A historic group of timber businesses has reported a strong year in its latest results, despite a dip in turnover and profit compared to an exceptional performance the prior year. Acquisitions made during the period are expected to support growth.
Founded in the early 19th century, Howarth Timber Group is the Leeds-based holding company for Howarth Timber & Building Supplies, Arbor Forest Products, Howarth Timber Engineered Solutions, Verdon Timber Group and The New Holland Dock Company. The group has branches and showrooms across the UK.
Recently filed accounts for the group show turnover of £295.8m was achieved in the year ending 31 March 2023, down from £337.3m in 2021/22.
Pre-tax profit was £25.1m, compared to £40.7m the previous year.
In their report accompanying the results, the directors said the results reflected a “strong year” for the group, which followed “exceptional” results the previous year due to increased demand for timber and building supplies and rising prices.
Revenue reduced by 12 per cent due to the impact of timber price deflation and decreased in volume in some areas of the group, with profits down as the market returned to more normal trading conditions post-Covid.
The directors said: “Demand by sector and product has been mixed during the year, with the landscaping season, which has been very strong for the last two years, being depressed, likely due to a combination of both economic uncertainty and also due to the increased demand over the last two years meaning landscaping projects had been brought forward.
“Areas of the business supporting new housebuilding have seen a very strong performance as this sector continued to perform strongly.
“The other major factor impacting sales for the group was the decrease in timber prices, which started to decline in autumn 2021, with a brief increase in March 2022, before further reductions throughout 2022. This has impacted sales values across each business unit and also actual gross margin achieved.”
During 2022/23, Howarth Timber & Building Supplies acquired Ernest Bentely & Sons, a builder’s merchant located in Manchester, to strengthen the North West region.
In March 2023, the group acquired Verdon Timber Group, an established timber business located in Leicestershire with two merchant branches and three other sites providing timber products to the construction and industrials sector.
The directors added: “The general economic outlook has been more pessimistic in 2022 with increased energy costs, inflation and higher interest rates all having a negative impact. The outlook for the construction market is for a contraction in new housing starts in 2023 and a decline in the repair, maintenance and investment sector which we sell into, and this will present a more challenging trading environment as we go through 2023 in to 2024.
“The group is in a strong position as we head into this more difficult trading period, and will continue to seek out opportunities to grow profitable product areas.
The group has made significant investments over the last two years, with company acquisitions and investment in production facilities. The group will ensure that these acquisitions are bedded into the group in 2023/24 and further strategic investment opportunities will also be considered.”
Source: “Strong year” for timber group with acquisitions set to support growth | Insider Media
