REG - James Halstead PLC - Interim Results <Origin Href="QuoteRef">JHD.L</Origin>

James HalsteadAnnouncement

31/03/2015 07:20

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 Sjskrenten 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.

This information is provided by RNS
The company news service from the London Stock Exchange
  END
IR SDFFMSFISEDD