Few things in life are certain, but among UK listed companies few things are more likely than James Halstead increasing its profits and dividends. After all, the floor coverings specialist has managed to increase its dividend payout every year for the past 35 years. And it's not as if the dividend teeters on the brink of being cut. Quite the reverse. The payout is comfortably covered by after-tax earnings and Halstead has a useful pile of cash, too. Oh, and turnover and profits to the year ending June 2011 were both at record levels.
- Dividend raised for 35th consecutive year
- Cash in hand
- New plant opens up access to new markets
- Strong overseas sales
- Exposure to mainland Europe
- Rising raw material costs
Granted, June seems like a long time ago, and there was little indication then of the torrid six months that were to follow. But in that period James Halstead has continued to make progress, confirming that sales in a very tough UK market were ahead by 4 per cent, while global sales continue to run at record levels. And the good news just keeps on coming because there has also been some respite from the constant rise in raw material costs, which the company reckons will help to boost profits at a faster rate than the increase in sales. Even so, management previously showed a nice touch by raising the group's stock holdings of raw material stocks associated with making vinyl floor coverings by more than the growth in output - inventories finished 2010-11 36 per cent higher than they started, at almost £49m. Chief executive Mark Halstead pointed out that the group's cash pile was generating just nominal rates of return, while raw material costs were rising at a lively rate, so it made sense to turn the cash into stock.