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James Halstead PLC on Thursday said demand in the commercial flooring space is ‘robust’ though it warned of weaker margins are energy prices remain red-hot.
Chair Anthony Wild said that the flooring manufacturer’s current trading has shown the ‘resilience’ of commercial flooring, with ‘most’ markets sales ahead of the same stage last year. Wild added that international shipping rates have started to reduce and noted that the availability of shipping has improved.
‘We anticipate that shipping rates will remain lower in the near-to-mid term. Moreover, the fall in the value of sterling has offered a competitive advantage in exports,’ he said while speaking at the flooring manufacturer’s annual general meeting.
Wild also noted a significant rise in energy costs, which has more than doubled the costs of energy at its Radcliffe site in the four months ended October 31 against the previous year.
Wild added: ‘Whilst support from the government on wholesale prices to business is welcome, our energy costs have yet to hit the cap at which government’s support would be payable and even then add on costs to wholesale prices are around an additional 40% charge and are outside the scope of assistance.
‘There has obviously been margin erosion and we continue to pass on cost increases, as much as possible.’
The chair added: ‘There are challenges across our global markets but it is still early in our financial year and historically the second half of our financial year is our stronger. I and the board remain cautiously positive about the medium term prospects for the group as a whole.’
Shares in the company were 6.6% lower at 183.50 pence each in London on Thursday morning.
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