James Halstead

Despite rising input costs and many an infrastructure project put on hold, commercial flooring manufacturer James Halstead has delivered record results yet again.

For the twelve months to June, revenue rose more than 10% to £186.4m and operating profits advanced 9.5% to £35.9m at the dependable James Halstead, whose recent installations range from London’s Sylvia Young Theatre School to the new Big Brother house to the Abu Dhabi Police Academy in the UAE.

AIM-traded 'Halstead', which has added to its ‘tally’ of football clubs via flooring installations with Blackpool FC and West Bromwich Albion, continues to reap the benefits of its focus on repair and renewal work, as well as the fact its Polyflor brand is winning market share from more expensive alternatives as budgets are scaled back.

The UK, the group’s largest market, is demonstrating robustness and encouragingly, international revenue continues to increase – it grew 18% last year – which means ongoing sterling weakness is only assisting Halstead in terms of its competitive global positioning.

Having achieved record cash inflow of £36.5m last year, Halstead upped the final dividend by 10.3% to a record 18.75p, increasing total dividends to 26.75p (2009: 24.25p) and thereby treating investors to their 34th consecutive year of dividend growth.

Halstead, which closed the year with £33.4m in cash, even after shelling out special dividends in January, is not dirt-cheap, trading on roughly 15 times historic earnings.

Yet, with such strong momentum behind the business and given its impressive track record, there should be much more mileage left in the shares, which have risen from a 52-week low of 465p and offer a 3.7% yield. The shares are well worth buying and stashing away.