City round-up: James Halstead; On the Beach
Manchester flooring specialist, James Halstead, reported a fall in its interim profits, despite record sales, but said, in the circumstances, the results for the six months to December 31, 2022, were “creditable”.
The AIM-listed group achieved sales of £149.6m, up from £136.7m the previous year, but a pre-tax profit of £23.2m was down from £25.4m previously.
At the end of the reporting period the group had cash of £44.3m, compared with £69.4m in 2021.
The interim dividend remains unchanged at 2.25p per share.
Chairman, Anthony Wild, said: “Distribution costs, in terms of export shipping, remained at very high levels throughout the period. Given our shipments of flooring were as diverse as the St Helene hospital in Mauritius, the student accommodation at Iceland University, the WKI Lab in East Java, the Biscotti Headquarters in Lviv or the Penfolds Wine Exhibition at Raffles City in Singapore we thank our logistics teams.”
He added: “Margins have remained under pressure throughout the period, even though in many markets we have undertaken price increases, with energy costs increasing steadily in our manufacturing sites in the UK.”
He revealed overhead costs in the six months to December 31, 2022 were 4.9% higher than the prior year with the most significant increase being export shipping costs.
He concluded: “Production from our UK factories is higher, and with that we should see improved productivity. Most importantly, sales in recent weeks in the UK and many export markets have been very encouraging with our core commercial vinyl ranges experiencing especially robust demand.”
Chief executive, Mark Halstead, said: “These last three years have seen our businesses challenged by numerous unexpected factors that have added to costs significantly and to the complexity of the simple business of designing, manufacturing and selling commercial flooring. The bottom line results show a small dip in profits at the half year but this, in the view of the board, is a creditable performance.”
Adrian Kearsey, analyst with investment bank Panmure Gordon, retained his Buy call on James Halstead shares after today’s announcement, saying: “James Halstead delivered a robust sales performance in the first half, with the top-line up 10%. As previously flagged, cost inflation headwinds continue, constraining near-term margins. Overall, we see the glass as half full and are leaving our full year forecasts unchanged.”
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Simon Cooper
On the Beach, the Manchester-based holidays group, has unveiled Jon Wormald as its group chief financial officer, having tempted him to leave retail giant THG.
He will join the business and the board on June 30, 2023, at which point the group’s previously announced CEO succession plan will be enacted. On the same date, Shaun Morton, the group’s current CFO, will replace Simon Cooper as chief executive and Simon, as trailed on December 8, 2022, will transition to his new role of founder director NED.
Jon Wormald is currently CFO of THG Nutrition, the world’s largest online sports nutrition brand. At THG Nutrition, Jon has been responsible for the financial performance of the division alongside responsibility for the vertically integrated manufacturing businesses.
He joined THG in 2021 as deputy group chief financial officer to deliver the successful reorganisation of the group, designed to maximise strategic optionality, which was completed ahead of market expectations.
Prior to THG, Jon spent 11 years at the Co-operative Group, holding a number of senior roles including director of M&A, programme director and leading the group’s fnance department.
The nomination committee is progressing a search for an additional independent non-executive director to complement the existing balance of skills and experience on the board. Once this position is filled, the board composition will remain in line with the requirements of the UK Corporate Governance Code.
On the Beach chair, Richard Pennycook, said: “The board and I are delighted to welcome Jon as our incoming group CFO. Having worked closely with Jon in a previous role, I know he is a talented individual whose extensive experience in both online and consumer-facing businesses are well suited to the company and we look forward to working with him.”
Shaun Morton, CEO designate, said: “Jon’s senior financial and operational roles will be invaluable to us at On the Beach as we continue to strengthen the brand and bring our leading customer proposition to a broader audience of beach holiday makers. I look forward to working closely with Jon as I step into the role of CEO and am also pleased to continue working with Simon in his new founder director role.”
Jon Wormald said: “I am thrilled to be joining On the Beach as group CFO, working with such a talented team in an exciting sector. The business is recognised for its customer-first mentality and has a clear strategy for future growth, and I am looking forward to contributing to its ongoing success.”
