Interim Results
James Halstead PLC
30 March 2006
30 March 2006
JAMES HALSTEAD PLC
INTERIM RESULTS FOR THE HALF-YEAR ENDED 31 DECEMBER 2005
Key Figures
James Halstead plc, manufacturer and international distributor of flooring,
reports:
- Turnover increased to £62.89 million - an increase of 10.7%
- Pre-tax profit up to £8.497 million - an increase of 22.6%
- Net interim dividend proposed per 5p ordinary share of 4.25p - an increase
of 21.4%
- Basic earnings per 5p ordinary share increased by 22.1%
The Chairman, Mr Geoffrey Halstead, commenting, said:
'In challenging markets and notwithstanding energy costs and polymer prices, I
am pleased to report, again, record results and we will pay an increased interim
dividend to reflect this. I remain confident of reporting another full year of
progress.'
Enquiries:
Mark Halstead, Chief Executive
Gordon Oliver, Finance Director Telephone : 0161 767 2500
Nick Lyon - Hudson Sandler Telephone : 020 7796 4133
Notes to Editors
Accounting standards
There are three new Financial Reporting Standards which have an effect on these
interim accounts. FRS 17 - Retirement Benefits requires the inclusion of a value
for the defined benefit pension scheme deficit in the balance sheet as a
liability. FRS 21 - Events After The Balance Sheet Date means that we no longer
include an accrual for dividends proposed or show dividends paid on the face of
the Interim Report. The final changes are for the required elements of FRS 25 -
Financial Instruments: Disclosure and Presentation which require us to
re-classify the C preference shares as debt rather than non-equity share
capital.
Comparative figures are restated and details are given in note 7.
Chairman's Statement
The six months to 31 December 2005 showed a healthy growth in turnover to £62.89
million, an increase of 10.7%.
Reviewing our flooring operations, it is worth noting that we have seen healthy
double digit growth in the United Kingdom, in central Europe and Australasia.
The portfolio of products we offer has positioned the Group to service both
day-to-day distribution and to secure significant flooring contracts around the
world. Examples include the Hilla hospital in Baghdad, the Botinskaya Clinic in
Moscow, the Centenary Hall at Chelsea FC and the Holby City set for the BBC.
Profit before tax has set another record for a six month period being £8.497
million (2004: £6.933 million) an increase of 22.6%.
The strong sales and profit performance translated well into cash flow. Cash
inflow from operations was 47% ahead of the corresponding period for last year
at £14.88 million which gave us the ability to announce a special dividend at
the AGM in December 2005. This dividend amounted to £12.7 million and was paid
on 17 February 2006.
Earnings Per Share and Dividend (per 5p Share)
We sub-divided our ordinary shares of 10p into 5p shares on 27 February 2006 so
I shall quote these figures per 5p share.
Our basic earnings per share of 11.6p (2004: 9.5p) show an increase of 22.1% and
we propose to increase the interim dividend payable in May 2006 to 4.25p (2004:
3.5p) an increase of 21.4% reflecting the improved results and our ability to
pay based on cash resources.
Outlook
It has been an outstandingly good half year for our Group and I am confident
that we will consolidate this progress through to the full year's result.
Geoffrey Halstead
Chairman
30 March 2006
Interim Report
for the half-year ended 31 December 2005
Half-year Half-year Year
ended ended ended
31.12.05 31.12.04 30.6.05
as restated as restated
£'000 £'000 £'000
Turnover 62,890 56,806 112,353
Operating profit 7,845 6,305 12,733
Interest and other finance costs 652 628 1,038
Group profit on ordinary activities
(before taxation) 8,497 6,933 13,771
Taxation (2,630) (2,145) (4,276)
Group profit on ordinary activities
(after taxation) 5,867 4,788 9,495
Earnings/(loss) per ordinary share of 10p:
- basic 23.1p 19.0p (0.6)p
- diluted 23.0p 18.9p (0.6)p
Note:
The company's 10p ordinary shares were sub-divided into two new ordinary shares of 5p each on 27
February 2006.
The following figures are therefore included for ease of reference:
Earnings/(loss) per ordinary share of 5p
- basic 11.6p 9.5p (0.3)p
- diluted 11.5p 9.5p (0.3)p
Details of dividends paid and proposed are given in Note 3.
Consolidated Balance Sheet
As at 31 December 2005
Half-year Half-year Year
ended ended ended
31.12.05 31.12.04 30.6.05
as restated as restated
£'000 £'000 £'000
Fixed assets
Intangible assets 3,346 3,574 3,460
Tangible assets 19,985 20,853 20,741
23,331 24,427 24,201
Current assets
Stocks 18,284 20,269 20,029
Debtors 18,750 17,953 18,887
Cash at bank, in hand and on 40,236 36,666 31,675
short-term deposits
77,270 74,888 70,591
Creditors - amounts falling due within one year (34,245) (28,614) (31,140)
Net current assets 43,025 46,274 39,451
Total assets less current liabilities 66,356 70,701 63,652
Creditors - amounts falling due after more than one (5,862) (231) (5,934)
year
Provisions for liabilities (205) (916) (353)
Net assets excluding pension scheme deficit 60,289 69,554 57,365
Pension scheme deficit (10,480) (9,163) (9,790)
49,809 60,391 47,575
Capital and reserves
Equity share capital 2,538 2,531 2,531
Non-equity share capital 360 200 360
Called up share capital 2,898 2,731 2,891
Share premium account 223 5,597 48
Revaluation reserve 3,544 3,544 3,544
Capital reserve 2,942 720 2,942
Profit and loss account 40,202 47,799 38,150
49,809 60,391 47,575
Consolidated Cash Flow Statement
For the half-year ended 31 December 2005
Half-year Half-year Year
ended ended ended
31.12.05 31.12.04 30.6.05
as restated as restated
£'000 £'000 £'000
Net cash inflow from operating activities 14,876 10,101 19,866
Returns on investments and servicing of finance 474 722 1,274
Return of capital - B share dividend - - (9,626)
Taxation paid (3,008) (3,507) (5,860)
Capital expenditure (641) (3,882) (5,827)
Acquisitions and disposals - (1,390) (1,390)
Equity dividends paid (3,236) (2,971) (4,743)
Cash inflow/(outflow) before financing 8,465 (927) (6,306)
Financing:
Shares issued 182 396 406
(Decrease)/increase in debt (119) - 401
Increase/(decrease) in cash 8,528 (531) (5,499)
Reconciliation of net cash flow to movement in net
funds
Increase/(decrease) in cash 8,528 (531) (5,499)
Movement in debt 119 - (401)
Change in net funds resulting from cash flows 8,647 (531) (5,900)
Effect of exchange differences (13) 152 129
Creation of C shares - - (5,559)
Movement in net funds for the period 8,634 (379) (11,330)
Net funds at start of period 25,715 37,045 37,045
Net funds at end of period 34,349 36,666 25,715
Statement of Total Recognised Gains and Losses
For the half-year ended 31 December 2005
Half-year Half-year Year
ended ended ended
31.12.05 31.12.04 30.6.05
as restated as restated
£'000 £'000 £'000
Profit for the financial period 5,867 4,788 9,495
Currency translation differences on foreign 133 556 597
currency net investments
Actuarial loss on the pension scheme (1,008) (874) (1,748)
Movement on deferred tax asset relating to the 302 262 524
pension scheme
5,294 4,732 8,868
Total recognised gains relating to the financial
period
Prior year adjustment (implementation of FRS 17) (9,790)
Total recognised losses since the last report (4,496)
Reconciliation of Movements in Shareholders' Funds
For the half-year ended 31 December 2005
Half-year Half-year Year
ended ended ended
31.12.05 31.12.04 30.6.05
as restated as restated
£'000 £'000 £'000
Profit for the financial period 5,867 4,788 9,495
Dividends (3,242) (2,977) (14,380)
2,625 1,811 (4,885)
Other recognised gains and losses relating to the (573) (56) (627)
financial period
Creation of C shares - - (5,559)
New share capital subscribed 182 396 406
Net increase/(decrease) in shareholders' funds for 2,234 2,151 (10,665)
the financial period
Opening shareholders' funds (originally £57,475,000 47,575 58,240 58,240
before prior year adjustment of £9,900,000)
Closing shareholders' funds 49,809 60,391 47,575
Equity shareholders' funds 49,449 60,191 47,215
Non-equity shareholders' funds 360 200 360
49,809 60,391 47,575
Notes to the Accounts
1. Basis of preparation
The interim financial statements, which are unaudited, consolidate the accounts
of the holding company and its subsidiaries made up to 31 December 2005, and
have been prepared in accordance with applicable Accounting Standards and, save
for the adoption of FRS 17 - Retirement Benefits, on the basis of accounting
policies as set out in the annual report and accounts for the year ended 30 June
2005. The comparative figures for the six months ended 31 December 2004 and year
ended 30 June 2005, have been restated from those previously published to
reflect the impact of the adoption of FRS 17 - Retirement Benefits, FRS 21 -
Events After The Balance Sheet Date and the required elements of FRS 25 -
Financial Instruments : Disclosure and Presentation.
2. Taxation
Taxation has been provided at the rate of 31% (2004: 30.9%).
3. Dividends
Half-year Half-year Year
ended ended ended
31.12.05 31.12.04 30.6.05
as restated as restated
£'000 £'000 £'000
Non-equity dividends paid:
On 200,000 preference shares at 5.5p per annum 6 6 11
On 16,042,530 B shares at 60p per share - - 9,626
6 6 9,637
Equity dividends paid:
Final dividend for the year ended 30 June 2004 - 2,971 2,971
Interim dividend for the year ended 30 June 2005 - - 1,772
Final dividend for the year ended 30 June 2005 3,236 - -
3,236 2,971 4,743
Total dividends paid 3,242 2,977 14,380
Equity dividends proposed at the end of the period
Special dividend 12,715 - -
Interim dividend 2,158 1,772 -
Final dividend - - 3,227
Equity dividends per share, paid and proposed, restated to take account of the
two-for-one share split which took place on 27 February 2006 are as follows:
• 25p special dividend for the year ended 30 June 2006, paid on 17 February
2006
• 4.25p interim dividend for the year ended 30 June 2006, payable on 26 May
2006 to those shareholders on the register at the close of business on 28
April 2006
• 6.375p final dividend for the year ended 30 June 2005, paid on 5 December
2005
• 3.5p interim dividend for the year ended 30 June 2005, paid on 26 May 2005
The single dividend payment of 60p on the B ordinary deferred shares was paid on
14 January 2005.
The first dividend of 2.4p per share on the non-cumulative C preference shares,
which under FRS 25 are now classified as a liability, was paid on 14 January
2006.
The preference dividend is payable on 30 June and 31 December each year. The
next preference dividend is payable on 30 June 2006 to those shareholders on the
register at the close of business on 19 May 2006.
4. Calculation of earnings per ordinary share
Half-year Half-year Year
ended ended ended
31.12.05 31.12.04 30.6.05
as restated as restated
£'000 £'000 £'000
Profit on ordinary activities after taxation 5,867 4,788 9,495
Preference dividend (6) (6) (11)
B share dividend - - (9,626)
Basic earnings 5,861 4,782 (142)
Goodwill amortisation charge 114 100 213
Add back B share dividend - - (9,626)
Underlying earnings 5,975 4,882 9,697
Weighted average number of 10p ordinary shares in 25,336,037 25,180,052 25,243,966
issue
Weighted average number of 10p ordinary shares in 25,478,960 25,301,848 25,366,107
issue
(diluted for the effect of outstanding share
options)
Underlying earnings per 10p ordinary share 23.6p 19.4p 38.4p
Basic earnings per 10p ordinary share 23.1p 19.0p (0.6)p
Diluted earnings per 10p ordinary share 23.0p 18.9p (0.6)p
The company's 10p ordinary shares were sub-divided into two new ordinary shares
of 5p each on 27 February 2006.
The following figures are therefore included for ease of reference:
Half-year Half-year Year
ended ended ended
31.12.05 31.12.04 30.6.05
as restated as restated
Weighted average number of 5p ordinary shares in 50,672,074 50,360,104 50,487,932
issue
Weighted average number of 5p ordinary shares in 50,957,920 50,603,696 50,732,214
issue (diluted for the effect of outstanding share
options)
Underlying earnings per 5p ordinary share 11.8p 9.7p 19.2p
Basic earnings per 5p ordinary share 11.6p 9.5p (0.3)p
Diluted earnings per 5p ordinary share 11.5p 9.5p (0.3)p
5. Statutory accounts
The figures for the year ended 30 June 2005 are an abridged statement of the
Group audited accounts for that year adjusted for the effect of the adoption of
FRS 17 - Retirement Benefits, FRS 21 - Events After The Balance Sheet Date and
the required elements of FRS 25 - Financial Instruments: Disclosure and
Presentation. 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.
7. Prior year adjustments
Prior year adjustments, relating to the adoption of FRS 17 - Retirement
Benefits, FRS 21 - Events After The Balance Sheet Date and the required
elements of FRS 25 - Financial Instruments : Disclosure and Presentation, have
changed previously reported results as follows:
Half-year ended 31.12.04 Year ended 30.6.05
as reported as restated as reported as restated
£'000 £'000 £'000 £'000
Group profit on ordinary activities 4,803 4,788 9,525 9,495
after taxation (FRS 17)
Creditors - amounts falling due within 30,386 28,614 34,367 31,140
one year (FRS 21)
Creditors - amounts falling due after 231 231 2,597 5,934
more than one year (FRS 25)
Total recognised gains relating to the 5,359 4,732 10,122 8,868
financial period (FRS 17)
Opening shareholders' funds (FRS 17 and 63,825 58,240 63,825 58,240
FRS 21)
Closing shareholders' funds (FRS 17, FRS 67,782 60,391 57,475 47,575
21and FRS 25)
Profit and loss account (FRS 17 and FRS 55,190 47,799 44,713 38,150
21)
Net funds (FRS 25) 36,666 36,666 29,052 25,715
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