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James Halstead PLC  -  JHD   

Interim Results

Released 07:00 27-Mar-2018

RNS Number : 8060I
James Halstead PLC
27 March 2018
 

                    

 

      27 March 2018

JAMES HALSTEAD PLC

 

INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2017

 

Key Figures

 

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

 

 

·     Revenue higher at £126.0 million - an increase of 5.4%

 

·     Operating profit higher at £23.9 million - an increase of 1.6%

 

·     Pre-tax profit higher at £23.7 million - an increase of 2.0%

 

·     Basic earnings per ordinary share 8.8p - a increase of 3.5%

 

·     Interim dividend increased to a record 3.85p - an increase of 2.7%

 

·     Net cash at £47.5 million

 

 

     

The Chief Executive, Mr. Mark Halstead, commented:

 

“Yet another record half-year for sales and profit and once again an increase in dividend.”

 

 

 

Enquiries:

 

James Halstead

0161 767 2500

Mark Halstead, Chief Executive

 

Gordon Oliver, Finance Director

 

 

 

Hudson Sandler

020 7796 4133

Nick Lyon

 

 

 

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

 

In my first announcement as Chairman, I am greatly pleased to be able to continue the long tradition of reporting not only a record level of sales at the interim but more gratifyingly increased profit and an increased interim dividend.

 

Group turnover at £126.0 million (2016: £119.6million) was some 5.4% ahead. The mix and range of customers continues to be as diverse as it is global, whether it is the Kitéa Furniture stores across Morocco, the Tullibardine Whisky Distillery located in Perth & Kinross or the The University of Corsica founded by Pasquale Paoli in 1765. Our sales encompass new buildings, extensions and refurbishment. The UK turnover is one third of total sales and was some 2.6% ahead of the comparative period. Given the tumult in the facilities management sector, not least the demise of Carillion, this is to my mind, commendable. Objectflor, reported just over 2% growth in sales in local currency which is creditable against the strong competition. In sterling terms Europe overall fared well with 4.4% sales growth in Germany and just over 14% in France.

 

Our pre-tax profit at £ 23.7 million (2016: £23.2 million) is some 2% ahead of the prior year comparative and is creditable against the raw material cost increases in this six months' trading, some 13.9% ahead of the comparable period. We noted in our preliminary results (issued 2 October 2017) that we had commenced utilising bulk storage for raw materials in Teesside to more easily source raw materials from Asia. This has not only mitigated European shortages but has also led to lower raw material prices than those available from local sources. Up to 50% of our polymer requirements are sourced this way and are a hedge against pricing / exchange rate issues with European supply. In addition, we can offset customs import duty as around 25% of our exports are outside the EU customs area.

 

One of the many positives in this trading period is that our sales in Australia have grown 7%. Having moved our Queensland warehouse to larger premises, opened our first warehouse in South Australia and augmented our sales force with representatives in Far North Queensland and Tasmania, the business continues to drive bottom line growth.

 

I am pleased to report that continued investment in sales representation at Polyflor Canada Inc. is bearing fruit with over a 25% increase in turnover in the period. Falck Design, based in Sweden, posted 9% growth. Polyflor India, having made a good start last year, has slipped backward with a decline in sales that resulted from the introduction of general sales tax (GST) in July 2017 which disrupted construction activity and purchasing particularly in our core healthcare sector. Current trading is now back up at prior year levels and growing. Our sales in the Middle East have also more than doubled with numerous healthcare and education sector projects completing together with projects in Qatar such as the Al Bayt and Khalifa Stadiums.

 

The Company will soon reach another milestone in its history- seventy years as a publicly quoted company. James Halstead floated on the LSE on 4th May 1948. At float there were 700,000 shares of 10 shillings in issue and anyone who followed the buy advice of W I Carr (stockbrokers) in November 1948 would have seen an approximate 300,000% return on their investment (not including dividends). One month after our flotation, one of our major customers of today also came into being- the National Health Service. These days our healthcare sales extend far and wide from Mediclinic Dubai, to Guizhou Provincial Cancer Hospital in China.

 

In addition to healthcare, our presence in retail continues to expand with global partners such as Montblanc stores (globally), Marc Dorcel stores across France, Thalia book stores across Germany and Freshii restaurants in Canada. Further examples of the breadth of applications of our flooring are the Indian Space Research Organisation (ISRO) semi-conductor laboratories, in Dehli, the Universal Church of San Paolo in Brazil and Central Bark dog hotel in Auckland.

 

We continue to focus on customer service to maintain market penetration and to be industry leaders, for example in responsible sourcing. BES6001 certification is the "gold" standard for the responsible sourcing of construction products and in recent months Polyflor was awarded an "excellent" rating by the independent certifying body. We continue to trail blaze in our approach to PVC waste collection and recycling and Polyflor are proud to announce the 8th annual Recofloor Awards event, which will soon take place at Anfield Football Stadium, hosted by footballing legend Kevin Keegan.

 

Earnings per Share

 

Our basic earnings per share at 8.8p are above the comparative period of 8.5p by 3.5%.

 

Having regard to cash, which stands at £47.5 million, I am pleased to say that an interim dividend of 3.85p has been declared (2017: 3.75p), representing a 2.7% increase and this reflects both the strength of earnings and the cash reserves of the Company. This will be payable on 6 June 2018 to those shareholders on the register at the close of business on 4 May 2018.

 

Outlook

 

The three months leading up to the half-year end saw us preparing for range updates and new product launches at the major European exhibitions held in January and February and I am pleased to report an encouragingly strong reception for these which should underpin the second half of the year.

 

We noted in our pre-close trading update (29 January 2018) that a German competitor had entered administration and would be closing its resilient vinyl manufacturing facility and this has now happened.  In consequence we have received multiple enquires from customers of that business. To date, we have converted many of these enquiries into sales across the European market and more will follow.

 

Looking at the period since the half-year it is pleasing to note that January trading was a particularly strong sales month and February and March also compared well to last year such that, to date, sales are ahead of the comparative by some 10%.

 

Against this background I have confidence in continued progress.

 

 

Anthony Wild

Chairman

27 March 2018

 

Consolidated Income Statement

for the half-year ended 31 December 2017

 

 

 

Half-year 

ended 

31.12.17 

£'000 

 

Half-year 

ended 

31.12.16 

£'000 

 

Year 

ended 

30.06.17 

£'000 

 

 

 

 

Revenue

126,024 

119,558 

240,784 

 

 

 

 

Operating profit

23,914 

23,532 

47,284 

Net finance cost

(229)

(311)

(668)

 

 

 

 

Profit before income tax

23,685 

23,221 

46,616 

 

 

 

 

Income tax expense

(5,292)

(5,533)

(10,106)

 

 

 

 

Profit for the period

18,393 

17,688 

36,510 

 

 

 

 

 

 

 

 

Earnings per ordinary share of 5p:

 

 

 

-basic

8.8p

8.5p

17.6p

-diluted

8.8p

8.5p

17.6p

 

 

 

 

 

 

 

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 2017

 

 

Half-year

ended

31.12.17

£'000

Half-year

ended

31.12.16

£'000

Year

ended

30.06.17

£'000

Non-current assets

 

 

 

Property, plant and equipment

36,539 

35,176 

36,103 

Intangible assets

3,232 

3,232 

3,232 

Deferred tax assets

3,394 

5,704 

4,151 

 

43,165 

44,112 

43,486 

Current assets

 

 

 

Inventories

73,831 

61,948 

72,936 

Trade and other receivables

26,630 

24,851 

31,176 

Derivative financial instruments

384 

1,670 

416 

Cash and cash equivalents

47,483 

51,607 

52,532 

 

148,328 

140,076 

157,060 

 

 

 

 

Total assets

191,493 

184,188 

200,546 

 

 

 

 

Current liabilities

 

 

 

Trade and other payables

51,412 

51,361 

59,321 

Derivative financial instruments

1,434 

636 

1,362 

Current income tax liabilities

4,775 

5,287 

3,860 

 

57,621 

57,284 

64,543 

 

 

 

 

Non-current liabilities

 

 

 

Retirement benefit obligations

16,532 

28,127 

21,257 

Deferred tax liabilities

-

603 

-

Borrowings

200 

200 

200 

Other payables

479 

476 

486 

 

17,211 

29,406 

21,943 

 

 

 

 

Total liabilities

74,832 

86,690 

86,486 

 

 

 

 

Net assets

116,661 

97,498 

114,060 

 

 

 

 

Equity

 

 

 

Equity share capital

10,399 

10,381 

10,393 

Equity share capital (B shares)

160 

160 

160 

 

10,559 

10,541 

10,553 

Share premium account

3,805 

3,256 

3,615 

Capital redemption reserve

1,174 

1,174 

1,174 

Currency translation reserve

6,021 

5,472 

6,194 

Hedging reserve

(186)

530 

(289)

Retained earnings

95,288 

76,525 

92,813 

Total equity attributable to shareholders of the parent

116,661 

97,498 

114,060 

 

 

 

 

 

 

Consolidated Cash Flow Statement

for the half-year ended 31 December 2017

 

 

Half-year 

ended 

31.12.17 

£'000 

Half-year 

ended 

31.12.16 

£'000 

Year 

ended 

30.06.17 

£'000 

 

 

 

 

Cash inflow from operations

20,211 

31,194 

47,478 

Net interest received

51 

81 

101 

Taxation paid

(4,337)

(4,548)

(10,682)

 

 

 

 

Cash inflow from operating activities

15,925 

26,727 

36,897 

 

 

 

 

Purchase of property, plant and equipment

(2,026)

(2,141)

(4,234)

Proceeds from disposal of property, plant and equipment

111 

82 

234 

Cash outflow from investing activities

(1,915)

(2,059)

(4,000)

 

 

 

 

Equity dividends paid

(19,238)

(17,646)

(25,438)

Shares issued

196 

167 

538 

Cash outflow from financing activities

(19,042)

(17,479)

(24,900)

 

 

 

 

 

 

 

 

Net (decrease)/ increase in cash and cash equivalents

(5,032)

7,189 

7,997 

Effect of exchange differences

(17)

322 

439 

Cash and cash equivalents at start of period

52,532 

44,096 

44,096 

 

 

 

 

Cash and cash equivalents at end of period

47,483 

51,607 

52,532 

 

 

Consolidated Statement of Comprehensive Income

for the half-year ended 31 December 2017

 

 

 

 

 

 

 

     

 

 

Half-year 

ended 

31.12.17 

£'000 

 

Half-year 

ended 

31.12.16 

£'000 

 

Year 

ended 

30.06.17 

£'000 

 

Profit for the period

18,393 

17,688 

36,510 

 

Other comprehensive income net of tax:

 

 

 

Re-measurement of the net defined benefit liability

3,317 

(2,853)

2,404 

Foreign currency translation differences

(173)

1,446 

2,168 

Fair value movements on hedging instruments

103 

1,229 

410 

 

 

 

 

Other comprehensive income for the period net of tax

 

3,247 

 

(178)

4,982 

 

 

 

 

Total comprehensive income for the period

21,640 

17,510 

         41,492 

 

 

 

 

Attributable to equity holders of the

 

 

 

parent

21,640 

17,510 

41,492 

 

 

 

 

 

Notes to the Interim Results

for the half-year ended 31 December 2017

 

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 2017.

 

The figures for the year ended 30 June 2017 are an abridged statement of the group audited accounts for that year. The financial statements for the year ended 30 June 2017 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 22.3% (2016: 23.8%).

 

 

3.

Earnings per share

 

 

 

 

 

 

 

Half-year

ended

31.12.17

£'000

 

Half-year

ended

31.12.16

£'000

 

Year

ended

30.06.17

£'000

 

 

 

 

 

 

 

 

Profit for the period

18,393

17,688

36,510

 

 

 

 

 

 

 

 

Weighted average number of shares in issue

207,957,907

207,544,288

207,620,432

 

 

Dilution effect of outstanding share options

124,938

381,936

216,506

 

 

Diluted weighted average number shares

208,082,845

207,926,224

207,836,938

 

 

 

 

 

 

 

 

Basic earnings per 5p ordinary share

8.8p

8.5p

17.6p

 

 

Diluted earnings per 5p ordinary share

8.8p

8.5p

17.6p

 

 

 

4.

Dividends

 

 

 

 

 

Half-year

ended

31.12.17

£'000

Half-year

ended

31.12.16

£'000

Year

ended

30.06.17

£'000

 

Equity dividends paid:

 

 

 

 

 

Final dividend for the year ended 30 June 2016

-

17,646

17,646

 

Interim dividend for the year ended 30 June 2017

-

-

7,792

 

Final dividend for the year ended 30 June 2017

19,238

-

-

 

 

 

 

 

 

 

19,238

17,646

25,438

 

 

 

 

 

 

Equity dividends declared/proposed at the end of the period

 

 

 

 

Interim dividend

8,007

7,792

-

 

Final dividend

-

-

19,238

 

 

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

 

 

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, paid on 6 June 2017

9.25p final dividend for the year ended 30 June 2017, paid on 1 December 2017

3.85p interim dividend for the year ended 30 June 2018, payable on 6 June 2018, to those shareholders on the register at the close of business on 4 May 2018

 

 

 

 

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