MIDAS SHARE TIPS UPDATE: Our tip James Halstead’s dividend file raises the ground
The final time flooring group James Halstead failed to boost its dividend was when Harold Wilson was Prime Minister. That was within the mid-Seventies, some 45 years in the past.
The board juggled funds final yr in response to the implications of the Covid-19 pandemic, however was in the end in a position to elevate the dividend to a brand new file of 14.25p, marking virtually half a century of unbroken progress.
The choice displays Halstead’s tradition as a family-style enterprise that mixes monetary conservatism and product innovation.
Based in 1915, the enterprise continues to be run by a scion of the unique household, Mark Halstead, and nonetheless operates out of Larger Manchester.
Set in stone: The final time flooring group James Halstead failed to boost its dividend was when Harold Wilson (pictured) was Prime Minister
In the present day Halstead’s flooring are bought to clients proper throughout the globe, all the best way from Scott Base in Antarctica to Svalbard Hotells in northern Norway.
The corporate invented vinyl sheet flooring, generally known as Polyflor, within the Forties and this stays the cornerstone of its success, utilized in colleges, stations, places of work, outlets and houses in 180 nations worldwide.
Hospitals are main clients too. A couple of quarter of Halstead’s income comes from the healthcare sector and just about each NHS belief makes use of its flooring, as do a whole lot of Covid-care and vaccination services worldwide.
A deal with healthcare helped Halstead to resist the worst results of the pandemic, whereas its potential to adapt rapidly to altering circumstances allowed the agency to achieve market share from bigger rivals.
In a buying and selling replace earlier this month, Halstead mentioned he anticipated file outcomes for the yr to June 30, 2021, with analysts in search of a 7 per cent enhance in gross sales to £255million and an 11 per cent rise in income to £49million.
Additional progress ought to be forthcoming this yr and past. The group has been making sturdy features in America, with medical services significantly interested in the agency’s hard-wearing and well-priced vinyl flooring.
Different worldwide markets are in Halstead’s sights, too. Abroad growth was curtailed through the pandemic, however is progressively regaining momentum and will ship outcomes as journey turns into much less difficult.
Nearer to house, Halstead’s luxurious vinyl tiles, which seem like wooden or stone, are more and more standard amongst owners, not simply in kitchens and loos but in addition in house places of work and gymnasiums.
Like most producers, the group has been hit by a scarcity of uncooked supplies, in addition to greater delivery prices and absenteeism amongst workers uncovered to the coronavirus.
Whereas these could create some short-term points, the agency’s long-term prospects stay strong.
Midas verdict: Midas advisable James Halstead shares in November 2018 at £3.72. They’ve risen 55 per cent since then to £5.50 and will proceed to achieve floor. A proud British enterprise with a worldwide status, Halstead has repaid shareholders handsomely. A robust, long-term maintain.
Traded on: AIM Ticker: JHD Contact: jameshalstead.com or 0161 767 2500