James Halstead

Dependable floor coverings specialist James Halstead (JHD) is to return up to £11m to shareholders by way of a tender offer.

The Manchester-based firm has regularly returned cash. Indeed, in January 2010 it declared a £7.8m special dividend. Including the latest payment it takes the sum returned to more than £50m in five years. Amiable finance director Gordon Oliver says, 'We are in a mature industry but remain highly cash generative.'

House broker Altium is to effect the tender by acquiring up to 2.5% of its share capital at a 105% premium to the average middle market price (prevailing five days prior to purchase). As at the end of June, the AIM counter had a chunky cash balance of £34m, so it can easily be afforded, even after capital expenditure. A long-established family company, both chairman Geoffrey Halstead and CEO Mark Halstead are to participate to their full entitlement.

Recent full-year results hit another record, revealing a 15% increase in sales to £213.9m, as pre-tax profits stepped up 8% to £38.5m. The UK market remains tough, but as an exporter to more than 100 countries Halstead is enjoying good 'double-digit' growth in overseas territories, from where it derives two-thirds of its sales. Its focus remains on commercial markets, recent work including the new Rolex headquarters in Cologne.

Altium forecasts 2012 pre-tax profits of £40.3m, producing EPS of 27.7p. It also predicts a dividend of 15p a share – the 36th consecutive year of increase. Though battling against increasing raw material prices, Halstead remains a huge success story, many shareholders remaining loyal due to the inheritance tax breaks of holding the shares.