REG - Latham(James) PLC - Final Results

James LathamAnnouncement

24/06/2021 07:00

RNS Number : 9147C
  
Latham(James) PLC
  
24 June 2021
  
 

James Latham plc
 
("James Latham" or "the Company")
 
Final Results 
 
 
Chairman's statement 
 
The financial year to 31 March 2021 was a year in which we saw considerable disruption to our business. In the first quarter of the year the COVID19 pandemic and lockdown caused a significant reduction in business, we then had to adapt to new ways of operating with working at home and social distancing, and then global supply issues and price rises affected the final quarter of the year. I am therefore very pleased to report good trading results for the financial year to 31 March 2021.
 
Revenue for the financial year to 31 March 2021 was £250.2m, up 1.3% on last year's £247.1m. Like for like volumes increased by 6.6%, with the growth mainly on delivered business from our own warehouses but with some growth on direct volumes shipped from the ports or from the manufacturers. Unsurprisingly due to COVID19 related operating restrictions, business collected by our customers from the depots has fallen significantly. The cost price of our products has started to rise significantly in the second half of the year and are on average 7.3% higher than at the start of the financial year. 
 
Gross profit percentage for the financial year to 31 March 2021 was 18.0% compared with 17.6% in the previous financial year, which shows a good recovery in margin from the 16.9% reported in the half year accounts. This figure includes warehouse costs and we are continuing to extend the shift systems to improve our service levels with five of our depots now working 24 hours a day.
 
Profit before tax is £18.6m, up £2.9m on last year's £15.7m. Profit after tax for the year is £15.0m, up from last year's £12.5m. Earnings per ordinary share is 75.4p (2020: 63.1p) an increase of 19.5%.
 
As at 31 March 2021 net assets have increased to £121.8m (2020: £104.3m). Inventory levels have increased to £48.3m from £44.3m last year. This is partly to do with increased inventory in our new timber pack business, LDT Ireland, based in Dublin, but mainly due to increases in prices for our products. Trade receivables at the year end were £1.1m higher than the previous year showing improvements in debtor days. Despite the challenges of the pandemic, bad debts have been minimal. Cash and cash equivalents of £28.6m (2020: £17.0m) remain strong with good cash flows from operating activities. 
 
At 31 March 2021 the deficit of the defined benefit scheme under IAS19 (revised) has reduced to £2.6m from £11.8m last year. This reduction is largely due to improvements in asset valuations and revision of mortality assumptions following the actuarial triennial valuation. The calculation of the pension deficit remains very sensitive to changes in assumptions. 
 
Final dividend
 
The Board has declared a final dividend of 15.5p per Ordinary Share (2020: 10.0p).  The dividend is payable on 27 August 2021 to ordinary shareholders on the Company's register at close of business on 6 August 2021.  The ex-dividend date will be 5 August 2021. The total dividend per ordinary share of 21.2p for the year (2020: 15.5p) is covered 3.6 times by earnings (2020: 4.1 times).  
 
Current and future trading
 
The strong demand seen towards the end of this financial year, has continued into the new financial year, with margins also improving. Global demand for timber products is very strong, being driven primarily by North America, but also from the construction sector worldwide. Many manufacturers have introduced an allocation system limiting the ability for us to grow our volumes. These manufacturers are unable to significantly increase capacity as they struggle with COVID19 (especially in South America), labour shortages, rising costs and a shortage of raw materials. We have seen significant price rises on many commodity products. This is an area where our volumes have grown as we have been able to use our supplier relationships to secure supply of product for our customers in these exceptional market conditions. There have also been worldwide issues on shortages of shipping containers, in part due to the COVID19 pandemic, with increased container rates which has further increased the costs of many of our imported products, as well as creating severe delays to shipments.
 
The majority of the market sectors that we supply are busy, but there are still a few sectors, such as hospitality, aerospace and shopfitting that are still trading at pre-COVID19 levels.  The outlook is difficult to predict, but the current challenging supply situation looks set to continue through 2021, but visibility beyond that is much more uncertain, but we know that the market will change at some point.
 
Whilst the supply side remains challenging we would expect our margins to be better than normal for the next few months, but returning to normal after that, and as we know from experience in our industry, the balance between supply and demand will change.
 
Development Strategy
 
The board has identified that there are plenty of opportunities to develop our business. We have demonstrated the robustness and flexibility of our business model during the recent pandemic, and that we are very well placed to make the most of the opportunities as they arise. We will continue with our strategy to look for suitable acquisitions that support market sectors and geographical areas that we are looking to further develop. We will continue to invest in our warehouses as we look to further improve the service to our customers, which is critical for our future success. During the year our Fareham, Hemel and Leicester depots have increased their working hours and are now operating 24/5 and this trend with other depots will continue, with Thurrock and Purfleet planning to join them towards the end of the next financial year.  Our other focus in this financial year will be on increasing the warehouse capacity at both Yate and Hemel, where the board has approved plans to increase their warehouses by approximately 25 %, as well as investing in new machinery at Dresser Mouldings, and completing the significant racking project at Thurrock.
 
 
As ever I would like to personally thank all the directors and everyone in the group who have worked so incredibly hard during what has been a very difficult period for everyone. These results are a real testament to the teamwork and commitment of everybody for which I am very grateful. In recognition of this, the board has decided to award all staff an additional day's holiday this year, and to extend the Christmas shut down by one day. I am looking forward to visiting the depots to thank everyone in person.
 
 
 
Nick Latham
Chairman
23 June 2021
 
 
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018
 
For further information please visit https://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 




Rob Rees  (Corporate Broking)


 




 
 
 
 
JAMES LATHAM PLC
CONSOLIDATED INCOME STATEMENT
For the year to 31 March 2021




 


Audited


Audited




 


Year to 31 March
 2021


Year to 31 March 2020




 


£000


£000




 


 


 




Revenue


250,162


247,100




 


 


 




Cost of sales (including warehouse costs)


(205,060)


(203,656)




 


 


 




Gross profit


45,102


43,444




 


 


 




Selling and distribution costs


(17,464)


(19,251)




Administrative expenses


(8,598)


(8,196)




Operating Profit


19,040


15,997




 


 


 




Finance income


11


82




Finance costs


(453)


(417)




 


 


 




Profit before tax


18,598


15,662




 


 


 




Tax expense


(3,616)


(3,181)




 


 


 




Profit after tax attributable to owners of the parent company


14,982


12,481




 


 


 




Earnings per ordinary share (basic)


75.4p


63.1p




Earnings per ordinary share (diluted)


75.2p


63.0p




 
All results relate to continuing operations.
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year to 31 March 2021




 


Audited


Audited




 


2021


2020




 


£000


£000




Profit after tax attributable to owners of the parent company


14,982


12,481




 


 


 




Other comprehensive income


 


 




Actuarial gain/(loss) on defined benefit pension scheme


6,717


(4,823)




Deferred tax relating to components of other comprehensive income


 
(1,276)


 
916




Foreign translation (charge)/gain


(58)


80




Other comprehensive income for the year, net of tax


5,383


(3,827)




Total comprehensive income attributable to owners of the parent company


 
20,365


 
8,654




 
JAMES LATHAM PLC                                                           COMPANY REGISTRATION NUMBER 65619
CONSOLIDATED BALANCE SHEET
At 31 March 2021




 


Audited


Audited




 


2021


2020




 


£000


£000




Assets


 


 




Non-current assets


 


 




Goodwill


872


872




Other intangible assets


1,655


1,822




Property, plant and equipment


35,342


35,952




Right-of-use-assets


4,064


4,895




Deferred tax asset


534


2,258




Total non-current assets


42,467


45,799




 


 


 




Current assets 


 


 




Inventories


48,262


44,288




Trade and other receivables


48,003


47,046




Cash and cash equivalents


28,618


16,950




Total current assets


124,883


108,284




Total assets


167,350


154,083




 


 


 




Current liabilities


 


 




Lease liabilities


1,123


1,178




Trade and other payables


34,761


28,686




Total current liabilities


35,884


29,864




 


 


 




Non-current liabilities


 


 




Interest bearing loans and borrowings


592


592




Lease liabilities


3,137


3,857




Retirement and other benefit obligation


2,561


11,812




Other payables


21


392




Deferred tax liabilities


3,339


3,289




Total non-current liabilities


9,650


19,942




Total liabilities


45,534


49,806




 


 


 




Net assets


121,816


104,277




 


 


 




Capital and reserves


 


 




Issued capital


5,040


5,040




Share-based payment reserve


167


25




Own shares


(471)


(619)




Capital reserve


398


398




Retained earnings


116,682


99,433




Total equity attributable to equity shareholders of the parent company


 
121,816


 
104,277




 
 
 
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 2019 - audited


5,430


259


(923)


3


93,427


98,196




Profit for the year


-


-


-


-


12,481


12,481




Other comprehensive income:


 


 


 


 


 


 




Actuarial loss on defined benefit pension scheme


-


-


-


-


(4,823)


(4,823)




Deferred tax relating to components of other comprehensive income


-


-


-


-


916


916




Foreign translation credit


-


-


-


-


80


80




Total comprehensive income for the year


-


-


-


-


8,654


8,654




Transactions with owners:


 


 


 


 


 


 




Dividends


-


-


-


-


(3,633)


(3,633)




Exercise of options


-


(253)


(261)


-


1,463


949




Deferred tax on share options


-


(45)


-


-


-


(45)




Purchase of preference shares


5


-


-


-


-


5




Cancellation of preference shares


(395)


-


478


395


(478)


-




Change in investment in ESOP shares


-


-


87


-


-


87




Share-based payment expense


-


64


-


-


-


64




Total transactions with owners


(390)


(234)


304


395


(2,648)


(2,573)




Balance at 31 March 2020 - audited


5,040


25


(619)


398


99,433


104,277




Profit for the year


-


-


-


-


14,982


14,982




Other comprehensive income:


 


 


 


 


 


 




Actuarial gain on defined benefit pension scheme


-


-


-


-


6,717


6,717




Deferred tax relating to components of other comprehensive income


-


-


-


-


(1,276)


(1,276)




Foreign translation loss


-


-


-


-


(58)


(58)




Total comprehensive income for the year


-


-


-


-


20,365


20,365




Transactions with owners:


 


 


 


 


 


 




Dividends


-


-


-


-


(3,121)


(3,121)




Exercise of options


-


(20)


148


-


5


133




Deferred tax on share options


-


6


-


-


-


6




Share-based payment expense


-


156


-


-


-


156




Total transactions with owners


-


142


148


-


(3,116)


(2,826)




Balance at 31 March 2021 - audited


5,040


167


(471)


398


116,682


121,816




 
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year to 31 March 2021




 


Audited


Audited




 


2020


2019




 


£000


£000




Net cash flow from operating activities


 


 




Cash generated from operations


21,374


13,528




Interest paid


(51)


(51)




Income tax paid


(3,191)


(3,851)




Net cash inflow from operating activities


18,132


9,626




 


 


 




Cash flows from investing activities


 


 




Interest received and similar income


11


82




Acquisition of businesses net of cash and cash equivalents acquired


-


(578)




Purchase of property, plant and equipment


(1,968)


(3,886)




Proceeds from sale of property, plant and equipment


 
8


 
152




Net cash outflow from investing activities


(1,949)


(4,230)




 


 


 




Cash flows from financing activities


 


 




Sale of treasury shares


-


1,036




Lease liability payments


(1,394)


(1,390)




Equity dividends paid


(3,121)


(3,633)




Net cash outflow from financing activities


(4,515)


(3,987)




Increase in cash and cash equivalents for the year


 
11,668


 
1,409




Cash and cash equivalents at beginning of the year


 
16,950


 
15,541




Cash and cash equivalents at end of the year


28,618


16,950




 
 
 
 
 
 
 
 
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 Accounting Standards in conformity with the requirements of the Companies Act 2006 set out in the Group accounts for the years ended 31 March 2020 and 31 March 2021, 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 15.5p per ordinary share, which will absorb £3,082,000 (2020: 10.0p absorbing £1,990,000), payable on 27 August 2021 to shareholders on the Register at the close of business on 6 August 2021.  The ex-dividend date is 5 August 2021.
 
The figures for the year ended 31 March 2020 and as at 31 March 2021 have been extracted from the audited statutory accounts for that year. The statutory accounts for the year ended 31 March 2021 have yet to be delivered to the Registrar of Companies and 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 2021 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 2021 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 2020 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 23 June 2021.
 
4.   Net cash flow from operating activities








 


 


Year to 31 March 2021 audited


Year to 31 March 2020 audited




 


 


£000


£000




 


 


 


 




Profit before tax


 


18,598


15,662




Adjustment for finance income and cost


 


442


335




Depreciation, amortisation and impairment


 


4,033


3,790




Profit on disposal of property, plant and equipment


 


(6)


(121)




Increase in inventories


 


(3,974)


(1,659)




Increase in receivables


 


(878)


(3,963)




Increase in payables


 


5,779


1,324




Retirement benefits 


 


(2,776)


(1,904)




Share-based payments non cash amounts


 


156


64




Cash generated from operations


 


21,374


13,528




 


 


 


 




 




 
 
 
 
5.   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.
 




 


Year to 31 March 2021 audited


Year to 31 March 2020 audited




 


£000


£000




 


 


 




Net profit attributable to ordinary shareholders


14,982


12,481




 


 


 




 


Number '000


Number '000




Weighted average share capital


19,882


19,781




Add: diluted effect of share capital options issued


31


23




Weighted average share capital for diluted earnings per ordinary share calculation


19,913


19,804




 


 


 


 




 
6.   The Annual General Meeting of James Latham plc will be held at Unit 1 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU on 25 August 2021 at 12.00pm.
 
Impact of COVID-19
The board continues to monitor the restrictions caused by the COVID-19 pandemic. Our preference is to welcome shareholders to this years AGM, especially given that shareholders were prevented from attending last year. Subject to Public Health England guidance the Annual General Meeting will be held in person, but an announcement will be made to the Stock Exchange should guidance change which places restrictions over holding the AGM. 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
  END
 
 
FR FJMRTMTJTBBB