James Halstead Regulatory News (JHD)

28 Mar 2007 07:01

James Halstead PLC28 March 2007 28 March 2007 JAMES HALSTEAD PLC INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2006 Key Figures James Halstead plc, manufacturer and international distributor of commercialfloor coverings reports: • Turnover increased to a record £71 million - an increase of 12.9% • Pre-tax profit increased to a record £11.05 million - an increase of 30.1% • Basic earnings per ordinary 5p share increased to a record 14.7p - an increase of 27%. • Proposed interim dividend increased to a record 5.25p - an increase of 23.5% Chairman, Mr Geoffrey Halstead, commenting said: "These interim figures, once again, show a record performance and are testimonyto the combined efforts of our sales teams, our workforce and our management. Iand the Board remain confident of continued success." Enquiries: Mark Halstead, Chief Executive Gordon Oliver, Finance Director Telephone : 0161 767 2500 Nick Lyon - Hudson Sandler Telephone : 020 7796 4133 CHAIRMAN'S STATEMENT The first six months of the year showed a healthy increase in turnover to £71million (2005: £62.89 million) an increase of 12.9%. Turnover related to flooring was almost 14% ahead of the comparative half yearand around 15% ahead based on like for like exchange rates. Our overseas salesprogressed well with Central Europe increasing 17%, the Pacific region(Australia/New Zealand) ahead 11% and our home market 12.8%. Sales of thePolysafe range of products continue to show good growth. Polysafe products areused widely in public areas to reduce the risk of slipping and, over time, thereis no degradation in the slip resistance as the result of wear. Over a number ofyears, we have successfully introduced a series of new and improved productsmeeting the conflicting demands of whole-life slip-resistance, cleanability andstrong design. Phoenix, our motorcycle accessories business, also showed growthin 'like for like' sales and the Arai motorcycle helmet brand increased sales by20% in a difficult market, undoubtedly through increasing market share. In the last six months we have re-organised sales activities in Australia andNew Zealand under the banner of the 'Pacific Region' and synergy of managementis already bringing added benefits. Profit before tax of £11.05 million (2005: £8.49 million) represents a 30%increase, reflecting the benefit of increased turnover. I believe this to be avery creditable performance. These results are very encouraging consideringintensive sales activity by our competitors, the challenging continuation ofhigh raw material prices and high energy costs. Our balance sheet remains robust. Cash has, again, increased but the balance at31 December 2006, at £33.2 million, is before the 30p per share special dividendpaid in February (some £15.3 million). The stock of £21.6 million (2005 : £18.3million) reflects stock build in advance of a production line overhaul. Thislevel of stock is mathematically 18% ahead of last year. Our basic earnings per share for the six months to 31 December 2006 of 14.7p(2005 : 11.6p) have increased 26.7% and we propose to pay an interim dividend inMay 2007 of 5.25p (2005: 4.25p) an increase of 23.5% reflecting the improvedresults. Our production facility in Radcliffe is achieving record levels of output andbuilding work for the expansion of production is nearing completion, withequipment installation at an advanced stage. In anticipation of the productionshutdown required to install the new machinery, stocks have been increased whichwill minimise and hopefully prevent stock shortages over the next few weeks. Inaddition, we have secured 80,000 sq ft of warehousing near to the Radcliffefacility which will reduce the pressure on logistics that has resulted from theincreased level of sales over the last few years. This offers a medium termsolution in dealing with our current warehousing requirements. Gross margins in our flooring business improved. With selling prices largelyunchanged, due to competitor activity, this was achieved by increased productionon largely fixed overheads and the benefits of product mix. At Polyflor thefocus on environmentally sustainable development continues and the company, ourcore manufacturing unit, has achieved savings in excess of 5% in energy usage asmeasured by kilowatt-hours per square metre of product produced. These savingsare independently assessed by The Carbon Trust. Gross margins in our motorcycleaccessories business also improved. At our Polyflor site, in Radcliffe, work has been taking place in allocatingpart of our site to a dedicated training facility for "grass-roots" floorlayers. Our products are sold into the distribution trade and then fitted byspecialist flooring contractors. Both the UK and Central Europe face skillsshortages in this area and in the last 12 months we have offered a 3 daytraining course for over 500 floor layers in Germany. Polyflor (the UKmanufacturing company) has for some time operated a floor-layer training schemebut will introduce a much broader based scheme similar to the scheme presentedin Central Europe for a nominal charge giving intensive training in products andtechniques. We have allocated staff and resources to training which willincrease key skills for our long term benefit (and no doubt that of ourcompetitors). At a time when many flooring manufacturers are scaling backtraining facilities we plan significant expansion (http://www.polyflor.com/jh/PolyflorHomePage.nsf/TRHP). Recognition from customers is always welcome and Iwould like to note that the Independent Flooring Distributors Association havevoted Polyflor overall Supplier of the Year. Outlook It has been a good six month's trading and we are focused on building on thisresult. Our products continue to be sold throughout the world from the OlympicStadium complex in Qazakh in Azerbaijan and the Sindh Institute (Pakistan'slargest public health organisation) through to the use of Polyflor in wards andcorridors at Reading's Royal Berkshire NHS Foundation Trust - rated in 2005 bythe Healthcare Commission as joint first cleanest NHS acute hospital in the UK.Detailed plans are in place to ensure that plant upgrades are trouble free butin the next few weeks there will be a period when one of our three majorproduction lines is closed, hence the cautious building of stock as previouslynoted. Other infrastructure projects are in hand to improve productivity.Taking all things into consideration, I remain solidly confident of another yearof progress in the year to June 2007. Geoffrey HalsteadChairman 28 March 2007 Interim Reportfor the half-year ended 31 December 2006 Half-year Half-year Year ended ended ended 31.12.06 31.12.05 30.6.06 £'000 £'000 £'000 Turnover 70,999 62,890 126,024 Operating profit 10,440 7,845 16,567Interest and other finance costs 608 646 914 Group profit on ordinary activities(before taxation) 11,048 8,491 17,481Taxation (3,549) (2,630) (5,647) Group profit on ordinary activities(after taxation) 7,499 5,861 11,834 Earnings per ordinary share of 5p:- basic 14.7p 11.6p 23.3p- diluted 14.6p 11.5p 23.2p Details of dividends paid and proposed are given in note 3 Consolidated Balance Sheetas at 31 December 2006 Half-year Half-year Year ended ended ended 31.12.06 31.12.05 30.6.06 £'000 £'000 £'000 Fixed assetsIntangible assets 3,118 3,346 3,232Tangible assets 18,341 19,985 18,687 21,459 23,331 21,919 Current assetsStocks 21,592 18,284 19,770Debtors 21,771 18,750 21,093Cash at bank, in hand and on short-term deposits 33,202 40,236 30,050 76,565 77,270 70,913 Creditors - amounts falling due within one year (40,724) (34,245) (37,685) Net current assets 35,841 43,025 33,228Total assets less current liabilities 57,300 66,356 55,147 Creditors - amounts falling due after more than oneyear (3,316) (6,062) (4,441) Provisions for liabilities and charges - (205) - Net assets excluding pension scheme deficit 53,984 60,089 50,706Pension scheme deficit (8,530) (10,480) (8,681) 45,454 49,609 42,025 Capital and reservesEquity share capital 2,545 2,538 2,543Equity share capital (B shares) 160 160 160 Called up share capital 2,705 2,698 2,703Share premium account 364 223 321Revaluation reserve 3,544 3,544 3,544Capital reserve 3,449 2,942 3,449Profit and loss account 35,392 40,202 32,008 45,454 49,609 42,025 Consolidated Cash Flow Statementfor the half-year ended 31 December 2006 Half-year Half-year Year ended ended ended 31.12.06 31.12.05 30.6.06 £'000 £'000 £'000 Net cash inflow from operating activities 12,915 14,876 25,130Returns on investments and servicing of finance 634 474 856Taxation paid (3,844) (3,008) (6,866)Capital expenditure (1,081) (641) (1,035)Equity dividends paid (4,072) (3,236) (18,113) Cash inflow/(outflow) before financing 4,552 8,465 (28) Financing:Shares issued 45 182 285Decrease in debt (1,363) (119) (1,794) Increase/(decrease) in cash 3,234 8,528 (1,537) Reconciliation of net cash flow to movement in netfundsIncrease/(decrease) in cash 3,234 8,528 (1,537)Movement in debt 1,363 119 1,794 Change in net funds resulting from cash flows 4,597 8,647 257Effect of exchange differences (46) (13) (151) Movement in net funds for the period 4,551 8,634 106Net funds at start of period 25,621 25,515 25,515 Net funds at end of period 30,172 34,149 25,621 Statement of Total Recognised Gains and Lossesfor the half-year ended 31 December 2006 Half-year Half-year Year ended ended ended 31.12.06 31.12.05 30.6.06 £'000 £'000 £'000 Profit for the financial period 7,499 5,861 11,834Currency translation differences on foreign currencynet investments (24) 133 (438)Actuarial (loss)/gain on the pension scheme (38) (1,008) 1,546Movement on deferred tax asset relating to the pensionscheme 11 302 (464)Share based payments 8 - - Total recognised gains relating to the financial period 7,456 5,288 12,478 Reconciliation of Movements in Shareholders' Fundsfor the half-year ended 31 December 2006 Half-year Half-year Year ended ended ended 31.12.06 31.12.05 30.6.06 £'000 £'000 £'000 Profit for the financial period 7,499 5,861 11,834Dividends (4,072) (3,236) (18,113) 3,427 2,625 (6,279) Other recognised gains and losses relating to thefinancial period (43) (573) 644New share capital subscribed 45 182 285 Net increase/(decrease) in shareholders' funds for thefinancial period 3,429 2,234 (5,350)Opening shareholders' funds 42,025 47,375 47,375 Closing equity shareholders' funds 45,454 49,609 42,025 Notes to the Accounts 1. Basis of preparation The interim financial statements, which are unaudited, consolidate the accountsof the holding company and its subsidiaries made up to 31 December 2006 and havebeen prepared in accordance with applicable Accounting Standards and, save forthe adoption of FRS 20 - Share Based Payments, on the basis of accountingpolicies as set out in the annual report and accounts for the year ended 30 June2006. The comparative figures for the six months ended 31 December 2005 andyear ended 30 June 2006, have not been restated from those previously publishedsince the impact of the adoption of FRS 20 on the results for those periods isnot material. 2. Taxation Taxation has been provided at the rate of 32.1% (2005: 31%). 3. Dividends Half-year Half-year Year ended ended ended 31.12.06 31.12.05 30.6.06 £'000 £'000 £'000 Equity dividends paid:Final dividend for the year ended30 June 2005 - 3,236 3,236Special dividend of 25p - - 12,715Interim dividend for the year ended 30 June 2006 - - 2,162Final dividend for the year ended30 June 2006 4,072 - - 4,072 3,236 18,113 Equity dividends proposed at the end of theperiodSpecial dividend 15,269 12,715 -Interim dividend 2,672 2,158 -Final dividend - - 4,072 Equity dividends per share, paid and proposed, are as follows: • 6.375p final dividend for the year ended 30 June 2005, paid on 5 December 2005. • 25p special dividend for the year ended 30 June 2006, paid on 17 February 2006. • 4.25p interim dividend for the year ended 30 June 2006, paid on 26 May 2006. • 8p final dividend for the year ended 30 June 2006, paid on 1 December 2006. • 30p special dividend for the year ended 30 June 2007, paid on 2 February 2007. • 5.25p interim dividend for the year ended 30 June 2007, payable on 23 May 2007 to those shareholders on the register at the close of business on 27 April 2007 4. Calculation of earnings per ordinary share Half-year Half-year Year ended ended ended 31.12.06 31.12.05 30.6.06 £'000 £'000 £'000 Basic earnings 7,499 5,861 11,834Goodwill amortisation charge 114 114 228 Underlying earnings 7,613 5,975 12,062 Weighted average number of 5p ordinary shares inissue 50,875,694 50,672,074 50,764,031Weighted average number of 5p ordinary shares inissue (diluted for the effect of outstandingshare options) 51,284,522 50,957,920 51,008,831 Underlying earnings per 5p ordinary share 15.0p 11.8p 23.8pBasic earnings per 5p ordinary share 14.7p 11.6p 23.3pDiluted earnings per 5p ordinary share 14.6p 11.5p 23.2p 5. Statutory accounts The figures for the year ended 30 June 2006 are an abridged statement of thegroup audited accounts for that year. The audited accounts, containing anunqualified audit report, have been delivered to the Registrar of Companies. 6. Copies of the interim results Copies of the interim results have been sent to shareholders. Further copiescan be obtained from the company's registered office, Beechfield, HollinhurstRoad, Radcliffe, Manchester M26 1JN. Directors and Advisors Directors Registrars G Halstead Capita RegistrarsM Halstead Northern HouseG R Oliver ACA MCT Woodsome ParkJ A Wild FCA Fenay Bridge Huddersfield HD8 0LA Secretary W J Whittaker FCMA Registered Office Auditors Beechfield PKF (UK) LLPHollinhurst Road Sovereign HouseRadcliffe Queen StreetManchester M26 1JN Manchester M2 5HR Tel. 0161 767 2500Fax. 0161 766 7499 Company Registration No. 140269 Website :www.jameshalstead.com This information is provided by RNS The company news service from the London Stock Exchange