31 March 2016

INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2015

Key Figures

James Halstead plc, the AIM listed manufacturer and international distributor of commercial floor coverings, reports:

The Chief Executive, Mr. Mark Halstead, commented:

"We continue to build on the robust performance of the last 15 years and despite having the strength of sterling as a strong headwind to our exports in the first half  we have again reported a record profit".

Enquiries:

CHAIRMAN'S STATEMENT

Given the strength of our currency here in the UK and the consequential effects on the translation of our results it is gratifying to report improved pre-tax profit of £23.0 million (2014: £21.4 million), an increase of 7.5%.

I can report that revenue of £114.7 million (2014: £117.2 million) was 2.1% below the comparative, owing to the strength of sterling over the first six months. This adverse situation has mathematically lowered the currency equivalent. At constant exchange rates sales were 2.9% ahead.

Trading

As already noted, the translation of overseas sales was affected by adverse exchange rates but there was growth in most markets when measured in local currency. Polyflor Canada Inc. continues to expand with a 32% growth in turnover. It is pleasing to report that our flooring is refurbishing store chains such as Loblaws and Indigo Kids in many cities. James Halstead France reported a near 10% increase and notable projects include the Alstrom Epsilon building complex in the heart of Lyon.

In our more established markets, Objectflor, our central European operation based in Cologne reported 4% growth in sales. Our latest range, "Expona Flow" has already been fitted in sales areas within Ikea stores in Kaiserlautern, Berlin and Ravensburg and long term customers such as the fashion retail chain Modepark Röther continue to expand. It is pleasing to report that "Simplay", our loose lay vinyl tile, was awarded a "Pro K Award" for innovative product development in the area of consumer plastics.

In looking at our home territory, it is clear that Polyflor UK maintains its strong presence, with notable projects such as Croydon University Hospital, the Vision Express retail chain and the new Pontypridd Lido at Ynysangharad Park. The UK market, representing about 39% of total turnover, has shown a solid performance with growth of 4.5% in the period, which is ahead of the market growth over that period.

Australia and New Zealand have reported 8-9% growth with the former providing flooring to Aldi stores across the country and the latter to Burwood Hospital in Christchurch (the country's largest ever healthcare project) and are just two examples of the growth in this region.

Gross margins have improved by 1.5% despite the adverse effects of foreign exchange rates on overseas trading. The reasons for this are threefold: being the effects of increased output of heterogeneous flooring, reduced raw material prices (in part helped by the strength of sterling) and energy savings. Overheads are 3.2% below the comparative period but on a par when viewed on a constant exchange rate basis.

The balance sheet is, as usual, robust with the component showing the largest change being cash which stands at £55.9 million some 19.5% ahead of the comparative of last year (2014: £46.7 million) and after dividends paid out of £22.8 million.

Earnings per Share

Our basic earnings per share at 8.6p are 10.3% ahead of the comparative of 7.8p and the Board is pleased to propose an increased interim dividend.

Having regard to cash, I am pleased to say that a dividend of 3.5p will be paid (2015: 3.142p), representing an 11.4% increase and this reflects both the strength of earnings and the cash reserves of the Company. This will be payable on 3 June 2016 to those shareholders on the register at the close of business on 6 May 2016. 

Outlook

We have delivered a solid first half performance.

Early trading in the second half has been challenging, with the UK noticeably facing rougher trading conditions. Nevertheless, our global footprint continues to provide good opportunities for advancement and I am confident that the depth of our experience of this industry, which has stood us in good stead for a generation, will continue to lead us to greater success.

Many are quick to apply hindsight to business but I think that the accumulation of knowledge our team offers James Halstead something better- insight.

Our group remains focused on sales growth and has every expectation of continued progress in the second half year.  

Geoffrey Halstead

Chairman

31 March 2016

Consolidated Income Statement

for the half-year ended 31 December 2015

All amounts relate to continuing operations.

Details of dividends paid and proposed are given in note 4.

Consolidated Balance Sheet

as at 31 December 2015

Consolidated Cash Flow Statement

for the half-year ended 31 December 2015

Consolidated Statement of Comprehensive Income

for the half-year ended 31 December 2015

Notes to the Interim Results

for the half-year ended 31 December 2015

       Equity dividends per share, paid and proposed are as follows