REG - Latham(James) PLC - Half-year Report
30/11/2023 07:15
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RNS Number : 1274V Latham(James) PLC 30 November 2023
James Latham plc
("James Latham" or the "Company")
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2023
Chairman's statement
Unaudited results for the six months trading to 30 September 2023
Revenue for the six months ended 30 September 2023 was £190.9m, down 10.3% on
£212.8m for the same period last year. Cost prices on both timber and
panels have slowly fallen throughout the first half of the year but they are
now relatively stable and there are currently few signs of price weakness.
Sales volumes have also remained at similar levels to the same period last
year. We have seen a change in the product mix of our sales, with some of our
customers moving to cheaper alternative products to counter the effect of high
inflation, which is the main reason for the reduction in revenues.
Gross profit percentage, which includes warehouse costs, for the six month
period ended 30 September 2023 was 16.8% compared with 19.4% in the
comparative six months. Increased competition in weaker market conditions
has led to the gross profit percentage dipping slightly below the long term
average of 17.5%.
Overheads have been well controlled during the six months, and despite the
stubbornly high inflation rates, the overheads are slightly lower than the
same period last year.
Operating profit was £14.5m, down £9m compared with £23.5m profit for the
same period last year. This reduction was anticipated as we return to normal
trading conditions after the exceptional results of the last two years. Profit
before tax was £16.4m compared with £23.7m for the same period last year.
The tax charge of £4.0m represents an effective rate of 24.6%, and reflects
the increase in the UK basic rate of corporation tax. Earnings per ordinary
share were 61.5p compared with 95.6 p for the same period last year.
As at 30 September 2023 net assets are £203.8m (2022: £180.5m). Inventory
levels of £66.1m have reduced from £74.6m at the same period last year as
supply chains have stabilised. Trade and other receivables are also slightly
down with bad debts remaining at a low figure. Cash and cash equivalents
have increased to £66.0m (2022: £36.9m) and we continue to take advantage of
additional early settlement discount opportunities with our suppliers as well
as generating improved interest receipts.
There is a surplus in the IAS19 valuation of the pension scheme at 30
September 2023 of £11.2m compared with £7.2m in the same period last year.
The triennial valuation at 31 March 2023 has been completed, and is showing a
surplus of £10.0m and a funding level of 118%. This strong position has
enabled the trustees to derisk their investments to reduce the volatility of
the IAS19 valuation. In addition the deficit recovery funding payment of £3m
a year will cease from 1 December 2023.
Interim dividend
The Board has declared an increased interim dividend of 7.75p per Ordinary
Share (2022: 7.25p). The dividend is payable on 26 January 2024 to ordinary
shareholders on the Company's Register at close of business on 5 January
2024. The ex-dividend date will be 4 January 2024.
Current and future trading
The second half of 2023/24 has started with similar volumes to the previous
six month period to 30 September 2023, with similar margins. Cost prices of
the majority of our products are stable at the moment, but we are mindful that
the market in continental Europe is quiet at the moment, with European Panel
manufacturers exporting more product to the UK, where the market is currently
more robust. There remain significant cost pressures on all our manufacturers,
so we expect any further price weakness to be limited.
Our customers still have reasonable order books, but there are still
indications that some contracts are being postponed rather than cancelled. We
are seeing a continued shift in our market sectors to more lower value
products, where we have gained market share, and we expect this trend to
continue as customers look for more cost effective solutions.
The strength of our customer base and the diverse markets in which we operate
will help us during the more challenging macroeconomic climate that we are all
facing.
The board anticipates that the results for the year ended 31 March 2024 will
be in line with market expectations.
Nick Latham
Chairman
30 November 2023
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended.
For further information please visit www.lathamtimber.co.uk
(http://www.lathamtimber.co.uk) or contact:
James Latham plc Tel: 01442 849 100
Nick Latham, Chairman
David Dunmow, Finance Director
SP Angel Corporate Finance LLP
Matthew Johnson / Charlie Bouverat (Corporate Finance) Tel: 0203 470 0470
Abigail Wayne (Corporate Broking)
JAMES LATHAM PLC
CONSOLIDATED INCOME STATEMENT
For the six months to 30 September 2023
Six months to 30 Sept. 2023 unaudited Six months to 30 Sept. 2022 unaudited Year to 31 March 2023 audited
£000 £000 £000
Revenue 190,882 212,797 408,370
Cost of sales (including warehouse costs) (158,832) (171,443) (328,361)
Gross profit 32,050 41,354 80,009
Selling and distribution costs (12,033) (12,147) (24,214)
Administrative expenses (5,558) (5,680) (12,097)
Operating profit 14,459 23,527 43,698
Finance income 2,063 231 1,071
Finance costs (126) (98) (258)
Profit before tax 16,396 23,660 44,511
Tax expense (4,030) (4,606) (8,593)
Profit after tax attributable to owners of the parent company 12,366 19,054 35,918
Earnings per ordinary share (basic) 61.5p 95.6p 179.5p
Earnings per ordinary share (diluted) 61.4p 95.2p 179.2p
All results relate to continuing operations.
JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months to 30 September 2023
Six months to 30 Sept. 2023 unaudited Six months to 30 Sept. 2022 unaudited Year to 31 March 2023 audited
£000 £000 £000
Profit after tax 12,366 19,054 35,918
Other Comprehensive income
Actuarial gains on defined benefit pension scheme 1,982 3,242 1,407
Deferred tax relating to components of other comprehensive income (495) (1,080) (632)
Foreign translation (charge)/credit (64) 492 233
Other comprehensive income for the period, net of tax 1,423 2,654 1,008
Total comprehensive income, attributable to owners of the parent company 13,789 21,708 36,926
JAMES LATHAM PLC
CONSOLIDATED BALANCE SHEET
At 30 September 2023
As at 30 Sept. 2023 unaudited As at 30 Sept. 2022 unaudited As at 31 March 2023 audited
£000 £000 £000
ASSETS
Non-current assets
Goodwill 1,181 1,363 1,193
Intangible assets 1,236 1,403 1,319
Property, plant and equipment 37,841 37,278 37,440
Right-of-use-asset 5,438 3,995 5,817
Retirement benefit surplus 11,212 7,318 7,221
Deferred tax asset 53 134 -
Total non-current assets 56,961 51,491 52,990
Current assets
Inventories 66,052 74,588 67,489
Trade and other receivables 64,220 69,380 66,782
Cash and cash equivalents 65,958 36,939 62,609
Tax receivable 13 - 490
Total current assets 196,243 180,907 197,370
Total assets 253,204 232,398 250,360
Current liabilities
Lease liabilities 879 1,429 879
Trade and other payables 35,013 40,471 41,066
Current tax payable - 268 -
Total current liabilities 35,892 42,168 41,945
Non-current liabilities
Interest bearing loans and borrowings 587 592 592
Lease liabilities 4,806 2,753 5,130
Deferred tax liabilities 8,124 6,369 7,118
Total non-current liabilities 13,517 9,714 12,840
Total liabilities 49,409 51,882 54,785
Net assets 203,795 180,516 195,575
Capital and reserves
Issued capital 5,040 5,040 5,040
Share-based payment reserve 152 438 124
Own shares - (708) -
Capital reserve 398 398 398
Retained earnings 198,205 175,348 190,013
Total equity attributable to shareholders of the parent company 203,795 180,516 195,575
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six months to 30 September 2023
Six months to 30 Sept 2023 unaudited Six months to 30 Sept 2022 unaudited Year to 31 March 2023 audited
£000 £000 £000
Net cash flow from operating activities
Cash generated from operations 13,197 11,744 43,864
Interest paid (25) (26) (53)
Income tax paid (3,094) (4,043) (7,498)
Net cash inflow from operating activities 10,078 7,675 36,313
Cash flows from investing activities
Interest received and similar income 1,697 127 822
Purchase of property, plant and equipment (2,233) (1,782) (3,304)
Proceeds from sale of property, plant and equipment 27 56 72
Net cash outflow from investing activities (509) (1,599) (2,410)
Cash flows before financing activities
Lease liability payments (425) (787) (1,499)
Equity dividends paid (5,789) (5,380) (6,825)
Purchase of own shares (6) - -
Cash outflow from financing activities (6,220) (6,167) (8,324)
Increase/(decrease) in cash and cash equivalents for the period 3,349 (91) 25,579
Cash and cash equivalents at beginning of the period 62,609 37,030 37,030
Cash and cash equivalents at end of the period 65,958 36,939 62,609
JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent company
Issued capital £000 Share-based payment reserve £000 Own shares £000 Capital reserve £000 Retained earnings £000 Total equity £000
As at 1 April 2022 (audited) 5,040 387 (873) 398 159,019 163,971
Profit for the period - - - - 19,054 19,054
Other comprehensive income:
Actuarial gain on defined benefit pension scheme - - - - 3,242 3,242
Deferred tax relating to components of other comprehensive income - - - - (1,080) (1,080)
Foreign translation credit - - - - 492 492
Total comprehensive income for the period - - - - 21,708 21,708
Transaction with owners:
Dividends - - - - (5,379) (5,379)
Deferred tax on share options - (37) - - - (37)
Change in investment in ESOP shares - - 165 - - 165
Share-based payment expense - 88 - - - 88
Total transactions with owners - 51 165 - (5,379) (5,163)
Balance at 30 September 2022 (unaudited) 5,040 438 (708) 398 175,348 180,516
Profit for the period - - - - 16,864 16,864
Other comprehensive income:
Actuarial loss on defined benefit pension scheme - - - - (1,835) (1,835)
Deferred tax relating to components of other comprehensive income - - - - 448 448
Foreign translation charge - - - - (259) (259)
Total comprehensive income for the period - - - - 15,218 15,218
Transactions with owners:
Dividends - - - - (1,446) (1,446)
Exercise of options - (386) 1,397 - 369 1,380
Deferred tax on share options - (22) - - - (22)
Transfer to retained earnings - - (524) - 524 -
Change in investment in ESOP shares - - (165) - - (165)
Share-based payment expense - 94 - - - 94
Total transactions with owners - (314) 708 - (553) (159)
Balance at 31 March 2023 (audited) 5,040 124 - 398 190,013 195,575
Profit for the period - - - - 12,366 12,366
Other comprehensive income:
Actuarial gain on defined benefit pension scheme - - - - 1,982 1,982
Deferred tax relating to components of other comprehensive income - - - - (495) (495)
Foreign translation charge - - - - (64) (64)
Total comprehensive income for the period - - - - 13,789 13,789
Transactions with owners:
Dividends - - - - (5,789) (5,789)
Exercise of options - (8) - - 8 -
Deferred tax on share options - (1) - - - (1)
Change in investment in ESOP shares - - - 184 184
Share-based payment expense - 37 - - - 37
Total transactions with owners - 28 - - (5,597) (5,569)
Balance at 30 September 2023 (unaudited) 5,040 152 - 398 198,205 203,795
JAMES LATHAM PLC
NOTES TO THE HALF YEARLY REPORT
1. The results presented in this report are unaudited and they have been
prepared in accordance with the recognition and measurement principles of
International Accounting Standards in conformity with the requirements of the
Companies Act 2006 and on the basis of the accounting policies expected to be
used in the financial statements for the year ending 31 March 2024. The half
yearly report does not include all the disclosures that would be required for
full compliance with IFRS. The figures for the year ended 31 March 2023 are
extracted from the statutory accounts of the group for that period.
2. The directors propose an interim dividend of 7.75p per ordinary share which
will absorb £1,560,000 (2022: 7.25p absorbing £1,445,000), payable on 26
January 2024 to shareholders on the Company's Register at the close of
business on 5 January 2024. The ex-dividend date is 4 January 2024.
3. This half yearly report does not constitute statutory financial accounts
within the meaning of section 434 of the Companies Act 2006. The statutory
accounts for the year ended 31 March 2023 were filed with the Registrar of
Companies. The audit report on those financial statements was not qualified
and did not contain a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying the report and did not contain
a statement under section 498 (2) or (3) of the Companies Act 2006. The half
yearly report has not been audited by the Company's auditor.
4. Earnings per ordinary share is calculated by dividing the net profit for
the period attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Six months to 30 Sept 2023 unaudited Six months to 30 Sept 2022 unaudited Year to 31 March 2023 audited
£000 £000 £000
Net profit attributable to ordinary shareholders 12,366 19,054 35,918
Number '000 Number '000 Number '000
Weighted average share capital 20,123 19,926 20,009
Add: diluted effect of share capital options issued 24 95 31
Weighted average share capital for diluted earnings per ordinary share 20,147 20,021 20,040
calculation
5. Net cash flow from operating activities
Six months to 30 Sept 2023 unaudited Six months to 30 Sept 2022 unaudited Year to 31 March 2023 audited
£000 £000 £000
Profit before tax 16,396 23,660 44,511
Adjustment for finance income and expenditure (1,937) (133) (813)
Depreciation and amortisation 2,272 2,091 4,173
Impairment - - 179
Loss/(profit) on disposal of property, plant and equipment 7 (51) (46)
Decrease/(increase) in inventories 1,437 (358) 6,741
Decrease/(increase) in receivables 2,562 (1,048) 1,550
Decrease in payables (5,934) (9,652) (8,167)
Retirement benefits non cash amounts (1,643) (2,853) (4,446)
Share-based payments non cash amounts 37 88 182
Cash generated from operations 13,197 11,744 43,864
6. Copies of this statement will be posted on our website,
www.lathamtimber.co.uk/investors A copy can be emailed or posted upon
application to the Company Secretary, James Latham plc, Unit C2, Breakspear
Park, Breakspear Way, Hempstead, Herts, HP2 4TZ, or by email to
plc@lathams.co.uk (mailto:plc@lathams.co.uk)
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