Interim Results

RNS Number : 9145I
James Halstead PLC
31 March 2015
 

                    

 

      31 March 2015

JAMES HALSTEAD PLC

 

INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2014

 

Key Figures

 

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

 

 

·     Revenue higher at £117.2 million - an increase of 5.7%

 

·     Operating profit higher at £21.6 million - an increase of 5.1%

 

·     Pre-tax profit higher at £21.4 million - an increase of 5.3%

 

·     Basic earnings per ordinary share 7.8p - an increase of 5.4%

 

·     Interim dividend increased to a record 3.142p - an increase of 4.7%

 

·     Net cash at £46.7 million

 

 

 

     

 

The Chief Executive, Mr. Mark Halstead, commented:

 

"After 100 years of manufacturing, 67 years as a quoted company and in our 40th year of increased dividend I am reminded of the famous Kipling quote "gardens are not made by sitting in the shade". We have grown and prospered and I have confidence in the full year result".

 

Enquiries:

 

 

Mark Halstead, Chief Executive

 

Gordon Oliver, Finance Director

Telephone: 0161 767 2500

 

 

Nick Lyon - Hudson Sandler

Telephone: 020 7796 4133

 

 

Phil Adams/Paul Lines - Altium

Telephone: 020 7484 4040

 

Chris Hardie - Arden Partners      

Telephone: 020 7614 5900    

                 

CHAIRMAN'S STATEMENT

 

This company was founded on 10 May 1915 and based at Crow Oak Works Radcliffe. Our humble beginnings were as a business based on the waxing and shower-proofing of cloth for the raincoat market. Today we continue to manufacture on the same site, albeit in a totally different marketplace and I believe few manufacturing companies can claim continuous activity on the same site for 100 years.

 

By way of celebration, I am most pleased to report an increase in turnover to £117.2 million (2013: £110.9 million), representing growth of 5.7%. The strength of Sterling has impacted upon the figures and the like for like turnover is some 10.3% ahead of last year.

 

It is also pleasing to report improved pre-tax profit at £21.4 million (2013: £20.4 million), an increase of 5.3%.

 

Given the strength of our currency here in the UK, the effects on the translation of our results are inevitable but it is gratifying to report continuing steps forward.

 

 

Trading

 

UK trading continues to be solid despite competitor activity and the figures reported for this half year are 9% ahead of the comparative. The UK accounts for just over a third of our total turnover and our position as market leader continues. Our European business has grown by some 6.7% (at constant exchange rates) and our Australasian businesses by just over 11% (again at constant exchange rates). Combined these markets represent some 85% of turnover. I note that our flooring continues to be installed across the world and has reached the Sjøskrenten student hostel in Longyearbyen on the Svalbard archipelago, probably our most northern contract yet and an area where polar bears outnumber people.

 

Gross margin is marginally ahead of the prior year. There are downward pressures on raw materials which are helpful but it must be noted our competitors also have the advantages of this easing. 

 

The day to day business is as much about refurbishment as it is new buildings and our sales team have ensured that refurbishment projects as far afield as the Cardiff International Swimming Pool; the Calgary Stampede showground and the extensive Daenisches Bettenlager retail outlets in Germany are part of our extensive list of fitted contracts.

 

Overheads have grown faster than inflation, which though disappointing is the reality of the nature of these costs and the largest are the infrastructure costs associated with representing our ranges in global markets. The costs are very much in line with planned expenditure and our deeper expansion into new territories, notably the Middle East, India and Canada.

 

The balance sheet is, as usual, robust with the component showing the largest change being cash which at £46.7 million is 21.2% ahead of the comparative (2013: £38.6 million). This is the result of healthy cash flow from operations of £28.3 million (2013: £20.2 million) and after dividends paid out of £14.5 million (2013: £ 12.4 million).

 

 

Earnings per Share

 

Our basic earnings per share at 7.8p are 5.4% ahead of the comparative of 7.4p and the Board is pleased to yet again propose an increased interim dividend.

 

Having regard to cash I am pleased to say that a dividend of 3.142p can be paid (2013: 3.0p), representing a 4.7% increase and this reflects both the strength of earnings and the cash reserves of the Company. This will be payable on 5 June 2015 to those shareholders on the register at the close of business on 8 May 2015.

 

 

Outlook

 

Our portfolio continues to be updated and re-launched with new designs and features: Simplay (a loose lay tile) was awarded the accolade of Best Flooring Innovation by the influential EuroDecor magazine and Expona Flow (our design sheet, manufactured in Teesside) was launched to some acclaim at the BAU exhibition in Munich this January. Just one of the refurbishments that continue to be supplied is the factory shop at Cadbury World in Bourneville.

 

Recofloor, our award winning recycling scheme, has collected record amounts of waste destined for landfill and returned it to the manufacturing loop and we are the first flooring manufacturer to achieve BES 6001 (Responsible Sourcing) underlining our approach of sound and demonstrable environmental responsibility.

 

There are many positives to our outlook and in the difficult times of recent years we have delivered the gains we had targeted. Once again we have increased our market share but the current strength of Sterling to near record levels presents more challenges and headwinds in the coming months. That said, the quote of Churchill that "kites rise highest against the wind, not with it" will be our mantra.

 

I remain confident of further progress during the rest of the year.

 

 

 

 

 

Geoffrey Halstead

Chairman

31 March 2015

 

Consolidated Income Statement

for the half-year ended 31 December 2014

 

 

 

Half-year 

ended 

31.12.14 

£'000 

 

Half-year 

ended 

31.12.13 

£'000 

 

Year 

ended 

30.06.14 

£'000 

 

 

 

 

Revenue

117,168 

110,881 

223,488 

 

 

 

 

Operating profit

21,640 

20,592 

42,236 

Net finance cost

(215)

(237)

(483)

 

 

 

 

Profit before income tax

21,425 

20,355 

41,753 

 

 

 

 

Income tax expense

(5,222)

(5,132)

(10,301)

 

 

 

 

Profit for the period

16,203 

15,223 

31,452 

 

 

 

 

 

 

 

 

Earnings per ordinary share of 5p:

 

 

 

-basic

7.8p

7.4p

15.2p

-diluted

7.8p

7.3p

15.1p

 

 

 

 

 

 

 

All amounts relate to continuing operations.

 

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

 

 

 

Consolidated Balance Sheet

as at 31 December 2014

 

 

Half-year

ended

31.12.14

£'000

Half-year

ended

31.12.13

£'000

Year

ended

30.06.14

£'000

Non-current assets

 

 

 

Property, plant and equipment

31,954

31,093

31,358

Intangible assets

3,232

3,232

3,232

Deferred tax assets

5,641

5,339

4,755

 

40,827

39,664

39,345

Current assets

 

 

 

Inventories

58,025

56,567

57,423

Trade and other receivables

29,438

27,653

36,621

Derivative financial instruments

2,427

989

342

Cash and cash equivalents

46,716

38,557

38,677

 

136,606

123,766

133,063

Current liabilities

 

 

 

Trade and other payables

54,235

49,769

53,334

Derivative financial instruments

286

694

211

Current income tax liabilities

4,902

5,350

3,350

 

59,423

55,813

56,895

 

 

 

 

Net current assets

77,183

67,953

76,168

 

 

 

 

Non-current liabilities

 

 

 

Retirement benefit obligations

20,115

14,805

15,554

Deferred tax liabilities

744

815

744

Borrowings

200

200

200

Other payables

389

432

428

 

21,448

16,252

16,926

 

 

 

 

Net assets

96,562

91,365

98,587

 

 

 

 

Equity

 

 

 

Equity share capital

10,363

10,356

10,353

Equity share capital (B shares)

160

160

160

 

10,523

10,516

10,513

Share premium account

2,899

2,659

2,740

Capital Redemption reserve

1,174

1,167

1,174

Currency translation reserve

1,455

3,709

3,086

Hedging reserve

1,237

232

104

Retained earnings

79,274

73,082

80,970

 

 

 

 

Total equity attributable to shareholders of the parent

96,562

91,365

98,587

 

 

 

 

 

 

Consolidated Cash Flow Statement

for the half-year ended 31 December 2014

 

 

Half-year 

ended 

31.12.14 

£'000 

Half-year 

ended 

31.12.13 

£'000 

Year 

ended 

30.06.14 

£'000 

 

 

 

 

Cash inflow from operations

28,315 

20,178 

35,034 

Net interest received

138 

99 

156 

Taxation paid

(3,671)

(5,045)

(11,500)

 

 

 

 

Cash inflow from operating activities

24,782 

15,232 

23,690 

 

 

 

 

Purchase of property, plant and equipment

(2,297)

(1,088)

(2,941)

Proceeds from disposal of property, plant and equipment

91 

1,581 

1,719 

Cash (outflow) / inflow from investing activities

(2,206)

493 

(1,222)

 

 

 

 

Equity dividends paid

(14,507)

(12,428)

(18,638)

Shares issued

169 

579 

664 

Purchase of own shares

-       

 

-

(433)

Cash outflow from financing activities

(14,338)

(11,849)

(18,407)

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

8,238 

3,876 

4,061 

Effect of exchange differences

(199)

(185)

(250)

Cash and cash equivalents at start of period

38,677 

34,866 

34,866 

 

 

 

 

Cash and cash equivalents at end of period

46,716 

38,557 

38,677 

 

 

Consolidated Statement of Comprehensive Income

for the half-year ended 31 December 2014

 

 

 

 

 

 

 

     

 

 

Half-year 

ended 

31.12.14 

£'000 

 

Half-year 

ended 

31.12.13 

£'000 

 

Year 

ended 

30.06.14 

£'000 

 

Profit for the period

16,203 

15,223 

31,452 

 

Other comprehensive income net of tax:

 

 

 

Actuarial loss on the defined benefit scheme

 (3,392)

 (690)

(2,459)

Deferred taxation - change of rate

- 

- 

               71 

Foreign currency translation differences

(1,631)

(1,637)

(2,260)

Fair value movements on hedging instruments

1,133 

(478)

 (606)

 

 

 

 

Other comprehensive income for the period net of tax

 

(3,890)

 

(2,805)

(5,254)

 

 

 

 

Total comprehensive income for the period

12,313 

12,418 

26,198 

 

 

 

 

Attributable to equity holders of the

 

 

 

parent company

12,313 

12,418 

26,198 

 

 

 

 

 

Notes to the Interim Results

for the half-year ended 31 December 2014

 

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 2014.

 

The figures for the year ended 30 June 2014 are an abridged statement of the group audited accounts for that year. The financial statements for the year ended 30 June 2014 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 24.4% (2013: 25.2%).

 

 

3.

Earnings per share

 

 

 

 

 

 

 

Half-year

ended

31.12.14

£'000

 

Half-year

ended

31.12.13

£'000

 

Year

ended

30.06.14

£'000

 

 

 

 

 

 

 

 

Profit for the period

16,203

15,223

31,452

 

 

 

 

 

 

 

 

Weighted average number of shares in issue

207,200,361

206,878,570

206,955,099

 

 

Dilution effect of outstanding share options

530,901

699,831

669,102

 

 

Diluted weighted average number shares

207,731,262

207,578,401

207,624,201

 

 

 

 

 

 

 

 

Basic earnings per 5p ordinary share

7.8p

7.4p

15.2p

 

 

Diluted earnings per 5p ordinary share

7.8p

7.3p

15.2p

 

 

 

 

4.

Dividends

 

 

 

 

 

Half-year

ended

31.12.14

£'000

Half-year

ended

31.12.13

£'000

Year

ended

30.06.14

£'000

 

Equity dividends paid:

 

 

 

 

 

Final dividend for the year ended 30 June 2013

-

12,428

12,428

 

Interim dividend for the year ended 30 June 2014

-

-

6,210

 

Final dividend for the year ended 30 June 2014

14,507

-

-

 

 

14,507

12,248

18,638

 

 

 

 

 

 

Equity dividends proposed at the end of the period

 

 

 

 

Interim dividend

6,513

6,210

-

 

Final dividend

-

-

14,507

 

 

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

 

 

6.0p final dividend for the year ended 30 June 2013, paid on 6 December 2013

 

3.0p interim dividend for the year ended 30 June 2014, paid on 6 June 2014

7.0p final dividend for the year ended 30 June 2014, paid on 5 December 2014

3.142p interim dividend for the year ended 30 June 2015, payable on 5 June 2015, to those shareholders on the register at the close of business on 8 May 2015

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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