14th Oct 2026 09:57
(Alliance News) - James Halstead PLC on Wednesday cited short-term trading headwinds, as it reported a decline in annual profit, but hiked its shareholder payout nonetheless.
The Manchester, England-based commercial flooring manufacturer booked a pretax profit of GBP48.2 million for the year ended June 30, down 13% from GBP55.1 million a year earlier.
Revenue fell to GBP259.9 million from GBP262.0 million, while expenses rose.
Selling and distribution costs were up to GBP51.5 million from GBP48.8 million, while administrative costs were up to GBP18.0 million from GBP14.9 million. Cost of sales, however, edged down to GBP144.9 million from GBP145.4 million on-year. Gross margin came in at 44.6% versus 44.5% a year earlier.
Earnings per share dropped to 8.5 pence from 9.7p, but the company still proposed to raise its final dividend to 6.10p from 6.05p, which would result in a total dividend of 8.95p, up from 8.80p on-year. James Halstead noted that this marks the 50th year in a row for dividend hikes.
It explained that "short term ongoing headwinds in Europe (particularly the UK) are affecting repair, renewal and roll-out budgets that have been constrained by additional employment costs in education, healthcare and hospitality sectors".
Specifically, Chief Executive Gordon Oliver noted that "cash flow difficulties" at key customer Headlam Group PLC had hurt the last few months of trading. Headlam went into administration last month, though Halstead said this has had "no material effect on debt exposure".
"Our ongoing expectations are for increased sales in the UK as spending on education, prisons, health care and aged care, particularly refurbishment, picks up. Additionally, we continue to increase our direct export sales and are confident that our overseas business can increase profitability," Oliver added.
The company said: "The board remains confident in the group’s prospects for the year ahead, supported by a strong balance sheet, prudent cost and stock control and a leading market presence."
Its cash balance was GBP75.7 million at the end of June, up from GBP68.4 million a year prior.
Chair Mark Halstead called financial 2026 "a difficult year" citing the trickle-down effects of conflict in the Middle East.
"The Gulf situation created clear pressure on material and energy costs while weaker demand and structural changes in the UK distribution market also affected sales and profit in the short term," the chair said.
"Notwithstanding these challenges, I am pleased to report, that against, this backdrop cash inflows from operations were 37.4% ahead of the comparative with cash balances at the year-end of GBP75.7 million. The strength of our balance sheet and business model also allows me to report an uplift in final dividend."
James Halstead shares were up 1.1% at 129.40 pence each on Wednesday morning in London, and are down 10% over the past year.
By Holly Munks, Alliance News reporter
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