JAMES HALSTEAD PLC
Covering the World
Report and Accounts 2021
Livesport Office, Prague, Czech Republic
Directors and Advisers
Directors | Nominated adviser and stockbrokers |
J A Wild FCA | Panmure Gordon & Co |
M Halstead | One New Change |
G R Oliver FCA MCT | London |
S D Hall | EC4M 9AF |
M J Halstead | Stockbrokers |
R P Whiting | |
WH Ireland | |
Secretary | 24 Martin Lane |
D N Fletcher ACMA ACG | London |
Registered office | EC4R 0DR |
Beechfield | Auditor |
Hollinhurst Road | BDO LLP |
Radcliffe | 3 Hardman Street |
Manchester | Spinningfields |
M26 1JN | Manchester |
Company registration No. | M3 3AT |
140269 | |
Website | |
www.jameshalstead.com | |
Bankers | |
National Westminster Bank plc | |
1 Hardman Boulevard | |
Manchester | |
M3 3AQ | |
Registrars | |
Link Group | |
Central Square | |
29 Wellington Street | |
Leeds | |
LS1 4DL |
1
Contents
Strategic Report | |
Chairman's Statement | 2 |
Chief Executive's Review | 5 |
Financial Director's Review | 9 |
Section 172 Statement | 13 |
Governance | |
Report of the Directors | 15 |
Board Report on Remuneration | 20 |
Corporate Governance | 21 |
Financial Statements | |
Independent Auditor's Report to the Members | |
of James Halstead plc | 27 |
Consolidated Income Statement | 33 |
Consolidated Statement of Comprehensive Income | 34 |
Consolidated Balance Sheet | 35 |
Consolidated Statement of Changes in Equity | 36 |
Consolidated Cash Flow Statement | 37 |
Notes to the Consolidated Financial Statements | 38 |
Company Balance Sheet | 64 |
Company Statement of Changes in Equity | 65 |
Notes to the Company Financial Statements | 66 |
Supplementary Information | |
Ten Year Summary | 73 |
Shareholder Information | 74 |
Notice of Annual General Meeting | 75 |
2
Chairman's Statement
Results
I am pleased to report turnover in the year was £266.4 million (2020: £238.6 million), 11.6% ahead of last year. Profit before tax at £51.3 million (2020: £43.9 million), was up 16.9%. Both sales and profits are at record levels. The projects we have been associated with in the year are as diverse as ever from Knattspyrnufélagið Fram - perhaps the largest football stadium in Iceland - to the Optimed Eye- Clinic in Belarus.
Our business, as have many, suffered disruptions in the year with production at our factories affected by labour shortages and raw material scarcity. However, healthy stock holdings supported sales. I am pleased to report these efforts were greatly appreciated by the trade and indeed we were recognised for those efforts by, for example, ProCure22 (the Construction Procurement Framework administrated by NHS England) with an award for outstanding support to the NHS during the pandemic.
The board, and I, are pleased to report we were able to continue to supply the many independent flooring contractors who worked on through the lock-downs. Our network of stockists were key to supplying these contractors and I would note that our business was also awarded the title "Flooring Manufacturer of the Year", which was particularly gratifying as the voting for this award was by the floor laying contractors (the Contract Flooring Association) that install our products.
These results are more than satisfying against the backdrop that all our major markets were faced with lockdowns of various durations and severity affecting many of our end users' needs for flooring. There were numerous delays and deferrals of maintenance and refurbishment work as well as new build projects as priorities and funding were diverted.
That said, the many global projects that we undertook involved healthcare and Covid-19 related installations (whether in temporary hospital wards, vaccination centres, test facilities or vaccine manufacturing) but it did not fully replace our normal level of healthcare directed flooring. One example was the flooring for a significant number of "campaign" hospitals for Covid patients next to main hospitals in eight different towns/cities in Portugal. Another example was a series of mobile hospitals within the seven emirates (Abu Dhabi, Dubai, Sharjah, Umm al-Qaiwain, Fujairah, Ajman, and Ra's al-Khaimah), where each field hospital contained 150 to 259 beds. Our ability to respond to these demands from stock was key to our strong performance.
The supply chain was under constant pressure over the year. Raw material costs rose and availability was challenging particularly on the supply of basic polymers as the global petrochemical companies struggled to maintain production. The reasons for this were varied but the most significant factors were:
the ravaging of one of the world's largest production plants in Louisiana, USA, which was put out of action by Hurricane Ida. This one plant serviced 40% of US demand for PVC and its closure meant that these materials across the globe were in shorter supply;
many of our basic materials are derived from the cracking process that produces aviation fuel and the decimation of that industry by the pandemic led to several refineries being temporarily closed;
the Covid-19 virus and the related self-isolation protocols led to severe shortages of labour and consequent output reduction.
It was due to the dedication of our sourcing team and our long and close relationships with suppliers that we kept our production lines fed. It was not an easy task and this was at a time when we also had severe production pressure owing to the non-availability of labour.
The company and our strategy
James Halstead plc is a group of companies involved in the manufacture and supply of flooring for commercial and domestic purposes, based in Bury UK. James Halstead plc has been listed on the London Stock Exchange for more than 70 years.
The group was established in 1914 and continues to operate out of the original premises in Bury. In its factories in Bury and Teesside it manufactures resilient flooring for distribution in the UK and worldwide.
The company's strategy is to constantly develop its brand identity and its reputation for quality, durability and availability thereby enhancing and maintaining goodwill with the aim of achieving repeat business. Our focus is to work with stockists who in turn distribute those bulk deliveries whilst promoting and representing the products to the end users and specifiers who will purchase the stock from those stockists.
This approach is designed to increase and secure revenue streams and drive profitability and cash flow which enables
3
the continuation of dividends thereby creating shareholder wealth. In the normal course of business one key element of the company ethos is having dedicated sales personnel to present our product to our customers' clientele. In this last year face to face relationships were not possible but I am pleased to say that our customer service and reputation for delivery were enhanced despite the trials and tribulations of the last year.
Over many years our strategy has also included a policy of continual investment in both process improvement and in product development to improve output efficiency and product offering. I can be confident in saying that the loose lay flooring (both in sheet and tile) that we have launched into the market some two years ago was very well regarded over the last difficult year.
Corporate governance and corporate social responsibility
The board has over many years recognised its responsibility towards good corporate governance. It is part of our character and, I believe, contributes to our ability to deliver long-term shareholder value. Increasingly companies are, quite rightly, tasked with demonstrating that their environmental credentials and supply chain management are supported by social and economic dimensions and stewardship.
We can now say that almost 100% of our electric usage is now derived from renewables. Our bi-annual Sustainability Report is about to be published and we have this report independently audited to further underline our credentials.
PVC polymer is one of our main raw materials and we began recycling waste into our processes in the 1950s and have continued to use waste PVC as part of the process of manufacturing in ever increasing volumes. For many years we have funded waste collection with Recofloor - our UK joint venture that collects post installation waste PVC within our industry. We are also founder members of the European PVC recycling venture, the AgPr, which funds the recycling of post-consumer PVC waste and diverts waste from landfill back into the manufacturing process.
An important point to note about PVC is that it has evolved and it is no longer just derived from petrochemicals. It is increasingly produced from bio-mass. Indeed, the byproducts of PVC manufacturing, chlorine and caustic soda, are indispensable to the medical and food industries. Often a maligned material, PVC manufacture has the lowest
consumption of primary energy of any of the major commodity plastics and our PVC flooring is made with over 80% renewable materials (excluding recyclates which further lessen the use of non-renewables).
As part of our focus on the future and the footprint of our industry we are major partners in industry wide bodies. One example is that our Technical Director is Chairman of the ERFMI (the European Resilient Flooring Manufacturing Institute). ERFMI activities range from involvement in the EU carbon neutral strategy through to funding new recycling initiatives to extend the ability of PVC to be recovered and recycled. In the past year initiatives include:
The Circular Plastics Alliance, a plastics industry association, to which ERFMI are a signatory has a target to achieve ten million tonnes of recycled plastic in new products in Europe by 2025.
In addition ERFMI has engaged consultants, based in Belgium, to undertake the following research:
Recycling technologies that can be used for the recycling of PVC floor coverings, with particular focus on extraction of legacy additives.
Identification and sorting technologies that can identify flooring containing legacy additives and the ability to sort it from flooring that does not contain legacy additives.
The scope of this engagement is to review technologies that have been tried in the past, that are emerging or used for other applications. This is just one example of working together for the future and we feel it is part of our duty as a responsible manufacturer (as opposed to importers) to be involved in a sustainable future.
The UK may have left the EU but our work on standards, the circular economy, sustainability and meaningful recycling is both Europe wide and globally focused and is progressing at pace. In no way has "Brexit" lessened our involvement as Europeans in the flooring industry.
Dividend
Profits and earnings per share have increased and we continue un-geared. Our cash balances stand at £83.3 million (2020: £67.4 million), even after dividends paid in the last year that amounted to £34.1 million, and taxation of £9.9 million. Our cash reserves continue to provide the foundation of our strong balance sheet.
Attachments
- Original document
- Permalink
Disclaimer
James Halstead plc published this content on 14 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 October 2021 15:01:07 UTC.