Halstead lifts profits on flat sales
Polyflor owner James Halstead has seen profits rise 3.3% on flat sales.
Turnover has flat at £126m in the six months to 31 December. Pre-tax profits rose to £24.5m.
‘It is pleasing to report a record profit at the interim stage. We are also announcing, once again, a record interim dividend. In terms of sales, every month showed an increase on the comparative with the only exception being December. It is clear that, in December, larger customers were exercising stock control - not least evidenced by the fact that whilst order volume in the UK was lower, the number of orders was up 4.8% in the month. Despite this single poor month, sales in the UK for the six months as a whole were 3.9% ahead of the comparative period. Export markets were in the majority of cases strong but with Central Europe showing a decline of some 1.7% (largely in line with figures published by our competitors). The start to the second half has shown a return of solid growth,’ says Anthony Wild, James Halstead chairman.
‘Whilst overall turnover was flat in comparison to the prior year, our gross margin improved as the result of an advantageous product mix (ie higher added value products) and favourable plant performance, though impacted to a degree by raw material price increases. Raw material inflation has been around 3% whereas in the prior year it was around 18%.
‘We made a significant investment in new sheet vinyl ranges and it is pleasing to see that in the important German market we are taking market share, with 15% growth in homogenous sheet vinyl. Palletone, launched in May 2018, continues to gain traction.
‘Our global reach continues and whether it is the Kenitra Agadir Hospital in Morocco, Tallinn Airport in Estonia or Scania buses in Poland, our products travel far. Closer to home our Voyager maritime flooring has been installed onboard Cunard's MS Queen Elizabeth, in the duty free area of Knock Airport in County Mayo and, underlining our environmental and sustainability credentials, Polyflor will feature in the "Active Office" - the UK's first energy positive building based at Swansea University. Investment continues with a new showroom / training facility having been opened in Cologne to provide greater market support to customers.
‘Our basic earnings per share at 9.1p are above the comparative period of 8.8p by 3.4%. Having regard to cash, which stands at a record £62.8m, I am pleased to say that an interim dividend of 4p has been declared (2018: 3.85p), representing a 3.9% increase and this reflects both the strength of earnings and the cash reserves of the company.
‘From projects as diverse as Zora Electronics in Bulgaria to the Waterport School in Gibraltar we continue to cover the world. The refurbishment of the Villa Deportiva National in Lima, Peru is a particularly impressive project that will host the Pan American Games later this year. This latter project involved significant volumes of our sheet vinyl and is an example of our focus on repair and renewal work.
‘The start of the second half has seen a good increase in sales and our newer ranges continue to increase their market penetration. In January we introduced further ranges to the market including our first "loose lay" safety flooring - "QuickLay" and our first fully rigid flooring range - "EnCore Loc". Both have been well received. Against this background I have confidence in our continued progress through 2019.’