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James Halstead PLC  -  JHD   

Interim Results

Released 07:00 29-Mar-2017

RNS Number : 8109A
James Halstead PLC
29 March 2017
 

                    

 

      29 March 2017

JAMES HALSTEAD PLC

 

INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016

 

Key Figures

 

James Halstead plc, the AIM listed manufacturer and international distributor of commercial floor coverings, reports:

 

 

·     Revenue higher at £119.6 million - an increase of 4.3%

 

·     Operating profit higher at £23.5 million - an increase of 0.9%

 

·     Pre-tax profit higher at £23.2 million - an increase of 0.8%

 

·     Basic earnings per ordinary share 8.5p - a decrease of 1.1%

 

·     Interim dividend increased to a record 3.75p - an increase of 7.1%

 

·     Net cash at £51.6 million

 

 

     

The Chief Executive, Mr. Mark Halstead, commented:

 

"Despite a tough six months in the UK and prevailing cost increases in raw materials - yet another record half year and a 7.1 % increase in dividend."

 

 

Enquiries:

 

James Halstead

0161 767 2500

Mark Halstead, Chief Executive

 

Gordon Oliver, Finance Director

 

 

 

Hudson Sandler

020 7796 4133

Nick Lyon/Jocelyn Spottiswoode

 

 

 

Panmure Gordon (Nomad and Joint Broker)

020 7886 2500

Ben Thorne

Andrew Potts

 

 

 

 

Arden Partners (Joint Broker)        

Chris Hardie                                    

020 7614 5900

 

 

 

CHAIRMAN'S STATEMENT

Trading

 

The group turnover at £119.6 million (2015: £114.7 million) was some 4.3% ahead. The mix and range of customers such as "Thalia" book stores throughout Germany, the Yau Ma Tei Police Station (Hong Kong) and the Jiaotouhemei Kindergarten of Enshi, in Hubei Province of the People's Republic of China continues to impress.

 

The profit before tax of £23.2 million (2015: £23.0 million) is marginally ahead of the comparative period.

 

The benefits of weaker sterling on exports have been beneficial and exports recorded growth of just over 12%, in constant currency this would have been 2.5%. Offsetting this to an extent has been a 7% decline in UK turnover that we believe is primarily the result of de-stocking in the UK. During the period one of our significant UK customers, a subsidiary of SIG plc, drastically de-stocked and faced buying restrictions. This subsidiary was sold to a UK based private equity investor in mid-February 2017, and it is to be hoped that more regular trading patterns may ensue.

 

International trade partners are becoming a more common feature of our group of companies, whether it is Mont Blanc stores, Chanel franchises or the new Dyson stores where we are not only able to arrange supply promptly from local stock but to do so at a competitive price.

 

Our Australia and New Zealand businesses have both seen growth in sales and profitability. As noted in the 2016 annual report, the rewards of the restructuring of the business last year which began to be seen in the latter part of that period are being reaped in this financial year. The focus on quality of service has seen the businesses meeting demand effectively and in some cases benefiting from competitors' failure in this area.

 

The move to a new Auckland warehouse took place smoothly, resulting in a lower cost operation in the future.

 

The European businesses are, in constant currency terms, on a par with last year. They have a busy 6 months ahead with the launch of key Luxury Vinyl Tile, Loose-lay and Heterogeneous products. Having been launched at exhibitions in January and February 2017 and well received it is anticipated that the benefits from sales of these products will be seen in the second half. Whether it is Croatia, with the Hotel Sipar in Umag or the Hotel des Trois Hiboux, within the Asterix theme park near Paris, our European business continues to be respected throughout the industry.

 

Scandinavia followed a very quiet beginning to the financial year with a strong performance in the second quarter and both sales and profits are ahead of the equivalent period. Felleskjøpet Agri; a cooperative owned by Norwegian farmers, is but one project of note that we were involved in.

 

Our business in Canada continues to meet the objectives set for it and we have a solid sales base for the country. Local sales continue to increase and we have expanded our staff representation in the country to include British Columbia, an area previously handled by a distributor. As the resources sector continues to suffer the business relating to portable buildings has retrenched. However, contracts into other sectors such as retail and commercial buildings have been developed over the last 4 years such that portable buildings are now a minor part of our Canadian business. The team cite "The Heights",Skeena - the country's largest passive  residence as a key project. Given that passive building technology is becoming an increasingly important part of our sustainable future we are particularly pleased to be associated with this project.

 

Our fledgling India business has continued to extend its roots in the first half of this year. A team of salespeople operating across the sub-continent means that we are obtaining specifications and enquiries at a far higher level. Deliveries continue to grow, particularly into the health care sector but also into industrial and pharmaceutical customers. Examples such as the Ayurdundra Hospital in Guwahati, the ESIC Hospital in Bhubaneswar and the ubiquitous Barclays Bank, in Delhi are but a few.

 

Earnings per Share

 

Our basic earnings per share at 8.5p are slightly below the comparative of 8.6p though still very healthy relative to dividends.

 

Having regard to cash, I am pleased to say that an interim dividend of 3.75p has been declared (2016: 3.5p), representing a 7.1% increase and this reflects both the strength of earnings and the cash reserves of the Company. This will be payable on 6 June 2017 to those shareholders on the register at the close of business on 5 May 2017.

 

Total Shareholder Return

 

We continue to focus on dividend growth and it is, perhaps, of interest to consider our total shareholder return which combines share price appreciation and dividends paid to express the total return to shareholders as a percentage. Our total shareholder return from 1 January 2001 to 31 December 2016 is over 4,700%, which compares favourably to the FTSE All Share index (124%) and FTSE AIM All Share index (-31%).

 

Outlook

 

It is only a short period of time since the Brexit vote and confidence is high for us as exporters. The UK market is solid but there is inevitably upward price pressure on raw materials and overseas sourced goods. Overall this is counterbalanced by opportunities for overseas exports from a weaker sterling.

 

Taking into account these points, and with the extremely positive feedback from our range re-vamps that have been presented to the trade at several major trade fairs we continue to be confident of progress through the year.

 

 

Geoffrey Halstead

Chairman

29 March 2017

 

Consolidated Income Statement

for the half-year ended 31 December 2016

 

 

 

Half-year 

ended 

31.12.16 

£'000 

 

Half-year 

ended 

31.12.15 

£'000 

 

Year 

ended 

30.06.16 

£'000 

 

 

 

 

Revenue

119,558 

114,675 

226,141 

 

 

 

 

Operating profit

23,532 

23,311 

46,083 

Net finance cost

(311)

(272)

(584)

 

 

 

 

Profit before income tax

23,221 

23,039 

45,499 

 

 

 

 

Income tax expense

(5,533)

(5,304)

(10,243)

 

 

 

 

Profit for the period

17,688 

17,735 

35,256 

 

 

 

 

 

 

 

 

Earnings per ordinary share of 5p:

 

 

 

-basic

8.5p

8.6p

16.4p

-diluted

8.5p

8.5p

16.3p

 

 

 

 

 

 

 

All amounts relate to continuing operations.

 

Details of dividends paid and declared/proposed are given in note 4.

 

 

 

Consolidated Balance Sheet

as at 31 December 2016

 

 

Half-year

ended

31.12.16

£'000

Half-year

ended

31.12.15

£'000

Year

ended

30.06.16

£'000

Non-current assets

 

 

 

Property, plant and equipment

35,176

32,185

34,384

Intangible assets

3,232

3,232

3,232

Deferred tax assets

5,704

5,061

5,129

 

44,112

40,478

42,745

Current assets

 

 

 

Inventories

61,948

58,567

62,828

Trade and other receivables

24,851

27,909

33,820

Derivative financial instruments

1,670

696

433

Cash and cash equivalents

51,607

55,850

44,096

 

140,076

143,022

141,177

 

 

 

 

Total assets

184,188

183,500

183,922

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

51,361

50,634

53,395

Derivative financial instruments

636

635

2,066

Current income tax liabilities

5,287

5,346

4,300

Dividend payable

-

16,303

-

 

57,284

72,918

59,761

 

 

 

 

Non-current liabilities

 

 

 

Retirement benefit obligations

28,127

18,904

25,431

Deferred tax liabilities

603

709

603

Borrowings

200

200

200

Other payables

476

390

460

 

29,406

20,203

26,694

 

 

 

 

Total liabilities

86,690

93,121

86,455

 

 

 

 

Net assets

97,498

90,379

97,467

 

 

 

 

Equity

 

 

 

Equity share capital

10,381

10,373

10,374

Equity share capital (B shares)

160

160

160

 

10,541

10,533

10,534

Share premium account

3,256

3,096

3,096

Capital redemption reserve

1,174

1,174

1,174

Currency translation reserve

5,472

87

4,026

Hedging reserve

530

14

  (699)

Retained earnings

76,525

75,475

79,336

 

 

 

 

Total equity attributable to shareholders of the parent

97,498

90,379

97,467

 

 

 

 

 

 

Consolidated Cash Flow Statement

for the half-year ended 31 December 2016

 

 

Half-year 

ended 

31.12.16 

£'000 

Half-year 

ended 

31.12.15 

£'000 

Year 

ended 

30.06.16 

£'000 

 

 

 

 

Cash inflow from operations

31,194 

31,059 

50,325 

Net interest received

81 

96 

134 

Taxation paid

(4,548)

(4,729)

(10,220)

 

 

 

 

Cash inflow from operating activities

26,727 

26,426 

40,239 

 

 

 

 

Purchase of property, plant and equipment

     (2,141)

     (2,180)

(4,842)

Proceeds from disposal of property, plant and equipment

         82 

         166 

200 

Cash outflow from investing activities

(2,059) 

(2,014) 

(4,642)

 

 

 

 

Equity dividends paid

(17,646)

(16,302)

(39,867)

Shares issued

167 

188 

189 

Cash outflow from financing activities

(17,479)

(16,114)

(39,678)

 

 

 

 

 

 

 

 

Net increase/(decrease) in cash and cash equivalents

        7,189 

        8,298 

              (4,081)

Effect of exchange differences

322

124

       749 

Cash and cash equivalents at start of period

44,096 

47,428 

47,428 

 

 

 

 

Cash and cash equivalents at end of period

51,607 

55,850 

44,096 

 

 

Consolidated Statement of Comprehensive Income

for the half-year ended 31 December 2016

 

 

 

 

 

 

 

     

 

 

Half-year 

ended 

31.12.16 

£'000 

 

Half-year 

ended 

31.12.15 

£'000 

 

Year 

ended 

30.06.16 

£'000 

 

Profit for the period

17,688 

17,735 

35,256 

 

Other comprehensive income net of tax:

 

 

 

Actuarial loss on the defined benefit scheme

 (2,853)

 (855)

         (7,360)

Deferred taxation - change of rate

             - 

             - 

             106 

Foreign currency translation differences

        1,446 

         869 

         4,808

Fair value movements on hedging instruments

      1,229 

      (1,413)

         (2,126)   

 

 

 

 

Other comprehensive income for the period net of tax

 

(178)

 

(1,399)

(4,572)

 

 

 

 

Total comprehensive income for the period

17,510 

16,336 

         30,684 

 

 

 

 

Attributable to equity holders of the

 

 

 

parent company

17,510 

16,336 

30,684 

 

 

 

 

 

Notes to the Interim Results

for the half-year ended 31 December 2016

 

1.

Basis of preparation

 

 

The interim financial statements are unaudited and do not constitute statutory accounts as defined within the Companies Act 2006.

 

The principal accounting policies applied in the preparation of the consolidated interim statements are those set out in the annual report and accounts for the year ended 30 June 2016.

 

The figures for the year ended 30 June 2016 are an abridged statement of the group audited accounts for that year. The financial statements for the year ended 30 June 2016 were audited and have been delivered to the Registrar of Companies.

 

As is permitted by the AIM rules, the directors have not adopted the requirements of IAS34 'Interim Financial Reporting' in preparing the interim financial statements. Accordingly the interim financial statements are not in full compliance with IFRS.

 

 

2.

Taxation

 

 

Income tax has been provided at the rate of 23.8% (2015: 23.0%).

 

 

3.

Earnings per share

 

 

 

 

 

 

 

Half-year

ended

31.12.16

£'000

 

Half-year

ended

31.12.15

£'000

 

Year

ended

30.06.16

£'000

 

 

 

 

 

 

 

 

Profit for the period

17,688

17,735

35,256

 

 

 

 

 

 

 

 

Weighted average number of shares in issue

207,544,288

207,392,532

207,431,307

 

 

Dilution effect of outstanding share options

381,936

541,827

473,629

 

 

Diluted weighted average number shares

207,926,224

207,934,359

207,904,936

 

 

 

 

 

 

 

 

Basic earnings per 5p ordinary share

8.5p

8.6p

17.0p

 

 

Diluted earnings per 5p ordinary share

8.5p

8.5p

17.0p

 

 

 

  

 

 

4.

Dividends

 

 

 

 

 

Half-year

ended

31.12.16

£'000

Half-year

ended

31.12.15

£'000

Year

ended

30.06.16

£'000

 

Equity dividends paid:

 

 

 

 

 

Final dividend for the year ended 30 June 2015

-

16,302

16,302

 

Interim dividend for the year ended 30 June 2016

-

-

7,262

 

Final dividend for the year ended 30 June 2016

17,646

-

-

 

Special dividend

-

-

16,303

 

 

17,646

16,302

39,867

 

 

 

 

 

 

Equity dividends declared/proposed at the end of the period

 

 

 

 

Interim dividend

7,785

7,262

-

 

Final dividend

-

-

17,646

 

 

          Equity dividends per share, paid and declared/proposed are as follows:

 

 

7.858p final dividend for the year ended 30 June 2015, paid on 4 December 2015

3.5p interim dividend for the year ended 30 June 2016, paid on 3 June 2016

8.5p final dividend for the year ended 30 June 2016, paid on 2 December 2016

3.75p interim dividend for the year ended 30 June 2017, payable on 6 June 2017, to those shareholders on the register at the close of business on 5 May 2017

7.858p special dividend was declared on 27 November 2015 and paid on 26 February 2016

 

 

 

5.

 

 

Copies of the interim results

 

 

Copies of the interim results have been sent to shareholders who requested them. Further copies can be obtained from the Company's registered office, Beechfield, Hollinhurst Road, Radcliffe, Manchester, M26 1JN and on the Company's website - www.jameshalstead.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Interim Results - RNS