James Halstead – Interim Results

JAMES HALSTEAD PLC

(“James Halstead or the “Company”)

INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2025

Solid H1 trading and despite challenging markets, our margins have remained strong.  A record interim dividend has been declared

James Halstead plc, the AIM listed manufacturer and international distributor of floor coverings, announces its results for the six months ended 31 December 2025.

Financial highlights

• Revenue at £127.2 million (2024: £130.1 million)

• Operating profit at £23.6 million (2024: £27.1 million)

• Pre-tax profit at £24.7 million (2024: £28.5 million)

• Basic earnings per ordinary share 4.4p (2024: 5.0p)

• Interim dividend declared of 2.85p (2024: 2.75p)

• Cash of £70.8 million (2024: £63.7 million)

Operational highlights

• Strong cash inflow from operations £36.9 million (2024: £25.3 million)

• Further gains in USA and Canadian markets; latter backed up by creation of further local stockholding capability

• Completion of capex projects at Teesside and Radcliffe sites in the UK

• Continued progress in Malaysia and South Asia Successful relaunch/update of Expona commercial range

The Executive Chairman, Mark Halstead, commented:

“I am pleased to report a robust balance sheet, strong cash inflow and a record interim dividend achieved against a backdrop of challenging markets. Our very long record of dividend increases continues and the markets in which we operate continue to generate  demand which in turn gives us confidence in the medium term.”

CHIEF EXECUTIVE’S STATEMENT

Trading for the six months ended 31 December 2025

Revenue of £127.2 million (2024: £130.1 million) was 2.2% lower than the prior year. Alongside adverse conditions that affected sales in key markets, there were slight margin reductions (44.56% v 44.75%) and overhead increases of 6.2%, largely in the UK. Consequently, operating profit of £23.6 million (2024: £27.1 million) is 12.8% behind the comparative period.

The UK represents our largest market at 44.25% of total turnover (2024: 42.7%). UK sales were 1% higher in the period despite there being a slowdown in activity in our UK commercial flooring sales. This slowdown was almost entirely in the latter 2-3 months of the trading period which was driven by certain of the larger distributors reducing purchases towards the calendar year end. Additionally, it would be fair to ascribe the group board’s prudent  approach to credit with customers also contributed to this effect. However, our ongoing expectations are for increased sales in the UK as spending on education, prisons, health care and aged care, particularly refurbishment, picks up.

Notwithstanding the flat sales in the UK and central Europe, we have seen certain markets perform well, notably the USA (+15%), Canada (+25%) and Africa (+41%), with the Middle East comparable with last year. However, our export market lagged the comparative by 5%, with Northern Europe and Australia/New Zealand being the weakest markets.

Taxation at 26.4% (2024: 26.3%) is broadly unchanged from the previous year. Despite cash at bank at the end of the six month period being ahead of last year, our interest receivable was lower due to lower cash balances in the first three months combined with UK deposit rates at lower levels relative to rates from the comparative period.

Our businesses and international markets

Our UK businesses are Polyflor and Riverside. Overall, it was a satisfactory trading period although stricter credit controls did affect sales in the latter two months of the trading period. This had a consequent effect of reduced variable and fixed overhead recovery which slightly depressed margins. In addition, stock holdings in Polyflor were reduced with inventory levels in this business 7% below the comparative.

Investment at our Teesside plant to replace the incinerator with a more energy efficient and environmentally friendly “scrubber” has already delivered cost savings and given the higher potential energy costs in the second half year could not have been better timed. Similarly, a significant installation of solar panels to the main production site at Polyflor in Radcliffe was completed, which are already delivering further energy cost benefits.

The core manufacturing base continues to lead in product development. Our launch, in September 2025, of Geotone QuickLay is a good example. It is a smooth, loose lay flooring solution, designed to offer quick and efficient installation to time critical projects in key market segments such as healthcare and education around the world. The product can be fitted over fresh concrete floors without the need for an additional Damp Proof Membrane. It can also be installed directly over a range of existing floor coverings which would otherwise have to be completely removed at extensive cost and significant levels of disruption. A recent example is the refurbishment of Solihull Hospital, against tight turnaround deadlines. Furthermore, the product has met the standards of the University of Stirling’s Dementia Services Development Centre (DSDC) Product Accreditation, for installation in environments for designed for those living with Dementia. In summary, a very encouraging launch fully backed up with our full range of sampling and exemplary presentations to end users.

Our German and Central European businesses are operating in an economic climate characterised by material uncertainty. Nevertheless, we relaunched and updated the Expona commercial collection (Luxury Vinyl Tile – “LVT”) which has already seen positive follow up with products specified in roll-out to McFit gyms, A1 Fitness and Adler fashion stores. This was one of the most successful launches of recent years.

Objectflor has a well respected market presence, and this was endorsed through the company being ranked, once again, as No 1 against its flooring competitors by BTH Heimtex, the trade magazine for floor coverings. Readers of BTH Heimtex are managers, opinion leaders and decision makers in specialist shops, interior decorators, wholesale companies and the construction industry. Our business in France, directed from Germany, supplied several prestigious contacts such as The Safran Aircraft engine factory in Châtellerault, and the Parc de jeux intérieur (Ô Park) in Castres.

Our Canadian business has seen further growth and the increased presence on the west coast is now backed up with a local stockholding capability.  The growth in volume over the first six months has been across each of our major product categories which is positive as we look to expand our presence further.

Our APAC region remains subdued, especially our Australian and New Zealand businesses.  Australia has suffered from higher than predicted interest rates with inflation remaining stubbornly high, and this has impacted consumer spend and refurbishment in the retail sector. As a result, our LVT sales suffered a double digit fall in volumes, the main factor for the drop in revenue.  Encouraging however, sheet product volumes from our own manufactured ranges were 12% ahead of comparatives.

A new managing director has been appointed in Australia and his role will include oversight of the New Zealand business; he joined us in March 2026.  Having previously worked for Polyflor Australia for 14 years, before a brief hiatus at another company, and within the flooring industry for the last 30 years, we anticipate renewed focus on the core UK manufactured ranges.

In New Zealand, the expectation was always that the sales would reduce this year due to the lower spend on social housing owing to the completion of the Kianga Ora contract.  Measures were put in place to reduce our cost base and with these now in place, along with interest rates falling to their lowest level in over 3 years, we are poised to take advantage of any uplift in sales.

Notwithstanding the above, our New Zealand business has been supplying the Taranaki Base Hospital which is a “showcase” rebuild / refurbishment project led by architectural firm  Warren and Mahoney. Similarly, our Australian business supplied a breadth of projects from the Gage Road Sports Bar (Perth Airport, WA), Christos Burgers (Banksia Grove, WA) and Brainy Bunch Paediatrics (Norman Park, QLD).

We are, however, pleased to report continued progress in Malaysia and South Asia. Our approach to this region is like our activities in the rest of the world. Looking at our approach in more detail, we have been active at trade exhibitions in Malaysia and in the Philippines (the latter went well and a follow-up event took place at Davao in February 2026). In conjunction with this we ran training days for government facilities managers on the details of flooring specifications and maintenance. There have been a myriad of hospital project successes and an increasing number of hotel projects such as the Shangri La and St Regis hotels in Singapore. The team engage with public works departments and with regional architects such as Architects 49 in Bangkok and Hirsch Bedner Associates across the South East Asian region.

North Asia, notably China, Hong Kong and South Korea, remain problematic and we are yet to see any large projects materialising because of central government restrictions.  We have redirected the sales management of this region back under the supervision of the Polyflor UK export department to prioritise project specifications.

In the rest of the world, revenue performance has been generally more positive (as noted above) with North America showing strong growth.

Working capital, cash flow earnings per share and dividend

Since the start of the financial year, we have distributed £25.2 million in dividends and paid corporation taxes of £6.7 million. In addition, capital expenditure over the period was £2.2 million, mainly focused on the energy saving initiatives noted above.

The cash inflow from operations at £36.9 million (2024: £25.3 million) is impressive, a 45.8% increase compared to last year, the improvement , in part, due to a large decrease in trade receivables as our businesses focused on tighter credit control and decreased inventories.

Our cash position stands at £70.8 million as of 31 December 2025 (2024: £63.7 million).  Our robust balance sheet continues to be a key strength.

Having regard to our cash and profitability, we have decided to declare an interim dividend of 2.85p per share (2024: 2.75p), an increase of 3.6%. This dividend will be payable on 5 June 2026 to those shareholders on the register as of 8 May 2026.

Current trading and outlook

It should be noted that UK sales, noticeably reduced in the weeks leading up to the 31 December 2025, have in the first two months of 2026 picked up with a greater perception of improved conditions. It is clear, to us, that backlogs of repair and refurbishment in key sectors remain.

However, once again issues in the Middle East are causing head winds in respect of raw material, energy and transportation costs which, it must be noted, affect our competitors at least as badly. Inevitably this will have inflationary effects.

The fundamentals of our business, product ranges and routes to market are well established and the markets in which we operate continue to generate the demand that, despite short term challenges, gives us confidence in the medium term.