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

James HalsteadAnnouncement

29/03/2017 07:16

RNS Number : 8109A
James Halstead PLC
29 March 2017
 
 29 March 2017
JAMES HALSTEAD PLC
INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016
Key Figures
James Halstead plc, the AIM listed manufacturer and international distributor of commercial floor coverings, reports:
 Revenue higher at 119.6 million - an increase of 4.3% 
 Operating profit higher at 23.5 million - an increase of 0.9%
 Pre-tax profit higher at 23.2 million - an increase of 0.8%
 Basic earnings per ordinary share 8.5p - a decrease of 1.1%
 Interim dividend increased to a record 3.75p - an increase of 7.1%
 Net cash at 51.6 million 
The Chief Executive, Mr. Mark Halstead, commented:
"Despite a tough six months in the UK and prevailing cost increases in raw materials - yet another record half year and a 7.1 % increase in dividend."
Enquiries:
James Halstead
0161 767 2500
Mark Halstead, Chief Executive
Gordon Oliver, Finance Director
Hudson Sandler
020 7796 4133
Nick Lyon/Jocelyn Spottiswoode
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
Trading
The group turnover at 119.6 million (2015: 114.7 million) was some 4.3% ahead. The mix and range of customers such as "Thalia" book stores throughout Germany, the Yau Ma Tei Police Station (Hong Kong) and the Jiaotouhemei Kindergarten of Enshi, in Hubei Province of the People's Republic of China continues to impress.
The profit before tax of 23.2 million (2015: 23.0 million) is marginally ahead of the comparative period.
The benefits of weaker sterling on exports have been beneficial and exports recorded growth of just over 12%, in constant currency this would have been 2.5%. Offsetting this to an extent has been a 7% decline in UK turnover that we believe is primarily the result of de-stocking in the UK. During the period one of our significant UK customers, a subsidiary of SIG plc, drastically de-stocked and faced buying restrictions. This subsidiary was sold to a UK based private equity investor in mid-February 2017, and it is to be hoped that more regular trading patterns may ensue.
International trade partners are becoming a more common feature of our group of companies, whether it is Mont Blanc stores, Chanel franchises or the new Dyson stores where we are not only able to arrange supply promptly from local stock but to do so at a competitive price.
Our Australia and New Zealand businesses have both seen growth in sales and profitability. As noted in the 2016 annual report, the rewards of the restructuring of the business last year which began to be seen in the latter part of that period are being reaped in this financial year. The focus on quality of service has seen the businesses meeting demand effectively and in some cases benefiting from competitors' failure in this area. 
The move to a new Auckland warehouse took place smoothly, resulting in a lower cost operation in the future. 
The European businesses are, in constant currency terms, on a par with last year. They have a busy 6 months ahead with the launch of key Luxury Vinyl Tile, Loose-lay and Heterogeneous products. Having been launched at exhibitions in January and February 2017 and well received it is anticipated that the benefits from sales of these products will be seen in the second half. Whether it is Croatia, with the Hotel Sipar in Umag or the Hotel des Trois Hiboux, within the Asterix theme park near Paris, our European business continues to be respected throughout the industry.
Scandinavia followed a very quiet beginning to the financial year with a strong performance in the second quarter and both sales and profits are ahead of the equivalent period. Felleskjpet Agri; a cooperative owned by Norwegian farmers, is but one project of note that we were involved in.
Our business in Canada continues to meet the objectives set for it and we have a solid sales base for the country. Local sales continue to increase and we have expanded our staff representation in the country to include British Columbia, an area previously handled by a distributor. As the resources sector continues to suffer the business relating to portable buildings has retrenched. However, contracts into other sectors such as retail and commercial buildings have been developed over the last 4 years such that portable buildings are now a minor part of our Canadian business. The team cite "The Heights",Skeena - the country's largest passive residence as a key project. Given that passive building technology is becoming an increasingly important part of our sustainable future we are particularly pleased to be associated with this project. 
Our fledgling India business has continued to extend its roots in the first half of this year. A team of salespeople operating across the sub-continent means that we are obtaining specifications and enquiries at a far higher level. Deliveries continue to grow, particularly into the health care sector but also into industrial and pharmaceutical customers. Examples such as the Ayurdundra Hospital in Guwahati, the ESIC Hospital in Bhubaneswar and the ubiquitous Barclays Bank, in Delhi are but a few.
Earnings per Share 
Our basic earnings per share at 8.5p are slightly below the comparative of 8.6p though still very healthy relative to dividends.
Having regard to cash, I am pleased to say that an interim dividend of 3.75p has been declared (2016: 3.5p), representing a 7.1% increase and this reflects both the strength of earnings and the cash reserves of the Company. This will be payable on 6 June 2017 to those shareholders on the register at the close of business on 5 May 2017. 
Total Shareholder Return 
We continue to focus on dividend growth and it is, perhaps, of interest to consider our total shareholder return which combines share price appreciation and dividends paid to express the total return to shareholders as a percentage. Our total shareholder return from 1 January 2001 to 31 December 2016 is over 4,700%, which compares favourably to the FTSE All Share index (124%) and FTSE AIM All Share index (-31%).
Outlook
It is only a short period of time since the Brexit vote and confidence is high for us as exporters. The UK market is solid but there is inevitably upward price pressure on raw materials and overseas sourced goods. Overall this is counterbalanced by opportunities for overseas exports from a weaker sterling.
Taking into account these points, and with the extremely positive feedback from our range re-vamps that have been presented to the trade at several major trade fairs we continue to be confident of progress through the year.
Geoffrey Halstead
Chairman
29 March 2017
Consolidated Income Statement
for the half-year ended 31 December 2016
Half-year
ended
31.12.16
'000
Half-year
ended
31.12.15
'000
Year
ended
30.06.16
'000
Revenue
119,558
114,675
226,141
Operating profit
23,532
23,311
46,083
Net finance cost
(311)
(272)
(584)
Profit before income tax
23,221
23,039
45,499
Income tax expense
(5,533)
(5,304)
(10,243)
Profit for the period
17,688
17,735
35,256
Earnings per ordinary share of 5p:
-basic
8.5p
8.6p
16.4p
-diluted
8.5p
8.5p
16.3p
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 2016
Half-year
ended
31.12.16
'000
Half-year
ended
31.12.15
'000
Year
ended
30.06.16
'000
Non-current assets
Property, plant and equipment
35,176
32,185
34,384
Intangible assets
3,232
3,232
3,232
Deferred tax assets
5,704
5,061
5,129
44,112
40,478
42,745
Current assets
Inventories
61,948
58,567
62,828
Trade and other receivables
24,851
27,909
33,820
Derivative financial instruments
1,670
696
433
Cash and cash equivalents
51,607
55,850
44,096
140,076
143,022
141,177
Total assets
184,188
183,500
183,922
Current liabilities
Trade and other payables
51,361
50,634
53,395
Derivative financial instruments
636
635
2,066
Current income tax liabilities
5,287
5,346
4,300
Dividend payable
-
16,303
-
57,284
72,918
59,761
Non-current liabilities
Retirement benefit obligations
28,127
18,904
25,431
Deferred tax liabilities
603
709
603
Borrowings
200
200
200
Other payables
476
390
460
29,406
20,203
26,694
Total liabilities
86,690
93,121
86,455
Net assets
97,498
90,379
97,467
Equity
Equity share capital
10,381
10,373
10,374
Equity share capital (B shares)
160
160
160
10,541
10,533
10,534
Share premium account
3,256
3,096
3,096
Capital redemption reserve
1,174
1,174
1,174
Currency translation reserve
5,472
87
4,026
Hedging reserve
530
14
 (699)
Retained earnings
76,525
75,475
79,336
Total equity attributable to shareholders of the parent
97,498
90,379
97,467
Consolidated Cash Flow Statement
for the half-year ended 31 December 2016
Half-year
ended
31.12.16
'000
Half-year
ended
31.12.15
'000
Year
ended
30.06.16
'000
Cash inflow from operations
31,194
31,059
50,325
Net interest received
81
96
134
Taxation paid
(4,548)
(4,729)
(10,220)
Cash inflow from operating activities
26,727
26,426
40,239
Purchase of property, plant and equipment
 (2,141)
 (2,180)
(4,842)
Proceeds from disposal of property, plant and equipment
 82
 166
200
Cash outflow from investing activities
(2,059)
(2,014)
(4,642)
Equity dividends paid
(17,646)
(16,302)
(39,867)
Shares issued
167
188
189
Cash outflow from financing activities
(17,479)
(16,114)
(39,678)
Net increase/(decrease) in cash and cash equivalents
 7,189
 8,298
 (4,081)
Effect of exchange differences 
322
124
 749
Cash and cash equivalents at start of period
44,096
47,428
47,428
Cash and cash equivalents at end of period
51,607
55,850
44,096
Consolidated Statement of Comprehensive Income 
for the half-year ended 31 December 2016
 
Half-year
ended
31.12.16
'000
Half-year
ended
31.12.15
'000
Year
ended
30.06.16
'000
Profit for the period
17,688
17,735
35,256
Other comprehensive income net of tax:
Actuarial loss on the defined benefit scheme
(2,853)
(855)
 (7,360)
Deferred taxation - change of rate
 -
 -
 106
Foreign currency translation differences
 1,446
 869
 4,808
Fair value movements on hedging instruments
 1,229
 (1,413)
 (2,126) 
Other comprehensive income for the period net of tax
(178)
(1,399)
(4,572)
Total comprehensive income for the period
17,510
16,336
 30,684
Attributable to equity holders of the 
parent company
17,510
16,336
30,684
Notes to the Interim Results
for the half-year ended 31 December 2016
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 2016.
The figures for the year ended 30 June 2016 are an abridged statement of the group audited accounts for that year. The financial statements for the year ended 30 June 2016 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 23.8% (2015: 23.0%).
3.
Earnings per share
Half-year
ended
31.12.16
'000
Half-year
ended
31.12.15
'000
Year
ended
30.06.16
'000
Profit for the period
17,688
17,735
35,256
Weighted average number of shares in issue
207,544,288
207,392,532
207,431,307
Dilution effect of outstanding share options
381,936
541,827
473,629
Diluted weighted average number shares 
207,926,224
207,934,359
207,904,936
Basic earnings per 5p ordinary share
8.5p
8.6p
17.0p
Diluted earnings per 5p ordinary share
8.5p
8.5p
17.0p
4.
Dividends
Half-year
ended
31.12.16
'000
Half-year
ended
31.12.15
'000
Year
ended
30.06.16
'000
Equity dividends paid:
Final dividend for the year ended 30 June 2015
-
16,302
16,302
Interim dividend for the year ended 30 June 2016
-
-
7,262
Final dividend for the year ended 30 June 2016
17,646
-
-
Special dividend
-
-
16,303
17,646
16,302
39,867
Equity dividends declared/proposed at the end of the period
Interim dividend
7,785
7,262
-
Final dividend
-
-
17,646
 Equity dividends per share, paid and declared/proposed are as follows:
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, paid on 3 June 2016 
8.5p final dividend for the year ended 30 June 2016, paid on 2 December 2016
3.75p interim dividend for the year ended 30 June 2017, payable on 6 June 2017, to those shareholders on the register at the close of business on 5 May 2017
7.858p special dividend 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 and on the Company's website - www.jameshalstead.com

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