James Halstead gets UK boost

Of course, chief executive Mark Halstead is entitled to describe the period as one of “record turnover, record profit and once again a record dividend”. But since 2012, turnover and pre-tax profits have risen just 11 and 15 per cent, respectively, while the dividend coverage ratio has narrowed from 1.8 to 1.3. Growth at any cost – particularly when battling sector-wide overcapacity – is rarely a strategy for success. But decent earnings growth is still important.

Then again, there’s not much to fault in these figures. Bucking a recent trend, operating cash flow exceeded operating profits, while free cash flow rose as a percentage of net earnings. The domestic business, which makes up around a third of group revenues, posted a 7.1 per cent increase in its top line – despite what chairman Anthony Wild characterised as the “constant focus on Brexit leading to deferred spending in several sectors” and to some retail clients' “curtailing their normal refurbishment cycles”.

Trading has remained solid since the year end, especially in the UK, where subsidiary Polyflor has just won a spot on a new construction procurement framework for the NHS, a client of more than 70 years’ standing.

Consensus forecasts are for adjusted earnings of 19.45p a share for the year to June 2020, rising to 20.4p in FY2021.