The AIM quoted manufacturer and international distributor of commercial floor coverings issued record breaking interim results. Despite the testing environment revenue increased 6.3% to a record £92.1 million and operating profit increased 10.1% to a record £16.6 million. Pre-tax profit increased 10.2% to a record £16.9 million and basic earnings per ordinary share increased 9.6% to a record 22.8p. The interim dividend increased 10.3% to a record 8.0p. The Group remained debt free (other than a small matter of a pension deficit) with cash on the balance sheet at £41.2m at the period end up from £31.8m in 2008. This also prompted a special dividend payment of 15p a share on 25th January 2010 in advance of the change in tax rules. Operating profit of £16.6m resulted in an operating cash inflow of £24.5m.
Chairman, Geoffrey Halstead, commented on “Steady progress, in heavy seas, best describes the first six months trading and whilst we can’t change the wind we have very deftly adjusted our sails”. Although the company has seen a decline in UK performance of 3.2% (and readily admits that this is still a fragile market), they have seen a rise in overseas revenue of 13.5% with principle markets such as Germany up 9.5%, Australia up 6.7% and New Zealand up 2%. Other territories such as Asia and Hong Kong are up 80% in part due to a very large social housing project in Tianjin, China’s sixth largest city.
Refurbishment at the recently acquired UK base in Oldham was completed and transfer of manufacturing away from the UK is will commence in the coming months, underlining the international nature of the business. Assisted by several new product launches in recent months, such as the ‘Expona Domestic collection’ at the Domotex exhibition in Hannover, and ‘MarineSafe’ flooring for utilitarian use on ships and off-shore construction, the outlook looks bright for this internationally expanding business. Consensus broker estimates fro the full year ending 30th June 2010 are for earnings per share of 45.70p and dividend per share of 26.70p. Despite the recession JHD hasn’t put a foot wrong and with the cash continuing to build should be in great shape as markets start to improve.
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