Disposal

JAMES LATHAM PLC
12 October 1999



James Latham plc ('the Company') announces that it has agreed terms for the
disposal ('the Disposal') of Latham Timber Centres (Holdings) Limited
('LTCH'), its timber and building supplies business, to Grafton Group (UK) plc
('Grafton'), conditional on the approval of the Company's shareholders.

The consideration for the disposal is £7.94 million, to be paid in full, in
cash, on completion.  LTCH trades as Latham Timber and Building Supplies and
specialises in the supply of timber products, sawn timber and building
materials principally to the house building sector but also to small builders
and DIY practitioners.  Latham Timber and Building Supplies operates from four
depots at Milton Keynes, Braintree, Horsham and Luton.  

In the year ended 31 March 1999, LTCH reported profit before taxation of
approximately £196,000 on sales of approximately £14,000,000.  Net assets were
approximately £4,312,000 at 31 March 1999.

Background to and reasons for the Disposal

There has recently been further consolidation within the UK builders merchants
industry.  In the Directors' view, LTCH is too small to take advantage of the
benefits derived from scale by spreading central overheads and maximising
purchasing terms.

Furthermore, LTCH is unable to offer national coverage with a comprehensive
product offering and the added value service that its major house-builder
customers increasingly require from their major suppliers.

Following on from this, the Board came to the view that shareholder value
could be maximised by focusing on the Group's core businesses.

The Directors consider the sale to Grafton, which is seeking to expand its UK
business through acquisition, to represent the best opportunity for the
business of Latham Timber and Building Supplies, as a whole, to be grown as
part of a larger merchanting business.

All of the cash received by the Company from the Disposal after expenses will
be used to reduce the Group's indebtedness in the short term and thereafter to
develop the core businesses.

Current trading and prospects

Turnover in the Summer has improved generally across the Group's activities
after a slow start to the year, with the additional benefit of increased gross
profit margins.

Trading at LTCH has continued to improve, resulting in an enhanced
contribution to Group profitability over the Summer.

There are two other trading subsidiaries which comprise the Group, Lathams
Limited and Nevill Long Limited.

Although volumes are higher at Lathams Limited, the Group's timber importing
and distribution business, turnover has marginally decreased at a time when
prices for panel products have been weak.  Gross margins are strengthening,
which have more than made up for the reduction in turnover, although transport
costs have continued to increase.  The Group is now beginning to see a
profitable trading contribution from its new depot at Eastleigh, Hampshire.

Nevill Long Limited, the Group's distributor of suspended ceilings,
partitioning and dry wall linings, has had a good Summer with improved sales
and profitability.

Overall the Group is experiencing stronger trading volumes than it was a year
ago and the Directors consider the Group's future prospects following the
Disposal to be good.

EGM

Completion of the Disposal is conditional upon the approval of the Company's
shareholders at an Extraordinary General Meeting to be held on Friday, 29
October 1999 at 12 noon at Leeside Wharf, Mount Pleasant Hill, Clapton, London
E5 9NG.  A circular containing full details of the Disposal is expected to be
despatched to shareholders today.

Recommendation

The Directors, who have received financial advice on the Disposal from Solomon
Hare Corporate Finance, believe that the Disposal is in the best interests of
the Company and the shareholders as a whole and strongly and unanimously
recommend shareholders to vote in favour of the resolution to be proposed at
the Extraordinary General Meeting.

The Directors intend to vote in favour of the resolution in respect of their
beneficial and non-beneficial holdings totalling 796,932 Ordinary Shares,
representing approximately 15.81 per cent. of the issued ordinary share
capital. The Directors and certain other shareholders, together holding
approximately 29.67 per cent. of the issue ordinary share capital, have
provided irrevocable undertakings to Grafton to vote in favour of the
resolution to be proposed at the Extraordinary General Meeting.

Further enquires

Please contact:

David Latham - Chairman, James Latham plc - 0181 806 3333
Pippa Latham - Company Secretary, James Latham plc - 0181 806 3333
Stephen Toole - Partner, Solomon Hare Corporate Finance - 01179 933 3344

Information on the Company

James Latham plc is a well-established Company, importing and distributing
quality timber and wood products for industrial and housebuilding uses. 
Established in 1757, the Company has the Royal Warrant 'by appointment to Her
Majesty the Queen wood merchants James Latham plc'.  Members of the Latham
family remain active in the management on the Company.  The Company has been
listed on the London Stock Exchange since 1965.

As well as being the third largest trader of panels and plywoods in the UK,
the Company is also the third largest distributor of hardwoods in the UK and
offers a tradition of quality of product and of service to the customer.  

The Company owns the Nevill Long group, nationwide distributors of suspended
ceiling systems, dry lining and partitioning.