Flooring group delivers solid performance as sales grow towards £300m

Flooring group James Halstead PLC has reported a growth in sales as turnover edged towards to £300m.

According to its preliminary results for the year ended 30 June 2022, total sales rose 9.6% to £291.9m from £266.4m in 2021. Underlying profit before tax resulted at £51.1m, down 0.4% from £51.3m last year.

The reported profit for the year of £52.2m differed from this due to the one-off effect of insurance pay-outs in respect of the breakdown of one of the major production lines at its Radcliffe manufacturing plant in September 2019.

Mark Halstead, Chief Executive, said: “A solid performance for a year that started in a positive way, as the large challenges of the last two years looked set to dissipate, only to be faced by a set of new obstacles with both energy and materials costs escalating.”

Commenting on its UKL division, Mark continued: “We continue to see growth in the heterogeneous ranges manufactured at Teesside, and a falloff in certain of the ‘older’ ranges manufactured in Radcliffe. Overall volumes were maintained. Output was increased as we returned to a situation of being able to run all production lines, albeit with continued absenteeism levels that are above the “normal” levels that existed prior to the Covid-19 pandemic.

“The increase in energy and raw material costs have put pressure on our margins and whilst we have a proportion of our energy consumption on forward contracts, costs continue to rise to unprecedented levels.   The recent announcement by the government, whilst welcome, will only limit the increase, not reduce it.  Availability of raw materials has improved, but costs remain high. The impact of rising energy costs on the production costs has been a significant issue.

“We have made several price increases during the year across our ranges and across all markets to pass on these increases. This continues to be the case after the year end.

“Stocks in the UK also increased, both in manufactured and merchanted goods.  Delays in product launches earlier in the year compounded the issue as we waited for marketing material, such as shade cards and display boards. This was another fallout of the Ukraine war due to the lack of wood pulp and related materials.”

Looking ahead, Anthony Wild, Chairman, added: “Trading from the year-end to date has been positive. Post year end, prices have been increased and demand has remained strong.

“Sales volume is higher and we have continued to pass on cost increases. Costs, most particularly energy, have continued to rise. The fall in the value of sterling, most markedly against the US dollar, in recent days will no doubt have implications to certain input costs but equally, given our level of exports, will have some positives.”

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