James Halstead PLC Pre-Close Trading Statement (5073U)
30 Julio 2020 - 1:00AM
UK Regulatory
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RNS Number : 5073U
James Halstead PLC
30 July 2020
30 July 2020
Pre-Close Trading Statement and Update on Interim Dividend
James Halstead plc, the commercial flooring manufacturer and
distributor, is providing the following trading update ahead of its
final results for the year ended 30 June 2020.
Since the Interim Report issued on 31 March much has happened.
As we went into the early stages of the pandemic we were conscious
of how cash flow would be affected and accordingly took decisive
action on spending. Capital expenditure was curtailed, and all
discretionary expenses such as marketing were cut. Spending on
safety measures increased to ensure our sites were more Covid-19
resistant. Initially a primary concern was cash inflow and it is
pleasing to report that customers did not, in general, hold up
payments and that the various initiatives by governments in the
territories in which we operate provided liquidity. At 30 June 2020
cash balances are slightly ahead of the levels at 31 December 2019.
The countries in which our businesses were completely closed were
few, with New Zealand being the most significant. There were
several UK and international government cash flow initiatives in
which we participated - the most significant being the VAT deferral
in the UK (March - June) and in Germany (April - June). The German
deferral was paid in June and at the end of June the UK deferral
amounts to around GBP1.9 million.
Looking now at how our businesses have been affected in more
detail:
The UK, which represents around 30-35% of turnover, faced
significant disruption: almost all of our customers are
distributors and through April and into May many were closed.
Turnover, in the UK, in those months dropped by up to 65% (versus
the comparable period last year) but we continued production to
focus on the type of product that was anticipated to remain in
demand. In June the UK turnover had recovered to approximately 80%
of the prior year.
Our direct exports (i.e. to non- Group companies) continued with
only a 5 - 10% reduction versus last year in the April- May period.
In terms of our overseas based businesses most continued to trade,
albeit it with reduced manning levels. In the core lock-down period
(i.e. April- May) sales were broadly 20% below the prior year
comparative with the full lock-down of New Zealand having an
effect. In June our overseas businesses recovered to 90% of the
prior year.
The preparations made by many governments for the onset of the
pandemic did lead to an uplift in the sales of our product to the
health and medical research sectors. Normally this sector would
represent around 30% of our sheet vinyl sales but from April to
June it was much more significant. As well as the supply of sheet
vinyl to the NHS across the UK and significant supplies to Ireland,
we have supplied new hospital facilities across the globe including
Brazil, Argentina, Chile, Mexico, Italy, South Africa, Qatar and
the UAE. This was not sufficient to offset the shortfall in
business of other sectors which were closed.
In terms of overall turnover during the period April to June we
averaged just over 70% of the prior year. In terms of the bottom
line in this period, profit before tax was just under 50% of the
prior year comparative. Cash levels have been preserved.
July has seen the position in terms of trading continue to
improve as the distribution base in the UK started to fully re-open
and in recent weeks we have seen UK sales average over 90% of the
comparative. Looking at our main businesses overseas (Germany,
Australia and New Zealand) the level is near parity with the
comparatives.
It is still too early to be confident that the worst is over but
it is clear that, to date, this situation is far better than we
envisaged four months ago. This has been one of the most testing
periods in our long history and many of our staff have put in the
most commendable of efforts mobilising direct shipments not just
across the UK but to far parts of the world. Whether it was the
drivers and warehouse staff coming in late on a bank holiday
weekend to ship Polyflor to the NHS or the health and safety teams
keeping our people safe - our thanks.
Finally, in our Interim Statement our Chairman noted that we
would declare a first interim dividend of 2.125p per share
representing half the dividend we would otherwise have declared and
to review a second equivalent payment of a second interim. These
dividends reflected a first half year of record sales and profit.
Given the improvement in trading conditions and the cash levels we,
as a Board, are sufficiently confident now to declare a second
interim dividend of 2.125p which will be payable on 10 September
2020 to shareholders on the register at 21 August 2020.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 .
Enquiries:
James Halstead plc Telephone: 0161 767 2500
Mark Halstead, Chief Executive
Gordon Oliver, Finance Director
Hudson Sandler Telephone: 020 7796 4133
Nick Lyon
Nick Moore
Panmure Gordon (Nominated advisor and broker) Telephone: 020 7886 2500
Dominic Morley
WH Ireland (Broker)
Ben Thorne
Chris Hardie
Telephone: 020 7614 5900
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END
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