I found this article on HWDN by well respected analyst Phil Oakley who now works for Ionic owner of ShareScope and SharePad, very interesting. It gives a good description of business as well as a good analysis.
This paragraph I have a comment on:
“One of the key sources of growth is growing the number of trade credit accounts per depots. Howdens has been good at doing this. Note the big jump in 2016. Is this a cause for concern? Does it signal that the company is having to offer more generous credit terms in order to maintain and grow sales? Or is it a genuine sign of depot managers’ ability to grow the underlying business?”
I read elsewhere: that that small building firms very much like the extended credit that HWDN gives as it enables them to complete job and get paid by client before it has to pay for kitchen etc. from HWDN. A real help with cash-flow for builders.
“Howdens has enjoyed a strong financial performance in recent years but the future looks as if it is going to be a little tougher.”
“However, it seems that there has been a significant slowdown in growth during the last 18 months.”
I am glad I reduced my holding by selling some in Feb 2016 at 489.2 and now happy to hold rump for long term. SP has moved up 26% since a low in early Nov last year.