Flooring specialist James Halstead (JHD) experienced a “disappointing six months”, says finance director Gordon Oliver. That reflected competitive market conditions, especially in Europe, but also a deterioration in demand during December.
Mr Oliver says the slippage experienced in the final month was partly down to some corporate customers with December year-ends wanting to minimise their stock holdings at that point in the year. But demand has recovered since, with sales growth of 7-8 per cent year on year since January. The group’s gross margin did fall 1 percentage point, however, as price erosion and a change in the product mix took their toll. Meanwhile, weaker government-led refurbishment spending hit performance in Australia, where underlying sales were flat. Some 18 per cent of group sales come from down under.
But demand held up in the UK, which generates 35 per cent of turnover, with sales up 5 per cent. The company’s smaller growth markets are also doing well. Sales in Spain jumped 18 per cent, driven by strong demand from the retail fit-out market, while Canada saw sales rise 10 per cent. This year management wants to focus on boosting sales in India, South America and North America - markets where the group sees greater volume potential.
Broker Arden partners expects adjusted full-year pre-tax profit of £42m, giving EPS of 15.2p (2013: £40.5m and 14.6p).
JAMES HALSTEAD (JHD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 295p | MARKET VALUE: | £611m | |
| TOUCH: | 293-300p | 12-MONTH HIGH: | 344p | LOW: 235p |
| DIVIDEND YIELD†: | 3.1% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 44p | NET CASH: | £38.6m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 109 | 21.2 | 7.5 | 2.75† |
| 2013 | 111 | 20.4 | 7.4 | 3 |
| % change | +2 | -4 | -1 | +9 |
Ex-div:07 May Payment:06 Jun †Excludes 7p special dividend | ||||
