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RNS Number : 4925B James Halstead PLC 01 October 2025
1 October 2025
JAMES HALSTEAD PLC
("James Halstead", the "Group" or the "Company")
PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS
FOR THE YEAR ENDED 30 JUNE 2025
James Halstead plc, the AIM listed manufacturer and international distributor
of commercial flooring, announces its results for the year ended 30 June 2025:
Financial highlights
· Revenue at £262.0 million (2024: £274.9 million)
· Profit before tax of £55.1 million (2024: £56.2 million)
· Profit after tax of £40.6 million (2024: £41.5 million)
· Earnings per ordinary share of 9.7p (2024: 10.0p)
· Final dividend per ordinary share proposed of 6.05p (2024: 6.0p) bringing
total dividend for the year to 8.80p (2024: 8.50p)
· Cash of £68.4 million (2024: £74.3 million)
Operational highlights
· Gross margin improvement to 44.5% (2024: 44.1%)
· Continued investment in our operations with £3.9 million of capital deployed
in the year to improve output efficiency and product offering
· Key projects during the year include:
· The newly built Colchester Hospital, where our flooring was winner of
an award by the Contract Flooring Journal for the installation. At this
project the contractors returned 2.5 tonnes of offcuts back to our factory for
recycling, cutting nearly 3 tonnes of CO₂ emissions
· "Le Stade Toulousdain" rugby union stadium in France
· Ongoing installations in Deichmann shoe stores throughout central
Europe
· Real Madrid World, the first football theme park at Dubai parks and
resort
· In Poland, the new office buildings of military air base in Lask,
part of the new "East Shield" programme
· In Italy the new Sacco Hospital being built in Milan
Outlook
· Continued growth in North America and forward momentum in Malaysia
· Short term ongoing headwinds in Europe affecting repair, renewal and roll-out
budgets that have been constrained by additional employment costs in
education, healthcare and hospitality sectors
· FY25 was a year of solid performance - the Board expects to make further
progress in FY26
· Board's confidence has enabled a further uplift in dividend, the 49th
consecutive year of increase
Mr Mark Halstead, Executive Chairman, commenting on the results, said:
"Despite headwinds in the commercial flooring sector it was a solid
performance with a cash conversion rate of 1.23. Looking ahead, we have
continuing product and process improvements and I, and the Board, remain
confident that the future offers many opportunities and on-going profitable
growth".
Enquiries:
James Halstead:
Gordon Oliver, Chief Executive Telephone: 0161 767 2500
David Drillingcourt, Finance Director
Hudson Sandler:
Nick Lyon / Nick Moore Telephone: 020 7796 4133
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 over 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 of products to the end users and specifiers
who will purchase the stock from those stockists.
CHAIRMAN'S STATEMENT
Results
Revenue for the year at £262.0 million (2024: £274.9 million) was 4.7%
behind the comparative year largely driven by headwinds in the European and
APAC regions. The year was satisfactory with a solid performance in the UK,
good growth in North America and continued forward momentum in Malaysia but
offsetting this were the challenges that the Group faced in several major
markets most particularly Europe, Australia and New Zealand.
A key pillar of our home and export strategy is differentiation from our
competitors through the company ethos comprising the technical support,
sustainability and availability of focused product ranges, whether a simple
corridor floor in a high use facility or a highly specialised conductive floor
for server rooms. This is a key reason for the geographic spread and diverse
sectors to which we supply flooring and why our sales in the year were to more
than 60 countries.
I think it worthy of note that our recently revamped "Expona Flow" range was
honoured by an international jury with the "Plus X Award" for high quality,
design, ease of use and functionality.
The reported profit before tax for the year of £55.1 million (2024: £56.2
million) was 1.9% behind the prior year comparative, a good result against a
challenging array of market conditions.
Gross margins held up well in all our major markets. Overall, the margins
improved from 44.1% to 44.5%. Principally this increase was driven by our
manufacturing efficiencies and product mix.
Selling and distribution costs at £48.8 million (2024: £52.9 million) were
7.8% below last year and reflect the partly lower volume of sales
(particularly in Europe and Australasia) and control of discretionary
overheads such as restricted marketing and sales staff vacancies.
Administration overheads at £14.9 million (2024: £14.3 million) are some
4.5% higher than last year, largely reflecting inflationary costs.
Investment
Over many years our strategy has also included a policy of continual
investment in both process improvement and 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.
Electrostatic dissipative (ESD) floorings have been a part of our ranges for
many years particularly SD (static dissipative) and EC (electro conductive)
flooring. During the year we have invested in our plant in Radcliffe to
upgrade these ranges to add focus to these products as they are used in server
rooms and areas of high-end electronic equipment, and this is a fast growing
area as the world of cloud computing moves into the age of AI. We are already
supplying this sector with the same flooring that has been used in hospitals
for many years. The recent announcement of investments such as "Stargate
UAE" and the "AI growth Zone" for the North East we will see continued growth
in these products. This bodes well for sales and ongoing work by our
development teams.
Plans for new production at our Teesside facility continue to be frustrated by
the deficiencies
in the ageing national grid infrastructure in the area. Notwithstanding these
difficulties, the year saw the completion of our upgrade to fume extraction
and product curing that has improved efficiency, reduced energy use and
increased throughput. Additionally, the year saw the completion of a £1
million project to upgrade the mixing of materials and of printed logic
circuit equipment, again at our Teesside factory.
Sustainability, social responsibility and the environment
We recently published our 20(th) sustainability report that details our
actions and ambitions in the areas of the environment, sustainability and
social responsibility.
The sustainability report covers in detail the standards we achieve in many
areas with environmental accreditations beyond the minimums of the industry
(independently verified) as well as details of our recycling initiatives and
employment practices.
Training for the future remains a core focus of the Group and is a key part of
our social responsibility commitment. The Objectflor training campus for
example hosted 1,350 visitors with around 40 events offering training,
professional development conferences and seminars each having between 10 - 120
participants. These courses not only offer flooring contractors advanced
skills and techniques but offer training on sales and marketing to small
businesses.
Cash position
Cash balances reduced 7.9% but remain strong at £68.4 million (2024: £74.3
million). The inventory at the year end is £80.4 million (2024: £82.3
million) which is 2.3% lower than the prior year comparative.
During the year taxation paid was £14.3 million (2024: £15.5million), fixed
asset additions of £3.9 million (2024: £3.3 million) and equity dividends
paid of £36.5 million (2024: £34.4 million).
Dividend
The interim dividend of 2.75p (2024: 2.50p) was paid in June 2025. The Board
is proposing a final dividend of 6.05p (2024: 6.0p) which will mean a total
dividend for the year of 8.80p (2024: 8.50p) an increase of 3.5%. This is a
record level of dividend and marks our 49(th) consecutive year of increased
dividend. The final dividend will be paid on 12 December 2025.
Outlook
There is no doubt that we have faced challenges in the year but there is
ongoing positive sentiment in North America, and in the UK we continue to see
good growth prospects.
The malaise in Central Europe due to low customer confidence continues to
affect shop-fitting and retail premises with cuts to renewal and roll-out
programmes. We shall approach the short term with caution, tight cost control
and a conservative approach to customer credit. The latter being particularly
important as competitors in thin markets chase volume.
I remain confident that our portfolio of products is appropriate to the
marketplace and of continued overseas growth backed by a robust market share
in our home territory.
Once again, I would like to thank all our colleagues across the globe for
their continued efforts in achieving this year's result.
Mark Halstead
Executive Chairman
CHIEF EXECUTIVE'S REVIEW
Our business is, in essence, simple. Our model is to manufacture in volume,
high quality flooring that we sell to distributors and stockists to satisfy
local demand whether this is via third parties (as in the UK), via our own
businesses across the globe or into direct export markets. Underpinning
ongoing success of this model is to understand, support, train, motivate and
persuade these stockists to service the true customer - end users and
contractors within a wide range of sectors.
Our various sales teams have secured many prestigious projects during the year
as in previous years, but the true driver of the business is day-to-day
projects supplied from stock and largely our order book is today's order
intake - delivered next day.
Looking at our businesses:
Polyflor and Riverside Flooring, based in UK
Our UK manufacturing plants continue to produce the flooring that is distributed across the world in part by our own subsidiaries but in the main via third party distribution. Our UK sales are via third party distribution with our wholesaler customers taking in the bulk deliveries that are regionally distributed.
Our Radcliffe produced flooring has been installed in countries across Africa where examples such as the new Onandjokwe State Hospital in Namibia and the Hospital dos Queimados de Luanda, Angola showcase our long history in healthcare. Our Teesside produced flooring has been fitted in the "Star of the Seas", the largest cruise ship ever. In Manati, Puerto Rico we have supplied Bristol Myers Squibb further products for their 33-acre manufacturing facility producing medicines.
Within the UK the installations are as diverse as the Millwall FC recently
renovated hospitality "No. 11 Lounge", NCR Dundee famous for its ATM
business and the recent major refurbishment of Butlins Bognor Regis. Our
flooring has been installed in Cyprus, Lithuania, Singapore, Indonesia - the
list is very extensive from high tech manufacturing facilities to children's
play areas.
The Polyflor business reported a 3.9% reduction in turnover driven largely by
reduced sales to our Australian and New Zealand businesses.
UK sales were £111.7m (2024: £110.7m) a 1.0% growth. The gross margin within
the Polyflor business increased to 43.4% (2024: 42.5%) because of positive
product mix with specialist flooring (such as the SD / EC ranges) being a
larger part of sales and balanced production scheduling. Notwithstanding the
margin improvement on sales the loss of sales volume to our international
subsidiaries inevitably affected profitability.
Riverside sells exclusively through the Polyflor business and saw its product
sales in the UK and export markets (excluding our own subsidiaries) increase.
Overheads, at all levels, were targeted throughout the year. The decision was
taken to delay the recruitment of replacements for leavers across all
departments and there was a key reduction at the board level of the business
with three director/executive level people leaving and a resultant restructure
within the existing teams. Marketing spend was refocused to target grass root
demand by a series of promotions targeted at the independent contractor to
push demand to the distributors and a series of promotions to the end buyers
of our products to encourage larger deliveries of key product lines to
stockists.
The core UK business held firm and grew against difficult market conditions,
but the savings noted earlier were essential given the volume declines
(principally from the APAC region) that the factory faced.
As a consequence, profits at Polyflor increased by 7.7% which is a good result
in the current trading environment.
Objectflor / Karndean and James Halstead France, our European operations
The climate for our German and Central European business remains highly
competitive with activity subdued. Overall revenue declined 7% in like for
like currency. The core German sales held up well (with Germany being by far
the largest country serviced by Objectflor) but were 3.2% down year on year
with the French market facing the brunt of sales decline just over 20%.
The French economy remains weak with the government deficit being amongst the
highest in the developed world, and they are struggling to bring down public
spending. With this backdrop, the general sentiment from the public is to
either save cash or prioritise holidays over major renovations.
Distributors are reporting revenue down 15-20% which inevitably is leading to
price discounting, and with independents struggling there has been an element
of consolidation in the market. We are mindful of the potential impact on
credit and are increasingly vigilant.
Recovery will be slow but focus on new product launches along with extending
CSTB approval on a greater number of products should provide a boost to sales.
In particular, Centre Scientifique et Technique du Bâtiment (Scientific and
Technical Center for Building) approval is important for healthcare
educational and institutional projects.
Gross margins across the region were maintained (with a modest increase). The
fall off in sales necessitated a focus on overhead control throughout the year
but it was inevitable that profits declined by c 30%.
Polyflor APAC - encompassing Australia, New Zealand and Asia
The APAC region, which includes our businesses in Australia, New Zealand,
South and North Asia, again had a difficult year.
The APAC region's production and delivery problems noted last year were
resolved during the period. In our largest market, Australia, sales were down
9.3%. The Australian economy remains weak with low economic growth and a
continued cost of living crisis on the back of high inflation. It has
struggled since the pandemic and whilst interest rates have started to move
downwards, real wage growth has remained negative. This has dampened consumer
sentiment and impacted the housing market with new builds and approvals
subdued. On the back of this, sales of products in domestic and retail
markets, much like European markets, have struggled. Government expenditure
has been focused on infrastructure, roads and airports, although on a positive
note, in the 2025 government budget there is proposed boosted funding for
Medicare and funding for social and affordable housing initiatives.
Given the lower demand across the market, sales prices have remained static
with a small fall in gross margin. Whilst Australia remains profitable, it has
been a disappointing year and going forward there will be an increased focus
on commercial products. As noted above, the UK factories depend on volume
demand from overseas and in the financial year the level of exports to the
region, and particularly Australia have been poor (albeit third party sourced
product has performed comparatively well). We have partially addressed this by
refocusing our UK teams on this market and expect that this will continue to
be addressed in the coming months.
Similarly in New Zealand, demand has been weak. We have benefited over the
past number of years from the government policy of building new social
housing, but this has come to an end. Whilst there will be some remedial or
refitting work, it will not be on the same scale and over the past 12 months
we have restructured the business, closing the Christchurch warehouse,
reducing staff numbers, subletting unused areas of our Auckland warehouse and
refining territories. The changes we have implemented should move New Zealand
back to profitability over the coming year.
The one positive in the region was our South Asia business based in Malaysia.
Revenue in local currency grew by 38% with sales growth across all but one
territory. Margins have improved in the second half of the year and this
should continue into 2025/26 as the full effect of the free trade agreement
works its way through the stocks. The investment in the region has seen steady
sales growth, the business is now profitable, and we remain positive for
further growth in the coming year.
Our North Asia business, now relocated to Shanghai with a satellite office in
Hong Kong, remains subdued. The slowdown in the construction market has left
all flooring manufacturers that supply these markets short of volume demand
resulting in very competitive pressures in the region. Whilst our pipeline of
orders is improving, we have lacked the larger volume projects that were
prevalent pre Covid. Rebuilding our market share continues and whilst not as
fast a recovery as we had hoped there is definite progress.
Polyflor Nordic comprising Polyflor Norway based in Oslo and Polyflor Sweden
based in Gothenburg
A disappointing performance from our Norwegian division with overall sales in
this region down 7%. Profitability has been supported by adding delivery
charges for transport of goods, particularly to remoter areas. Sweden achieved
a record turnover 11.3% ahead of the comparative and secured a major new
account and key projects that delivered volume increases in Polyflor UK
manufactured vinyl.
Norway was more subdued but collected design awards for their work in the
region most noteworthy was Winner of SBID International Design Awards 2024
Regional (Public Space - Rest of the World) for Svalbard Folkehøgskole - the
world's northernmost high school. Awards such as this add to the ability to
sell in other countries.
Polyflor Canada, based in Toronto
Another solid performance from our Canadian business which saw a 7.4% increase
in revenue in local currency. Whilst recently the residential sector has
experienced a slowdown, reflecting broader market conditions, significant
government investment in the education and healthcare sectors has been
beneficial. This presents opportunities moving forward as we look to
capitalise on the next wave of tenders following successful projects in those
sectors this year.
The opening of our new Vancouver office and warehouse is a key step forward in
our long term growth strategy for the country and once fully operational, will
enhance our logistical capabilities, reduce delivery times and strengthen our
regional customer support, factors that should drive further sales growth and
market reach.
Rest of the World
Polyflor continues to expand across the globe selling direct to over 60
countries during the year other than those mentioned above.
In the USA, increased interest in commercial products within the market along
with our homogeneous and heterogeneous ranges, has seen good traction for our
safety floor ranges. As noted at the half year, despite tariffs increasing on
goods from the United Kingdom, these remain lower than for imported goods from
elsewhere and our US customers remain positive for the year ahead.
In South America, we have seen a drop off in sales and as this remains a
project driven business, the timing of shipments is particularly important.
There was an uplift towards the end of the year and this has continued into
the new year with improved sales into Brazil and Mexico. In recent years we
have seen good sales in the Middle East and like our South American sales are
largely project based (i.e. larger volume but more irregular sales) that
fluctuate in terms of timing but with a pipeline that is visible and secure
save as to exact timing of the sale. We have a third-party logistics warehouse
in place in Mexico to secure regular day-to-day business and this should not
only support larger projects that await full container orders but give
confidence locally to our ongoing commitment.
Our Indian business, which has struggled to gain any momentum in the day to
day contract business, is in the process of being closed. The closure costs
are not significant. Local stock is being sold off and we will resort to our
historic project business controlled from the UK with senior salespeople on
the ground.
Sustainability, social responsibility and the environment
As highlighted in the Chairman's Statement, we recently published our 20th
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.
In conclusion
Plant efficiency and manufacturing output are crucial to the performance of
our UK business and more so to the overall group performance. With overheads
such as energy continuing to exceed those of our international competitors,
Radcliffe and Teesside production lines have continued to seek process
improvements and increase machine utilisation to reduce the costs per unit of
output. We are, in the coming year, looking to address manufactured volume
sales in the Australian market by investment in the grass roots areas of
education and healthcare.
In the UK there has been a focus on wholesalers to reduce stocks as the
domestic carpet market has been difficult and the Group has felt the effects
of declines in third party distributors stock levels. The level of UK orders
processed has increased over the year as a result with our services
departments working hard to fulfil short notice requirements.
There have been some hard yards covered by the fragility of UK and European
markets in the past 18 months and in short term these challenges persist. The
fall off in sheet vinyl sales in Australia is being addressed and whilst there
are short term challenges with significant stock in the region, I believe we
are on track to rebalance our business. Many markets and key markets are
moving forward very positively and we look ahead with confidence.
Gordon Oliver
Chief Executive
Audited Consolidated Income Statement
for the year ended 30 June 2025
Year Year
ended ended
30.06.25 30.06.24
£'000 £'000
Revenue 261,967 274,881
Cost of sales (145,396) (153,760)
Gross profit 116,571 121,121
Selling and distribution costs (48,832) (52,945)
Administration expenses (14,918) (14,269)
Operating profit 52,821 53,907
Finance income 2,584 2,642
Finance cost (268) (325)
Profit before income tax 55,137 56,224
Income tax expense (14,525) (14,704)
Profit for the year attributable to equity shareholders 40,612 41,520
Earnings per ordinary share of 5p:
-basic 9.7p 10.0p
-diluted 9.7p 10.0p
All amounts relate to continuing operations.
Audited Consolidated Statement of Comprehensive Income
for the year ended 30 June 2025
Year Year
ended ended
30.06.25 30.06.24
£'000 £'000
Profit for the year 40,612 41,520
Other comprehensive income net of tax:
Items that will not be reclassified subsequently to the income statement:
Remeasurement of the net defined benefit asset
20 564
20 564
Items that could be reclassified subsequently to the income statement if
specific conditions are met
Foreign currency translation differences (2,092) (248)
(1,396) (472)
Fair value movements on hedging instruments
(3,488) (720)
Other comprehensive income for the year (3,468) (156)
Total comprehensive income for the year 37,144 41,364
Attributable to equity holders of the
company 37,144 41,364
Items in the statement above are disclosed net of tax.
Audited Consolidated Balance Sheet
as at 30 June 2025
As at As at
30.06.25 30.06.24
£'000 £'000
Non-current assets
Intangible assets 3,232 3,232
Property, plant and equipment 34,730 34,965
Right of use assets 4,420 6,209
Retirement benefit obligations 555 14
Deferred tax 1,585 214
44,522 44,634
Current assets
Inventories 80,401 82,268
Trade and other receivables 45,238 44,042
Derivative financial instruments 193 482
Current tax 1,527 1,287
Cash and cash equivalents 68,369 74,282
195,728 202,361
Total assets 240,250 246,995
Current liabilities
Trade and other payables 48,096 57,487
Derivative financial instruments 1,936 106
Current tax - 273
Lease liabilities 1,940 2,707
51,972 60,573
Non-current liabilities
Other payables 326 410
Lease liabilities 2,747 3,680
Preference shares 200 200
Deferred tax 3,006 855
6,279 5,145
Total liabilities 58,251 65,718
Net assets 181,999 181,277
Equity
Equity share capital 20,839 20,839
Equity share capital (B shares) 160 160
20,999 20,999
Share premium account 55 55
Currency translation reserve 1,754 3,846
Hedging reserve (1,062) 334
Retained earnings 160,253 156,043
Total equity attributable to shareholders of the parent 181,999 181,277
Audited Consolidated Cash Flow Statement
for the year ended 30 June 2025
Year Year
ended ended
30.06.25 30.06.24
£'000 £'000
Profit for the year attributable to equity shareholders
40,612 41,520
Income tax expense 14,525 14,704
Profit before income tax 55,137 56,224
Finance cost 268 325
Finance income (2,584) (2,642)
Operating profit 52,821 53,907
Depreciation of property, plant and equipment
3,987 4,093
Depreciation of right of use assets 3,542 3,046
Profit on sale of plant and equipment (75) (75)
Defined benefit pension scheme employer contributions paid
(500) (781)
Change in fair value of financial instruments 46 27
Share based payments expense 47 39
Decrease in inventories 180 4,884
(Increase) / decrease in trade and other receivables
(1,794) 2,901
(Decrease) in trade and other payables (8,240) (3,263)
Cash inflow from operations 50,014 64,778
Taxation paid (14,294) (15,450)
Cash inflow from operating activities 35,720 49,328
Interest received 2,570 2,642
Purchase of property, plant and equipment (3,881) (3,313)
Proceeds from disposal of property, plant and equipment 143 108
Cash outflow from investing activities (1,168) (563)
Interest paid (29) (24)
Lease interest paid (239) (242)
Lease capital paid (3,430) (2,981)
Equity dividends paid (36,469) (34,383)
Shares issued - 43
Cash outflow from financing activities (40,167) (37,587)
Net (decrease)/increase in cash and cash equivalents 11,178
(5,615)
Effect of exchange differences on cash and cash equivalents
(298) (118)
Cash and cash equivalents at start of year 74,282 63,222
Cash and cash equivalents at end of year 68,369 74,282
NOTES
1. The final dividend of 6.05p per ordinary share will be paid, subject to the
approval of the shareholders, on 12 December 2025 to shareholders on the
register as at 14 November 2025. The annual report and accounts will be
posted to shareholders on 17 October 2025.
2. The financial information in this statement does not represent the statutory
accounts of the Group. Statutory accounts for the year ended 30 June 2024 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 2025 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
2025 2024
£'000 £'000
Profit for the year attributable to equity shareholders 40,612 41,520
Weighted average number of shares in issue 416,786,436 416,761,396
Dilution effect of outstanding share options - 32,457
Diluted weighted average number of shares 416,786,436 416,793,853
Basic earnings per ordinary share 9.7p 10.0p
Diluted earnings per ordinary share 9.7p 10.0p
The earnings per 5p ordinary share are attributable to equity shareholders.
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