REG - Latham(James) PLC - Half-year Report
28/11/2024 07:00
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RNS Number : 9268N Latham(James) PLC 28 November 2024
James Latham plc
("James Latham" or the "Company")
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2024
Chairman's statement
Unaudited results for the six months trading to 30 September 2024
Revenue for the six months ended 30 September 2024 was £186.6m, down 2.3% on
£190.9m for the same period last year. Cost prices on both timber and
panels have remained stable throughout the first half of the year but there
are signs of price weakness in some of our commodity products. Sales volumes
are up 4.1% compared with the same period last year. We are still seeing a
move in the product mix of our sales towards cheaper alternative products.
Gross profit percentage, which includes warehouse costs, for the six-month
period ended 30 September 2024 was 16.3% compared with 16.8% in the
comparative six months. Whilst our panel product side of the business has
continued to perform well, the anticipated improvement in our timber business
did not occur. The enforcement of EU Deforestation Regulations in Europe has
led to cheap uncertified hardwoods, especially in our African sapele markets,
being diverted to the UK market. This has resulted in a significant negative
effect on our margins on those products.
Operating profit was £11.3m, down £3.2m compared with £14.5m operating
profit for the same period last year. Profit before tax was £13.6m compared
with £16.4m for the same period last year. The tax charge of £3.4m
represents an effective rate of 25.3%, reflecting the UK basic rate of
corporation tax. Earnings per ordinary share were 50.5p compared with 61.5 p
for the same period last year.
As at 30 September 2024 net assets are £210.4m (2023: £203.8m). Inventory
levels of £66.9m, and trade and other receivables of £64.4m have remained
stable throughout the period. Bad debts for this period are lower than the
same period last year. Cash and cash equivalents have increased to £67.5m
(2023: £66.0m) which is very positive considering the one-off special
dividend that was paid in August 2024. 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 2024 of £15.1m (2023: £11.2m). The trustees completed their
derisking exercise during this period with the aim of reducing the volatility
of the IAS19 valuation.
Interim dividend
The Board has declared an increased interim dividend of 7.95p per Ordinary
Share (2023: 7.75p). The dividend is payable on 24 January 2025 to ordinary
shareholders on the Company's Register at close of business on 3 January
2025. The ex-dividend date will be 2 January 2025.
Current and future trading
The second half of 2024/25 has started with similar volumes to the previous
six-month period to 30 September 2024, with similar margins. We were
expecting the market to show signs of improvement in the second half of this
year but so far this has not materialised. We have seen considerable
challenges in our marketplace, including a significant competitor going into
administration and others looking to quickly turn inventories into cash, which
has affected short-term margins in some product groups. This has created
opportunities to increase our market share and enabled us to take on three new
brands of melamine and laminate panel products as well as some key specialist
salespeople to help promote these new products.
Our customers still have reasonable order books but are finding the
marketplace more challenging. Whilst we are not seeing an increase in
debtors days, we are seeing an increase in unexpected bad debts, although our
level of credit insurance cover remains strong. The strength of our customer
base and the diverse market sectors within which we operate will help us
during the more challenging macroeconomic climate that we are all facing.
The board has completed the end-to-end supply chain review as part of our
long-term planning for the business. This review considered both current
supply chain conditions and our expectations of what this will look like over
the longer term. In order to future proof our supply chain and routes to
market, we have decided to invest in a National Distribution Centre to support
the depot network. This centre will allow the business to manage its stock
more efficiently, increase the range of products that we can offer our
customers, whilst at the same time freeing up space in our existing warehouses
to increase stock throughput and reduce the need for further investment in our
sites. We anticipate that a National Distribution Centre will be fully
operational within three years, once the appropriate location has been
identified.
The board is pleased with these interim results considering the challenging
market conditions. However, we anticipate that the results for the year
ended 31 March 2025 will fall slightly below last year's results, with the
anticipated improvement in market conditions now not expected until the middle
of 2025. The results for the year ended 31 March 2025 will be announced on
26 June 2025.
Nick Latham
Chairman
28 November 2024
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 2024
Six months to 30 Sept. 2024 unaudited Six months to 30 Sept. 2023 unaudited Year to 31 March 2024 audited
£000 £000 £000
Revenue 186,591 190,882 366,514
Cost of sales (including warehouse costs) (156,251) (158,832) (304,415)
Gross profit 30,340 32,050 62,099
Selling and distribution costs (12,933) (12,033) (24,225)
Administrative expenses (6,074) (5,558) (11,731)
Operating profit 11,333 14,459 26,143
Finance income 2,468 2,063 4,313
Finance costs (210) (126) (194)
Profit before tax 13,591 16,396 30,262
Tax expense (3,433) (4,030) (7,601)
Profit after tax attributable to owners of the parent company 10,158 12,366 22,661
Earnings per ordinary share (basic) 50.5p 61.5p 112.7p
Earnings per ordinary share (diluted) 50.3p 61.4p 112.6p
All results relate to continuing operations.
JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months to 30 September 2024
Six months to 30 Sept. 2024 unaudited Six months to 30 Sept. 2023 unaudited Year to 31 March 2024 audited
£000 £000 £000
Profit after tax 10,158 12,366 22,661
Other Comprehensive income
Actuarial (loss)/gains on defined benefit pension scheme (1,167) 1,982 5,770
Deferred tax relating to components of other comprehensive income 292 (495) (1,442)
Foreign translation charge (35) (64) (252)
Other comprehensive income for the period, net of tax (910) 1,423 4,076
Total comprehensive income, attributable to owners of the parent company 9,248 13,789 26,737
JAMES LATHAM PLC
CONSOLIDATED BALANCE SHEET
At 30 September 2024
As at 30 Sept. 2024 unaudited As at 30 Sept. 2023 unaudited As at 31 March 2024 audited
£000 £000 £000
ASSETS
Non-current assets
Goodwill 1,193 1,181 1,193
Other intangible assets 1,069 1,236 1,152
Property, plant and equipment 41,462 37,841 39,989
Right-of-use-asset 10,492 5,438 8,363
Trade and other receivables 863 - 789
Retirement benefit surplus 15,066 11,212 15,864
Deferred tax asset - 53 -
Total non-current assets 70,145 56,961 67,350
Current assets
Inventories 66,882 66,052 61,709
Trade and other receivables 64,399 64,220 64,757
Cash and cash equivalents 67,457 65,958 75,881
Tax receivable - 13 -
Total current assets 198,738 196,243 202,347
Total assets 268,883 253,204 269,697
Current liabilities
Lease liabilities 1,372 879 1,373
Trade and other payables 37,856 35,013 35,456
Current tax payable 18 - 408
Total current liabilities 39,246 35,892 37,237
Non-current liabilities
Interest bearing loans and borrowings 592 587 592
Lease liabilities 9,493 4,806 7,298
Deferred tax liabilities 9,147 8,124 9,340
Total non-current liabilities 19,232 13,517 17,230
Total liabilities 58,478 49,409 54,467
Net assets 210,405 203,795 215,230
Capital and reserves
Issued capital 5,040 5,040 5,040
Share-based payment reserve 197 152 152
Capital reserve 398 398 398
Retained earnings 204,770 198,205 209,640
Total equity attributable to shareholders of the parent company 210,405 203,795 215,230
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six months to 30 September 2023
Six months to 30 Sept 2024 unaudited Six months to 30 Sept 2023 unaudited Year to 31 March 2024 audited
£000 £000 £000
Net cash flow from operating activities
Cash generated from operations 11,523 13,197 29,563
Interest paid (36) (25) (48)
Income tax paid (3,722) (3,094) (5,943)
Net cash inflow from operating activities 7,765 10,078 23,572
Cash flows from investing activities
Interest received and similar income 1,976 1,697 3,560
Purchase of property, plant and equipment (3,166) (2,233) (5,595)
Proceeds from sale of property, plant and equipment 57 27 67
Net cash outflow from investing activities (1,133) (509) (1,968)
Cash flows before financing activities
Purchase of treasury shares - - (6)
Exercise of share options 137 - 212
Lease liability payments (902) (425) (1,190)
Equity dividends paid (14,291) (5,789) (7,348)
Purchase of own shares - (6) -
Cash outflow from financing activities (15,056) (6,220) (8,332)
(Decrease)/increase in cash and cash equivalents for the period (8,424) 3,349 13,272
Cash and cash equivalents at beginning of the period 75,881 62,609 62,609
Cash and cash equivalents at end of the period 67,457 65,958 75,881
JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent company
Issued capital £000 Share-based payment reserve £000 Capital reserve £000 Retained earnings £000 Total equity £000
As at 1 April 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)
Own shares movement - - - 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
Profit for the period - - - 10,295 10,295
Other comprehensive income:
Actuarial gain on defined benefit pension scheme - - - 3,788 3,788
Deferred tax relating to components of other comprehensive income - - - (947) (947)
Foreign translation charge - - - (188) (188)
Total comprehensive income for the period - - - 12,948 12,948
Transactions with owners:
Dividends - - - (1,559) (1,559)
Exercise of options - (24) - 24 -
Deferred tax on share options - (19) - - (19)
Own shares movement - - - 22 22
Share-based payment expense - 43 - - 43
Total transactions with owners - - - (1,513) (1,513)
Balance at 31 March 2024 (audited) 5,040 152 398 209,640 215,230
Profit for the period - - - 10,158 10,158
Other comprehensive income:
Actuarial loss on defined benefit pension scheme - - - (1,167) (1,167)
Deferred tax relating to components of other comprehensive income - - - 292 292
Foreign translation charge - - - (35) (35)
Total comprehensive income for the period - - - 9,248 9,248
Transactions with owners:
Dividends - - - (14,291) (14,291)
Exercise of options - (36) - 36 -
Deferred tax on share options - 2 - - 2
Own shares movement - - - 137 137
Share-based payment expense - 79 - - 79
Total transactions with owners - 45 - (14,118) (14,073)
Balance at 30 September 2024 (unaudited) 5,040 197 398 204,770 210,405
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 2025. 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 2024 are
extracted from the statutory accounts of the group for that period.
2. The directors propose an interim dividend of 7.95p per ordinary share which
will absorb £1,605,000 (2023: 7.75p absorbing £1,560,000), payable on 24
January 2025 to shareholders on the Company's Register at the close of
business on 3 January 2025. The ex-dividend date is 2 January 2025.
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 2024 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 2024 unaudited Six months to 30 Sept 2023 unaudited Year to 31 March 2024 audited
£000 £000 £000
Net profit attributable to ordinary shareholders 10,158 12,366 22,661
Number '000 Number '000 Number '000
Weighted average share capital 20,131 20,123 20,112
Add: diluted effect of share capital options issued 63 24 14
Weighted average share capital for diluted earnings per ordinary share 20,194 20,147 20,126
calculation
5. Net cash flow from operating activities
Six months to 30 Sept 2024 unaudited Six months to 30 Sept 2023 unaudited Year to 31 March 2024 audited
£000 £000 £000
Profit before tax 13,591 16,396 30,262
Adjustment for finance income and cost (2,258) (1,937) (4,119)
Depreciation and amortisation 2,475 2,272 4,271
(Profit)/loss on disposal of property, plant and equipment (24) 7 35
(Increase)/decrease in inventories (5,173) 1,437 5,780
Decrease in receivables 283 2,562 1,236
Increase/(decrease) in payables 2,427 (5,934) (5,862)
Retirement benefits non cash amounts 123 (1,643) (2,120)
Share-based payments non cash amounts 79 37 80
Cash generated from operations 11,523 13,197 29,563
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, Hemel Hempstead, Herts, HP2 4TZ, or by email to
plc@lathams.co.uk (mailto:plc@lathams.co.uk)
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