This FTSE 100 hidden gem is quietly taking things to the next level

The expansion story of FTSE 100 incumbent Howden Joinery Group (LSE: HWDN) has been admirable. It has organically grown market share, efficiency, and returns in years passed by. This helped propel the enterprise to the UK’s premier index final 12 months.

I already personal shares within the agency, and on paper, I’m up 47%! As a shareholder, I used to be eager to see and dissect yesterday’s half-year outcomes.

I’ve been interested by the path of the enterprise not too long ago, as I preserve a detailed eye on all my holdings. I reckon the agency is making a strategic shift at current, and I’m intrigued to see what occurs.

Constructive buying and selling momentum

Let’s begin by breaking down the outcomes launched yesterday for the 26 week interval ending 10 June 2024. As a long-time follower of the enterprise, I’m used to seeing common constructive updates, and yesterday was no exception.

The principle takeaways for me included a 4.3% rise in income in comparison with the identical interval final 12 months. Plus, revenue earlier than tax, web money to spice up its stability sheet, and the interim dividend all elevated.

The replace did point out greater prices, particularly linked to inflationary pressures, which is comprehensible within the present financial local weather. Plus, the enterprise continues to work on efficiencies and cost-cutting.

General, administration mentioned that efficiency was in keeping with full-year expectations.

What’s subsequent?

Personally, I reckon the enterprise is gearing itself up for market domination. Let’s face it, most corporations aspire to be the market-leader in no matter {industry} they function in. Suppose Coca-Cola of the soft-drink world, as a superb instance.

In trade for rising market share, near-term profitability has develop into much less of a precedence, in my eyes. Don’t get me improper, the enterprise remains to be turning a wholesome revenue, and at a superb charge. Nonetheless, I feel the enterprise appears to be sacrificing fast wins, to set itself up for longer-term achieve.

I feel that is displayed in its latest replace through the point out of cost-cutting to spice up effectivity. Plus, though it possesses an industry-leading margin stage of over 60%, it’s nonetheless at related ranges of final 12 months. That is regardless of a rise in income. Moreover, working revenue remained static.

Let me be clear, I don’t suppose it’s a secret what the Howden’s board is doing right here. Nonetheless, it appears to be going about it with none fanfare.

Some actions the agency appears to be taking for development functions embrace new depots and workers. Plus, it continues to have a look at additional efficiencies to be leaner.

Remaining ideas

Kitchens and joinery aren’t the sexiest merchandise on the market, not less than to not me. It’s maybe not as thrilling as synthetic intelligence (AI) shares, or different tech shares. Nonetheless, there’s loads of proof – such because the agency’s observe file – to recommend that constant returns and development could possibly be on the playing cards for the long run.

Plus, the present housing imbalance within the UK may present Howden with a good way to catapult its ambitions of market dominance.

I’m personally buoyed by what’s occurring, and actually pleased with the capital development, and dividends I’ve obtained thus far. I’m planning on holding on to my shares for a very long time. If I’m ready to purchase extra after I can, I’ll achieve this.