James Halstead sees healthcare opportunity

While the second half of the year started well, lockdown measures being imposed in response to Covid-19 are now causing disruption. Raw material supply for manufacturing is thus far unaffected, but product distribution looks set to become more difficult. Over 70 per cent of turnover is exported and international freight rates are rising.

Office refurbishments and custom from retail and leisure is expected to slow “drastically” over the coming weeks. But the group envisages a short-term demand spike from the healthcare sector as temporary medical facilities are set up. James Halstead is a preferred supplier to the NHS and also enjoys key supplier status in several other markets.

Instead of cancelling the half-year dividend in response to the crisis, the group is paying half of what it would have done under normal circumstances. It is mulling a second interim payout in August should conditions improve.

Panmure Gordon projects the pandemic will shave £16m off of sales, of which half can be offset through cost savings and government assistance. It has lowered its full-year forecasts by 6 per cent, now anticipating adjusted pre-tax profit of £47.7m and EPS of 19.1p in 2020.