Flooring specialist James Halstead (JHD) delivered an impressive first-half performance - it pushed operating profit up 2.1 per cent to £21.3m, boosted the dividend and proposed a 7p a share special payout. However, the shares slid 6 per cent on the day these figures appeared after management warned that a deteriorating trading climate will make it hard to match last year's full-year profits.
Turnover fell in the period - reflecting last year's closure of motorcycle accessories business Phoenix Distribution, adverse exchange-rate movements and a 3 per cent sales decline in the core flooring business. Indeed, there was a 15 per cent drop in sales volumes in Australia and a slowdown in Middle Eastern markets. However, UK flooring sales rose 3 per cent and, in like-for-like terms, sales in central Europe - the group's biggest market - were only a shade down from the previous year. So the modest increase in profits was driven by tight cost control, reduced spending and flat raw material costs - which helped push the operating margin up from 17.7 per cent to 19.5 per cent. Finances remained in good shape, too, and cash flow from operations rose 37 per cent to £31.6m.
Broker Arden Partners has revised down its full-year forecasts and now expects pre-tax profit of £40m and EPS of 14.2p (from £42.7m and 14.8p in 2012).
| JAMES HALSTEAD (JHD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 283p | MARKET VALUE: | £585m | |
| TOUCH: | 283-290p | 12-MONTH HIGH: | 349p | LOW: 242p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 48p | NET CASH: | £51.9m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p)** | Dividend per share (p)** |
|---|---|---|---|---|
| 2011 | 118 | 21.1 | 7.20 | 2.50 |
| 2012 | 109 | 21.6 | 7.70 | 2.75* |
| % change | -8 | +2 | +7 | +10 |
Ex-div: 8 May Payment: 7 Jun *Excludes special dividend of 7p a share **Adjusted for one-for-one bonus issue in January 2013 | ||||
