Report & Accounts 2023
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Classic Mystique PUR
Imperial War Museum, Cambridgeshire, UK
Expona Commercial PUR
House of Books & Friends, Manchester, UK
Beechfield
Hollinhurst Road
Radcliffe
Manchester
M26 1JN
Tel +44 (0)161 767 2500
Fax +44 (0)161 766 7499
www.jameshalstead.com
Nominated adviser and stockbrokers
Panmure Gordon & Co
40 Gracechurch Street
London
EC3V 0BT
Stockbrokers
WH Ireland
24 Martin Lane
London
EC4R 0DR
Independent auditor
BDO LLP
3 Hardman Street
Spinningfields
Manchester
M3 3AT
Directors and Advisers
Directors
J A Wild FCA
M Halstead
G R Oliver FCA MCT
S D Hall
M J Halstead
R P Whiting
Secretary
D N Fletcher ACMA ACG
Registered office
Beechfield
Hollinhurst Road
Radcliffe
Manchester
M26 1JN
Company registration No.
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 4
Financial Director’s Review 9
Section 172 Statement 10
Climate-related Financial Disclosures 14
Sustainability and the environment 19
Governance
Report of the Directors 20
Board Report on Remuneration 24
Corporate Governance 25
Financial Statements
Independent Auditor’s Report to the Members
of James Halstead plc 31
Consolidated Income Statement 37
Consolidated Statement of Comprehensive Income 38
Consolidated Balance Sheet 39
Consolidated Statement of Changes in Equity 40
Consolidated Cash Flow Statement 41
Notes to the Consolidated Financial Statements 42
Company Balance Sheet 67
Company Statement of Changes in Equity 68
Notes to the Company Financial Statements 69
Supplementary Information
Ten Year Summary 76
Shareholder Information 77
Notice of Annual General Meeting 78
2
Chairman’s Statement
Results
Revenue for the year at £303.6m (2022: £291.9m) is 4%
ahead of the comparative year largely driven by increased
demand across a number of our key markets. This is a
record level of sales.
The reported profit before tax for the year of £52.1m
(2022: £52.1m) is a fraction over the comparative.
Nevertheless, profit after tax is £42.4m (2022: £40.3m) –
an increase of 5.1%. A record level of profit. Furthermore,
earnings per share are at 10.2p (2022: 9.7p) which is an
increase of 5.2% and a record level of EPS.
The financial year was one of contrast, with the earlier
months having encountered escalating energy costs,
severe difficulties as a result of the lack of timely
availability of international shipping and increased
transportation costs. However, the latter months of the
year were much more positive with the easing of energy
in shipping and
costs and a great
transportation costs. In addition, our export sales in many
markets developed as demand increased. The breadth of
projects stretches from The Media Centre for the Paris
2024 Olympics, Castlerock Farm in British Columbia to The
Centre for Autism Research (CFAR) at the King Faisal
Specialist Hospital & Research Centre in Riyadh.
improvement
Sales growth has, on the whole, proved positive with the UK,
the Americas, Australia, New Zealand and Malaysia all
reporting increased demand, although Central Europe sales
were lower than last year. As the year progressed, gross
margins improved for the reasons already noted helped by the
price increases and also by a swing in the mix of sales to pure
commercial ranges as opposed to light commercial/heavy
domestic. The core focus of our flooring ranges in healthcare,
education and retail infrastructure, rather than private
residential, remains a key benefit to our business model.
Nevertheless, in Germany we have seen recent successes in
new residential apartment buildings such as Quartier Möllner
Straße in Rostock (Mecklenburg-Vorpommern) and York-
Quartier in Münster (North Rhine-Westphalia).
has been listed on the London Stock Exchange for 75 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, product innovation,
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
the continuation of dividends, in turn creating shareholder
value. 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.
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 our
product offering.
Sustainability, social responsibility
and the environment
We have in recent weeks published our 18th sustainability
report that details our actions and ambitions in the areas
of the environment, sustainability and social responsibility.
Climate change has led to a greater focus on carbon
dioxide levels but climate change it is not, in our view, a
matter of trying to highlight any one single measure such
as carbon emissions or net zero targets. As a manufacturer
in the UK there are basic levels of environmental legislation
that far exceed the standards of many countries. However
we look to go far beyond that. Further information on the
actions that we have taken are included further down in
this report.
The Company and our strategy
Dividend
James Halstead 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
Our cash balances stand at £63.2 million (2022: £52.1
million) with one of the major reasons for the increase
being decreased stock. The finished goods inventory at the
3
year-end is £77.1 million (2022: £101.9 million) which is
about 24.3% lower than the prior year comparative.
government spending restrictions on refurbishment in the
education sector and this continues to be case.
Also of note regarding the cash flow for the year is taxation
paid of £11.9 million (2022: £9.9 million), fixed asset
additions of £2.9 million (2022: £3.2 million) and equity
dividends paid of £32.3 million (2022: £32.3 million).
We welcome the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP) and note
that we already trade with 10 of the 11 countries that now
have a free trade agreement with the UK.
Overall overseas turnover is 60-65% of total turnover and
growing. With greater availability of global shipping, a
strong balance sheet and a proven business model, we are
confident in the prospects of the year ahead and progress
across the Group.
Anthony Wild
Chairman
29 September 2023
The interim dividend of 2.25p (2022: 2.25p) was paid in
June 2023. The Board, having regard to the cash balances
and profitability, is proposing a final dividend of 5.75p
(2022: 5.50p) which will mean a total dividend for the year
of 8.0p (2022: 7.75p) an increase of 3.23%. This is a record
level of dividend.
Acknowledgements
Once again, I would like to thank our colleagues for their
continued efforts in achieving this year’s result.
Our thanks also to the UK Contract Flooring Association for
their members’ accolades with Polyflor being awarded the
2023 Manufacturer of the Year, as well as the best use of
flooring in a charitable initiative with the community
interest company House of Books and Friends, Manchester.
Outlook
Trading from the year end to date, overall, has been
positive. Flooring has been supplied to diverse end
customers from Medica Sur, which is recognised as the best
hospital in Mexico, the Giant Flagship Store, Düsseldorf
(one of the world’s largest manufacturers of high-end
bicycles) and the new headquarters of Deloitte in Milan (a
NZEB – “Nearly Zero Energy Building”), helped by our
flooring rated with both LEED “Platinum” status and WELL
“Gold” certified. While both four-letter acronyms have
similar requirements and standards, the two certifications
are very different. WELL Certification focuses on people’s
health and wellness, while LEED is a certification that
focuses on environmental impact and sustainability.
In the UK demand has been slightly less buoyant. Our UK
business is far more focused on commercial flooring and
repair, renewal and refurbishment and consequently less
exposed to consumer spending. Nevertheless, there are
budgetary constraints on renewal spending. Indeed, the
Chairman’s report of September 2016 noted UK
4
Chief Executive’s Review
Our business is, in essence, really simple. We create a
floorcovering fit for purpose, we manufacture in volume and
efficiently, we present the product to wholesalers, architects
and end-users then sell the product, collect payment, make
a profit and repeat the process.
It has been a record year for sales for the Group but the year
had its challenges, disappointments and successes and
overall must be considered as satisfactory. We have supplied
flooring from the Van der Valk Hotel in Sneek, Netherlands
to the Hospital de Bosa in Bogota, Colombia whilst
supplying innumerable small projects in schools, offices,
cafes, care homes, ships and hospitals across the world. Our
own distribution teams and those of our very many
stockists are despatching constantly and it is our delivery,
availability and quality that keeps this show on the road.
Our sales tomorrow are the orders we receive today as we
are not in the “make to order” sector. Our sales are what we
have in the warehouse.
Sustainability and environmental consideration have been a
key part of buying decisions for many end users for very
many years and increasingly part of listed company
accounts. I echo the Chairman’s comment to look at the
audited sustainability report that is in its 18th annual
version. We are proud of our record in this area and the
annual accounts will have fuller details including the
ubiquitous SECR (streamlined energy and carbon reporting)
and the Companies (Strategic Report) (Climate-related
Financial Disclosure) Regulations 2022 statements which
are often referred to as the very similar “TCFD” (task force
on climate related change financial disclosures). The ESG
element of our business is a part of the presentation to end
users and their purchase decision process whether it is
Wendy’s Restaurants, Ontario or the new Louis Vuitton’s
headquarters just steps away from La Samaritaine in Paris.
Environment and sustainability are as much about marginal
gains with each 1% adding to the amassed improvements
to offset the effects of anthropogenic climate change.
Sustainable manufacturing has, to us, always been
important and we look to minimise use of scarce resources,
recycle and recover materials, and leave as small a footprint
by our manufacturing as possible.
Perhaps one point I would make on the subject of social
responsibility is that we are deeply involved in many trade
bodies across Europe and in our markets globally. Rather
than hire consultants to represent us we feel that trade
bodies act not only as a representative body for the
industry/market that they characterise, putting forward the
collective view and position of its members, but probably
more importantly the members set and raise standards to
promote and improve best practices, whilst highlighting
common areas of concern. The results over time are that
end users and consumers gain confidence in the product. In
addition, a trade body can give the ‘industry voice’. Trade
associations speak on behalf of their members with the
‘industry voice’, especially when communicating with
related industries (suppliers, customers and end-users),
governments, agencies, regulators and on occasion the
media.
Objectflor/Karndean and James
Halstead France, our European
operations
It was a difficult year for our Central European business
(based in Cologne) with sales down 7.9% in the year. Sales
in Germany are more exposed to the retail and domestic
market than any other subsidiary. The French market saw a
12.6% increase in sales where the effects from the Ukraine
crisis were lower due to greater government intervention in
the cost of living crisis. We moved to a new warehouse in
France during the year, reduced our costs, whilst also
improving our service to customers.
Inflation, uncertainty from the conflict in Ukraine, and some
destocking by customers all played a part in a clearly
challenging economic environment. Given interest rates and
construction costs, many new build projects were put on
hold or cancelled. The housing market in Germany has been
poor. Even though demand for accommodation is large the
supply has fallen significantly. A 32% fall in residential
housing construction in Germany has driven negative
sentiment which is reported to be at levels last seen after
the global financial crisis.
In France, the sales were raised by particular successes in
increasing loose lay tile products (albeit these tend to be at
lower margin than many other ranges), a 29% increase in
own label collections to distributors and growing success in
the healthcare sector. Healthcare was targeted in France last
year by the introduction of dedicated sales representation
to this end user segment and the success against economic
conditions was clearly the result of taking increased market
share in this area.
Margins remained suppressed during the year, driven by the
overhang of cost surcharges and price increases in the stock
value. There have been improvements in the latter half of
the year as stock is replenished and sea freight surcharges
have reduced.
Stocks within Objectflor have been reduced by 25.2% which
resulted from a combination of reduction from last year’s
strategic increases and also a reaction to the lower sales in
5
the year. The management team have placed focus on costs
to mitigate the drop off in sales and profitability. Just one
example was that Objectflor withdrew from major
exhibitions along with many other flooring manufacturers
which did the same, reflecting the negative sentiment of the
industry against market conditions. The headcount was
reduced as staff leaving were not replaced on sales-facing
roles.
The business remains very profitable and the re-launch of
the Expona Domestic luxury vinyl tile collection in January
2023 was very successful. The business supplied new
flooring to the Ford factory in Cologne.
Polyflor APAC – encompassing
Australia, New Zealand and Asia
Our APAC region is made up of four distinct areas including
Australia, New Zealand, North Asia and Southeast Asia. To
give a better strategic focus in the region a new reporting
structure has been established to oversee the region as a
whole. These changes are aimed at enhancing collaboration,
aligning strategies and ensuring efficient decision making
across the region creating a stronger network, promoting
regional initiatives and leveraging resources effectively.
One immediate example of this is the implementation of a
new ERP system. Our Malaysian business was the first to
move over to this software during 2022, led by the
Australian team who then supported New Zealand in their
switch at the start of 2023. Australia successfully went live
on the same system on 1 July 2023 and whilst all separate
reporting entities, now have a common system where
shared resources can be utilised.
Sales in the region were affected by international shipping
delays that depleted stock holdings and the cost of shipping
affected margins.
Looking individually at each of these regions, we have seen
Australia grow gross sales by a further 3.8% to a record
level, an excellent achievement. The increase this year has
been driven largely through price increases with volumes
4.5% down in the year.
Despite price increases, margins are down on last year with
the sales growth for the period coming from more
commercial flooring than domestic, adversely affecting the
product mix in terms of margin. Stocks, including goods in
transit, are 13% down on the previous years.
New Zealand saw another solid year. Sales were ahead by
20% but the ongoing high freight and product cost affected
margins. During the early part of the year we experienced
significant shipping delays which gradually eased from
January 2023 onwards. Stock levels were reduced 17%.
There remains traffic congestion locally holding up
shipments. There were some one-off costs in the year, such
as the ERP implementation noted above, but overall
profitability remained level despite this.
Our Malaysian business which services the Southeast Asia
region has gone from strength to strength increasing sales
by 78%. We are starting to see the benefits of our
investment in salespeople across the region as more
projects are secured, although Malaysia remains the biggest
market. Sales into Singapore were boosted by obtaining
SGBC (Singapore Green Building Council) certification
which helped sales of Polyflor products into the government
sector.
All sales to date in this region are from products
manufactured in our UK factories, however, now we have
established ourselves in the market, we will look to
introduce a small range of luxury vinyl tile products during
the next financial year, sourced regionally. Interest has been
positive.
Unfortunately, our North Asia sales continue to
underperform. Extended Covid shutdowns in China, lack of
projects, surplus capacity from competing Chinese factories
and delays in manufacturing and shipping our product have
all contributed. None of the countries covered by this area
showed any growth. Following a review of the North-Asia
region at the end of the year, a change in management has
occurred and with all travel restrictions now over, our APAC
management will take a more strategic view of the whole
region and focus resources to best achieve growth. There will
not be an immediate turn around given the nature of the
business, but we believe it will succeed.
Polyflor & Riverside Flooring, based in
UK
Undoubtedly, it was overall a commendable year at our UK
manufacturing sites. These businesses supply not only the
UK, where turnover was 4.2% ahead of last year, but also our
overseas subsidiaries and direct export customers. Profits
were also ahead of the prior year despite the challenges of
increased input cost, massive energy cost increases and
industrial action by part of the workforce in Radcliffe.
Riverside output and sales increased with a near 14%
increase in turnover. In the UK the increase was 10%, sales
to our own overseas subsidiaries were down 10% but sales
to the rest of the world increased by 36%.
6
Chief Executive’s Review
continued
Export demand was restricted for the early part of the year
by availability of timely shipping though this was greatly
improved by the year end. It was also the case that the
“bottlenecks” of international transport delayed and
restricted supplies to our overseas subsidiaries; local stock
helped to minimise the effects on sales but opportunities
for greater sales were lost.
Significant product launches in the year were undertaken.
Camaro (our light commercial heavy domestic luxury tile
range) in September 2022 was relaunched with new designs
and tiles. The market reception was extremely positive.
Expona Commercial (our project focused luxury vinyl tile)
was relaunched in July 2022 was extremely well received.
The marketing support for these launches in terms of
sampling, product presenters, and display materials was
impressive, and costly, but will stand the ranges in good
stead over the next 2-3 years before we again refresh
designs. The Aztech Soccer Arena in Guernsey was just one
project that Expona commercial was used in.
Raw material costs and availability were difficult in the early
months of the year but improved and from January 2023,
when combined with sales price increases, led to improved
margins. Energy cost increases were a severe problem in the
first half of the year and though this eased in the second
half, the costs are still very high when compared to prior
year comparatives. In this we are not alone but in the global
market place, outside Europe, energy costs have not been so
severe. Inflationary pressures affected all costs. Wages,
services and costs across all areas were challenging. Cost
control was a constant focus for the Group.
Our stock levels were drastically reduced as concerns over
energy abated, indeed the industrial action on part of our
plant helped reduce stock levels more rapidly than we might
otherwise has chosen. The stock reduction was generally
very good for cash generation but as a result we have
struggled to supply certain product ranges and have been
out of stock in some lines.
Unfulfilled demand to a manufacturer is far from desirable.
Shift patterns and overtime in part helped alleviate some of
the difficulties but on several key ranges stock levels
remained persistently low. The export departments ended
the year with outstanding orders that were unfulfilled by
production and, whilst the second half of the year saw much
greater ability to get exports to the end markets, our
manufacturing capability lagged. Against the economic
environment, the balance between prudence and increasing
manufacturing headcount was assessed and prudence
prevailed.
Polyflor Nordic comprising Polyflor
Norway based in Oslo and Polyflor
Sweden based in Gothenburg
After a strong performance in the previous financial period,
we saw a flat year for our Nordic markets with combined
sales marginally down by 1.8% in the year. An increase in
costs saw the region fall back in terms of profitability, but
our investment in extra sales personnel across the region,
this year more concentrated on Sweden, should return us to
further growth next year.
Our Norwegian business had some key project success in
hospital projects and
introduced a new high-end
commercial carpet from Germany.
Whilst the sales have remained flat overall, the mix has
improved with an increase in UK manufactured product
which benefits the Group as a whole. Growth remains the
focus in both markets.
As with other markets, overall stocks have been reduced in
the region (by approximately 10%), but with the greater
cooperation between the countries, a more balanced
approach should lead to improved delivery times and lower
freight costs as we progress.
Polyflor Canada, based in Toronto
Our Canadian business saw a record year for sales and a
significant increase in net profit against a generally sluggish
economy. It was another strong performance with sales
ahead of last year by 30%. We have seen growth in both LVT
volumes (+24%) and UK manufactured product (10%). The
Canadian sales of product supplied by our Teesside plant
increased by 30%.
The business supplied flooring to the Huawei Offices in
Vancouver and to the Toronto Dominion Bank, the latter
being in Expona commercial luxury vinyl tile (newly re-
launched by Polyflor UK).
As we noted last year, Covid-19 resulted in restricted travel
so with a greater ability to visit distributors and specifiers
we have seen an uplift in trading. There has also been an
improvement in the logistic bottlenecks that hampered
previous years helping to ensure product was available for
projects. It was clear that increased interest rates and input
costs have noticeably affected customer confidence and
building projects were keenly contested.
7
Stocks have been reduced by 8.3%, despite the decision to
purchase more LVT direct rather than relying on the UK
stock holdings and this strategy will continue as we see
continued growth from our LVT ranges. We continue to
invest in growth in the region with further recruitment in
sales personnel planned for the coming year.
4% of the water that we use comes from the mains supply.
We have expanded collection of rainwater from our
factories guttering to underground storage and this will
enable us to further reduce mains water usage. We have
added filtration so that we can use the collected water for
other uses on site such as jet washing.
Rest of the World
Waste
Our products are sold in many markets across the globe and
the preceding sections cover some of the key markets where
we have a local presence and warehousing. These markets
have been long established for the sales of our flooring and
there has also been significant growth in several other
markets when compared to last year. Our products are
available and sold across the globe and we continue to make
strides in our export markets. Whilst our European
neighbours have remained subdued with more of an impact
from the Ukraine crisis affecting energy inflation and
spending power than other countries, we have seen good
sales growth in the USA (+36%), Latin America (+31%), the
Middle East (+38) and the Mediterranean (+20%).
We are actively looking to increase our presence in both the
Middle East and Latin America by increasing the number of
salespeople on the ground.
In India we continue to control costs. This remains a market
where freight costs remain problematical and our focus is
now mainly on pharmaceutical and healthcare sectors.
There were projects such as the Serum Institute and the
Hazrat Shahjalal International Airport in Dhaka Bangladesh.
Sustainability, social responsibility
and the environment
As highlighted in the Chairman’s Statement, we recently
published our 18th sustainability report for the Company. In
this we detail the actions and ambitions that we have taken
to addressing environment impact, sustainability and social
responsibility. I would like to note just a few of the many
areas of focus covered by our independently audited
sustainability report:
Water usage
Water is a natural resource that must be protected.
Manufacturing can result in a high use of water but at
Polyflor we collect rainwater and store it for use in cooling
during the manufacturing process (and have done so for
over 50 years). This stored water is returned to storage after
use and largely avoids the use of mains water supply, just
I have noted over the years our Recofloor after sale vinyl
take back scheme. However, waste comes in other forms
notably packaging. At Polyflor we minimise waste to landfill
and have an onsite waste collection, segregation and re-
purposing team with a dedicated part of the site. Cardboard,
wood and metals are separated for recycling and waste
liquids sent for treatment to extract for alternative uses.
Training for the skill shortage
Fifteen years ago we created the Polyflor Training Academy
based on the Radcliffe site to add to the skills set of our end
users (the contract floor layers). The academy delivers 1-4
day training courses for a nominal charge with basic skills
training to advanced level training. Last year we ran 27
courses in Radcliffe for 275 participants. In addition, the
training academy offers product training to our own
employees and undertakes off site training. This facility has
been replicated in our European business with the
Objectflor Campus. The Campus held 17 courses in the last
year with around 500 delegates and a further 12 related
industry courses with around 400 delegates. Smaller events
have taken place in Australia, New Zealand and Canada. We
see this as a key part of our social responsibility to bridge
the skills gap even though these delegates are not directly
our customers. Our stockists should, over time, benefit and
do take confidence from these commitments.
Environmental product declarations (EPD)
With many green labels and accreditations across the globe
the proliferation can be confusing for end consumers. The
abundance of “green washing” is known to many. The
Centre for European Standards (CEN) created a European
standard (EN) with the aim of a worldwide standard for
environmental performance. The EPDs that Polyflor has
attained are independently verified and are environmentally
assessed based on global warming potential, ozone
depletion potential as well as five other environmental
impact indicators. The benefit is that EPDs support the
environmental goals of stakeholders from design stage to
use whether in new build construction or retrofit.
8
Chief Executive’s Review
continued
ESG is not supposed to be “boiler plate” nor “tick box” and
each element of our place in our locality, in our wider
community and our industry is important. Each facet is so
much more important to the future and needs to be much
broader than one measure or targeting “net zero” at some
future point. Environmental sustainability is not the
responsibility of one person or committee but the work of
the whole team across the Group looking at the different
facets and focusing on the components that should each
combine for a more cohesive strategy.
In conclusion
Given the circumstances we can only be pleased with the
results for the year. The hard work, dedication and
experience of our subsidiary directors and management has
been a key factor in this achievement.
The recent years since “Brexit” (January 2020) have seen our
businesses rise to the many challenges since that time and
it is perhaps worth a glance at our performance since the
2020 year end. Our sales since then are 27% higher (+49%
in the UK, +10% in Europe, + 22% in Australasia and +42%
in the rest of the world); our profit before tax some 19%
higher. Notwithstanding these figures our progress in global
markets has been hampered by many factors however these
are now behind us and though we have inflationary issues
and in many markets spending constraints I and our teams
feel confident of the Group’s progress in the global markets.
We look ahead with confidence across the business.
Mark Halstead
Chief Executive
29 September 2023
9
Financial Director’s Review
As is usual, we have prepared these accounts by the
consistent application of accounting standards with due
appraisal and judicious accrual for known probable liabilities
with as yet uncertain outcome at the year end. As in
previous years we, as a board, look to be prudent.
The group operates through separate legal entities in certain
areas of the world and though these are discussed in the
Chief Executive’s Review we, as a board, have concluded
that these operations are one segment for the purposes of
IFRS 8.
Some key statistics:
Group turnover at £303.6 million (2022: £291.9
million) was 4% higher than last year.
Profit before tax was £52.1 million (2022: £52.1
million).
Selling and distribution costs were 6% higher than
last year. Administration expenses were 4% lower
than last year.
Trade receivables decreased to £42.9 million (2022:
£46.7 million). Trade payables decreased to £40.3
million (2022: £61.5 million).
Inventory levels stand at £87.4 million (2022: £112.3
million).
Cash stands at £63.2 million (2022: £52.1 million)
even after the payment of £32.3 million in dividends,
£11.9 million in tax and £2.9 million of capital
expenditure.
Key performance indicators
The board considers growth in profit before tax and growth
in dividend key targets in line with the task of delivering
shareholder value. Control of working capital continues to
be important and the level of cash is monitored. Cash flow
has been a key performance measure.
Rather than focus on individual working capital targets or
ratios, the board are informed of all significant issues
directly by subsidiary management by means of monthly
reports on the key decisions and influences on working
capital. The group comprises two major manufacturing
plants and a number of overseas importer and distribution
businesses but no overall KPI seem appropriate. Obviously
sales, profit and cash generation are monitored against
budgets and more so against prior year comparatives.
Our focus at subsidiary level is on stock availability and
appropriate credit given to and received from customers
and suppliers respectively. Obviously sales, margin and
profitability are monitored as well as cash, which is the final
result of our economic activities. Appropriate summaries of
these statistics are collated into monthly group reports.
These accounts contain analysis and more importantly we
require each director to undertake a written report on their
area and often these include key indicators (obvious
examples are level of absenteeism in the factories, debtor
days and margin by product line but these are backed up
with detail of the key drivers of these ratios and the planned
response).
No individual key performance indicator, or group thereof, is
regarded as more important than informed, in-depth
knowledge of the underlying businesses. Subsidiaries
present their key performance indicators on debtor days,
stock turn and creditor days but the consolidation of these
for the whole group offers no extra benefit as the
component of mix can mask underlying effects.
In terms of non-financial KPIs brand awareness, reputation,
customer satisfaction and market share are all important
but difficult to assess. We do not believe that surveys and
market share data, to the extent that they are collated by
various trade bodies, is complete nor wholly accurate.
Consequently little reliance is placed upon this data. We
subscribe to various third party reports on the flooring
industry which to an extent match and compare us to our
competitors and whilst valid snap-shots of the sector they
are limited. Customer satisfaction awards are always
welcome and we note these in our strategic report. At
subsidiary level there are non-financial KPIs. Examples being
call response time, non-conforming product complaints,
staff turnover/retention but these are company or
department specific and reported by directors in their
monthly reports. The executive directors comment on these
on case specific bases and the non-executives have sight of
the major reports.
Principal decisions
The strategic report notes our approach to Section 172 of
the Companies Act 2006 and we have faced many decisions
in the year. We define principal decisions as those that have
a significant impact on the company and/or group and/or
our stakeholders. Principal decisions that are currently
confidential to the group are not included in the list below.
Any such decision would be included in future report and
accounts if and when confidentiality is no longer a factor.
The potential impact of principal decisions on stakeholders
is assessed in detail by the board. The executive directors
kept the board appraised of their actions and these are
described in the strategic review and in our interim
reporting. To the extent that these decisions affect
employees there
is a bi-annual update on group
performance. Each of the principal decisions has a potential
effect on employment and hence employees as a whole so
this high level update is important to provide context for
the individuals.
10
Financial Director’s Review
continued
During the year the following were considered by the board.
Payment of dividends
The board considered shareholder expectations in setting
these dividends, along with the cash position of the
company. Cash flow projections are an important part of
this, particularly in the current economic environment - the
executive directors were tasked with keeping the board
appraised of the working capital position.
Defined benefit pension scheme
Further to the triennial valuation of 2020 and having regard
to the relatively small numbers of active members the board
took the decision to close this scheme to future accrual. In
addition having regard to the many changes in the
economic climate the board asked the trustees to consider
an interim valuation of the scheme to ensure the most up
to date figures were available for the basis of agreed
ongoing funding.
Approval of group budget
A key process is to each year agree budgets with our trading
subsidiaries and this is presented to the board towards the
end of each trading year. Having regard to the ongoing
disruption to energy across our markets the budgetary
process this year was deemed to still be fraught with
uncertainties. Nevertheless, a full budgetary process has
been undertaken to assess our manufacturing capacity and
manage shift patterns and associated expenditure.
Warehouse expansion
In 2020 the board appraised the need for increased
warehouse capacity in the UK. Given the myriad of other
problems that have presented themselves since that date
this project has not progressed as of yet.
Salary increases
During the year the UK faced significant inflation and the
board took the view that directors of its subsidiaries would
have increases capped at 5%
Principal business risks and
uncertainties
The board resolved (in February 2022) that we should cease
to undertake sales of flooring to Russia and given the close
involvement of Belarus to only supply the latter with
healthcare related products (after a review by the board of
individual projects). The effects of this conflict on global
trade and costs continues to be an uncertainty.
The effects on UK energy costs have been widely reported
but the implications for UK manufacture go much deeper.
Certainly the increased cost of our UK energy of both gas
and electricity has been significant but the effects on raw
material supplies have also been significant. The
dependency of many industries in Europe on the large
refinery and chemical plants being fed oil and gas from
Russia made it immediately apparent that the conflict
would lead to major disruptions in supply beyond the cost
of energy. The situation as of the end of the current financial
year is much improved from the scenario a year ago but
remains a business risk.
The board constantly assesses risks and discusses business
issues regularly. To the extent risk is insurable the board is
risk averse and the group is widely insured. A comprehensive
insurance appraisal takes place annually to mitigate
exposure to risks, such as business interruption and fire but
obviously key risks such as escalating raw material prices
and energy costs fall outside any insurable event. Inevitably
the unexpected cannot be anticipated but given the depth
of understanding of our principal business by the senior
management, and the board, risk is ameliorated but not
eliminated.
Our goals are simple and we avoid over-stretching our
capabilities. During the year the unknowns associated with
the pandemic were a key unknown and consequently a key
risk. Our plans are not limited to a twelve month set of
figures, though budgets are prepared and monitored, and we
look to benefit from decisions over a longer time frame. A
major mitigation of risk is a close understanding of our
people, their motivations, experience and limitations. In
general it is in the nature of the board to talk about and
focus on the problems of our business. This is the major way
in which risk is not merely identified but mitigated. Excess
capacity exists in our businesses and across Europe.
The risks identified beyond insured events include foreign
exchange risk, credit risk, liquidity risk and key management.
There are, additionally, key customers and key suppliers
which create dependencies. Sales and purchasing policies
are under regular review to assess these dependencies. In
the main, risk and control are measured and assessed from
a financial perspective, but this is not to the exclusion of
non-financial risks and uncertainties. It is clear that
scenarios can be envisaged where the group’s activities may
be disrupted and little could be done to mitigate the
negative effects. Cyber security is another identifiable risk,
there are many media reports an increase in blanket attacks
by cyber criminals often backed by hostile nation states
targeting civilian and commercial organisations, owing to
the value of the personal and sensitive data held. Ransom
ware remains the single biggest threat to organisations and
the use of sophisticated phishing and social engineering
techniques by cyber criminals persists as the main method
of entry and compromise. The board regularly tasks its
subsidiaries with assessment of cyber risk and most
particularly in the area of bank scams. In addition servers
and emails are protected with various firewall safeguards. In
addition, the group avails itself of various insurances which
may offer some help in the event of a cyber-ware event.
11
the cost and complexity in terms of arranging facilities and
complying with local taxation rules would seem to
outweigh the benefits.
The last five years of these exposures in terms of increase /
(decrease) in the value of our overseas assets are as follows:
2023
2022
2021
2020
2019
£’000
(1,818)
926
(615)
336
(170)
Aside from the strategic, operational and financial risks
described there are also compliance risks relating to the
legal and regulatory requirements of the various markets in
which we operate. Directors and senior management are
involved in health and safety, duty and customs clearance,
waste management and other such issues. Risks associated
with climate change, which are not, currently, deemed to be
principal risks and uncertainties are noted elsewhere under
our Climate-related Financial Disclosures (CFD).
Defined benefit pension scheme
In common with other long established businesses we have the
complications and uncertainty associated with having a “final
salary” pension scheme. The scheme has been closed to active
members as at 31 January 2023, with no added service to the
defined benefit scheme from that date
Accounting for this defined benefit scheme is prescribed by IAS
19 and the quantum of the deficit or surplus is ever volatile due
to the nature of using gilt yields, at a point in time, and to a
lesser extent a myriad of assumptions determined by the
actuarial profession.
The scheme comprises deferred members (present and past
employees not yet in retirement) and pensioners.
Gordon Oliver
Finance Director
29 September 2023
In terms of credit risk certain companies have insurance in
place and where there is no insurance we often require
letters of credit or bills of exchange but fundamentally
credit control and market awareness are important. Our
cash balances, and bank facilities combined with a robust
balance sheet are buffers against liquidity risk.
respect of exchange
In
risk, the group operates
internationally and is exposed to foreign exchange risk on
both sales and purchases that are denominated in
currencies other than sterling. Those giving rise to the most
significant risk are US dollar, euro and Australian dollar. To
mitigate risk associated with exchange rate fluctuations the
group’s policy is to hedge known and forecast transactions.
This hedging is at least 25% and on occasion, albeit rarely,
more than 100% of the next year’s anticipated exposure.
IFRS 7 dictates several disclosures on risk and we have
undertaken a market risk sensitivity analysis on fluctuations
in our major currency exposure and the effects on the
financial assets and liabilities in the balance sheet (which is
included in the notes to the accounts).
Several external factors can be envisaged that would affect
operating activities. These include technical failures, labour
disputes outside our businesses, availability of raw
materials, and import or customs delays. Given the spread
of our operating activities there is a reduced risk of any
single event being catastrophic, but external factors are an
area of risk that continues to be monitored. Certain
suppliers would be difficult to replace or their products to
substitute and delays could be of several weeks duration,
which wouldn’t be covered by our current levels of stock
holding. Given the length of service of many senior
managers, succession planning becomes a risk and/or an
uncertainty but again the open style of decision making and
collaboration mitigate the risk.
The activity and progress of our competitors is a significant
risk. Whether there is a new innovation or a gain in
competitive advantage by a new process, or the loss of
market share by any means, any effect on our volume
throughput will have an effect on profitability. The board
looks for market intelligence, and devotes significant time to
understanding the strategy of our competitors
I would note that we have overseas subsidiaries with
significant profit and assets which are translated at average
exchange rates (in the case of profit and loss items) and at
year end rates (in the case of balance sheet items). The
effect of this is shown annually in the Consolidated
Statement of Comprehensive Income. Inevitably there is a
translational exposure on these items and since they are not
necessarily cash flows (excepting dividend payments) the
consolidated net worth of the group varies over time. We do
not hedge this translational exposure though we have in the
past hedged overseas assets with matching debt. At present
12
Section 172 Statement
The directors and the board as a collective consider that they acted in a way that would be most likely to promote the success
of the company for the benefit of its members as a whole (having regard to the stakeholders and matters set out in S172(1)
(a) to (f) of the Act) in the decisions taken during the year ended 30 June 2023.
The group comprises business units in various locations worldwide, all of which have engagement with their local stakeholders
and other companies within the group structure. The group’s governance delegation of authority allows decisions to be made
at business unit level up to defined limits, which allows them to take account of the needs of their local stakeholders through
their decisions implemented locally. The board routinely monitors these decisions and ultimately takes responsibility for the
interaction with all stakeholders.
In consideration of major matters discussed at board level, the likely impact on all stakeholders is carefully considered and
where possible, decisions are carefully explained and discussed with affected stakeholders before actions are implemented to
ensure they understand and have any necessary support.
The group’s key stakeholders and how we engage with them are set out below.
Stakeholder group
How do we engage with them?
How has the board considered their interests?
Shareholders
Members of the board have regular dialogue
with institutional Investors and individual
shareholders in order to develop an
understanding of their views.
The AGM is an important forum for private
shareholders to meet the board and ask any
questions they may have, directly.
The company’s website has an investors
section which gives investors direct access to
reports, press releases and business
information. There is also a contact mailbox
facility.
Customers
We interact with our customers through:
Regular visits and meetings
Industry exhibitions
Customer site tours and presentations
Business unit websites
Supplying extensive samples and
supporting literature
Delivering a high standard of technical
support
Providing enhanced digital design
services and support
The board understands that shareholders
require sustainable growth and value
creation. In recognising this, it has
implemented a policy which has resulted in
increasing dividend returns and incremental
shareholder returns over a sustained period.
Shareholder views, together with movements
in the shareholder base, are regularly
reported to and discussed by the board and
their views are considered.
Our NOMAD’s views on market sentiment
are fed back on a regular basis, and are
considered by the board where it impacts
strategy.
Our strategy of attaining sustainable growth
in profit and building goodwill in our brands
will only be achieved through an
understanding of the needs of our customers
and the markets we serve.
The board regularly considers the impact on
customers when considering strategic
decisions, for instance the major investment
in a new warehousing facility has been driven
by the need to improve customer service.
Suppliers
Employees
Communities
Engagement with suppliers and business
partners is achieved by holding regular
meetings, regular evaluation reviews and
through audits of the supplier base.
We engage with our employees through site
communications, briefings, performance
reviews, newsletters and notice boards.
Employees are also written to individually on
matters which are deemed important.
We operate from multiple sites and seek to
be a good neighbour with the local
communities. Where possible we create
opportunities to recruit and develop local
people, which helps support the local
economy and look after the environment. We
also support local charities through
fundraising and donations.
13
The board recognises that relationships with
the supplier base is important to the
reputation and long term success of the
group. There is regular dialogue between our
management team and our suppliers, where
quality, price, sustainability and health and
safety are key to the discussions. Any matters
which the board needs to be aware of are
reported back as appropriate.
The board is aware that our employees are
critical to the successful achievement of the
strategic aims. The group prides itself on
providing a friendly and safe working
environment for all employees, and given the
nature of our manufacturing process, health
and safety is taken extremely seriously. There
are a number of employees who have
achieved thirty, forty and even fifty years’
service. The group has operated a share
scheme which enabled employees to build up
personal shareholding in James Halstead plc
and participate in its expansion and success.
The board has a full understanding of the
importance of good community relations
with both internal and external stakeholders.
The impact of our operations from an
environmental perspective is recognised on a
local and global level. Capital expenditure
projects, for example, focus on improving
energy efficiency and reducing environmental
emissions.
The corporate social responsibility section of the latest Polyflor Sustainability Report outlines in further detail, the group’s
commitment to its stakeholders, including the supply chain, employees and the communities.
The principal decisions in the year are included in the Financial Director’s Review.
14
Climate-related Financial Disclosures
Non-Financial and Sustainability
Information
In 2022 the UK Government introduced the Climate-related
Financial Disclosure Regulations. These regulations have
been introduced to support informed decisions by investors
and to encourage companies to embed climate-change
considerations into the management of businesses. These
disclosures were largely based on the recommendations of
the Task Force on Climate-Related Financial Disclosures
(TCFD) and are a requirement for accounting periods
starting on or after 6 April 2022.
Separately within the Report of the Directors we have
disclosed our streamlined energy and carbon reporting
(SECR) and in addition the Chairman’s Statement, the Chief
Executive’s Review and the Report of the Directors refer to
environmental, social responsibility and sustainability
considerations and initiatives. It should be noted that our
SECR is reported on a location-based approach; however,
the business does purchase 100% renewable electricity for
its operations, further reducing the operational carbon
footprint when taking a market-based reporting approach.
Sustainability and environmental considerations have been
key considerations for our businesses for over a generation
and we see these as a differentiation against competitors. A
key consideration is to dispel the myth of PVC as being a
’bad’ choice because of its derivation from fossil fuels. PVC
is widely used in products and applications and brings
sustainability benefits whether they are cars (to make them
lighter and thus more economic) or in buildings (windows,
floors, piping and cabling) to perform effectively for much
longer than alternative materials. Life spans of 30 to 100
years with minimal maintenance (hence limited additional
consumption of energy and raw materials). At end-of-life
PVC can be recycled and has the longest history of recycling
amongst plastic with the most advanced level of material
recycling (i.e. lower energy input). The volume of PVC that
we process each year is less than one tenth of one percent
of global annual production. In terms of safety PVC has a
very good long term record and is one of only a few
materials trusted and approved for use for the storage of live
human blood cells.
Our annual ESG reports are part of our
manufacturing ethos.
There is an assumption that investors and regulators have
an appreciation of climate reporting, but in reality there is a
myriad of ‘green claims’ and much of it inconsistent with a
consumer society. For our part, we focus on durability and
life span of products since an extended life span reflects
lower energy usage.
Within the context of the regulations we, and others, have
responsibilities to assess and manage climate-related risks
and opportunities. Whilst our business has always assessed
risks these regulations seek to add separate focus to
climate-related issues. Noted below are specific risks that
we have assessed together with a degree of background and
the related mitigation.
Governance and time
In terms of collating and undertaking these responsibilities,
the board has delegated the role to the finance director to
assess and enquire. This in no way negates the board’s
primary focus and involvement in climate-related risks and
the FD will, as a matter of course, update the board on
climate-related risks. Indeed, this is not different to
assessing risk management. It is a matter for the board as a
whole to determine further actions. The initial assessment in
the short term is that climate charge related risk to our
business is low and not material. Nevertheless, the board
wishes this to be an open item on the agenda for subsidiary
boards to have further meetings and risk assessment.
Subsidiary board meetings are held 6-8 times a year and
Group board meetings 5-6 times. Risks identified, usually by
discussion and enquiry are reported to the main board and
mitigating actions assessed.
The subject of climate change and associated risks in the
medium term will require greater time and involvement
with 3rd parties including suppliers, trade bodies and
potentially consultants. The risks surrounding climate
change often do not fit with other risk management areas
as they are, in the medium to long term, largely imprecise
and mitigation tends, therefore, to be hypothetical in the
short term. The subject matter and risk perception may well
change over time and hence to board’s decision to seek
input, and to make the subject an ongoing agenda subject.
It is to be envisioned that larger risks may be recognised in
future years and that more resource may be needed to
assess the, as yet, indeterminate effects on our small
business as a result of climate change.
There follows a number of areas where risks have been assessed
and whilst the reporting is not tabled and boxed the board believe
the context of these areas warrants a degree of background.
These are the current risks associated with climate related
changes but these may potentially have increased severity in
the medium term (4-8 years). The risks identified currently are,
to the belief of the board, sufficient to gain an understanding of
our business model. Currently, the board believe, the following
points outline the perceived risks but will consider the impact
of these risks to our business model and may undertake
resilience modelling in the fullness of time.
15
In referencing the past the board is no way distancing the
need to look at the future, and the long term and past
events can and do have relevance to preparedness. At the
moment our current targets in relation to managing climate
related risks are to increase awareness of the risks, to engage
with stakeholders and to continue to assess both risks and
opportunities. If it is to be envisaged that, in due course over
the next 2-5 year performance indicators / key metrics may
be identified. However, data sets on the effects of climate
changed and the geographic location of potential effects are
incomplete and speculative.
Risk Management
The main board has made climate-related risks an agenda
item at subsidiary level and in the initial phase asked
subsidiary directors to consider a wide range of issues to
assess risks. Quarterly these will be discussed in detail for
board presentation. The process is aimed at allowing the
board to identify and determine relative significance to the
business of the risks (and opportunities).
The board believes it important to note that environmental
considerations and sustainability are key considerations and
nothing in the statutory climate related disclosure
statements alters that view. As manufacturers this has been
both good practice and good stewardship, as well as
progress to a low carbon footprint. In reality this means
using less energy, fewer resources, greater recycling and
preserving air quality, all of which are reported in our annual
sustainability report, with constant review and to strive to
improve. Our 18th annual sustainability report is available
on our website or as a printed copy and this offers a far
more detailed review of the group’s activities, albeit with a
heavy focus on our manufacturing activities.
Given that our manufacturing is based within Europe, it
perhaps does not go without saying that legislation is
significant with regard to environmental issues, air quality,
and water use and that the vast majority of raw materials
and all energy used are subject to the same standards. These
are not insignificant and it is to be hoped that greater focus
on climate change might add to greater scrutiny of
sustainability and environmental good practice that
compares favourably against imported products from less
highly controlled regions.
Our manufacturing bases are Radcliffe in Manchester and
Thornaby on Teesside. Neither of these locations are at high
risk for flooding and both are near to, or part of, significant
main roads and infrastructure. At this time and in the
medium term we see low risk of anything other than short
term disruption from climate related weather events. This
average increase may lead to increased severity in weather
events and more extremes (hotter, colder, rainier, and longer
drought). We have already experienced some of these
extremes over the last two years and arguably some actions
that we took during the pandemic also assist with our
preparedness (in regard to delays in raw material input
deliveries).
The risks of climate change are by their nature as yet
unknown. The board recognise the need for ongoing
assessment and ask all management to input into the
process. In looking for a key performance indicator or
indicators the nature of the subject makes this, as yet,
difficult and nebulous. However, the structure we have
adopted is for the senior finance team to consider the
financial effects in line with other risk assessments. The
review relates to all the group’s subsidiary activities but
outside the UK our activities are sales and distribution with
relevant warehouse facilities. Outside the UK no significant
risks were noted other than potential disruption by an
extreme weather event within the territory, or affecting a
particular warehouse and this would be assessed as
temporary and insured. Examples of extreme events that we
have faced in recent years (which may or may not be
climate-change related):
– extreme flooding in Queensland, Australia;
– extended drought and wildfires in Australia;
– earthquake damage in Christchurch, New Zealand.
risk without
In considering various scenarios, it is almost impossible to
assess
attaching probabilities but
notwithstanding our teams will meet and review perceived
risks. However, even though risk mitigation plans may be
difficult that does not mean that the risk of complacency is
high merely that retaining speed of reaction and flexibility is
important and no amount of “speculation” or boilerplate
can obviate this.
Strategy
Looking at the risks across several areas where we have
identified risks associated with climate change with
background detail and / or mitigation actions (where relevant).
Raw materials
Around 50% of our raw materials (by mass) are sourced from
the UK, from less 40 miles away and up to about 95% from
Europe. Delays in these shipments would seem not to be
affected by most weather events other than heavy snow
which can close local and main roads (dependent on severity)
but over a relatively short time period. As a site we carry over
500 tonnes in reserve at any one time so are well placed to
last circa a week without any deliveries. We also hold around
40-50 tonnes of bag stock which can be added into the
production lines manually for an extra day’s production.
16
Climate-related Financial Disclosures
continued
Most polymers and plasticisers are sourced from outside the
UK. Polymers are sourced from the large European
petrochemical producers (as do our European flooring
competitors) and the biggest negative impact we have seen
in recent years is when there are low water levels in the
main French / German rivers that are used heavily to
transport goods and materials. Chemicals and raw materials
are often transported between sites by barge and these
barges are unable to operate if the river is too low (or too
high) and/or loading limits are lowered when the rivers run
low. In addition, various parts of the Rhine have in the last
year become impassable (due to droughts / prolonged
periods without rain) which has resulted in delays and
inefficiencies from these suppliers. The same can be said
during prolonged rainfall (extreme events) that the rivers
become too high to be navigated. Climate change could
exacerbate the situation. In mitigation alternate supplies
from the USA are possible and there are several agents that
facilitate such alternatives.
Further to local delays as a result of extreme events we do
also see shipping delays due to rough seas (high winds /
extreme events) that can also lead to delays and ships being
unable to dock and/or miss ports / unloading.
Since the pandemic our manufacturing sites now hold
higher reserves of raw materials than before and have
increased storage capacity by 100 tonnes of bulk liquids. We
have also sought to increase the number of approved
suppliers from further afield and in 2022 purchased over
600 tonnes of US or Asian sourced PVC which assists during
any delays in Europe. Of course, these extreme weather
events can also affect US or Asian suppliers and we have
witnessed the impact of the extreme weather event ice
storm in Texas, which impacted at least one chemical
producer for which we were reliant for a speciality chemical.
In this case alternative sources were found.
Diversifying and increasing sources of approved materials
can reduce the direct impact to the site and on-going
production.
For all other (non-major) ingredients, on balance, many of
these are either sourced locally and/or we carry large
inventories to provide protection. We also, as one of the
largest accounts in the UK, enjoy excellent relationships
with our long-standing key material suppliers and interact
with other organisations operating in similar fields /
ingredients. A reflection of this being the problems we have
endured during the global pandemic when despite all the
issues raw materials sourcing was disrupted but supply
maintained.
Production facilities - extreme weather events
Over the last year extremes in weather have been
experienced in Manchester. In the summer of 2022 UK air
temperatures increased to over 42ºC. The UK Met Office
issued an Amber and Red warning for extreme heat. This
affected those that are most vulnerable to extreme heat and
needed some changes to working practices and daily
routines. The extreme heat event also led to a higher risk of
failure of heat sensitive systems and equipment. This is a
known issue and summer time heat waves are not
uncommon in the UK. During this event there were
increased electrical components failures and losses in
efficiency were experienced. Given our history as a
manufacturer we have well established spares policies to
react to these types of problem. In higher ambient
temperatures the line speeds of some of our production are
lessened. Provisions for all employees to mitigate the
impact from these events needed to be considered and
actions implemented.
During the winter of 2022 the site also observed the
opposite extreme temperatures with minus 12ºC being
recorded overnight. These extremes potentially lead to pipes
freezing, valves failing and issues with other engineering
equipment. In addition, it involves also keeping the site
operating safely with gritting and snow clearing and
providing employees with winter work wear. An increase in
such events may well affect output but are not expected to
preclude ongoing UK based manufacturing.
The site can at times also suffer from heavy sustained
periods of extreme high rainfall and with climate change
these kind of events may increase in frequency. This can lead
to localised flooding on local roads, flooding of production
halls from back-up from the drains or off the roofing areas.
We have the necessary equipment on site to remediate
these short term travails.
Stock shortage
Ultimately, to protect the on-going business and any such
impacts from extreme weather events, as a business, on the
whole, we carry large inventories of finished product stocks
at separate locations. So, in the unlikely event of impact
from a severe weather event on the manufacturing
capabilities these stock reserves enable the business to
continue to supply the market with goods. This was tested
in 2019 when one production line endured a mechanical
failure and was shut for 12 weeks. Obviously this is only a
mitigation to short term climate related events which we
consider appropriate.
17
PVC use and regulation
There is increasing activity by activists who protest against
anything plastic or derived from oil. As users of PVC, we are
of course arguably on that list but it is generally accepted as
an essential polymer in the building sector. PVC is a low
energy polymer and has many advantages.
We strive to underline the benefits of vinyl as a building
product and most especially as flooring. We have many
environmental accreditations, and present the benefits of
thermoplastic materials, recycling, and our stewardship
through the Recofloor take-back scheme. We have been
recycling PVC for over 60 years and it is a fact that vinyl
flooring is less energy intensive and more efficient to make
than many alternatives.
PVC brings important benefits to products and applications
in areas as diverse as construction, automobile
manufacturing, medical devices, electronics and electrical
equipment, packaging and fashion. Whether it is rigid or
flexible, PVC helps to make cars lighter and resistant against
corrosion, it enables windows to last longer, allows fresh
water delivery through the use of durable piping, and stores
blood to save and improve people’s lives.
Vinyl applications can perform effectively for much longer
than alternative materials. Their life-span can range from 30
to 100 years in the case of cables, pipes and window
In addition, PVC products need minimal
profiles.
maintenance, and hence very
limited additional
consumption of energy, raw materials and chemicals is
necessary to ensure their continued functionality. As a
result, PVC has the advantage of remaining in use for a long
period before it enters into the waste chain and we continue
to work with various agencies to divert such waste back into
the manufacturing process.
When it reaches its end of life, PVC can be recycled. In fact,
PVC has the longest history of recycling amongst plastics
and the most advanced level of mechanical recycling. We
have been using recycled PVC for over 50 years.
One major mitigation of these risks has been the focus on
healthcare around the world during and since the pandemic.
Vinyl flooring produced in long wide rolls and used as an
impervious layer in extremely long lasting and extremely
easy to disinfect. Demand may well increase but the use of
textile flooring in healthcare appears to be diminishing.
One risk that remains is that as legislators increase the
demands on business so that manufacturing within the UK
(and indeed Europe) becomes difficult or uneconomic. It
cannot be correct that all manufacturing moves out of the
UK as costs of energy and targeting of specific initiatives
makes importers more competitive. To mitigate this we sit
on trade bodies and work with industry initiatives to explain
our processes and present a fairer presentation of facts.
Reputational risk
As the general public and the customers become more
environmentally aware there are risks and opportunities. As
already noted the majority of our flooring products have
some oil derived content (PVC polymers). This can and has
been replaced by alternative polymer sources though there
is an added energy cost to such polymers that offset the
perceived benefit of non-fossil fuel sources. On a more basic
level the fossil-fuel source is derived as a by-product of the
oil cracking process so it will continue to be made as long as
petrol is produced.
Durability and reason for use are huge benefits. As an
impervious layer on a hospital floor that can be easily
cleaned / disinfected a vinyl floor is not easily replaced.
Already up to 85% of that vinyl flooring is from sustainable
and/or recycled product.
Our ongoing challenge to mitigate objections to vinyl
flooring is to present facts. Our sustainability credentials are
literally an open book with an annual sustainability report it
is not “green-washing” and is independently audited with
independently verified facts.
It should be noted that many climate related disasters lead
to an increase in demand for vinyl flooring. The use of
temporary buildings for the homeless and the rescue efforts
associated with weather based events has a long association
with the use of vinyl flooring.
Metrics and Targets
We have not as an entity set targets or key performance
indicators. Within our industry we are working with many
trade bodies and authorities to increase the take up of
recycled material. Our sustainability and environmental
considerations are wider than simple numbers such as
carbon neutrality. As a factory making flooring we inevitably
have a carbon footprint and as we grow this may increase
but unlike competitors outside Europe we are in a
community that looks to recycle waste, improve air quality
and reduce the impact of our actions. We strive to source all
our electricity from 100% renewables but this costs more.
Our most recent CP21 shows 100% all our UK electricity
usage in the year to March 2023 renewable and was either
wind or photovoltaic (not biomass). The decision was taken
to exclude biomass from our renewable purchases. Our
renewable energy being fully supported by REGO
certification (renewable energy of guaranteed origin).
18
Climate-related Financial Disclosures
continued
Over and above our energy costs we have multiple add on
costs levied by government for many varied projects (feed-
in tariff, renewable obligations, climate change levy or
Elexon).
Polyflor, is member of VinylPlus which was founded in
2011by the European Council of Vinyl Manufacturers
(ECVM), the European Stabiliser Producers Association
(ESPA), European Plasticisers and the European Plastics
Converters (EuPC) when the PVC industry renewed a
previous initiative called Vinyl 2010. It currently recycles c
800,000 tonnes of PVC annually.
In addition, as detailed within the SECR in the Report of the
Directors, we use the Greenhouse Gas (GHG) Protocol to
calculate our emissions and measure performance against
these. The UK has purchased 100% renewable electricity,
however, our carbon emission reporting is not based on our
purchases of electricity but rather the actual electricity that
we extract from the national grid. This is a location based
methodology rather than market related and underlines
that whilst we are using renewable the provision of
electricity is far from renewable. Furthermore, we do use
natural gas as energy supply, principally to our Teesside
facility, but are unable to move this to electricity because
the national grid infrastructure can supply no more
electricity to the industrial estate where our business is
based without upgrades to underground connections.
The group is committed to improvements in operational
energy efficiency with the efficiency measures that were
undertaken during the year explained within our SECR. The
group are undertaking the Energy Savings Opportunity
Scheme Phase 3 to identify further energy savings
opportunities, and better understand patterns of energy
consumption. The implementation of the findings of these
surveys should enable further energy savings to be made in
the future.
Sustainability and the environment
19
James Halstead plc is the parent company that trades and
manufactures under the Polyflor brand. Recently Polyflor
has published its 18th annual sustainability report, covering
the company’s environmental, social and governance (ESG)
performance for 2022. The data for this report has been
independently verified for BES 6001 v3.1 to provide our
stakeholders with complete transparency.
As a responsible manufacturer, Polyflor endeavours to
reduce and minimise the environmental impact across all
operations. Whilst reporting this and highlighting our
focused objectives and guiding policies, integrity is
important: Reporting remains impartial, and indications are
made regarding future improvements.
Sustainability at Polyflor is not the responsibility of just one
person: It is very much a team effort throughout the entire
company and involves listening to our customers and other
external driving forces. Sustainability is driven by our board
of directors across all areas of the business and includes our
environmental objectives and processes or quite simply,
encouraging employees to ‘do their bit’ at home, in the
community and in the workplace.
Polyflor has always been industry leading with regards to its
products and sustainability. We have used harvested
rainwater for production since 1915 and have been
recycling vinyl since we pioneered it in 1950. Polyflor was an
early adopter of BRE with products first assessed on a Life
Cycle Analysis in 2005 and we were the first commercial
flooring manufacturer to achieve the BRE’s standard for
Responsible Sourcing, BES 6001, for many of our products.
Other firsts as a flooring manufacturer included achieving
GreenTag’s LCARate certification and rolling out a recycling
initiative inclusive of site collections and distributor drop-off
sites to suit all customer and waste volume requirements.
its sustainability objectives. Our
Undoubtedly, recent years have presented significant
challenges to our businesses, however, Polyflor has
continued to perform well and has maintained a full focus
on
in
sustainability
initiatives has continued throughout,
including our Recofloor recycling scheme which is widely
regarded as one of the best examples of its type. Co-
founded by Polyflor in 2009, Recofloor continues to
significantly reduce the environmental impact of Polyflor
and its customers and is a scheme we are very proud of.
investment
In 2022, Polyflor made further progress across a broad range
of its objectives and was able to reduce carbon footprint
across a number of key areas of the business, not least
production and logistics. Of course, the business remains
committed to continual improvement with sustainability at
the heart of our operations and we look forward to
reporting further significant progress next year.
The strategic report was approved by the board of directors
and signed on behalf of the board.
D N Fletcher
Secretary
29 September 2023
20
Report of the Directors
The directors are pleased to present their report, together
with the audited accounts for the year ended 30 June 2023.
Substantial interests
Results and dividends
The group results for the year and the financial position at
30 June 2023 are shown in the consolidated income
statement on page 37 and the consolidated balance sheet
on page 39.
The directors are recommending a final dividend of 5.75p
(2022: 5.50p) per share on the ordinary share capital for
payment on 15 December 2023 to those shareholders on the
register at 17 November 2023. This final dividend together
with the interim dividend of 2.25p (2022: 2.25p) per share
paid on 9 June 2023 makes a total dividend of 8.00p
(2022: 7.75p) per share for the year.
Directors
The directors who held office during the year were as
follows:
J A Wild
M Halstead
G R Oliver
S D Hall
M J Halstead
R P Whiting
Mr M J Halstead and Mr R P Whiting are the directors
retiring by rotation, and offer themselves for re-election at
the annual general meeting.
The interests of the directors and their families in the share
capital of the company were as follows:
30 June 2023 30 June 2022
Beneficial As Trustee Beneficial As Trustee
J A Wild 300,600 23,950,720 300,600 23,950,720
M Halstead 26,505,604 22,246,584 26,505,604 22,250,344
G R Oliver 440,988 254,428 430,988 258,188
S D Hall 11,400 – 11,400 –
M J Halstead 1,376,234 – 1,376,234 –
R P Whiting – – – –
The directors consider that the board of directors include
key management for all areas of the business and that there
are no other key management which require disclosure.
Details of the directors’ options under the terms of the
executive share option scheme are set out in note 27.
As at 15 September 2023 the company had been notified of
the following interests which represent 3% or more of the
existing issued share capital:
Number %
Rulegale Nominees 72,865,342 17.5
John Halstead Settlement 70,894,436 17.0
Octopus Investment Nominees 27,447,999 6.6
Share capital
Full details of the company’s share capital and movements
during the year are set out in note 11 to the company’s
financial statements.
Special business at the annual general
meeting
Resolution 6 renews the directors’ authority to offer
ordinary shareholders the opportunity to take ordinary
shares in lieu of any cash dividends which may be payable
prior to the Annual General Meeting in 2024.
Resolution 7 authorises the directors to allot relevant
securities pursuant to section 551 of the Companies Act
2006 up to a maximum nominal amount of £6,945,901
representing approximately 33.33% of the total ordinary
share capital. The authority will expire at the next Annual
General Meeting of the company to be held in 2024 or six
months after the next accounting reference date of the
company (whichever is the earlier).
Except for the issue of shares to satisfy the exercise of share
options granted under the share schemes, the board has no
present intention of issuing any ordinary share capital of the
company. As at the date of this document, the company
holds no treasury shares.
Resolution 8 invites shareholders to renew the board’s
authority to issue shares for cash without first being
required to offer them pro rata to existing shareholders.
The proposed authority will terminate at the next Annual
General Meeting of the company to be held in 2024 or six
months after the next accounting reference date of the
company (whichever is earlier). The authority is limited to
equity securities up to an aggregate nominal amount of
5.0% of the company’s issued ordinary share capital. The
resolution also contains provisions to enable the directors to
21
employees allowing them to gain skills for use in their own
homes.
Promotion or opportunities in different departments are
often recruited from within the business and is preferred to
external candidates. The senior management and the
directors having, in the main, come from lower positions
within the business, including the executive directors of the
main company. Our recycling partnership presents to senior
management and staff on a regular basis to promote a better
understanding of achievements and goals to involve more of
our staff in sustainability.
We have a firm belief in equality and our main subsidiaries are
SA8000 accredited (an independent standard for decent
working environments). Also BS OHAS 18001 accredits our
occupational and safety management protocols.
All our UK employees are offered pension scheme benefits
with company contribution and the majority of UK
employees are shareholders in the company by virtue of a
long standing employee participation scheme. This is
currently being reviewed to make it even more relevant to the
group today. On the more personal level we operate a
company supported social club for employees, we have
outdoor seating, we offer bike sheds and there are shower
facilities at most sites. Also there are break out zones and
facilities to either buy or prepare food at all our sites. The
company looks favourably on providing time for employees
to undertake voluntary work.
(some with
representatives
Across our sites there are regular consultation meetings with
employee
trade union
representatives). Our employees are an important asset and
are kept abreast of group performance at least twice a year.
In terms of decisions directly affecting employees,
communication is by line managers in the first instance, but
the directors will discuss overall matters with designated
representatives. In regard to the principal decisions of the
business the board has considered the employees as a group
and their wellbeing as a whole.
Health and safety
The health and safety of the group’s employees, customers and
members of the general public who may be affected by the
group’s activities continue to be matters of primary concern. It
is therefore the group’s policy to manage its activities so far as
to avoid causing any unnecessary or unacceptable risk to the
health and safety of all those affected by its activities. In order
to ensure that the group’s high standards in this area are
maintained, a substantial programme of training and retraining
of employees took place throughout the year.
deal with fractional entitlements and other practical
difficulties which could arise in the event of a rights issue or
similar pre-emptive offer.
Resolution 9 seeks to renew the authority of shareholders to
allow the company to purchase its own shares in respect of
up to 10% of the issued capital at prices not exceeding 5%
above the average of the middle market quotations for the
five business days preceding the purchase. The directors
undertake that the authority would only be exercised if the
directors were satisfied that a purchase would result in an
increase in expected earnings per share and was in the best
interests of the company at that time. The directors may
choose to hold shares purchased under such authority in the
form of treasury shares (subject to a maximum of 10% of
the issued ordinary share capital at any one time).
Going concern
The directors have reviewed current performance and forecasts,
combined with capital
investment and expenditure
commitments, and a range of trading scenarios. The forecasts
cover the next two financial years. The group has no net
borrowings and owns the freeholds on many of its premises
(the most significant being four UK operating sites and two
sites in Germany).
After considering current trading, forward forecasts and
scenario planning the directors have formed a judgement, at
the time of approving the financial statements, that there is a
reasonable expectation that the group has adequate resources
to continue in operational existence and meet its liabilities as
they fall due for the foreseeable future. The directors have not
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant
doubt on the entity’s ability to continue as a going concern for
a period of at least one year from when the financial
statements are authorised for issue. For this reason, the
directors continue to adopt the going concern basis in preparing
the financial statements.
Employee involvement
Within the UK we have both 25 year clubs and 40 year clubs
for all employees. Many employees have worked their entire
career for the group, and retaining an experienced workforce
is important to our long term success. Our workforce
retention rate is very high. Recruitment is biased to the local
area, and we have a number of graduate recruits and offer
internships to support younger people looking to develop
their employment skills. We look to pass on knowledge and
we are involved in skills training to the flooring industry,
technical knowledge to the industry in general and
involvement in the Chartered Institute of Human Resource
Management’s “Skills Ahead Mentoring Project”. We have a
floor fitting school for the industry and this is accessible to
22
Report of the Directors
continued
Research and development
We
remain totally committed to the continuing
development of our processes and our products to both
satisfy the needs of our customers and ensure that we
remain at the forefront of our industry.
Environmental policy
A policy has been issued and implemented on safeguarding
against air, water, noise and land pollution. The management
team constantly reviews and
implements at every
opportunity the most effective use of materials and energy.
A number of control measures have been introduced and
these, combined with materials storage and handling
methods, together with training, form the basis of the
environmental programme. The policy is fully endorsed by
the directors and is under constant review to ensure full
compliance with the UK Environmental Protection Act 1990.
All employees, suppliers and contractors are made aware of
the environmental policy which is also freely available to
the general public and regulatory authorities.
Emissions and energy consumption
Scope 1 and 2 consumption and carbon dioxide emission
data has been calculated in line with the 2019 UK
Government environmental reporting guidance. Emissions
Factor Database 2021 version 1 has been used, utilising the
published kWh gross calorific volume and kgCO2e
emissions factors relevant for the reporting period.
Year ended 30 June
2022
Tonnes
of CO2e
2023
Tonnes
of CO2e
9,120
9,370
4,035
5,464
14,834
Scope 1 - direct emissions
(UK facilities and vehicles)
Scope 2 - indirect emissions
(UK purchased electricity)
Total Scope 1 and Scope 2 emissions
13,155
Intensity metric – total scope
1 & 2 emissions per metric tonne
produced
0.27
0.25
Total UK energy consumption
(kWh)
68,576,711 74,936,963
The group is committed to improvements in operational
energy efficiency. The energy efficiency measures that were
undertaken during the year were:
The ongoing installation of LED lighting to replace old
inefficient lighting
Thermographic surveys of electrical equipment to
identify abnormally high temperatures within our
electrical distribution systems. This equipment may be
operating incorrectly and consuming high amounts of
energy. The equipment may be
replaced or
performance optimised.
A database system that monitors energy consumption
and identifies areas of abnormal consumption for
measures to reduce consumption
A new boiler was installed to replace an old inefficient
boiler
Surveys of compressed air systems to identify and
repair leakages to reduce wasted energy
Installation of thermal insulation for heated mixing
equipment to reduce wasted heat and keep
equipment within its optimum performance range
The group are undertaking the Energy Savings Opportunity
Scheme Phase 3 to identify further energy savings
opportunities, and better understand patterns of energy
consumption. The implementation of the findings of these
surveys should enable further energy savings to be made in
the future.
Risk management
Information in relation to risk management and future
developments can be found in the financial director’s review
in the strategic report.
Directors’ responsibilities statement
The directors are responsible for preparing the annual report
and the financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have, as required by the AIM Rules of the London
Stock Exchange, elected to prepare the group financial
statements in accordance with UK adopted international
accounting standards. The directors have elected to prepare
the parent company financial statements in accordance
with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and
applicable law) including Financial Reporting Standard 101
Reduced Disclosure Framework. Under company law the
23
Auditor
A resolution to re-appoint BDO LLP as auditor will be
proposed at the forthcoming annual general meeting.
Directors’ statement as to the disclosure
of information to the auditor
All of the current directors have taken all the steps that they
ought to have taken to make themselves aware of any
information needed by the company’s auditor for the
purposes of their audit and to establish that the auditor is
aware of that information. The directors are not aware of any
relevant audit information of which the auditor is unaware.
Approved by the board of directors and signed on behalf of
the board.
D N Fletcher
Secretary
29 September 2023
directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the
state of affairs of the group and the company and of the
profit or loss of the group for that period.
The directors are also required to prepare financial
statements in accordance with the rules of the London
Stock Exchange for companies trading securities on the
Alternative Investment Market.
In preparing these financial statements the directors are
required to:
select suitable accounting policies and then apply
them consistently;
make judgements and accounting estimates that are
reasonable and prudent;
state whether the group financial statements have
been prepared in accordance with UK adopted
international accounting standards subject to any
material departures disclosed and explained in the
financial statements; and
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
group and company will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the company’s transactions, to disclose with reasonable
accuracy at any time the financial position of the company
and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the company and
the group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors are responsible for ensuring the annual report
and financial statements are made available on a website.
Financial statements are published on the company’s
website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of
financial statements which may vary from legislation in
other jurisdictions.
The directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the company's website. The directors’ responsibilities
also extend to the ongoing integrity of the financial
statements contained therein.
24
Board Report on Remuneration
the aggregate price payable on the exercise of all options or
rights to subscribe for ordinary shares granted to an
individual employee under the share option plan and under
all other discretionary schemes.
Pensions
The company operates defined benefit and defined
contribution pension schemes. The defined benefit pension
scheme was closed to future accrual on 31 January 2023.
The group chief executive and group finance director are
deferred members of the defined benefit scheme. Pension
entitlements are calculated on basic salary only. All
members of the schemes are required to contribute a
percentage of their pensionable earnings.
Other benefits within the schemes are death in service lump
sums, spouse’s and dependant’s pensions following death in
service of the member and ill health early retirement when
the appropriate circumstances arise.
Service agreements
The chairman and the group chief executive do not have
service agreements. The group finance director has a service
agreement which terminates within or is terminable by the
company and the executive on not more than one year’s
notice. The remuneration committee has taken the view
that notice periods of one year are reasonable and in the
interests of both the company and its executive directors
having regard to prevailing market conditions and current
practice. Mr S D Hall, Mr M J Halstead and Mr R P Whiting
each has a service contract for an initial term of two years
from the date of his appointment, which can be terminated
by either party by one month’s written notice.
S D Hall
Chairman of the Remuneration Committee
29 September 2023
Remuneration committee
The remuneration committee comprises the non-executive
directors, with Mr S D Hall, as chairman. The committee
meets at least once a year, although usually more
frequently, to determine the remuneration packages of the
executive directors of the group.
The remuneration policy for the non-executive directors is
determined by the board as a whole by reference to market
rates. They do not participate in the group bonus scheme,
pension scheme or share option scheme. No director can
vote in regard to his own remuneration.
Remuneration policy
The remuneration policy is to provide terms of employment
such that the recruitment, motivation and retention of high
calibre personnel is achieved and maintained to the mutual
benefit of shareholders and employees. The committee is
assisted from time to time by data supplied by independent
professional remuneration consultants as to comparable
companies, although identical circumstances are rarely
found.
Basic salary and bonus payments
The directors’ salaries and fees for the year are disclosed in
note 14. Annual bonus schemes are in place which reward
the executive directors on achieving performance
objectives. Performance is determined by index-linked profit
improvements through a trend of earnings per share growth.
UK based executives are eligible members of the employee
share scheme. Performance bonuses of £500,000 to each of
the group chief executive and group finance director were
paid during the year. These related to the 2022 financial
year.
Share option schemes
The remuneration committee believes that share option
plans are an important long term incentive to executive
directors and other senior employees. They are intended to
link the exercise of the option to a sustained and significant
improvement in the underlying financial performance of the
group.
The share option plan is reviewed by the remuneration
committee and is open to executive directors and selected
employees of the group. The option price per ordinary share
will not be less than the market value on the day of grant. A
limit of four times earnings has been placed on the value of
25
Corporate Governance
Chairman’s introduction to
governance
The board
The role of the board is summarised as follows:
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. The Financial Reporting
Council and the Quoted Company Alliance have both issued
guidance on governance and having assessed these codes
we have aligned our approach to the latter. In many ways
this is a continuing process but in the following paragraphs
we outline how we effect this code and I trust our
shareholders will take the time to review our comments.
It is my belief that good governance is accountability to
shareholders as a whole over time rather than being swayed
by current short term objectives of individual holders. For
many companies some shareholders are transient and focus
short term, looking for ambitious acquisitions or risky
strategies and yet quick to exit at the first sign of problems.
Management need to be focused on the medium to long
term goal as much as current issues.
Anthony Wild
Chairman
29 September 2023
Directors and committees
The company is controlled by the board of directors. The
board consists of a non-executive chairman, two executive
directors, a senior independent director and two non-
executive directors.
The board has two sub committees: a remuneration
committee and an audit committee.
The directors are named below along with their membership
of board committees.
Director
Role
Mr Anthony Wild
Mr Mark Halstead
Mr Gordon Oliver
Mr Steve Hall
Non-executive
Chairman
Chief
Executive
Finance
Director
Senior
Independent
Director
Mr Michael Halstead Non-executive
Mr Russell Whiting
Director
Non-executive
Director
Remuneration
Audit
Committee
Committee
X
X
X
X
X
X
X
X
To establish and maintain the group’s vision, mission
and values
Decide on the current and future strategy to ensure
the group’s longevity
To delegate to management the implementation of
policies, strategies and business plans while ensuring
the framework of internal controls is effective
Account to shareholders and stakeholders to promote
their interests and the goodwill to the group
The board comprises two executive directors and four non-
executive directors. The roles of chairman and chief
executive are separated.
Directors
Mr Anthony Wild – non-executive Chairman
Mr Wild was appointed to the board as senior independent
director in 2001 and chairman in 2017. He is a Chartered
Accountant and was senior partner in a local firm for many
years offering management consultancy services. He brings a
long and in depth knowledge of James Halstead plc, its
heritage and strategy over many years along with business
and commercial knowledge obtained in a career of business
advice. A key responsibility of the chairman is to lead the
board effectively and to oversee the adoption, delivery and
communication of the company’s corporate governance
model. The chairman as a non-executive director has
adequate separation from the day-to-day business to be able
to have an independent view. The chairman ensures that the
board receives accurate, timely and clear information and
there should be good information flows within the board and
its committees as well as between the NEDs and senior
management.
Mr Mark Halstead – Chief Executive
Mr Halstead has over 30 years’ experience in the group
holding senior management positions within Polyflor prior
to his appointment as group chief executive in 2002. Having
gained his grounding in many aspects of the group’s flooring
activities Mr Halstead focused on exports and founded our
operations in Europe. He brings unparalleled knowledge of
the group’s activities, the products and positioning in
markets and experience to allow for the assessment of
future opportunities for the group both in commercial terms
and product related. Mr Halstead is tasked with the delivery
of the business model agreed within the strategy set by the
board.
26
Corporate Governance
continued
Mr Gordon Oliver – Finance Director
Mr Russell Whiting – non-executive director
Mr Oliver is a Chartered Accountant. He trained with KPMG
and held a number of financial positions in industry prior to
joining James Halstead in 1987 as group financial controller.
He was instrumental in the disposal of non-core businesses
in the UK and overseas and became finance director of the
group
in 1999. He brings knowledge of financial
management and control, corporate governance and
business acumen to the business as well as development of
future strategy arising from a long period as a member of
the board. During his time with the company Mr Oliver’s
standing has been recognised by several awards from his
peers and the financial press. Mr Oliver is tasked with
working closely with the chief executive to progress the
business and to have regard to mitigation of risk. In addition
a key role is integrity of the financial information and
communicating to the board the financial implications of
areas of subjective judgement.
Mr Steve Hall – Senior independent director
Mr Hall was appointed to the board in 2012 as a non-
executive director. He has 21 years’ experience as a director
of corporate banking for the Royal Bank of Scotland where
he was responsible for corporate SMEs and quoted clients.
For several years he has acted as a consultant outside of
banking and is a non-executive director to a large retail
chemist chain. He brings with him this banking experience
as well as broad experience of mergers, acquisitions and
disposals and the financing thereof. One of the key
responsibilities of the senior independent director is leading
the performance evaluation of the chairman, or the search
for a new chairman. As senior independent director, Mr Hall
is an alternative route of access for shareholders and other
directors who have a concern that cannot be raised through
the normal channels of the chair or the executive directors.
Mr Hall is chairman of the remuneration and the audit
committees.
Mr Michael Halstead – non-executive director
Mr Halstead was appointed to the board in 2017. He has
many years’ experience in the advertising industry having
been an account director for Saatchi and Saatchi and more
recently running his own company HH&S Group Limited.
He brings general business acumen to the board along with
specifics relating to marketing and public relations arising
from his background. Mr Halstead provides oversight and
scrutiny of the performance of the executive directors,
whilst both constructively challenging and inspiring them,
thereby ensuring the business develops, communicates and
executes the agreed strategy and operates with reference to
the risk management framework. Mr Halstead is in the 4th
generation after the founder and has never worked within
the business but is passionate to preserve the principles of
the company and to contribute to its continued success.
Mr Whiting was appointed to the board in 2017. He is a
local businessman and is director of a company involved in
leasing of assets, Associated Credits Holdings Ltd. As well as
general business acumen he brings specific understanding of
business and asset financing to a broad range of commercial
enterprises. He has known the group for a number of years
through his business. Mr Whiting possesses the critical skills
that are relevant to modern companies, which includes both
technical experience and the ability to positively challenge
and to listen in equal measure.
Attendance at the six board meetings during the year was as
follows:
Possible Actual
J A Wild 6 6
M Halstead 6 6
G R Oliver 6 6
S D Hall 6 6
M J Halstead 6 6
R P Whiting 6 6
Senior management team
Mr David Drillingcourt – Corporate development director
Mr Drillingcourt is a Chartered Accountant and trained with
KPMG before joining the company in 1996 as group
accountant. He served as finance director at two of the
company’s subsidiaries, Phoenix Distribution (NW) Limited
(1999-2005) and Polyflor Limited (2005 – 2013). He served
as company secretary (2013 – 2021). He was appointed
corporate development director in 2019. Working closely
with the board and subsidiary directors, the role is designed
to help support the future growth of the business across the
globe.
Internal control
The board has ultimate responsibility for the system of
internal control operating throughout the group and for
reviewing its effectiveness. Internal control systems in any
group are designed to meet the particular needs of that
group and the risks to which it is exposed. No system of
internal control can provide absolute assurance against
material misstatement or loss. The group’s system is
designed to manage rather than eliminate the risk of failure
in order to achieve business objectives and to provide the
board with reasonable assurance that potential problems
will normally be prevented or will be detected in a manner
which will enable appropriate action to be taken.
27
The key procedures which the directors have established
with a view to providing effective internal control are as
follows:
the audit committee keeps under review the
effectiveness of the system of internal control and
reports its conclusions to the full board;
the group directors are responsible for establishing,
maintaining and reviewing the group’s system of
internal control and meet regularly to consider group
financial performance, business development and
management issues, and to review these against
predetermined objectives;
the group board establishes corporate strategy and
business objectives. Management of subsidiary
companies integrate these objectives into their
business strategies for presentation to the group
board with supporting financial objectives;
subsidiary company budgets, containing financial and
operating targets, capital expenditure proposals and
performance/profitability indicators, are presented to
and reviewed by the group executive directors. The
consolidated group budget is approved by the group
board;
there is an ongoing process for identifying, evaluating
and managing the significant risks faced by the group.
These risks are appraised and evaluated by
responsible executives and endorsed by subsidiary
and group management. This process has been in
place throughout the year and up to the date of
approval of the annual accounts;
as part of the regular monitoring and review, the
group executive directors hold regular meetings with
the management of the subsidiary companies at
which reports covering such areas as forecasts,
business development, strategic planning, risk
exposure and performance against budget, are
presented and discussed. These are then reported to
the group board, on a quarterly basis;
the group board reviews and considers any major
problem which may have occurred and assesses how
the risks have changed in the period under review;
there is a group-wide policy governing appraisal and
approval of capital expenditure and asset disposals;
to underpin the effectiveness of controls, it is the
group’s policy to recruit management and staff of
high calibre, integrity and appropriate disciplines.
High standards of integrity, business ethics and
compliance with laws, regulations and internal
policies are demanded from staff at all levels;
the board also conducts an assessment of the
effectiveness of the
internal control system.
This assessment consists of a review of all the
significant areas of internal control, including risk
assessment, the control environment, control
activities, information and communication, and
monitoring.
The Quoted Company Alliance Code
(“QCA code”)
The directors recognise the importance of good corporate
governance and have chosen to apply the QCA code as their
framework to do so. The QCA code was developed by the
Quoted Company Alliance in consultation with a number of
institutional small company investors as an alternative code
applicable to AIM companies. The QCA code was published
in April 2018.
The QCA code sets out ten principles which seek to ensure
that the overall framework for corporate governance is
robust. The directors believe that this framework is
appropriate to the size and operations of the business and
each of the principles is commented on below. Many of the
disclosures relevant to the code are already made in our
annual report and accounts.
The chairman has the responsibility for corporate
governance and has taken a lead on this matter. The
executive team are directed with day to day management
and are accountable to the rest of the board. The chairman
expects and demands open discussion of issues facing the
business and in the application of this code has sought input
from the auditors, the company’s advisors and a review by
the company lawyer. The board is tasked with continuing
the success of the business over time and through
successive generations of management and the importance
of corporate governance is to oversee the division of
ownership and stewardship. The executive directors have the
day to day responsibility of stewardship and the chairman
and non-executives monitor and evaluate this on behalf of
the owners.
James Halstead plc has been listed on the London stock
exchange for over 70 years and continues to look for growth
in sales and profit to continue its strong record of reward to
shareholders in the form of dividend. Whilst this is a primary
role, the board is proud of its reputation within its industry
and the financial markets and corporate control is central to
the ethos.
28
Corporate Governance
continued
The disclosures below were last reviewed and approved by
the board on 29 September 2023.
QCA Principles and James Halstead
plc’s approach
1. Establish a strategy and business model which promote
long-term value for shareholders
James Halstead plc’s strategy is explained fully within our
Strategic Report section in our Report and Accounts each
financial year.
Our strategy is focussed on stable profitable growth from
building the goodwill in our brands and products leading to
increasing dividends over time.
Key risks and mitigating factors to our business are also
detailed annually in our Report and Accounts.
2. Seek to understand and meet shareholder needs and
expectations
The board has a track record of increasing dividends over
many years. Where the business has generated funds in
excess of its medium-term requirements and no specific
investment requirements exist the board has also
encouraged the payment of special dividends over the years.
Members of the board talk regularly to both institutional
and private investors and the financial press to ensure that
company’s strategy and objectives are communicated. The
group has a large number of shareholders and regular broker
updates are published.
The company regularly hosts institution and broker site
visits to update on progress and the executive directors are
in ongoing contact with the nominated advisor who
communicates more closely with the market.
Shareholders can contact the company secretary with
questions and may be referred to the directors.
In addition, the AGM acts as a forum for all shareholders to
meet with the board and raise any questions they may have.
3. Take into account wider stakeholder and social
responsibilities and their implications for long-term
success.
The board recognises that the group has responsibilities to
many stakeholders other than its shareholders. This includes
employees, customers, suppliers and the wider societies in
which we operate.
In terms of communications with stakeholders this is done
in ways appropriate to the stakeholder and may take the
form of formal announcements, individual meetings (for
example appraisals with employees) and negotiations with
other stakeholders.
The environmental impact of our manufacturing and our
output is of significant importance to our medium term
prospects not only to demonstrate our commitment to the
community at large but also to customers who increasingly,
and rightly, look for suppliers with strong ethical values.
As a member of the communities in which we operate the
board takes seriously the impact the business has, positively
in terms of being an employer and seeking continuous
impact on the
improvement with respect to the
environment and communities. This is illustrated by our
annual “Sustainability Report” copies of which are available
on www.polyflor.com which outlines the impact of our
manufacturing operations on the wider environment and
local
improvements over time. Feedback from the
community is received directly to the head office. This
report has been published for nearly two decades and is now
an annual report.
We understand continuous development of our products
also contributes to our responsibilities as well as the success
of the business. This is illustrated, for example, by
development of “dementia friendly” flooring in recent years.
The operating businesses encourage feedback from
customers through their relationship managers in the
business and customer service teams.
4. Embed effective risk management, considering both
opportunities and threats, throughout the organisation.
Risk management is reported annually in our Report and
Accounts along with how those risks are mitigated and how
they change over time.
The board meets six times a year during which business and
other risks are assessed. Key subsidiaries have their own
management boards which meet regularly and assess the
risks relevant to that specific business and relevant
responses. These are communicated to the main board
either by direct representation or via group management
structures that are in place. There are also formal and
informal communication routes that allow for risks to be
communicated to board members in a timely manner from
all operational entities.
5. Maintain the board as a well-functioning, balanced
team led by the chair.
Anthony Wild, the non-executive chairman is responsible for
the running of the board and Mark Halstead as chief
executive has responsibility for implementation of the
board’s direction.
29
A monthly report is provided to the board of the financial and
operational performance of the group. Information is
provided in advance of meetings.
The board is responsible for all strategic decisions and the
overall governance and culture of the group.
All the directors have access to the services and advice of the
company secretary and are able to take independent
professional advice to enable them to do so. This may be done
at the group’s expense.
The board has a majority of non-executive directors and
consider that they bring independent thought and judgement
to bear as well as business experience out-with the group.
The board has sub committees with specific remits,
specifically remuneration and audit committees and detail of
the number of meetings and attendance by directors is noted
in the Annual Report.
6. Ensure that between them the directors have the
necessary up-to-date experience, skills and capabilities
The board evaluates consistently those skills that are
required and whether they are adequately provided for. In
doing so and where relevant it will consider guidance available
on appointment and training of board members. The Company
Secretary has the responsibility to make the board aware of
legal changes and will advise on the company’s approach. For
example the recent GDPR requirements and previously the
Market Abuse Regulations (MAR).
The company secretary supports the chairman in addressing
the training and development needs of the directors. In the
case of new directors there is an induction process to ensure
they become aware of the operations of the group.
The directors are aware of their individual responsibility to
undertake appropriate continuing development.
7. Evaluate board performance based on clear and relevant
objectives seeing continuous improvement.
The board will take account of the Financial Reporting
Council’s Guidance on Board Effectiveness as it evaluates on
a regular basis its performance. The remuneration committee
meets formally and is tasked with not only the remuneration
of the executive directors but also evaluation of performance.
To this end the board is circulated with press comment and
market feedback on the business. Market share data and peer
group analysis is available.
In terms of the financial performance the auditors meet the
audit committee (comprising the non-executives) bi-
annually and beyond the audit report do comment on the
systems, procedures and efficacy of the management. The
nominated advisor has access to the Chairman and meets
the non-executives annually.
A rigorous recruitment process is undertaken for new
directors prior to their proposal and election. In terms of re-
election their performance is reconsidered prior to them
being proposed to ensure they remain effective in their role
and that they retain their independence.
Re-election is considered by the shareholders at the AGM at
which shareholders have the opportunity as a body to
approve or otherwise board membership. Succession
planning for the board and as importantly the key
executives around the world who manage our businesses is
an ongoing topic of discussion.
8. Promote a corporate culture that is based on ethical
values and behaviours.
The board expects the highest ethical standards of its
members and management across the group.
The group has documented procedures with respect to its
responsibilities regarding ethical behaviour, specifically
bribery and corrupt practices and modern slavery and these
are applicable across its operations including supply and
customer chains.
The board also takes seriously its responsibilities towards
sustainability of its operations and the impact of our
operations on the environment. This is documented and
reported on annually in Polyflor’s Sustainability Report.
As an employer and member of many communities
throughout the world, the board consider that strong ethical
values to be a good member of these communities is a mind-
set not one underpinned by rules and procedures. Ensuring,
via recruitment processes and cultural values that this
cascades through the business is critical to ensuring the
group is a “good member of the community”. All directors of
the group’s companies are expected to comply and are given
a manual on procedures and expectations. This covers
authority levels and gives guidance on appropriate behaviour.
Ultimately service contracts underpin this by indicating
behaviour that can be deemed a breach of contract and the
directors are clear about their statutory duties as formally
set out in sections 171 – 177 of the Companies Act 2006.
30
Corporate Governance
continued
9. Maintain governance structures and processes that are
fit for purpose and support good decision making by the
board
10. Communicate how the company is governed and is
performing by maintaining a dialogue with shareholders
and other relevant stakeholders
The AGM is a key forum for communications with any
shareholders who wish to attend, and the directors are
available here to listen to views expressed both formally and
informally. This combined with the normal cycle of
announcements is the key method of communication. The
outcome of resolutions put to the AGM are published and
are available on the company website.
In terms of publication of results, the company uses the
Stock Exchange regulatory news service (RNS) to advise the
market (i.e. shareholders and others) of performance and
significant matters. As a group we do not find social media
(Facebook, twitter etc.) an appropriate medium for
dissemination of news due to the “sound-bite” nature of the
medium. Brokers are updated and circulate notes regularly.
The group has, where appropriate, communications with
major institutional and private shareholders and encourages
dialogue.
Corporate governance disclosures are assessed at least
annually, including whether the structures and processes are
fit for purpose.
The board retains ultimate accountability for maintaining
good governance. The executive directors are responsible for
the day-to-day operational management of the group and
the non-executive directors are responsible for bringing
their independent and objective judgement to board
discussions and decisions. The roles of chairman and chief
executive are split in accordance with best practice. The
board are responsible for the implementation of strategy,
the achievement of performance and ensuring the
framework of internal controls is effective. The board has
delegated specific responsibilities to the audit and
remuneration committees.
The audit committee assists the board by ensuring that the
financial performance of the group is properly reported. It
oversees and reviews the internal control processes, its
relationship with external auditors and the process for
ensuring compliance with laws, regulations and corporate
governance.
The remuneration committee is responsible for establishing
a formal and transparent procedure for developing policy on
remuneration and to set the remuneration packages of
individual directors, including, where appropriate, bonuses,
incentive payments and share options.
Due the nature and size of the company, the directors have
determined that a nomination committee is not necessary
and that issues concerning the nomination of directors will
be dealt with by the board directly.
31
Independent Auditor’s Report to the Members of
James Halstead plc
Opinion on the financial statements
In our opinion:
Independence
the financial statements give a true and fair view of
the state of the Group’s and of the Parent Company’s
affairs as at 30 June 2023 and of the Group’s profit
for the year then ended;
the Group financial statements have been properly
prepared
in accordance with UK adopted
international accounting standards;
the Parent Company financial statements have been
in accordance with United
properly prepared
Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements of James
Halstead plc (the ‘Parent Company’) and its subsidiaries (the
‘Group’) for the year ended 30 June 2023 which comprise
the Consolidated Income Statement, the Consolidated
Statement of Comprehensive Income, the Consolidated and
the Parent Company Balance Sheets, the Consolidated and
Parent Company Statement of Changes in Equity, the
Consolidated Cash Flow Statement and notes to the
consolidated and Parent Company financial statements,
including a summary of significant accounting policies.
The financial reporting framework that has been applied in
the preparation of the Group financial statements is
applicable law and UK adopted international accounting
standards. The financial reporting framework that has been
applied in the preparation of the Parent Company financial
statements
law and United Kingdom
including Financial Reporting
Accounting Standards,
Standard 101 Reduced Disclosure Framework (United
Kingdom Generally Accepted Accounting Practice).
is applicable
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the
financial statements section of our report. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
We remain independent of the Group and the Parent
Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed
entities, and we have
fulfilled our other ethical
responsibilities in accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the Directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group
and the Parent Company’s ability to continue to adopt the
going concern basis of accounting included:
Examining the Directors’ business plan covering the
period through to October 2024. We examined the
cash flow forecasts for key judgements, verifying to
source data as appropriate, as well as considering
downside sensitivities to these;
Testing their mechanical accuracy and assessing
historical forecast accuracy;
the
reasonableness of key
We considered
assumptions and mitigating actions used by the
Directors in their stress test scenarios based on our
knowledge of the business; and
Assessing the adequacy against the accounting
standards of the disclosures within the financial
statements relating to the Directors’ assessment of
the going concern basis of preparation.
Based on the work we have performed, we have not
identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast
significant doubt on the Group and the Parent Company’s
ability to continue as a going concern for a period of at least
twelve months from when the financial statements are
authorised for issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
32
Independent Auditor’s Report to the Members of
James Halstead plc continued
Overview
Coverage
88% (2022: 99%) of Group profit before tax
79% (2022: 90%) of Group revenue
81% (2022: 95%) of Group total assets
Key audit matters
Inventory provisioning
Pension scheme assumptions
Materiality
2023
(cid:0)(cid:0)
(cid:0)(cid:0)
2022
(cid:0)(cid:0)
(cid:0)(cid:0)
Group financial statements as a whole: £2.6m (2022:
£2.6m) based on 5% of profit before tax (2022: 5% of profit
before tax).
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding
of the Group and its environment, including the Group’s
system of internal control, and assessing the risks of
material misstatement in the financial statements. We also
addressed the risk of management override of internal
controls, including assessing whether there was evidence of
bias by the Directors that may have represented a risk of
material misstatement.
Our Group audit scope focused on the Group's principal
operating locations being the United Kingdom and Germany.
The operations in the United Kingdom, which were deemed
to be significant components, were subject to a full scope
audit given the statutory audit requirements whilst the
significant component in Germany was also subject to a full
scope audit to component materiality. The German
component was audited by a non-BDO member firm. The
remaining components of the Group were considered non-
significant and these components were principally subject to
analytical review procedures by the Group engagement
team. In the case of the Australian component, although
non-significant, it was subject to a full scope audit to
component materiality by a BDO member firm.
Our involvement with component auditors
For the work performed by component auditors, we
determined the level of involvement needed in order to be
able to conclude whether sufficient appropriate audit
evidence has been obtained as a basis for our opinion on the
Group financial statements as a whole. Our involvement
with component auditors included the following:
The German operations form a significant part of Group
turnover and profitability. As part of our audit strategy, the
Responsible Individual and senior members of the Group
audit team were involved during the planning and risk
assessment process of the German component in addition
to during the completion of detailed audit procedures. We
attended key meetings with component management and
auditors, and reviewed component auditor work papers.
In respect of the Australian operations, the Responsible
Individual and senior members of the Group audit team
were involved at all stages of the audit process, directing the
planning and risk assessment work performed through calls
with the component auditors and local management.
Reviews of the component auditor working papers were also
completed.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified, including
those which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit, and
directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Key audit matter – Inventory provisioning
As described in Note 2 (accounting policies) and Note 19
(inventories), the Group carries inventory at the lower of
cost and net realisable value.
Provision is made against slow moving, obsolete and
damaged inventories.
judgement
This area represented a key audit matter as significant
is required to assess the
management
appropriate level of provisioning for items which may be
sold below cost or written off as a result of a reduction in
consumer demand, particularly in light of changing
consumer tastes and new products being developed. Such
judgements include management's expectations for future
sales.
33
How the scope of our audit addressed the key
audit matter
How the scope of our audit addressed the key
audit matter
concerning management's
We obtained evidence
assumptions applied in calculating the value of inventory
provisions by:
Challenging the Group's inventory provisioning policy
with specific consideration given to slow moving or
obsolete stock lines. This involved a review of
production and sales records for a sample of products
to ascertain when they were last made or sold and
whether they had been appropriately provided for;
Assessing the appropriateness of the percentages
applied within the provision by reviewing historic
sales and the ageing of stock; and
Testing of a sample of inventory to check it is held at
the lower of cost and net realisable value, through
comparison to invoices for cost and sales prices.
We also reviewed the basis of stock provisioning applied by
all Group entities and considered whether these were being
applied consistently and reflected the nature of the stock
held in each location.
Key observation: Our work did not highlight evidence that
the method of inventory provision was inappropriate.
Key audit matter – Pension scheme
assumptions
As described in Note 2 (accounting policies) and Note 26
(retirement benefit obligations), the Group has a defined
benefit pension plan in the UK.
At 30 June 2023, the Group recorded a net retirement
obligation of £1.4m (2022: £6.1m benefit), comprising
scheme assets of £56.1m (2022: £69.2m) and scheme
liabilities of £57.6m (2022: £63.1m).
The pension valuation is dependent on market conditions
and key assumptions made by management, in particular
relating to investment markets, discount rate, inflation
expectations and life expectancy assumptions.
This area and the related disclosures represented a key audit
matter given that the setting of these assumptions is
complex and
requires the exercise of significant
management judgement with the support of third party
actuaries.
In testing the pension valuation, with the help of external
pension actuarial experts, we reviewed the key actuarial
assumptions used, both financial and demographic, and
considered the appropriateness of the methodology utilised
to derive these assumptions.
We benchmarked the scheme assumptions against other
schemes of a similar size and profile. Specifically, we
challenged the discount rate, inflation and mortality
assumptions applied in the calculation by using pension
experts to benchmark the assumptions applied against
comparable
the
appropriateness of the assumptions in the context of the
Group’s own position. We have also performed sensitivity
analysis on the assumptions determined by the Directors.
third party data and assessed
We have tested the accuracy of the scheme asset
statements by reference to service organisation control
reports to gain assurance over the robustness of the
provider’s internal controls. Further, we have sample tested
assets to third party sources in order to confirm ownership
and valuation.
Furthermore, we have assessed the disclosure of the net
liability and the related assumptions and
pension
sensitivities in the financial statements against the relevant
accounting framework.
Key observation: We have not identified any evidence to
suggest that the methodology and assumptions applied in
relation to determining the pension valuation are not within
an acceptable range. Furthermore, the disclosures made are
in accordance with the relevant accounting framework.
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the
magnitude by which misstatements, including omissions,
could influence the economic decisions of reasonable users
that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the
probability that any misstatements exceed materiality, we
use a lower materiality level, performance materiality, to
determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
34
Independent Auditor’s Report to the Members of
James Halstead plc continued
Based on our professional judgement, we determined
materiality for the financial statements as a whole and
performance materiality as follows:
Group financial statements
2023
£2.60m
Materiality
Basis for determining
materiality
Performance materiality £1.69m
5% of profit before tax
2022
£2.60m
5% of profit before tax
£1.69m
Parent company financial statements
Materiality
Basis for determining
materiality
2023
£1.82m
Based on 70% of.
group materiality
Performance materiality £1.18m
2022
£1.61m
Based on 70% of.
group materiality
but restricted to
5% of profit before tax.
£1.05m
Rationale for the benchmark applied – Pre-tax profit is
determined to be a stable basis of assessing business
performance and is considered to be the most significant
determinant of performance used by shareholders.
Rationale for the percentage applied for performance
materiality – 65% of the above materiality level. This is
considered the appropriate basis given the multiple
significant components across two geographic regions
(United Kingdom and Germany), the level of misstatements
in the past and our overall risk assessment.
Component materiality
For the purposes of our Group audit opinion, we set
materiality for each significant component of the Group,
apart from the Parent Company whose materiality is set out
above, based on a percentage of between 50% and 75%
(2022: 20% and 70%) of Group materiality dependent on
the size and our assessment of the risk of material
misstatement of that component. Component materiality
ranged from £1.30m to £1.95m (2022: £0.52m to £1.82m).
In the audit of each component, we further applied
performance materiality levels of 65% (2022: 65%) of the
component materiality to our testing to ensure that the risk
of errors exceeding component materiality was
appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report
to them all individual audit differences in excess of £52,000
(2022: £52,000). We also agreed to report differences below
this threshold that, in our view, warranted reporting on
qualitative grounds.
Other information
The Directors are responsible for the other information. The
other information comprises the information included in
the Report and Accounts 2023 other than the financial
statements and our auditor’s report thereon. Our opinion
on the financial statements does not cover the other
information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read
the other information and, in doing so, consider whether the
other information is materially inconsistent with the
financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to
determine whether this gives rise to a material
misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that
there is a material misstatement of this other information,
we are required to report that fact.
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work
performed during the course of the audit, we are required by
the Companies Act 2006 and ISAs (UK) to report on certain
opinions and matters as described below.
Strategic report and Director’s report
In our opinion, based on the work undertaken in the course
of the audit:
the information given in the Strategic report and the
Directors’ report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
the Strategic report and the Directors’ report have
been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the
Group and Parent Company and its environment obtained
in the course of the audit, we have not identified material
misstatements in the Strategic report or the Directors’
report.
35
Matters on which we are required to report by
exception
Extent to which the audit was capable of detecting
irregularities, including fraud
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
adequate accounting records have not been kept by
the Parent Company, or returns adequate for our
audit have not been received from branches not
visited by us; or
the Parent Company financial statements are not in
agreement with the accounting records and returns;
or
certain disclosures of Directors’ remuneration
specified by law are not made; or
we have not received all the information and
explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the preparation
of the financial statements and for being satisfied that they
give a true and fair view, and for such internal control as the
Directors determine is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or the Parent
Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit
of the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of non-
laws and regulations. We design
compliance with
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed
below:
Non-compliance with laws and regulations
Based on:
Our understanding of the Group and the industry in
which it operates;
Discussion with management and those charged with
governance;
Obtaining an understanding of the Group’s policies
and procedures regarding compliance with laws and
regulations;
we considered the significant laws and regulations to be the
international accounting standards, the UK Companies Act
2006, the QCA Code and Group-wide taxation laws.
The Group is also subject to laws and regulations where the
consequence of non-compliance could have a material
effect on the amount or disclosures in the financial
statements, for example through the imposition of fines or
litigations. We identified such laws and regulations to be
those that relate to the payment of employees; and industry
related such as compliance with health and safety
requirements.
Our procedures in respect of the above included:
Review of minutes of meeting of those charged with
governance for any instances of non-compliance with
laws and regulations;
Review of correspondence with regulatory and tax
authorities for any instances of non-compliance with
laws and regulations;
Review of financial statement disclosures and
agreeing to supporting documentation;
Involvement of tax specialists in the audit; and
Review of legal expenditure accounts to understand
the nature of expenditure incurred.
36
Independent Auditor’s Report to the Members of
James Halstead plc continued
Fraud
We assessed the susceptibility of the financial statements
to material misstatement, including fraud. Our risk
assessment procedures included:
A critical assessment of the consolidation to check
this had been prepared appropriately and
consideration of manual or late journals posted at
consolidation level to verify the accuracy and
appropriateness of these; and
Enquiry with management and those charged with
governance regarding any known or suspected
instances of fraud;
Obtaining an understanding of the Group’s policies
and procedures relating to:
Detecting and responding to the risks of fraud;
and
Internal controls established to mitigate risks
related to fraud.
Review of minutes of meeting of those charged with
governance for any known or suspected instances of
fraud;
Discussion amongst the engagement team as to how
and where fraud might occur in the financial
statements;
Enquiring of management concerning potential
litigations and claims;
Performing analytical procedures to identify any
unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud; and
Considering remuneration incentive schemes and
performance targets and the related financial
statement areas impacted by these.
Based on our risk assessment, we considered the areas most
susceptible to fraud to be inappropriate journal entries,
revenue recognition and management bias in accounting
estimates.
Our procedures in respect of the above included:
Testing a sample of journal entries throughout the
year, which met a defined risk criteria, by agreeing to
supporting documentation;
Involvement of forensic specialists in the audit to
assess the fraud risks that have been identified above
and discussed by the audit team and to challenge the
audit team as to whether all aspects were
appropriately considered;
Challenging assumptions and judgements made by
management in their significant accounting estimates,
in particular in relation to the Group’s defined benefit
pension scheme liabilities, stock provisions (as set out
in the key audit matters section above), accruals and
forecasts used within impairment models utilised to
assess goodwill impairment;
Testing a sample of revenue transactions around the
year end to supporting documentation (including
invoice and proof of delivery) for all significant
components to assess if the revenue had been
recorded in the correct period;
Agreement of the financial statement disclosures to
underlying supporting documentation.
We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement team
members, including component engagement teams, who
were all deemed to have appropriate competence and
capabilities and remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the
audit. For component engagement teams, we also reviewed
the result of their work performed in this regard.
Our audit procedures were designed to respond to risks of
in the financial statements,
material misstatement
recognising that the risk of not detecting a material
misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve
forgery,
deliberate concealment by,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations
is from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
for example,
Financial
A further description of our responsibilities is available on
the
at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
Reporting Council’s website
Use of our report
This report is made solely to the Parent Company’s
members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Parent Company’s
members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company
and the Parent Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Stuart Wood (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
Manchester, United Kingdom
29 September 2023
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127).
(cid:1)
(cid:1)
37
Consolidated Income Statement
for the year ended 30 June 2023
Note 2023 2022
£’000 £’000
Revenue 5 303,562 291,860
Cost of sales (188,099) (178,355)
Gross profit 115,463 113,505
Selling and distribution costs (53,338) (50,316)
Administration expenses (10,514) (10,931)
Operating profit 51,611 52,258
Finance income 9 748 42
Finance cost 10 (260) (237)
Profit before income tax 7 52,099 52,063
Income tax expense 11 (9,695) (11,735)
Profit for the year attributable to equity shareholders 42,404 40,328
Earnings per ordinary share of 5p
– basic 12 10.2p 9.7p
– diluted 12 10.2p 9.7p
All amounts relate to continuing operations.
Details of dividends paid and proposed are given in note 13.
38
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2023
Note 2023 2022
£’000 £’000
Profit for the year 42,404 40,328
Other comprehensive income net of tax:
Items that will not be reclassified subsequently
to the income statement:
Remeasurement of the net defined benefit liability 26 (7,237) 7,090
(7,237) 7,090
Items that could be reclassified subsequently
to the income statement if specific conditions are met:
Foreign currency translation differences (1,818) 926
Fair value movements on hedging instruments (135) (111)
(1,953) 815
Other comprehensive income for the year net of tax (9,190) 7,905
Total comprehensive income for the year 33,214 48,233
Attributable to:
Equity holders of the company 33,214 48,233
Items in the statement above are disclosed net of tax. The income tax relating to each component of other comprehensive income
is disclosed in note 11.
39
Consolidated Balance Sheet
as at 30 June 2023
Note 2023 2022
£’000 £’000
Non-current assets
Intangible assets 15 3,232 3,232
Property, plant and equipment 16 35,887 36,671
Right of use assets 17 7,164 5,634
Retirement benefit obligations 26 – 6,144
Deferred tax 18 114 234
46,397 51,915
Current assets
Inventories 19 87,440 112,279
Trade and other receivables 20 46,979 51,171
Derivative financial instruments 29 773 2,166
Current tax 699 –
Cash and cash equivalents 21 63,222 52,144
199,113 217,760
Total assets 245,510 269,675
Current liabilities
Trade and other payables 22 60,738 84,507
Derivative financial instruments 29 213 517
Current tax 422 2,097
Lease liabilities 23 2,696 2,166
64,069 89,287
Non-current liabilities
Retirement benefit obligations 26 1,460 –
Other payables 22 400 453
Lease liabilities 23 4,582 3,548
Preference shares 24 200 200
Deferred tax 18 585 2,929
7,227 7,130
Total liabilities 71,296 96,417
Net assets 174,214 173,258
Equity
Equity share capital 27 20,838 20,837
Equity share capital (B shares) 27 160 160
20,998 20,997
Share premium account 13 –
Currency translation reserve 4,094 5,912
Hedging reserve 806 941
Retained earnings 148,303 145,408
Total equity attributable to shareholders of the parent 174,214 173,258
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 September 2023.
M Halstead G R Oliver
Director Director
James Halstead plc Registration Number 140269
40
Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
Capital Currency
Share Share redemption translation Hedging Retained Total
capital premium reserve reserve reserve earnings equity
£'000 £'000 £'000 £'000 £’000 £’000 £'000
Balance at 30 June 2021 10,568 4,122 1,174 4,986 1,052 134,592 156,494
Profit for the year – – – – – 40,328 40,328
Remeasurement of the net defined
benefit liability – – – – – 7,090 7,090
Foreign currency translation
differences – – – 926 – – 926
Fair value movements on
hedging instruments – – – – (111) – (111)
Total comprehensive income for
the year – – – 926 (111) 47,418 48,233
Transactions with equity shareholders
Dividends – – – – – (32,298) (32,298)
Issue of share capital 11 812 – – – – 823
Bonus issue of share capital 10,418 (4,934) (1,174) – – (4,310) –
Share based payments – – – – – 6 6
Balance at 30 June 2022 20,997 – – 5,912 941 145,408 173,258
Profit for the year – – – – – 42,404 42,404
Remeasurement of the net defined
benefit liability – – – – – (7,237) (7,237)
Foreign currency translation
differences – – – (1,818) – – (1,818)
Fair value movements on
hedging instruments – – – – (135) – (135)
Total comprehensive income for
the year – – – (1,818) (135) 35,167 33,214
Transactions with equity shareholders
Dividends – – – – – (32,298) (32,298)
Issue of share capital 1 13 – – – – 14
Share based payments – – – – – 26 26
Balance at 30 June 2023 20,998 13 – 4,094 806 148,303 174,214
41
Consolidated Cash Flow Statement
for the year ended 30 June 2023
2023 2022
£’000 £’000
Profit for the year attributable to equity shareholders 42,404 40,328
Income tax expense 9,695 11,735
Profit before income tax 52,099 52,063
Finance cost 260 237
Finance income (748) (42)
Operating profit 51,611 52,258
Depreciation of property, plant and equipment 3,461 3,794
Depreciation of right of use assets 3,060 3,139
Profit on sale of property, plant and equipment (84) (198)
Defined benefit pension scheme service cost 178 500
Defined benefit pension scheme employer contributions paid (1,942) (1,970)
Changes in fair value of financial instruments (776) 703
Share based payments expense 26 6
Decrease/(increase) in inventories 22,966 (50,272)
Decrease/(increase) in trade and other receivables 3,031 (7,451)
(Decrease)/increase in trade and other payables (20,365) 15,905
Cash inflow from operations 61,166 16,414
Taxation paid (11,900) (9,879)
Cash inflow from operating activities 49,266 6,535
Interest received 467 42
Purchase of property, plant and equipment (2,854) (3,248)
Proceeds from disposal of property, plant and equipment 134 280
Cash outflow from investing activities (2,253) (2,926)
Interest paid (36) (20)
Lease interest paid (224) (143)
Lease capital paid (3,015) (3,233)
Equity dividends paid (32,298) (32,298)
Shares issued 14 823
Cash outflow from financing activities (35,559) (34,871)
Net increase/(decrease) in cash and cash equivalents 11,454 (31,262)
Effect of exchange differences on cash and cash equivalents (376) 145
Cash and cash equivalents at start of year 52,144 83,261
Cash and cash equivalents at end of year 63,222 52,144
42
Notes to the Consolidated Financial Statements
1. General information
James Halstead plc (“the company” or “the parent company”) is a limited liability company, registered in England and Wales,
domiciled in the United Kingdom and listed on AIM on the London Stock Exchange. The address of its registered office is Beechfield,
Hollinhurst Road, Radcliffe, Manchester, M26 1JN.
Accounting policies
2.
Basis of preparation
The group financial statements have been prepared in accordance with UK adopted international accounting standards. The
company financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework, and are presented separately following the group financial statements.
The group financial statements have been prepared on a going concern basis and on the historical cost basis as modified by the
valuation of certain financial assets and financial liabilities (being derivative instruments) at fair value.
Going concern
The directors have reviewed current performance and forecasts, combined with capital investment and expenditure commitments,
and a range of trading scenarios. The forecasts cover the next two financial years. The group has no net borrowings and owns the
freeholds on many of its premises (the most significant being four UK operating sites and two sites in Germany).
After considering current trading, forward forecasts and scenario planning the directors have formed a judgement, at the time of
approving the financial statements, that there is a reasonable expectation that the group has adequate resources to continue in
operational existence and meet its liabilities as they fall due for the foreseeable future. The directors have not identified any material
uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the entity’s ability to
continue as a going concern for a period of at least one year from when the financial statements are authorised for issue. For this
reason, the directors continue to adopt the going concern basis in preparing the financial statements.
Recent accounting developments
The financial statements are prepared in accordance with UK adopted international accounting standards and interpretations in force
at the reporting date. The group has not adopted any standards or interpretations in advance of the required implementation dates.
The following standards were adopted in the period.
Amendments to IFRS 3 Business Combinations, IAS 16 Property, Plant and Equipment, IAS 37 Provisions, Contingent Liabilities and
Contingent Assets
Annual Improvements to IFRS, (2018-2020 Cycle): IFRS 1, IFRS 9, Illustrative Examples accompanying IFRS 16 and IAS 41
There were no new standards, interpretations and amendments, which are not yet effective and have not been adopted early in
these financial statements, which will or may have an effect on the group’s future financial statements. The directors continue to
assess any accounting developments which could have a material effect on the financial statements.
Basis of consolidation
The group financial statements consolidate the financial statements of the parent company and all its subsidiaries, as if they formed
a single entity. Subsidiaries are entities controlled by the group. Control exists if all three of the following elements are present:
power over the entity, exposure to variable returns from the entity, and the ability to affect those variable returns. Control is
reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. Control is
normally achieved by a majority shareholding. The company, directly or through an intermediate subsidiary owned 100% of the
share capital of all of its subsidiaries. The results of subsidiaries acquired are consolidated from the date on which control passes to
the group. The results of disposed subsidiaries are consolidated up to the date on which control passes from the group. All intra-
group transactions and balances are eliminated on consolidation.The financial statements of subsidiaries are adjusted to bring them
into line with the group’s accounting policies as required.
43
2.
Accounting policies (continued)
Segment reporting
Operating segments are those segments for which results are reviewed by the group’s chief operating decision maker (CODM) to
assess performance and make decisions about resources to be allocated. The CODM is the group board which meets regularly
throughout the year to discuss the performance and results of the group as a whole. The business of the group is the manufacture
and distribution of flooring products. The group operates through separate legal entities in certain areas of the world and in order
to provide information in a structured manner to readers of the accounts who are unfamiliar with the internal management
reporting of the group, these operations are discussed by the chief executive in his report. However, the directors consider that
under the definitions contained within IFRS 8 there is only one reportable segment, which is the group as a whole. This is consistent
with the core principle of IFRS 8, which is to disclose information to enable users of the financial statements to evaluate the nature
and financial effects of the business activities in which the group engages and the economic activities in which it operates.
Foreign currencies
Functional and presentation currency – the group’s consolidated financial statements are presented in pounds sterling, the
functional currency of the parent company, being the currency of the primary economic environment in which the parent company
operates.
Transactions and balances – transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are reported at the rates of exchange prevailing at the balance
sheet date. Exchange differences on retranslating monetary assets and liabilities are recognised in the income statement except
where they relate to qualifying cash flow hedges, in which case the exchange differences are deferred in equity. Non-monetary
items carried at historical cost are stated at the rate of exchange ruling at the date of the transaction. Non-monetary items carried
at fair value are stated at the rate of exchange ruling when the fair value was determined.
Foreign subsidiaries – the results of foreign subsidiaries (none of which has the currency of a hyperinflationary economy), that have
a functional currency different from the group’s presentation currency, are translated at the average rates of exchange for the year.
Assets and liabilities of foreign subsidiaries, that have a functional currency different from the group’s presentation currency, are
translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising from the translation of the results
of foreign subsidiaries and their opening net assets are recognised as a separate component of equity.
When a foreign subsidiary is sold the cumulative exchange differences relating to the retranslation of the net investment in that
foreign subsidiary are recognised in the income statement as part of the gain or loss on disposal. This applies only to exchange
differences recorded in equity after 1 July 2006. Exchange differences arising prior to 1 July 2006 remain in equity on disposal as
permitted by IFRS 1.
Intangible assets
Goodwill – goodwill arising on the acquisition of a subsidiary undertaking is the excess of the aggregate of the fair value of the
consideration transferred, the fair value of any previously held interests, and the recognised value of the non-controlling interest in the
acquiree over the net of the acquisition date amounts of the identifiable assets acquired and liabilities assumed. Goodwill is reviewed
for impairment at least annually and when there are indications that the carrying amount may not be recoverable. For the purpose of
impairment review, goodwill is allocated to the relevant cash generating unit (CGU) within the group. An impairment loss is recognised
if the carrying value of the CGU, including its goodwill, exceeds its recoverable amount. Any impairment loss is recognised immediately
in the income statement and is not subsequently reversed. On disposal of a subsidiary, the attributable amount of goodwill is included
in the calculation of the profit or loss on disposal. Goodwill arising on acquisitions before the date of transition to IFRS has been
retained at the UK GAAP value as at that date having been reviewed for impairment at that date and subsequently at least annually.
44
Notes to the Consolidated Financial Statements
continued
2.
Accounting policies (continued)
Taxation
Income tax on the profit for the year comprises current and deferred tax. Income tax is recognised in the income statement except
to the extent that it relates to items recognised in other comprehensive income.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation authorities based
on tax rates and laws that are enacted at the balance sheet date. Deferred income tax is provided in full, using the liability method,
on temporary differences arising between the tax bases of assets and liabilities and their corresponding book values as recorded in
the group’s financial statements with the following exceptions:
where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that
is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences can be utilised;
deferred income tax is not provided on unremitted earnings of foreign subsidiaries where there is no likelihood to remit the
earnings.
Deferred income tax assets and liabilities are based on tax rates and laws that are substantively enacted at the balance sheet date.
Deferred income tax assets and liabilities are undiscounted.
Share-based payments
The group grants equity settled share options to certain of its employees. An expense in relation to such options based on their fair
value at the date of grant, is recognised over the vesting period. The group uses the Black Scholes model for the purpose of
computing fair value.
Inventories
Inventories are measured at the lower of cost and net realisable value on a weighted average cost basis. Cost includes expenditure
incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of finished and partly
finished goods, cost represents the cost of raw materials, direct labour, other direct costs and related production overheads on bases
consistently applied from year to year. In all cases provision is made for obsolete, slow-moving or defective items where appropriate.
Financial assets and liabilities
Financial assets comprise trade and other receivables and cash and cash equivalents. Financial liabilities comprise trade and other
payables.
Trade and other receivables
Trade and other receivables are non-interest bearing and are initially stated at fair value and then subsequently at amortised cost
less provision for lifetime expected credit losses using the simplified approach in IFRS 9. Estimated irrecoverable amounts are based
on historical experience and forward looking information, together with specific amounts that are not expected to be collectable.
Individual amounts are written off when management deems them not to be collectible.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, short-term (with an original maturity of three
months or less) deposits and bank overdrafts. Bank overdrafts are disclosed as current liabilities except where the group participates
in offset arrangements with certain banks whereby cash and overdraft amounts are offset against each other. Cash and cash
equivalents are held at amortised cost.
45
Accounting policies (continued)
2.
Trade and other payables
Trade and other payables are non-interest bearing and are initially stated at fair value and then subsequently at amortised cost.
Pension scheme arrangements
The group operates defined contribution pension schemes and a defined benefit pension scheme for certain of its United Kingdom
employees.
A defined contribution scheme is a scheme in which the group pays contributions into publicly or privately administered schemes
on a voluntary, statutory or contractual basis. The group has no further payment obligations once the contributions have been
made. The amount charged to the income statement is the contribution payable in the year. Differences between contributions
payable in the year and contributions actually paid are shown as receivables or payables in the balance sheet.
A defined benefit scheme is a scheme in which the amount of pension benefit that an employee will receive on retirement is
defined. For the defined benefit scheme, pension costs and the costs of providing other post retirement benefits are charged to the
income statement in accordance with the advice of qualified independent actuaries. Past service costs are recognised in the income
statement at the earlier of when the plan amendment or curtailment occurs or when the group recognises related restructuring
costs or termination benefits. The service cost is charged against operating profit and the net interest cost is charged as a finance
cost. The net interest cost is calculated using the discount rate at the beginning of the period. The retirement benefit obligations
recognised on the balance sheet represent the difference between the fair value of the scheme’s assets and the present value of
the scheme’s defined benefit obligations measured at the balance sheet date. The defined benefit obligation is calculated annually
by independent actuaries using the projected unit method. Remeasurements of the net defined benefit obligations are recognised
in the period in which they arise in other comprehensive income. A net defined benefit obligations asset is recognised to the extent
that the group can realise an economic benefit from that asset.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment except for land which
is stated at cost less any impairment. Cost includes expenditure that is directly attributable to the acquisition of the asset.
Depreciation is calculated on the depreciable amount (being cost less the estimated residual value) on a straight line basis over the
estimated useful lives of the assets as follows:
Freehold land: Not depreciated
Freehold buildings: 10 to 50 years
Plant and equipment: 2 to 20 years
Residual values and useful lives are reviewed at each group balance sheet date for continued appropriateness and indications of
impairment and adjusted if appropriate.
Right of use assets and lease liabilities
A right of use asset and a lease liability are recognised for all leased asset contracts on their commencement, except for low value
leases and short term leases of one year or less.
On recognition, the right of use asset and lease liability are measured at the present value of the lease payments discounted over
the lease term. The discount rate used is the rate inherent in the lease if this can be determined, or the incremental borrowing rate.
The right of use asset is stated at cost being lease payments, reduced for any lease incentives received, and increased for any lease
payments made at or before commencement of the lease, initial direct costs incurred and the amount of any provision recognised
where the group is contractually required to dismantle, remove or restore the leased asset.
Subsequent to initial recognition, the right of use assets are depreciated on a straight line basis over the shorter of the lease term
or the useful life of the asset. The lease liabilities are increased by the interest cost and reduced by the lease payments made. A
depreciation charge and an interest cost are recognised in the income statement.
The lease payments for low value and short term leases are expensed in the income statement on a straight line basis over the
lease term.
46
Notes to the Consolidated Financial Statements
continued
Accounting policies (continued)
2.
Revenue recognition
Revenue is from the sales of flooring products and is recognised at the point in time when control of the products has been
transferred to the customer. Control passes to the customer at the point terms of despatch are met, which is generally when the
goods are delivered to the customer. There is limited judgement needed in identifying the point control passes: once physical
delivery of the products to the agreed location has occurred, the group no longer has physical possession, usually will have a present
right to payment (as a single payment on delivery) and retains none of the significant risks and rewards of the goods. Sales are
invoiced at the time of despatch and payment terms are based on the invoice date. Payment terms vary by customer, but do not
exceed six months. Revenue is stated after provision for trade discounts and rebates due on the sales. Revenue excludes VAT and
sales taxes.
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and
understanding, is recognised in the income statement as an expense as incurred.
Development expenditure not meeting all the criteria for capitalisation contained in IAS 38 – Intangible Assets, is recognised in the
income statement as an expense as incurred.
Grants
Grants that compensate for expenses are recognised in the income statement in the same period and category in which the
expenses are recognised.
Dividends
Interim dividends are recognised when they are paid. Final dividends are recognised when they are approved by the shareholders.
Derivative financial instruments and hedging
The group uses derivative financial instruments to hedge its exposure to foreign currency transactional risk. In accordance with its
treasury policy the group does not hold or issue derivative financial instruments for trading purposes.
Derivative financial instruments are recorded at fair value on the date the derivative contract is entered into and are subsequently
remeasured at fair value at each group balance sheet date.
The method by which any gain or loss arising from remeasurement is recognised depends on whether the instrument is designated
as a hedging instrument and, if so, the nature of the item being hedged. The group recognises an instrument as a hedging
instrument by documenting at the inception of the transaction the relationship between the instrument and the hedged items and
the objectives and strategy for undertaking the hedging transaction. To be designated as a hedging instrument, an instrument must
also be assessed, at inception and on an ongoing basis, to be highly effective in offsetting changes in cash flows of hedged items.
For derivatives not used in hedging transactions, the gain or loss on remeasurement of fair value is recognised immediately in the
income statement.
Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or
of a highly probable forecast future transaction, the gain or loss on remeasurement which relates to the portion of the hedge which
is deemed effective is recognised in equity through other comprehensive income, with the balance of the gain or loss, relating to
the ineffective portion, being recognised immediately in the income statement.
Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profit or loss.
The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date.
47
Financial risk management
3.
Financial risk and treasury policies
A full description of the James Halstead plc group’s treasury policy is contained in the financial director’s review.
The group’s activities expose it to a number of financial risks as detailed below. These risks are managed, with the objective of
limiting adverse effects, from the group’s head office in accordance with policies determined by and decisions made by the group
board.
There have been no changes in financial risks from the previous year.
Market risks
Market risk is the risk that changes in market prices, such as currency exchange rates and interest rates will affect the group’s results.
The objective of market risk management is to control it within suitable parameters.
(a) Foreign exchange risk
The group operates internationally and is exposed to foreign currency risk on sales and purchases that are denominated in a
currency other than the functional currency of the entity making the sale or purchase. There are a range of currencies giving rise to
this risk, but most significant is the euro. To mitigate risks associated with future exchange rate fluctuations, the group’s policy is
to use forward exchange contracts to hedge its known and certain forecast transaction exposures based on historical experience
and projections. The group hedges at least 25% but rarely more than 100% of the next twelve months’ anticipated exposure.
(b) Interest rate risk
The group does not use derivative financial instruments to mitigate its exposure to interest rate risk. The main element of interest
rate risk concerns sterling deposits which are made on floating market based rates and short-term overdrafts in foreign currencies
which are also on floating rates.
Credit risk
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the group’s trade receivables from customers and monies on deposit with
financial institutions.
With regard to trade receivables, the group is not subject to significant concentration of credit risk. Exposure is spread across a large
number of companies and the underlying local economic and sovereign risks vary across the world. Trade receivable exposures are
managed locally in the individual operating units where they arise and credit limits are set as deemed appropriate. Where
practicable and deemed necessary the group endeavours to minimise credit risks by the use of trade finance instruments such as
letters of credit and insurance.
The group controls credit risk in relation to counterparties to other financial instruments by dealing only with highly rated financial
institutions.
The group’s maximum credit exposure on financial assets is represented by their book value.
Liquidity risk
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due. The group’s approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due.
Capital risk
The group’s objectives in managing capital are to safeguard the ability of all entities within the group to continue as going concerns,
whilst maximising the overall return to shareholders over time. The capital structure of the group consists of equity attributable
to equity holders of the parent company less cash and cash equivalents.
The group will only usually take on borrowings where those borrowings would be financed by the cash expected to be generated
by the related investment opportunity and where the borrowing would not significantly increase the group’s exposure to risk.
48
Notes to the Consolidated Financial Statements
continued
Critical accounting estimates and judgements
4.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of certain
estimates and associated assumptions that affect the application of policies, the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these
estimates are based on management’s best assessments of amounts, events or actions, actual results may ultimately differ from
those estimates. The estimates and underlying assumptions are reviewed on a regular and ongoing basis. There are no significant
judgements.
The estimates that have had the most significant effect on the amounts included in these consolidated financial statements are as
follows:
Inventories
For financial reporting purposes the group evaluates its inventory to ensure it is carried at the lower of cost or net realisable value.
Provision is made against slow moving, obsolete and damaged inventories. Damaged inventories are identified and written down
through the inventory counting procedures conducted within each business. Provision for slow moving and obsolete inventories is
assessed by each business as part of their ongoing financial reporting. Obsolescence is assessed based on comparison of the level
of inventory holding to the projected likely future sales. Future sales are assessed based on historical experience, and adjusted where
the market conditions are known to have changed. To the extent that future events impact the saleability of inventory these
provisions could vary significantly. For example, changes in specifications or regulations may render inventory, previously considered
to have a realisable value in excess of cost, obsolete and require such inventory to be fully written off. The effect on the income
statement of the movements in inventory write-downs is provided in note 19.
Retirement benefit obligations
The liability recognised in respect of retirement benefit obligations is dependent on a number of estimates including those relating
to mortality, inflation, and the rate at which liabilities are discounted. Any change in these assumptions would impact the
retirement benefit obligations recognised. Further details on these estimates are provided in note 26.
49
Segmental information
5.
Operating segments are those segments for which results are reviewed by the group’s chief operating decision maker (CODM) to
assess performance and make decisions about resources to be allocated. The CODM is the group board which meets regularly
throughout the year to discuss the performance and results of the group as a whole. The business of the group is focussed almost
entirely on the manufacture and distribution of flooring products. The directors consider that under the definitions contained within
IFRS 8 there is only one reportable segment, which is the group as a whole. This is consistent with the core principle of IFRS 8, which
is to disclose information to enable users of the financial statements to evaluate the nature and financial effects of the business
activities in which the group engages and the economic activities in which it operates. Therefore the majority of the disclosures
required under IFRS 8 have already been given in these financial statements.
Segment assets comprise property, plant and equipment, right of use and intangible assets. Geographical disclosures in respect of
revenues and segment assets are provided below and include revenue for Germany of £56,887,000 (2022: £62,553,000) and assets
in Germany of £9,426,000 (2022: £9,016,000).
Revenue
United Kingdom
Europe and Scandinavia
Australasia and Asia
Rest of the World
Non-current assets
United Kingdom
Europe and Scandinavia
Australasia and Asia
Rest of the World
Total segment assets
Retirement benefit obligations
Deferred tax assets
Total non-current assets
2023
£’000
117,447
116,261
40,915
28,939
2022
£’000
110,612
121,109
38,021
22,118
303,562
291,860
2023
£’000
29,689
10,961
5,619
14
46,283
–
114
46,397
2022
£’000
30,018
10,544
4,870
105
45,537
6,144
234
51,915
Revenue is by location of customer. Assets are by location of asset.
Employee profit share
6.
Profit for the year is after charging the cost of the James Halstead plc share ownership plan. Since 1980 the group has operated an
employee share scheme, approved under the Finance Act 1978. In December 2001 the shareholders approved a new share ownership
plan in line with the requirements of legislative changes. The aim of this scheme is to enable employees to build up a personal
shareholding in James Halstead plc and to participate in its continued expansion and success as shareholders as well as employees.
As members of the scheme the following directors received shares to the value of, Mr M Halstead £nil and Mr G R Oliver £nil.
50
Notes to the Consolidated Financial Statements
continued
Profit before income tax
7.
Profit before tax is stated after charging/(crediting) the following:
Depreciation of property, plant and equipment
Depreciation of right of use assets
Profit on disposal of property, plant and equipment
Research and development
Government grant income for business support UK and overseas
Fees payable to the group’s auditor for the audit of the parent company and
consolidated financial statements
Fees payable to the group’s auditor and its associates for other services:
The audit of the group’s subsidiaries pursuant to legislation
8.
Staff costs and numbers
Staff costs comprised:
Wages and salaries
Social security costs
Pension costs – defined benefit scheme
– defined contribution schemes
Share based payments expense
The average monthly number of employees during the year was:
Manufacturing, selling and distribution
Administration
The directors’ remuneration was:
Salary or fees
Bonuses
Benefits
Total remuneration excluding pension contributions
Pension contributions
2023
£’000
3,461
3,060
(84)
1,533
–
100
247
2023
£’000
39,036
4,990
178
1,096
26
45,326
2022
£’000
3,794
3,139
(198)
1,549
(112)
55
148
2022
£’000
37,092
4,564
500
907
6
43,069
2023
Number
2022
Number
692
168
860
2023
£’000
1,047
1,000
20
2,067
–
2,067
654
165
819
2022
£’000
1,004
1,000
25
2,029
25
2,054
Social security costs related to this remuneration
287
272
There were no directors accruing benefits in the defined benefit scheme (2022: one).
There were no directors in the defined contribution schemes.
9.
Finance income
Bank deposit interest
Other interest
Net pension interest income
Finance income
10. Finance cost
Other interest
Preference share dividend
Lease interest
Net pension interest cost
Finance cost
11.
Income tax expense
Current tax
UK current year
UK adjustments in respect of prior years
UK total
Overseas
Deferred tax
Current year temporary differences
Current year tax rate difference
Adjustments in respect of prior years
51
2022
£’000
36
6
42
–
42
2022
£’000
9
11
20
143
74
237
2022
£’000
7,573
(516)
7,057
3,737
10,794
565
137
239
941
2023
£’000
455
12
467
281
748
2023
£’000
25
11
36
224
–
260
2023
£’000
8,522
(1,540)
6,982
2,534
9,516
746
139
(706)
179
Total taxation
9,695
11,735
The effective tax rate for the year to 30 June 2023 is lower (2022: higher) than the standard rate of corporation tax in the UK. The
differences are explained below:
Profit before tax
Profit before tax multiplied by the standard rate of corporation tax in
the UK of 20.5% (2022: 19%)
Effects of:
Adjustments to tax in respect of prior periods
Overseas tax rates
Disallowable items
Deferred tax rate difference
Total taxation
2023
£’000
52,099
2022
£’000
52,063
10,680
9,892
(2,246)
1,039
83
139
9,695
(277)
1,659
324
137
11,735
In addition to the amounts above £2,412,000 has been credited (2022: £2,015,000 charged) as other comprehensive income in
respect of the remeasurement of the net defined benefit liability, and has been netted off the amounts shown in the Consolidated
Statement of Comprehensive Income.
The UK corporation tax rate changed to 25% from 1 April 2023. The UK deferred tax balances at 30 June 2023 were measured
at 25%.
52
Notes to the Consolidated Financial Statements
continued
12. Earnings per share
Profit for the year attributable to equity shareholders
Weighted average number of shares in issue
Dilution effect of outstanding share options
Diluted weighted average number of shares
Basic earnings per 5p ordinary share
Diluted earnings per 5p ordinary share
The earnings per 5p ordinary share are attributable to equity shareholders.
13. Dividends
Equity dividends
Final dividend for previous year of 5.50p (2022: 11.00p)
Interim dividend for current year of 2.25p (2022: 2.25p)
Amounts recognised as distributions to equity shareholders in the year
2023
£’000
42,404
2022
£’000
40,328
416,752,764
416,586,675
21,390
201,425
416,774,154
416,788,100
10.2p
10.2p
9.7p
9.7p
2023
£’000
22,921
9,377
32,298
2022
£’000
22,921
9,377
32,298
A final dividend of 5.75p per share for the year ended 30 June 2023, amounting to £23,963,000 will be proposed at the Annual
General Meeting.
14. Profit of the parent company
The company has taken advantage of the provisions of Section 408 of the Companies Act 2006 and elected not to present its own
profit and loss account. The profit after taxation for the financial year dealt with in the financial statements of the company was
£36,226,000 (2022: £30,797,000). The aggregate amount of directors’ emoluments excluding pension contributions was
£2,067,000 (2022: £2,029,000) of which the highest paid director’s emoluments were £994,000 (2022: £978,000). The directors’
salaries or fees for the year ended 30 June 2023 were Mr J A Wild £40,000 (2022: £40,000), Mr M Halstead £485,000
(2022: £463,000), Mr G R Oliver £457,000 (2022: £436,000), Mr S D Hall £25,000 (2022: £25,000), Mr M J Halstead £20,000
(2022: £20,000) and Mr R P Whiting £20,000 (2022: £20,000).
15.
Intangible assets
Cost and net book value at 30 June 2021, 2022 and 2023
53
Goodwill
£’000
3,232
An impairment review of goodwill was done by reference to value in use. Value in use was determined using conservative five year
plus terminal value cash flow projections, based on current levels of profitability and assumed conservative growth rates of 5%
(2022: 0% to 5%) and discount rates of 7% (2022: 7% to 11%). The result of the review indicated that no impairment was required
with no reasonable sensitivities indicating an impairment.
16. Property, plant and equipment
Cost
At 30 June 2021
Additions
Disposals
Exchange differences
At 30 June 2022
Additions
Disposals
Transfer
Exchange differences
At 30 June 2023
Depreciation
At 30 June 2021
Charge for the year
Disposals
Exchange differences
At 30 June 2022
Charge for the year
Disposals
Exchange differences
At 30 June 2023
Net book value
At 30 June 2021
At 30 June 2022
At 30 June 2023
Freehold
land and
buildings
£’000
Plant and
equipment
£’000
28,042
311
–
27
28,380
–
–
(133)
(31)
28,216
11,054
676
–
13
11,743
686
–
(15)
12,414
16,988
16,637
15,802
75,730
2,937
(783)
119
78,003
2,854
(713)
133
(286)
79,991
55,476
3,118
(701)
76
57,969
2,775
(663)
(175)
59,906
20,254
20,034
20,085
Total
£’000
103,772
3,248
(783)
146
106,383
2,854
(713)
–
(317)
108,207
66,530
3,794
(701)
89
69,712
3,461
(663)
(190)
72,320
37,242
36,671
35,887
54
Notes to the Consolidated Financial Statements
continued
17. Right of use assets
Cost
At 30 June 2021
Additions
Disposals
Exchange differences
At 30 June 2022
Additions
Disposals
Exchange differences
At 30 June 2023
Depreciation
At 30 June 2021
Charge for the year
Disposals
Exchange differences
At 30 June 2022
Charge for the year
Disposals
Exchange differences
At 30 June 2023
Net book value
At 30 June 2021
At 30 June 2022
At 30 June 2023
Land and
buildings
£’000
Motor
vehicles
£’000
9,088
2,625
(1,142)
250
10,821
4,322
(5,115)
(451)
9,577
4,448
2,503
(1,142)
131
5,940
2,465
(5,040)
(140)
3,225
4,640
4,881
6,352
2,238
16
(134)
1
2,121
973
(1,212)
–
1,882
863
636
(134)
3
1,368
595
(892)
(1)
1,070
1,375
753
812
Total
£’000
11,326
2,641
(1,276)
251
12,942
5,295
(6,327)
(451)
11,459
5,311
3,139
(1,276)
134
7,308
3,060
(5,932)
(141)
4,295
6,015
5,634
7,164
18. Deferred tax assets and liabilities
Deferred tax assets
Deferred tax liabilities
At 30 June 2021
Credited/(charged) to income statement
Charged to other comprehensive income
Exchange differences
At 30 June 2022
Credited/(charged) to income statement
Credited to other comprehensive income
Exchange differences
At 30 June 2023
2023
£’000
114
(585)
(471)
Retirement
benefit
obligations
£’000
Accelerated
tax
depreciation
£’000
Other
timing
differences
£’000
828
(349)
(2,015)
–
(1,536)
(511)
2,412
–
365
(1,709)
(87)
–
–
(1,796)
(529)
–
–
(2,325)
1,135
(505)
–
7
637
861
–
(9)
1,489
55
2022
£’000
234
(2,929)
(2,695)
Total
£’000
254
(941)
(2,015)
7
(2,695)
(179)
2,412
(9)
(471)
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets against current tax
liabilities and the deferred income taxes relate to the same tax authority. All deferred tax assets and liabilities are analysed as non-
current.
19.
Inventories
Raw materials and consumables
Work in progress
Finished goods
Opening balance
(Decrease)/increase in inventories
Exchange differences
Closing balance
2023
£’000
7,437
2,883
77,120
87,440
112,279
(22,966)
(1,873)
2022
£’000
8,161
2,258
101,860
112,279
60,684
50,272
1,323
87,440
112,279
An amount of £3,868,000 has been charged (2022: £1,283,000 charged) to the income statement in respect of movements in
inventory write-downs. The cost of inventory recognised as an expense was £188,099,000 (2022: £178,355,000).
56
Notes to the Consolidated Financial Statements
continued
20. Trade and other receivables
Trade receivables
Other receivables
Prepayments
Opening balance
(Decrease)/increase in trade and other receivables
Exchange differences
Closing balance
2023
£’000
42,941
1,373
2,665
46,979
51,171
(3,031)
(1,161)
46,979
2022
£’000
46,734
1,781
2,656
51,171
42,949
7,451
771
51,171
All amounts within trade and other receivables are due within one year. The fair value of amounts included in trade and other
receivables approximates to book value. The maximum exposure to credit risk at the reporting date is the fair value of each class
of receivable. The group does not hold any collateral as security.
The group’s trade receivables are stated after a provision for expected credit losses of £1,911,000 (2022: £1,820,000). The provision
against trade receivables for expected credit losses is based on specific risk assessments taking into account past default experience
and appropriate forward looking information. The provision is analysed as follows:
Opening balance
Debts written off
Charged to income statement
Exchange differences
Closing balance
Not past due
Up to three months past due
Over three months past due
Loss rate
2023
%
1
5
90
Gross
2023
£’000
28,189
15,822
841
44,852
Provision
2023
£’000
374
777
760
1,911
Loss rate
2022
%
2
5
93
The maximum exposure to credit risk for trade and other receivables by currency was:
Sterling
Euro
Australian Dollar
New Zealand Dollar
Canadian Dollar
Norwegian Krone
US Dollar
Other currencies
Total
2023
£’000
1,820
(28)
138
(19)
1,911
Gross
2022
£’000
34,143
13,736
675
48,554
2023
£’000
21,512
10,803
3,376
1,335
993
1,195
3,750
1,350
44,314
2022
£’000
1,746
(135)
197
12
1,820
Provision
2022
£’000
541
651
628
1,820
2022
£’000
22,896
13,985
3,650
844
792
977
3,818
1,553
48,515
21. Cash and cash equivalents
The fair values of cash and cash equivalents approximate to book value due to their short maturities.
The currency analysis of cash and cash equivalents is as follows:
Sterling
Euro
Australian Dollar
New Zealand Dollar
Canadian Dollar
Norwegian Krone
US Dollar
Other currencies
Total
22. Trade and other payables
Amounts falling due within one year
Trade payables
Value added, payroll and other taxes
Other payables
Accruals
Amounts falling due after more than one year
Other payables
Opening balance
(Decrease)/increase in trade and other payables
Exchange differences
Closing balance
The fair value of amounts included in trade and other payables approximates to book value.
23. Lease liabilities
Opening balance
Leases started
Leases cancelled
Lease interest
Lease payments
Exchange differences
Closing balance
Amounts payable in less than one year
Amounts payable in more than one year
All amounts are payable within five years.
57
2022
£’000
29,483
3,533
2,023
599
1,396
335
13,223
1,552
52,144
2022
£’000
61,466
5,565
1,355
16,121
84,507
2023
£’000
46,500
7,000
866
441
1,159
584
4,667
2,005
63,222
2023
£’000
40,267
4,974
2,314
13,183
60,738
400
453
61,138
84,960
84,960
(20,365)
(3,457)
61,138
65,998
15,905
3,057
84,960
2023
£’000
5,714
5,295
(395)
224
(3,239)
(321)
7,278
2,696
4,582
7,278
2022
£’000
6,184
2,641
–
143
(3,376)
122
5,714
2,166
3,548
5,714
58
Notes to the Consolidated Financial Statements
continued
24. Preference shares
Preference shares
2023
£’000
200
2022
£’000
200
The cumulative preference shares have no fixed repayment date. They are not listed and therefore no market price is available. The
fair value of the preference shares was not materially different from their book value.
25. Net funds analysis
At 30 June 2021
Cash flow
Other changes
Exchange differences
At 30 June 2022
Cash flow
Other changes
Exchange differences
At 30 June 2023
Cash
and cash
equivalents
£’000
83,261
(31,262)
–
145
52,144
11,454
–
(376)
63,222
Lease
liabilities
£’000
Preference
shares
£’000
(6,184)
3,376
(2,784)
(122)
(5,714)
3,239
(5,124)
321
(7,278)
(200)
–
–
–
(200)
–
–
–
(200)
Net
funds
£’000
76,877
(27,886)
(2,784)
23
46,230
14.693
(5,124)
(55)
55,744
26. Retirement benefit obligations
In the UK the group operates a defined benefit pension scheme which was closed to new members in 2002 and to future accrual
in 2023. Executive directors Mr M Halstead and Mr G R Oliver are deferred members of the defined benefit scheme and their
employer pension contributions for the year were £nil (2022: £25,000) and £nil (2022: nil) respectively. At 30 June 2023 the
accrued pension for the highest paid director was £131,000 (2022: £131,000) and the transfer value of this accrued benefit was
£2,203,000 (2022: £2,557,000).
The company sponsors the Halstead Group Pension Scheme, a funded defined benefit pension scheme in the UK. The scheme is
administered within a trust which is legally separate from the company. Trustees are appointed by both the company and the
scheme’s membership and act in the interest of the scheme and all relevant stakeholders, including the members and the company.
The trustees are also responsible for the investment of the scheme’s assets.
The scheme closed to future accrual with effect from 31 January 2023. At this point former active members of the scheme stopped
paying contributions.
Before 31 January 2023 active members of the scheme paid contributions at the rate of either 7.5% or 6% of salary depending on
category and the company pays the balance of the cost as determined by regular actuarial valuations.
The scheme poses a number of risks to the company, for example, longevity risk, investment risk, interest rate risk, inflation risk and
salary risk. The trustees are aware of these risks and use various techniques to control them. The trustees have a number of internal
control policies including a risk register, which are in place to manage and monitor the various risks they face. Furthermore, the
scheme’s investments are designed to hedge against some to these risks.
All of the scheme’s assets are held in quoted funds with the exception of the cash balance in the trustees’ bank account.
The scheme’s investment strategy is to invest broadly 80% in return seeking assets and 20% in matching assets. This strategy
reflects the scheme’s liability profile and the trustees’ attitude to risk.
59
26. Retirement benefit obligations (continued)
The trustees’ investment strategy includes investing in liability driven investment, the value of which will increase with decreases
in interest rates and/or increases in future inflation expectations. The scheme’s assets are hedged to around 90% of interest rate
and inflation risk as at the year end. The investment strategy is reviewed regularly by the trustees in consultation with the company.
The scheme’s growth assets are also expected to provide protection from inflation over the long term. Note that the scheme hedges
interest rate risk on a gilts basis, whereas AA corporate bonds are used to set the IAS19 discount rate and so there is potential for
the IAS19 position to diverge from the trustees’ strategic target should yields on gilts and corporate bonds diverge.
The scheme does not directly hold any financial derivatives but invests in funds which hold the derivatives required to hedge the
scheme’s interest rate, inflation and currency risks. The main risks associated with financial derivatives include: losses may exceed
the initial margin, counterparty risk, and liquidity risk. These risks are managed by the monitoring of investment managers to ensure
they have reasonable levels of market exposure relative to initial margin and positions are fully collateralised on a regular basis.
The scheme is subject to regular actuarial valuations, which must be carried out at least every three years. These actuarial valuations
are carried out in accordance with the requirements of the Pensions Act 2004 and so include margins for prudence. This contrasts
with these accounting disclosures, which are determined using best estimate assumptions.
An actuarial valuation was carried out as at 31 August 2022. The results of that valuation have been projected forward to 30 June
2023 by a qualified independent actuary. The figures in the following disclosure were measured using the Projected Unit Method.
On 26 October 2018, the High Court reached a judgement in relation to Lloyds Banking Group’s defined benefit pension schemes
which concluded that schemes should equalise pension benefits for men and women as regards guaranteed minimum pension
benefits. The impact of this judgement on the scheme has been estimated and included in the pension liability.
At 30 June 2022 the scheme was in surplus as measured under the principles of IAS19. Under the accounting standard an entity is allowed
to recognise a pension scheme surplus on its balance sheet to the extent that it is able to realise an economic benefit from that surplus.
The directors have reviewed the rules of the scheme and have concluded that the company can gain full economic benefit from the
scheme on the basis that the rules provide it access to any surplus after the last member has no further benefits in the scheme (referred
to in the standard as gradual settlement). Furthermore, the rules are such that the trustees are not able to take any actions that would
reduce the accounting surplus, such as benefit augmentations or triggering a scheme wind-up, without the company’s action or consent.
Principal actuarial assumptions at the balance sheet date
Discount rate at end of year
Future salary increases
Future pension increases
Rate of inflation – RPI
– CPI
Future expected lifetime of current pensioner at age 65:
Male born in 1958
Female born in 1958
Future expected lifetime of future pensioner at age 65:
Male born in 1978
Female born in 1978
The sensitivities of the principal assumptions used to measure the scheme liabilities are as follows:
Assumption
Discount rate
Rate of inflation
Expected lifetime
Change in assumption
Decrease by 0.1%
Increase by 0.1%
Increase by 1 year
2023
2022
5.50%
2.65%
3.10%
3.25%
2.65%
4.00%
2.45%
2.95%
3.05%
2.45%
21.0 years
23.4 years
21.0 years
23.4 years
22.4 years
24.9 years
22.3 years
24.9 years
Impact on scheme liabilities
Increase by £0.6m
Increase by £0.4m
Increase by £2.0m
The sensitivities may not be representative of the actual change in the present value of the scheme obligations, as it is unlikely that
the change in assumptions would occur in isolation of each other, as the assumptions may be linked.
60
Notes to the Consolidated Financial Statements
continued
26. Retirement benefit obligations (continued)
Amounts recognised in the balance sheet
Present value of funded obligations
Fair value of scheme assets
Net (liability)/asset before deferred taxation
Related deferred tax asset/(liability)
Net (liability)/asset after deferred taxation
Amounts recognised in the income statement
Current service cost
Net interest income/(cost)
Amounts recognised in other comprehensive income
Return on assets excluding amount included in net interest cost
Gain arising from changes in financial assumptions
Loss arising from changes in demographic assumptions
Experience loss
Deferred tax
Remeasurement of the net defined benefit liability
The actual return on the scheme assets in the year was a £11,498,000 loss (2022: £6,980,000 loss).
Changes in the present value of the scheme assets
Opening fair value of scheme assets
Interest income
Return on assets excluding interest income
Employer contributions
Employee contributions
Benefits paid
Closing fair value of scheme assets
Changes in the present value of the scheme obligations
Opening defined benefit obligations
Service cost
Interest cost
Employee contributions
Gain arising from changes in financial assumptions
Loss arising from changes in demographic assumptions
Experience loss
Benefits paid
Closing defined benefit obligations
2023
£’000
(57,609)
56,149
(1,460)
365
(1,095)
2023
£’000
(178)
281
103
2023
£’000
(14,236)
5,207
(230)
(390)
(9,649)
2,412
(7,237)
2023
£’000
69,236
2,738
(14,236)
1,942
88
(3,619)
56,149
2023
£’000
(63,092)
(178)
(2,457)
(88)
5,207
(230)
(390)
3,619
(57,609)
2022
£’000
(63,092)
69,236
6,144
(1,536)
4,608
2022
£’000
(500)
(74)
(574)
2022
£’000
(8,553)
18,303
–
(645)
9,105
(2,015)
7,090
2022
£’000
77,265
1,573
(8,553)
1,970
152
(3,171)
69,236
2022
£’000
(81,622)
(500)
(1,647)
(152)
18,303
–
(645)
3,171
(63,092)
26. Retirement benefit obligations (continued)
Changes in the net defined benefit (liability)/asset
Opening net defined benefit asset/(liability)
Service cost
Net interest income/(cost)
Return on assets excluding interest income
Gain arising from changes in financial assumptions
Loss arising from changes in demographic assumptions
Experience loss
Employer contributions
Closing net defined benefit (liability)/asset
Major categories of scheme assets
Diversified growth fund
Liability driven assets
Cash
Total market value of assets
The scheme has no investments in the company or in property occupied by the company.
Scheme liabilities by category of membership
Active members
Deferred pensioners
Pensions in payment
Average duration of scheme liabilities
Active members
Deferred pensioners
Pensions in payment
All scheme liabilities
61
2022
£’000
(4,357)
(500)
(74)
(8,553)
18,303
–
(645)
1,970
6,144
2022
£’000
55,154
6,256
7,826
69,236
2022
£’000
22,559
7,883
32,650
63,092
2022
years
15
16
9
12
2023
£’000
6,144
(178)
281
(14,236)
5,207
(230)
(390)
1,942
(1,460)
2023
£’000
42,244
13,485
420
56,149
2023
£’000
11,700
14,523
31,386
57,609
2023
years
15
12
9
11
Company contributions of £2,048,000 are expected to be paid into the scheme during the year ended 30 June 2024.
62
Notes to the Consolidated Financial Statements
continued
27. Share capital
Ordinary shares – allotted, issued and fully paid
Opening ordinary shares of 5p each
Ordinary shares of 5p each issued
Ordinary shares of 5p each bonus issue
Closing ordinary shares of 5p each
Ordinary B shares of 1p each
Total allotted, issued and fully paid
2023
Number
2022
Number
416,744,052
10,000
–
208,159,916
212,110
208,372,026
416,754,052
416,744,052
16,042,530
16,042,530
2023
£’000
20,837
1
–
20,838
160
20,998
2022
£’000
10,408
11
10,418
20,837
160
20,997
The ordinary shares of 5p each were issued during the year for a consideration of £14,000 (2022: £823,000).
The issued share capital was increased by a bonus issue of one fully paid ordinary share for each fully paid ordinary share held on
the register at 14 January 2022.
The preference shares detailed below are included as financial instruments within creditors. Full details of these are given in note
11 of the financial statements of the company.
Allotted, issued and fully paid
200,000 5.5% preference shares of £1 each
2023
£’000
200
2022
£’000
200
Ordinary shares under option
Under the terms of the executive share option scheme approved on 3 December 1998, share options were granted and exercised
during the year. The share options outstanding are as follows:
Date of
grant
Date
exercisable
21 Jul 14
12 Jun 17
18 Oct 18
10 Aug 22
21 Jul 14
12 Jun 17
18 Oct 18
10 Aug 22
21 Jul 17
12 Jun 20
18 Oct 21
10 Aug 25
21 Jul 17
12 Jun 20
18 Oct 21
10 Aug 25
Date of
expiry
20 Jul 24
11 Jun 27
17 Oct 28
9 Aug 32
20 Jul 24
11 Jun 27
17 Oct 28
9 Aug 32
Exercise
price
(pence)
135.145
238.250
195.415
206.000
135.145
238.250
195.415
206.000
12 Jun 17
22 Dec 17
18 Oct 18
4 Oct 21
27 Jun 22
10 Aug 22
12 Jun 20
22 Dec 20
18 Oct 21
4 Oct 24
27 Jun 25
10 Aug 25
11 Jun 27
21 Dec 27
17 Oct 28
3 Oct 31
26 Jun 31
9 Aug 32
238.250
218.040
195.415
262.665
205.330
206.000
Director
M Halstead
G R Oliver
Total – directors
Employees
Total – employees
Grand total
17,802
100,000
120,000
–
24,582
100,000
120,000
–
482,384
340,000
40,000
235,780
690,000
20,000
–
1,325,780
Number
30.06.22
Exercised
in the year
Granted
(lapsed)
in the year
–
–
–
–
(10,000)
–
–
–
–
–
–
100,000
–
–
–
100,000
Number
30.06.23
17,802
100,000
120,000
100,000
14,582
100,000
120,000
100,000
(10,000)
200,000
672,384
–
–
–
–
–
–
–
–
–
(830)
(80,000)
–
830,000
340,000
40,000
234,950
610,000
20,000
830,000
749,170
2,074,950
1,808,164
(10,000)
949,170
2,747,334
63
27. Share capital (continued)
The market price of the shares at 30 June 2023 was 211p (2022: 203p). The share price during the year ranged from 176p to 222p.
Directors exercised 10,000 (2022: nil) share options during the year. Aggregate gains on exercising the share options by directors in
the year amounted to £7,000 (2022: £nil) of which £nil (2022: £nil) related to the highest paid director.
A summary of movements in numbers of share options is as follows:
At 30 June 2021
Exercised in the year
Granted in the year
At 30 June 2022
Exercised in the year
Lapsed in the year
Granted in the year
At 30 June 2023
Weighted
average
exercise
price
209p
194p
261p
231p
135p
262p
206p
222p
Number of
options
1,522,384
(424,220)
710,000
1,808,164
(10,000)
(80,830)
1,030,000
2,747,334
At 30 June 2023 there were 1,087,334 (2022: 1,098,164) share options exercisable at a weighted average exercise price of 217p
(2023: 215p).
The weighted average remaining contractual life of share options outstanding at 30 June 2023 was 7.1 years (2022: 7.0 years).
Share based payments
The group’s equity settled share based payments comprise the grant of share options to certain employees under the group’s
executive share option scheme. Details of such options are given above. The group calculated the fair value of the options at the
date of grant using the Black Scholes model.
An expense based on the fair value calculated at the date of grant was recognised in the income statement over the vesting period
of the options. The share based payment expense for the year ended 30 June 2023 was £26,000 (2022: £6,000).
The inputs into the Black Scholes model for the share options granted in the year were as follows:
Expected life of option
Expected share price volatility
Expected dividend yield
Risk free interest rate
Exercise price
3.5 years
20.0%
4.0%
0.9%
206p
64
Notes to the Consolidated Financial Statements
continued
28. Reserves
The nature and purpose of each reserve within equity is as follows.
Reserve
Equity share capital
Share premium account
Capital redemption reserve
Currency translation reserve
Hedging reserve
Retained earnings
Description and purpose
Nominal value of equity share capital issued.
Amount subscribed for equity share capital in excess of nominal value.
Amounts transferred from share capital on redemption of issued shares.
Cumulative currency translation gains and losses arising on the
retranslation of the net assets of the group’s foreign operations.
Gains and losses arising on the fair value of financial instruments in an
effective designated cash flow hedging relationship.
All other gains and losses and transactions with owners, such as
dividends, not recognised in other reserves.
The share premium account and capital redemption reserve were utilised in paying up at par the new ordinary shares issued for
the bonus issue on 14 January 2022.
29. Derivative financial instruments
The group is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the functional
currency of the entity concerned. The currencies giving rise to this risk are various, but the most significant are the US Dollar and
the Euro. Forward exchange contracts are used to manage this exposure to fluctuations in foreign exchange rates. The group buys
or sells foreign currency at spot where necessary to address any short-term imbalances.
The group hedges, using forward exchange contracts, transactions denominated in a foreign currency which are not matched
against other transactions in the same currency within the group. The forward exchange contracts have maturities of less than one
year after the balance sheet date.
The group classifies its forward exchange contracts hedging forecasted transactions as cash flow hedges and states them at fair
value. The hedged cash flows are expected to occur within one year after the balance sheet date.
The fair values have been calculated by applying (where relevant), for equivalent maturity profiles, the rate at which forward
currency contracts with the same principal amounts could be acquired at the balance sheet date.
Changes in the fair value of forward exchange contracts for which no hedge accounting is applied or where the hedge is considered
ineffective are recognised in the income statement.
Other than the use of forward exchange contracts as detailed above, the group does not make use of derivative financial
instruments.
65
30. Financial instruments
For cash and cash equivalents and trade and other payables and receivables the fair value approximates to their book value due to the
short maturity profile of these financial instruments. On receivables, allowances are made within the book value for credit risk. The fair
value of forward exchange contracts is determined by reference to spot rates adjusted for the forward points to the contract value date.
The book values and fair values of financial instruments are set out below:
Current:
Trade and other receivables
Forward exchange contracts
Cash and cash equivalents
Trade and other payables
Forward exchange contracts
Lease liabilities
Total
Non-current:
Other payables
Lease liabilities
Preference shares
Total
2023
Book value
£’000
2023
Fair value
£’000
2022
Book value
£’000
2022
Fair value
£’000
44,314
773
63,222
(55,764)
(213)
(2,696)
49,636
(400)
(4,582)
(200)
(5,182)
44,314
773
63,222
(55,764)
(213)
(2,696)
49,636
(400)
(4,582)
(200)
(5,182)
48,515
2,166
52,144
(78,942)
(517)
(2,166)
21,200
(453)
(3,548)
(200)
(4,201)
48,515
2,166
52,144
(78,942)
(517)
(2,166)
21,200
(453)
(3,548)
(200)
(4,201)
Other than forward exchange contracts which are categorised as derivative instruments, all financial assets are categorised as financial
assets measured at amortised cost and all financial liabilities are categorised as financial liabilities measured at amortised cost.
The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value.
IFRS 7 requires that these be grouped into Levels 1 to 3 based on the degree to which the fair value is observable. All items in the
table below are categorised as Level 2 which, as defined by IFRS 7, refers to those items whose fair value measurement is derived
from inputs other than that are observable for the asset or liability either directly or indirectly.
Forward exchange contracts at fair value through profit and loss account
Forward exchange contracts at fair value through hedging reserve
2023
£’000
2
558
560
2022
£’000
24
1,625
1,649
Sensitivity analysis
The group’s principal exposures in relation to market risks are to changes in the euro exchange rate against sterling and to changes
in UK interest rates. The group does not fix the interest rate receivable on its sterling balances, and based on balances held at the
year end, a 1% increase or decrease in sterling interest rates would lead to an increase or decrease in post-tax earnings of
£370,000 (2022: £239,000). The table below details the notional impact of changes in the euro exchange rate against sterling on
the group’s post-tax profit and equity. The gains and losses arise from the translation of receivables, payables, cash and forward
exchange contracts which are denominated in currencies other than each subsidiary’s reporting currency.
Euro 5% stronger against sterling
Euro 5% weaker against sterling
2023
Post-tax profits
£’000
2022
2023
Equity Post-tax profits
£’000
£’000
16
(15)
16
(15)
36
(32)
2022
Equity
£’000
36
(32)
66
Notes to the Consolidated Financial Statements
continued
31. Group companies
At 30 June 2023, the trading subsidiaries of the group and the proportion of ordinary share capital owned were:
Name of subsidiary
Activity
Polyflor Limited
Riverside Flooring Limited
Polyflor Australia Pty Limited
Polyflor New Zealand Limited
Polyflor Canada Inc
Polyflor India Pvt Limited
Polyflor (M) SDN BHD
Objectflor Art und Design Belags GmbH
Karndean International GmbH
James Halstead France SAS
Polyflor Nordic Sweden AB
Flooring manufacturing and distribution
Flooring manufacturing
Flooring distribution
Flooring distribution
Flooring distribution
Flooring distribution
Flooring distribution
Flooring distribution
Flooring distribution
Flooring distribution
Flooring distribution
Country of
incorporation
England
England
Australia
New Zealand
Canada
India
Malaysia
Germany
Germany
France
Sweden
Proportion
owned
(%)
100
100
100
100
100
100
100
100
100
100
100
A complete list of the group’s subsidiaries is provided in note 4 of the financial statements of the company.
32. Exchange rates
The currency exchange rates used to translate the results, assets and liabilities of foreign subsidiaries were:
Euro
Australian dollar
New Zealand dollar
Canadian dollar
Swedish krona
Indian rupee
Malaysian ringgit
UAE dirham
2023
Closing
1.17
1.91
2.08
1.68
13.73
104.30
5.93
4.67
2023
Average
2022
Closing
1.15
1.79
1.95
1.61
12.70
98.17
5.40
4.42
1.16
1.77
1.95
1.57
12.44
95.91
5.35
4.46
2022
Average
1.18
1.83
1.96
1.68
12.18
100.05
5.62
4.89
33. Related parties
Transactions between the company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note.
The group’s contributions to the defined benefit pension scheme are disclosed in note 26.
Details of other related party transactions for the group are shown in the directors' report, board report on remuneration and in
the notes to the financial statements. The key management personnel are the directors.
Polyflor Limited, a subsidiary of the company, leases cars from a company of which Mr Russell Whiting is a director. The lease
payments during the year were £265,000 (2022 £41,000) and the outstanding lease commitments at 30 June 2023 were £126,000
(2022: £128,000).
Company Balance Sheet
as at 30 June 2023
Fixed assets
Tangible fixed assets
Investments
Current assets
Debtors due within one year
Debtors due after one year
Retirement benefit obligations
Total debtors
Derivative financial instruments
Cash at bank and in hand
Total current assets
Creditors due within one year
Derivative financial instruments
Net current assets
Total assets less current liabilities
Creditors due after more than one year
Provision for liabilities
Retirement benefit obligations
Net assets
Capital and reserves
Equity share capital
Equity share capital (B shares)
Called up share capital
Share premium account
Hedging reserve
Profit and loss account
Total shareholders’ funds
Note
3
4
5
5
10
7
8
7
9
6
10
11
2023
£’000
4,077
40,982
45,059
53,244
132
–
53,376
773
51,389
105,538
(9,639)
(213)
95,686
140,745
(200)
–
(1,460)
139,085
20,838
160
20,998
13
558
117,516
139,085
67
2022
£’000
4,291
40,152
44,443
63,042
–
6,144
69,186
2,166
41,171
112,523
(11,063)
(517)
100,943
145,386
(200)
(1,765)
–
143,421
20,837
160
20,997
–
1,625
120,799
143,421
The company has taken advantage of the provisions of Section 408 of the Companies Act 2006 and has elected not to present its
own profit and loss account. The profit after taxation for the financial year dealt with in the financial statements of the company
was £36,226,000 (2022: £30,797,000).
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 September 2023.
M Halstead
Director
G R Oliver
Director
James Halstead plc Registration Number 140269
68
Company Statement of Changes in Equity
for the year ended 30 June 2023
Share
capital
£'000
Share
premium
£'000
Capital
redemption
reserve
£'000
Hedging
reserve
£’000
Profit
and loss
account
£’000
Total
shareholders’
funds
£'000
Balance at 30 June 2021
10,568
4,122
1,174
749
119,514
136,127
Profit for the year
Remeasurement of the net defined
benefit liability
Fair value movements on
hedging instruments
Total comprehensive income for
the year
Transactions with equity shareholders
Dividends
Issue of share capital
Bonus issue of share capital
Share based payments
Balance at 30 June 2022
–
–
–
–
–
11
10,418
–
20,997
Profit for the year
Remeasurement of the net defined
benefit liability
Fair value movements on
hedging instruments
Total comprehensive income for
the year
Transactions with equity shareholders
Dividends
Issue of share capital
Share based payments
–
–
–
–
–
1
–
Balance at 30 June 2023
20,998
–
–
–
–
–
–
–
–
–
812
(4,934)
–
–
–
(1,174)
–
–
–
–
–
–
–
13
–
13
–
–
–
–
–
–
–
–
–
–
–
30,797
30,797
7,090
7,090
876
–
876
876
37,887
38,763
–
–
–
–
(32,298)
–
(4,310)
6
(32,298)
823
–
6
1,625
120,799
143,421
–
–
36,226
36,226
(7,237)
(7,237)
(1,067)
–
(1,067)
(1,067)
28,989
27,922
–
–
–
(32,298)
–
26
(32,298)
14
26
558
117,516
139,085
69
Notes to the Company Financial Statements
1.
Accounting policies
Basis of preparation
The separate financial statements of the company are presented as required by the Companies Act 2006. The company meets the
definition of a qualifying entity under FRS 100 Application of Financial Reporting Requirements issued by the Financial Reporting
Council. Accordingly, the financial statements have been prepared in accordance with FRS 101 Reduced Disclosure Framework as
issued by the Financial Reporting Council.
The company has used the disclosure exemptions available under FRS 101 in relation to presentation of a cash flow statement,
comparative information for certain assets, capital management, transactions with other group companies, compensation of key
management personnel and the effects of new but not yet effective UK adopted international accounting standards.
As the consolidated financial statements include the equivalent disclosures, the company has used the disclosure exemptions
available under FRS 101 in relation to share based payments, and financial instruments. The disclosures for the defined benefit
retirement obligations are included in the consolidated financial statements.
The financial statements are prepared on a going concern basis and in accordance with the historical cost convention, except for
certain financial instruments that have been measured at fair value.
The statement on going concern in the consolidated financial statements also justifies the going concern basis used for the
company financial statements.
The accounting policies of the company are the same as those set out in the consolidated financial statements. The critical
accounting estimates and judgements are income taxes and retirement benefit obligations as set out in the consolidated financial
statements.
The following additional accounting policies are specific to the company’s financial statements.
Investments
Investments in subsidiaries are stated at cost less provision for impairment in value.
Investment land and buildings
Investment land and buildings are stated at cost less depreciation and any provision for impairment. Depreciation is calculated to
write off the buildings on a straight line basis over their estimated economic life of fifty years. No depreciation is charged in respect
of land.
Group debtors
Amounts owed by group undertakings are stated after any provision for expected credit loss in line with the three stage model in
IFRS 9.
70
Notes to the Company Financial Statements
continued
2.
Staff costs and numbers
Staff costs comprised:
Wages and salaries
Social security costs
Pension costs
Share based payments expense
The average monthly number of employees during the year was 23 (2022: 22).
3.
Tangible fixed assets
2023
£’000
3,433
458
94
26
4,011
Cost
At 30 June 2022
Disposals
At 30 June 2023
Depreciation
At 30 June 2022
Charge for the year
Disposals
At 30 June 2023
Net book value
At 30 June 2023
At 30 June 2022
Investment
land and
buildings
£’000
8,091
–
8,091
4,954
160
–
5,114
2,977
3,137
Freehold
land and
buildings
£’000
1,326
–
1,326
350
24
–
374
952
976
Plant and
equipment
£’000
596
(18)
578
418
30
(18)
430
148
178
2022
£’000
3,493
472
98
6
4,069
Total
£’000
10,013
(18)
9,995
5,722
214
(18)
5,918
4,077
4,291
The investment land and buildings relates to a freehold property that is occupied by a subsidiary company. The rental income was
£600,000 (2022: £600,000).
4.
Investments
Cost
At 30 June 2022
At 30 June 2023
Provision for impairment
At 30 June 2022
Provision reduced in the year
At 30 June 2023
Net book value
At 30 June 2023
At 30 June 2022
71
Shares in
subsidiary
undertakings
£’000
49,552
49,552
9,400
(830)
8,570
40,982
40,152
The provision for impairment of the investment in Titan Leisure Group Limited was reduced in the year.
At 30 June 2023, the company held directly and indirectly 100% of the equity and voting rights of the following undertakings:
Subsidiary
Owned by the company
Polyflor Limited
Riverside Flooring Limited
Titan Leisure Group Limited
Halstead Flooring International Limited
Expona Limited
JHL Limited
Halstead Floorings Limited
Halstead Flooring Concepts Pty Limited
Polyflor Canada Inc
Polyflor India Pvt Limited
Polyflor (M) SDN BHD
Polyflor North Asia Limited
Objectflor Art und Design Belags GmbH
James Halstead France SAS
Polyflor Nordic Sweden AB
Owned by subsidiaries
Polyflor Australia Pty Limited
Colonia Flooring Pty Limited
Polyflor New Zealand Limited
Karndean International GmbH
Activity
Flooring manufacturing and distribution
Flooring manufacturing
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Holding company
Flooring distribution
Flooring distribution
Flooring distribution
Dormant company
Flooring distribution
Flooring distribution
Flooring distribution
Flooring distribution
Dormant company
Flooring distribution
Flooring distribution
Country of
incorporation
Proportion
owned
(%)
England
England
England
England
England
England
Ireland
Australia
Canada
India
Malaysia
Hong Kong
Germany
France
Sweden
Australia
Australia
New Zealand
Germany
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
72
Notes to the Company Financial Statements
continued
Investments continued
4.
Subsidiary
Polyflor Limited
Riverside Flooring Limited
Titan Leisure Group Limited
Halstead Flooring International Limited
Expona Limited
JHL Limited
Halstead Floorings Limited
Halstead Flooring Concepts Pty Limited
Polyflor Australia Pty Limited
Colonia Flooring Pty Limited
Polyflor Canada Inc
Polyflor India Pty Limited
Polyflor (M) SDN BHD
Polyflor North Asia Limited
Objectflor Art und Design Belags GmbH
Karndean International GmbH
James Halstead France SAS
Polyflor Nordic Sweden AB
Polyflor New Zealand Limited
Registered office
Beechfield
Hollinhurst Road
Radcliffe
Manchester
M26 1JN
England
24/26 City Quay
Dublin 2
D02NY19
Ireland
101 Prosperity Way
Dandenong
VIC 3175
Australia
3209 Orlando Drive
Mississauga
Ontario L4V IC5
Canada
B-408 Knox Plaza
Mindspace, Malad West
Mumbai 400 064
India
802, 8th Floor, Block C
Kelana Square
17 Jalan 557/26
Petaling Jaya
Salangor 47301
Malaysia
Units 1607-8
16th floor
Citicorp Centre
18 Whitfield Road
Causeway Bay
Hong Kong
Wankelstrasse 50
D 50996 Koln
Germany
Parc Saint Christophe
10 Avenue de l’Enterprise
95861 Cergy Pontoise
France
Box 102 51
434 23 Kungsbacka
Besoksadress
Energigatan 9
Sweden
2 Narek Place
Manukau City
Auckland 2104
New Zealand
5.
Debtors
Trade debtors
Amounts owed by group undertakings
Corporation tax
Other debtors
Prepayments
Debtors due within one year
Deferred tax assets (note 6)
Debtors due after one year
6.
Deferred tax assets/(liabilities)
At 30 June 2022
Charged to income statement
Credited to other comprehensive income
At 30 June 2023
2023
£’000
–
53,081
–
72
91
53,244
132
132
Retirement
benefit
obligations
£’000
Accelerated
tax
depreciation
£’000
(1,536)
(511)
2,412
365
(229)
(4)
–
(233)
Derivative financial instruments
7.
Derivative financial instruments are forward foreign exchange contracts recognised in the balance sheet at fair value.
8.
Creditors due within one year
Trade creditors
Amounts due to group undertakings
Other taxation and social security
Other creditors
Accruals
2023
£’000
136
6,631
125
414
2,333
9,639
73
2022
£’000
172
62,084
544
86
156
63,042
–
–
Total
£’000
(1,765)
(515)
2,412
132
2022
£’000
370
6,631
122
427
3,513
11,063
74
Notes to the Company Financial Statements
continued
9.
Creditors due after more than one year
Preference shares (note 11)
10. Retirement benefit obligations
Present value of funded obligations
Fair value of scheme assets
Net (liability)/asset
2023
£’000
200
2023
£’000
(57,609)
56,149
(1,460)
2022
£’000
200
2022
£’000
(63,092)
69,236
6,144
The company sponsors the Halstead Group Pension Scheme. Disclosure information is provided in note 26 to the consolidated
financial statements.
11. Share capital
Ordinary shares – allotted, issued and fully paid
Opening ordinary shares of 5p each
Ordinary shares of 5p each issued
Ordinary shares of 5p each bonus issue
Closing ordinary shares of 5p each
Ordinary B shares of 1p each
Total allotted, issued and fully paid
2023
Number
2022
Number
416,744,052
10,000
–
208,159,916
212,110
208,372,026
416,754,052
416,744,052
16,042,530
16,042,530
2023
£’000
20,837
1
–
20,838
160
2022
£’000
10,408
11
10,418
20,837
160
20,998
20,997
The ordinary shares of 5p each were issued during the year for a consideration of £14,000 (2022: £823,000).
The issued share capital was increased by a bonus issue of one fully paid ordinary share for each fully paid ordinary share held on
the register at 14 January 2022.
Shareholders approved a proposal for the return of capital (“return of capital”) at an extraordinary general meeting on 6 December
2004. This resulted in the creation of the 1 pence B ordinary shares (“B shares”), which were issued on 14 January 2005. Following
the issue of the B shares, holders received a single dividend of 60 pence per B share. The B shares are not listed, have extremely
limited rights and are of negligible value.
The preference shares detailed below are included as financial instruments within creditors.
Allotted, issued and fully paid
200,000 5.5% preference shares of £1 each
2023
£’000
2022
£’000
200
200
75
11. Share capital (continued)
The 5.5% cumulative preference shares of £1 shall confer on the holders thereof the right to receive in priority to all other shares
in the capital of the company out of the profits of the company which it shall be determined to distribute, a fixed cumulative
preferential dividend at the rate of 5.5% per annum on the capital for the time being paid up thereon and the right in the event of
a winding up, in priority to all other shares in the capital of the company, to repayment of the capital paid up thereon together
with a premium of 5p per share and a sum equivalent to any arrears and accruals of the said fixed cumulative preferential dividend
thereon (whether earned or declared or not) calculated up to the date of such repayment of capital but shall not confer any further
right to participate in profits or assets of James Halstead plc.
The company shall not be at liberty to create or issue any further shares ranking in priority to or pari passu with the preference
shares without the consent in writing of the holders of three-fourths of the issued preference shares or the sanction of an
extraordinary resolution of the holders of such preference shares passed at a separate general meeting of such holders. The
preference shares shall not confer upon the holders thereof the right to attend or vote at any general meeting of the company or
to receive notice thereof, unless either:
(i) At the date of the notice convening the meeting the fixed cumulative preferential dividend on the preference shares is six
months in arrears and then so long only as such dividend shall remain unpaid, and so that for this purpose the dividend on the
preference shares shall be deemed to accrue due and be payable by equal half-yearly instalments on 30 June and 31 December in
every year, or
(ii) The business of the meeting includes the consideration of a resolution for reducing the capital or winding up the company or
for the sale of its undertaking or of any resolution directly abrogating or varying any of the special rights or privileges attached to
the preference shares.
The preference shares shall nevertheless entitle the holders thereof to receive notice of every general meeting. At a general
meeting at which the holders of preference shares are entitled to attend and vote, the preference shares shall entitle a holder
thereof, or his proxy, to vote only for every preference share held by him.
12. Related party transactions
The company has taken advantage of the exemption granted by FRS 101 not to disclose transactions and balances with other group
companies.
76
Ten Year Summary (Unaudited)
2014
£’000
2015
£’000
2016
£’000
2017
£’000
2018
£’000
2019
£’000
2020
£’000
2021
£’000
2022
£’000
2023
£’000
Revenue
223,488 227,261 226,141 240,784 249,510 253,038 238,630 266,362 291,860 303,562
Profit before income tax
41,753
44,184
45,499
46,616
46,702
48,276
43,857
51,268
52,063
52,099
Income tax
(10,301) (10,250) (10,243) (10,106)
(9,994) (10,484)
(9,502) (11,407) (11,735)
(9,695)
Profit after income tax
31,452
33,934
35,256
36,510
36,708
37,792
34,355
39,861
40,328
42,404
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Basic earnings per 5p share
Dividends per 5p share
7.6p
5.0p
8.2p
5.5p
8.5p
6.0p
8.8p
6.5p
8.8p
6.8p
9.1p
7.0p
8.3p
7.1p
9.6p
7.6p
9.7p
7.8p
10.2p
8.0p
Figures for the previous years have been restated to take account of the one-for-one bonus share issue in the year ended 30 June
2022.
Special dividends are not included.
77
Shareholder Information
Financial calendar
Annual general meeting
Announcement of results
For the half year
For the full year
Dividend payments
Ordinary shares – interim
– final
1 December 2023
March
September
June
December
Preference shares
June and December
Share dealing information
The ordinary shares of the company are traded on the Alternative Investment Market of the London Stock Exchange.
Information concerning the day-to-day movement of the share price can be found on the London Stock Exchange website.
Shareholder analysis
as at 15 September 2023
By size of holding
1-20,000
20,001-100,000
100,001-200,000
200,001-1,000,000
1,000,001 and over
By category
Private individuals
Banks and nominee companies
Other limited companies/corporate bodies
Miscellaneous bodies/pension funds
Investment trusts and funds
Number of
holders
Number of
shares
1,365
391
67
76
54
8,327,362
17,946,064
9,201,016
33,634,479
347,645,131
%
2.0
4.3
2.2
8.1
83.4
1,953
416,754,052
100.0
Number of
holders
Number of
shares
1,649
264
29
7
4
201,480,944
213,490,454
1,535,684
146,074
100,896
%
48.4
51.2
0.4
0.0
0.0
1,953
416,754,052
100.0
78
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the ONE HUNDREDTH and EIGHTH ANNUAL GENERAL MEETING of the company will be
held at Platinum Suite, Toughsheet Community Stadium, Burnden Way, Bolton, BL6 6JW, on 1 December 2023 at 12pm.
Ordinary business
1
To receive and adopt the report of the directors and the statement of accounts for the year ended 30 June 2023
together with the report of the auditors.
2
3
4
5
To declare a final dividend on the ordinary shares in the capital of the company for the year ended 30 June 2023.
To re-elect Mr M J Halstead who is retiring by rotation under the articles of association as a director.
To re-elect Mr R P Whiting who is retiring by rotation under the articles of association as a director.
To re-appoint BDO LLP as auditors of the company and authorise the directors to fix their remuneration for the
ensuing year.
Special business
To consider and, if thought fit, pass the following resolutions of which resolutions 6 and 7 shall be proposed as ordinary
resolutions and resolutions 8 and 9 will be proposed as special resolutions:
6
7
8
That, subject to the passing of the ordinary and special resolutions numbered 8 and 9 below, the directors be and they
are hereby authorised, pursuant to article 35.14 of the company’s articles of association:
(i)
(ii)
to exercise the power contained in article 35.14 so that, to the extent determined by the directors, the holders of
ordinary shares be permitted to elect to receive new ordinary shares of 5.0p each in the capital of the company,
credited as fully paid, instead of all or part of any interim or final dividends which shall be declared before the
conclusion of the next annual general meeting of the company after the passing of this resolution; and
to capitalise the appropriate amount of new ordinary shares falling to be allotted pursuant to any elections made
as aforesaid out of profits, or sums standing to the credit of any share premium account or capital reserves of
the company, to apply such sums in paying up such new ordinary shares and to allot such new ordinary shares
to the members of the company making such elections in accordance with their respective entitlements.
That in substitution for all existing and unexercised authorities and powers, the directors of the company be and they
are hereby generally and unconditionally authorised for the purpose of section 551 Companies Act 2006 (the “Act”)
to exercise all or any of the powers of the company to allot shares of the company or to grant rights to subscribe for,
or to convert any security into, shares of the company (such shares and rights being together referred to as “Relevant
Securities”) up to an aggregate nominal value of £6,945,901 to such persons at such times and generally on such
terms and conditions as the directors may determine (subject always to the articles of association of the company)
PROVIDED THAT this authority shall, unless previously renewed, varied or revoked by the company in general meeting,
expire at the conclusion of the next annual general meeting or on the date which is six months after the next
accounting reference date of the company (if earlier) save that the directors of the company may, before the expiry
of such period, make an offer or agreement which would or might require relevant securities or equity securities (as
the case may be) to be allotted after the expiry of such period and the directors of the company may allot relevant
securities or equity securities (as the case may be) in pursuance of such offer or agreement as if the authority
conferred hereby had not expired.
That subject to the passing of the ordinary resolution numbered 8 above the directors be and they are hereby
empowered pursuant to Section 570 of the Companies Act 2006 to allot equity securities (within the meaning of
Section 560 subsection (1) of the said Act) for cash pursuant to the authority conferred by resolution numbered 6
above as if Section 561 of the said Act did not apply to any such allotment provided that this power shall be limited
to:
(i)
the allotment of equity securities in connection with an offer of such securities by way of rights to holders of
ordinary shares in proportion (as nearly as may be practical) to their respective holdings of such shares, but
subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation
to fractional entitlements or any legal or practical problems under the laws of any territory, or the
requirements of any regulatory body or stock exchange; and
79
(ii)
the allotment (otherwise than pursuant to sub-paragraph (i) above) of equity securities up to an aggregate
nominal amount of 5% of the ordinary share capital of the company in issue at the date of the passing of this
resolution
and shall expire at the conclusion of the next annual general meeting or on the date which is six months after the next
accounting reference date of the company (if earlier) save that the company may before such expiry make an offer or
agreement which would or might require equity securities to be allotted after such expiry and the directors may allot
equity securities in pursuance of such an offer or agreement as if the power conferred hereby had not expired.
9
That the company is hereby generally and unconditionally authorised for the purposes of section 693 and 701 of the
Companies Act 2006 to make one or more market purchases (within the meaning of section 693(4) of the said Act)
of fully paid ordinary shares of 5 pence each in the capital of the company (“ordinary shares”) provided that:
(i)
(ii)
(iii)
(iv)
(v)
the maximum aggregate number of ordinary shares hereby authorised to be purchased is 10% of the ordinary
shares in issue at the date of passing of this resolution;
the maximum price (exclusive of any expenses) which may be paid for an ordinary share shall not be more
than 5% above the average of the middle market quotations for an ordinary share as derived from the Daily
Official List of The London Stock Exchange plc for the five business days immediately preceding the day on
which the ordinary share is purchased;
the minimum price which may be paid for each ordinary share is 5 pence (exclusive of any expenses);
unless previously revoked or varied, the authority hereby conferred shall expire at the conclusion of the next
annual general meeting of the company or twelve months from the date, if earlier, of passing this resolution;
the company may make a contract or contracts to purchase its ordinary shares under the authority hereby
conferred prior to the expiry of such authority which will or may be executed wholly or partly after the expiry
of such authority and the company may make a purchase of its ordinary shares in pursuance of such contract
as if the authority hereby conferred had not expired; and
(vi)
the directors may elect to hold shares purchased under this authority in the form of treasury shares (subject
to a maximum of 10% of the issued ordinary share capital of the company at any one time).
By order of the board
D N Fletcher
Secretary
13 October 2023
Beechfield
Hollinhurst Road
Radcliffe
Manchester
M26 1JN
80
Notice of Annual General Meeting
continued
Notes
1
Preference shareholders are advised that they are not entitled to attend or vote at the annual general meeting.
2
3
4
5
6
7
8
9
You can vote either:
i.
By logging on to www.signalshares.com and following the instructions. If you experience difficulties in logging in or require
assistance, please contact Link Group directly on Tel: 0371 664 0300 (Calls are charged at the standard geographic rate and will
vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between
09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales).
By appointing a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at the meeting. A
shareholder may appoint more than one proxy in relation to the meeting provided that each proxy is appointed to exercise the
rights attached to a different share or shares held by that shareholder. A proxy need not be a shareholder of the company. Please
consider appointing the Chairman of the AGM as your proxy, with voting instructions, to ensure your vote is counted. You may
request a form of proxy directly from the registrars, Link Group using the telephone number above (same call terms and
conditions apply). In order for a proxy appointment to be valid a form of proxy must be completed. In each case the form of proxy
must be received by Link Group, Central Square, 29 Wellington Street, Leeds, LS1 4DL by 12pm on 29 November 2023.
By attending the meeting in person at the address and time set out at the beginning of this notice, bringing either your
attendance card or other appropriate form of identification so that you can be identified by the company’s registrars. It is
recommended that you arrive at least 15 minutes before the time appointed for the meeting to begin. To be entitled to attend
and vote at the meeting (and for the purpose of the determination by the company of the votes they may cast), shareholders
must be entered in the register of members of the company at close of business on 29 November 2023.
In the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the procedures
set out below.
ii
iii
iv.
If you return more than one proxy appointment, either by paper or electronic communication, the appointment received last by the
Registrar before the latest time for the receipt of proxies will take precedence. You are advised to read the terms and conditions of use
carefully. Electronic communication facilities are open to all shareholders and those who use them will not be disadvantaged
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the
Meeting (and any adjournment of the Meeting) by using the procedures described in the CREST Manual (available from
www.euroclear.com/site/public/EUI). CREST Personal Members or other CREST sponsored members, and those CREST members who
have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the
appropriate action on their behalf. In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate
CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s
specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must
be transmitted so as to be received by the issuer’s agent (ID RA10) by 12pm on 29 November 2023. For this purpose, the time of receipt
will be taken to mean the time (as determined by the timestamp applied to the message by the CREST application host) from which
the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change
of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & Ireland Limited
does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore,
apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the
CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that their
CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means
of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting
system providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system
and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
Any corporation which is a shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its
powers as a shareholder provided that no more than one corporate representative exercises powers in relation to the same shares.
As at 28 September 2023 (being the latest practicable business day prior to the publication of this Notice), the company’s ordinary
issued share capital consisted of 416,754,052 ordinary shares, carrying one vote each. Therefore, the total voting rights in the company
as at 28 September 2023 were 416,754,052.
You may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006) provided in either this
Notice or any related documents (including the form of proxy) to communicate with the company for any purposes other than those
expressly stated.
A copy of this Notice, and other information required by Section 311A of the Companies Act 2006, can be found on the company’s
website at www.jameshalstead.com.
10
The documents listed below will be available for inspection at an agreed time at the registered office of the company during the usual
business hours on any weekday except bank holidays. Please e-mail secretary@jameshalstead.plc.uk (Label your e-mail “AGM
documents”) to book an appointment to view the following documents:
i.
ii.
The register of interests of the directors in the share capital of the company: and
Copy of the service contract of Mr G R Oliver.
11
The final dividend, if approved, will be paid on 15 December 2023 to shareholders on the register as at 17 November 2023.
Report & Accounts 2023
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Classic Mystique PUR
Imperial War Museum, Cambridgeshire, UK
Expona Commercial PUR
House of Books & Friends, Manchester, UK
Beechfield
Hollinhurst Road
Radcliffe
Manchester
M26 1JN
Tel +44 (0)161 767 2500
www.jameshalstead.com
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