DAVY VIEW

The consensus 2020 pre-tax profit forecast for Howdens was below £140m as recently as early December. However, following another upgrade to guidance, Howdens is now expecting pre-tax profit for the year of around £185m. This is some 11% above its December guidance. It confirms the group enjoyed an exceptional H2 and highlights that the first half of last year (when it was loss making) was very much a blip. Our lingering concern remains valuation, with Howdens trading on over 20x forward earnings.