As befits a company that makes commercial floor coverings, interim financial results from James Halstead (JHD) were solid, if not thrilling. There was still room for poetry, however: with the company about to celebrate its centenary, chief executive Mark Halstead was moved to echo Rudyard Kipling's line that "gardens are not made by sitting in the shade".
Certainly, a 5 per cent increase in operating profit for the six months to 31 December suggests the company's graft is paying off. In the UK, where James Halstead is the market leader, revenues were up 9 per cent, while the European and Australasian markets grew by 6.7 per cent and 11 per cent, respectively, on a constant-currency basis. Currency headwinds have dented competitiveness in Europe, but this has been partly offset by a fall in the cost of some of James Halstead's Europe-sourced raw materials, alongside currency hedges.
Looking ahead to the full-year results, the company is confident that new premium products will boost the bottom line. Finance director Gordon Oliver said the launch of a range of resilient sheet flooring products with carpet or wood-like effects is proving successful, and contributed to the slight profit margin lift at the half-year.
House broker Arden Partners forecasts full-year adjusted pre-tax profits of £44m and EPS of 15.9p, rising to £46.5m and 16.8p in 2016.
JAMES HALSTEAD (JHD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 340p | MARKET VALUE: | £704m | |
| TOUCH: | 328.5-340p | 12-MONTH HIGH: | 362p | LOW: 260p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 47p | NET CASH: | £46.5m | |
| Half-year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 111 | 20.4 | 7.4 | 3 |
| 2014 | 117 | 21.4 | 7.8 | 3.142 |
| % change | +6 | +5 | +5 | +5 |
Ex-div:07 May Payment:05 Jun | ||||
