Companies: JHD   

Investors in vinyl floor covering manufacturer James Halstead (JH) can expect to receive a £15m cash windfall due to the disposal of non-core assets. Due to its decision to focus on the core floor covering business, the company sold a number of brands, including Belstaff International (a jacket manufacturer), for £10.4m in June. In total, this and previous disposals contributed net cash of £37.1m to the balance sheet, so it is with little wonder JH can afford to return 60p per share to shareholders. The monies will be returned through the issue of B and C shares that can be redeemed immediately or on an annual basis with 4% interest while the shares are still held. Regardless of the disposals, which will have a small impact on profits, the company is in rude health, reporting a pre-tax profit of £21.4m for the year to June. Once the exceptional gains from its disposals are stripped out, the company still increased its profits by 12.2% to £13.7m. JH predominantly produces various floor coverings for the education and healthcare sectors in the UK and overseas. Most recently it acquired Swedish concern Falck Design. House broker Westhouse Securities expects pre-tax profits of £14.2m in 2005. While the prospective p/e of 13.7 is only slightly higher than the sector average, if you've already bought in hold for the return of capital, but bear in mind that the shares have already jumped up 42% to 550p since January.