TIDMJHD
RNS Number : 3689U
James Halstead PLC
29 March 2019
29 March 2019
JAMES HALSTEAD PLC
INTERIM RESULTS FOR THE HALF-YEARED 31 DECEMBER 2018
Key Figures
James Halstead plc, the AIM listed manufacturer and
international distributor of commercial floor coverings,
reports:
* Revenue at GBP126 million (2018: GBP126 million) -
unchanged
* Operating profit at GBP24.5 million (2018: GBP23.9
million) - up 2.6%
* Pre-tax profit at GBP24.5 million (2018: GBP23.7
million) - up 3.3%
* Basic earnings per ordinary share 9.1p (2018: 8.8p) -
up 3.4%
* Interim dividend increased to a record 4.0p (2018:
3.85p) - up 3.9%
* Net cash at GBP62.8 million
The Chief Executive, Mr. Mark Halstead, commented:
"We have supplied flooring to installations as diverse as the
Spence Copper Mines in the Atacama Desert in Chile to the Hard Rock
Café in Guyana and with profits growth, increased cash and new
ranges developing well - a satisfying first half, cemented with a
record interim dividend."
Enquiries:
James Halstead 0161 767 2500
Mark Halstead, Chief Executive
Gordon Oliver, Finance Director
Hudson Sandler 020 7796 4133
Nick Lyon
Nick Moore
Panmure Gordon (Nomad and Joint
Broker) 020 7886 2500
Ben Thorne
Dominic Morley
Arden Partners (Joint Broker) 020 7614 5900
Paul Shackleton
Benjamin Cryer
CHAIRMAN'S STATEMENT
Trading
Once again it is pleasing to report a record profit at the
interim stage. We are also announcing, once again, a record interim
dividend. In terms of sales, every month showed an increase on the
comparative with the only exception being December. It is clear
that, in December, larger customers were exercising stock control -
not least evidenced by the fact that whilst order volume in the UK
was lower, the number of orders was up 4.8% in the month. Despite
this single poor month, sales in the UK for the six months as a
whole were 3.9% ahead of the comparative period. Export markets
were in the majority of cases strong but with Central Europe
showing a decline of some 1.7% (largely in line with figures
published by our competitors). The start to the second half has
shown a return of solid growth.
Whilst overall turnover was flat in comparison to the prior
year, our gross margin improved as the result of an advantageous
product mix (ie higher added value products) and favourable plant
performance, though impacted to a degree by raw material price
increases. Raw material inflation has been around 3% whereas in the
prior year it was around 18%.
As noted in my last report, we made a significant investment in
new sheet vinyl ranges and it is pleasing to see that in the
important German market we are taking market share, with 15% growth
in homogenous sheet vinyl. Palletone, launched in May 2018,
continues to gain traction.
Our global reach continues and whether it is the Kenitra Agadir
Hospital in Morocco, Tallinn Airport in Estonia or Scania buses in
Poland, our products travel far. Closer to home our Voyager
maritime flooring has been installed onboard Cunard's MS Queen
Elizabeth, in the duty free area of Knock Airport in County Mayo
and, underlining our environmental and sustainability credentials,
Polyflor will feature in the "Active Office" - the UK's first
energy positive building based at Swansea University.
Investment continues with a new showroom / training facility
having been opened in Cologne to provide greater market support to
customers.
Earnings per Share
Our basic earnings per share at 9.1p are above the comparative
period of 8.8p by 3.4%.
Having regard to cash, which stands at a record GBP62.8 million,
I am pleased to say that an interim dividend of 4.0p has been
declared (2018: 3.85p), representing a 3.9% increase and this
reflects both the strength of earnings and the cash reserves of the
Company. This will be payable on 6 June 2019 to those shareholders
on the register at the close of business on 10 May 2019.
Outlook
From projects as diverse as Zora Electronics in Bulgaria to the
Waterport School in Gibraltar we continue to cover the world. The
refurbishment of the Villa Deportiva National in Lima, Peru is a
particularly impressive project that will host the Pan American
Games later this year. This latter project involved significant
volumes of our sheet vinyl and is an example of our focus on repair
and renewal work.
At the time of publishing these results Brexit is still in the
news and while there continues to be much speculation on the
eventual outcome we have undertaken our own review and are
confident that opportunities continue to present themselves and
that our business model is "fit for purpose". We regularly export
to far more countries than are members of the European Union and
are confident of our credentials as leading flooring manufacturers.
That said, there are many complications beyond the practicalities
of port of entry delays - for example duty rates (both cross EU
borders and external) and certification of standards. Our
management has spent extensive time considering the possible
implications and we have made appropriate stock adjustments as a
contingency.
On a far more positive note the start of the second half has
seen a good increase in sales and our newer ranges continue to
increase their market penetration. In January we introduced further
ranges to the market including our first "loose lay" safety
flooring - "QuickLay" and our first fully rigid flooring range -
"EnCore Loc". Both have been well received. Against this background
I have confidence in our continued progress through 2019.
Anthony Wild
Chairman
29 March 2019
Consolidated Income Statement
for the half-year ended 31 December 2018
Half-year Half-year Year
ended ended ended
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Revenue 125,786 126,024 249,510
============ ============ ===========
Operating profit 24,528 23,914 47,148
Net finance cost (52) (229) (446)
Profit before income tax 24,476 23,685 46,702
Income tax expense (5,474) (5,292) (9,994)
Profit for the period 19,002 18,393 36,708
============ ============ ===========
Earnings per ordinary share of 5p:
-basic 9.1p 8.8p 17.7p
-diluted 9.1p 8.8p 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 2018
Half-year Half-year Year
ended ended ended
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 36,870 36,539 36,324
Intangible assets 3,232 3,232 3,232
Deferred tax assets 3,267 3,394 2,674
---------- ---------- ----------
43,369 43,165 42,230
---------- ---------- ----------
Current assets
Inventories 63,664 73,831 71,096
Trade and other receivables 26,911 26,630 32,040
Derivative financial instruments 620 384 971
Cash and cash equivalents 62,795 47,483 50,679
---------- ---------- ----------
153,990 148,328 154,786
---------- ---------- ----------
Total assets 197,359 191,493 197,016
Current liabilities
Trade and other payables 48,930 51,412 48,721
Derivative financial instruments 428 1,434 119
Current income tax liabilities 4,624 4,775 3,769
53,982 57,621 52,609
---------- ---------- ----------
Non-current liabilities
Retirement benefit obligations 18,491 16,532 14,899
Borrowings 200 200 200
Other payables 475 479 491
---------- ---------- ----------
19,166 17,211 15,590
---------- ---------- ----------
Total liabilities 73,148 74,832 68,199
---------- ---------- ----------
Net assets 124,211 116,661 128,817
========== ========== ==========
Equity
Equity share capital 10,404 10,399 10,399
Equity share capital (B shares) 160 160 160
---------- ---------- ----------
10,564 10,559 10,559
Share premium account 3,922 3,805 3,805
Capital redemption reserve 1,174 1,174 1,174
Currency translation reserve 5,680 6,021 5,435
Hedging reserve (130) (186) 668
Retained earnings 103,001 95,288 107,176
Total equity attributable to shareholders of the parent 124,211 116,661 128,817
========== ========== ==========
Consolidated Cash Flow Statement
for the half-year ended 31 December 2018
Half-year Half-year Year
ended ended ended
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Profit for the period 19,002 18,393 36,708
Income tax expense 5,474 5,292 9,994
---------- ---------- ----------
Profit before income tax 24,476 23,685 46,702
Net finance cost 52 229 446
---------- ---------- ----------
Operating profit 24,528 23,914 47,148
Depreciation 1,558 1,548 3,055
Loss/(profit) on sale of plant and equipment 24 (16) 31
Decrease/(increase) in inventories 7,713 (988) 1,247
Decrease/(increase)in trade and other receivables 5,469 4,340 (1,093)
(Decrease)/increase in trade and other payables (598) (7,540) (11,448)
Defined benefit pension scheme service cost 287 290 497
Defined benefit pension scheme employer contributions paid (643) (1,299) (1,517)
Change in fair value of financial instruments 89 (41) 250
Share based payments 5 3 5
Cash inflow from operations 38,432 20,211 38,175
Net interest received 158 51 114
Taxation paid (4,581) (4,337) (9,642)
Cash inflow from operating activities 34,009 15,925 28,647
---------- ---------- ----------
Purchase of property, plant and equipment (2,038) (2,026) (3,567)
Proceeds from disposal of property, plant and equipment 34 111 232
---------- ---------- ----------
Cash outflow from investing activities (2,004) (1,915) (3,335)
---------- ---------- ----------
Equity dividends paid (20,080) (19,238) (27,245)
Shares issued 122 196 196
---------- ---------- ----------
Cash outflow from financing activities (19,958) (19,042) (27,049)
---------- ---------- ----------
Net increase/(decrease) in cash and cash equivalents 12,047 (5,032) (1,737)
---------- ---------- ----------
Effect of exchange differences 69 (17) (116)
Cash and cash equivalents at start of period 50,679 52,532 52,532
Cash and cash equivalents at end of period 62,795 47,483 50,679
========== ========== ==========
Consolidated Statement of Comprehensive Income
for the half-year ended 31 December 2018
Half-year Half-year Year
ended ended ended
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Profit for the period 19,002 18,393 36,708
---------- ---------- ----------
Other comprehensive income net of tax:
Re-measurement of the net defined benefit liability (3,102) 3,317 4,895
Foreign currency translation differences 245 (173) (759)
Fair value movements on hedging instruments (798) 103 957
Other comprehensive income for the period net of tax (3,655) 3,247 5,093
Total comprehensive income for the period 15,347 21,640 41,801
========== ========== ==========
Attributable to equity holders of the parent
15,347 21,640 41,801
========== ========== ==========
Notes to the Interim Results
for the half-year ended 31 December 2018
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 2018.
The figures for the year ended 30 June 2018 are an abridged statement of the group audited
accounts for that year. The financial statements for the year ended 30 June 2018 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 22.4% (2017: 22.3%).
3. Earnings per share
Half-year Half-year Year
ended ended ended
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Profit for the period 19,002 18,393 36,708
--------------- --------------- --------------
Weighted average number of shares in issue 208,031,705 207,957,907 207,965,693
Dilution effect of outstanding share options 45,378 124,938 121,068
Diluted weighted average number shares 208,077,083 208,082,845 208,086,791
Basic earnings per 5p ordinary share 9.1p 8.8p 17.7p
Diluted earnings per 5p ordinary share 9.1p 8.8p 17.6p
4. Dividends
Half-year Half-year Year
ended ended ended
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Equity dividends paid:
Final dividend for the year ended 30 June 2017 - 19,238 19,238
Interim dividend for the year ended 30 June 2018 - - 8,007
Final dividend for the year ended 30 June 2018 20,080 - -
20,080 19,238 27,245
---------- ---------- ----------
Equity dividends declared/proposed at the end of the period
Interim dividend 8,324 8,007 -
Final dividend - - 20,080
Equity dividends per share, paid and declared/proposed are as
follows:
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, paid on 6 June 2018
9.65p final dividend for the year ended 30 June 2018, paid on 7 December 2018
4.00p interim dividend for the year ended 30 June 2019, payable on 6 June 2019, to those shareholders
on the register at the close of business on 10 May 2019
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 at www.jameshalstead.com
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END
IR SEUFLAFUSEDD
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