REG - Latham(James) PLC - Half-year Report

James LathamAnnouncement

25/11/2020 07:01

RNS Number : 3954G
  
Latham(James) PLC
  
25 November 2020
  
 

James Latham plc 
 ("James Latham" or the "Company")
 
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2020
 
Chairman's statement
 
Unaudited results for the six months trading to 30 September 2020
 
Revenue for the six months ended 30 September 2020 was £107.0m, down 14.8% on £125.6m for the same period last year.  Revenue in Q2 was 5.3% up on the same period last year highlighting the strong recovery from Q1 which as previously reported was significantly impacted by the first lockdown. Month on month trends continue to improve with September being ahead of the same month last year.  We have had strong volume growth in both delivered and direct commodity panel products. Cost prices on both timber and panels have been slowly rising during the period.  All sites have coped very well with the local lockdowns and all the other challenges that they have faced during this unprecedented period.
 
Gross profit, which includes warehouse costs, for the six month period ended 30 September 2020 was 16.9% compared with 17.4% in the comparative six months.  Overheads have been very well controlled during the 6 months. 
  
Operating profit was £6.5m, down 22.7% on the £8.5m profit for the same period last year.  Profit before tax was £6.3m compared with £8.3m for the same period last year.  Earnings per ordinary share were 25.6p (2019: 33.8 p) a decrease of 24.3%.
 
As at 30 September 2020 net assets are £109.1m (2019: £97.6m).  Stock volume levels have remained stable throughout the six months, although the strong sales at the end of Q2 resulted in a temporary reduction in our inventory values.  Trade receivables have continued to show good debtor day figures, with bad debts at a very low figure.  Cash and cash equivalents of £26.1m (2019: £16.5m) remain strong due to the reduced inventory figures and also good collections of our trade receivables.  We continue to take advantage of additional early settlement discount opportunities with our suppliers.
 
These positive results are a good indication of the strength of our business model, and the importance of having a diversified customer base.
 
The calculation of the pension deficit remains very sensitive to changes in assumptions, and the pension deficit under IAS19 is calculated as decreasing from £11.8m at 31 March 2020 to £8.8m at 30 September 2020.  This is largely due to a recovery in the plan asset valuations, although discount rates continue to fall which add to the deficit. 
 
Interim dividend
 
The Board has declared an increased interim dividend of 5.7p per Ordinary Share (2019: 5.5p), which is covered 4.5 times (2019: 6.1 times).  The dividend is payable on 29 January 2021 to ordinary shareholders on the Company's Register at close of business on 4 January 2021.  The ex-dividend date will be 31 December 2020.
 
 
Current and future trading
 
The second half of 2020/21 has started strongly with margins slightly ahead of the previous period.  We are seeing significant increased volumes of commodity products, but reduced volumes of some of our added value panel products which predominantly go into market sectors that have been adversely affected by the COVID-19 pandemic, such as hospitality, exhibitions and shopfitting.  Purchase prices of many of our commodity panel products continue to rise with some extended lead times.  The majority of our customers are busy, and we remain confident that we will have a strong end to our financial year.  The investment in our Gateshead facility is now complete, and we are mid-way through a large racking project at our Thurrock facility which will improve the stock holding and efficiency of the warehouse.  This project will be completed by end March 2021.
 
We have been working for some time in preparation for Brexit and have acted on the risks to our business.  Our supply chain team have been working closely with suppliers and intermediaries and have identified the best routes to market, and we have increased stock levels of those products most at risk of disruption.
 
We remain committed to continued investment in the business, both in our existing depots and in looking for other opportunities to grow our market position. 
  
 
 
Nick Latham
Chairman
25 November 2020
 
 
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








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 2020






































Six months to 30 Sept. 2020 unaudited


Six months to 30 Sept. 2019 unaudited


Year to                31 March 2020 audited


























£000


£000


£000






















Revenue


107,034


125,609


247,100






















Cost of sales (including warehouse costs)


(88,985)


(103,726)


(203,656)






















Gross profit


18,049


21,883


43,444






















Selling and distribution costs


(7,449)


(9,703)


(19,251)




Administrative expenses


(4,056)


(3,712)


(8,196)






















Operating profit


6,544


8,468


15,997






















Finance income


5


46


82




Finance costs


(236)


(198)


(417)






















Profit before tax


6,313


8,316


15,662






















Tax expense


(1,215)


(1,630)


(3,181)






















Profit after tax attributable to owners of the parent company


5,098


6,686


12,481






















Earnings per ordinary share (basic)


25.6p


33.8p


63.1p






















Earnings per ordinary share (diluted)


25.6p


33.8p


63.0p








































All results relate to continuing operations.















 




 



JAMES LATHAM PLC


































CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


































For the six months to 30 September 2020






































Six months to 30 Sept. 2020 unaudited


Six months to 30 Sept. 2019 unaudited


Year to                31 March 2020 audited


























£000


£000


£000






















Profit after tax


5,098


6,686


12,481




Other Comprehensive income
















Actuarial gains/(loss) on defined benefit pension scheme


1,923


(6,767)


(4,823)




Deferred tax relating to components of other comprehensive income


(365)


1,150


916




Foreign translation credit


23


12


80




Other comprehensive income for the period, net of tax


1,581


(5,605)


(3,827)




Total comprehensive income, attributable to owners of the parent company


6,679


1,081


8,654



 




 



JAMES LATHAM PLC
















CONSOLIDATED BALANCE SHEET


































At 30 September 2020






































As at 30 Sept. 2020 unaudited


As at 30 Sept. 2019 unaudited 


As at 31 March 2020 audited


























£000


£000


£000




ASSETS
















Non-current assets
















Goodwill


872


523


872




Intangible assets


1,738


1,905


1,822




Property, plant and equipment


35,477


34,581


35,952




Right-of-use-asset


4,629


4,344


4,895




Deferred tax asset


1,694


2,560


2,258




Total non-current assets


44,410


43,913


45,799






















Current assets
















Inventories


41,360


42,501


44,288




Trade and other receivables


44,764


45,697


47,046




Cash and cash equivalents


26,159


16,538


16,950




Total current assets


112,283


104,736


108,284








































Total assets


156,693


148,649


154,083






















Current liabilities
















Lease liabilities


1,242


1,143


1,178




Trade and other payables


30,122


28,321


28,686




Current tax payable


-


86


-




Total current liabilities


31,364


29,550


29,864






















Non-current liabilities
















Interest bearing loans and borrowings


592


592


592




Lease liabilities


3,579


3,252


3,857




Retirement and other benefit obligation


8,774


14,637


11,812




Other payables


-


180


392




Deferred tax liabilities


3,264


2,856


3,289




Total non-current liabilities


16,209


21,517


19,942








































Total liabilities


47,573


51,067


49,806








































Net assets


109,120


97,582


104,277






















Capital and reserves
















Issued capital


5,040


5,040


5,040




Share-based payment reserve


96


89


25




Own shares


(542)


(891)


(619)




Capital reserve


398


398


398




Retained earnings


104,128


92,946


99,433






















Total equity attributable to shareholders of the parent company


109,120


97,582


104,277







 



JAMES LATHAM PLC


































CONSOLIDATED CASH FLOW STATEMENT


































For the six months to 30 September 2020






































Six months to 30 Sept 2020 unaudited


Six months to 30 Sept 2019 unaudited


Year to                31 March 2020 audited


























£000


£000


£000




Net cash flow from operating activities
















Cash generated from operations


13,565


8,040


13,528




Interest paid


-


(3)


(3)




Income tax paid


(950)


(2,552)


(3,851)




Net cash inflow from operating activities


12,615


5,485


9,674






















Cash flows from investing activities
















Interest received and similar income


5


46


82




Acquisition of businesses net of cash acquired


-


-


(578)




Purchase of property, plant and equipment


(785)


(1,512)


(3,886)




Proceeds from sale of property, plant and equipment


6


119


152




Net cash outflow from investing activities


(774)


(1,347)


(4,230)






















Cash flows before financing activities
















Sale of treasury shares


-


-


1,036




Purchase of treasury shares


-


(5)


-




Lease liability payments


(621)


(572)


(1,390)




Equity dividends paid


(1,987)


(2,540)


(3,633)




Preference dividend paid


(24)


(24)


(48)




Cash outflow from financing activities


(2,632)


(3,141)


(4,035)






















Increase in cash and cash equivalents for the period


9,209


997


1,409






















Cash and cash equivalents at beginning of the period


16,950


15,541


15,541






















Cash and cash equivalents at end of the period


26,159


16,538


16,950



 
 




 



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 2019 (audited)


5,040


259


(923)


3


93,427


98,177




Profit for the period 


-


-


-


-


6,686


6,686




Other comprehensive income:




























Actuarial loss on defined benefit pension scheme 


-


-


-


-


(6,767)


(6,767)




Deferred tax relating to components of other comprehensive income 


-


-


-


-


1,150


1,150




Foreign translation charge


-


-


-


-


12


12




Total comprehensive income for the period


-


-


-


-


1,081


1,081




Transaction with owners:




























Dividends


-


-


-


-


(2,540)


(2,540)




Exercise of options


-


(181)


(520)


-


1,488


787




Deferred tax on share options


-


(32)


-


-


(32)


(64)




Purchase of preference shares


5


-


-


-


-


5




Cancellation of preference shares


(395)


-


478


395


(478)


-




Change in investment in ESOP shares


-


-


74


-


-


74




Share-based payment expense


-


43


-


-


-


43




Total transactions with owners


(390)


(170)


32


395


(1,562)


(1,676)




Balance at 30 September 2019 (unaudited)


5,040


89


(891)


398


92,946


97,582




Profit for the period 


-


-


-


-


5,795


5,795




Other comprehensive income:




























Actuarial gain on defined benefit pension scheme 


-


-


-


-


1,944


1,944




Deferred tax relating to components of other comprehensive income 


- 


-


-


-


(234)


(234)




Foreign translation charge


-


-


-


-


68


68




Total comprehensive income for the period


-


-


-


-


7,573


7,573




Transactions with owners:




























Dividends


-


-


-


-


(1,093)


(1,093)




Exercise of options


-


(72)


259


-


(25)


162




Deferred tax on share options


-


(13)


-


-


32


19




Change in investment in ESOP shares


-


-


13


-


-


13




Share-based payment expense


-


21


-


-


-


21




Total transactions with owners


-


(64)


272


-


(1,086)


(878)




Balance at 31 March 2020 (audited)


5,040


25


(619)


398


99,433


104,277




Profit for the period


-


-


-


-


5,098


5,098




Other comprehensive income:




























Actuarial gain on defined benefit pension scheme


-


-


-


-


1,923


1,923




Deferred tax relating to components of other comprehensive income


-


-


-


-


(365)


(365)




Foreign translation charge


-


-


-


-


23


23




Total comprehensive income for the period


-


-


-


-


6,679


6,679




Transactions with owners:




























Dividends


-


-


-


-


(1,987)


(1,987)




Exercise of options


-


(8)


-


-


3


(5)




Change in investment in ESOP shares


-


-


77


-


-


77




Share-based payment expense


-


79


-


-


-


79




Total transactions with owners


-


71


77


-


(1,984)


(1,836)




Balance at 30 September 2020 (unaudited)


5,040


96


(542)


398


104,128


109,120



 




 



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 Financial Reporting Standards ('IFRS') as adopted by the EU and on the basis of the accounting policies expected to be used in the financial statements for the year ending 31 March 2021. 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 2020 are extracted from the statutory accounts of the group for that period.










2.  The directors propose an interim dividend of 5.7p per ordinary share which will absorb £1,133,000 (2019: 5.5p absorbing £1,085,000), payable on 29 January 2021 to shareholders on the Company's Register at the close of business on 4 January 202. The ex-dividend date is 31 December 2020.










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 2020 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 2020 unaudited


Six months to 30 Sept 2019 unaudited


Year to 31 March 2020 audited








£000


£000


£000






















Net profit attributable to ordinary shareholders


5,098


6,686


12,481


























Number '000


Number '000


Number '000




Weighted average share capital


19,876


19,759


19,781




Add: diluted effect of share capital options issued


26


33


23




Weighted average share capital for diluted earnings per ordinary share calculation


19,902


19,792


19,804






















5.  Net cash flow from operating activities














Six months to 30 Sept 2020 unaudited


Six months to 30 Sept 2019 unaudited


Year to 31 March 2020 audited








£000


£000


£000






















Profit before tax


6,313


8,316


15,662




Adjustment for finance income and expenditure


231


152


335




Depreciation and amortisation


2,017


1,797


3,790




Profit on disposal of property, plant and equipment


(6)


(119)


(121)




Increase in inventories


2,928


(151)


(1,659)




Increase in receivables


2,193


(3,084)


(3,963)




Increase/(decrease) in payables


962


1,162


1,244




Own shares non cash amounts


77


853


-




Retirement benefits non cash amounts


(1,247)


(941)


(1,904)




Translation non cash amounts


23


12


80




Share-based payments non cash amounts


74


43


64




Cash generated from operations


13,565


8,040


13,528
















6.  Copies of this statement will be posted on our website, www.lathams.co.uk.  A copy can be emailed or posted upon application to the Company Secretary, James Latham plc, Unit 3 Swallow Park, Finway Road Hemel Hempstead, Herts, HP2 7QU, or by email to plc@lathams.co.uk



 
 

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