Howden Joinery Group (LSE:HWDN) this week extends its route-to-market into the made-to-order online segment, with a surprise acquisition of Ultima Furniture Systems (which trades as DIY Kitchens), a £390 million deal that although unexpected finds favour with broker Panmure Liberum.
The broker has repeated a 'Buy' rating and a 1,099p price target, following the deal news.
According to analyst Adrian Kearsey, the deal is both strategically and financially sensible for Howden, the UK’s largest manufacturer-distributor of kitchen and joinery products to the trade, as it leverages an online-first channel alongside the group’s depot network.
Panmure, in a note, flagged the transaction’s EV of £390m, whilst noting DIY Kitchens’ five‑year revenue CAGR of +17%, and pointing out that c.40% of COGS (the cost of goods sold) are internally manufactured.
The acquisition is expected to lift FY27 EPS from 53.5p to 56.1p, according to the broker, and that's a 4.9% upgrade, with the deal funded from internal cash, while the shareholder returnss continue, with a share buyback remaining in place.
Panmure concludes the acquisition complements Howden’s strategy but stresses the Group’s valuation will remain principally driven by its core UK in‑stock, depot‑based network.
