REG - Latham(James) PLC - Final Results

James LathamAnnouncement

27/06/2019 07:05

RNS Number : 5613D
Latham(James) PLC
27 June 2019
 


James Latham PLC
 
("James Latham" or the "Group")
 
Final Results
 
Chairman's statement
 
I am pleased to report good trading results for the financial year to 31 March 2019
 
Revenue for the financial year to 31 March 2019 was £235.1m, up 9.4% on last year's £214.9m. Volumes increased by 0.9%, with the majority of the growth being on direct business. The cost price of our products increased against the comparative 12 months and fluctuated more than in previous years. However cost prices on some imported plywood have shown price weakness in the last quarter of the year.
 
Gross profit for the financial year to 31 March 2019 was 17.2% compared with 17.6% in the previous financial year. This figure includes warehouse costs, which have increased due to planned extended working hours, further investment in our racking systems and some increased rents at our leased sites.
 
Profit before tax is £15.3m, up £0.1m on last year's £15.2m. As reported at the half year, the High Court made a judgment confirming that pension schemes are required to equalise male and female Guaranteed Minimum Pensions ("GMP"). The trustees have assessed this one-off cost and £0.7m has been provided to cover this. In addition profit before tax this year includes a profit of £1.1m on the sale of our old Yate site, and last year included a profit of £1.3m on the sale of our old site in Wigston.
 
Profit after tax for the year is £12.4m, down from last year's £12.6 m
 
Earnings per ordinary share, adjusted for the effect of the property profit and the one off cost relating to GMP were 61.6p (2018: 57.9p) an increase of 6.4%.
 
As at 31 March 2019 net assets have increased to £98.0m (2018: £89.8m). Non current assets have increased by £2.7m from 31 March 2018, in part due to the continuing investment in our vehicle fleet and warehouse forklifts, plus also the acquisition of Abbey Wood Agencies Limited. Inventory levels have increased to £42.3m, partly due to the increase in unit cost of the stock as well as our planned Brexit stock. Trade receivables have continued to show good debtors day figures with there being another low bad debt charge of 0.23% of revenue. Cash and cash equivalents of £15.5m (2018: £14.0m), remain strong with good cash flows from operating activities.
 
At 31 March 2019 the deficit of the defined benefit scheme under IAS19 (revised) was £8.7m, up £0.3m compared with £8.4m last year. The calculation of the pension deficit remains very sensitive to changes in assumptions.
 
Final dividend
 
The Board has declared a final dividend of 12.9p per Ordinary Share (2018: 12.1p). The dividend is payable on 23 August 2019 to ordinary shareholders on the company's register at close of business on 2 August 2019. The ex-dividend date will be 1 August 2019. The total dividend per ordinary share of 17.9p for the year (2018: 16.6p) is covered 3.5 times by earnings (2018: 3.9 times). 
 
 
Current and future trading
 
We have had a positive start to the year with sales per working day 4.5 % higher for April and May than the corresponding period last year, excluding Abbey Woods. Margins have also improved compared to the second half of 2018/19.  The acquisition and integration of Abbey Woods has gone very well, and we now have a great platform to develop sales in Ireland.  We continue to see growth in sales of added value timber and panel products, although volume growth in our core products is proving more challenging. Prices on some of our commodity panels are showing signs of weakness, partly due to over stocking within our industry. I am pleased to report that there is a good level of activity for the majority of both our timber and panel customers.  Despite the strong start to the year, there is still uncertainty surrounding the economic outlook, but we remain confident that we are in a strong position to continue to grow the business.
 
 




Development Strategy
 
The directors will continue to develop the business, and look for opportunities to grow the business through any suitable acquisitions to support market sectors we are looking to grow and also identify new products in market sectors where we are focussing our efforts. We will continue to invest in our warehouses and extend the working day at our depots to ensure that we meet the delivery needs of our existing and new customers. The focus will be major racking investment in Purfleet and Thurrock, and Gateshead where we have now gained planning permission to develop the site to improve the yard layout and provide new offices. Our Fareham depot will join Yate and Leeds in working a 24 hour shift system. I am pleased to report that our focus on the A&D specification sector is leading to a growing number of specifications for our products, and this is an area we will continue to develop as we build our future order book.
 
 
 
 
Nick Latham
Chairman
26 June 2019
 
 
 
 
 
 
 
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
For further information please visit www.lathams.co.uk or contact:



  
James Latham plc


 
Tel: 01442 849 100




Nick Latham, Chairman
David Dunmow, Finance Director


















SP Angel Corporate Finance LLP
Nominated Adviser and Broker


Tel: 0203 470 0470




Matthew Johnson / Charlie Bouverat
Abigail Wayne







 




 
JAMES LATHAM PLC
CONSOLIDATED INCOME STATEMENT
For the year to 31 March 2019







Audited


Audited




 


Year to 31 March
 2019


Year to 31 March 2018








£000


£000




 












Revenue


235,132


214,919




 












Cost of sales (including warehouse costs)


(194,686)


(177,145)


















Gross profit


40,446


37,774


















Selling and distribution costs


(18,082)


(16,277)




Administrative expenses


(7,896)


(7,106)




Operating Profit


14,468


14,391




 












Profit on disposal of property


1,052


1,276




Finance income


71


37




Finance costs


(256)


(488)




 


 


 




Profit before tax


15,335


15,216




 


 


 




Tax expense


(2,913)


(2,570)




 


 


 




Profit after tax attributable to owners of the parent company


12,422


12,646




 


 


 




Earnings per ordinary share (basic)


63.1p


64.4p




Earnings per ordinary share (diluted)


63.0p


64.1p




Earnings per ordinary share (basic, excluding GMP equalisation and profit on disposal of property)


 
61.6p


 
57.9p




Earnings per ordinary share (diluted, excluding GMP equalisation and profit on disposal of property)


 
61.5p


 
57.6p



 
All results relate to continuing operations.




 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year to 31 March 2019







Audited


Audited








2019


2018








£000


£000




Profit after tax attributable to owners of the parent company


12,422


12,646


















Other comprehensive income












Actuarial (loss)/gain on defined benefit pension scheme


(1,360)


7,948




Deferred tax relating to components of other comprehensive income


 
314


 
(1,262)




Foreign translation charge


(31)


-




Other comprehensive income for the year, net of tax


(1,077)


6,686




Total comprehensive income attributable to owners of the parent company


 
11,345


 
19,332







JAMES LATHAM PLC                                                           COMPANY REGISTRATION NUMBER 65619
CONSOLIDATED BALANCE SHEET
At 31 March 2019







Audited


Audited








2019


2018




 


£000


£000




Assets












Non-current assets












Goodwill


523


237




Other intangible assets


1,989


1




Property, plant and equipment


34,159


33,831




Deferred tax asset


1,577


1,491




Total non-current assets


38,248


35,560




 












Current assets












Inventories


42,350


40,068




Trade and other receivables


42,613


41,508




Cash and cash equivalents


15,541


13,989




Assets held for sale


-


638




Total current assets


100,504


96,203




Total assets


138,752


131,763




 


 


 




Current liabilities












Trade and other payables


27,113


28,648




Tax payable


1,193


1,292




Total current liabilities


28,306


29,940


















Non-current liabilities












Interest bearing loans and borrowings


597


987




Retirement and other benefit obligation


8,714


8,382




Other payables


413


291




Deferred tax liabilities


2,762


2,374




Total non-current liabilities


12,486


12,034




Total liabilities


40,792


41,974


















Net assets


97,960


89,789


















Capital and reserves












Issued capital


5,430


5,040




Share-based payment reserve


259


184




Own shares


(923)


(529)




Capital reserve


3


3




Retained earnings


93,191


85,091




Total equity attributable to equity shareholders of the parent company


 
97,960


 
89,789



 
The Company's profit for the year was £679,000 (2018: £1,481,000).



JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the owners of the parent company
 







 
 
Issued capital


Share-based payment reserve


 
 
Own shares


 
 
Capital reserve


 
 
Retained
earnings


 
 
Total
Equity








£'000


£'000


£'000


£'000


£'000


£'000




Balance at 1 April 2017 - audited


5,040


108


(291)


3


68,398


73,258




Profit for the year


-


-


-


-


12,646


12,646




Other comprehensive income:




























Actuarial gain on defined benefit pension scheme


-


-


-


-


7,948


7,948




Deferred tax relating to components of other comprehensive income


 
-


 
-


 
-


 
-


 
(1,262)


 
(1,262)
 




Total comprehensive income for the year


-


-


-


-


19,332


19,332




Transactions with owners:




























Dividends


-


-


-


-


(3,014)


(3,014)




Write down on conversion of ESOP shares


-


-


15


-


(15)


-




Exercise of options


-


(19)


-


-


19


-




Transfer of treasury shares


-


-


(414)


-


414


-




Deferred tax on share options


-


-


-


-


(43)


(43)




Change in investment in ESOP shares


-


-


161


-


-


161




Share-based payment expense


-


95


-


-


-


95




Total transactions with owners


-


76


(238)


-


(2,639)


(2,801)




Balance at 31 March 2018 - audited


5,040


184


(529)


3


85,091


89,789




Profit for the year


-


-


-


-


12,422


12,422




Other comprehensive income:




























Actuarial loss on defined benefit pension scheme


-


-


-


-


(1,360)


(1,360)




Deferred tax relating to components of other comprehensive income


-


-


-


-


314


314




Foreign translation charge


-


-


-


-


(31)


(31)




Total comprehensive income for the year


-


-


-


-


11,345


11,345




Transactions with owners:




























Dividends


-


-


-


-


(3,363)


(3,363)




Exercise of options


-


(19)


-


-


19


-




Transfer of treasury shares


-


-


(82)


-


82


-




Deferred tax on share options


-


-


-


-


31


31




Purchase of preference shares


390


-


(478)


-


-


(88)




Write down on conversion of ESOP shares


-


-


14


-


(14)


-




Change in investment in ESOP shares


-


-


152


-


-


152




Share-based payment expense


-


94


-


-


-


94




Total transactions with owners


390


75


(394)


-


(3,245)


(3,174)




Balance at 31 March 2019 - audited


5,430


259


(923)


3


93,191


97,960







JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year to 31 March 2019







Audited


Audited








2019


2018








£000


£000




Net cash flow from operating activities












Cash generated from operations


10,267


11,251




Interest paid


(8)


(1)




Income tax paid


(2,651)


(2,797)




Net cash inflow from operating activities


7,608


8,453




 












Cash flows from investing activities












Interest received and similar income


71


37




Acquisition of businesses


(1,604)


-




Purchase of property, plant and equipment


(2,362)


(10,840)




Proceeds from sale of property, plant and equipment


 
1,743


 
2,186




Net cash outflow from investing activities


(2,152)


(8,617)




 












Cash flows from financing activities












Purchase of treasury shares


(478)


-




Equity dividends paid


(3,363)


(3,014)




Preference dividend paid


(63)


(79)




Net cash outflow from financing activities


(3,904)


(3,093)




(Decrease)/increase in cash and cash equivalents for the year


 
1,552


 
(3,257)




Cash and cash equivalents at beginning of the year


 
13,989


 
17,246




Cash and cash equivalents at end of the year


15,541


13,989



 
 
 
 
 
 
 




JAMES LATHAM PLC
 
Notes to the audited preliminary financial information
 
1.   The preliminary financial information presented in this report is audited and has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards ('IFRS') as adopted by the EU set out in the Group accounts for the years ended 31 March 2018 and 31 March 2019, and does not contain all the information to be disclosed in financial statements prepared in accordance with IFRS.
 
2.   The directors propose a final dividend of 12.9p per ordinary share, which will absorb £2,537,000 (2018: 12.1p absorbing £2,379,000), payable on 23 August 2019 to shareholders on the Register at the close of business on 2 August 2019.  The ex-dividend date is 1 August 2019.
 
The figures for the year ended 31 March 2018 and as at 31 March 2019 have been extracted from the audited statutory accounts for that year, which have yet to be delivered to the Registrar of Companies and which have been prepared in accordance with IFRS as adopted by the EU and those parts of the Companies Act 2006 that remain applicable to companies reporting under IFRS.  The preliminary financial information does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006, and does not contain all the information required to be disclosed in a full set of IFRS financial statements.
 
Statutory accounts for the year ended 31 March 2019 will be delivered to the Registrar of Companies and sent to Shareholders shortly.  The Annual Report and Accounts may also be viewed in due course on James Latham plc's website at www.lathams.co.uk
 
The audit report on the statutory financial statements for the year ended 31 March 2019 is unqualified and does not include reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and does not contain any statement under Section 498(2) or (3) of the Companies Act 2006.
 
Statutory accounts for the year ended 31 March 2018 have been filed with the Registrar of Companies.  The auditor's report on those accounts was unqualified and did not include 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) and (3) of the Companies Act 2006.
 
3.   This announcement was approved and authorised for issue by the Board of Directors on 26 June 2019.
 
4.   Net cash flow from operating activities














Year to 31 March 2019 audited


Year to 31 March 2018 audited












£000


£000






















Profit before tax






15,335


15,216




Adjustment for finance income and cost






185


451




Depreciation, amortisation and impairment






2,036


1,941




Profit on disposal of property, plant and equipment






(1,079)


(1,444)




Increase in inventories






(2,282)


(4,560)




Increase in receivables






(1,105)


(1,432)




(Decrease)/increase in payables






(1,825)


1,526




Retirement benefits non cash amounts






(1,213)


(703)




Translation non cash amounts






(31)


-




Share-based payments non cash amounts






94


95




Own shares non cash amounts






152


161




Cash generated from operations






10,267


11,251

























 
 
5.   The Annual General Meeting of James Latham plc will be held at Unit 1 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU on 21 August 2019 at 12.30pm.




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