Interim Results

RNS Number : 6178T
James Halstead PLC
31 March 2016
 

                    

 

      31 March 2016

JAMES HALSTEAD PLC

 

INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

 

Key Figures

 

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

 

·    Revenue lower at £114.7 million - a decrease of 2.1% (on a constant exchange rate basis increased by 2.9%)

·    Operating profit higher at £23.3 million - an increase of 7.7%

·    Pre-tax profit higher at £23.0 million - an increase of 7.5%

·    Basic earnings per ordinary share 8.6p - an increase of 10.3%

·    Interim dividend increased to a record 3.5p - an increase of 11.4%

·    Net cash at £55.9 million

 

The Chief Executive, Mr. Mark Halstead, commented:

 

"We continue to build on the robust performance of the last 15 years and despite having the strength of sterling as a strong headwind to our exports in the first half  we have again reported a record profit".

 

 

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

Given the strength of our currency here in the UK and the consequential effects on the translation of our results it is gratifying to report improved pre-tax profit of £23.0 million (2014: £21.4 million), an increase of 7.5%.

 

I can report that revenue of £114.7 million (2014: £117.2 million) was 2.1% below the comparative, owing to the strength of sterling over the first six months. This adverse situation has mathematically lowered the currency equivalent. At constant exchange rates sales were 2.9% ahead.

 

 

Trading

 

As already noted, the translation of overseas sales was affected by adverse exchange rates but there was growth in most markets when measured in local currency. Polyflor Canada Inc. continues to expand with a 32% growth in turnover. It is pleasing to report that our flooring is refurbishing store chains such as Loblaws and Indigo Kids in many cities. James Halstead France reported a near 10% increase and notable projects include the Alstrom Epsilon building complex in the heart of Lyon.

 

In our more established markets, Objectflor, our central European operation based in Cologne reported 4% growth in sales. Our latest range, "Expona Flow" has already been fitted in sales areas within Ikea stores in Kaiserlautern, Berlin and Ravensburg and long term customers such as the fashion retail chain Modepark Röther continue to expand. It is pleasing to report that "Simplay", our loose lay vinyl tile, was awarded a "Pro K Award" for innovative product development in the area of consumer plastics.

 

In looking at our home territory, it is clear that Polyflor UK maintains its strong presence, with notable projects such as Croydon University Hospital, the Vision Express retail chain and the new Pontypridd Lido at Ynysangharad Park. The UK market, representing about 39% of total turnover, has shown a solid performance with growth of 4.5% in the period, which is ahead of the market growth over that period.

 

Australia and New Zealand have reported 8-9% growth with the former providing flooring to Aldi stores across the country and the latter to Burwood Hospital in Christchurch (the country's largest ever healthcare project) and are just two examples of the growth in this region.

 

Gross margins have improved by 1.5% despite the adverse effects of foreign exchange rates on overseas trading. The reasons for this are threefold: being the effects of increased output of heterogeneous flooring, reduced raw material prices (in part helped by the strength of sterling) and energy savings. Overheads are 3.2% below the comparative period but on a par when viewed on a constant exchange rate basis.

 

The balance sheet is, as usual, robust with the component showing the largest change being cash which stands at £55.9 million some 19.5% ahead of the comparative of last year (2014: £46.7 million) and after dividends paid out of £22.8 million.

 

Earnings per Share

 

Our basic earnings per share at 8.6p are 10.3% ahead of the comparative of 7.8p and the Board is pleased to propose an increased interim dividend.

 

Having regard to cash, I am pleased to say that a dividend of 3.5p will be paid (2015: 3.142p), representing an 11.4% increase and this reflects both the strength of earnings and the cash reserves of the Company. This will be payable on 3 June 2016 to those shareholders on the register at the close of business on 6 May 2016. 

 

Outlook

 

We have delivered a solid first half performance.

 

Early trading in the second half has been challenging, with the UK noticeably facing rougher trading conditions. Nevertheless, our global footprint continues to provide good opportunities for advancement and I am confident that the depth of our experience of this industry, which has stood us in good stead for a generation, will continue to lead us to greater success.

 

Many are quick to apply hindsight to business but I think that the accumulation of knowledge our team offers James Halstead something better- insight.

 

Our group remains focused on sales growth and has every expectation of continued progress in the second half year.  

 

 

Geoffrey Halstead

Chairman

31 March 2016

 

 

 

Consolidated Income Statement

for the half-year ended 31 December 2015

 

 

 

Half-year 

ended 

31.12.15 

£'000 

 

Half-year 

ended 

31.12.14 

£'000 

 

Year 

ended 

30.06.15 

£'000 

 

 

 

 

Revenue

114,675 

117,168 

227,261 

 

 

 

 

Operating profit

23,311 

21,640 

44,720 

Net finance cost

(272)

(215)

(536)

 

 

 

 

Profit before income tax

23,039 

21,425 

44,184 

 

 

 

 

Income tax expense

(5,304)

(5,222)

(10,250)

 

 

 

 

Profit for the period

17,735 

16,203 

33,934 

 

 

 

 

 

 

 

 

Earnings per ordinary share of 5p:

 

 

 

-basic

8.6p

7.8p

16.4p

-diluted

8.5p

7.8p

16.3p

 

 

 

 

  

All amounts relate to continuing operations.

 

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

 

 

 

 

Consolidated Balance Sheet

as at 31 December 2015

 

 

Half-year

ended

31.12.15

£'000

Half-year

ended

31.12.14

£'000

Year

ended

30.06.15

£'000

Non-current assets

 

 

 

Property, plant and equipment

32,185

31,954

31,172

Intangible assets

3,232

3,232

3,232

Deferred tax assets

5,061

5,641

4,908

 

40,478

40,827

39,312

Current assets

 

 

 

Inventories

58,567

58,025

58,707

Trade and other receivables

27,909

29,438

31,402

Derivative financial instruments

696

2,427

2,242

Cash and cash equivalents

55,850

46,716

47,428

 

143,022

136,606

139,779

Current liabilities

 

 

 

Trade and other payables

50,634

54,235

48,022

Derivative financial instruments

635

286

8

Current income tax liabilities

5,346

4,902

4,814

Dividend payable

16,303

-

-

 

72,918

59,423

52,844

 

 

 

 

Net current assets

70,104

77,183

86,935

 

 

 

 

Non-current liabilities

 

 

 

Retirement benefit obligations

18,904

20,115

18,492

Deferred tax liabilities

709

744

709

Borrowings

200

200

200

Other payables

390

389

386

 

20,203

21,448

19,787

 

 

 

 

Net assets

90,379

96,562

106,460

 

 

 

 

Equity

 

 

 

Equity share capital

10,373

10,363

10,364

Equity share capital (B shares)

160

160

160

 

10,533

10,523

10,524

Share premium account

3,096

2,899

2,917

Capital redemption reserve

1,174

1,174

1,174

Currency translation reserve

87

1,455

(782)

Hedging reserve

14

1,237

1,427

Retained earnings

75,475

79,274

91,200

 

 

 

 

Total equity attributable to shareholders of the parent

90,379

96,562

106,460

 

 

 

 

 

 

 

 

Consolidated Cash Flow Statement

for the half-year ended 31 December 2015

 

 

Half-year 

ended 

31.12.15 

£'000 

Half-year 

ended 

31.12.14 

£'000 

Year 

ended 

30.06.15 

£'000 

 

 

 

 

Cash inflow from operations

31,059 

28,315 

42,015 

Net interest received

96 

138 

150 

Taxation paid

(4,729)

(3,671)

(8,416)

 

 

 

 

Cash inflow from operating activities

26,426 

24,782 

33,749 

 

 

 

 

Purchase of property, plant and equipment

     (2,180)

(2,297)

(3,855)

Proceeds from disposal of property, plant and equipment

         166 

          91 

187 

Cash outflow from investing activities

(2,014) 

(2,206) 

(3.668)

 

 

 

 

Equity dividends paid

(16,302)

(14,507)

(21,020)

Shares issued

188 

169 

188 

Cash outflow from financing activities

(16,114)

(14,338)

(20,832)

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

        8,298 

8,238 

              9,249

Effect of exchange differences

124

 (199)

       (498)

Cash and cash equivalents at start of period

47,428 

38,677 

38,677 

 

 

 

 

Cash and cash equivalents at end of period

55,850 

46,716 

47,428 

 

 

 

Consolidated Statement of Comprehensive Income

for the half-year ended 31 December 2015

 

 

 

 

 

 

 

     

 

 

Half-year 

ended 

31.12.15 

£'000 

 

Half-year 

ended 

31.12.14 

£'000 

 

Year 

ended 

30.06.15 

£'000 

 

Profit for the period

17,735 

16,203 

33,934 

 

Other comprehensive income net of tax:

 

 

 

Actuarial loss on the defined benefit scheme

 (855)

       (3,392)

         (2,720)

Deferred taxation - change of rate

                      - 

               - 

              35 

Foreign currency translation differences

                  869

       (1,631)

         (3,868)

Fair value movements on hedging instruments

             (1,413)

       1,133

        1,323 

 

 

 

 

Other comprehensive income for the period net of tax

 (1,399)

         (3,890)

(5,230)

 

 

 

 

Total comprehensive income for the period

16,336 

12,313 

        28,704 

 

 

 

 

Attributable to equity holders of the

 

 

 

parent company

16,336 

12,313 

28,704 

 

 

 

 

 

Notes to the Interim Results

for the half-year ended 31 December 2015

 

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 2015.

 

The figures for the year ended 30 June 2015 are an abridged statement of the group audited accounts for that year. The financial statements for the year ended 30 June 2015 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 23.0% (2014: 24.4%).

 

 

3.

Earnings per share

 

 

 

 

 

 

 

Half-year

ended

31.12.15

£'000

 

Half-year

ended

31.12.14

£'000

 

Year

ended

30.06.15

£'000

 

 

 

 

 

 

 

 

Profit for the period

17,735

16,203

33,934

 

 

 

 

 

 

 

 

Weighted average number of shares in issue

207,392,532

207,200,361

207,238,042

 

 

Dilution effect of outstanding share options

541,827

530,901

562,584

 

 

Diluted weighted average number shares

207,934,359

207,731,262

207,800,626

 

 

 

 

 

 

 

 

Basic earnings per 5p ordinary share

8.6p

7.8p

16.4p

 

 

Diluted earnings per 5p ordinary share

8.5p

7.8p

16.3p

 

  

4.

Dividends

 

 

 

 

 

Half-year

ended

31.12.15

£'000

Half-year

ended

31.12.14

£'000

Year

ended

30.06.15

£'000

 

Equity dividends paid:

 

 

 

 

 

Final dividend for the year ended 30 June 2014

-

14,507

14,507

 

Interim dividend for the year ended 30 June 2015

-

-

6,513

 

Final dividend for the year ended 30 June 2015

16,302

-

-

 

 

16,302

14,507

21,020

 

 

 

 

 

 

Equity dividends proposed at the end of the period

 

 

 

 

Interim dividend

7,261

6,513

-

 

Final dividend

-

-

16,302

 

 

       Equity dividends per share, paid and proposed are as follows

 

 

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, paid on 5 June 2015

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, payable on 3 June 2016, to those shareholders on the register at the close of business on 6 May 2016

In addition a 7.858p special dividend amounting to £16,303,000 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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