An 8.2% dividend hike has failed to ease investor concerns over building materials supplier James Halstead’s (JHD) warning about the increasing cost of raw materials.
The stock is trading nearly 5% lower at 459.6p.
One of its raw materials known as plasticiser, a solvent used for making materials more hard-wearing, has been under significant pricing pressure. This is being blamed on suspended production at German chemicals giant BASF after an explosion at one of its European plants.
James Halstead says it has ‘appropriate volumes’ but highlights that BASF’s failure to supply is raising prices. There are also supply chain delays, which are expected to continue in to the second half.
Revenue in the UK market is expected to be 4% to 5% lower than last year, although this has been factored in by management.
