31st Mar 2015 13:03
LONDON (Alliance News) - James Halstead PLC Tuesday said its pretax profit rose in the first half of its financial year, though it cautioned the strength of sterling is dragging on sales.
The company, a manufacturer and distributor of commercial floor coverings, said pretax profit rose 5.3% to GBP21.4 million from GBP20.4 million in the six months to the end of December. Revenue increased 5.7% to GBP117.2 million from GBP110.9 million in the same period a year earlier, with like-for-like sales 10.3% higher.
However, it did say that the strength of sterling "has impacted upon the figures".
"Given the strength of our currency here in the UK, the effects on the translation of our results are inevitable but it is gratifying to report continuing steps forward," Chairman Geoffrey Halstead said in a statement.
The company said that UK trading continues to be solid for the half year at 9% ahead of the comparative period last year. The European and Australasian businesses would have grown by 6.7% and 11% respectively if exchange rates had remained constant.
It also noted that gross margin is slightly ahead year on year due to downward pressures on raw materials.
The company has booked costs relating to infrastructure in global markets, meaning that overheads have grown faster than inflation, but said that the costs are in line with planned expenditure and deeper expansion into the Middle East, India and Canada.
It will pay an interim dividend of 3.142 pence, an increase of 4.7%.
"There are many positives to our outlook and in the difficult times of recent years we have delivered the gains we had targeted. Once again we have increased our market share but the current strength of sterling to near record levels presents more challenges and headwinds in the coming months. That said, the quote of Churchill that "kites rise highest against the wind, not with it" will be our mantra," Geoffrey Halstead said, adding that he is confident of further progress during the rest of the year.
Shares in James Halstead were trading down 1.7% at 328.5 pence midday Tuesday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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