Interim Results - 6 Months to 31 December 1999

Halstead(James) Group PLC 29 March 2000 JAMES HALSTEAD plc INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 1999 KEY FIGURES * Pre-tax profit up to £4.86m - 4.6% increase * Net dividend per ordinary share up to 4.05p - 4.5% increase * Earnings per ordinary share up to 11.12p - 7.5% increase * Net assets per ordinary share up to 165.88p - 6.3% increase Enquiries: Geoffrey Halstead, Chief Executive Gordon Oliver, Finance Director Telephone: 0161 767 2500 on Wednesday, 29 March 2000 INTERIM STATEMENT Pre-Tax Profit I am pleased to report once again an increase in pre-tax profit with a figure at £4.86 million, which is some 4.6% ahead of last year. This solid performance has been achieved in an adverse trading climate by a good growth in sales. Turnover and Margins Turnover is ahead of last year by 15%, with growth in most of our subsidiaries. Flooring turnover is significantly ahead, largely as a result of acquisitions made in 1998. JHT showed excellent growth and facilitated extra sales in several of the other group companies. Conway Products increased sales and Phoenix Distribution surpassed itself. There was margin erosion in the Flooring Divisions as a result of the weak Euro and increasing raw material prices. Phoenix also experienced some margin erosion in respect of import costs from Japan. Balance Sheet The balance sheet remains strong. Stock and debtor levels have reduced despite the growth in sales, and cash balances have increased. Earnings per share and dividend The earnings per share growth of 7.5% reflects a lower effective tax charge and we are increasing the dividend by 4.5% to 4.05p per ordinary share. The dividend will be paid on 2nd June 2000 to those shareholders on the register as at 14th April 2000. Once again, we will offer to shareholders the opportunity of choosing to take new fully paid ordinary shares in lieu of cash. Board Changes On 17th January 2000, Mr Arthur Halstead resigned as a non-executive director after fifty years service. I would like to thank Arthur for his splendid contribution to the Halstead Group. Mr John Lee was appointed a non-executive director, and will also sit on the Remuneration and Audit Committees. Mr Lee is by training a chartered accountant. He is a former Member of Parliament and government minister, and also serves on the boards of Falcon Holdings plc and Paterson Zochonis plc as a non-executive director. Mr Mark Halstead was appointed an executive director, having been with the group for over twenty years. For the past six years he has been the managing director of JHT Limited and he has been the joint managing director of Objectflor for the past four years. Mr Jack Whittaker has been appointed Company Secretary. I welcome these additions, which I believe will substantially strengthen the group board. Outlook Given some respite from the pressures on margins, the group looks forward to another year of progress. V E Clare 29 March 2000 Chairman JAMES HALSTEAD plc INTERIM REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 1999 PROFIT AND LOSS ACCOUNT Half-year Half-year Year ended ended ended 31.12.99 31.12.98 30.6.99 £'000 £'000 £'000 Turnover 44,057 38,282 84,305 ----------------------------------- Group profit on ordinary activities (before exceptional items) 4,862 4,646 9,251 Exceptional item - - (3,363) ----------------------------------- Group profit on ordinary activities (before taxation) 4,862 4,646 5,888 Taxation (1,459) (1,463) (3,030) ----------------------------------- Group profit on ordinary activities (after taxation) 3,403 3,183 2,858 Dividends: Preference (5.5%)* - non-equity (6) (4) (9) Ordinary - equity (1,263) (1,194) (3,417) ----------------------------------- Retained profit 2,134 1,985 (568) ====== ====== ====== Earnings per ordinary share of 10p: - headline 11.12p 10.34p 20.40p - basic and fully diluted 10.89p 10.31p 9.24p ====== ====== ====== Net dividends per ordinary share 4.05p 3.875p 11.00p ====== ====== ====== Net assets per ordinary share 165.88p 156.12p 159.75p ====== ====== ====== *Formerly 3.85% JAMES HALSTEAD plc CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 1999 Half-year Half-year Year ended ended ended 31.12.99 31.12.98 30.6.99 £'000 £'000 £'000 FIXED ASSETS Tangible assets 21,706 20,762 22,068 Intangible assets 2,667 1,980 2,738 ----------------------------------- 24,373 22,742 24,806 ----------------------------------- CURRENT ASSETS Stocks 18,372 20,523 21,669 Debtors 16,528 18,188 18,624 Cash at bank and short term deposits 10,979 9,228 7,135 ----------------------------------- 45,879 47,939 47,428 Creditors - amounts falling due within one year (18,078) (21,626) (21,271) ----------------------------------- NET CURRENT ASSETS 27,801 26,313 26,157 ----------------------------------- TOTAL ASSETS LESS CURRENT LIABILITIES 52,174 49,055 50,963 ----------------------------------- Creditors - amounts falling due after more than one year (214) (687) (915) Provisions for liabilities and charges (11) (52) (11) ----------------------------------- 51,949 48,316 50,037 ====== ====== ====== CAPITAL AND RESERVES Equity share capital 3,120 3,082 3,120 Non-equity share capital 200 200 200 ----------------------------------- Called up share capital 3,320 3,282 3,320 Share premium account 2,933 2,319 2,933 Revaluation reserve 3,670 3,828 3,670 Profit and loss account 42,026 38,887 40,114 ----------------------------------- 51,949 48,316 50,037 ====== ====== ====== JAMES HALSTEAD plc CONSOLIDATED CASH FLOW STATEMENT FOR THE HALF-YEAR ENDED 31 DECEMBER 1999 Half-year Half-year Year ended ended ended 31.12.99 31.12.98 30.6.99 £'000 £'000 £'000 Cash flow from operating activities 6,402 5,652 11,078 Returns on investments and servicing of finance 102 260 321 Taxation paid (14) (335) (3,277) Capital expenditure (1,284) (2,099) (4,688) Acquisitions and disposals 1,437 (2,616) (3,112) Equity dividends paid (2,223) (2,003) (2,546) ----------------------------------- Cash inflow/(outflow) before use of liquid resources and financing 4,420 (1,141) (2,224) Management of liquid resources (8,288) - - Financing: Repayment of loans (511) - (1,089) ----------------------------------- Decrease in cash (4,379) (1,141) (3,313) ====== ====== ====== Reconciliation of net cash flow to movement in net funds Decrease in cash (4,379) (1,141) (3,313) Cash flow from decrease in debt 511 - 1,089 Cash flow from change in liquid resources 8,288 - - ----------------------------------- Change in net funds resulting from cash flows 4,420 (1,141) (2,224) Effect of exchange differences (41) (86) 48 Borrowings in subsidiaries acquired - (579) (586) ----------------------------------- Movement in net funds for the period 4,379 (1,806) (2,762) Net funds at 30 June 1999 6,600 9,362 9,362 ----------------------------------- Net funds at 31 December 1999 10,979 7,556 6,600 ====== ====== ====== STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE HALF-YEAR ENDED 31 DECEMBER 1999 Half-year Half-year Year ended ended ended 31.12.99 31.12.98 30.06.99 £'000 £'000 £'000 Profit for the financial period 3,403 3,183 2,858 Currency translation differences on foreign currency net investments (222) (174) 543 Property revaluation - - (158) ----------------------------------- Total recognised gains relating to the financial period 3,181 3,009 3,243 ====== ====== ====== RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS FOR THE HALF-YEAR ENDED 31 DECEMBER 1999 Half-year Half-year Year ended ended ended 31.12.99 31.12.98 30.06.99 £'000 £'000 £'000 Profit for the financial period 3,403 3,183 2,858 Dividends (1,269) (1,198) (3,426) ----------------------------------- 2,134 1,985 (568) Other recognised gains and losses relating to the financial period (222) (174) 385 Goodwill previously written off - - 3,063 New share capital subscribed - - 652 ----------------------------------- Net increase in shareholders' funds for the financial period 1,912 1,811 3,532 Opening shareholders' funds 50,037 46,505 46,505 ----------------------------------- Closing shareholders' funds 51,949 48,316 50,037 ====== ====== ====== Equity shareholders' funds 51,749 48,116 49,837 Non-equity shareholders' funds 200 200 200 ----------------------------------- 51,949 48,316 50,037 ====== ====== ====== NOTES TO THE ACCOUNTS 1.Basis of preparation The interim results to 31 December 1999 and 31 December 1998 which are unaudited have been prepared on the basis of accounting policies as set out in the annual report and accounts for the year ended 30 June 1999. 2.Taxation Taxation has been provided at the rate of 30% (1998: 31.5%). 3.Dividends The interim dividend is payable on 2 June 2000 to those shareholders on the register at the close of business on 14 April 2000. The preference dividend, which was paid on 31 December 1999, is in respect of 5.5 per cent cumulative preference shares. The next preference dividend is payable on 30 June 2000 to those preference shareholders on the register at the close of business on 5 June 2000. 4.Calculation of earnings per ordinary share Half-year Half-year Year ended ended ended 31.12.99 31.12.98 30.06.99 £'000 £'000 £'000 Profit on ordinary activities after taxation 3,403 3,183 2,858 Preference dividend (6) (4) (9) ----------------------------------- Basic earnings 3,397 3,179 2,849 Exceptional item - - 3,363 Goodwill amortisation charge 71 8 82 ----------------------------------- Headline earnings 3,468 3,187 6,294 ====== ====== ====== Weighted average number of ordinary shares in issue 31,196,149 30,820,652 30,848,428 Headline earnings per ordinary share 11.12p 10.34p 20.40p Basic and fully diluted earnings per ordinary share 10.89p 10.31p 9.24p 5.Statutory accounts The figures for the year ended 30 June 1999 are an abridged statement of the group audited accounts for that year. The audited accounts, containing an unqualified audit report have been delivered to the registrar of companies. 6.Copies of the interim results Copies of the interim results have been sent to shareholders. Further copies can be obtained from the company's registered office, Beechfield, Hollinhurst Road, Radcliffe, Manchester, M26 1JN.

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