* 16 weeks to April 16 same depot sales up 5.2 percent
* Says gross margin similar to 2010 as a whole
* Property deals to cut future costs by 17 million sterling
* Shares down 2.3 percent
(Adds detail, CEO, analyst comment, shares)
By James Davey
LONDON, April 28 (Reuters) - British kitchen supplier Howden Joinery posted a rise in sales so far this year, showing the residential building market is holding up better than the wider retail market.
The firm, which supplies kitchen units and joinery to over 200,000 small builders from 494 UK depots, said on Thursday sales at depots open over a year rose 5.2 percent in the 16 weeks to April 16.
That compares with a rise of 11.6 percent in the first two months of 2011, an outcome flattered by a snow-impacted comparative last year.
Total revenue from UK depots increased 7.8 percent, while gross margin over the period was similar to that seen in 2010.
The firm said underlying sales growth was consistent with market forecasts for total sales growth for 2011 of 5 percent.
A raft of British retailers have issued profit warnings over the past month as the economic outlook has darkened, with consumers worried about government job and welfare cuts, muted wage growth and the prospect of higher interest rates.
A survey on Thursday showed UK consumer morale fell to a two-year low in April.
Howden, which emerged from the old MFI Furniture business, has, however, prospered. It does not serve the retail market, focusing instead on trade customers, who typically put more value on the quality of service and products than prices.
"The strengths and uniqueness of our business model ... set us apart and continue to enable us to make progress in the ongoing tough market conditions," said CEO Matthew Ingle.
Prior to Thursday's update shares in Howden had increased by 48 percent over the last six months as it traded well and property liabilities relating to its previous ownership of MFI were mitigated.
The stock was down 2.4 percent at 111.8 pence at 0813 GMT, valuing the business at about 706 million pounds ($1.17 billion), as some investors booked profits on the lack of forecast upgrades.
"Today's update suggests that headline growth ... has slowed but it is important to note that direct comparisons across the most recent two periods (to April 16) are also difficult given the timing of the bank holidays and the implementation of price increases last year," said analysts at Singer Capital Markets.
Howden said that since March further "legacy" property agreements have reduced aggregate future costs by around 17 million pounds.
In March, the firm posted a 47 percent rise in 2010 profit and outlined a plan to resume dividends in the current year. (Editing by Mark Potter and Jane Merriman) ($1=.6035 Pound)