LONDON (ShareCast) - (Sharecast News) - James Halstead said in an update on Tuesday that full-year profit was expected to be in line with market forecasts, despite subdued sales in Europe and a slower-than-expected recovery in UK public sector demand.
The AIM-traded commercial flooring manufacturer said sales for the year ended 30 June would be marginally below the prior year, while profit was set to come in just below last year's record, but still within expectations.

Solid trading in the UK and overseas helped offset headwinds in mainland Europe, where consumer spending and construction demand remained muted.

UK sales - the company's largest market - rebounded from a 5% decline in the prior year, driven by gains in market share and continued strength in sheet vinyl.

While volumes of luxury vinyl tile (LVT) rose only modestly, Halstead said demand for its Polyflor-branded LVT held up well due to its quality, value, and sustainability credentials, helping the company outperform the wider market.

However, expectations for a broader recovery in public sector demand were yet to materialise.

"An anticipated uplift in demand in the education, healthcare and the prison sectors has not, yet, materialised," the company said, although sales into aged care and affordable housing were described as satisfactory.

In Europe, trading was more challenging.

The firm cited sluggish consumer activity, particularly in France and the Netherlands, and constrained public spending as governments prioritised national security over social infrastructure.

That weighed on refurbishment projects and new retail store openings, hurting LVT volumes.

Outside Europe, performance was stronger.

Sales in the Americas, the Middle East, the Mediterranean and south Asia all posted growth, with south Asia up 38% year-on-year.

Margins were supported by tight cost control and manufacturing efficiency.

The company also noted that while shipping delays and tariff-related uncertainty disrupted trade routes, they had the unexpected benefit of lifting demand for UK-made flooring in the US, as importers sought alternatives to higher-tariff markets.

James Halstead said it was still operating with no gearing and strong reserves.

It said it expected to report full-year results towards the end of September.

At 1446 BST, shares in James Halstead were down 4.02% at 149.25p.

Reporting by Josh White for Sharecast.com.

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