REG - James Halstead PLC - Preliminary Results
01/10/2024 07:00
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RNS Number : 3101G James Halstead PLC 01 October 2024
1 October 2024
JAMES HALSTEAD PLC
("James Halstead", the "Group" or the "Company")
PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS
FOR THE YEAR ENDED 30 JUNE 2024
James Halstead plc, the AIM listed manufacturer and international distributor
of commercial flooring, announces its results for the year ended 30 June 2024:
Financial highlights
· Revenue at £274.9 million (2023: £303.6 million) - down 9.4%
· Profit before tax of £56.2 million (2023: £52.1 million) - up 7.9%
· Profit after tax of £41.5 million (2023: £42.4 million) - down 2.1%
· Earnings per ordinary share of 10.0p (2023: 10.2p) - down 2.0%
· Final dividend per ordinary share proposed of 6.0p (2023: 5.75p) - up 4.3%
· Cash of £74.3 million (2023: £63.2 million)
Operational highlights
· Gross margin improvement in all major markets - overall up by 6% to at 44%
(2023: 38%)
· Continued investment in our operations:
o Riverside - invested £350,000 to update new drive system for press and
registration control systems
o Royton - full upgrade to modern LED lighting at the cost of £200,000
o Radcliffe - undertaking preparatory work for a £400,000 investment in
solar panels
· New significant business secured in UAE, Colombia, Iceland, Italy, Mexico,
Poland, Greece and South Africa
· Completion of projects around the world underpin our strong foothold in global
markets
Outlook
· Prospects continue to look positive giving the board confidence in the outturn
for the financial year ahead
· FY24 was a year of profitable growth - we look ahead with confidence in our
long term strategy
Mr Mark Halstead, Chief Executive, commenting on the results, said:
"FY24 has been a largely positive year against the challenging economic
backdrop with frustrations and further disruption to global trade routes. Our
proposed dividend continues our unbroken chain of dividend payment increases
from 1974.
We have continued to invest in process improvement as well as product
development to improve output efficiency and our product offering. This has
been substantial and I am pleased to say has already led to improved
productivity and margin improvement.
During the year we have secured many prestigious projects around the world,
demonstrating the continued demand for our high quality offering on a global
scale.
We look ahead to FY25 in good stead and after delivering another year of
profits growth."
Enquiries:
James Halstead:
Mark Halstead, Chief Executive Telephone: 0161 767 2500
Gordon Oliver, Finance Director
Hudson Sandler:
Nick Lyon Telephone: 020 7796 4133
Nick Moore
Panmure Liberum (Nomad & Joint Broker):
Ed Mansfield / Tom Scrivens Telephone: 020 7886 2500
Zeus (Joint Broker):
Ben Thorne / Fraser Marshall Telephone: 020 3829 5000
Notes to editors
James Halstead is a group of companies involved in the manufacture and supply
of flooring for commercial and domestic purposes, based in Bury, UK. James
Halstead plc has been listed on the London Stock Exchange for 75 years. The
Group was established in 1914 and continues to operate out of the original
premises in Bury. In its factories in Bury and Teesside it manufactures
resilient flooring for distribution in the UK and worldwide.
The Company's strategy is to constantly develop its brand identity and its
reputation for quality, product innovation, durability and availability,
thereby enhancing and maintaining goodwill with the aim of achieving repeat
business. James Halstead's focus is to work with stockists who in turn
distribute those bulk deliveries. However, the Company also promotes and
represents the business's range to the end users and specifiers who will
purchase the stock from those stockists.
CHAIRMAN'S STATEMENT
Results
Revenue for the year at £274.9m (2023: £303.6m) was 9.4% behind the
comparative year largely driven by headwinds in the UK and Europe. The year
was largely positive and the challenges that the Group faced in its major
markets were not unexpected and appropriate mitigating actions were already in
place. There was further disruption to world trade routes as a result of the
ongoing situation in the Red Sea. This has extended delivery times to many
export markets, in some cases impacting sales and increasing freight
transportation costs.
The geographic spread and diverse sectors to which we supply flooring can be
illustrated this year by installations such as the Venetis Chain Stores
(Bakeries) in Greece, founded in 1948, Vox Cinemas in Kuwait and the
incredible Star of the Seas, which is the second ship from the Icon class mega
cruisers, that will be built in Finland.
The reported profit before tax for the year of £56.2m (2023: £52.1m) was
7.9% ahead of the prior year comparative, a good result against a challenging
array of market conditions.
Gross margins improved in most of our major markets. Overall, the margins
moved from 38% to 44%. Principally this increase was driven by our
manufacturing plants which ran longer hours thus improving plant utilisation,
and output volumes.
Selling and distribution costs at £53.0m (2023: £53.3m) were slightly below
last year and reflect the lower volume of sales (particularly in UK and
Europe). Expenses were also mitigated by reduced freight costs and restricted
marketing and sampling costs.
Administration overheads at £14.3m (2023: £10.5m) are some 35.7% higher than
last year. However, the comparative included a receipt of £1.6m regarding an
insurance claim receipt (a one off relating to a major breakdown at the
Radcliffe site dating back to 2020) together with an increase in IT
expenditure (Australia and New Zealand with new IT systems and major upgrades
to our systems security in the UK) representing about 5% of the increase in
overheads.
The standard rate of tax in the UK for the year increased to 25% (2023: 20.5%)
which in effect added £2.6m to tax charges. As a consequence, profit after
tax was £41.5m (2023: £42.4m), a decrease of 2.1%.
Consequent to the rise in the effective rate of tax, earnings per share are at
10.0p (2023: 10.2p) which is a decrease of 2%.
Re-investment
Over many years our strategy has also included a policy of continual
investment in both process improvement and in product development to improve
output efficiency and our product offering. To maintain our competitiveness as
manufacturers supplying global markets, we continue to commit to capital
investment in the upgrading of plant for efficiency, flexibility, durability
and to reduce energy usage.
During the Covid pandemic, and for a period afterward, we had to severely
curtail some investment and production improvements. In part this was because
of the unavailability of labour due to the covid self-certification of workers
and to far greater degree the severe shortage of spares and parts due to the
disruption of global supply chains. Consequently, this year has been
significant for investment in our various production lines which will continue
to underpin growth.
At Riverside two major capital items were approved and work initiated which
represented a £350,000 investment. Firstly, a new drive system for the press
and registration control systems has been updated and improved. The new
equipment will also use less energy.
In addition, preparations were made for replacing the Teesside plant's fume
abatement systems. This will increase line efficiency, increase the level of
fume extraction and removal thereby improving air quality, line performance
and using less energy. This is a £1.6 million investment.
Royton (our UK main warehouse) is undertaking a full upgrade to modern LED
lighting at the cost of £200,000 and our Radcliffe plant is undertaking
preparatory work for a £400,000 investment in solar panels where 100% of the
energy will be used on site.
The breadth of change has been significant and has already led to improved
productivity and margin improvement.
Sustainability, social responsibility and the environment
We have recently published our 19(th) sustainability report that details our
actions and ambitions in the areas of the environment, sustainability and
social responsibility (available for download from our website).
Climate change has led to a greater focus on carbon dioxide levels but dealing
with climate change is not, in our view, just a matter of trying to highlight
any one single measure such as carbon emissions or setting net zero targets.
As a manufacturer in the UK there are basic levels of environmental
legislation that far exceed the standards of many countries and as users of
energy we rely on government policies to achieve the greater use of greener
energy. In addition, we look to go far beyond that in our ethical sourcing
and we strive to have our claims independently audited to credible standards -
none of which is required of "importers". Further information on some of the
actions that we have taken are referred to in the Chief Executive's Review.
Dividend
Cash balances increased to £74.3 million (2023: £63.2 million) helped by a
further reduction in our stock-holdings. The inventory at the year-end is
£82.3 million (2023: £87.4 million) which is about 6% lower than the prior
year comparative.
During the year taxation paid was £15.5 million (2023: £11.9 million), fixed
asset additions of £3.3 million (2023: £2.9 million) and equity dividends
paid of £34.4 million (2023: £32.3 million).
The interim dividend of 2.5p (2023: 2.25p) was paid in June 2024. The board,
having regard to the cash balances and profitability, is proposing a final
dividend of 6.0p (2023: 5.75p) which will mean a total dividend for the year
of 8.5p (2023: 8.0p) an increase of 6.25%. This is a record level of dividend
and marks our 49(th) year of increased dividend. This final dividend will be
paid on 13 December 2024.
Acknowledgements
Once again, I would like to thank all our colleagues across the globe for
their continued efforts in achieving this year's result.
In memoriam
Special acknowledgement must be made to the Life President, Geoffrey Halstead,
who died on 22 August at the age of 94. Geoffrey was a director of the company
for 60 years and guided the first steps that were taken to manufacture
resilient sheet vinyl flooring and to moving the business from textiles to the
focus on Polyflor. He will be sadly missed by staff, past and present and
customers, suppliers and the many friends who knew him. Our condolences to the
family are heart felt.
Outlook
The results, cash generation and proposed dividend stand testament to the
resilience of the products, the business and the management of the Company.
After 23 years as a non-executive director with currency crises, the great
financial recession, Brexit and more recently the Covid recession and the
Ukraine/energy inflation recession one thing has been constant - the Company's
ability to progress even in the face of adversity.
As announced separately, I am stepping down as Chairman at the forthcoming
AGM. I have been proud to serve as Chairman since 2017 after many years as a
non-executive director. The Company has a strong team both on the board and in
the subsidiary companies with solid foundations for continued growth.
Since I joined the board in 2001, turnover is near 300% higher and profit 525%
higher. Quoting the late Sir John Harvey-Jones, back in 1993, "James Halstead
has a consistency of aim and performance, with the results obtained
highlighting sound management principles and spectacular growth".
As I step down, the Company's prospects continue to look positive into the new
financial year and beyond. Projects such as the International Airport JSM in
San Jose, capital of Costa Rica underline the reach and deep history of our
global sales.
The malaise of the UK and European markets will end, the deferral of spending
due to high inflation and the energy crisis will ease and our global markets
offer continued opportunity.
James Halstead has operated for more than 100 years, withstanding and
resilient to the numerous market challenges that it has faced. The Company is
pleased to report a year of profitable growth in FY24 and looks ahead with
confidence in the long term growth strategy.
Anthony Wild
Chairman
CHIEF EXECUTIVE'S REVIEW
Our business is, in essence, simple. Our business model is to manufacture in
volume, quality flooring that we sell to distributors and stockists to satisfy
local demand whether this is via third parties (as in the UK) or via our own
businesses across the globe. Crucial to the success of this model is to
understand, motivate and cajole these stockists to service the true customer -
end users and contractors within a wide range of sectors.
Each market is given a focus and local management tasked with achieving
targets.
Our various sales teams have secured many prestigious projects along with
scores of thousands of corridors, stairwells and toilet areas that are the
ubiquitous backbone of our day to day business. Products such as the corporate
headquarters of Lidl Danone and Mitsibushi (in France); African Medical Centre
Of Excellence located in Abuja, Nigeria; the Katima Mulilo campus of
University of Namibia; St. Jacob's Medical Center in the city of Stryi,
Ukraine and Hotel Croatia Cavtat a five-star resort and conference centre in
the South Adriatic just 5km from Dubrovnik airport.
Looking at our businesses:
Objectflor / Karndean and James Halstead France, our European operations
The climate for our German and Central European business remains highly
competitive and subdued. Volumes have been impacted and our turnover in most
markets in the region was below last year with Germany 17% lower. Official
figures suggest building permits issued for new builds in Germany for the
first quarter of 2024 were 21% down on the previous year.
Though the year started well with more normal rates for shipping, the issues
in the Red Sea have caused disruption once again in the container shipping
industry with vessels avoiding the Suez Canal and travelling around the Cape.
This added 2/4 weeks in transit times for the supply of LVT, but also had the
knock on effect of tying up containers causing a shortage and ultimately
leading to price increases in shipping. Whilst costs have not risen to the
peaks of the immediate post Covid period, we have nonetheless encountered
increased costs and our sales were impacted by our stock availability at the
start of 2024 with product unable to be shipped.
Despite these factors, margins have held up following prices increases in
early 2023 and for much of the year a more stable freight cost for imports
from the Far East.
In addition, overheads were reduced with tight spending control and profits
were above the prior year comparative.
Notable projects included the HARIBO corporate office in Bonn, Germany, Polo
Motorcycle stores in Germany and XXXLutz furniture stores in Austria.
The lease on the largest of our current warehouses in continental Europe has
been extended and a review of our warehouse requirements in Germany is under
way.
Our business in France was similarly hit by customer confidence, reduced
demand and the stock shortages noted above which contributed to a
disappointing drop in sales from last year's highs (-18%). The election
turmoil has not helped, causing uncertainty in the market and the effects of
inflation on budgets and discretionary spend have also contributed to a
decrease in consumer confidence. We have, however, added to our sales team
to give greater coverage across the whole of France and allow a more dedicated
approach to larger projects. The belief is that this will pull back volume
next year.
As with Germany, the improved margin throughout the 12 months ensured net
profit did not suffer.
Polyflor APAC - encompassing Australia, New Zealand and Asia
Our APAC region is made up of four distinct areas - Australia, New Zealand,
North Asia and South East Asia. To give a better strategic focus in the
region a new reporting structure has been established to oversee the region as
a whole. These changes are aimed at enhancing collaboration, aligning
strategies and ensuring efficient decision making across the region creating a
stronger network, promoting regional initiatives and leveraging resources
effectively.
In Australia, sales were 15% below the comparative. As production returned to
normal, and stock availability improved, we were then hit by increased transit
times caused by the Red Sea issues, further delaying stock reaching our
overseas warehouses. Our stockholdings in the region do, to an extent, act
as a buffer to this, and where possible stock was transferred between
countries and states, but inevitably sales were lost.
This impact of shortages was experienced across all five warehouses in
Australia. If available, stock would be moved across states, but with high
transit costs, margins were impacted. The stock situation started to correct
itself during the second half of the financial year as stock arrived and we
entered the new financial year better placed to push for greater volume of
sales.
Australia did start to benefit from the recent trade agreement with the UK,
(CPTPP), with no duty charged on purchases from the UK, allowing Polyflor
Australia to be more competitive in the market relative to our European
sourced competition.
New Zealand sales were down 7.6% in the year. The year started with a
slowdown in activity as projects stalled ahead of the general election in
October 2023. As in Australia, domestic builds in New Zealand have slowed
significantly brought about by high inflation and mortgage rate hikes which
have impacted on consumer spend. Inflation has started to ease but the
government have pulled back on spending across public facilities, though it is
hoped this will drive more maintenance activities.
With an eye on costs, the decision was taken to close our smaller warehouse in
Christchurch at the end of the year and move the stock back to the main
warehouse facility Auckland. There has also been a consolidation of some roles
within the wider APAC management team, allowing for future cost savings.
Our South East Asia business (centred in Malaysia) ended the year strongly
with sales marginally ahead of last year despite trailing for the majority of
the financial year. It was pleasing to see growth across Singapore, Vietnam,
Thailand and Indonesia. Malaysia itself saw a small fall in sales compared to
last year, affected by reduced purchases by one major customer. Looking
forward, there is positive news with a significant investment in a "Tech Free"
zone in southern Malaysia.
A change of the senior manager was made in North Asia at the start of the
financial year and the role is now based in Shanghai rather than Hong Kong
which is operationally beneficial. We have a renewed focus on increasing
distribution within China along with the other countries serviced by our North
Asia business. One prestigious project among many was Gansu Provincial
Maternity and Child-care Hospital Lanzhou, China.
We have yet to see the full benefit of the UK joining the CPTPP which will
reduce duty rates across the region. The required number of countries have now
ratified the UK to join the bloc and the agreement will now officially enter
into force on 15 December 2024. The UK Department for Business and Trade are
pushing for remaining members to ratify the deal in their own countries. As a
result, we should start to see benefits from the start of 2025.
From 1 July 2024, North Asia, which had operated as a branch of Polyflor
Limited, will now operate independently, under the guidance of our APAC
management and on the same ERP systems. Stock is being rationalised so there
are common ranges across the APAC countries which will help with stock
availability and quicker movement across the region if needed. Faster moving
lines will still be held in local warehouses, whilst for some slower moving
items, these can be held in a free zone warehouse in China and moved to
whichever market as required. As a result, overall stockholding will be
reduced with little impact on service to the customers.
The APAC region bore the brunt of production and delivery problems associated
with labour restriction in the UK (Covid), raw material shortages and global
shipping restrictions. These are largely resolved and the teams are focussed
on rebuilding the Polyflor market share.
Polyflor and Riverside Flooring, based in UK
The core of the group is our manufacturing base in the UK producing the
flooring that is distributed across the world.
The Polyflor business, that manufactures and sells product globally, reported
a 4.4% reduction in turnover. UK sales were £110.7m (2023: £117.5m) a 5.8%
reduction. However, sales of Polyflor sheet vinyl manufacture in Radcliffe
for overseas markets rose 8% as our output increased to satisfy global
markets.
In the UK, many distributors were significantly affected by the decline in
domestic carpet sales which is not a product in our portfolio. Many looked to
cut back on costs to offset sales shortfalls and increased debt costs.
Inevitably, some distributors reduced their stock holdings of our products
and it is clear this affected our sales into the distribution channel. Whilst
it is difficult to identify the exact impact we believe this represented at
least 50% of our reduction in UK sales. However, end customer service levels
were unaffected and there were positive signs of investment by some of our
distribution partners as the decline did not apply to every customer.
Notwithstanding the negative consumer confidence, in our experience, the
effect of lower customer confidence and demand has always led distributors to
rationalise ranges and as a manufacturer of branded flooring this has tended
to be positive for us. In buoyant times there are a plethora of flooring
options sourced from Europe and Asia but these are dropped when times are
harder. This year has been no different.
We have updated and relaunched our Colonia luxury vinyl tile collection.
Colonia is a commercial grade flooring but does sell significant quantities
into the residential market. This relaunch took place in April and May of this
year. There are now 100 new sales presentation stand locations, adding to the
existing 400 locations. Each of these locations is nominated by our
distributor partners. The delivery and installation of these stands were
completed by our own sales force, and customer reaction and sales out via our
distribution partners went well and continues to progress. In addition, we
have successfully introduced "cashback" promotions. This type of promotion is
for end users (principally flooring contactors) to encourage them to buy from
our stockists and will offer incentive to divert sales from competitors to our
ranges and in some cases from distributors' "me too" products. Feedback has
been positive on these initiatives.
Regarding the 5.8% reduction in UK turnover, of this manufactured sheet vinyl
sales were c4% down with the luxury vinyl tiles nearer to 9% lower reflecting
the greater exposure of LVT to the residential flooring sector.
Raw material costs reduced during the year to c5% below the prior year
comparative but these costs are still over 50% higher than the pre-2022
levels. Energy costs remain high with the falls in warehouse prices of
electricity being almost totally offset by increases in add-ons to the bare
energy cost.
Whilst we mainly source from UK and European sources, we maintain key
relationships with suppliers much further afield (Korea, North America and
South America). This maintains supply and protects against sudden increases in
costs and quality. In the latter months of the year a PVC supplier in Mexico
closed as a result of the ongoing drought in the region which caused a ripple
in the global supply chain. On the counter side, certain eastern European
suppliers had cash flow problems and increased output volumes to sell at low
prices. The global nature of business is not just on the sales side and, as
ever, offers opportunity to those up to the task of managing supply.
Increased output with greater plant utilisation improved the gross margin
within the UK businesses. As noted earlier, throughout the year there have
been plant investments and improvements to continue the growth in output. New
granulators on the non-directional production line will increase the speed of
recycling edge trims, a £200,000 investment, with a further £700,000 on the
calendar mixers on this line. The raw material tank farm has been updated and
extended to offer smoother flow of raw materials into production and to give
greater onsite storage for raw materials (£250,000).Other investment included
the replacement of the UV curing lamp systems at Teesside (£950,000) and gel
drum upgrades on the safety flooring production line (£120,000).
We have invested in IT infrastructure including the replacement and upgrade of
computer servers and storage (£170,000), as well as a refresh of our whole
firewall and data security protocols (£187,000). In addition, in January
2024, we went fully live with our own self-filing of customs entries for all
our free carrier arrangement (FCA) customers. We extended this to include
Middle Eastern and South American customers, and to many ex works (EXW)
customers who are unfamiliar with accurate processing of export documentation.
Energy efficiency receives attention at subsidiary level and nowhere more so
than at Polyflor, the manufacturing hub and the main user of energy in our
business. Reducing energy usage drives down costs and reduces our carbon
emissions.
We implemented a number of initiatives during the year, as we continue to
focus on building our sustainability credentials and operating as a greener
business.
In the UK, we enjoyed a record year for profits - testimony to the team and
the foundations of our prior year work.
Polyflor Nordic comprising Polyflor Norway based in Oslo and Polyflor Sweden
based in Gothenburg
A solid performance with both Norway and Sweden seeing a 6.3% increase in
sales over comparatives. Profitability has been supported by adding delivery
charges for transport of goods, particularly to remoter areas.
Both the businesses improved profits.
A review of warehouse operations has resulted in the decision to move our
stockholding from Stockholm to Gothenburg which will lower overall costs,
reduce transit times from the UK and have the potential to hold further stocks
for the Scandinavian market. This will take place Q1 of the new financial
year.
Stocks have been reduced during the year, to both improve working capital and
to ensure a tighter focus in these two large geographic but relatively lower
populated regions.
Norway is currently in the process of upgrading its ERP system with a go live
date planned for November 2024. The system will be the same as that
introduced to the APAC region last year.
Our flooring has been selected for use in "Polestar" car showrooms and in the
Silja - Tallink Ferry terminal the Sweden - Finland connection.
Polyflor Canada, based in Toronto
After last year's record sales, there was a small drop in revenue this year
(-5%), although this still represents a 29% increase from 2 years ago.
Despite the lower sales, the margin improved with lower freight costs
incurred and a favourable mix of products with the result of a further
increase in net profit.
The decision to purchase more LVT direct from the Asian suppliers rather than
to be supplied from the Europe based stock holdings helped the improvement in
margins on those ranges and whilst this has led to higher stock levels, we
have improved our service to the market.
A proposal for expanding our footprint across Canada is being developed and
the pipeline of projects remains strong across all categories of product.
The local management remain positive for the year ahead.
Rest of the World
Polyflor continues to expand across the globe selling direct to over 50
countries during the year other than those mentioned above.
Our sales have performed strongly again in the Middle East (+26%) and South
America (+12%) where we continue to see good specification across various
projects in health, education and housing. Both these regions achieved record
sales. We will continue to seek to employ regional representation to augment
our direct exports in growing markets - a policy that for over a generation
has underpinned export growth.
Significant business in the year has taken place in territories such as UAE,
Colombia, Italy, Mexico, Poland, Greece and South Africa to list a few.
It was a record year for sales in Saudi Arabia, Bulgaria, Georgia, Lithuania,
Costa Rica, Brazil, Egypt and Belgium.
As with Canada, our USA sales were below the prior year record sales but
remain ahead of 2022 revenues. The B2B arrangement remains positive with
further products added to the portfolio for next year. Our small presence in
India remains, but sales have once again gone backwards, and we are reviewing
how to reverse this trend. We are impacted by higher duty costs than our
competitors and have not been able to increase sales from our local
stockholding. The significant portion of sales remain direct shipments from
the UK to the healthcare sector, where Polyflor product is held in high
regard.
It is encouraging that our representatives in Latin America are converting
interest into sales and new markets that are currently being developed such as
El Salvador, Guatemala, Nicaragua, Bolivia and Honduras should start
generating some sales soon.
Sustainability, social responsibility and the environment
As highlighted in the Chairman's Statement, we recently published our 19th
sustainability report for the Company. In this we detail the actions and
ambitions that we have taken to addressing environment impact, sustainability
and social responsibility.
For many years we have operated a vinyl take back scheme in the UK, Recofloor
but there are regulatory difficulties in re-patriating recyclate from overseas
markets and so during the year we have entered into a new recycling initiative
in Australia, Resiloop. Together with the Australian Resilient Flooring
Association (ARFA) our Australian business (Polyflor Australia Pty Ltd) has
formed a product stewardship scheme aimed at reducing PVC going into landfill.
A national scheme has been established with the funding to commence the
recovery and recycling of resilient floor coverings with onshore recycling
capacity. ARFA's members represent 60% of the market sales of resilient
flooring and the take-back and recycle model is based on our own UK experience
albeit that we are not manufacturing in Australia so the aim is to prepare
recycled material for alternative uses locally.
In conclusion
Given the circumstances we can only be pleased with the results for the year.
The levels of confidence in key markets (the UK and Europe) with reduced
budgets for projects have been challenging. Different issues such as the
challenges of transportation affected our APAC region but nevertheless there
has been progress and increased profitability.
It has been another year of profitable growth in FY24 and the Group looks
ahead with confidence.
Mark Halstead
Chief Executive
Audited Consolidated Income Statement
for the year ended 30 June 2024
Year Year
ended ended
30.06.24 30.06.23
£'000 £'000
Revenue 274,881 303,562
Cost of sales (153,760) (188,099)
Gross profit 121,121 115,463
Selling and distribution costs (52,945) (53,338)
Administration expenses (14,269) (10,514)
Operating profit 53,907 51,611
Finance income 2,642 748
Finance cost (325) (260)
Profit before income tax 56,224 52,099
Income tax expense (14,704) (9,695)
Profit for the year attributable to equity shareholders 41,520 42,404
Earnings per ordinary share of 5p:
-basic 10.0p 10.2p
-diluted 10.0p 10.2p
All amounts relate to continuing operations.
Audited Consolidated Statement of Comprehensive Income
for the year ended 30 June 2024
Year Year
ended ended
30.06.24 30.06.23
£'000 £'000
Profit for the year 41,520 42,404
Other comprehensive income net of tax:
Items that will not be reclassified subsequently to the income statement:
Remeasurement of the net defined benefit asset /(liability)
564 (7,237)
564 (7,237)
Items that could be reclassified subsequently to the income statement if
specific conditions are met
Foreign currency translation differences (248) (1,818)
(472) (135)
Fair value movements on hedging instruments
(720) (1,953)
Other comprehensive income for the year (156) (9,190)
Total comprehensive income for the year 41,364 33,214
Attributable to equity holders of the
company 41,364 33,214
Items in the statement above are disclosed net of tax.
Audited Consolidated Balance Sheet
as at 30 June 2024
As at As at
30.06.24 30.06.23
£'000 £'000
Non-current assets
Intangible assets 3,232 3,232
Property, plant and equipment 34,965 35,887
Right of use assets 6,209 7,164
Retirement benefit obligations 14 -
Deferred tax 214 114
44,634 46,397
Current assets
Inventories 82,268 87,440
Trade and other receivables 44,042 46,979
Derivative financial instruments 482 773
Current tax 1,287 699
Cash and cash equivalents 74,282 63,222
202,361 199,113
Total assets 246,995 245,510
Current liabilities
Trade and other payables 57,487 60,738
Derivative financial instruments 106 213
Current tax 273 422
Lease liabilities 2,707 2,696
60,573 64,069
Non-current liabilities
Retirement benefit obligations - 1,460
Other payables 410 400
Lease liabilities 3,680 4,582
Preference shares 200 200
Deferred tax 855 585
5,145 7,227
Total liabilities 65,718 71,296
Net assets 181,277 174,214
Equity
Equity share capital 20,839 20,838
Equity share capital (B shares) 160 160
20,999 20,998
Share premium account 55 13
Currency translation reserve 3,846 4,094
Hedging reserve 334 806
Retained earnings 156,043 148,303
Total equity attributable to shareholders of the parent 181,277 174,214
Audited Consolidated Cash Flow Statement
for the year ended 30 June 2024
Year Year
ended ended
30.06.24 30.06.23
£'000 £'000
Profit for the year attributable to equity shareholders
41,520 42,404
Income tax expense 14,704 9,695
Profit before income tax 56,224 52,099
Finance cost 325 260
Finance income (2,642) (748)
Operating profit 53,907 51,611
Depreciation of property, plant and equipment
4,093 3,461
Depreciation of right of use assets 3,046 3,060
Profit on sale of plant and equipment (75) (84)
Defined benefit pension scheme service cost - 178
Defined benefit pension scheme employer contributions paid
(781) (1,942)
Change in fair value of financial instruments 27 (776)
Share based payments expense 39 26
Decrease in inventories 4,884 22,966
Decrease in trade and other receivables 2,901 3,031
(Decrease) in trade and other payables (3,263) (20,365)
Cash inflow from operations 64,778 61,166
Taxation paid (15,450) (11,900)
Cash inflow from operating activities 49,328 49,266
Interest received 2,642 467
Purchase of property, plant and equipment (3,313) (2,854)
Proceeds from disposal of property, plant and equipment 108 134
Cash outflow from investing activities (563) (2,253)
Interest paid (24) (36)
Lease interest paid (242) (224)
Lease capital paid (2,981) (3,015)
Equity dividends paid (34,383) (32,298)
Shares issued 43 14
Cash outflow from financing activities (37,587) (35,559)
Net increase in cash and cash equivalents 11,178 11,454
Effect of exchange differences on cash and cash equivalents
(118) (376)
Cash and cash equivalents at start of year 63,222 52,144
Cash and cash equivalents at end of year 74,282 63,222
NOTES
1. The final dividend of 6.0p per ordinary share will be paid, subject to the
approval of the shareholders, on 13 December 2024 to shareholders on the
register as at 15 November 2024. The annual report and accounts will be
posted to shareholders on 18 October 2024.
2. The financial information in this statement does not represent the statutory
accounts of the Group. Statutory accounts for the year ended 30 June 2023 have
been delivered to the Registrar of Companies, carrying an unqualified audit
report and no statement under section 498 (2) or (3) of the Companies Act
2006.
3. Statutory accounts for the year ended 30 June 2024 have not yet been delivered
to the Registrar of Companies. They will carry an unqualified audit report and
no statement under section 498 (2) or (3) of the Companies Act 2006.
4. Earnings per ordinary share
2024 2023
£'000 £'000
Profit for the year attributable to equity shareholders 41,520 42,404
Weighted average number of shares in issue 416,761,396 416,752,764
Dilution effect of outstanding share options 32,457 21,390
Diluted weighted average number of shares 416,793,853 416,774,154
Basic earnings per ordinary share 10.0p 10.2p
Diluted earnings per ordinary share 10.0p 10.2p
The earnings per 5p ordinary share are attributable to equity shareholders.
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