Good morning, and welcome to the Howden's 2026 Interim Results Presentation. I'll begin by introducing our performance in the first half, and Jackie Callaway, our CFO, will then review our financial results for the period.

And I'll then share my perspective on our 2026 performance to date and our plans for the remainder of the year, and then we'll take your questions. In the first half, the business continued to advance on all fronts in what remains a challenging marketplace.

The results met our expectations for the period, and we're on track for 2026. Group sales in the first half increased by 3.3% and were up 3.7% on a trading adjusted basis.

In the U.K., the number of kitchens we sold increased, and we are well positioned to take market share again this year. We maintained an industry-leading gross margin with gross profit ahead of last year, and we balanced recovery of cost rises with our commitment to providing competitive prices across the board for our customers.

Underlying profit before tax for the period was also ahead of last year, increasing at a higher rate than reported sales with underlying operating -- underlying operating profit increasing more so. We progressed our strategic plans for the U.K.

business, which support our trade customers and total sales of our international operations continue to increase. At the half year, we had a total of 975 depots trading, including 893 in the U.K.

The business delivered strong operating cash flow, and we maintained a robust balance sheet. This gives us the flexibility to continue to invest in our growth plans for the business and provide shareholders with an increased interim dividend for this year.

In 2026, we will also return a total of GBP 100 million to shareholders through our latest buyback program announced in February. The interim results demonstrate the strength of our local trade-only in-stock model.

Our market-leading product lineup, consistently high stock availability, industry-leading service levels and a very engaged team have all contributed to our performance, which benefits from the ongoing investments in our strategic initiatives. In the U.K., we had a record number of customer accounts as at the half year with a similar proportion trading as last year.

As well as maintaining an industry-leading gross margin, our total KPI sales volume was ahead of last year. Our performance to date has been in line with our expectations.

And whilst we have peak trading ahead of us, we are on track with our plans for the business and our outlook for the year is unchanged. We have a robust business model and operate in fragmented markets with significant growth opportunities.

This year, we planned for the size of the kitchen market to be level on the year, and we believe this outcome remains the most likely outcome. We are well prepared for the challenges and opportunities ahead in what remains a challenging marketplace.

And our customers, namely self-employed people, are highly adept at winning business in all market conditions. Delivered by our highly entrepreneurial and well-incentivized depot teams, our service-orientated trade-only, in-stock model is hard to replicate and it's difficult to compete with.

And we have initiatives in place to make it more so. At present, we believe the value of our principal U.K.

markets, which are relatively unconsolidated is some GBP 11 billion and that there are significant long-term growth opportunities for us. We continue to prioritize investment in the business on this basis.

So I'll update you on our strategic initiatives, which are key to the longer-term development of the business after Jackie has taken you through our financial results for the period. Before handing over to Jackie, I will briefly cover our acquisition of DIY Kitchens business for an enterprise value of GBP 390 million, which completed on the 23rd of June.

DIY Kitchens is a vertically integrated kitchen business, which sells its products exclusively online, principally to end users, particularly those looking to self-manage the purchase of their kitchen. And as such, its online self-service business model is quite distinct from our own relationship-based trade-only fully in-stock model and one through which we can access directly non-trade kitchen purchasers, thereby expanding the group's addressable U.K.

marketplace customer base. It's a very profitable business, cash generative and a growing enterprise like Howdens.

It has well-invested manufacturing, scalable capabilities and also an entrepreneurial culture. Whilst DIY kitchens is much smaller than our trade-only kitchen and joinery business, the two are complementary because of their disciplined focus on serving distinct customer bases, which have very different requirements.

We believe that they are each the best at what they do and that both businesses have plenty of room to grow. Accordingly, DIY will operate on a stand-alone basis from Howden Trade and we'll continue to be an online-only business, focusing on non-trade customers with a differentiated kitchen product, which is made to order and displayed in a small number of destination showrooms.

In summary, by size, this is an incremental acquisition, which is additive through DIY Kitchen's differentiated online self-service model, which extends our direct customer reach and is accretive to revenue, EBIT and EPS. So having said that, I'll hand over to Jackie, who will take us through our financial results for the first half and our guidance also for the full year.

Thanks, Jackie.

Thanks, Andrew, and good morning, everyone. I'm pleased to present Howden's half year results for 2026, and I'll begin by summarizing the key highlights.

Howden's first half performance shows the resilience and growth potential of our differentiated in-stock trade-only business model. Following our last trading update in April, the business continued to perform well in the final 2 periods of the half.

Group sales increased by 3.7% adjusted for the one fewer trading day this year. We maintained our industry-leading gross margin, which was 70 basis points ahead of last year as we balance price and volume effectively.

The margin reflects the benefit of the price increase implemented at the start of the year and our focus on productivity, sourcing and manufacturing efficiencies. Operating expenses were tightly controlled, and we delivered an underlying EBIT margin of 12.4% with profit growth ahead of sales while continuing to invest in strategic initiatives that strengthen our competitive position.

Underlying profit before tax was up 4.3% to GBP 122 million. The underlying effective tax rate was 23%.

Finally, we delivered underlying EPS growth of 5.5%. Let's now look at sales growth in a bit more detail.

We maintained a disciplined approach to balancing pricing and volume. While the market remains competitive, our differentiated trade-focused business model delivered by a highly entrepreneurial local depot teams supported continued volume growth in the kitchen market, we still expect to be about flat this year.

Overall, U.K. revenue increased by 3.3% to GBP 991 million and was up 2.3% on a same depot basis.

The price increase implemented at the start of this year had an impact on sales of around 1.6%. International depot revenue was EUR 46 million, 8.5% ahead of 2025 on an adjusted basis and 7% higher on a same depot basis.

In France, sales for the first half continued to increase. Our focus remains on both developing our depot teams capabilities and actively managing the depot estate to optimize performance, including by trialing a more compact depot format that incorporates recent U.K.

format innovations. In the Republic of Ireland, our depots traded well, and we're opening more depots there this year.

Andrew will take you through our international operations in more detail shortly. Now turning to profit before tax.

Starting from profit before tax of GBP 117 million in 2025. Gross profit was GBP 28 million ahead of last year.

The price increase at the start of the year delivered a GBP 16 million benefit with volumes and mix contributing GBP 12 million. Kitchen volumes increased as we continue to invest in new product introductions and associated kitchen products.

Overall, within our cost of goods sold, despite the ongoing uncertainty in the Middle East, we've offset inflationary increases of around GBP 8 million in the first half. Howdens supply chain has remained robust and our predominantly near-sourced vertically integrated business model is resilient across all macroeconomic conditions.

We are maintaining very good ongoing stock availability, which supports our trade customers in securing and delivering work, and we've hedged fuel and energy expenses through to the end of the year. And we will continue to stay vigilant in the current environment, keeping a sharp focus on productivity, efficiency and disciplined cost control.

Looking at operating costs, increases were held to GBP 21 million, balancing tight cost control with a further GBP 9 million investment in our strategic initiatives. This disciplined approach supported an increase in underlying EBIT margin and an underlying profit before tax of GBP 122 million for the half year.

Now looking at operating costs in a bit more detail. Ongoing investment in our strategic initiatives was GBP 9 million in the year, and this included the incremental costs of the new U.K.

depots, which totaled GBP 5 million, included the cost of 25 depots opened from the beginning of 2025. We invested a further GBP 3 million in other strategic initiatives, predominantly digital.

We also invested in our international businesses, for example, by opening depots in the Republic of Ireland. In our existing U.K.

depots, additional costs were GBP 7 million related to a combination of labor costs, property costs and volume increases. We also incurred GBP 3 million of additional labor costs arising from the government's changes to the employer's national insurance and the minimum wage, which came into effect last April.

I would also highlight that we've offset around GBP 11 million of inflationary cost increases with productivity and efficiency actions. In 2026, we now expect inflationary headwinds of around GBP 40 million in the total cost base.

So that's across both cost of goods sold and operating costs. These headwinds are in areas -- in areas such as commodity, labor and additional property costs.

And the additional GBP 10 million higher than -- sorry, this is GBP 10 million higher than our previous guidance and reflects the additional cost pressures as a result of the uncertainty in the Middle East. As in previous years, we will take a disciplined approach on costs with ongoing actions to offset these inflationary headwinds where practicable.

In the first half, our actions delivered combined cost savings of around GBP 19 million across operating costs and cost of goods sold. We will also continue to invest in our strategic initiatives to fund future growth, and Andrew will take you through our plans for 2026 shortly.

Next, let's look at the cash flow. Cash generation was strong, and we ended the first half with GBP 333 million of cash.

In total, we invested around GBP 12 million in working capital to support our growth. Capital expenditure was GBP 41 million as planned.

Our normalized CapEx spend will continue to be around GBP 125 million a year. And aside from maintenance CapEx, which is around GBP 30 million a year, within this, there are 3 major investment categories that we are prioritizing to support profitable growth and strengthen our competitive position.

Firstly, manufacturing. We continue to make investments in our U.K.

manufacturing base to enhance productivity, increase our capacity and broaden our capabilities. And this includes our plans to develop the Runcorn site, which will increase capacity there by around 1 million rigid cabinets.

In 2025, we acquired the lease for some additional land, and this enabled development work to begin on a new trailer park, which frees up space for the expansion of the factory. And in the first half, following clearing and development of this land, the first trailer has now been parked there, enabling work to start on the site extensions, which is progressing to plan.

Secondly, we'll invest in depot reformats and openings. Our updated format provides the best environment to do business with our trade customers, and we continue to see attractive investment returns when we convert a depot.

And finally, we will invest in digital. We will continue to support our trade customers by upgrade to our digital capabilities to make them more productive and to raise brand awareness.

We're also using technology to support new services and ways to trade while delivering productivity benefits to the depots. Moving now on to cash tax.

In previous years, we've benefited from the prior year tax credits arising from our patent box claim. This is normalizing now.

And looking forward, we expect cash tax to be around GBP 60 million a year with an effective tax rate of around 23% to 24%. Finally, our GBP 100 million share buyback is underway with GBP 7 million completed in the first half and a total of GBP 39 million completed by the close of business on Tuesday, the 21st of July.

We remain on track to complete the full buyback by the end of this year as planned. Moving on to capital allocation.

Howdens is a highly cash-generative business, and we continue to take a disciplined approach to capital allocation. Our priority is to invest in and develop our differentiated business model to deliver sustainable profit growth.

At the same time, we aim to maintain a progressive and sustainable ordinary dividend, providing shareholders with an attractive ongoing income stream. Following completion of the acquisition of DIY Kitchens, the group retains a robust balance sheet and expects to remain in a net cash position.

And going forward, we will continue to prioritize organic growth, maintain our progressive dividend and look to return surplus capital to shareholders while maintaining a net cash position. And importantly, following the acquisition, our existing dividend policy and the previously announced GBP 100 million share buyback program for 2026 are unchanged.

The Board has declared an interim dividend for 2026 of 5.1p per ordinary share, an increase of 2%, which will be paid on 20th of November to shareholders on the register on the 16th of October. We continue to expect to remain a net cash position to support future investment in growth and ongoing shareholder value creation.

So to summarize, we have performed well in the first half. Our differentiated in-stock, trade-only model continues to demonstrate its resilience and growth potential, and our strategy is well defined and being executed well.

Our robust balance sheet and strong cash generation support continued investment in our strategic initiatives and in the future growth of the business. We are firmly focused on growing our profits faster than sales, and it was pleasing to achieve this in the first half.

Looking ahead, we are well prepared for our peak trading period in the autumn, supported by our strongest ever product lineup across kitchens and joinery and the strength of our local depot teams, first-rate product quality, market-leading stock availability and the skill of our trade customers and winning work. We remain well positioned to continue to grow profitably and meet current market expectations for 2026.

Thank you, and I'll now hand you back to Andrew.

Thank you, Jackie. We believe our markets give us significant longer-term growth opportunities, and our strategic initiatives are key to capitalizing on these.

And I'm going to use them as a framework to review our first half performance and our plans for the rest of the year. So based around our key features of our business model, the initiatives are to evolve our depot network, to improve our range and supply management and to develop our digital capabilities and service and to grow our international operations.

So firstly, we will look at depot evolution. High service levels, including local proximity and immediate availability are very important to our trade customers.

We continue to see profitable opportunities to open depots. For the medium term, we continue to see scope for around 1,000 depots in the U.K.

versus the 891 trading at the end of 2025. And this year, we expect to open around 25 more depots as compared to 23 in 2025, of which two were opened in the first half.

Last time, I took you through the latest iteration of the updated format, and the format enables us to provide the best working and trading environment and to make productivity and space utilization gains in a cost-effective way. The format innovations have strengthened our competitive position and our program to revamp depots opened in the old format is now well advanced.

By the end of 2025, including relocations, we had revamped 410 depots to an updated format. These principally comprised of conversions of our larger and longest established depots.

This year, including relocations, we plan to update the format of around 30 more depots and completed 10 of these in the first half. So by the year-end, we expect to have revamped around 66% of the depots, which opened in the old format and to have around 75% of all U.K.

depots trading in the updated one. We're also modifying the layer of some of the depots converted earlier in the program so that these incorporate more of the latest format innovations.

The next point is range and supply management. Sales of new products are a significant contributor to our performance.

In the first half, sales of products introduced this year and over the preceding 18 months represented over 15% of the U.K. product sales, a higher proportion of sales than for the comparable 24 months in H1 last year.

And value for money always features in purchasers' buying decisions, and we're committed to providing our customers with market-leading, easy to fit and fairly priced product. And given the pressures in household budgets, price featured predominantly in 2025, we expect it to do so again this year.

With an emphasis on value for money and choice at all price points, our offering is well positioned to take advantage of this. This year's new kitchen program makes more color, styles and finishes available to more budgets, principally at entry and mid-level price points.

So excluding paint order, we have 23 new kitchens so far this year, and we entered the second half of our entire offering with such kitchens organized around 11 families with a similar kitchen count to last year. Elsewhere, we're innovating other long established product categories and adding more colors and styles to our fitted bedroom offering launched 2 years ago.

This year, we have a total of 13 new kitchens for our established entry and mid-price families, most of which have been in depot since the start of the year and all of which are now in stock well ahead of our peak trading period. For our entry-level families, we have introduced 5 new colors, which are popular elsewhere in our offering, including Greenwich in natural walnut and we launched -- which we launched at the start of the second half.

At the mid-level, we've launched 9 new kitchens for our established families, including 5 more colors for our more modern Shaker kitchens, so Frome, which going forward replaces Chelford in our lineup. And recent additions to these families include Frome in Reed Green and Halesworth in Mist, both shown.

For the second half, we also have our new mid-level contemporary family, Winterton, for the first time. Winterton is available in 5 colors, including Gloss Sandstone and Gloss White.

Our higher-priced kitchen portfolio comprises 4 families, including 3 Shaker-style families, which are collectively marketed as classic timber kitchens. In the first half, the proportion of our classic timber kitchens sold paint water continued to increase.

For the second half, we've refreshed our paint to order pallet with 4 new colors. And for our top-end in-frame shaker family, Ilfracombe, which is exclusively available in paint to order, we've added a new beaded style door frame option as shown in the picture.

This year, we have also migrated 2 of the leading paint to order colors over to the in-stock offering of our Chilcomb and Elmbridge families. And for the second half, we have also just launched our new natural walnut effect cabinet, which replaces our croft gray cabinet and is our first cabinet refresh in several years.

The natural walnut cabinet complements a wide color palette can be specified for all of our kitchen families and offering it from stock for immediate delivery is a first for the U.K. mass market.

Solid surface worktops, which are often, but not exclusively associated with the sale of higher-priced kitchens, continue to represent significant opportunities for the group. Our offering in this category, where we trade as Howdens Work Surfaces, or HWS, is underpinned by our in-house manufacturing capability, which is among the largest in the U.K., helping us offer rapid template to fit times.

In recent years, we've increased the number of decors we offer in this service. And for this year, we've introduced clearer, simpler ranging and more delineated pricing to demonstrate the value that we offer at all price points.

Ahead of peak trading, our total offering will comprise of a similar number of options to last year. In 2026, we've continued to upgrade our offering in other categories, including our own label brands, which complement the third-party branded products that we sell.

In appliances, we've put in place a major refresh to our Lamona brand, which is one of the leading integrated appliance brands in the U.K. And we've modified the design, lowered the prices of a suite of high-volume products without compromising these products functionality and updated the design and specification of several higher-priced products, including washing machines, fridge freezers and cookers.

Elsewhere in Flooring and ironmongery, we've extended the offering of our own label brands, Oake & Gray, Fuller & Forge and added new product finishes, designs and subcategories. As well as being substantial businesses, doors and joinery remain a key footfall driver building product for us.

For our door lineup, new product includes a new premium range of Howdens branded solid engineered doors. And in joinery we've developed the subcategory extensions into wall paneling, spare parts and loft spaces, which we initiated in 2025.

[indiscernible] fitted bedroom sales continue to increase as well as representing a source of incremental sales and profit that help us foster customer relationships. Installing fitted bedroom suits the skills of our customers who fit kitchens and a significant portion of total bedroom sales compromise purchases either by new customers or by customers who had bought from us relatively infrequently.

We develop our bedroom ranges in-house, utilizing our existing designs and supply infrastructure, and they have a high cabinet content, which matches our manufacturing capabilities. Our 2025 offering comprised bedrooms in 5 leading family designs run from our kitchen portfolio, including a new family [indiscernible] launched during the year.

And this year, our focus is on entry and mid-level bedrooms, which have a total of 5 new ones, including second half -- including for the second half and new mid-level family Winterton, which we've just launched in 3 gloss colors. Howdens is an in-stock business and the trade tell us that a high level of stock availability is one of the key reasons that they buy from us.

The investment in our XDC network, which enabled us to offer next-day delivery service and other initiatives, including daily traders facilitate exceptional levels of service. In the first half, deliveries totaled some 30 million pieces, and our service level from primary to depots was a world-class 99.98%.

Our in-house manufacturing capability, which is a source of competitive advantage for us, and we keep under review what we believe is best to make or buy balancing cost and overall supply chain availability, resilience and flexibility. And investments in manufacturing in recent years have strengthened our competitive position by increasing our manufacturing capacity and by adding broader and newer capabilities.

Our Runcorn factory with its high-volume, low-cost cabinetmaking capability has always been an integral part of our manufacturing and logistics strategy. Our 3-year development program for Runcorn site is now underway and is proceeding as planned.

In line with our long-term ambitions for the business, the program will give us at Runcorn more capacity, more flexibility, broader capability and lead to lower COGS than would otherwise have been the case. And turning to our digital platform.

We use digital to reinforce our model of strong local relationships between depots and their customers. We use it to raise brand awareness to support the business model with new ways to trade with us and to deliver productivity benefits and more leads to our depot teams and our customers.

In the first half, new registrations for our online account facilities, which provide efficiencies and benefits for customers and depot staff alike increased. New registrations totaled some 56,000.

Around 62% of customers had an online account at the year-end with 80% of trade users regularly looking at their individual and confidential prices. Customers with an online account have, on average, continued to trade with us more frequently and spent more than nonusers.

We saw high levels of engagement with our web platform and growth in our social media presence, which also stimulates interest in viewing our products and services online. And site visits totaled 11.3 million in the period.

Among kitchen specialists, we continue to have the highest number of fitted kitchen site visits in the U.K. and the time spent viewing pages and the number of pages viewed per visit were at consistently high levels.

Across the leading social media channels, our follower base is at over 800,000, that's up 17% with about 4.6 million engagements a month. We are seeing increased usage of our upgraded Click and Collect service for everyday products and new account management tools introduced last year is helping depots manage their relationships more efficiently and productively.

This year, our new depot pricing and margin tool, PAM, is operating in all U.K. depots.

And it was designed in-house and PAM makes depot pricing management easier and more effective. It provides comprehensive data for depot teams to make more informed pricing decisions with a higher degree of confidence and enables depots to access quickly the impact on margin of those price changes.

Depot feedback has been very positive, and we see both more bespoke local pricing and improvements in depot margin on the product incorporated in the system. And finally, international.

Total sales -- sorry, total half 1 sales of our operations based in France increased following a significant year-on-year increase in half 1 last year. We now have in place an experienced leadership team adept at depot management in tough market conditions.

The business has continued to respond positively to measures taken to improve existing depot sales performance. In 2026, we continue to focus on both developing our depot teams capabilities, particularly account management and actively managing our depot estate, including by closures and relocations where necessary.

As we look to optimize the existing depot performance. As we guided last time, we anticipate closing up to 6 depots in suboptimal locations later this year, having closed 2 such depots last year.

Alongside this, we're trialing a more compact version of our format. It is under half the average size of the current depots in France, has lower rental costs and the layout incorporates recent U.K.

format innovations. In the first half, we opened one of these depots in France to the west of Paris.

And in the second half, we are intending on opening another one serving the city of Tour in the Loire Valley. Overall, we expect to end the year with around 60 depots trading.

Half 1 sales in the Republic of Ireland were well ahead of last year, and we are opening more depots there in 2026. The Irish market suits our differentiated model and one which sets us apart from the incumbents.

We commenced trading in the Republic of Ireland in 2022 using a similar format location strategy to that in France with the local team supported by our U.K. infrastructure and our digital platform.

By the end of 2025, we had 16 depots trading, including 9 clustered around Dublin and 3 serving Cork. In the first half of this year, we opened 2 more depots, which respectively serve the areas around Wexford and Athlone.

And in the second half, we expect to open at least 3 more, which would increase the number of trading to 21 depots by the year-end. So for 2026, we are well planned, including on our strategic initiatives as day-to-day, we deliver value to customers across all price points and product categories.

We already have 23 kitchens in stock well ahead of peak autumn trading plus a very competitively priced paint to order kitchen offering and our lineup in other product categories is the best that we've had in my time at Howdens. We have a program of rooster promotions in place to keep Howdens at the front of the trade's mind together with other price initiatives.

And we continue to improve service and availability and increase functionality we offer online to the benefit of our depot customers and end users alike. During 2026, we plan to open around 25 depots in the U.K.

and reformat around another 30 existing depots. We expect to end the year with around 80 depots trading in France, Belgium and the Republic of Ireland.

And finally, in the second half, DIY Kitchens will contribute to the group's results for the first time, and we are looking forward to working with the team there. Lastly, outlook.

Whilst we have peak trading ahead of us, we're on track with our plans for the business and our outlook for the full year is unchanged in what remains a challenging marketplace. We plan for the size of the U.K.

kitchen market in 2026 to be level year-on-year, which in our view, remains the most likely outcome, and we are well prepared for the challenges and opportunities ahead. We aim to retain a profitable balance between price and volume as we continue to maintain competitive pricing whilst aligning operating costs and work with suppliers to keep product and input costs controlled.

We're confident that our business model enables us to address the opportunities in the market across changing conditions. And in summary, we're well placed to outperform our competitors in 2026 as we both continue to invest in our strategic initiatives and return a further GBP 100 million to shareholders through our latest buyback program.

So thank you very much for listening. And Jackie and I will now take your questions.

[indiscernible].

Yes. I think trade Fest is the all-important period, of course, and you can't have a good year in Howdens without delivering trade fest.

So we've put a serious level of work into making sure the depots are in the right place. First thing is having the right product lineup for the period.

And I think we are as well set as I can possibly think it would be. We've got a brand-new cabinet.

We've got 23 kitchen ranges. We've got a lot of day-to-day products.

So I think the team has done really an exceptional job of lining up the product offering for the peak. The second thing is making sure the teams are as incentivized as well as possible and understand the trading rhythm we need to hit as we go into it.

So we've done this year a similar thing that we did last year. We did 10 regional boards.

We completed them just at the back end of the first half. We went around the country.

They probably to imagine 100 depot managers in a room per region. And I would say the feedback is just as strong and the fighting spirit is strong as ever.

So I walked away from all of those sessions, very encouraged by the second half plans for Trade Fest. It's also the second year that we're doing this event.

And we would have taken some lessons out of last year to make it even better. So we branded Trade Fest, but it's better than a sale.

And it struck the chord with our depot managers very well. We've actually branded it.

We've registered the name Trade Fest, and we're doing it again this year and it's really focused on helping the builders sort of sell our products. So it's absolutely into the core of the model of the builders really being successful through the event and it celebrates sort of their work and then bringing the work, which is the most efficient thing that we can do.

So you'll see our builders doing a lot in social media even more than last year. From a stock availability point of view, we're in terrific place on it.

I mean it's just the advantages of being so focused on vertical integration and all the work that we've done on our vertical integrated capabilities have meant that when we sit around as an exec and talk about what's missing -- we talk about what's missing, and there's very, very little missing in our entire product offering for peak. So we expect to run service levels through peak at sort of 99.98% all the way through.

And that's a key thing for delivering this peak that is -- can't be replicated by the competition because we're the only people with stock on the ground able to get kitchens out before Christmas. So I feel we're as well set up as we possibly can when I look at sort of the lead indicators on it and momentum in the business is enough there to do what we want to do for peak and deliver the guidance that we've got.

So having said that, the market is tough, but our teams are so able to fight. You wouldn't want to be -- you wouldn't be up against competing against them.

So yes, they're well -- the incentives look fantastic for the teams this year.

Then in terms of inflation, we are guiding an additional $10 million of inflation this year. It's primarily as a result of the Middle East war.

So we've seen cost price increases primarily around commodities, particularly raw materials, timber. So anything that's got a sort of energy fuel impact.

So that's going to hit our cost of goods sold primarily. It's in our stock now.

So it's already happening. It unwinds into the P&L in the second half of the year.

We will look to offset all of that. So we've guided in line with expectations today.

So there's a little bit more price coming through in the second half, but also productivity is a big part of how we offset inflation. To your question on go forward, this is something we've been good at doing in the past.

If you think about productivity, it's 3 areas. It's better buying and cost of goods sold.

The buying team over the last few days have done a fantastic job, and they'll continue to do that going forward. The manufacturing teams are very good with cost efficiencies in the plant.

So areas like reducing waste, better productivity on headcount. So that will continue.

And the third area that we're very focused on is in our operating costs. So that could be logistics where we -- every year, we see our logistics teams doing a good job on cost savings, better procurement, again, people savings.

So something we've done well in the past and we'll continue to do well in the future. We will always look to offset our cost increases with productivity efficiencies.

I didn't realize it was me. Emily Biddulph from Barclays.

I've got 3, please. The first 2 are on DIY Kitchens.

I just wondered if you could give us a sense of what you think the addressable market is for that business or how big do you think it could potentially be? Secondly, how does DIY Kitchens acquire customers?

Obviously, the core business has a trade to sort of promote Howdens. But is there a sort of advertising expense we should bear in mind here or sort of something that might change in the group because of the existence of DIY?

And then thirdly, you obviously delivered 5.5% profit growth in what looks to be a flat market in H1. If we wanted to be really ambitious and sort of imagine that the U.K.

market grows at some point, is there a list of sort of strategic initiatives that you have in the back pocket that you would like to be doing in a stronger market? Or are you doing things at the pace you'd like to be?

And actually, if we think about incremental volume, we should look at that sort of dropping through to the bottom line?

Well, I'll go with the third one first because I think that's exactly right. I think one of the things that we've been quite distinctive on here is pressing ahead with our strategic initiatives and investing well into the business to do all of the right things, whether it's manufacturing, revamping the depots, investing in digital, the stuff I've covered.

And if the market got into that place, and we don't see it this year, but if the market got into that positive place, I think it looks extremely attractive actually for both businesses. So I think we're extremely well placed when it comes back.

And others who may have backed away from space, we've not. We've opened up more space.

Those who may not have invested in manufacturing, but we've done the opposite, and we've invested extremely well in our manufacturing. And one of the big plays we've made and why we're incredibly confident in the Howdens business model it is making the investment into the Runcorn plant that gives us capacity to manufacture more cabinets for the future.

That's a long-term play that we're very proud we're making. So I think all the metrics look incredibly attractive when the market turns a bit in our favor.

And I don't think we need to do anything differently. We've always spoken about the kitchen market being split into, but we talked about Howdens sort of addressing the whole market.

But DIY clearly addresses a different type of customer to the Howdens customer. And as I've got into the business and understood it more than you do through a due diligence process, I think I'm absolutely bang on in what I thought, which was this is a sort of canny customer, if you like, who is not having bought their first kitchen, probably their second or third.

They're confident about doing it. They want to do it themselves.

They may have a builder there, and they're very sharp on price. And that we know that DIY doesn't affect the Howdens business.

If you take the one DIY showrooms in Whitney and one in Yorkshire and you track what's happened to the depot performance around those showrooms, there's absolutely no impact. If anything, it's slightly positive because customers come to the area.

So a third showroom will open up for DIY in Livingston, which is in between Edinburgh and Glasgow. That was due to be opened up in January next year.

We bring a bit more capability to it all, and it will be pulled forward until the end of October this year, sort of a third. One of the beautiful things I love about this profitable model is a lot of it is also being done through social media and sort of lower cost forms of communicating with customers.

And DIY also, it's word of mouth. And a lot of it is on social media.

It runs a very strong reputation with its customer base. Most of their work is done.

They do pay a little bit on pay per click, but it's very efficient. Most of it is naturally around natural search.

And I do not propose that we start spending more on that. So it's more of the same.

The showrooms help, but I don't want a big network of [indiscernible] showrooms. I want a number of large destination showrooms that people are happy to drive a couple of ours too.

So I would say no sort of change in the metrics there.

Priyal Woolf from Jefferies. Just two questions from me.

You've obviously talked about the market backdrop being challenging. So just in that context, I wondered if you're seeing any signs of down trading to lower-priced kitchens and if there's some sort of mix effect we need to factor in over the next couple of months?

And then the second question, I do appreciate it's early days, but in terms of trends that you've seen against this sort of challenging backdrop, is there any discernible difference in terms of the levels of demand or the lead indicators between DIY Kitchens and your incumbent business?

Yes. I mean the lovely thing about how we've set up our kitchen model is we love cabinet volume.

And from a margin point of view, our margins are pretty level, whether you're at opening mid or high price points in Howdens. So for us, it's important that we drive significant cabinet volume growth.

I would sort of expect, but not really to -- any kind of overall numbers to affect the business. I would expect us to remain particularly strong in the mid-end and opening price has always been very robust for us through all of this cycle and the better end has always been sort of brand-new business territory for the business.

So we progressed on all 3 in the first half. We had noticed a good pickup in the midrange, and I'd expect that to continue as we go into the second half.

I think you see customers doing things like they want the solid surface, so they might trade down on the door, but the overall kitchen values is simply just putting the emphasis in different places. I think it's too early for me to comment on the DIY thing.

I mean, I think from a demand point of view, we're very comfortable with what we have seen post the acquisition and the momentum of the business. But we got the keys 4 weeks ago.

Julian Lee is in there doing a great job settling down the team and organizing how he wants organizing to get more volume out of the business. And I think it's been sort of a textbook handover from [indiscernible] to Julian, but also in our manufacturing operations, Julian has handed over to his number too, and that has been as smooth as it possibly could have been.

It's Charlie Campbell at Stifel. I've got a couple of questions, please, if I can.

You referenced the best range ever. I just wondered if you could sort of show us your workings a bit behind that because that's an intriguing statement.

And then secondly, I just wondered what the impact of PAM has been already? And how should we think of that going forward?

Is that a tool that helps depot managers secure sales by reverse engineering to the right price? Or is it about kind of giving less away and discounting and going...

Yes, all of that actually. Yes.

Look, I commented on our best range ever. I think what the team have done superbly this year is we've continued to move the Howdens offering of being a sort of slow follower maybe 8 years ago to being really on the front foot around product and how we test product in regions and then know for certain when we launch something how well it's going to sell.

So our accuracy on forecasting of new ranges coming through is very good. So we say it in the math.

We know how much new innovation we'got. We measure our new product introductions as a percentage of sales.

We love innovation because it keeps the margin strong as you'seen in the first half. And we've got gear that our depot teams can sell that nobody else has got in the market.

And a good example of that would be the Oak cabinet that we've launched in James McKenzie when he joined the business, had been working with the team and doing the rounds, and we've seen so much of it in the upstream in the shows and with suppliers and with some competitors in Europe, we've decided just to go for the cabinet new color, and that's really a year ahead of when we plan to do it. So that's a big feature of something new that the depots will get accretive margin for because it's so fresh to the market.

And then the range it's just a constant refinement. And I think we've advanced ourselves so much further than the rest of the market with the product range that's right for us using the lessons of colors that we put in paint to order that we know where we're there are safe options to go and put into the core range.

There's 2 ways that we fuel our thinking into the core range and one of them is find the gap but the other is understanding what colors are working in paint to order, where you're not investing any stock, you're just investing in effectively paint colors and learning what to do there. So I made that statement this year.

I probably could have made it last year because I think we're constantly improving every year. The PAM tool primarily affects non-kitchen product and where we've grown quite a lot, our most actively traded product areas is the stuff behind the counter, everything to help the builder get his job done.

And there are others who are very transparent in price around those areas and quite a lot of product categories for the teams to get around. So we put PAM, which is a price and margin tool built on the lessons from our stock management tool, which we call TED.

So PAM primarily does pricing on everything outside of kitchens, but does some elements of basic kitchens like thinks and taps. But the teams can quite easily see where the pricing is of that product with competitors, but also see it with immediate depots, and they can see that sort of price volume mix.

So they go in and actively use it. It's important for a couple of reasons because customers can go online now in the confidential area and they can see their Howden pricing.

So it has to be right. It has to be right with the local depot.

And they can also jump on somebody else's website and find out what the price is. Very difficult to do in the kitchen, but on non kitchen stuff it is.

So it's been a very, very helpful tool for the depot managers. And I think it increases over the long term, real confidence in our pricing on long kitchen product and the results would show that it's working.

Two questions really. First, clearly, DIY Kitchens is a bit of a departure for Howdens and its DNA of not really acquiring things over the years.

Has it raised any eyebrows within your existing workforce in terms of changes of direction or not? And the second question, the 1,000 U.K.

depots, how is availability of the sites from here to there looking for you? And how much of this is about sort of genuinely fresh territory enabled by XDC versus infill?

Just trying to get a sense because the incremental returns from the depots appear very high despite you sort of getting towards the 1,000.

Yes. Great questions.

Look, the DIY Kitchen, I just be absolutely clear on this. It is not a change of direction for the Howdens business model.

And when I went on the calls with all the depot teams, this is sort of genuine feedback was they just felt pride amongst the teams that we've been able to buy this business and grow it out. Our teams see it as an entirely different business model.

They know that what they do in Howdens is about -- we plan for the builder. We work in a triangle between the builder, the end consumer and our depot teams.

We're there all the way through the project. It's relationship-type business and DIY is a transactional business.

Howdens is trade only and DIY is online only. And never the two will meet and I've given the teams the commitment that it will not be the same gear sold across both businesses, but it's an incremental opportunity.

So we settled the teams down. There was no issue.

A couple of questions came back, and I said, I want you to forget about it, and that's what they've done. So when we did the full day regional boards, there was not one question from any one of the teams in any of the regional boards about DIY.

We said you compete with them in the normal way that you would normally and you compete with them because we win on service and we win on support to the builder customer and so on. So I'm extremely comfortable that it is completely incremental and that it is a discrete thing and there is no change whatsoever to the Howdens business.

So no eyebrows. Amongst the supply base, you would imagine a lot of eyebrows went up.

One of them described it to me as sort of clever chess move and you haven't expected it and they sort of seen us maybe buying other types of businesses. But we've not bought anything.

I mean you could argue that the worktop business sort of a make versus buy type decision. It is the first time we bought something, and I was very, very thoughtful about doing it for quite a long period of time, and I got to know Alf and Claire for about 5 years before we made the move.

So it was just very conscious of what we were doing. I love Howdens as a business.

And my absolute focus is on growing the Howdens business. There's lots of runway for us to do that.

And DIY, I think it's just so interesting because who knows what's going on down the road around AI, who knows that there will always be customers who want to be empowered to buy their own kitchen and there's customers there that no matter how good we are in Howdens, there will be kitchens sold there. Otherwise, we'd have the whole market.

So I think there's a long way to grow out DIY. And I'm conscious I mean I didn't answer your question, but I could see the DIY business being 10x the size it is at the minute or maybe that's an exaggeration.

It won't be in my lifetime, but it's got that feeling when I go in there of a very, very exciting opportunity and a fresh, innovative way of selling kitchens in the future that's both incremental and accretive. And I'm glad we've got it.

Your second question, Geoff, on the 1,000 depots. Look, it does get harder.

It does get harder as time goes on. But we've got a really strong property team.

And the -- a lot of the agents know that we're out looking for stuff. We're flexible in the type of space that we can take and it's better that we're in the area, even if it's sort of slightly suboptimal.

And we opened up our first one in Waterloo underneath the Arches, and we've managed to fit in there very well. And I think it's a combination of driving the convenience measure for the builder because time is money and drive time is money.

We can get the stock there with XDC and what we hold in balance between XDC and what's in stock. But quite a portion of the number is within London actually, where we've got around about 100 depots inside the M25, and it should be quite a lot more than that, but we just got to be very thoughtful on how we get there.

So it's really sort of inside the M25, driving convenience, some smaller depots and the infills outside in rural catchments. I mean we're very clear that 1,000 is about the number.

And you probably will see our rate of openings slow over coming years because we will never compromise on quality. But last year, I called out that we might move from 30 down to 20, and then we ended up sort of doing 23.

And this year, we're going to do 25. I think we've got a good lineup for next year actually.

We're very confident we do a similar sort of number next year, too.

Rob Chantry at Berenberg. Three questions from me.

So firstly, could you just talk about the changing shape of U.K. trading locations and how it impacts you?

So you're doing well, others are struggling. Does that impact footfall in the areas?

Does it create opportunities to go for a one-stop shop type approach? But how does the dynamics of trading estates work when everyone else is struggling?

Secondly, depot maturity, just limited to how you're thinking about it has changed in recent years. Is there a correlation with the larger depots continuing to grow, the midsized ones with 3, 4 years old, showing stronger growth.

Once they're all in that same depot-like mix, how do they mature? How do you think about that?

And then thirdly, I think historically, you've mentioned flooring. I think the fourth biggest in the U.K.

Can you give us a quick update on strategy, manufacturing, distribution, stand integrated, exactly what the economics of flooring look like for Howdens?

Yes. I'd say on the first one, U.K.

trading locations, they're busy. They're busy at the minute and parking is often an issue.

And I think trading estates in general have become busier with businesses like Screwfix and Toolstation, pulling customers online, who may not necessarily be always trade customers, but a right mix of customers end up going on to trading estates. And trading estates sometimes get hot and cold over a period of time.

We'll tend to move around 6 to 8 depots a year to make sure that they're in the right sort of place. We're always optimizing it, but they remain busy.

And we tend -- because we started our journey quite earlier than others, we tend to be in more featured spots than others. On depot maturity, I think the point I would probably raise is that we've always thought about a 7-year maturity in depots.

But our biggest depot, which I always quote as being David, our manager at Glasgow depot. He will clear the -- he tells me he will clear the GBP 10 million mark this year.

And David has consistently done that, led the way every single time, an unbelievable manager. And that's sort of a figure that we probably never would have thought we would have hit on a per depot basis, but it leads the way for the others to get there.

And we've got a number of depots that are not too far behind that. So I think that challenges is how is 7 years the right maturity because that depot in Glasgow has been open over 25 years, and it's still growing because the strategic initiatives support it.

Great leadership supports it, great incentives, the relationship he's built with the trade customers all support it. And I don't think there's much more to say sort of on our maturity profile, except to sort of push it out over time.

Flooring, I don't know where we rank at the minute in sort of flooring, but it's grown particularly well this year. And we've done a combination of own brand, which is our Oaken Grey flooring brand that has done superbly well.

And we've launched some new more premium brands into the range, supported by XDC. And we've refreshed all the displays across the estate in flooring.

So we're growing very well, and I don't think the competitors are similar story.

Clyde Lewis at Peel Hunt. I think I've got 3, if I may, Andrew.

You talked about a flat market for the kitchens in the U.K. this year.

Is that on a volume or a value basis? That's the first one.

Second one, probably following on from Rob's question a little bit about flooring, but talking about the, I suppose, the non-kitchen revenue within the U.K. was that better or worse than that 3% figure that you've reported for the first half?

And the third one was probably around Runcorn and the investment there. I'm thinking, a, have the metrics and the numbers changed at all in terms of the spend and the returns, but also -- and I know you're pretty keen on keeping a clear demarcation between DIY Kitchens and Howdens, but the bit where it may overlap, certainly when I look at it is on the manufacturing side.

And I'm wondering whether certainly we're doing cabinets out of Runcorn, whether those cabinets can easily be directed into DIY Kitchens and speed up that whole return process.

Yes. Look, it's great to have capacity, isn't it when you built it out ahead of time.

I don't know is the answer to all of that. But the cabinet is different, and I will always keep the cabinet different.

The panels are panels and they can be made anywhere. But I have no plans for that.

DIY has had a very strong investment program. It makes to order rather than to stock, which is slightly different.

But we are certainly -- we will have optionality, if you like, for that, and we'll work that out as we go forward and how well it grows. We're also having interesting conversations with suppliers as well because a lot of the products are similar across the piece.

So James is well placed to shake all that down. But we will have capacity, and there will be opportunities to optimize supply across the two, I suppose is what you're getting at.

Kitchens versus non kitchens, there's not a lot in it, to be honest, in the first half, it's nicely balanced. We -- I am absolutely obsessed with customers coming in on a routine basis, and they might come in and buy joinery or flooring or whatever, and that gives us the opportunity to sell them kitchens.

So decent balance between the 2 and most of the other categories in good growth actually in the first half of the year, and I'd be worried if they weren't because you don't see the sort of frequency of customers. Do you do the one on the market?

On the market -- yes, on a value basis, it's flat, flat year-on-year on a value basis, probably slightly.

Probably slightly...

Slightly down on a volume basis.

Allison from Bank of America. Just three questions from me.

So first of all, do you feel any pressure from your competitors, maybe like Wix, which we know they're probably having a small comeback story. Do you feel anything from their side?

No.

Number two, I guess that's probably the answer. On the DIY kitchen, because obviously, we feel very good about this deal.

But did you see any potential challenges or difficulties when you do the integration? Anything you could think of?

And lastly, do you have a number target for the showrooms for DIY kitchens at all?

I've answered the first question. I don't -- every competitor bothers us every day.

But I think we're so well ahead on product development, service incentives with the teams. I don't worry about that.

Challenges from DIY, I mean there's always -- I mean one of the things I think we've done really well over all of the years of Howdens has been focused. And we're focused on kitchen categories.

So when I go and spend time with the DIY team, we talk kitchens and that's -- we're obsessed about panels and hinges and supply chain and matching the front and the back end. It's not complicated to pick up given what we know from Howdens.

So if I had been worried about defocus, I'm not because it's separate. It's going to have its own leadership team.

And I will never defocus myself out of Howdens. But I see way more opportunity than any challenge.

But the obvious one is, does it defocus you from your core business. And I'm absolutely certain it does not.

If anything, it will strengthen us because you look at similar problems from a different angle. And it's pretty fifty on cost at DIY and you take those challenges back to the core business, and there'll be opportunities there.

Each of the supplier will get a challenge around it. We're buying similar machinery in Europe for DIY as we are for the U.K.

So the -- I think the opportunity is really significant and is incremental and additive to the business. From a sharing point of view, I think we'll feel our way forward, but what DIY has cleverly done is they've got this model where the customer does quite a lot of the work themselves.

They place the order, take responsibility for the design and they get in a car and they drive a good distance to go and see good displays. And what they offer is fantastic.

If you ever get an opportunity to go up to Whitney or York, you'll see the 2 largest showrooms in the U.K. But I don't see us building a whole lot of showrooms across the U.K.

I would see us doing 6 or 8 or 10 sort of territory. There's only Oxford down south at the minute.

And then Scotland has been a very good market for DIY. So one up there is totally appropriate.

Ben, RBC. I'll do two, please.

Just in terms of the midterm margin, just your thinking there. Obviously, you putting into new capacity DIY kitchens in as well.

So just your thinking around operating leverage within the business in the midterm. And then the second one is just in terms of France.

Can you give a sense of the mix of depots have perhaps reached breakeven level and the change of travel there and what you're looking to see to accelerate the growth?

Yes. Look, Jackie and I are very focused on getting core Howdens back to the sort of 17% territory where we've been before when we had great volumes going through the factories in this business has operated up at 19% during the 2 big COVID years.

So to the question earlier about when the market comes back and volumes really run through the business, it's about that. But we're doing a lot around cost, good clever margin management, and we can make progress back up as you'seen us growing profits ahead of sales in the first half.

We want to do the same in the second half, and we'll be very challenging ourselves as we go into next year. France, Jackie and I did a full review of the French business yesterday, and they are making good progress and our depot managers incentivized in getting to breakeven.

We have a number of depots, which we don't disclose, but a number of depots increasing their hurdle rate and getting over the breakeven point last year, and we expect a whole lot more this year. And we tidied up the -- we will have by the back end of this year, tidied up the depots that we weren't confident we get to that place.

So -- but there's a lot to play for in the second half for France this year, and they're very well set up to do it. So we'll update more at the full year on that.

One more here.

Zaim Beekawa, JPMorgan. Just a couple of questions on the wardrobe business.

Can you remind us on the opportunity set at present? And I think you said you're focusing on the entry to mid.

What would drive you to focus more on maybe a premium wardrobe range? And what would that do to the opportunity in that business?

Yes. We like our bedroom business.

We make the vast majority of it. We'backed it into our kitchen range.

So -- and it's grown very nicely, and we've done it in a way that doesn't make the depots focus off kitchens and on to bedrooms because we're absolutely focused on selling kitchens. So it's been a very good incremental opportunity.

Howdens started off its kitchen business and opening price and then moved into the middle. And we've done that.

People don't tend to spend the same amount of money in the bedroom as they do in a part of the home that they are happy to show off to people coming in. So we have pitched it as opening and mid-priced.

So I think that premium opportunity would be much longer term for us. I think we've hit it at exactly the right sort of addressable market is around about 1/5 of what the kitchen market is.

So it represents that sort of opportunity for us. We've got 1/4 of the kitchen market.

And could we ever get there in bedrooms? I don't know, but it's growing very well.

You asked a second question, I can't remember. No, you didn't just.

And then the final question in front of me.

I'll keep it to 2. Thank you for the question.

Regarding the Magnet CBA, Ren hasn't been shy of chasing after customers there. Is there any sort of guidance sense you can give us any benefit to first half numbers in terms of either picking up magnet customers or anything of that nature that you can point to?

Yes. I don't know if I can really.

I mean we've got a very long history with Magnet, obviously, because Matthew came out of Magnet, a lot of our earlier managers in Magnet. There's still a lot of Magnet managers around.

So we've got a very strong sense of what's going on in that business. And we've taken a number of the sites already, and we may take some more, but when I sit in front of the depot managers, which we do 7 times a year in front of every depot manager, I never ever, ever hear Magnet as a concern.

I don't even hear we'won business against Magnet. It's just sort of gone sort of thing.

So there's nothing really I'd point to there at all.

And just as a lead indicator in the international business, can you give us a bit of a flavor or a sense of how the number of accounts is developing and how you're going about doing that, please?

Yes. We do it similar to the U.K.

actually, that's our most successful way is developers out in the road building accounts and building relationships with customers, and it's growing very well. So it takes time to show a customer how they can make money out of the Howdens offering.

And our best depots in France do that incredibly well. So yes, we are growing the account base well.

We had one of our U.K. regional Managing Directors in France for 2 years.

He's just returned having handed over to a local who's reporting into Sebastian Crychek. And Zarren would have been very, very strong on growing the account base and the conversion rates that are brought from that.

So I think those processes are properly installed in the French business now.

Okay. Great.

I was going to ask about the DIY kitchens balance sheet, but I'll take that offline.

Okay. Great.

I think that summarizes it. We're done.

Thank you very much.