29 March 2017
INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2016 Key FiguresJames Halstead plc, the AIM listed manufacturer and international distributor of commercial floor coverings, reports:
|
|
|
|
|
|
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
TradingThe 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. Felleskjøpet 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 ShareOur 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 ReturnWe 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%).
OutlookIt 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.
James Halstead plc published this content on 29 March 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 29 March 2017 16:04:06 UTC.
Original documenthttp://cfrenzy.webfactional.com/pdfs/notifications/2017/015_Announcement_Interims_Results_29_March_2017.pdf
Public permalinkhttp://www.publicnow.com/view/CD518B8CF2ED34DB925D542E5BE419E6562D88EC