15. James Halstead Plc
Flooring the World
Tracing its roots back to 1915, James Halstead Plc manufactures and distributes flooring products globally, with a focus on vinyl solutions for various sectors. Based in Manchester, the company operates in the flooring industry – a niche within construction materials – supplying durable, stylish flooring for schools, hospitals, offices, and homes across the UK, Europe, Scandinavia, Australasia, Asia, and beyond.
James Halstead’s revenue primarily comes from selling its flooring products through its flagship brand, Polyflor, and other lines like Polysafe, Expona, and Camaro. These vinyl floor coverings are made at its UK facilities, such as those run by subsidiaries Polyflor Limited and Riverside Flooring Limited, and distributed internationally via subsidiaries like Polyflor Australia Pty Limited and Polyflor Canada Inc. The company caters to diverse needs – from slip-resistant flooring for hospitals to luxury vinyl tiles for homes – often charging per square metre, with prices varying by product and market. It also earns by exporting to over 60 countries, leveraging a network of sales and warehouse operations in places like China and the Middle East. In 2024, revenues were £274.9 million, down 9.45% from £303.6 million the previous year, reflecting tough market conditions, though net income held steady at £41.5 million because of a slight easing of supply chain costs.
The company’s history of innovation bolsters its earnings. In the late 1940s, it pioneered Polyflor, a groundbreaking vinyl sheet product that became a cornerstone of its success. Today, James Halstead continues to invest in technical advancements, producing flooring that meets modern demands for sustainability and safety, which helps it secure contracts in public and commercial projects. Employing around 800 people, it remains family-led, with Halstead descendants on the board, maintaining a focus on quality and global expansion.
Despite its strengths, James Halstead faces challenges from economic slowdowns and competition in the flooring market. Its global reach offers growth potential, but currency fluctuations and supply chain issues could squeeze margins. Still, its reputation for durability and innovation keeps it a solid player in a competitive field.
James Halstead remains a family-run business with an excellent balance sheet. For years, it was a staple in UK inheritance tax planning – one of the rare dependable names on AIM. But recent legislative changes have eroded the tax advantages of AIM membership, triggering prolonged selling pressure and a sharp drop in the share price.
This isn’t a company that’s going to deliver explosive returns, but it is dependable, well-managed, and conservatively financed. It doesn’t merit a full Wonder Stocks Deep Dive; it's simply too pedestrian an opportunity. But it is a high-quality business trading on a cheap valuation with a strong yield.
Jamie Ward, author of Wonder Stocks, wrote up this value opportunity for MoneyWeek in 2024. You can find the article on the Wonder Stocks site under Elsewhere.
