James Halstead Regulatory News (JHD)

26 July 2011

James Halstead plc

Pre-close Trading Statement

"Continues robust trading and confident of reporting record profit"

James Halstead plc, the commercial flooring manufacturer and distributor, is providing the following trading update prior to entering the close period ahead of its results for the year to 30 June 2011.

In its interim results statement issued on 31 March 2011, the Company stated that: "The first half year trading was very solid with record revenue representing an increase of 15.2%. The Chairman, Mr. Geoffrey Halstead expressed confidence that the Company would forge ahead in the second half year.

Overall, this confidence was well founded and the Company has continued to trade robustly. Trading performances across the Company's export markets have remained strong and overall turnover should have increased by around 15%. The growth in our export markets is particularly strong and it is too simplistic to put this down to the value of sterling. Our exports have grown over a generation and we are well placed to continue supplying flooring to major infrastructure projects across the globe.

In the UK the commercial flooring market place has declined as might be expected in a building recession. Notwithstanding this, we expect turnover in the UK to be ahead of last year. Our home market has faced the challenges of price competition (as manufacturers look to hold on to volume) and an estimated 16% decline in the market for sheet vinyl. One of our key strengths is in refurbishment, but several large flooring contractors have gone out of business which has frustrated the smooth flow of ongoing refurbishment spending. None of this was unexpected and the UK commercial flooring market continues to be challenging.

Notwithstanding these problems, we have increased turnover in the UK, partly as a result of increased market share but also as a result of significant growth in sourced product which has crossed over from its target market of "light contract" into the "heavy domestic" marketplace. With the same route to market as commercial flooring, through flooring distributors, we have encouraged this expansion.

Rising raw material and energy costs have continued to impact on margins though there are some compensatory effects of which the most significant is improved margins on increased international sales. Our cash balances and even after dividends, acquisitions and plant expenditure it should exceed the levels of last year.

Riverside Flooring Ltd, the newest addition to the Group, which was acquired in November 2010, has incurred some significant costs as we tested, adapted and re-commissioned the plant. Previously the plant used to make domestic cushion vinyl.

Taking all the above into consideration the Board is confident that the Company will report another year of record profits for the year ended 30 June 2011 in line with market expectations.

Enquiries: