 1 July 2024 1 July 2024 2.5 years
Fixed Variable
Financial Statements
Additional Information
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Remuneration Committee report continued
Policy on payment for loss of office
The treatment of the various elements of remuneration payable to Executive Directors in a loss of office scenario is set out
in the table below. In exceptional circumstances an arrangement may be established specifically to facilitate the exit of a
particular individual; however, any such arrangement would be made within the context of minimising the cost to the Company.
The Committee will only take such a course of action where it considers it to be in the best interests of shareholders.
Full disclosure of any payments will be made.
Component Policy
General When determining any loss of office payment for a departing individual, the Committee will always seek
to minimise cost to the Company while seeking to reflect the circumstances in place at the time. As an
overriding principle there should be no element of reward for failure.
Base salary
and benefits
In the event of termination by the Company, there will be no compensation for loss of office due to
misconduct or normal resignation. In other circumstances, Executive Directors may be entitled to
receive compensation for loss of office which will 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.
Annual bonus Where an Executive Director’s employment is terminated after the end of a performance year but
before the payment is made, the Executive Director may be eligible for an annual bonus award for that
performance year subject to an assessment based on performance achieved over the period. No award
will be made in the event of gross misconduct.
Where an Executive Director’s employment is terminated during a performance year, a pro rata annual
incentive award for the period worked in that performance year may be payable subject to an assessment
based on performance achieved.
Long-term incentives
and deferred annual
bonus
The treatment of outstanding deferred annual bonus is governed by written agreements with individuals
and the treatment of long-term incentive awards by the rules of the relevant plan. Individuals are defined
as either a good or bad leaver for the purposes of outstanding incentive awards. Good leavers are those
leaving under pre-specified circumstances (such as retirement, ill-health or disability) or those deemed by
the Committee at its absolute discretion as a good leaver given the circumstances surrounding the loss of
office. All other leavers are bad leavers.
If an individual is a good leaver then they will either continue to hold the award, which will vest on the
normal vesting date based on Howdens’ performance (where applicable), or the Committee may exercise
discretion to accelerate vesting of the award, prorated to reflect the extent to which the performance
targets have been met (allowing for the curtailed performance period). In both scenarios, the amount
vesting may be prorated for the proportion of the performance period elapsed when the individual leaves.
If an individual is a bad leaver then all awards to which they are conditionally entitled will lapse in full.
Post-cessation
shareholding
requirement
Upon departure, individuals will be required to retain 100% of their shareholding requirement (or full actual
holding if lower) for a period of two years post-cessation from the Board of Howden Joinery Group Plc.
Change of Control
There are no enhanced provisions on a change of control, but the Remuneration Committee can exercise judgement and
discretion in line with the respective incentive plan rules.
Directors’ Remuneration Policy continued
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Strategic Report
Remuneration at a glance
Summary of Executive Director pay
(£’000)
Wider workforce remuneration highlights
Company share price performance vs peers
1 January 2018 to 31 December 2024
95% 11.3k
93% 1.7m
Executive Directors' fixed vs variable
pay received
of employees
1
have an element
of performance-related pay in
their remuneration
employees who hold SIP shares
pension participation
amongst employees
1
SIP free shares held by employees
Source: FactSet as at 22 January 2025. ‘Builder Merchants’ consists of Ferguson, Grafton, Kingfisher, Nobia, SIG, and Travis Perkins.
‘House Builders’ consists of Barratt Redrow, Bellway, Berkeley, Crest Nicholson, Persimmon, Taylor Wimpey, and Vistry.
1 Excludes France and Belgium.
Directors’ Remuneration Report
Fixed Variable
Fixed Variable
72%
28%
2024
71%
29%
-40% -30% 0% 10%-10%-20% 20% 50%40%30% 60% 70% 80%
Andrew Livingston Paul Hayes
Fixed elements of remuneration Annual Bonus LTIP
2023 20232024 2024
823
334
1,360
1,478
841
836
550
788
556
554
218
889
FTSE 100
Builder Merchants
Howdens
House Builders
2023
Financial Statements
Additional Information
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Remuneration Committee report continued
In this section of the Directors’ Remuneration Report, we detail some of the considerations the Committee has regard
to when implementing the Directors' Remuneration Policy. Contained in this section are specific disclosures on Group
performance, aswell as comparative disclosures on the relative importance of spend on pay, historic CEO single figure,
CEO ratio and all-Director remuneration relative to average employees.
Profit before tax (PBT)
The graph below illustrates the Company’s historical
PBT performance.
Total shareholder return (TSR)
The graph below illustrates the Company’s TSR
performance relative to the constituents of the FTSE 100
(excluding investment trusts) of which the Company is a
constituent. It shows that over the past 10 years Howdens
has generated significantly higher returns than the FTSE
100 (excluding Investment Trusts).
Group performance
Directors’ Remuneration Report – Part 1: Company performance and stakeholder experience
Howdens historical PBT (£m)Howdens historical TSR
1 See consolidated income statement on page 175.
2 Net cash flow from operating activities is the definition used for the annual bonus scheme (see page 135).
Relative importance of spend on pay
The graph below sets out the change in the Group’s total remuneration spend from 2023 to 2024 compared to
the total returns to shareholders of the Group and the two incentive performance measures PBT and cash flow.
Howdens FTSE 100 (excluding Investment Trusts)
250
400
450
350
300
200
100
50
0
201620152014 20 17 2018 2019 2020 2021 2022 2023 2024
50
350
300
250
100
150
200
0
£219.6m
£237.0m
£232.2m
£238.5m
£260.7m
£185.3m
£390.3m
£405.8m
£327.6m
£328.1m
201720162015 2018 2019 2020 2021 2022 2023 2024
150
400
500
700
600
300
100
200
0
Total spend on pay
24
£688.0m
PBT
1
+0.2%
Cash flow
2
-3.4%
£m
Total returns to shareholders
-29.4%
£115.9m
£164.1m
24 2423
£328.1m
£327.6m
23
£ 452.7m
£437.4m
23
£656.0m
23 24
+4.9%
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CEO historical pay reporting
Historical single figure
The table and graph below show the historical CEO single figure and incentive payout levels. They show that the performance
of the annual bonus and long-term incentives have reflected the challenging marketconditions.
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 and it remained at this level for 2024.
Year 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
CEO single figure (£'000) 5,225 3,098 1,268 2,569 1,391 816 3,951 2,571 2,517 3,155
Annual bonus (% of maximum) 56% 48% 35% 75% 76% 0% 100% 100% 24% 58%
LTIP vest (% of maximum) 100% 100% 0% 0% 0%
1
0% 100% 43% 100% 74%
1 Andrew Livingston was appointed as CEO in April 2018 and therefore he was not granted an award under the LTIP in 2017.
Fixed Variable
CEO single figure 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 201920182015 2020 2021 2022 2023 2024
Financial Statements
Additional Information
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Remuneration Committee report continued
CEO pay ratio reporting
Howdens has calculated the CEO pay ratio for 2024 in line with the Directors’ Remuneration Reporting Regulations. The data used
to calculate the CEO pay ratio and the pay and benefits of the reference employees was accurate as at 31 December 2024.
CEO pay ratio
Year Method 25th percentile pay ratio 50th percentile pay ratio 75th percentile pay ratio
2024 A
1
90:1 79:1 65:1
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
1 In accordance with section 17 of The Companies (Miscellaneous Reporting) Regulations 2018, method A was used in the calculation of the pay ratios; ranking
the pay and benefits of all our UK employees for the relevant financial year to identify the 25th, 50th, and 75th percentile-ranked employees and using the pay
and benefits figures for these employees to determine the pay ratios at each quartile. Method A has been used as it has been identified by the Department for
Business and Trade in its guidance as the most statistically accurate method for identifying the pay ratios.
Pay and benefits of reference employees
The total pay, benefits, and salary of each employee who is the best equivalent of the 25th, 50th, and 75th ranked employee
is asfollows:
25th percentile 50th percentile 75th percentile
Total pay and benefits (FTE)
2
£35,190 £40,039 £48,676
Salary (including overtime) (FTE)
2
£25,662 £29,179 £36,144
2 The pay and benefits of employees was calculated in line with the Single Total Figure of Remuneration methodology. In our calculations we used actual pay from
1 January 2024 to 31 December 2024. 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 monthly or quarterly basis, we included payments made in the 2024 compensation year; however, for
annual bonus payments, we estimated the bonus due to employees for the 2024 compensation year (payment is due in March 2025). P11D values are based on
the 2023-24 reportable values; however, they have been annualised accordingly.
2024 pay ratio explanation
3
A significant proportion of the CEO's remuneration for 2024 is made up of variable pay (i.e. annual bonus and share awards).
Since the 2022 Performance Share Plan (PSP) award was granted, the Company's share price (three-month average to 28
December 2024) has increased by just over 10% and it is the three-month average share price on 28 December 2024 on which
the value of the PSP award, which is reported in the single figure of remuneration table on page 132, is based. The annual bonus
is also due to pay out at 58% of maximum for the CEO. In the previous year, the CEO's bonus paid out at 24% of maximum.
3 Explanations for the CEO ratios of previous years may be found in the respective annual report for that year.
How executive pay relates to pay and reward throughout the Company
Howdens’ vertically integrated business means that our workforce is made up of a wide range of roles from kitchen designers to
skilled engineers, and from warehouse staff to senior management. We work on the premise that Howdens must be worthwhile
for all concerned and our reward structures across the business are designed to reflect the levels of personal autonomy and
outperformance we expect from every individual. Our pay structures vary between roles to deliver an appropriate balance
between fixed and variable pay. Emphasis on profit in our reward structures, from the depots to the Executive Directors,
helps 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 Committee
is regularly updated on the benefits provided across the business and is mindful that consistency of approach and fairness are
two key principles and important drivers for change.
Directors’ Remuneration Report – Part 1: Company performance and stakeholder experience continued
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Strategic Report
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
in employee pay. This comparison is made on salary, bonus, and taxable benefits, so does not include some of the elements
disclosed under the single figure of remuneration table such as pension contribution or long-term incentives. While 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 instead been included in the table below as this provides a more representative comparison as Howden Joinery
Group Plc did not employ any individuals during 2019 to 2024.
Footnotes have been included beneath the table in relation to the 2023 to 2024 period. Footnotes relating to prior years can be
found in the previous applicable annual report.
% change in basic salary % change in benefits % change in bonus
2023–
2024
2022–
2023
2021–
2022
2020–
2021
2019-
2020
2023–
2024
2022–
2023
2021–
2022
2020–
2021
2019-
2020
2023–
2024
2022–
2023
2021–
2022
2020–
2021
2019-
2020
Average Howdens
Group employee
remuneration 3% 9% 5% 1% 4% (17)% 5% (9)% (15)% 9% 6% (18)% (4)% 38% 12%
Executive Directors
Andrew Livingston 2%
6% 3%
12%
3%
(18)% 40%
5%
(85)% 84%
152%
(67)%
3% 100%
(100)%
Paul Hayes 2% 6% 3% – – (26)% (6)% 80% – – 152% (67)% 3% – –
Non-Executive
Directors
Andrew Cripps
1,4
24% 11% 6% 3% 5% 0% 0% 0% 0% 0% – – – – –
Roisin Currie
2
– – – – – – – – – – – – – – –
Louis Eperjesi
3,4
83% – – – – 100% – – – – – – – – –
Louise Fowler
4
13% 0% 3% 4% 515% 20% 25% 300% 0% 100% – – – – –
Vanda Murray
2
– – – – – – – – – – – – – – –
Suzy Neubert
2
– – – – – – – – – – – – – – –
Peter Ventress 2% 101% – – – 0% 0% – – – – – – – –
Former Directors
Karen Caddick
4,5
(65)% 4% 6% 3% 18% (100)% 0% 100% 0% (89)% – – – – –
Debbie White
6
– 0% 3% 4% 3% – 600% (100)% (50)% 390% – – – – –
1 Andrew Cripps was appointed Senior Independent Director part-way through 2023 and therefore 2024 was the first year he received a full year's worth of fees
for that additional role.
2 Vanda Murray was appointed to the Board in February 2024, and Roisin Currie and Suzy Neubert were appointed to the Board in July 2024; therefore,
comparative figures cannot be calculated for any of the periods reported above.
3 Louis Eperjesi was appointed to the Board in June 2023 and so did not receive a full year of fees until 2024 and did not have any taxable benefits in 2023, which is
why the percentage change in taxable benefits is shown as a 100% increase.
4 In 2023, Non-Executive Directors (NEDs) waived an increase in their basic NED fee. This meant that in 2024 the basic NED fee fell below lower quartile when
considered against FTSE companies of a similar size. It was agreed by the Board in April 2024 to increase the basic NED fee to the level shown on page 135.
5 Karen Caddick retired from the Board on 2 May 2024 and so did not receive a full year of fees in 2024.
6 Debbie White retired from the Board on 30 December 2023 and therefore comparative figures cannot be calculated for the period 2023 to 2024.
Wider workforce considerations
When determining the base salary, benefits and variable pay awards for the Executive Directors and senior management,
the Committee had regard to the information referred to in a 'Provision 33 of the UK Corporate Governance Code Dashboard',
which includes information such as the CEO pay ratio, gender pay gap statistics, and thesalary, bonus, pensions, benefits and
share plan arrangements available to the wider workforce.
Financial Statements
Additional Information
Governance
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Remuneration Committee report continued
Directors’ Remuneration Report – Part 2: Application of policy in 2024
In this section of the Directors’ Remuneration Report we set out how the Committee has executed the policy for 2024.
Disclosures in this section are retrospective and where applicable are shown against prior year comparator.
Single figure of remuneration (audited)
£'000
Salary/fees
Taxable
benefits Pension
Total
fixed Bonus LTIP
Total
variable
Total
remuneration
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
1
2024 2023
1
2024 2023
1
Executive Directors:
Andrew Livingston 726 710 23 28 87 85 836 823 841 334 1,478 1,667 2,319 2,001 3,155 2,824
Paul Hayes 474 464 25 34 57 56 556 554 550 218 788 1,090 1,338 1,308 1,894 1,862
Total 1,200 1,174 48 62 144 141 1,392 1,377 1,391 552 2,266 2,757 3,657 3,309 5,049 4,686
Non–Executive
Directors:
Karen Caddick
Retired May 2024
27 77 0 2 – – 27 79 – – – – – – 27 79
Andrew Cripps 102 82 0 0 – – 102 82 – – – – – – 102 82
Roisin Currie
Appointed Jul 2024
35 – 4 – – – 39 – – – – – – – 39 –
Louis Eperjesi 66 36 1 0 – – 67 36 – – – – – – 67 36
Louise Fowler 68 60 6 5 – – 74 65 – – – – – – 74 65
Vanda Murray
Appointed Feb 2024
76 – 3 – – – 79 – – – – – – – 79 –
Suzy Neubert
Appointed Jul 2024
35 – 1 – – – 36 – – – – – – – 36 –
Peter Ventress 332 325 0 0 – – 332 325 – – – – – – 332 325
Debbie White
Retired Dec 2023
– 60 – 6 – – – 66 – – – – – – – 66
Total 741 640 15 13 – – 756 653 – – – – – – 756 653
1 The vesting value of the 2021 PSP award for the Executive Directors has been restated to reflect the actual share price on vesting on 6 April 2024 of £8.6882.
Salary
Salaries will not usually 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 inflation and/or in line with the wider employee
population. Salaries are set within a range defined by
market benchmark derived from companies in a similar
sector. Salaries for 2025 can be found on page 135.
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.
Taxable benefits
Executive Directors' benefits are based upon market rates
and include receipt of a company car or car allowance,
health insurance, and death-in-service insurance payable
by theCompany. Non-Executive Directors are entitled
to receive expenses in respect of reasonable travel and
accommodation costs.
Pension
Both Executive Directors received a cash benefit in lieu of
pension during the year. More information about Executive
Director pension benefits can be found on page 138.
Notes to the single figure table
Executive Directors
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Strategic Report
Annual bonus (audited)
Targets
Our annual bonus for 2024 was based on PBT and cash flow measures subject to an aggregate maximum of 200%
of salary. The PBT and cash flow measures were weighted as follows:
PBT component Cash flow component Total
Target % of salary Target % of salary % of salary
Threshold £297m 17% £329m 3% 20%
Target £330m 85% £342m 15% 100%
Outperformance £363m 170% £356m
30% 200%
Outcome
The PBT figure for the year in relation to the annual bonus is £330m. As explained in the Chair's annual statement, the
Committee applied judgement in reviewing whether the adjusted PBT outcome of £331.9m 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 'Target' performance.
The cash flow figure for the year in relation to the bonus was £437.4m. In aggregate, the Executive Directors will receive
an annual bonus of 115% of salary for 2024, which is equivalent to 57.5% of the maximum bonus opportunity.
70% of the bonus will be paid in cash and 30% will be deferred into Company shares for two years following the deferral
date (subject to continued employment).
Andrew Livingston Paul Hayes
PBT (% of salary) 85% 85%
Cash flow (% of salary) 30% 30%
Total bonus (% of salary) 115% 115%
Total bonus (£'000) 841 550
Actual outcome Actual outcomeTarget not reached Target not reached
Notes to the single figure table continued
Fixed Variable
PBT outcome Cash flow outcome
Worth 85% of maximum bonus
opportunity (170% of salary)
Worth 15% of maximum bonus
opportunity (30% of salary)
50%
100%
50%
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
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Remuneration Committee report continued
Performance Share Plan (PSP) (audited)
Targets
The 2022 PSP award is measured against PBT growth and relative total shareholder returns (TSR) over a three-year
period between FY 2021 to FY 2024. Any shares that vest under the PSP award are subject to a two-year post-vest
holding period for serving Executive Directors.
Directors’ Remuneration Report – Part 2: Application of policy in 2024 continued
Actual outcome Actual outcomeTarget not reached Target not reached
PBT growth measure
Performance level Growth in PBT
Proportion of
PBT tranche
that will vest
Below threshold Below 5% p.a. 0%
Threshold 5% p.a. 15%
Exceptional 12% p.a. or above 100%
Relative TSR measure
Performance
level
Position at which the
Company's TSR is
ranked compared to the
Comparators' TSRs
Proportion of
TSR tranche
that will vest
Below threshold Below median 0%
Threshold At median 15%
Exceptional At or above upper quartile 100%
Outcome
67% of the 2022 PSP award was based on a PBT growth threshold requirement of 5% p.a. and a maximum requirement
of 12% p.a. At the threshold requirement, 15% of the PBT growth component of the award would vest. The actual growth
on FY 2021 PBT was 11.1% p.a, calculated on an adjusted basis, excluding those costs and income that the Remuneration
Committee assessed to be exceptional in nature so that the vesting outcome results in a fair reflection of the performance
achieved over the period. The costs that were assessed to be exceptional in nature related to a combination of strategic
investments made to deliver growth beyond 2024 and one-off costs linked to events not envisaged when the targets were
set in 2022. This component of the award will vest at 88.9% of maximum opportunity.
33% of the 2022 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 component would vest.
Based on performance to FY 2024, the Company was ranked 'median to upper quartile' compared to the comparator
group and therefore 44.6% of the TSR component of the award will vest.
The overall final vesting of the 2022 PSP award is 74.3% of the maximum opportunity. The share price at the date of grant
was 770.8p and the three month average to 28 December 2024, the price on which the value of the award is calculated,
was 848.4p. Therefore, £135,214 of Andrew Livingston's LTIP award and £72,037 of Paul Hayes's LTIP award, both shown
in the single figure of remuneration table, is attributable to share price appreciation.
PBT growth outcome Relative TSR outcome
Worth 67% of maximum opportunity under award Worth 33% of maximum opportunity under award
89% 45%
11%
55%
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Strategic Report
Directors’ Remuneration Report – Part 3: Implementation of policy in 2025
In this section of the Directors’ Remuneration Report we set out how the Committee has implemented policy for 2025.
Disclosures in this section are forward looking. The outcome of any variable award for Executive Directors will be reported
intheRemuneration Committee report for the financial year 2025.
Non-Executive Director fees
Current fee levels for Non-Executive Directors are set out in the table below. Increases in Non-Executive Director fees are
generally aligned to the average increase for the wider workforce, which, effective 1 April 2025, are anticipated to be on average
2% of salary across the Group. During 2024, the NED fees were reviewed alongside market benchmarks for comparably sized
companies. As a result, fees were increased effective 1 April 2024 taking into account the time commitment of the roles and to
reflect the mid-market level for a company of Howdens' size.
Basic
NED fee
1
Chair
fee
SID
fee
Committee
Chair fee
2025
Annual fee £71,400 £341,445 £17,340 £20,400
Effective date 1 April 2025
2024
Annual fee £70,000 £334,750 £17,000 £20,000
Effective date 1 April 2024
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 are set out in the table below. The rationale for the increases may be found in the
Annual Remuneration Committee Chair statement on page 114.
Executive Directors
2025 2024
Salary (£'000) Effective date Salary (£'000) Effective date
Andrew Livingston (CEO) 855 1 January 2025 731 1 April 2024
Paul Hayes (CFO) 515 1 January 2025 478 1 April 2024
Executive Director annual bonus measures
The table below sets out annual bonus measures for 2025. 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 2025 Remuneration Committee report.
Bonus measure Definition Performance level Payout level
PBT Pre-exceptional profit before tax from continuing operations Threshold
Target
Maximum
17% of salary
85% of salary
170% of salary
Cash
flow
Net cash flow from operating activities, taking into account
the efficiency with which working capital is used, and
adjusted for exceptional items
Threshold
Target
Maximum
3% of salary
15% of salary
30% of salary
Fixed Variable
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
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Remuneration Committee report continued
Executive Director Performance Share Plan (PSP) measures
Set out below and on the next page are the performance measures and relative weightings for each of the measures for the 2025
PSP award. Further detail about the measures may be found on pages 115 and 120. The maximum opportunity under the PSP
is 285% of base salary for the CEO and 235% of base salary for the CFO. The performance period is three years, measured over
the relevant financial years. The award will also be subject to a two-year post-vesting holding period and malus and clawback
provisions. See page 140 for scheme interests awarded in 2024.
PBT – 60% weighting
PBT component
vesting schedule
PBT performance condition Payout level
£360m 100% of maximum
Straight-line vesting between these points
£320m 15% of maximum
Less than £320m 0% of maximum
Return on Capital Employed (ROCE) – 10% weighting
ROCE component
measurement details
Calculated by dividing the Group operating profit by the average capital employed under management’s control,
expressed as a percentage. The capital employed will include investments in assets, working capital and related
balances but will exclude balances that relate to historical or long-term financing or are outside the control of
current management. Excluded items include: cash, pension deficit repair contributions, deferred tax and long-
term financing of the Group, such as lease liabilities and borrowings.
Performance
assessment
ROCE performance condition Payout level
24% 100% of maximum
Straight-line vesting between these points
21% 15% of maximum
Less than 21% 0% of maximum
Strategic measures – 10% weighting
Performance condition Payout level
International sales growth
Year-on-year cumulative sales over
performance period versus three-
year cumulative sales to YE 2024
See note 1 below
Up to 33.3% of the strategic measures component
of the award
New product introductions
Average % of sales generated
from products launched in the
performance period
See note 1 below
Up to 33.3% of the strategic measures component
of the award
Vertical integration
Average % of COGs manufactured in-
house over the performance period
See note 1 below
Up to 33.3% of the strategic measures component
of the award
1 Commercial sensitivity precludes the advance publication of the strategic measures targets; however, they will be disclosed retrospectively in the applicable
Remuneration Committee report.
Directors’ Remuneration Report – Part 3: Implementation of policy in 2025
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Strategic Report
Fixed Variable
Relative TSR – 10% 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
at or shortly before the start of the performance period (excluding Investment Trusts).
• TSR average for the two months preceding the first day of the performance period and two months TSR
average for the final two months of the performance period.
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
Environmental measures– 10% weighting
Environmental component
measurement details
All carbon emission and waste targets to be achieved by 31 December 2027. Base year for all targets is 2021.
Performance condition Payout level
Improving our carbon
intensity ratio
Year-on-year cumulative average
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
UK primary fleet only, based on
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
A target of a minimum average over three years of 99% waste avoiding landfill across UK operations will apply which, if not achieved, will result in
a downward modifier to the outcome under this Environmental measure.
Financial Statements
Additional Information
Governance
Strategic Report
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Remuneration Committee report continued
Directors’ Remuneration Report – Part 4: Additional disclosures
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, and external appointments.
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
The Committee met six times during 2024 and discussed a number of items for which it is responsible. Under its Terms of Reference,
which are reviewed on an annual basis, the Committee is responsible for determining the broad policy and specific remuneration
packages for Executive Directors and senior management (that being the members of the Executive Committee, the Company
Secretary and the Director of Risk and Assurance), including pension rights and, where applicable, any compensation payments.
The Committee is also regularly updated on pay and conditions applying to other employees intheCompany.
Loss of office payments or payments to past Directors (audited)
No loss of office payments or payments to past Directors were made in the year under review.
External appointments
It is recognised that Executive Directors may be invited to become non-executive directors of other companies and that exposure
to such duties can broaden their experience and skills, which will benefit the Company. Howdens allows Executive 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 conflicts of interest.
Andrew Livingston is currently Non-Executive Director of LondonMetric Property Plc, a FTSE 100 REIT. Andrew received £60,896
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.
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 in the proposed
Directors' 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. No additional benefits become receivable if Executive Directors retire early.
Executive Directors
Andrew Livingston Paul Hayes
Accrued pension at 28 December 2024 (£'000) – –
Normal retirement date – –
Pension value in the year from defined benefit component (£'000) – –
Pension value in the year from defined contribution component (£'000) – –
Pension value in the year from cash allowance (£'000) 87 57
Total 87 57
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Strategic Report
Executive Director shareholdings (audited)
Executive Directors are currently expected to build up and maintain apersonal shareholding in the Company of at least 200% of
salary so that their interests are aligned with those of shareholders. Subject to shareholder approval of the updated Directors'
Remuneration Policy at the AGM in May 2025, this will increase to 300% of base salary.
The table below sets out the total shares held together with 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. Subject to shareholder approval of the updated Directors' Remuneration Policy
at the AGM in May 2025, unvested deferred bonus shares (net of income tax and National Insurance contributions) will be taken
into account in calculating the Executive DIrectors' shareholdings.
Current Executive Directors
Andrew Livingston Paul Hayes
Shareholding requirement (% of salary) 200% 200%
Shareholding requirement (number of shares)
1
172,322 112,664
Shares owned outright (including by connected persons)
2,5
521,308 105,503
Current shareholding (% of salary)¹ 605% 187%
Guideline met Y N
Unvested deferred bonus shares 29,598 19,353
Share awards subject only to continued employment
3
194 189
Share awards subject to performance conditions and continued employment
4
730,354 389,105
1 Based on a share price of £8.484, being the three-month average price to 28 December 2024, and basic salary as at 28 December 2024. This is calculated by
using only those shares owned outright by the Executive Directors and their connected persons at 28 December 2024 and the Executive Director’s salary at
thatdate.
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 28 December 2024 (the end of the period) and 26 February 2025, Andrew Livingston has acquired 37 SIP partnership Shares and Paul Hayes 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 26 February 2025.
Non-Executive Director shareholdings (audited)
There is no shareholding requirement for Non-Executive Directors. The shareholding figures below include any shares held
by connected persons. With the exception of Karen Caddick, who was not a member of the Board as at 26February2025
1
,
the Company can confirm that no changes to the Non-Executive Directors' total shareholdings (including anyholdings of
their connected persons) have occurred between the end of the period and 26 February 2025.
Non-Executive Director
Karen
Caddick
1
Andrew
Cripps
Roisin
Currie
Louis
Eperjesi
Louise
Fowler
Vanda
Murray
Suzy
Neubert
Peter
Ventress
Shareholding: 6,000 7,500 – 3,100 470 3,000 7,305 20,316
1 Karen retired from the Board on 2 May 2024. Her respective reported shareholding is therefore given as at the date she retired from the Board.
Fixed Variable
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
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Howden Joinery Group Plc
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Scheme interests awarded during the financial year (audited)
During 2024, the Executive Directors were invited to participate in the Performance Share Plan (PSP) and Share Incentive Plan
(SIP), asset out in the table below. Further information on conditional shares and SIP free and matching shares may be found in
note 23 of the consolidated financial statements:
Nature of award: Conditional shares under the PSP
CEO CFO
Number of shares under award: 207,528 110,563
Face value of award
1
: £1,973,591.28 £1,051,454.13
Performance period Grant date Vest date Additional holding period
See individual Performance
Conditions below
30 August 2024 30 August 2027 Two years
Performance Conditions:
Profit Before Tax (PBT)
(60% weighting)
Performance period:
FY2024 to FY 2026
PBT at end of performance period Proportion of PBT component of award that can vest
£420m 100%
Straight-line vesting between these points
£340m 15%
Less than £340m 0%
Relative Total Shareholder
Returns (TSR) (20% weighting)
Performance period:
FY2024 to FY2026
Howdens’ rank versus comparator group Proportion of TSR component of award that can vest
At or above upper quartile 100%
Straight-line vesting between these points
At median 15%
Below median 0%
Return on Capital Employed
(ROCE) (10% weighting)
Performance period:
FY2024 to FY 2026
ROCE achieved Proportion of ROCE component of award that can vest
28% 100%
Straight-line vesting between these points
23% 15%
Less than 23% 0%
Environmental measure (EM)
(10% weighting)
Performance period:
All carbon emission and waste
targets to be achieved by
31 December 2026. Base
year for all targets is 2021.
Improving our carbon
intensity ratio
Fleet emissions reduction Waste avoiding landfill
Per annum
reduction
Proportion of EM
that can vest Reduction
Proportion of EM
that can vest
A target of a minimum average
over three years of 99% waste
avoiding landfill across UK
operations will apply which, if not
achieved, will result in a downward
modifier to theoutcome under this
Environmental measure.
4.2% 50% 15% 50%
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%
1 Based on a share price of £9.51, being the closing price on 29 August 2024.
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 17 May 2024 to 19 Aug 2024 17 May 2027 to 19 Aug 2027 20 Average £9.123 Average £45.615
Free shares 30 Aug 2024 30 Aug 2027 26 £9.510 £247.26
CFO
Matching shares 19 Apr 2024 to 19 Aug 2024 19 Apr 2027 to 19 Aug 2027 43 Average £9.022 Average £76.144
Free shares 30 Aug 2024 30 Aug 2027 26 £9.510 £247.26
1 Free and matching share awards under the SIP do not have performance conditions; however, there is a service condition of three years from the award date
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").
Remuneration Committee report continued
Directors’ Remuneration Report – Part 4: Additional disclosures continued
Governance Page Title
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Strategic Report
Fixed Variable
Advisors to the Committee
The Committee regularly consults with the CEO, CFO and the 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 following a
competitive tender process. 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.
The Committee is satisfied that Korn Ferry provided robust, objective and independent advice during the year. Work undertaken
during the year for the Committee included Directors' Remuneration Policy review, 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 £136,038 with fee levels based on the quantity and complexity of work undertaken.
During the year, the Committee engaged FIT Remuneration Consultants ("FIT") to carry out additional benchmarking work on
Executive Director pay. The total fees paid to FIT were £14,320. The Committee confirms that FIT had no previous connection
to Howdens upon undertaking this work.
Voting at the 2024 AGM
The result of the advisory vote in respect of the Directors’ Remuneration Report ("Report") at the 2024 AGM is shown in the chart
below. The 2023 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.
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
For
1
Against
1 A vote 'for' includes those votes giving the Chair discretion.
2 A vote 'withheld' is not a vote in law.
2023
2024
For 86.06%
For 98.93%
Against 13.94%
Against 1.07%
Withheld
2
2,392,924
Withheld
2
47,066
Report
Report
By order of the Board
Vanda Murray OBE
Remuneration Committee Chair
26 February 2025
Financial Statements
Additional Information
Governance
Strategic Report
Governance Page Title
Introduction
I am pleased to present the Howden Joinery Group Plc
Audit Committee report for 2024. This report is divided
into the following sections:
1. Key information at a glance
2. Activities of the Committee in 2024
andkeyactivities in the year ahead
3. Financial reporting
4. Governance
5. External auditor
6. Controls and internal audit
As announced in November 2024, I will be retiring from
the Board and my position as Audit Committee Chair
at the AGM in May. Upon my retirement, Tim Lodge will
become Audit Committee Chair. Since Tim's appointment
to the Board at the beginning of January 2025, he
has been undertaking an induction to the business,
with a particular emphasis on meeting with the Audit
Committee's key stakeholders. I will continue to work
with Tim over the coming months until my retirement
to ensure there is an effective handover of Audit
Committee Chair duties.
I look forward to answering any questions on the work
of the Audit Committee from shareholders at the AGM
in May.
Andrew Cripps
Audit Committee Chair
Audit Committee report
Key information at a glance
Andrew Cripps
Audit Committee Chair
External auditor
1
External auditor KPMG LLP (“KPMG”)
External auditor appointed 12 May 2022
Lead audit partner Zulfikar Kamran Walji
Lead audit partner tenure Year one
(of a five-year cycle)
Reappointment of external
auditor to be recommended by
the Board
Yes
1 The information above is correct as at 28 December 2024.
Further information on page 146.
Audit fees
Further information on pages 146 and 147.
Areas of significant
financial judgement
Inventory obsolescence provisioning
Defined benefit pension scheme obligation
Further information on page 144.
Half Year review ESG assuranceStatutory audit fees
Governance
4%
8%
88%
7%
93%
2023
2024
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Howden Joinery Group Plc
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Audit Committee reportGovernance Page Title
2024 Audit Committee activity
Key Committee activities
inthe year ahead
Committee meeting
attendance in 2024
AGM
• The reappointment 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
• 2024 external auditplan
• Finance Director
(France) update
• Update on French
external audit
• Lead audit partner
succession.
• Discussion with Head of
Internal Audit (without
management present)
Committee meeting
• 2024 Half Year results,
including going concern
considerations
• External auditor Half
Year review
• Key controls and Half
Year control reviews
update
• Internal Audit report
• Cyber security and SAP
access controls review
• French audit and
compliance update
• FRC review of 2023
Annual Report and
Accounts
• Provision of non-audit
services by the external
auditor (ESG assurance)
• Discussion with external
auditor (without
management present)
Committee meeting
• 2023 draft Annual
Report and Accounts
and Full Year
Announcement
• Year End 2023: key
judgements
• External audit report
• External audit policies
• External auditor
independence
• Key controls: year end
assurance
• Internal Audit report
• Audit Committee
effectiveness
• Conflict of interest
review
• Discussion with external
auditor (without
management present)
April
May
Committee meeting
• Internal Audit report
• 2024 Annual Report
timetable
• Key controls and
fraud controls
• Annual review of risk
and control framework
• Internal Audit charter
• Director of Risk and
Assurance reporting line
• Health and safety
in France
September
Committee meeting
• Corporate Governance
update
• External audit
plan update
• Internal Audit report
• 2025 internal Audit
plan and budget
• Key controls and
fraud controls
• Commercial Finance
Director update
• Depot compliance
update
• Terms of reference
review
• 2025 Audit Committee
calendar
• Discussion with Director
of Risk and Assurance
(without management
present)
November
1 Suzy was unable to attend the September meeting due to
commitments entered into before her appointment. She was provided
with all the Committee papers ahead of the meeting and provided her
feedback to the Committee Chair and Company Secretary.
February July
• Review of the Annual Report and Accounts
andpreliminary results announcement.
• Review of Audit Committee effectiveness.
• KPMG’s reappointment as auditor to be recommended
to shareholders at the Annual General Meeting (AGM).
• Review of the 2025 interim results.
• Consideration of Internal Audit’s annual plan,
findings,independence, and resources.
• Review of key controls.
• Approval of the 2026 Audit Committee calendar.
Andrew Cripps (5/5)
Karen Caddick (2/2) Retired on 2 May 2024
Roisin Currie (3/3) Appointed 1 July 2024
Louis Eperjesi (3/3)
Louise Fowler (5/5)
Vanda Murray (4/4) Appointed 1 February 2024
Suzy Neubert (2/3)
1
Appointed 1 July 2024
Financial Statements
Additional Information
Governance
Strategic Report
143
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Annual Report & Accounts 2024
Governance Page Title
Governance
Financial reporting
Results review
The Audit Committee reviewed the Group’s 2023 Annual
Report and Accounts published in March 2024 and the half-
yearly financial report published in July 2024.
As part of these reviews, the Committee scrutinised papers
from management on accounting policy, areas of significant
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
Accounts and review of the half-yearly financial report.
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.
Controls over financial reporting
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
Group’s internal financial controls (with specific reference
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
onpage 148.
Accounting policies
There were no changes in accounting policies in the year.
Areas of significant financial judgement
The Committee exercises its judgement in deciding the areas
of accounting that are significant to the Group’s accounts.
In addition to requesting papers from management, the
Committee reviews the external audit plan and highlights
which areas are of particular concern to the Committee and
on which it would further question audit conclusions. The
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
Financial Officer, Group Finance Director, and the external
auditor. The Committee has challenged the underlying
assumptions and is satisfied that each matter has been fully
and adequately addressed by the Executive Committee,
appropriately tested, and reviewed by the external auditor,
and the disclosures made in the 2024 Annual Report and
Accounts are appropriate.
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 2024, management continued to take a strategic position
on stock holding. The Committee challenged management's
conclusions on stock valuation and provisioning.
The external auditor provided reports to the Committee
which evaluated 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 auditor
demonstrated appropriate scepticism in their approach.
The Committee considered the processes used to value
each category of inventory, including the assumptions
behind obsolescence provisions, and was satisfied with the
judgements made, and the auditor's conclusions.
Actuarial valuation of pension fund liabilities
The Committee reviewed the report of the Company's
actuaries, concluding that:
• the actuarial assumptions applied to pension fund
liabilities, and in particular the discount, inflation and
mortality assumptions, were appropriate; and
• 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 28 December 2024, 49% of total
pension fund assets (2023: 57%) were assets for which there
is no observable market value (see note 22 of the consolidated
financial statements).
Some of the asset valuations required judgement because
manager valuations at the balance sheet date were not
expected to be available until after the finalisation of this
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,
any significant market events that may have impacted the
assets since the latest valuation, or any significant changes
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.
FRC review of the 2023 Annual Report
and Accounts
Howdens’ 2023 Annual Report and Accounts was selected
bythe Financial Reporting Council’s Corporate Reporting
Review team (“CRR”) for a limited scope review during
theyear. Their review raised one question about our
approachto, and disclosure of, impairment testing.
Audit Committee report continued
144
Howden Joinery Group Plc
Annual Report & Accounts 2024
Governance Page Title
While preparing the response on behalf of the Company,
management consulted with KPMG, the Chair of the Board
and Chair of the Audit Committee. Our updated disclosure
can be found in notes 9 and 10 of the consolidated
financialstatements.
The FRC ask accounts preparers to note that the FRC's
reviews of annual report and accounts do not benefit from
detailed knowledge of the business or an understanding of the
underlying transactions entered into. The reviews are, however,
conducted by staff of the FRC who have an understanding of
the relevant legal and accounting framework. FRC reviews
do not provide assurance annual report and accounts are
correct in all material respects; the FRC’s role is not to verify
information provided to it but to consider compliance with
reporting requirements. The FRC accepts no liability for
reliance on its review by Howdens or any third party, including
but not limited to, investors and shareholders.
Governance
Governance updates
Updates on the latest governance practices for audit
committees and changes in reporting requirements were
reviewed with the external auditor. In addition to other
resources, members of the Audit Committee are members of
the KPMG Board Leadership Centre and other bodies, which
provide updates on financial and reporting matters.
During the year, the Committee received regular updates on
the proposed corporate governance reforms. This included
strengthened board accountability for the effectiveness of
the risk and internal control framework and declarations on
the effectiveness of risk management and internal control
systems as set out in the updated UK Corporate Governance
Code 2024. The Company will report compliance against all
relevant provisions of the updated UK Corporate Governance
Code 2024 in the 2025 Annual Report and Accounts.
Committee effectiveness
An effectiveness review was carried out on the Committee
and its members as part of the wider internal Board evaluation
process (further detail regarding the effectiveness review
methodology can be found on page 108). The review
concluded that the Committee was collaborative and
independent in how it operated and that members were
prepared to probe and challenge assumptions presented to
them. It was also concluded that the current mix of financial,
commercial and relevant sector experience of the Committee,
and that of its advisors, was such that the Committee could
effectively exercise its responsibilities.
In the year ahead, the review noted that members were keen
to ensure that Tim Lodge, who will take over as Committee
Chair following Andrew Cripps's retirement in May 2025 (see
'Committee membership and Chair' section below), will be well
supported and embedded in his new role. It was also noted
that operational controls must remain a priority topic for the
Committee and that the relationship with the new external
audit partner continue to be built and strengthened.
Policies and conflicts
The Committee reviewed its policies in relation to allocation
of non-audit work (further detail on this policy may be found on
page 147) and employment of ex-audit firm personnel. It also
reviewed the Directors’ related parties and conflicts of interest
register. Further information about the Committee's review
of related parties and conflicts of interest may be found on
pages143 and 149.
Competition and Markets Authority Order
(the“Order”) compliance
The Audit Committee confirms that the Company has complied
with the provisions of the Order throughout its financial period
ended 28December 2024 and up to the date of this report.
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. Information about
the last external audit tender can be found on page 146 and
in the 2022 Annual Report and Accounts. The Committee's
assessment of the effectiveness of the external auditor can be
found on page 146.
Committee membership and Chair
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.
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, Director of Risk and Assurance,
the Company Secretary and senior representatives of the
external auditor. He is also responsible for ensuring that key
audit issuesare reported to the Board in an effective and
timely manner and that they are reported to shareholders in
the Annual Report. As already reported, Andrew will retire from
the Board and Audit Committee at the AGM on 1 May 2025.
Upon Andrew's retirement, Tim Lodge will be appointed as
Chair of the Audit Committee.
Recent and relevant financial experience
Andrew Cripps is a qualified Chartered Accountant and
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.
Tim Lodge is a fellow of the Chartered Institute of Management
Accountants and has over 30 years' finance and accounting
experience. He spent six years as Chief Financial Officer
(CFO) at Tate & Lyle PLC and held CFO roles at the COFCO
International group. He is currently the Audit Committee Chair
of SSP Group plc and Serco Group Plc, both public companies.
Financial Statements
Additional Information
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Governance
Audit Committee report continued
Competence relevant to the sector
The unique business model of Howdens means it does not
naturally fit into one sector and therefore when the Committee
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
tocustomers.
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.
External Auditor
External auditor appointment
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
both the 2023 AGM and 2024 AGM and shareholders approved
the re-appointment with 98.9% and 99.2% of votes in favour,
respectively.
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 2024,
whichincluded:
• A review of the independence of the external auditor and
the arrangements which they have in place to restrict,
identify, report and manage conflicts of interest.
• 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
asappropriate.
• 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
externalauditor.
At the year end, the external auditor formally confirmed
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.
Lead Audit Partner
Robert Brent retired from KPMG LLP in April 2024 following
completion of the 2023 external audit process. There was a
detailed handover process, overseen by the Audit Committee,
to the new Lead Audit Partner, Zulfikar Kamran Walji, who was
responsible for the audit assurance work undertaken at the
Half Year and the 2024 external audit. The Committee would
like to extend its thanks to Robert for his service to Howdens,
in particular managing the transition from Deloitte in 2022.
External auditor effectiveness
To assess the effectiveness of the external auditor,
theCommittee reviewed:
• The proposed plan of work presented by the external
auditor, including audit risks, materiality, terms of
engagement and fees prior to commencement of the
2024audit.
• The external auditor’s fulfilment of the agreed audit plan
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, scepticism, and perceptiveness of the
auditor in their handling of the key accounting and audit
judgements.
• Internal control and risk content of the external
auditor’sreport.
• Independence of thought and potential for conflict.
The Lead Audit Partner also met with all members of the Boardto
discuss their expectations and areas of focus for theaudit process.
The Committee concluded that the external auditor remained
effective and audit quality remained high, and therefore the
Board will once again recommend KPMG's reappointment to
shareholders at the 2025 AGM.
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 figure on page 142 and
in note 4 to the consolidated financial statements.
In July 2024, the Audit Committee approved a proposal
from KPMG to undertake certain ESG assurance services
for the Group. The Committee determined that it was in the
Company's best interests to acquire these services from
KPMG due to the benefit of efficiencies created by having one
audit and assurance provider, though day-to-day assurance
work was to be carried out by a team separate from the
financial audit team. Approval was given for two limited
assurance engagements in accordance with International
Standard on Assurance Engagements UK and ISAE 3410. The
Committee took into account both the FRC Ethical Standard
and Howdens' own policy for the provision of non-audit
services when considering the proposals and concluded that
the engagements were a permitted service under the policy.
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Policy for non-audit services provided by
theexternal auditor
The main aims of this policy are to:
• Ensure the independence of the auditor in performing
thestatutory audit; and
• Avoid any conflict of interest by clearly detailing the types
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; and
• categories of service that are prohibited from being
carried out by the auditor.
The policy specifies a de minimis limit as well as the type of
non-audit work that the auditor may be engaged in without
the matter first being referred to the Audit Committee, which
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
subsidiaries. The policy also clarifies responsibilities for the
agreement of fees payable for non-audit work.
In the year, the Committee has only authorised KPMG to review
the half yearly financial report and conduct a limited assurance
review of ESG disclosures. Both of these are technically non-
audit services, but are so closely connected with external
audit that it is appropriate that KPMG conduct the work and
their independence is not compromised.
Performance expectations for the external auditor
Specific auditor responsibilities
• 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
staffmembers of KPMG.
• Provide sufficient time for management to consider
draft auditor's reports and respond to requests
andqueries.
• Ensure consistent communication between local
and central audit teams.
Wider responsibilities
• Adhere to all independence policies.
• Provide timely up-to-date knowledge of technical
andgovernance issues.
• Serve as an industry resource, communicating best
practice trends in reporting.
• Deliver a focused and consistent audit approach for
theGroup that reflects local risks and 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 consideration of the
potential for conflicts of interest as well as the auditor's
internal procedures to ensure independence of its staff.
Controls and internal audit
Internal control framework
The Group has enhanced its established framework of internal
controls, which includes the following key elements:
• The Board approves the Group’s strategy and annual
budgets; the Executive Committee is accountable for
performance against these.
• The Group and its subsidiaries operate control procedures
designed to ensure complete and accurate accounting
of financial transactions and to limit exposure to loss of
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). The Audit Committee 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.
• Operating entities provide certified statements of
compliance with key financial and non-financial risk areas
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.
Financial Statements
Additional Information
Governance
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Governance
Audit Committee report continued
The Committee remains committed to the activities to further
strengthen the control environment across the business,
as well as preparing for compliance with Provision 29
requirements of the updated 2024 version of the UK Corporate
Governance Code (see case study above).
Internal audit
The Internal Audit team has focuses on the development of
our processes and frameworks to align with both new Institute
for Internal Audit (IIA) standards and the requirements of the
function for the revised Corporate Governance Code. This has
included training for the full team and the wider business.
An updated Internal Audit Charter has been approved by the
Committee and communicated to management, thereby
refreshing understanding of responsibilities for internal
controls and their verification, based on the three lines of
defence model.
Material controls
As previously reported, management continued a Group-wide
controls and governance oversight improvement project in
2024. Sponsored by the CEO and CFO, and reporting regularly
to the Audit Committee, this work is improving our capability
over our operational, compliance, IT and financial controls,
which mitigate our key and principal risks and evidence their
effective implementation.
Work on tightening and evidencing our IT and financial
controls was largely completed in 2023. In 2024, the focus
has been on rolling this out to all other areas of operations and
governance, with regular updates being provided to the Audit
Committee. Work has focused on refining embedded internal
control frameworks and reporting, as well as our systems used
to improve process efficiency and the use of data analytics.
Case study
Preparedness for the UK Corporate Governance Code
changes (risk management and internal controls)
The 2024 version of the UK Corporate Governance Code has
introduced a new Provision (Provision 29), requiring boards
to monitor their company’s risk management and internal
control framework and, at least annually, to conduct a
review of its effectiveness. For financial years beginning
on or after 1 January 2026, a description of how the board
monitored and reviewed the effectiveness of the framework,
a declaration of the effectiveness of material controls, and a
description of any material controls that have not operated
effectively (including action taken or proposed to improve
them) must be reported in the annual report.
In readiness for these changing requirements, Howdens
has completed a two-year Company-wide readiness
project. Sponsored jointly by the CEO and CFO with the
oversight of the Audit Committee, the Key Controls Project
was a wide-reaching improvement programme to further
improve our governance, controls and evidence. A key
objective of the project was to retain Howdens' culture of
empowered, entrepreneurial teams operating efficiently
while demonstrating effective control and governance.
Our approach mapped our principal risks as well as wider
legal, financial, compliance and operational risk areas to a
revised governance framework with clear accountability
for each Executive Committee member. To do this we have
revised our risk appetite matrix and developed a clear link
to both operational and financial materiality, ensuring
that our governance approach focuses on truly material
controls, while allowing the business to keep track of its
wider operational control effectiveness.
For each area, a control framework was developed,
focused on providing the Executive member responsible
with appropriate information and evidence to ensure
it remains effective. Directly aligned with our deeply
embedded risk management process, all control owners
and reviewers are responsible for understanding
individual, evidenced risks in their area and signing
off that controls are effective and have fully operated
during the period.
Throughout the project we have aimed for a clear and
efficient process, covering governance and controls
to manage both Economic Crime and Corporate
Transparency Act 2023 (ECCTA) and the revised UK
Corporate Governance Code in one simple process. We
have upgraded our governance, risk and compliance
(GRC) tooling, which was already familiar to the business,
to provide both management sign-off of control
effectiveness and evidence management to support it.
Our GRC solution is directly linked with our 3rd line Internal
Audit activity, providing a clear link between control
sign-off, review and assurance activity for the Executive
Committee and Audit Committee.
We are continuing to develop our compliance functions
to align against this new model and to ensure that this
approach is effective.
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Governance Page Title
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;
• results of audits and other significant findings, including
the adequacy and timeliness of management’s response;
• staffing, reporting and effectiveness of divisional audit; and
• independent assurance.
Independent assurance
The Committee assessed the coverage of independent
assurance by reviewing the annual internal audit
and compliance plans against the Group’s controls
governance process.
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 has reviewed and ensured compliance
with the revised IIA Standards. The revised Standards become
effective in 2025. The team also remains compliant with the
International Professional Practices Framework (IPPF).
The Audit Committee has commissioned an external
assessment of the internal audit function every five years
to assess the performance and effectiveness of the Internal
Audit department, next scheduled for completion in 2025-26
against the new Standards.
The last assessment was completed in 2021 and no areas
reviewed were considered to be of concern.
Fraud risk & ECCTA
The Committee has reviewed management’s progress in
implementing required developments to comply with ECCTA.
The Committee considered the controls in place to mitigate
fraud risk and received a report from Internal Audit and other
compliance functions to confirm controls are effective. The
Committee will continue to regularly assess best practice for
ECCTA compliance over the course of 2025.
Cyber and information security risk
The risk of a cyber security incident is considered to be one of
the Group’s principal risks. More information on this risk can be
found on page 40.
Updates on cyber and information security were presented
to the Committee by the Chief Customer Officer, Head of
Information Security and the Director of Infrastructure and
Service Delivery at the Committee meetings in April and
July. In July, the Committee noted that certification had
been received in respect of the ISO 27001 (management of
information security) accreditation. Other areas considered
by the Committee during these updates included threat
landscape, cyber insurance, and access controls.
There were no significant information security breaches
during the year and there have been no such breaches during
the preceding three-year period.
Divisional controls
Members of senior management are invited to Audit
Committee meetings to discuss financial reporting,
succession planning, risk management, and controls in their
business areas. The Finance Director for France and Belgium
and the UK Commercial Finance Director each presented to the
Committee during the year, setting out their respective team's
priorities and risks and opportunities. The Head of Compliance
for the Trade division also presented to the Committee on the
progress of the UK depot compliance programme and the
Chief Customer Officer attended to present on SAP controls
and cyber security.
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 82 and 83).
Conflicts of interest and related parties
The Companies Act 2006 places a duty upon Directors to ensure
that they do not, without the Company’s prior consent, place
themselves in a position where there is a conflict, or possible
conflict, between the duties they owe the Company 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 authorise a conflict
if it is determined that to do so would be in the best interests of
the Company. The Audit Committee reviews the output of this
process annually to ensure it is appropriately monitored.
By order of the Board
Andrew Cripps
Audit Committee Chair
26 February 2025
Financial Statements
Additional Information
Governance
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Sustainability
Committee report
Committee evaluation
in2024
Peter Ventress (3/3)
Karen Caddick (2/2) Retired 2 May 2024
Andrew Cripps (3/3)
Roisin Currie (1/1) Appointed 1 July 2024
Louis Eperjesi (3/3)
Louise Fowler (3/3)
Vanda Murray (2/2) Appointed 1 February 2024
Suzy Neubert (1/1) Appointed 1 July 2024
Areas of focus:
• Role and operations of the Committee
• Composition
• Leadership
• Process and procedures
Methodology:
See page 108 of the Nominations Committee report.
Outcomes:
In all areas of focus (see above), the Committee scored
above benchmark
1
. In particular, it was felt that the
Committee had the appropriate competence relevant to the
Company's sector and was collaborative in its approach.
It was noted by Committee members that a key focus
for the Committee in the year ahead would be ensuring
sufficient resource was in place for the Company to
identify and meet the ever-growing and significant
reporting and legislative requirements and to ensure
appropriate verification of data was carried out.
1 Benchmark is derived from over 1,000 board evaluations, which
include feedback from more than 3,000 board members across
400 organisations.
Committee meeting
attendance in2024
Peter Ventress
Sustainability Committee Chair
Introduction
I am pleased to present the Sustainability Committee
report for 2024. This report is organised into the
following sections:
1. Committee member attendance, Committee
evaluation results, Committee activity in 2024
and keyactivities in the year ahead.
2. Committee environmental and social
considerations in the year
3. Case study: Chartered Manager Degree
Apprenticeships
Having a sustainable business is a priority for the
Board. It is central to everything we do and the
Sustainability Committee helps to ensure that it is
given as much of the Board’s time and attention as our
other business priorities. Many of the items considered
and approved at the Committee are considered in
detail in the Sustainability matters report (beginning
on page 42), so this Committee report is necessarily
shorter than others to avoid duplication but to still
highlight some of the key work of the Committee during
the year, and to consider the work in the year ahead.
Peter Ventress
Sustainability Committee Chair
Governance
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Governance Page TitleSustainability Committee report
2024 Sustainability
Committee activity
Committee meeting
• SBTi Net Zero approval and progress update
• ESG materiality review results
• EDI update
• Gender pay gap report
• 2023 Sustainability Committee report
• Sustainability Committee effectiveness review
February
Committee meeting
• Scope 3 emissions update
• Gender Working Group update
• Early careers, including presentations from
graduate apprentices
April
Committee meeting
• EU Deforestation Regulations update
• ESG performance and compliance update
• Climate risk
• EDI update
• 2025 Sustainability Committee calendar
• Committee Terms of Reference
November
• 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 2025 Sustainability Committee
calendar.
Key Committee activities
inthe year ahead
Committee environmental and social
considerations in the year
Net Zero
1
Having the Group’s Net Zero targets approved by SBTi,
as reported to the Committee during the year, represents
a significant milestone for Howdens’ ESG agenda. The
Committee received regular updates on progress against
targets from the Director of ESG and will continue to do so
in 2025 and in future years.
The Committee is mindful of 2030 targets which include the
reduction of absolute Scope 1 and 2 GHG emissions by 42%
and absolute Scope 3 GHG emissions by 25%. In addition,
the Committee will monitor the target for 25% of suppliers
(by spend) to set science based targets by 2027.
The Director of ESG reported to the Committee that a new
website had been launched during the year to support the
Group’s sustainability activities. This can be accessed at
https://howdens.foleon.com/sustainability/our-road-to-zero/
Supplier engagement
Supplier engagement is key to the execution of the Net Zero
strategy and reduction of Scope 3 emissions. The Committee
received an update from the Director of ESG in April on the
ESG messaging at the Supplier Conference in March. At that
conference, the CEO delivered the message that meeting the
Group’s ESG long-term targets was non-negotiable.
Further information about the Supplier Conference and
supplier engagement can be found on pages 49, 90 and 91.
The Sustainability Committee also received updates on
ESG360, the Group’s ESG supplier engagement tool.
ESG compliance
The regulatory burden for companies relating to ESG
disclosure and compliance is significant and increasing at
pace. During the year, the Committee received updates in
relation to EU Deforestation Regulation (EUDR) and the EU
Zero Deforestation policy, Corporate Sustainability Reporting
Directive (CSRD), TCFD disclosures (to be superseded by
disclosures under International Sustainability Standards
Board (ISSB)), TNFD disclosures, Greenwashing Directive as
well as voluntary disclosures under the Carbon Disclosure
Project (CDP).
The Committee will work with the Audit Committee on a CSRD
implementation plan during 2025 and work has already
commenced on double-materiality assessments. CSRD will
apply to the French business from 2025.
1 See page 47 for a definition of 'Net Zero'.
Financial Statements
Additional Information
Governance
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Governance
Sustainability Committee report continued
Climate risk
The Director of Risk and Assurance provided the Committee with
an update on physical climate risk at the November meeting.
The climate risk assessment looked to identify inherent
physical climate risk exposures using Recognised Climate
Pathways (RCPs) to analyse the risk of precipitation, river
floods, storms, sea level rises, heat fire and drought to
Howdens’ depots (including international operations),
manufacturing and distribution sites along with other critical
infrastructure locations (such as IT data centres); all Tier 1
suppliers globally that are relied upon to derive £2.5m or more
of profit; and any planned major future investment locations
and new depot locations. Risk was assessed over three time
horizons: short, medium and long-term.
More information on our 2024 physical climate risk
assessment can be found on page 66.
Equality, diversity and inclusion (EDI)
and skills
The Committee continued to have oversight of management’s
EDI strategy and received regular updates from the HR team
throughout the year. The Committee received a presentation
on Chartered Manager Degree Apprenticeships in July, a case
study of which is set out on page 153.
The Committee considered and approved the Group’s Gender
pay gap report in February and will continue to monitor this
with the Remuneration Committee in 2025. Information was
provided to the Committee at their request in respect of
bonus differentials, although it was noted that this was due
to new joiner, leavers and apprentices not being in receipt
of performance-related bonuses.
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Case study
Chartered Manager Degree Apprenticeships
Howdens has a strong track record of promoting social
mobility and organically growing its talent pool through
apprenticeships. In 2024, the Sustainability Committee
received an update from the Operations Leadership
team on the first cohort of Chartered Manager Degree
Apprenticeships (CMDAs), which included presentations
from two of the students enrolled in the programme.
The primary objective of the programme is to nurture
talented individuals capable of leading the Company's
strategic initiatives across key business areas and
enhancing business performance.
The rotational programme is structured to offer
participants exposure to critical areas of our
manufacturing and logistics business, helping them to
gain insights and develop a breadth of knowledge, skills
and experience. By immersing themselves in diverse roles
and functions, participants gain a broad understanding of
the business, resulting in a well-rounded skill set, which will
support business performance.
Key to the success of this initiative is the recruitment of
high-calibre candidates who demonstrate the attitude
and drive to excel. Through a thorough assessment and
selection process, we identify individuals who embody our
core values and exhibit a passion for continuous learning
and growth, curiosity, leadership and initiative – all critical
to be successful at Howdens.
The business partnered with Corndel, a third-party
educational partner, to develop the Chartered Manager
Degree Apprenticeship programme. In its first year,
the programme received over 120 applications.
Applicants were shortlisted and 18 were invited to attend
an assessment centre in Howden, East Yorkshire. Members
of the Operations leadership team were part of the assessor
pool and Julian Lee (Operations Director) opened the
assessment centre, demonstrating our commitment to
this new programme. The calibre of the applicants at the
assessment centre was very strong and five offers were
made to applicants.
The first placement of the programme lasts nine months
and has included placements in Safety, Health &
Environment (SHE), quality, engineering, procurement,
HR, finance, manufacturing, and warehousing. For the
first time this year, we also included a placement in ESG.
Subsequent placements last for six months and every
apprentice spends one placement on shift in either our
manufacturing or warehousing operations. Apprentices
gain invaluable experience working with and managing
colleagues in operational roles.
In addition, each apprentice has one day a week to do their
university studies remotely, supported by Corndel. At the
end of the two-and-a-half-year programme, they receive
a Level 6 Chartered Management Degree.
The Howdens CMDA programme, which is now in its second
year, has 10 apprentices across Operations. As well as the
Sustainability Committee, apprentices have presented to
the Executive Committee, Operations leadership team, and
shareholders at our investor days.
Financial Statements
Additional Information
Governance
Strategic Report
153
Howden Joinery Group Plc
Annual Report & Accounts 2024
Governance Page Title
GovernanceGovernance
The Directors have pleasure in submitting their report and the audited financial
statements for the 52-week period ended 28 December 2024. Comparative figures
relate to the 53 weeks ended 30 December 2023.
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. Any sections that have been moved have been cross-referenced below.
Located in the Sustainability matters 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 Strategic Report:
Matters of strategic importance, principal Group
activities, business review, and results: pages 2 to 35.
Dividend and other returns to shareholders: pages 17, 18,
33, and 34.
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 75 under 'Board meeting attendance'.
2018 version of the 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 94 to 99. 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 pages 147 to 149. Risk
management arrangements information can be found on
pages 36 to 41.
Board and Group Diversity policies: page 104.
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 86 to 93.
Employees: The total number of employees and gender
diversity statistics are located on page 104. The methods
of engaging with the workforce can be found on pages
88 and 89. All eligible UK employees have been invited to
participate in a free shares award under the Company’s
Share Incentive Plan (the "SIP") each year since 2015 and,
since 2024, Isle of Man employees have been invited to
participate in Free Shares awards. Since 2021, eligible UK
employees have also been invited to participate in a SIP
Partnership and Matching Shares plan.
Directors’ statement of disclosure of information to the
auditor: page 156.
Directors’ report
154
Howden Joinery Group Plc
Annual Report & Accounts 2024
Governance Page TitleDirectors’ report
Located in the Additional Information section:
Annual General Meeting (AGM): Information about the
AGM can be found on page 225. The recommendation to
reappoint KPMG LLP as the Group’s auditor can be found on
page 146.
Share capital, substantial shareholdings and whether
the Company’s acquired its own shares (including
nominal value of shares purchased): pages 225 and 226.
Directors' Indemnity and Insurance: page 226.
Significant agreements, which take effect, alter or
terminate upon a change of control: page 226.
Disclosure required under Listing Rule 6.6.1R:
• Dividend waivers: page 225.
• Published profit forecasts made during the reporting
period to 28 December 2024: page 226.
Located in the financial statements:
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 UKLR 6.6.1R:
• Details of long-term incentive schemes: note 23.
• Details of any tax relief, including amount and
treatment: note 7.
The remaining disclosures required by UKLR 6.6.1R (with
the exception of those described below under subheading
'Located in the additional information section') are not
applicable to the Company.
Dividend: note 17.
Political donations
The Group made no political donations during the current and
previous financial years. Nor has it made any contributions
to any non-UK political party during the current or previous
financial years.
Research and development (R&D)
The Group undertakes development activities in relation to
its product design and innovation work. The five pillars that
new product design and sourcing decisions are based on are:
sustainability, quality, design, cost, and availability (further
information on new product introductions can be found on
pages 21, 26 and 52). The Group also undertakes development
work in relation to its digital capabilities to make life easier
for our trade customers and our depots (further information
about our digital developments can be found on pages 23 and
27).
By order of the Board
Forbes McNaughton
Company Secretary
26 February 2025
Financial Statements
Additional Information
Governance
Strategic Report
155
Howden Joinery Group Plc
Annual Report & Accounts 2024
Governance Page TitleDirectors’ statements
Governance
Directors’ statements
Disclosure of information to the auditor
Having made the requisite enquiries, the Directors in office at
the date of this report have each confirmed that, so far as they
are aware, there is no relevant audit information (as defined by
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
confirmation is given and should be interpreted in accordance
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 financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and
parent Company financial statements for each financial year.
Under that law they are required to prepare the Group financial
statements in accordance with UK-adopted international
accounting standards and applicable law and have elected
to prepare the parent Company financial statements in
accordance with UK accounting standards and applicable law,
including FRS 101 Reduced DisclosureFramework.
Under company law, the Directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
parent Company and of the Group’s profit or loss for that
period. In preparing each of the Group and parent Company
financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable,
relevant, reliable and, in respect of the parent Company
financial statements only, prudent;
• for the Group financial statements, state whether they
have been prepared in accordance with UK-adopted
international accounting standards;
• for the parent Company financial statements, state
whether applicable UK accounting standards have been
followed, subject to any material departures disclosed and
explained in the parent Company financial statements;
• assess the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern; and
• 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
accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is
necessary to enable the preparation of financial statements
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
andotherirregularities.
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 maintenance
and integrity of the corporate and financial information
included on the Company’s website. Legislation in the UK
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency
Rule (“DTR”) 4.1.16R, the financial statements will form
part of the annual financial report prepared under DTR
4.1.17R and 4.1.18R. The auditor’s report on these financial
statements provides no assurance over whether the annual
financial report has been prepared in accordance with those
requirements.
Directors’ responsibility statement
We confirm to the best of our knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit
or loss of the Group and Company, and the undertakings
including the consolidation taken as a whole;
• 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
face; and
• 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:
Chief Executive Officer Chief Financial Officer
26 February 2025
156
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Annual Report & Accounts 2024
Governance Non-financial and sustainability information
Non-financial measures are an important part of our business and we have recognised the importance of non-financial
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-financial reporting and sustainability information, the table below shows where in this Annual Report and Accounts
to find 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 sustainability strategy and SBT Net Zero
commitment and targets (pages 45 to 47).
• Climate-related financial disclosure as defined in section 414CA(2a) Companies Act
2006 (Governance – (a) on pages 57 and 58; Strategy – (f) on pages 58 and 59;
Risk management – (b), (c), (d) and (e) on page 59 and pages 61 to 63; Metrics and
Targets – (g) and (h) on page 60).
• Discussion of the Company’s progress on implementing the recommendations of the
Task Force on Climate-Related Financial Disclosures (pages 57 to 63).
• Discussion of the UN Sustainable Development Goals (UN SDGs) (page 45).
• Discussion of our progress on 'zero waste to landfill' (page 56), Route to Net Zero
(pages 46 to 47), decarbonisation of the distribution fleet (page 51), our sustainable
product offer and product innovation (pages 52 to 53) and our use of renewable
energy sources (page 50).
• KPIs on production waste reduction (page 56) and our target of 100% of wood-based
material used in manufacturing processes being made from FSC® or PEFC certified
sources (page 50).
Social matters Sustainability and
Corporate Social
Responsibility Statement of
Intent (see Group website).
• Our impact on our stakeholders (pages 64 and 65) and engagement
with stakeholders (starting on page 86).
• Our progress on equality, diversity and inclusion and wellbeing matters
(pages 54 and 55).
• Our Boardroom and Group Diversity Policies (page 104).
Respect for
human rights
Human Rights Policy and
Modern Slavery Statement
(see Group website).
• Discussion of our EDI and wellbeing initiatives (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 corruption,
conflicts of 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 human rights, modern slavery,
human rights, and anti-bribery for our compliance team and buyers.
• Further information about our whistleblowing facility may be found on page 89.
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).
• Discussion of employee rewards and benefits, development opportunities and
apprentice schemes (pages 54, 55, 64, 115, and 131).
• Diversity policies and statistics (pages 103 and 104).
• Workforce engagement (pages 88 and 89).
• Directors’ Remuneration Policy (see Group website for the full current policy and
pages 117 to 126 for the full proposed new policy).
We outline our resilient business model on pages 14 and 15. All of our non-financial KPIs are presented together on page 29.
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.
Non-financial and sustainability information
Financial Statements
Additional Information
Governance
Strategic Report
157
Howden Joinery Group Plc
Annual Report & Accounts 2024
Governance Page Title
Dividends paid
£115.9m paid in 2024
Revenue
£2.3bn (2023: £2.3bn)
EPS
45.6p (2023: 46.5p)
Net cash
£344m (2023: £283m)
Profit before tax
£328m (2023: £328m)
Operating profit
£339m (2023: £340m)
Our financial
performance
2023 +2023£340m 46.5p
£328m £283m2023
2024
2024
2024
2024
2024
2024
2023 2023£2.3bn
£2.3bn
£339m
£328m
45.6p
£344m
£115.9m
2020 2020
2022 2022 2022
2021 2021
£415m 65.8p £115.0m
2021 (inc. £54.1m special dividend) £133.6m
£196m 24.9p
£402m 53.2p
2020 £0.0m
£406m £308m
2020 20202020
2022 2022 2022
2021
2021
2021
£1.5bn
£2.3bn
£2.1bn
£185m
£390m
£431m
£515m
£114.1m2023
Financial Statements
158
Howden Joinery Group Plc
Annual Report & Accounts 2024
160 Independent auditor’s report
175 Consolidated income statement
175 Consolidated statement of comprehensive income
176 Consolidated balance sheet
177 Consolidated statement of changes in equity
178 Consolidated cash flow statement
179 Notes to the consolidated financial statements
216 Company balance sheet
217 Company statement of changes in equity
218 Notes to the Company financial statements
159
Howden Joinery Group Plc
Annual Report & Accounts 2024
1. Our opinion is unmodified
In our opinion:
• the financial statements of Howden Joinery Group Plc give a true and fair view of the state of the Group’s and of the Parent
Company’s affairs as at 28 December 2024, and of the Group’s profit for the 52 week period then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
• the Parent Company financial statements have been properly prepared in accordance with UK accounting standards,
including FRS 101 Reduced Disclosure Framework; and
• the Group and Parent Company financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
What our opinion covers
We have audited the Group and Parent Company financial statements of Howden Joinery Group Plc (“the Company”)
for the 52 week period ended 28 December 2024 (FY24) included in the Annual Report and Accounts, which comprise:
Group (Howden Joinery Group Plc and its subsidiaries) Parent Company (Howden Joinery Group Plc)
• Consolidated income statement
• Consolidated statement of comprehensive income
• Consolidated balance sheet
• Consolidated statement of changes in equity
• Consolidated cash flow statement
• Notes 1 to 25 to the Group financial statements, which include
the accounting policies.
• Company balance sheet
• Company statement of changes in equity
• Notes 1 to 7 to the Parent Company financial statements,
which include the accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Ourresponsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and
appropriatebasis for our opinion. Our audit opinion and matters included in this report are consistent with those discussed
andincluded in our reporting to the Audit Committee (“AC”).
We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with, UK ethical
requirements including the FRC Ethical Standard as applied to listed public interest entities.
Independent auditor’s report
To the members of Howden Joinery Group Plc
Financial Statements
160
Howden Joinery Group Plc
Annual Report & Accounts 2024
Independent auditor’s report
Audit committee interaction
During the year, the AC met 5 times. KPMG are invited to attend all AC meetings and are provided with an opportunity to meet
with the AC in private sessions without the Executive Directors being present. For each Key Audit Matter, we have set out
communications with the AC in section 4, including matters that required particular judgement for each.
The matters included in the Audit Committee report on page 144 are materially consistent with our observations of those meetings.
Our independence
We have fulfilled our ethical responsibilities under, and we
remain independent of the Group in accordance with,
UK ethical requirements including the FRC Ethical Standard
as applied to listed public interest entities.
We have not performed any non-audit services during
FY24 or subsequently which are prohibited by the FRC
Ethical Standard.
We were first appointed as auditor by the shareholders for
the 52 week period ended 24 December 2022. The period
of total uninterrupted engagement is for the three financial
years ended 28 December 2024.
The Group engagement partner is required to rotate every
5 years. As these are the first set of the Group’s financial
statements signed by Zulfikar Walji, he will be required to
rotate off after the FY28 audit.
Total audit fee £1.4m
Audit-related fees (including interim review) £0.1m
Other services £0.1m
Non-audit fee as a % of total audit and audit
related fee % 6.7%
Date first appointed 12 May 2022
Uninterrupted audit tenure 3 years
Next financial period which requires a tender 2032
Tenure of Group engagement partner 1 year
Factors driving our view of risks
We have undertaken a risk assessment to identify those
matters that, in our professional judgment, were of most
significance in the audit of the financial statements of the
current period. We have considered the sector in which the
Company operates and the external factors that drives the
key underlying risks.
Our risk assessment also considers the Group’s operations,
the macro-economic and other relevant external factors
which impact the judgements and estimates made by the
Group. Having considered these external factors, we have
identified the same key audit matters and level of risk in
relation to these, as in the prior year.
We have determined that accounting for inventory is of
significance to our audit given the scale of the Group’s
product range which means there is significant judgement
in determining the adequacy and completeness of the
inventory obsolescence provision. Inventory provisioning
includes estimation based on both historic usage and
forward-looking demand assumptions, and as a result, the
continued uncertainty in the macro-economic environment
during FY24 is not considered to have a significant impact
on the already high estimation uncertainty associated with
this key audit matter. Inventory quantity and cost is also
included within this audit matter due to the effect it has on
our audit effort.
We have identified the defined benefit plan obligation as
a key audit matter given the significant level of estimation
required to determine the valuation of the gross defined
benefit liability. The sensitivity of this estimation is
heightened when there is volatility in macro-economic
conditions, as experienced in the UK in FY23 and FY24.
The risk has therefore not moved significantly from the
prior year.
The recoverability of the Parent Company’s investments in
subsidiaries is not at a high risk of significant misstatement,
however is identified due to its materiality in the context of
the Parent Company financial statements.
Key Audit Matters Vs FY23 Item
Accounting for inventory (Group)
4.1
Defined benefit pension obligation
(Group)
4.2
Recoverability of Parent Company’s
investments in subsidiaries (Parent
Company)
4.3
2. Overview of our audit
Financial Statements
Additional Information
Governance
Strategic Report
161
Howden Joinery Group Plc
Annual Report & Accounts 2024
Independent auditor’s report continued
Group scope (item 7 below)
We have performed risk assessment procedures to
determine which of the Group’s components are likely to
include risks of material misstatement to the Group financial
statements, what audit procedures to perform at these
components and the extent of involvement required from
our component auditors around the world.
We performed procedures at 4 components. We determined
which components are likely to include risks of material
misstatements to the Group financial statements. We
identified 4 quantitatively significant components as those
contributing at least 10% of total revenue or total assets.
Weselected these because these are the most representative
of the relative size of the components.
In addition, for the remaining components for which we
performed no audit procedures, we performed analysis at
an aggregated Group level to re-examine our assessment
that there is not a reasonable possibility of a material
misstatement in these components.
Our audit of the Group was undertaken to the materiality
levels specified above and was performed by a single
auditteam.
We consider the scope of our audit, as communicated to
theAudit Committee, to be an appropriate basis for our
auditopinion.
Our audit procedures covered 97%
of Group revenue:
We performed audit procedures in relation to components
that accounted for the following percentages:
Materiality (item 6 below)
The scope of our work is influenced by our view of
materiality and our assessed risk of material misstatement.
We have determined overall materiality for the Group
financial statements as a whole at £16.0m (FY23: £17.5m)
and for the Parent Company financial statements as a
whole at £9.8m (FY23: £9.8m).
Consistent with FY23, we determined that profit before
tax remains the benchmark for the Group. As such,
we based our Group materiality on profit before tax,
of which it represents 4.9% (FY23 5.3%).
Materiality for the Parent Company financial statements
was determined with reference to a benchmark of Parent
Company total assets of which it represents 1% (FY23: 1%).
Group Group Materiality
GPM Group Performance
Materiality
HCM Highest Component
Materiality
PLC Parent Company Materiality
LCM Lowest Component Materiality
AMPT Audit Misstatement Posting
Threshold
Materiality levels used in our audit
To the members of Howden Joinery Group Plc
Quantitatively significant components
Group
GPM
HCM
PLC
LCM
AMPT
FY24 £m
FY23 £m
97% 95% 93%
Group revenue
Total profits and
losses that make
up Group PBT
Group total
assets
9.8
9.8
2.5
4
0.9
0.8
17.5
16
13.1
12
16.6
15.2
Financial Statements
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3. Going concern, viability and principal risks and uncertainties
The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Group
or the Parent Company or to cease their operations, and as they have concluded that the Group’s and the Parent Company’s
financial position means that this is realistic. They have also concluded that there are no material uncertainties that could
have cast significant doubt over their ability to continue as a going concern for at least a year from the date of approval of the
financial statements (“the going concern period”).
Going concern
We used our knowledge of the Group, its industry, and the
general economic environment to identify the inherent risks
to its business model and analysed how those risks might
affect the Group’s and Company’s financial resources or
ability to continue operations over the going concern period.
The risk that we considered most likely to adversely affect
the Group’s and Company’s available financial resources
over this period was:
• Customer confidence in light of the current cost of
living challenges, and the possibility of this negatively
impacting the Group’s sales.
We considered whether these risks could plausibly affect the
liquidity or covenant compliance in the going concern period
by assessing the degree of downside assumptions that,
individually and collectively, could result in a liquidity issue,
taking into account the Group’s and Company’s current and
projected cash and facilities (a reverse stress test).
We assessed the completeness of the going concern
disclosure in note 1 to the financial statements.
Accordingly, based on those procedures, we found the
Directors’ use of the going concern basis of accounting
without any material uncertainty for the Group and Parent
Company to be acceptable.
However, as we cannot predict all future events or conditions
and as subsequent events may result in outcomes that
are inconsistent with judgements that were reasonable at
the time they were made, the above conclusions are not
a guarantee that the Group or the Parent Company will
continue in operation.
Our conclusions
• We consider that the Directors’ use of the going concern
basis of accounting in the preparation of the financial
statements is appropriate;
• We have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
collectively, may cast significant doubt on the Group’s or
Parent Company’s ability to continue as a going concern
for the going concern period;
• We have nothing material to add or draw attention to
in relation to the Directors’ statement in note 1 to the
financial statements on the use of the going concern
basis of accounting with no material uncertainties that
may cast significant doubt over the Group and Parent
Company’s use of that basis for the going concern period,
and we found the going concern disclosure in note 1 to be
acceptable; and
• The related statement under the Listing Rules set out
on page 69 is materially consistent with the financial
statements and our audit knowledge.
The impact of climate change on our audit
We have considered the potential impacts of climate change
on the financial statements as part of planning our audit.
On page 41, the Group has explained that climate change is
an emerging risk. It identifies this both in terms of transitional
risks as the world moves towards a zero-carbon economy,
and the physical risks presented as climate change. The
Group has set its own targets to reduce emissions, as
described on page 47.
Climate change impacts the Group in a variety of ways,
and pages 61 to 66 describe the associated risks and
opportunities identified by the Directors. These include
the impact of climate risk on the reputation of the
Group. However, the Group has not identified any risks
which have a material impact on the preparation of the
financialstatements.
We performed a risk assessment, taking into account climate
change risks and commitments made by the Group, of how
climate change may impact the financial statements and our
audit. This included enquiries of management, consideration
of the Group’s processes for assessing the potential impact of
climate change risk on the financial statements and assessing
the TCFD scenario analysis performed by the Group.
We held discussions with our own climate change
professionals to challenge our risk assessment.
Based on our risk assessment we determined that the climate
related risks to the Group’s business, strategy and financial
planning do not have a significant impact on balances in the
financial statements or on our key audit matters.
We have read the Group’s disclosure of climate related
information in the front half of the annual report as set out
on pages 57 to 68, and considered consistency with the
financial statements and our audit knowledge.
Financial Statements
Additional Information
Governance
Strategic Report
163
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Annual Report & Accounts 2024
Disclosures of emerging and principal risks and longer-term viability
Our responsibility
We are required to perform procedures to identify whether there is a material inconsistency
between the Directors’ disclosures in respect of emerging and principal risks and the viability
statement, and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
• the Directors’ confirmation within the Long-term prospects and viability statement that
they have carried out a robust assessment of the emerging and principal risks facing
the Group, including those that would threaten its business model, future performance,
solvency and liquidity;
• the 2024 principal risks and uncertainties disclosures describing these risks and how
emerging risks are identified and explaining how they are being managed and mitigated;
and
• the Directors’ explanation in the Long-term prospects and viability statement of how
they have assessed the prospects of the Group, over what period they have done so and
why they considered that period to be appropriate, and their statement as to whether
they have a reasonable expectation that the Group will be able to continue in operation
and meet its liabilities as they fall due over the period of their assessment, including any
related disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to review the Long-term prospects and viability statement set out
onpage 70 under the Listing Rules.
Our work is limited to assessing these matters in the context of only the knowledge
acquired during our financial statements audit. As we cannot predict all future events or
conditions and as subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the absence of anything
to report on these statements is not a guarantee as to the Group’s and Parent Company’s
longer-term viability.
Our reporting
We have nothing material
to add or draw attention
to in relation to these
disclosures.
We have concluded that
these disclosures are
materially consistent with
the financial statements
and our audit knowledge.
4. Key audit matters
What we mean
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified
by us, including those which had the greatest effect on:
• the overall audit strategy;
• the allocation of resources in the audit; and
• directing the efforts of the engagement team.
We include below the Key Audit Matters in decreasing order of audit significance together with our key audit procedures to
address those matters and our results from those procedures. These matters were addressed, and our results are based on
procedures undertaken, for the purpose of our audit of the financial statements as a whole. We do not provide a separate opinion
on these matters.
4.1 Accounting for inventory (Group)
Financial Statement Elements
Our assessment
of risk vs FY23 Our results
FY24 FY23
Our assessment is that the
risk is similar to FY23.
FY24: Acceptable
FY23: Acceptable
Inventories gross value £435.6m £432.4m
Inventory provision £44.9m £49.6m
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
Financial Statements
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Annual Report & Accounts 2024
Description of the Key Audit Matter Our response to the risk
The Group holds a significant amount of inventory across
its large depot network and a number of warehouses. The
accounting for inventory is the key audit matter which has
the greatest effect on our overall audit strategy. As at 28
December 2024, net inventory, after recognising relevant
provisions is £390.7 million (FY23: £382.8 million).
Subjective estimate
The scale of the Group’s product range means there is
significant judgement in determining the adequacy and
completeness of the inventory obsolescence provision,
in particular the provision applied to discontinued and
slow-moving product lines. Given the judgement required
in determining this provisioning, we have identified this as
an area at higher risk of fraud or error.
The continued uncertainty in the macro-economic
environment during FY24 is not considered to have
a significant impact on the already high estimation
uncertainty associated with this key audit matter.
The effect of these matters is that, as part of our
risk assessment, we determined that the inventory
obsolescence provision has a high degree of estimation
uncertainty, with a potential range of reasonable
outcomes greater than our materiality for the financial
statements as a whole.
Accounting for inventory (quantities and cost)
The Group’s inventory is composed of a wide product
range, typically held in large quantities. The Group
conducts periodic inventory counts at its warehouses and
at each of its depots, which are performed throughout the
year. It updates its inventory records to reflect the results
of the counts.
Cost of inventory is based on a standard cost which
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
considered to represent a significant risk of material
misstatement, it is one of the matters that has the greatest
effect on our overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the
engagement team in order to conclude.
Our procedures to address the risk included:
• Count attendance: for the Group’s depots and warehouses we tested the
operating 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: we assessed the accuracy of the cost of inventory through
testing a sample of inventory lines to relevant source data.
• Our sector experience: we assessed the Directors’ methodology and key
assumptions supporting the inventory provision, including the provision
percentages applied to discontinued and slow-moving products, the
expected level of inventory that may not be in demand and its respective
sales price, against our knowledge of the business and industry.
• Historical comparisons: we assessed the Directors’ assumptions made
in the inventory obsolescence provision by comparing to the historical
utilisation.
• Test of detail: we evaluated the appropriateness of each of the key
assumptions within the provision which are supported by data elements back
to relevant source data and challenged the level of provision applied by the
Directors to discontinued items.
• Test of detail: we evaluated the completeness of the provision by testing a
sample of current inventory lines for slow moving items or sales prices below
cost to evaluate whether additional provisioning is required.
• Assessing transparency: we assessed the adequacy of the financial
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
seeking to rely on any of the Group’s controls because the nature of the balance
is such that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Communications with the Howden Joinery Group Plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
• Our approach to the audit of inventory including details of our planned substantive procedures and the extent of our control reliance; and
• Our conclusions on the appropriateness of the Group’s inventory provisioning methodology and disclosures.
Areas of particular auditor judgement
We identified the following as the areas of particular auditor judgement:
• Subjective auditor judgement was required in assessing the adequacy of the inventory obsolescence provision, in particular the provision
percentages applied to the discontinued and slow-moving inventory lines.
Our results
We found the carrying value of inventory, including the level of inventory obsolescence provisioning, to be acceptable (FY23: Acceptable).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 144 for details on how the Audit
Committee considered inventory obsolescence provisioning as an area of significant attention, page 193 for the accounting
policy on inventory obsolescence provisioning, and note 12 for the financial disclosures.
Financial Statements
Additional Information
Governance
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4.2 Defined benefit pension obligation (Group)
Financial Statement Elements
Our assessment
of risk vs FY23 Our results
FY24 FY23
Our assessment is that the
riskis similar to FY23.
FY24: Acceptable
FY23: Acceptable
Gross defined benefit liability £808.0m £913.6m
Description of the Key Audit Matter Our response to the risk
Subjective estimate
A significant level of estimation is required in order to determine
the valuation of the gross defined benefit liability. Small changes
in the key assumptions (in particular, discount rates, inflation
and mortality rates) can have a material impact on the amount
recognised in the financial statements.
The sensitivity of this estimation is heightened when there is
volatility in macro-economic conditions, as experienced in the UK in
FY23 and FY24. The risk has therefore not moved significantly from
the prior year.
The effect of these matters is that, as part of our risk assessment,
we determined that valuation of the gross defined benefit obligation
has a high degree of estimation uncertainty, with a potential range of
reasonable outcomes greater than our materiality for the financial
statements as a whole, and possibly many times that amount. The
financial statements (note 22) disclose the sensitivities estimated by
the Group.
Our procedures to address the risk included:
• Benchmarking assumptions: we challenged, with the support
of our own actuarial specialists, the key assumptions applied in
the estimation of the pension liability, being the discount rate,
inflation rate and mortality/life expectancy, by comparing to
externally derived data.
• Actuary’s credentials: we assessed the competence,
capabilities and objectivity of the Group’s actuarial expert.
• Assessing transparency: we considered the adequacy of the
Group’s disclosures in respect of the sensitivity of the pension
liability to these assumptions.
We performed the tests above rather than seeking to rely on any
of the Group’s controls because the nature of the balance is such
that we would expect to obtain audit evidence primarily through
thedetailed procedures described.
Communications with the Howden Joinery Group Plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
• We discussed our audit response to the Key Audit Matter which included the use of specialists to challenge the key aspects of the
actuarial valuation;
• Our conclusions on the appropriateness of the key actuarial assumptions applied to the valuation of the gross defined benefit liability; and
• The adequacy of the disclosures, particularly as it relates to the sensitivities disclosed by the Group.
Areas of particular auditor judgement
We identified the following as the areas of particular auditor judgement:
• Subjective and complex auditor judgement was required in evaluating the key actuarial assumptions used by the Group (including the
discount rate, inflation and mortality assumptions).
Our results
We found the valuation of the gross defined benefit pension liability to be acceptable (FY23: Acceptable).
Further information in the Annual Report and Accounts: See the Audit Committee report on page 144 for details on how the
Committee considered validity of pension assumptions as an area of significant attention, pages 203 and 204 for the accounting
policy on defined benefit pensions, and note 22 for the financial disclosures.
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
Financial Statements
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Annual Report & Accounts 2024
4.3 Recoverability of Parent Company’s investments in subsidiaries (Parent Company)
Financial Statement Elements
Our assessment
of risk vs FY23 Our results
FY24 FY23
Our assessment is that the
riskis similar to FY23.
FY24: Acceptable
FY23: Acceptable
Investments in subsidiaries £699.0m £699.0m
Description of the Key Audit Matter Our response to the risk
Low risk, high value
The carrying amount of the Parent Company’s investments in
subsidiaries balance represents 70% (2023: 71%) of the Parent
Company’s total assets. Their recoverability is not at a high risk
of significant misstatement or subject to significant judgement.
However, due to their materiality in the context of the Parent
Company financial statements, this is considered to be the area
that had the greatest effect on our overall Parent Company audit.
Our procedures to address the risk included:
• Tests of detail: Assessing 100% of the investments in
subsidiaries against the net assets of the relevant subsidiary
included with the Group consolidation to identify whether the
entity net asset value, being an approximation of its minimum
recoverable amount, was in excess of the carrying amount. Our
procedures also included assessing whether those individual
subsidiary entities have historically been profit-making.
• Comparing valuations: For the investments where the carrying
amount exceeded the net asset value, we compared the carrying
amount of the Company’s investments to the market capitalisation
of the Group as Howden Joinery Holdings Limited either directly
or indirectly owns all other subsidiaries of the Group.
We performed the tests above rather than seeking to rely on any of
the Company’s controls because the nature of the balance is such
that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Communications with the Howden Joinery Group Plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
• Our approach to the audit of Parent Company investments in subsidiaries including details of our planned substantive procedures
and the extent of our control reliance; and
• Our conclusions on the recoverability of the Parent Company’s investments in subsidiaries balances.
Areas of particular auditor judgement
Limited auditor judgement was required in relation to the carrying amount of the Parent Company’s investments in subsidiaries
Our results
We found the carrying value of investments in subsidiaries balance to be acceptable (FY23: Acceptable)
Further information in the Annual Report and Accounts: See page 218 for the accounting policy on Parent Company investments
and note 3 for the financial disclosures.
Financial Statements
Additional Information
Governance
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Annual Report & Accounts 2024
5. Our ability to detect irregularities, and our response
Fraud – identifying and responding to risks of material misstatement due to fraud
Fraud risk assessment
Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
• Enquiring of Directors, the Audit Committee, internal audit and inspection of policy documentation as to the Group’s
high-level policies and procedures to prevent and detect fraud, including the internal audit function, and the Group’s
channel for “whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
• 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.
• Using analytical procedures to identify any unusual or unexpected relationships.
Risk communications
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout
the audit.
Fraud risks
As required by auditing standards, and taking into account possible pressures to meet profit targets and market expectations,
we perform procedures to address the risk of management override of controls, in particular the risk that Group management
may be in a position to make inappropriate accounting entries and the risk of bias in accounting estimates such as the
inventory obsolescence provisions and pension assumptions. On this audit we do not believe there is a fraud risk related
to revenue recognition because there are limited opportunities to fraudulently adjust revenue recognition given the high
volume and low value nature of purchases.
We identified a fraud risk related to the inventory obsolescence provision in response to possible pressures to meet profit
targets or market expectations and the opportunities for bias in the subjective estimate.
Link to KAMs
Further detail in respect of the inventory obsolescence provision is set out in the key audit matter disclosures in section 4
of this report.
Procedures to address fraud risks
We performed procedures including:
• Identifying journal entries and other adjustments to test for all full scope components based on risk criteria and comparing
the identified entries to supporting documentation. These included those posted by users outside of their expected business
area and those posted to unusual accounts.
• Assessing whether the judgements made in making accounting estimates are indicative of a potential bias.
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
Financial Statements
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Annual Report & Accounts 2024
Laws and regulations – identifying and responding to risks of material misstatement relating
to compliance with laws and regulations
Laws and regulations risk assessment
Identifying and responding to risks of material misstatement related to compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the
financialstatements from our general commercial and sector experience, and through discussion with the Directors
(asrequired by auditing standards), and discussed with the Directors the policies and procedures regarding compliance
with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including
the entity’s procedures for complying with regulatory requirements.
Risk communications
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-
compliance throughout the audit.
Direct laws context and link to audit
The potential effect of these laws and regulations on the financial statements varies considerably.
The Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation
(including related companies legislation), distributable profits legislation, pension scheme legislation and taxation legislation
and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial
statement items.
Most significant indirect law/regulation areas
The Group is subject to many other laws and regulations where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the
loss of the Group’s license to operate. We identified the following areas as those most likely to have such an effect: health and
product safety and employment laws recognising the nature of the Group’s activities.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry
of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach
of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in accordance
with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing
standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud
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
and cannot be expected to detect non-compliance with all laws and regulations.
Financial Statements
Additional Information
Governance
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6. Our determination of materiality
The scope of our audit was influenced by our application of materiality. We set quantitative thresholds and overlay qualitative
considerations to help us determine the scope of our audit and the nature, timing and extent of our procedures, and in evaluating
the effect of misstatements, both individually and in the aggregate, on the financial statements as a whole.
£16.0m (FY23: £17.5m)
Materiality for the Group financial statements as a whole
What we mean Basis for determining materiality and judgements applied
A quantitative reference for the purpose
of planning and performing our audit.
Materiality for the Group financial statements as a whole was set
at £16.0m (FY23: £17.5m). This was determined with reference to
a benchmark of Group profit before tax.
Consistent with FY23, we determined that Group profit before tax remains
the benchmark for the Group as this is the primary measure by which
stakeholders and the market assess the performance of the Group.
Our Group materiality of £16.0m was determined by applying a
percentage to the Group profit before tax. When using a benchmark of
Group profit before tax to determine overall materiality, KPMG’s approach
for public interest entities considers a guideline range 3% – 5% of the
measure. In setting overall Group materiality, we applied a percentage
of 4.9% (FY23: 5.3%) to the benchmark.
Materiality for the Parent Company financial statements as a whole was
set at £9.8m (FY23: £9.8m), determined with reference to a benchmark
of Parent Company total assets, of which it represents 1% (FY23: 1%).
£12.0m (FY23: £13.1m)
Performance materiality
What we mean
Basis for determining performance materiality
and judgements applied
Our procedures on individual account balances
and disclosures were performed to a lower
threshold, performance materiality, so as to
reduce to an acceptable level the risk that
individually immaterial misstatements in individual
account balances add up to a material amount
across the financial statements as a whole.
We have considered performance materiality at a level of 75% (FY23: 75%)
of materiality for Howden Joinery Group Plc Group financial statements
as a whole to be appropriate.
The Parent Company performance materiality was set at £7.4m
(FY23: £7.4m), which equates to 75% (FY23: 75%) of materiality for
the Parent Company financial statements as a whole.
We applied this percentage in our determination of performance
materiality because we did not identify any factors indicating an elevated
level of risk in FY24 following our reassessment of aggregation risk.
£0.8m (FY23: £0.9m)
Audit misstatement posting threshold
What we mean
Basis for determining the audit misstatement posting threshold
and judgements applied
This is the amount below which identified
misstatements are considered to be clearly trivial
from a quantitative point of view. We may become
aware of misstatements below this threshold which
could alter the nature, timing and scope of our
audit procedures, for example if we identify smaller
misstatements which are indicators of fraud.
This is also the amount above which all
misstatements identified are communicated to
Howden Joinery Group Plc’s Audit Committee.
We set our audit misstatement posting threshold at 5% (FY23: 5%) of our
materiality for the Group financial statements. We also report to the Audit
Committee any other identified misstatements that warrant reporting on
qualitative grounds.
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
Financial Statements
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Annual Report & Accounts 2024
The overall materiality for the Group financial statements of £16.0m (FY23: £17.5m) compares as follows to the main financial
statement caption amounts:
Total Group Revenue Group profit before tax Total Group Assets
FY24 FY23 FY24 FY23 FY24 FY23
Financial statement Caption £2,322.1m £2,310.9m £328.1m £327.6m £2,237.5m £2,064.5m
Group Materiality as % of caption 0.7% 0.8% 4.9% 5.3% 0.7% 0.8%
7. The scope of our audit
Group scope
What we mean
How the Group auditor determined the procedures to be performed across the Group.
This year, we applied the revised group auditing standard in our audit of the consolidated financial statements. The revised
standard changes how an auditor approaches the identification of components, and how the audit procedures are planned
and executed across components.
In particular, the definition of a component has changed, shifting the focus from how the entity prepares financial information
to how we, as the group auditor, plan to perform audit procedures to address group risks of material misstatement (“RMMs”).
Similarly, the group auditor has an increased role in designing the audit procedures as well as making decisions on where
these procedures are performed (centrally and/or at component level) and how these procedures are executed and
supervised. As a result, we assess scoping and coverage in a different way and comparisons to prior period coverage figures
are not meaningful. In this report we provide an indication of scope coverage on the new basis.
We performed risk assessment procedures to determine which of the Group’s components are likely to include risks of material
misstatement to the Group financial statements and which procedures to perform at these components to address those risks.
In total, we identified 15 components, having considered our evaluation of the Group’s operational structure, the existenceof
common risk profile across divisions and the presence of key audit matters and our ability to perform audit procedurescentrally.
Of those, we identified quantitatively significant components which contained the largest percentages of either total revenue
or total assets of the Group, for which we performed audit procedures.
The below summarises where we performed audit procedures:
Component type
Number of components where we
performed audit procedures Range of materiality applied
Quantitatively significant components 4 £4.0m – £15.2m
Total 4
We set the component materialities having regard to the mix of size and risk profile of the Group across the components.
We also performed the audit of the Parent Company.
Our audit procedures covered 97% of Group revenue.
We performed audit procedures in relation to components that accounted for 95% of total profits and losses that make
up Group profit before tax and 93% of Group total assets.
Financial Statements
Additional Information
Governance
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7. The scope of our audit continued
Controls approach for group audit
We were able to rely upon the Group’s internal control over financial reporting in several areas of our audit, where our controls
testing supported this approach, which enabled us to reduce the scope of our substantive audit work; in the other areas the
scope of the audit work performed was fully substantive.
The Group relies on a number of IT systems and applications. We identified that the following key IT systems were relevant
to our Group audit:
• The ERP system used across all in scope components that is used to record underlying transactions.
• The trade EPOS and stock control system used in all the Group’s depots.
• The warehouse management system used to provide operational and stock control processes.
As noted by the Audit Committee on page 148, the Group’s control environment is undergoing a programme of review and
strengthening of the key controls, including IT. We involved IT specialists and obtained an understanding of the controls
related to the three key IT systems identified above, which are integrated with one another.
On this audit we take a predominantly substantive approach, with the exception of inventory, as our belief is that it is more
efficient not to rely on controls. We have identified some control findings in relation to the IT environment and manual journal
entries, and following incremental risk assessment, we determined that no significant changes were required to our planned
approach to journal testing. We adopted a data-oriented approach to auditing revenue by performing data and analytics
routines and, given we did not rely on the Group’s IT environment, we directly tested the completeness and reliability of the
data used in those routines.
For inventory, we tested the operating effectiveness of, and were able to rely on, the Group’s manual inventory cycle count
controls and therefore were able to reduce the extent of our substantive procedures in this area.
8. Other information in the Annual Report
The Directors are responsible for the other information presented in the Annual Report together with the financial statements.
Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit
opinion or, except as explicitly stated below, any form of assurance conclusion thereon.
All other information
Our responsibility Our reporting
Our responsibility is to read the other information and, in doing so, consider whether,
based on our financial statements audit work, the information therein is materially
misstated or inconsistent with the financial statements or our audit knowledge.
Based solely on that work we
have not identified material
misstatements or inconsistencies
in the other information.
Strategic Report and Directors’ Report
Our responsibility and reporting
Based solely on our work on the other information described above we report to you as follows:
• we have not identified material misstatements in the strategic report and the Directors’ report;
• in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
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Directors’ Remuneration Report
Our responsibility Our reporting
We are required to form an opinion as to whether the part of the Directors’
Remuneration Report to be audited has been properly prepared in accordance
withthe Companies Act 2006.
In our opinion the part of the
Directors’ Remuneration Report
to be audited has been properly
prepared in accordance with the
Companies Act 2006.
Corporate governance disclosures
Our responsibility Our reporting
We are required to perform procedures to identify whether there is a material
inconsistency between the financial statements and our audit knowledge, and:
• the Directors’ statement that they consider that the annual report and financial
statements 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;
• the section of the annual report describing the work of the Audit Committee,
including the significant issues that the Audit Committee considered in relation
tothe financial statements, and how these issues were addressed; and
• the section of the annual report that describes the review of the effectiveness
of theGroup’s risk management and internal control systems.
Based on those procedures, we
have concluded that each of these
disclosures is materially consistent
with the financial statements and
our audit knowledge.
We are also required to review the part of the Corporate Governance Statement relating
to the Group’s compliance with the provisions of the UK Corporate Governance Code
specified by the Listing Rules for our review.
We have nothing to report
inthisrespect.
Other matters on which we are required to report by exception
Our responsibility Our reporting
Under the Companies Act 2006, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the accounting
records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these
respects.
Financial Statements
Additional Information
Governance
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9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 156, the Directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error;
assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern; and using 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.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance
is a high level of assurance, but does not guarantee that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report prepared under Disclosure Guidance
and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides no assurance over whether the annual financial report
has been prepared in accordance with those requirements.
10. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report,
or for the opinions we have formed.
for and on behalf of KPMG LLP , Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
26 February 2025
Independent auditor’s report continued
To the members of Howden Joinery Group Plc
Financial Statements
174
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Annual Report & Accounts 2024
Consolidated income statement
Consolidated statement of comprehensive income
| 52 weeks to | 53 weeks to | ||
| 28 December 2024 | 30 December 2023 | ||
| Notes | £m | £m | |
Revenue | 2 | ||
Cost of sales | ( | ( | |
Gross profit | |||
Operating expenses | ( | ( | |
Operating profit | 4 | ||
Finance income | 5 | ||
Finance costs | 6 | ( | ( |
Profit before tax | |||
Tax on profit | 7 | ( | ( |
Profit for the period attributable to the equity holders of the parent | |||
| Earnings per share: | |||
Basic earnings per 10p share | 8 | ||
Diluted earnings per 10p share | 8 |
| 52 weeks to | 53 weeks to | ||
| 28 December 2024 | 30 December 2023 | ||
| Notes | £m | £m | |
Profit for the period | |||
| Items of other comprehensive income: | |||
| Items that will not be reclassified subsequently to profit or loss: | |||
Actuarial gains/(losses) on defined benefit pension scheme | 22 | ||
Deferred tax on actuarial gains and losses on defined benefit pension scheme | 7 | ( | ( |
Change of tax rate on deferred tax | 7 | ( | |
| Items that may be reclassified subsequently to profit or loss: | |||
Currency translation differences | ( | ( | |
Other comprehensive income for the period | |||
Total comprehensive income for the period attributable to equity holders of the parent |
Financial Statements
Additional Information
Governance
Strategic Report
175
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Annual Report & Accounts 2024
Consolidated balance sheet
| 28 December 2024 | 30 December 2023 | ||
| Notes | £m | £m | |
| Non-current assets | |||
Intangible assets | 9 | ||
Property, plant and equipment | 10 | ||
Lease right-of-use assets | 11 | ||
Deferred tax asset | 7 | ||
Long-term prepayments | |||
| Current assets | |||
Inventories | 12 | ||
Corporation tax | 7 | ||
Trade and other receivables | 13 | ||
Cash and cash equivalents | 20 | ||
Total assets | |||
| Current liabilities | |||
Lease liabilities | 11 | ( | ( |
Trade and other payables | 14 | ( | ( |
Provisions | 15 | ( | ( |
( | ( | ||
| Non-current liabilities | |||
Pension liability | 22 | ( | ( |
Lease liabilities | 11 | ( | ( |
Deferred tax liability | 7 | ( | ( |
Provisions | 15 | ( | ( |
( | ( | ||
Total liabilities | ( | ( | |
Net assets | |||
| Equity | |||
Share capital | 16 | ||
Capital redemption reserve | 16 | ||
Share premium | 16 | ||
ESOP and share-based payments | 16 | ||
Treasury shares | 16 | ( | ( |
Retained earnings | 16 | ||
Total equity |
Financial Statements
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| 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 24 December 2022 | ( | ||||||
Accumulated profit for the period | |||||||
Other comprehensive income for the period | |||||||
Total comprehensive income for the period | |||||||
Current tax on share schemes | |||||||
Movement in ESOP | |||||||
Buyback and cancellation of shares | ( | ( | ( | ||||
Transfer of shares from treasury into share trust | ( | ||||||
Dividends | ( | ( | |||||
At 30 December 2023 | ( | ||||||
Accumulated profit for the period | |||||||
Other comprehensive income for the period | |||||||
Total comprehensive income for the period | |||||||
Current tax on share schemes | |||||||
Deferred tax on share schemes | |||||||
Movement in ESOP | |||||||
Transfer of shares from treasury into share trust | ( | ||||||
Dividends | ( | ( | |||||
At 28 December 2024 | ( |
The item “Movement in ESOP” consists of the share-based payment charge in the year, together with any receipts of cash from
employees on exercise of share options.
At the current period end there were 3,844,331 ordinary shares held in treasury, each with a nominal value of 10p (2023:
4,918,375 shares of 10p each).
We present a description of the nature and purpose of each reserve at note 16.
Consolidated statement of changes in equity
Financial Statements
Additional Information
Governance
Strategic Report
177
Howden Joinery Group Plc
Annual Report & Accounts 2024
| 52 weeks to | 53 weeks to | ||
| 28 December 2024 | 30 December 2023 | ||
| Notes | £m | £m | |
Profit before tax | |||
| Adjustments for: | |||
Finance income | ( | ( | |
Finance costs | |||
Depreciation and amortisation of owned assets | 9, 10 | ||
Depreciation, impairment and loss on termination of leased assets | 11 | ||
Share-based payments charge | |||
(Increase)/decrease in long-term prepayments | ( | ||
Difference between pension operating charge and cash paid | ( | ||
Loss on disposal of property, plant and equipment and intangible assets | |||
Operating cash flows before movements in working capital | |||
| Movements in working capital | |||
Increase in inventories | ( | ( | |
(Increase)/decrease in trade and other receivables | ( | ||
Increase/(decrease) in trade and other payables and provisions | ( | ||
( | ( | ||
Cash generated from operations | |||
Tax paid | ( | ( | |
Net cash flow from operating activities | |||
| Cash flows used in investing activities | |||
Payments to acquire property, plant and equipment and intangible assets | ( | ( | |
Receipts from sale of property, plant and equipment and intangible assets | |||
Interest received | |||
Net cash used in investing activities | ( | ( | |
| Cash flows used in financing activities | |||
Payments to acquire own shares | ( | ||
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 cash used in financing activities | ( | ( | |
Net increase/(decrease) in cash and cash equivalents | ( | ||
Cash and cash equivalents at beginning of period | |||
Effect of movements in exchange rates on cash held | |||
Cash and cash equivalents at end of period |
We present an analysis of cash and non-cash changes in liabilities due to financing activities in note 18.
Consolidated cash flow statement
Financial Statements
178
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Annual Report & Accounts 2024
Notes to the consolidated financial statements
General information
1 General information
Company and currency details
Foreign currency transactions
Foreign operations
Accounting period
Impairment of assets
Statement of compliance and basis of preparation
Going concern
Standards in issue but not yet effective
Earnings
2 Revenue
3 Segmental reporting
4 Operating profit
5 Finance income
6 Finance costs
7 Current and deferred tax
8 Earnings per share
Operating assets and liabilities
9 Intangible assets
10 Property, plant and equipment
11 Lease right-of-use assets and lease liabilities
12 Inventories
13 Other financial assets
14 Other financial liabilities
15 Provisions
Capital structure and risk
16 Share capital and reserves
17 Dividends
18 Notes to the cash flow statement
19 Borrowing facility
20 Financial risk management
Employees
21 Staff costs and number of employees
22 Retirement benefit obligations
23 Share-based payments
Other supporting notes
24 Financial commitments
25 Related party transactions
The order of the notes is set out below. Significant accounting policies and, where applicable, information relating to significant
judgements and sources of estimation uncertainty are presented as part of the related note.
Financial Statements
Additional Information
Governance
Strategic Report
179
Howden Joinery Group Plc
Annual Report & Accounts 2024
Notes to the consolidated financial statements
Notes to the consolidated financial statements continued
General Information
Company and currency details
Its registered office address is 105 Wigmore Street, London W1U 1QY . The nature of the Group’s operations and principal activities
are set out in the Strategic Report.
These financial statements are presented in pounds sterling, the currency of the primary economic environment in which the
Group operates. Foreign operations are included on the basis set out below.
Accounting period
The Group’s accounting period covers the 52 weeks to 28 December 2024. The comparative period covered the 53 weeks
to 30 December 2023.
Financial Statements
180
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Annual Report & Accounts 2024
Going concern
The Directors have undertaken a robust assessment and concluded that it is appropriate to prepare the financial statements on
the going concern basis. They have not identified any material uncertainties and there were no significant judgements involved
in coming to this conclusion. Full details are set out in the strategic review, starting on page 69.
Other significant accounting policies
These are presented as part of the related notes to these financial statements.
Earnings
Financial Statements
Additional Information
Governance
Strategic Report
181
Howden Joinery Group Plc
Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Earnings continued
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| Revenues from external customers | £m | £m |
UK | 2, 247.4 | 2,241.1 |
France, Belgium and Ireland | 74.7 | 69.8 |
2,322.1 | 2,310.9 |
| 28 December 2024 | 30 December 2023 | |
| Carrying amount of assets | £m | £m |
UK | 2,119.6 | 1,935.6 |
France, Belgium and Ireland | 117.9 | 128.9 |
2, 237.5 | 2,064.5 |
| 28 December 2024 | 30 December 2023 | |
| Non-current assets (excluding non-current deferred tax) | £m | £m |
UK | 1,129.4 | 1,068.3 |
France, Belgium and Ireland | 73.0 | 80.8 |
1,202.4 | 1,149.1 |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| Additions to property plant and equipment and intangible assets | £m | £m |
UK | 114.2 | 108.3 |
France, Belgium and Ireland | 3.3 | 9.1 |
117.5 | 117.4 |
Financial Statements
182
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Annual Report & Accounts 2024
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Cost of inventories recognised as an expense | (889.5) | (900.9) |
Write down of inventories | (1.5) | (6.1) |
Loss on disposal of fixed assets | (0.4) | (0.3) |
Auditor’s remuneration for audit services | (1.4) | (1.3) |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
| Audit services: | ||
| Fees paid to the Company’s auditor for the audit of the Company’s annual financial | ||
statements | (0.3) | (0.3) |
| Fees paid to the Company’s auditor and their associates for other services to the Group: | ||
– the audit of the subsidiary companies pursuant to legislation | (1.1) | (1.0) |
Total audit fees | (1.4) | (1.3) |
| Other services: | ||
Audit-related assurance services | (0.1) | (0.1) |
Non-audit-related assurance services | (0.1) | – |
Total non-audit fees | (0.2) | (0.1) |
Financial Statements
Additional Information
Governance
Strategic Report
183
Howden Joinery Group Plc
Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Earnings continued
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Bank interest receivable | 9.9 | 5.5 |
9.9 | 5.5 |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Interest expense on lease liabilities | (20.7) | (16.8) |
Other finance expense – pensions | (0.3) | (1.3) |
Total finance costs | (21.0) | (18.1) |
Financial Statements
184
Howden Joinery Group Plc
Annual Report & Accounts 2024
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
| Current tax: | ||
Current year | 60.5 | 64.7 |
Adjustments in respect of previous periods | (6.8) | (8.2) |
Total current tax | 53.7 | 56.5 |
| Deferred tax: | ||
Current year | 21.2 | 14.9 |
Adjustments in respect of previous periods | 3.9 | 0.9 |
Effect of changes in tax rate | – | 0.7 |
Total deferred tax | 25.1 | 16.5 |
Total tax charged in the income statement | 78.8 | 73.0 |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Deferred tax charge to other comprehensive income on actuarial difference on pension scheme | 3.2 | 2.9 |
Change of rate effect on deferred tax | – | 0.4 |
Deferred tax credit to equity on share schemes | (0.1) | – |
Current tax credit to equity on share schemes | (0.5) | (0.3) |
Total charge to other comprehensive income or changes in equity | 2.6 | 2.9 |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Profit before tax | 328.1 | 327.6 |
Tax at the UK corporation tax rate of 25.0% (2023: 23.5%) | 82.0 | 77.0 |
IFRS2 share scheme charge | 0.1 | 0.5 |
Expenses not deductible for tax purposes | 1.7 | 2.9 |
Overseas losses not utilised | 6.3 | 6.2 |
Non-qualifying depreciation | 1.6 | 1.0 |
Rate change | – | 0.7 |
Patent box claim | (10.0) | (8.0) |
Other tax adjustments in respect of previous years | (2.9) | (7.3) |
Total tax charged in the income statement | 78.8 | 73.0 |
Financial Statements
Additional Information
Governance
Strategic Report
185
Howden Joinery Group Plc
Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Earnings continued
| Retirement | Accelerated | Company | Other | |||
| benefit | capital | share | temporary | |||
| obligations | allowances | schemes | Leasing | differences | Total | |
| £m | £m | £m | £m | £m | £m | |
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 outside the income statement | (2.9) | – | – | – | – | (2.9) |
At 30 December 2023 | 3.2 | 0.4 | 2.2 | 2.9 | 3.6 | 12.3 |
Credit/(charge) to income statement | 0.5 | (25.4) | (1.6) | (0.6) | 2.0 | (25.1) |
(Charge)/credit outside the income statement | (3.2) | – | 0.1 | – | – | (3.1) |
At 28 December 2024 | 0.5 | (25.0) | 0.7 | 2.3 | 5.6 | (15.9) |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Deferred tax assets | 10.5 | 15.6 |
Deferred tax liabilities | (26.4) | (3.3) |
(15.9) | 12.3 |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Trading losses | 123 | 100 |
Non-trading losses | 20 | 20 |
Capital losses | 86 | 86 |
Total losses | 229 | 206 |
Financial Statements
186
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Annual Report & Accounts 2024
8 Earnings per share
52 weeks to 28 December 2024 | 53 weeks to 30 December 2023 | |||||
| Weighted | Weighted | |||||
| average | average | |||||
| number of | Earnings per | number of | Earnings per | |||
| Earnings | shares | share | Earnings | shares | share | |
| From continuing operations | £m | m | p | £m | m | p |
Basic earnings per share | 249.3 | 546.7 | 45.6 | 254.6 | 548.1 | 46.5 |
Effect of dilutive share options | – | 2.1 | (0.2) | – | 2.1 | (0.2) |
Diluted earnings per share | 249.3 | 548.8 | 45.4 | 254.6 | 550.2 | 46.3 |
The difference between the weighted average number of shares used in the calculation of basic earnings per share and the total
number of shares in issue at the period end is due to the net effect of time-apportioned adjustments for shares held in treasury,
shares held in trust which are not unconditionally vested, and shares bought back and cancelled in the period.
Operating assets and liabilities
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Goodwill – cost and carrying value | 12.4 | 12.4 |
Software | 45.7 | 31.1 |
58.1 | 43.5 |
Financial Statements
Additional Information
Governance
Strategic Report
187
Howden Joinery Group Plc
Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Operating assets and liabilities continued
| Intangible assets | Assets under | ||
| in use | construction | TOTAL | |
| £m | £m | £m | |
| Cost | |||
At 24 December 2022 | 45.8 | 7.8 | 53.6 |
Additions | 3.0 | 10.6 | 13.6 |
Disposals | (1.4) | – | (1.4) |
Reclassifications | 4.9 | (4.9) | – |
At 30 December 2023 | 52.3 | 13.5 | 65.8 |
Exchange adjustments | (0.1) | – | (0.1) |
Additions | 9.9 | 10.7 | 20.6 |
Disposals | (1.2) | – | (1.2) |
Reclassifications | 9.0 | (9.0) | – |
At 28 December 2024 | 69.9 | 15.2 | 85.1 |
| Accumulated depreciation | |||
At 24 December 2022 | (30.1) | – | (30.1) |
Exchange adjustments | – | – | – |
Charge for the period | (6.0) | – | (6.0) |
Disposals | 1.4 | – | 1.4 |
At 30 December 2023 | (34.7) | – | (34.7) |
Charge for the period | (5.8) | – | (5.8) |
Disposals | 1.1 | – | 1.1 |
At 28 December 2024 | (39.4) | – | (39.4) |
Net book value at 28 December 2024 | 30.5 | 15.2 | 45.7 |
Net book value at 30 December 2023 | 17.6 | 13.5 | 31.1 |
Financial Statements
188
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Annual Report & Accounts 2024
| Leasehold | Plant, | |||||
| Freehold | property | machinery | Fixtures & | Assets under | ||
| property | improvements | & vehicles | fittings | construction | TOTAL | |
| Cost | £m | £m | £m | £m | £m | £m |
At 24 December 2022 | 73.1 | 108.1 | 206.4 | 264.2 | 59.7 | 711.5 |
Exchange adjustments | – | – | (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) |
Reclassifications | 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 |
Exchange adjustments | – | (0.1) | (0.4) | (1.5) | (0.1) | (2.1) |
Additions | 3.3 | 13.9 | 15.2 | 42.0 | 22.5 | 96.9 |
Disposals | – | (0.1) | (6.0) | (1.7) | – | (7.8) |
Reclassifications | 0.8 | – | 14.1 | 16.3 | (31.2) | – |
At 28 December 2024 | 81.1 | 135.5 | 254.0 | 362.3 | 52.6 | 885.5 |
| Accumulated depreciation | ||||||
At 24 December 2022 | (10.8) | (34.4) | (133.0) | (134.6) | – | (312.8) |
Exchange adjustments | – | – | – | 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) |
Exchange adjustments | – | – | 0.2 | 0.4 | – | 0.6 |
Charge for the period | (2.0) | (6.9) | (16.7) | (25.7) | – | (51.3) |
Disposals | – | 0.1 | 5.9 | 1.4 | – | 7.4 |
Reclassifications | – | – | 0.5 | (0.5) | – | – |
At 28 December 2024 | (14.7) | (45.8) | (144.9) | (179.5) | – | (384.9) |
Net book value at 28 December 2024 | 66.4 | 89.7 | 109.1 | 182.8 | 52.6 | 500.6 |
Net book value at 30 December 2023 | 64.3 | 82.8 | 96.3 | 152.1 | 61.4 | 456.9 |
Financial Statements
Additional Information
Governance
Strategic Report
189
Howden Joinery Group Plc
Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Operating assets and liabilities continued
Financial Statements
190
Howden Joinery Group Plc
Annual Report & Accounts 2024
| 28 December 2024 | 30 December 2023 | |
| Right-of-use assets | £m | £m |
Property | 589.3 | 591.7 |
Vehicles, plant & machinery | 53.0 | 56.2 |
642.3 | 647.9 | |
Additions to right-of-use assets in the period | 96.6 | 122.9 |
| 28 December 2024 | 30 December 2023 | |
| Lease liabilities | £m | £m |
Current | (89.3) | (85.3) |
Non-current | (591.7) | (599.2) |
(681.0) | (684.5) |
Financial Statements
Additional Information
Governance
Strategic Report
191
Howden Joinery Group Plc
Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Operating assets and liabilities continued
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
| Included in net operating expenses | ||
| Depreciation of right-of-use assets: | ||
– property | 76.5 | 72.7 |
– vehicles, plant & machinery | 20.6 | 17.8 |
Impairment and net gain on lease termination | (0.1) | (0.4) |
Total – recognised in net operating costs | 97.0 | 90.1 |
Expense relating to short-term leases | 3.4 | 4.8 |
Variable lease payments, not included in the measurement of lease liabilities | 2.7 | 2.6 |
| Included in finance costs | ||
Interest expense on lease liabilities | 20.7 | 16.8 |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Total cash outflow for leases | 113.4 | 121.8 |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
| Maturity analysis of lease liabilities | ||
| Contractual undiscounted cashflows due | ||
– within 1 year | 108.4 | 102.9 |
– 1 to 5 years | 329.5 | 316.5 |
– more than 5 years | 371.6 | 382.6 |
809.5 | 802.0 |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Sublease income recognised in the period | 0.7 | 0.7 |
Financial Statements
192
Howden Joinery Group Plc
Annual Report & Accounts 2024
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Raw materials | 25.9 | 28.0 |
Work in progress | 9.5 | 9.5 |
Finished goods and goods for resale | 400.2 | 394.9 |
Allowance against carrying value of inventories | (44.9) | (49.6) |
390.7 | 382.8 |
2024 | 2023 | |||
| Gross value | Allowance against | Gross value | Allowance against | |
| of stock | carrying value | of stock | carrying value | |
| £m | £m | £m | £m | |
Stock with no allowance against it | 351.9 | – | 338.3 | – |
Stock with an allowance | 83.7 | (44.9) | 94.1 | (49.6) |
435.6 | (44.9) | 432.4 | (49.6) |
Financial Statements
Additional Information
Governance
Strategic Report
193
Howden Joinery Group Plc
Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Operating assets and liabilities continued
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Trade receivables (net of allowance) | 217.1 | 159.5 |
Prepayments | 39.1 | 29.2 |
Other receivables | 8.4 | 5.8 |
264.6 | 194.5 |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Balance at start of period | 18.0 | 17.6 |
(Decrease)/increase in allowance recognised in the income statement | (1.1) | 0.4 |
Balance at end of period | 16.9 | 18.0 |
Financial Statements
194
Howden Joinery Group Plc
Annual Report & Accounts 2024
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
1–30 days past due | 21.7 | 21.4 |
31–60 days past due | 5.9 | 6.8 |
61–90 days past due | 4.0 | 3.9 |
90+ days past due | 15.4 | 14.0 |
Total overdue amounts, excluding allowance for doubtful receivables | 47.0 | 46.1 |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Trade payables | 178.6 | 174.5 |
Other tax and social security | 77.4 | 70.4 |
Other payables | 33.3 | 29.8 |
Accruals | 97.5 | 98.5 |
386.8 | 373.2 |
Financial Statements
Additional Information
Governance
Strategic Report
195
Howden Joinery Group Plc
Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Operating assets and liabilities continued
| French post- | |||||
| employment | |||||
| Property | Warranty | Other | benefits | Total | |
| £m | £m | £m | £m | £m | |
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) |
Utilisation of provision in the period | (1.1) | (7.0) | – | – | (8.1) |
At 30 December 2023 | 3.8 | 8.2 | 0.2 | 0.3 | 12.5 |
Additional provision in the period | 0.7 | 7.7 | 0.1 | – | 8.5 |
Provision released in the period | (1.1) | – | – | – | (1.1) |
Utilisation of provision in the period | (0.6) | (6.6) | (0.2) | – | (7.4) |
At 28 December 2024 | 2.8 | 9.3 | 0.1 | 0.3 | 12.5 |
Presented as current liabilities | 1.6 | 6.6 | 0.1 | – | 8.3 |
Presented as non-current liabilities | 1.2 | 2.7 | – | 0.3 | 4.2 |
At 28 December 2024 | 2.8 | 9.3 | 0.1 | 0.3 | 12.5 |
Financial Statements
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Capital structure and risk
| 53 weeks to | 53 weeks to | |||
| 28 December 2024 | 30 December 2023 | 28 December 2024 | 30 December 2023 | |
| Ordinary shares of 10p each: | No. | No. | £m | No. |
| Allotted, called up and fully paid | ||||
Balance at the beginning of the period | 553,591,720 | 560,916,049 | 55.4 | 56.1 |
Bought back and cancelled during the period | – | (7,324,329) | – | (0.7) |
Balance at the end of the period | 553,591,720 | 553,591,720 | 55.4 | 55.4 |
Financial Statements
Additional Information
Governance
Strategic Report
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Notes to the consolidated financial statements continued
Capital structure and risk continued
17 Dividends
Amounts recognised as distributions to equity holders in the period:
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Final dividend for the 52 weeks to 24 December 2022 – 15.9p/share | – | 87.8 |
Interim dividend for the 53 weeks to 30 December 2023 – 4.8p/share | – | 26.3 |
Final dividend for the 53 weeks to 30 December 2023 – 16.2p/share | 89.0 | – |
Interim dividend for the 52 weeks to 28 December 2024 – 4.9p/share | 26.9 | – |
115.9 | 114.1 |
Dividends proposed at the end of the period (but not recognised in the period):
| 52 weeks to | |
| 28 December 2024 | |
| £m | |
Proposed final dividend for the 52 weeks to 28 December 2024 – (16.3p/share) | 89.2 |
The Directors propose a final dividend in respect of the 52 weeks to 28 December 2024 of 16.3p per share, payable to ordinary
shareholders who are on the register of shareholders on 11 April 2025, and payable on 23 May 2025.
The proposed final dividend for the current period is subject to the approval of the shareholders at the 2025 Annual General
Meeting, and has not been included as a liability in these financial statements.
Dividends have been waived indefinitely on all shares held by the Group’s employee share trusts which have not yet been
awarded to employees.
Note to the cash flow statement: changes in liabilities arising from financing activities
The only liabilities which have changed due to financing activities are lease liabilities. The cash and non-cash changes in lease
liabilities are analysed below.
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Opening balance | (684.5) | (665.3) |
Cash movement: repayment of principal on lease liabilities | 92.7 | 105.0 |
Cash movement: lease interest paid | 20.7 | 16.8 |
Non cash movement: net additions to lease liabilities | (109.9) | (141.0) |
Closing balance | (681.0) | (684.5) |
Financial Statements
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| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
| Financial assets (current and non-current) | ||
Trade receivables | 217.1 | 159.5 |
Cash and cash equivalents | 343.6 | 282.8 |
| Financial liabilities (current and non-current) | ||
Trade payables | 178.6 | 174.5 |
Other payables 1 | 21.0 | 21.2 |
Financial Statements
Additional Information
Governance
Strategic Report
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Notes to the consolidated financial statements continued
Capital structure and risk continued
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Trade receivables (net of allowance) | 217.1 | 159.5 |
Cash | 343.6 | 282.8 |
Total credit risk exposure | 560.7 | 442.3 |
Financial Statements
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| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
| Euro | ||
Trade receivables | 10.2 | 8.4 |
Other receivables | 3.8 | 3.1 |
Cash and cash equivalents | 17.8 | 57.7 |
Trade payables | (34.5) | (35.4) |
Other payables | (8.5) | (4.6) |
(11.2) | 29.2 | |
| US Dollar | ||
Other receivables | 0.5 | – |
Cash and cash equivalents | 0.4 | 19.7 |
Trade payables | (0.3) | (0.8) |
0.6 | 18.9 | |
TOTAL | (10.6) | 48.1 |
Financial Statements
Additional Information
Governance
Strategic Report
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Notes to the consolidated financial statements continued
Capital structure and risk continued
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
10% weakening of Sterling to Euro | (1.2) | 3.2 |
10% strengthening of Sterling to Euro | 1.0 | (2.7) |
10% weakening of Sterling to US dollar | 0.1 | 2.1 |
10% strengthening of Sterling to US dollar | (0.1) | (1.7) |
Financial Statements
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Employees
21 Staff costs and number of employees
The aggregate payroll costs of employees, including Executive Directors, were:
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Wages and salaries | (591.1) | (561.4) |
Social security costs | (51.5) | (49.8) |
Pension operating costs (note 22) | (45.4) | (44.8) |
(688.0) | (656.0) |
Wages and salaries includes a charge in respect of share-based payments of £9.6m (2023: £6.0m).
The average monthly number of persons (including Executive Directors) employed by the Group during the period was as follows:
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| No. | No. | |
UK depots, support and administration | 9,382 | 9,417 |
Manufacturing and logistics | 2,481 | 2,288 |
International | 744 | 707 |
12,412 |
Financial Statements
Additional Information
Governance
Strategic Report
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Notes to the consolidated financial statements continued
Employees continued
Financial Statements
204
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Annual Report & Accounts 2024
Financial Statements
Additional Information
Governance
Strategic Report
205
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Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Employees continued
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
| Charged to the income statement: | ||
Defined benefit plan – administration cost | 1.9 | 2.3 |
Defined benefit plan – total service cost | 1.9 | 2.3 |
Defined benefit plan – net finance charge | 0.3 | 1.3 |
Defined contribution plans – total operating charge | 43.5 | 42.5 |
Total net amount charged to profit before tax | 45.7 | 46.1 |
| Charged to equity: | ||
Defined benefit plan – actuarial gains | (12.7) | (13.3) |
Total charge | 33.0 | 32.8 |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
Discount rate | 5.50% | 4.55% |
Inflation assumption – RPI | 3.15% | 3.05% |
Inflation assumption – CPI | 2.75% | 2.60% |
Rate of increase of pensions in deferment capped at lower of CPI and 5% | 2.75% | 2.60% |
Rate of CARE revaluation capped at lower of RPI and 3% | 2.30% | 2.40% |
| Rate of increase of pensions in payment: | ||
– pensions with increases capped at lower of CPI and 5% | 2.70% | 2.60% |
– pensions with increases capped at lower of CPI and 5%, with a 3% minimum | 3.55% | 3.40% |
– pensions with increases capped at the lower of LPI and 2.5% | 2.00% | 2.15% |
– pensions with increases capped at the lower of CPI and 3% | 2.15% | 2.20% |
| Life expectancy (years): pensioner aged 65 | ||
– male | 85.7 | 85.7 |
– female | 88.0 | 88.0 |
| Life expectancy (years): non-pensioner aged 45 | ||
– male | 86.7 | 86.7 |
– female | 89.6 | 89.6 |
Financial Statements
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| Projected 2025 pension cost | ||||
| Present value of | ||||
| scheme liabilities at | Net interest | Net pension | ||
| 28 December 2024 | Total service cost | (credit)/cost | (credit)/expense | |
| £m | £m | £m | £m | |
| Assumption | ||||
Current valuation, using the assumptions above | 808 | 2.1 | 0.1 | 2.2 |
0.5% decrease in discount rate | 860 | 2.1 | 3.0 | 5.1 |
0.5% increase in inflation | 829 | 2.1 | 1.3 | 3.4 |
1 year increase in longevity | 836 | 2.1 | 1.7 | 3.8 |
28 December 2024 | 30 December 2023 | |||
| 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* | ||||
– fixed income | 315.8 | – | 282.9 | – |
– derivatives | (38.0) | 20.5 | – | |
– cash | 8.3 | 12.7 | – | |
| Equities | ||||
– passive equities | – | – | – | 49.8 |
| Alternative growth assets | ||||
– insurance-linked securities | – | 78.9 | – | 70.8 |
Corporate bonds | – | – | 0.1 | – |
Commercial property funds | – | 210.2 | – | 233.4 |
Other secure income | 113.9 | 107.0 | 60.0 | 161.9 |
Asset-backed securities | 0.5 | – | 0.5 | – |
Cash and cash equivalents | 9.3 | – | 8.3 | – |
Total | 409.8 | 396.1 | 385.1 | 515.9 |
Financial Statements
Additional Information
Governance
Strategic Report
207
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Annual Report & Accounts 2024
Notes to the consolidated financial statements continued
Employees continued
Financial Statements
208
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Annual Report & Accounts 2024
| Target weighting | Range | |
| % | % | |
RETURN-SEEKING ASSETS | 55 | 45-65 |
– Absolute return | 7 | 2-12 |
– Multi-asset credit | 13 | 8-18 |
– Secure income assets | 35 | 25-45 |
RISK-REDUCING ASSETS | 45 | 35-55 |
2024 1 | |||
No. of members | % of total liability | Duration (years) | |
Deferred members | 5,542 | 52% | 16 |
Pensioners | 4,680 | 48% | 10 |
Total No./average duration | 10,222 | 100% | 13 |
2023 2 | |||
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 |
Financial Statements
Additional Information
Governance
Strategic Report
209
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Notes to the consolidated financial statements continued
Employees continued
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Present value of defined benefit obligations | (808.0) | (913.6) |
Fair value of scheme assets | 805.9 | 901.0 |
Deficit in the scheme, recognised in the balance sheet | (2.1) | (12.6) |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Present value at start of period | 913.6 | 930.5 |
Administration cost | 1.9 | 2.3 |
Interest on obligation | 40.6 | 42.8 |
| Actuarial losses/(gains): | ||
– changes in financial assumptions | (102.7) | 14.2 |
– changes in demographic assumptions | (1.6) | (26.5) |
– experience | 0.3 | (9.2) |
Benefits paid, including expenses | (44.1) | (40.5) |
Present value at end of period | 808.0 | 913.6 |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Fair value at start of period | 901.0 | 889.0 |
Interest income on plan assets | 40.3 | 41.5 |
Employer contributions | – | 19.2 |
Loss on assets excluding amounts included in net interest | (91.3) | (8.2) |
Benefits paid, including expenses | (44.1) | (40.5) |
Fair value at end of period | 805.9 | 901.0 |
Financial Statements
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| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Deficit at start of period | (12.6) | (41.5) |
Administration cost | (1.9) | (2.3) |
Employer contributions | – | 19.2 |
Other finance charge | (0.3) | (1.3) |
Total remeasurements recognised in other comprehensive income | 12.7 | 13.3 |
Deficit at end of period | (2.1) | (12.6) |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Current service cost | – | – |
Administration cost | 1.9 | 2.3 |
Total pensions cost | 1.9 | 2.3 |
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Interest income on plan assets | (40.3) | (41.5) |
Interest cost on defined benefit obligation | 40.6 | 42.8 |
Net charge | 0.3 | 1.3 |
Financial Statements
Additional Information
Governance
Strategic Report
211
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Notes to the consolidated financial statements continued
Employees continued
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Actuarial loss on plan assets | (91.3) | (8.2) |
Decrease/(Increase) in plan liabilities due to financial assumptions | 102.7 | (14.2) |
(Increase)/decrease in plan liabilities due to experience | (0.3) | 9.2 |
Decrease in plan liabilities due to demographic assumptions | 1.6 | 26.5 |
Net actuarial gain before associated deferred tax | 12.7 | 13.3 |
Financial Statements
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(iv) Restricted Share Awards, where the participant receives beneficial entitlement to shares upon grant of the award. The legal
interest, however, is not transferred to the participant until the forfeiture provisions and restrictions applicable to the awards
cease to apply. The shares are not subject to any performance conditions other than continued employment. Dividends are
payable during the vesting period.
2) Movements in the period
| SIP (i) | LTIP (i) | LTIP (iii) | LTIP (iv) | |
| 52 weeks to 28 December 2024 | Number | Number | Number | Number |
In issue at start of period | 1,924,596 | 461,777 | 2,793,278 | 12,854 |
Granted in period | 304,980 | 509,374 | 778,873 | – |
Lapsed in period | (81,476) | (16,668) | (70,594) | – |
Exercised in period | (456,274) | (164,406) | (858,664) | (5,646) |
In issue at end of period | 1,691,826 | 790,077 | 2,642,893 | 7,208 |
Exercisable at end of period | 805,491 | – | – | – |
| Number of options in the closing balance | ||||
granted before 7 November 2002 | 9,853 | – | – | – |
| Weighted average share price for options | ||||
exercised during the period (£) | 8.80 | 8.42 | 8.70 | 8.24 |
| Weighted average life remaining for options | ||||
outstanding at the period end (years) | 1.6 | 1.0 | 1.3 | 0.0 |
| Weighted average fair value of options | ||||
granted during the period (£) | 9.51 | 7.94 | 8.47 | N/A |
Exercise price for all options (£) | N/A | N/A | N/A | N/A |
| LTIP (ii) | |||
| SIP (ii) | |||
Number | WAEP (£) | Number | |
In issue at beginning of period | 100,899 | 3.79 | 106,741 |
Granted in period | – | N/A | 48,617 |
Lapsed in period | – | N/A | (30,438) |
Exercised in period | (100,899) | 4 | (2,948) |
In issue at end of period | – | N/A | 121,972 |
Exercisable at end of period | – | N/A | 9,269 |
| Number of options in the closing balance | |||
granted before 7 November 2002 | N/A | – | – |
| Weighted average share price for options | |||
exercised during the period (£) | 9 | – | 9 |
| Weighted average life remaining for options | |||
outstanding at the period end (years) | – | – | 2 |
| Weighted average fair value of options | |||
granted during the period (£) | N/A | – | 9 |
Exercise price for all options (£) | N/A | – | N/A |
Financial Statements
Additional Information
Governance
Strategic Report
213
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Notes to the consolidated financial statements continued
Employees continued
| SIP (i) | LTIP (i) | LTIP (iii) | LTIP (iv) | |
| 53 weeks to 30 December 2023 | 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) | – |
Exercised in period | (467,695) | – | (448,629) | – |
In issue at end of period | 1,924,596 | 461,777 | 2,793,278 | 12,854 |
Exercisable at end of period | 1,009,826 | – | 67 | – |
| Number of options in the closing balance | ||||
granted before 7 November 2002 | 12,692 | – | – | – |
| Weighted average share price for options | ||||
exercised during the period (£) | 6.96 | N/A | 7.37 | N/A |
| Weighted average life remaining for options | ||||
outstanding at the period end (years) | 1.00 | 1.80 | 1.3 | 0.60 |
| Weighted average fair value of options | ||||
granted during the period (£) | 7.03 | 6.70 | 5.70 | 7.05 |
Exercise price for all options (£) | 0.00 | 0.00 | 0.00 | 0.00 |
Number | |||
Financial Statements
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3) Fair value of options granted
The fair value of most of the share awards is considered to be the market value of the potential shares awarded, at market close
on the day before the grant of the award.
The fair value of the Performance Share Plan (“LTIP (iii) above) awards granted is estimated on the date of grant using a Monte
Carlo option valuation model.
The key assumptions used in this model were:
| 52 weeks to | 53 weeks to | |
| 28 December 2024 | 30 December 2023 | |
Dividend yield (%) | 2.2 – 5.9 | 3.4 |
Expected life of options (years) | 0-3 | 3 |
Expected share price volatility (%) | 24.6-29.5 | 30.50 |
Other supporting notes
24 Financial commitments
Capital commitments
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
| Contracted for, but not provided for in the financial statements: | ||
– Tangible assets | 16.2 | 15.2 |
– Intangible assets – software | 0.6 | – |
16.8 | 15.2 |
| 28 December 2024 | 30 December 2023 | |
| £m | £m | |
Short-term employment benefits | 6.9 | 10.2 |
Termination benefits | – | 0.5 |
Share-based payments | 5.6 | 2.3 |
12.5 | 13.0 |
Financial Statements
Additional Information
Governance
Strategic Report
215
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Notes
£m
30 December 2023
£m
Non-current assets
Investments in subsidiaries 3 699.0 699.0
Property, plant and equipment 4 36.3 37.4
Lease right-of-use assets 5 171.2 179.1
Amounts owed by wholly-owned subsidiary companies 6 86.6 69.4
Deferred tax assets 0.8 0.9
Long term prepayments 0.9 0.7
994.8 986.5
Current assets
Other debtors 0.3 0.3
Total assets 995.1 986.8
Current liabilities
Lease liabilities 5 (6.9) (6.8)
Trade and other payables – (0.4)
(6.9) (7.2)
Non-current liabilities
Lease liabilities 5 (190.5) (197.1)
Deferred tax liabilities (0.1)
(190.6) (197.1)
Total liabilities (197.5) (204.3)
Net assets 797.6 782.5
Equity
Called up share capital 6 55.4 55.4
Capital redemption reserve 9.8 9.8
Share premium 87.5 87.5
Treasury shares (18.8) (24.0)
Retained earnings 663.7 653.8
Total equity 797.6 782.5
The Company profit after tax for the 52 weeks to 28 December 2024 was £125 .8 m (53 weeks to 28 December 2023: profit after
tax of £266.2m).
The financial statements were approved by the Board and authorised for issue on 26 February 2025 and were signed on its
behalf by
Paul Hayes
Chief Financial Officer
For and on behalf of Howden Joinery Group Plc, registered number 02128710
Company balance sheet
Financial Statements
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Company statement of changes in equity
Called up
share capital
£m
Capital
redemption
reserve
£m
Share
premium
account
£m
Treasury
shares
£m
Retained
earnings
£m
Total
£m
At 24 December 2022 56.1 9.1 87.5 (25.5) 551.6 678.8
Retained profit for the period – – – – 266.2 266.2
Buyback and cancellation of shares (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
Retained profit for the period – – – – 125.8 125.8
Transfer of shares from treasury into share trust – – – 5.2 – 5.2
Dividends declared and paid – – – – (115.9) (115.9)
At 28 December 2024 55.4 9.8 87.5 (18.8) 663.7 797.6
28 December 2024
£m
The Company’s distributable reserves at period end are:
Retained earnings 663.7
Treasury shares (18.8)
Distributable reserves 644.9
Financial Statements
Additional Information
Governance
Strategic Report
217
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Annual Report & Accounts 2024
Notes to the Company financial statements
1 Significant Company Accounting policies
General information
Howden Joinery Group Plc is a company incorporated in the United Kingdom under the Companies Act 2006. The Company’s
principal activity is being the Parent company of the Howden Joinery Group. More information about the Group structure is given
at page 223.
Basis of presentation
The Company’s accounting period covers the 52 weeks to 28 December 2024. The comparative period covered the 53 weeks
to 30 December 2023.
Basis of accounting
These financial statements have been prepared on the going concern basis and in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework (FRS 101) and the UK Companies Act.
The accounts are prepared under the historical cost convention. Under section 408 of the Companies Act 2006 the Company
is exempt from the requirement to present its own income statement or statement of comprehensive income.
In these financial statements, the Company has applied the exemptions available under FRS 101 in respect of the following
disclosures:
• Statement of Cash Flows and related notes;
• a comparative period reconciliation for share capital;
• disclosures in respect of transactions with wholly owned subsidiaries;
• comparative period reconciliations for tangible fixed assets and intangible assets;
• disclosures in respect of capital management;
• the effects of new but not yet effective IFRSs; and
• disclosures in respect of Key Management Personnel.
As the Group Financial Statements include the equivalent disclosures, the Company has also taken advantage of the exemptions
under FRS 101 available in respect of IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instruments.
Going concern
This Company controls, directly or through one of its 100% owned subsidiaries, the operations of the whole Group. Consequently,
when assessing the going concern status of this Company, the Directors have made their assessment based on the work done
to assess the going concern status of the consolidated Group as a whole.
The Directors have undertaken a robust assessment and concluded that it is appropriate to prepare the financial statements
of this Company on the going concern basis. They have not identified any material uncertainties and there were no significant
judgements involved in coming to this conclusion. Full details are set out in the strategic report, starting on page 69.
Investments in subsidiaries
These investments are shown at cost less any provision for impairment.
Other accounting policies
The Company’s accounting policies are the same as those for the Group, which are disclosed as part of the relevant notes to the
Group consolidated financial statements.
2 Profit and loss account information
The Company has no employees (2023: none). The fees payable to the Company’s auditor for the audit of the Company’s annual
accounts, and Directors’ emoluments, were paid by another Group company in the current and prior periods.
Financial Statements
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3 Investments in subsidiaries
Total
£m
Cost and carrying value:
At 30 December 2023 and 28 December 2024 699.0
The investment represents the Company’s 100% ownership and control of Howden Joinery Holdings Limited, which in turn holds 100%
of all other Group companies – either directly or through one of its own 100%-owned subsidiaries. The combined results and financial
position of the subsidiaries and this Company are shown in the consolidated Howden Joinery Group Plc financial statements.
The Company has no income receivable other than from transactions with its 100%-owned subsidiaries. It is therefore considered
that the market capitalisation of the Group, which was significantly in excess of the carrying value of the investment in subsidiaries
at both the current and prior period end, is a useful proxy for the net present value in use of expected future cashflows from the
investment in subsidiaries, and that therefore there is no indicator of any impairment in the Company’s investment in subsidiaries.
Details of all Group subsidiaries are given on page 223, which forms part of these financial statements.
4 Property, plant and equipment
Leasehold
property
improvements
£m
Plant,
machinery &
vehicles
£m
Fixtures &
Fittings
£m
Assets under
construction
£m
Total
£m
Cost
At 24 December 2022 – – – – –
Additions 44.6 – – 1.7 46.3
At 28 December 2023 44.6 – – 1.7 46.3
Additions 0.6 – – 0.4 1.0
Transfers 1.6 0.1 0.2 (1.9) –
At 28 December 2024 46.8 0.1 0.2 0.2 47.3
Accumulated depreciation
At 24 December 2022 – – – – –
Charge for the period (8.9) – – – (8.9)
At 28 December 2023 (8.9) – – – (8.9)
Charge for the period (2.0) – (0.1) – (2.1)
At 28 December 2024 (10.9) – (0.1) – (11.0)
Net book value at 28 December 2024 35.9 0.1 0.1 0.2 36.3
Net book value at 30 December 2023 35.7 – – 1.7 37.4
Financial Statements
Additional Information
Governance
Strategic Report
219
Howden Joinery Group Plc
Annual Report & Accounts 2024
5 Lease right-of-use assets and lease liabilities
Nature of the Company’s leasing activities
The Company is the signatory for leases relating to factory, warehouse and office properties which are used by other
Group companies.
Amounts recognised in the balance sheet
Right-of-use assets
28 December 2024
£m
30 December 2023
£m
Property 171.2 179.1
Additions to right-of-use assets in the period – 12.9
28 December 2024
£m
30 December 2023
£m
Lease liabilities
Current (6.9) (6.8)
Non-current (190.5) (197.1)
(197.4) (203.9)
Amounts recognised in the income statement
52 weeks to
28 December 2024
£m
53 weeks to
30 December 2023
£m
Included in net operating expenses
Depreciation of property right-of-use assets 7.9 8.6
Included in finance costs
Interest expense on lease liabilities 4.6 4.6
Variable lease payments, not included in the measurement of lease liabilities 0.3 –
Cash flows and maturity analysis of lease liabilities
52 weeks to
28 December 2024
£m
53 weeks to
30 December 2023
£m
Total cash outflow for leases 11.1 14.7
Maturity analysis of lease liabilities
28 December 2024
£m
30 December 2023
£m
Contractual undiscounted cashflows due
– within 1 year 11.6 11.1
– 2 to 5 years 46.8 46.7
– more than 5 years 192.8 204.5
251.2 262.3
Notes to the Company financial statements continued
Financial Statements
220
Howden Joinery Group Plc
Annual Report & Accounts 2024
6 Amounts owed by wholly-owned subsidiary companies
These amounts are reviewed at each year end by examination of the subsidiary company financial position. If there is an
indication that the counterparty will not be able to repay all or part of the balance on demand, an allowance is made for
expected credit losses.
7 Share capital
Ordinary shares of 10p each:
52 weeks to
28 December 2024
No.
53 weeks to
30 December 2023
No.
52 weeks to
28 December 2024
£m
53 weeks to
30 December 2023
£m
Allotted, called up and fully paid
Balance at the beginning of the period 553,591,720 560,916,049 55.4 56.1
Bought back and cancelled during the period – (7,324,329) – (0.7)
Balance at the end of the period 553,591,720 553,591,720 55.4 55.4
Financial Statements
Additional Information
Governance
Strategic Report
221
Howden Joinery Group Plc
Annual Report & Accounts 2024
Additional Information
223 Parent company and all subsidiary undertakings
224 Five year record
225 Shareholder and share capital information
227 Shareholder ranges
227 Corporate timetable
228 Advisors and registered office
222
Howden Joinery Group Plc
Annual Report & Accounts 2024
Parent company and all subsidiary undertakings
Country of registration
orincorporation Registered office
Parent company
Howden Joinery Group Plc England and Wales 105 Wigmore Street, London, England, W1U 1QY
All subsidiary undertakings
Intermediate Holding Companies:
Howden Joinery Holdings Limited England and Wales 105 Wigmore Street, London, W1U 1QY
Howden Joinery International Holdings Limited England and Wales 105 Wigmore Street, London, W1U 1QY
Trading:
Howden Joinery Limited England and Wales 105 Wigmore Street, London, W1U 1QY
Howdens Cuisines SAS France 1 Rue Calmette, ZA Du Bois Rigault Nord,
62880 Vendin-Le-Vieil
Howdens Cuisines SRL Belgium Rue du Cerisier 05-12, 6041 Gosselies
Howden Joinery (Ireland) Limited 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:
Howden Joinery Properties Limited England and Wales 105 Wigmore Street, London, W1U 1QY
Howden Kitchens Properties Limited England and Wales 105 Wigmore Street, London, W1U 1QY
Administration and Employee Services:
Howden Joinery Corporate Services Limited England and Wales 105 Wigmore Street, London, W1U 1QY
Howden Joinery People Services Limited England and Wales 105 Wigmore Street, London, W1U 1QY
Dormant:
Howden Kitchens Limited England and Wales 105 Wigmore Street, London, W1U 1QY
Foreign Company Registrations of UK Companies:
Howden Joinery Limited Isle of Man 33–37 Athol Street, Douglas, Isle of Man, IM1 1LB
Howden Joinery Limited Jersey 105 Wigmore Street, London, W1U 1QY
Howden Joinery Properties Limited Isle of Man 33–37 Athol Street, Douglas, Isle of Man, IM1 1LB
At 28 December 2024
Financial Statements
Additional Information
Governance
Strategic Report
223
Howden Joinery Group Plc
Annual Report & Accounts 2024
Parent company and all subsidiary undertakingsFinancial Statements Page Title
Five year record
December 2024
52 weeks
£m
December 2023
53 weeks
£m
December 2022
52 weeks
£m
December 2021
52 weeks
£m
December 2020
52 weeks
£m
Summarised Income Statement
Revenue 2,322.1 2,310.9 2,319.0 2,093.7 1,547.5
Operating Profit 339.2 340.2 415.2 401.7 195.7
Profit before tax 328.1 327.6 405.8 390.3 185.3
Basic EPS (pence) 45.6 46.5 65.8 53.2 24.9
Full year dividend per share (pence) 21.2 21.0 20.6 19.5 18.2
Summarised Balance Sheet
Non-current assets excluding
leases and pension 570.6 516.8 471.5 332.1 290.7
Non-current lease right-of-use assets 642.3 647.9 614.3 555.8 544.2
Inventories 390.7 382.8 373.3 301.6 255.0
Receivables 264.6 194.5 265.6 205.8 166.6
Payables and provisions (including tax) (400.0) (349.3) (454.2) (468.7) (338.2)
Pension asset/(liability) (2.1) (12.6) (41.5) 140.8 (47.7)
Total lease liabilities (681.0) (684.5) (665.3) (591.2) (580.5)
(427.8) (469.1) (522.1) (411.7) (544.8)
Net cash & short-term investments 343.6 282.8 308.0 515.3 430.7
Total net assets 1,128.7 978.4 871.7 991.5 720.8
Number of depots at end of year
UK 869 840 808 778 748
France & Belgium 65 65 60 40 30
Republic of Ireland 13 10 5 – –
TOTAL 947 915 873 818 778
Capital expenditure 122 119 141 86 70
Additional Information
224
Howden Joinery Group Plc
Annual Report & Accounts 2024
Five year recordFinancial Statements Page Title
Shareholder and share capital information
Annual General Meeting
The 2025 Annual General Meeting (AGM) will be held at
Freshfields Bruckhaus Deringer LLP, 100 Bishopsgate,
London, EC2P 2SR on 1 May 2025 at 11.00am.
Shareholders will have the opportunity to discuss Howdens’
progress and operations directly with the Board at the AGM.
The notice of the AGM will be sent to shareholders at least
21clear days before the meeting and will detail the resolutions
to be voted on.
Dividend
Subject to the 2024 final dividend payment being approved
by shareholders at the AGM on 1 May 2025, the following
timetable will apply:
2024 Final Dividend
Ex-Dividend date 10 April 2025
Record Date 11 April 2025
Payment Date 23 May 2025
Dividend reinvestment plan (“DRIP”)
Howden Joinery Group Plc (“Howdens”) offers a DRIP for our
shareholders in eligible countries who wish to elect to use their
dividend payments to purchase additional ordinary Howdens
shares, rather than receive a cash payment. The DRIP is
provided and administered by Equiniti Financial Services
Limited (“Equiniti”). Further details regarding the DRIP can be
found on Equiniti’s website: www.shareview.co.uk/info/drip
Dividend payments directly to a bank orbuilding
societyaccount
If you are a shareholder with a UK bank or building society
account, you can arrange through our registrar, Equiniti, to
have dividends paid directly to your account using a bank or
building society mandate. You can arrange this by completing
the form attached to a previous dividend confirmation you
have received, through Equiniti’s Shareview Portfolio website,
portfolio.shareview.co.uk (registration is required), or by
calling Equiniti on +44 (0) 333 207 6558.
Existing dividend mandate details can be amended to have
dividends paid to a different UK bank or building society
account. Dividend mandate details can also be de-selected
ifyou would prefer to receive payments by cheque.
Share Capital
As at 28 December 2024, the Company had only fully paid
up ordinary 10 pence shares in issue (“Shares”). Below sets
out the share capital position at 28 December 2024 and at
30 December 2023:
% change
Number of Shares
28 Dec 2024 30 Dec 2023
Total Shares in issue – 553,591,720 553,591,720
Treasury Shares (21.8)% 3,844,331 4,918,375
Shares with voting rights 0.2% 549,747,389 548,673,345
Shares held in Treasury have no voting or dividend rights and
are used solely for the satisfaction of employee share awards.
Details of employee share schemes are set out in note 23 to
the consolidated financial statements.
Shares held by the Howden Joinery Group Plc Employee
Benefit Trust abstain from voting at the Company’s general
meetings and waive dividends. Shares held in the Share
Incentive Plan Trust, which have been allocated to employees
through all-employee share plans available in the UK and Isle
of Man, have both voting and dividend rights.
Shares in public hands
1
(“Free Float” shares)
As at 28 December 2024, 0.69% of the Company’s issued
share capital was held in Treasury, 0.28% was held by
Directors, persons discharging managerial responsibility
(PDMRs) or connected persons of those Directors or PDMRs.
0.19% was held in employee share trusts (excluding any
allocated shares which are not forfeitable), and 5.21% was
held by major shareholders (those who have declared
holdings above 5%).
Free Float shares therefore accounted for 93.63% of the
Company’s issued share capital at 28 December 2024.
Acquisition of the Company’s own shares
At the AGM on 2 May 2024, the Directors were granted
authority by shareholders to purchase up to 54,867,335 of the
Company’s ordinary shares through the market
2
. The authority
expires at the conclusion of the 2025 AGM or within 15 months
from the date of passing the resolution (whichever is earlier).
The Company did not repurchase any of its own shares in the
52 weeks to 28 December 2024.
1 The definition of “Shares in public hands” may be found in UK Listing Rule 5.5.3R. The Company considers shares which meet the definition of “shares in public
hands”, as set out in the Listing Rules, to be Free Floatshares.
2 At prices ranging between 10p and the higher of (a) 105% of the average middle market quotation for an ordinary share as derived from the London Stock
Exchange Daily Official List for the five business days immediately preceding the day on which the ordinary share is purchased; and (b) an amount equal
tothehigher of the price of the last independent trade of an ordinary share and the highest current independent bid for an ordinary share as derived from
theLondon Stock Exchange Trading System.
Financial Statements
Additional Information
Governance
Strategic Report
225
Howden Joinery Group Plc
Annual Report & Accounts 2024
Shareholder and share capital informationFinancial Statements Page Title
Rights and restrictions
Issued share classes: Ordinary only (fully paid)
Voting rights at general meetings: One vote per share
Fixed income rights: None
Individual special rights of control: None
Holding size restrictions
1
: None
Transfer restrictions
1
: None
The Directors are not aware of any agreements between
holders of the Company’s shares that may result in
restrictions on the transfer of shares or on voting rights.
Substantial shareholdings
The Company had been notified, inaccordance with Rule 5 of
the Disclosure and Transparency Rules, of the following voting
rights held by a shareholder of theCompany:
Interests disclosed following the period under review (the 52 weeks ended
28 December 2024) until 26 February 2025
2
:
Substantial
Shareholder
% of total
voting rights
Date of last
notification
Invesco Ltd 4.99% 21 February 2025
Interests disclosed in the period under review (the 52 weeks ended
28 December 2024):
Substantial
Shareholder
% of total
voting rights
Date of last
notification
BlackRock, Inc 5.24% 4 November 2024
Norges Bank 3.16% 7 March 2024
The percentage interest is as stated by the shareholder at the
time of notification and is based on voting rights and capital
information at the time of the notification. Current interests
may therefore vary.
Significant agreements
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.
The only one of these which is considered to be significant in
terms of likely impact on the business of the Group as a whole
is the bank facility (as described on page 35 and in note 19
of the consolidated financial statements). If the lender were
not prepared to consent to a change of control, a mandatory
repayment of the entire facility would be triggered.
The Directors are not aware of any agreements between the
Company and its Directors or employees that provide for
compensation for loss of office or employment that occurs
because of a takeover bid.
Provision for indemnity against liability
incurred by a Director
The Company has provided indemnities to the Directors
(to the extent permitted by the Companies Act 2006) in respect
of liabilities incurred as a result of their office. Neither the
indemnity nor any insurance provides cover in the event that
the Director is proven to have acted dishonestly orfraudulently.
Listing Rule 6.6.1R(2) disclosure
The following statement, characterised as a profit forecast,
was included in the Group’s Trading Update on 7 November
2024 for the financial year ended 28 December 2024:
“ Given ongoing market conditions, Howdens expects
profit before tax in 2024 will be within the range of current
analysts’ consensus forecasts.”
A footnote to the statement above read:
“ 2024 Full Year Profit Before Tax consensus published on the
Company’s website is an average of £341m with a range of
£328m to £350m.”
The actual Group profit before tax figure for the period ended
28 December 2024 is set out in the consolidated income
statement on page 175.
1 Governed by the general provisions of the Articles of Association (which may be amended by special resolution of the shareholders) and prevailing legislation.
2 26 February 2025 is the date not more than one month before the date of the 2025 Notice of Annual General Meeting, that being 19 March 2025.
Shareholder and share capital information continued
Additional Information
226
Howden Joinery Group Plc
Annual Report & Accounts 2024
Financial Statements Page Title
Number of holders Number of shares Percentage of holders Percentage of shares
Corporate holders
0 to 1,000 86 23,373 1.32 0.00
1,001 to 5,000 75 175,175 1.15 0.03
5,001 to 10,000 51 369,075 0.78 0.07
10,001 to 50,000 137 3,594,202 2.10 0.65
50,001 to 100,000 69 4,957,726 1.06 0.90
100,001 to 250,000 105 16,909,909 1.61 3.05
Over 250,000 214 521,532,411 3.28 94.21
737 547,561,871 11.30 98.90
Individual holders
0 to 1,000 4,718 1,634,050 72.34 0.30
1,001 to 5,000 913 2,081,504 14.00 0.38
5,001 to 10,000 93 669,144 1.43 0.12
10,001 to 50,000 56 1,013,162 0.86 0.18
50,001 to 100,000 3 211,989 0.05 0.04
100,001 to 250,000 0 0 0.00 0.00
Over 250,000 1 420,000 0.02 0.08
5,784 6,029,849 88.70 1.10
Total 6,521 553,591,720 100 100
2025
Trading update 29 April
Annual General Meeting 1 May
Half-Yearly Report 24 July
Trading update 6 November
End of financial year 27 December
Shareholder ranges as at 28 December 2024
Corporate timetable
Financial Statements
Additional Information
Governance
Strategic Report
227
Howden Joinery Group Plc
Annual Report & Accounts 2024
Shareholder Ranges Shareholder RangesFinancial Statements Page Title
Financial Statements Page Title
Advisors and registered office
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
Freshfields Bruckhaus Deringer
100 Bishopsgate
London
EC2P 2SR
Auditor
KPMG
15 Canada Square
London
E14 5GL
Registrar
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Registered Office
105 Wigmore Street
London
W1U 1QY
Additional Information
228
Howden Joinery Group Plc
Annual Report & Accounts 2024
Financial Statements Page Title
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