James Halstead Plc - Year End Results
JAMES HALSTEAD PLC
PRELIMINARY ANNOUNCEMENT OF AUDITED RESULTS
FOR THE YEAR ENDED 30 JUNE 2019
"Record turnover and profits with, once again, record dividend."
Revenue at £253.0 million (2018: £249.5 million) - up 1.4%
Profit before tax £48.3 million (2018: £46.7 million) - up 3.4%
Earnings per 5p ordinary share of 18.2p (2018: 17.7p) - up 2.8%
Final dividend per ordinary share proposed of 10.0p (2018: 9.65p) - up 3.6%
Cash £68.7 million (2018: £50.7 million) - nil gearing
Mr Mark Halstead, Chief Executive, commenting on the results, said:
"Welcome news with record turnover, record profit and once again a record dividend"
I am pleased to report that we have, again, achieved record turnover with sales of £253.0 million (2018: £249.5 million). In addition, we have also achieved a record profit before tax of £48.3 million (2018: £47.1 million). The growth in these numbers may be modest but they build upon years of increasing and continued progress and in a particularly difficult climate where so many seem to have deferred spending plans.
The UK turnover (which represents 35% of the total) grew by a very respectable 7.1% and this is the result of targeted sales focus in a difficult market. The constant focus on Brexit has led to deferred spending in several sectors and certain retail chains are curtailing their normal refurbishment cycles.
The company and our strategy
James Halstead plc 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 Exchanges for more than 70 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 enhance the brand identity thereby generating and enhancing goodwill and customer satisfaction with the aim of continued repeat business. This approach is designed to increase revenue and consequently profitability and cash flow to enable the continuation of dividends thereby creating shareholder wealth. As a manufacturer our supply is in bulk to distributors responsible for regional and local delivery. Key to the company ethos is having dedicated sales personnel to present our product to end users and specifiers rather than to delegate the representation of products to stockists. Our businesses are totally flooring focused and predominantly commercial flooring.
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 product offering.
Sustainability is a key area of focus and, from our award winning recycling initiatives through to our environmental policies, we are recognised as leaders within our industry. We publish an annual "Sustainability Report" and our latest achievements include an 84% usage of renewable energy in our production processes, a 16% decrease in energy usage and 570 tonnes of post-consumer PVC waste collected for re-use in production.
Corporate governance and corporate social responsibility
The board has over many years recognised its responsibility towards good corporate governance. It is part of our character and, I believe, contributes to our ability to deliver long-term shareholder value.
We continue to focus on the life cycle analysis to identify and reduce the environmental impacts throughout our product life cycle and just one example of this is that we are now achieving 96% usage of recycled water within our production processes. For some years air quality has been in the press and it is a factor in the flooring selection decision. There should be no negative impact on air quality and we commit to being at the forefront of our market. The "Indoor Air Comfort Gold" certification extends across the vast majority of our flooring portfolio, exceeds the standards of other "ecolabels" and various EU specifications and are rated "best in class". As ever, we believe independent verification and certification demonstrates our credentials as a global player.
Profits and earnings per share have increased and we continue un-geared. Our cash balances stand at £68.7 million, even after dividends paid in the last year that amounted to £28.4 million and taxation of £10.5 million. Our cash reserves continue as the foundation of our strong balance sheet.
It is pleasing to report that the board proposes, yet again, an increased final dividend. The final dividend will be 10.0p (2018: 9.65p) representing a 3.6% increase which, combined with the interim dividend paid in June 2019 of 4.0p (2018: 3.85p), makes a total of 14.0p (2018: 13.5p) for the year, an increase of 3.7%.
This is a record dividend.
Trading since our year-end continues to be solid, particularly in the UK. As a Board we continue to consider the Brexit situation which seems never ending.
I can report that, in September 2019, Polyflor was selected as a key supplier for the National Health Service under an initiative known as Procure 22. James Halstead plc listed on the London Stock Exchange 8 weeks before the foundation of the NHS and has been proud to supply flooring to the organisation for over 70 years.
I can only be confident of continued progress in the coming year.
Anthony Wild, Chairman