REG - Latham(James) PLC - Preliminary Results
29/06/2022 07:01
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RNS Number : 5305Q Latham(James) PLC 29 June 2022
James Latham plc
("James Latham" or "the Company")
Preliminary Results
Chairman's statement
The financial year to 31 March 2022 was a year in which there were
considerable challenges to the business. The economy bounced back from the
effects of the COVID19 pandemic which put pressure on global supply chains and
led to difficulties in obtaining regular supplies of inventory. In addition
there were significant increases in the market prices for our products, mainly
in the first half of the year. I am therefore very pleased to report
unprecedented trading results for the financial year to 31 March 2022.
Revenue for the financial year to 31 March 2022 was £385.4m, up 54.0% on last
year's £250.2m. Like for like volumes taking into account working days and
acquisitions, increased by 11.9%, with the growth equally on delivered
business from our own warehouses and direct volumes shipped from the ports or
from the manufacturers. The cost price of our products is on average 36.2%
higher (2021: 7.6% higher) than at the start of the financial year.
Gross profit percentage for the financial year to 31 March 2022 was 23.8%
compared with 18.0% in the previous financial year, and 26.4% 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 six of our
depots now working 24 hours a day.
Profit before tax is £58.0m, up £39.4m on last year's £18.6m. Profit after
tax for the year is £45.6m, up from last year's £15.0m. Earnings per
ordinary share is 229.3p (2021: 75.4p) an increase of 204.1%.
As at 31 March 2022 net assets have increased to £164.0m (2021: £118.0m).
Inventory levels have increased to £74.2m from £48.2m last year. This is
partly to do with increased inventory in our new business, IJK Timber, based
in Northern Ireland, but mainly due to increases in prices for our products
and extended lead times for our imported products. Trade and other receivables
at the year end were £20.3m higher than the previous year due to the increase
in revenues but are still showing an improvement on last year's debtor days.
Despite the challenges of the economic environment, bad debts have remained
small at 0.1% of revenues. Cash and cash equivalents of £37.0m (2021:
£28.6m) remain strong with good cash flows from operating activities.
Final dividend
The Board has declared a final dividend of 27.0p per Ordinary Share (2021:
15.5p). This final dividend includes a payment of 8.0p per Ordinary Share to
reflect the exceptional results for the year. The dividend is payable on 2
September 2022 to ordinary shareholders on the Company's register at close of
business on 5 August 2022. The ex-dividend date will be 4 August 2022. The
total dividend per ordinary share of 33.5p for the year (2021: 21.2p) is
covered 6.8 times by earnings (2021: 3.6 times).
Current and future trading
The strong results seen in this financial year have continued into the new
financial year, with volumes and margins comparable to those achieved in the
second half of 2021/22. The supply of many of our key products has become a
little easier but there are still a few notable challenges, including
obtaining alternative supplies to replace products that previously were
sourced from Russia. We are starting to see signs that cost prices are
weakening in some of our major product groups, but the continuing supply chain
issues and supplier cost pressures on raw material, logistics, power and other
overheads, are tempering these price weaknesses.
I would like to thank all of our key suppliers for supporting us during this
financial year. I think the true partnerships that we have developed over many
years have stood us apart from our competitors during what has been a
challenging period for us all.
During the year we purchased Sarcon (No 155) Ltd which trades as IJK Timber in
Northern Ireland. This acquisition and subsequent integration into our systems
have gone very well and we now have a great platform to develop panel product
sales on the island of Ireland.
Despite the positive start to the year there is increasing uncertainty
surrounding the macroeconomic outlook and continuing inflationary pressures on
our overheads. At this stage the majority of our customers remain busy. We are
confident in our ability to deal with the challenges as they arise, but we do
not expect to repeat the exceptional results achieved in this financial year.
Development Strategy
The directors remain focussed on developing the business, and believe that the
results demonstrate the flexibility of our business model to deal with all the
challenges that we have faced in the last year. We will continue to invest in
our current warehouse facilities, including extending the Yate warehouse to
increase capacity and further extending the working day at Scotland, Gateshead
and Purfleet. We will also complete phase 2 of the investment in new machinery
at Dresser Mouldings to have a state of the art production facility to improve
efficiencies and enable us to target more business.
In the summer we will be relocating our Head Office team to a new modern
office in Hemel Hempstead, which will allow us to look at the opportunity to
further develop the warehouse at Hemel Hempstead.
We will continue to look for acquisitions that either help with our strategy
of developing sales in specific market sectors or any geographical
opportunities that arise.
We recognise that the movement of product from suppliers or distribution
centres to our customers is critical, and we will be reviewing this to
identify any potential efficiencies that we can make to improve the service to
our customers.
Nick Latham
Chairman
29 June 2022
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 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
Rob Rees (Corporate Broking)
JAMES LATHAM PLC
CONSOLIDATED INCOME STATEMENT
For the year to 31 March 2022
unaudited unaudited
Year to 31 March Year to 31 March 2021
2022
£000 £000
Revenue 385,368 250,162
Cost of sales (including warehouse costs) (293,839) (205,060)
Gross profit 91,529 45,102
Selling and distribution costs (22,151) (17,464)
Administrative expenses (11,213) (8,598)
Operating Profit 58,165 19,040
Finance income 29 11
Finance costs (242) (453)
Profit before tax 57,952 18,598
Tax expense (12,310) (3,616)
Profit after tax attributable to owners of the parent company 45,642 14,982
Earnings per ordinary share (basic) 229.3p 75.4p
Earnings per ordinary share (diluted) 228.3p 75.2p
All results relate to continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year to 31 March 2022
Restated
unaudited unaudited *
2022 2021
£000 £000
Profit after tax attributable to owners of the parent company 45,642 14,982
Other comprehensive income
Actuarial gain on defined benefit pension scheme 3,625 3,345
Deferred tax relating to components of other comprehensive income
703 (1,763)
Foreign translation charge (29) (58)
Other comprehensive income for the year, net of tax 4,299 1,524
Total comprehensive income attributable to owners of the parent company
49,941 16,506
* see Note 3
JAMES LATHAM PLC COMPANY REGISTRATION NUMBER 65619
CONSOLIDATED BALANCE SHEET
At 31 March 2022
Restated
unaudited unaudited *
2022 2021
£000 £000
Assets
Non-current assets
Goodwill 1,372 872
Other intangible assets 1,487 1,655
Property, plant and equipment 36,935 35,342
Right-of-use-assets 4,154 4,064
Retirement and other benefit obligation 1,119 -
Deferred tax asset 154 47
Total non-current assets 45,221 41,980
Current assets
Inventories 74,230 48,262
Trade and other receivables 68,332 48,003
Cash and cash equivalents 37,030 28,618
Total current assets 179,592 124,883
Total assets 224,813 166,863
Current liabilities
Lease liabilities 1,275 1,123
Trade and other payables 50,876 34,761
Tax payable 400 -
Total current liabilities 52,551 35,884
Non-current liabilities
Interest bearing loans and borrowings 592 592
Lease liabilities 3,133 3,137
Retirement and other benefit obligation - 5,933
Other payables - 21
Deferred tax liabilities 4,566 3,339
Total non-current liabilities 8,291 13,022
Total liabilities 60,842 48,906
Net assets 163,971 117,957
Capital and reserves
Issued capital 5,040 5,040
Share-based payment reserve 387 167
Own shares (873) (471)
Capital reserve 398 398
Retained earnings 159,019 112,823
Total equity attributable to equity shareholders of the parent company
163,971 117,957
* see Note 3
JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the owners of the parent company
Share-based payment reserve Restated *
Issued capital Own shares Capital reserve Retained Total
earnings Equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 April 2020 - unaudited 5,040 25 (619) 398 99,433 104,277
Profit for the year - - - - 14,982 14,982
Other comprehensive income:
Actuarial gain/(loss) on defined benefit pension scheme - - - - 3,345 3,345
Deferred tax relating to components of other comprehensive income - - - - (1,763) (1,763)
Foreign translation charge - - - - (58) (58)
Total comprehensive income for the year - - - - 16,506 16,506
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 - unaudited 5,040 167 (471) 398 112,823 117,957
Profit for the year - - - - 45,642 45,642
Other comprehensive income:
Actuarial gain/(loss) on defined benefit pension scheme - - - - 3,625 3,625
Deferred tax relating to components of other comprehensive income - - - - 703 703
Foreign translation charge - - - - (29) (29)
Total comprehensive income for the year - - - - 49,941 49,941
Transactions with owners:
Dividends - - - - (4,379) (4,379)
Exercise of options - (24) (402) - 634 208
Deferred tax on share options - 75 - - - 75
Share-based payment expense - 169 - - - 169
Total transactions with owners - 220 (402) - (3,745) (3,927)
Balance at 31 March 2022 - unaudited 5,040 387 (873) 398 159,019 163,971
* see Note 3
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year to 31 March 2022
unaudited unaudited
2022 2021
£000 £000
Net cash flow from operating activities
Cash generated from operations 30,983 21,374
Interest paid (59) (51)
Income tax paid (10,259) (3,191)
Net cash inflow from operating activities 20,665 18,132
Cash flows from investing activities
Interest received and similar income 29 11
Acquisition of businesses net of cash and cash equivalents acquired (2,238) -
Purchase of property, plant and equipment (4,319) (1,968)
Proceeds from sale of property, plant and equipment 62 8
Net cash outflow from investing activities (6,466) (1,949)
Cash flows from financing activities
Lease liability payments (1,408) (1,394)
Equity dividends paid (4,379) (3,121)
Net cash outflow from financing activities (5,787) (4,515)
Increase in cash and cash equivalents for the year
8,412 11,668
Cash and cash equivalents at beginning of the year
28,618 16,950
Cash and cash equivalents at end of the year 37,030 28,618
JAMES LATHAM PLC
Notes to the unaudited preliminary financial information
1. The preliminary financial information presented in this report is
unaudited 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 2021 and 31 March 2022, 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 27.0p per ordinary share,
which will absorb £5,379,000 (2021: 15.5p absorbing £3,082,000), payable on
2 September 2022 to shareholders on the Register at the close of business on 5
August 2022. The ex-dividend date is 4 August 2022.
3. The figures for the year ended 31 March 2021 and as at 31 March 2022
are unaudited. Other than the adjustment referred to below, the figures
relating to 31 March 2021 have been extracted from the statutory accounts for
that year. The statutory accounts for the year ended 31 March 2022 have yet to
be delivered to the Registrar of Companies and have been prepared in
accordance with UK-adopted International Accounting Standards. 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 2022 will be delivered to the
Registrar of Companies and sent to Shareholders in due course. The Annual
Report and Accounts may also be viewed in due course on James Latham plc's
website at www.lathamtimber.co.uk (http://www.lathamtimber.co.uk)
Statutory accounts for the year ended 31 March 2021 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.
The 31 March 2021 defined benefit pension scheme deficit has been restated to
take account of the requirement in IFRIC 14 to consider the present value of
future benefits available in the form of reduced contributions and/or
repayments, taking into account the deficit recovery plan the Group was
committed to at 31 March 2021. The effect of this is to reduce the deferred
tax asset by £487,000, increase the retirement and other benefit obligation
by £3,372,000 with a corresponding reduction of £3,859,000 in the other
comprehensive income for the year. There is no change to profits or cash flows
resulting from this correction. The results for the year ended 31 March 2021
are presented as unaudited in this preliminary statement while the Company's
auditors complete the audit of the restated accounts.
4. This announcement was approved and authorised for issue by the Board of
Directors on 29 June 2022.
5. Net cash flow from operating activities
Year to 31 March 2022 unaudited Year to 31 March 2021 unaudited
£000 £000
Profit before tax 57,952 18,598
Adjustment for finance income and cost 213 442
Depreciation, amortisation and impairment 4,128 4,033
Loss/(Profit) on disposal of property, plant and equipment 50 (6)
Increase in inventories (23,990) (3,974)
Increase in receivables (18,034) (878)
Increase in payables 13,940 5,779
Retirement benefits (3,445) (2,776)
Share-based payments non cash amounts 169 156
Cash generated from operations 30,983 21,374
6. 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 2022 unaudited Year to 31 March 2021 unaudited
£000 £000
Net profit attributable to ordinary shareholders 45,642 14,982
Number '000 Number '000
Weighted average share capital 19,905 19,882
Add: diluted effect of share capital options issued 85 31
Weighted average share capital for diluted earnings per ordinary share 19,990 19,913
calculation
7. The Annual General Meeting of James Latham plc will be held at Unit 1
Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU on 31 August 2022
at 12.30pm.
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