James Halstead prospers in tough floorings market

30th Sep 2010 14:50

Floorcoverings supplier James Halstead is raising its final dividend by 10% after reporting record revenues and profit in a declining market. Revenues increased from £169.3m to £186.4m in the year to June 2010, while pre-tax profit improved from £33m to £35.8m. Halstead has net cash of just over £33m so the 10.3% increase in the final dividend to 18.75p a share is easy to afford. The total dividend for the year increased from 24.25p a share to 26.75p a share. That total dividend costs just short of £14m. Halstead also paid a special dividend of 15p a share earlier in the year. Even after that special dividend, the cash in the balance sheet rose last year. Halstead is also issuing one additional share for every share owned. This is the fourth time in less than three decades that Halstead has undertaken a bonus share issue. Management believes that the share issue should improve the marketability of the shares. Halstead has achieved its impressive results even though the contract flooring market has suffered its biggest two year decline for three decades, according to Palmer Market Research. The market is thought to have declined by one-fifth. Sterling's relative weakness has helped Halstead even though it was hit by raw material shortages and price increases. Management is hopeful that repair and refurbishment business should remain strong. However, the public sector is a large customer.