Final Results

RNS Number : 8187S

Latham(James) PLC

28 June 2018

 

James Latham PLC

("James Latham" or the "Group")

Final Results

Chairman's statement

I am pleased to report good trading results for the financial year to 31 March 2018.

Revenue for the financial year to 31 March 2018 was £214.9m, up 8.1% on last year's £198.8m. We have seen volumes continue to grow, especially through our own warehouses where they are up 4.5%. The cost price of our products have increased in comparison to the previous twelve months. This is in part down to the weakening of sterling against the Euro, but also we have seen manufacturers continuing to increase their prices.

Gross margin for the financial year to 31 March 2018 was 17.6% compared with 18.2% in the previous financial year. It was particularly pleasing to see an improvement in the gross margin in the second half of the year, which was 17.9% compared with 17.3% in the first half of the year.

Selling and distribution costs were 5.3% higher than last year. Distribution costs rise in line with volumes, and we monitor costs per delivered tonne which are up by 2.3%.

Overheads have been well controlled when we consider that we have relocated both Yate and Leicester (Wigston) sites during the year. We have successfully minimised the relocation costs and double costs of owning two empty sites, which have cost us less than £150,000. Both sites are performing extremely well since their relocation, particularly in added value products where the new racking systems have allowed us to increase our stock range.

Profit before tax is £15.2m, up £1.4m on last year's £13.8m. This includes a profit of £1.3m on the sale of our Wigston site.

Post tax profit for the year is £12.6m, up from last year's £11.0m.

Earnings per ordinary share were 64.4p (2017: 56.0p) an increase of 15.0%.

As at 31 March 2018 net assets have increased to £89.8m (2017: £73.3m). Non-current assets have increased by £6.1m from 31 March 2017, with the investment in the two new sites as well as continuing investment in our vehicle fleet and warehouse forklifts. Inventory levels have increased to £40.1m, partly due to the increase in unit cost of the stock as well as an increase in volumes. Trade Receivables have continued to show good debtors day figures with there being another low bad debt charge of under 0.15% of revenue. Cash and cash equivalents of £14.0m (2017: £17.2m), remain strong with good cash flows from operating activities.

Pension Scheme

The company and the Trustees of the James Latham plc Pension and Assurance Scheme have approved the triennial valuation dated 31 March 2017 with the scheme actuary. This valuation shows a shortfall of assets of £12.1m compared to a shortfall of £1.5m in the previous valuation dated 31 March 2014. The company has agreed a recovery plan with the trustees of £2.0m per annum until 31 March 2024.

At 31 March 2018 the deficit of the defined benefit scheme under IAS19 (revised) was £8.4m, down £8.2m compared with £16.6m last year. The calculation of the pension deficit remains very sensitive to changes in assumptions.

Final dividend

The Board has declared a final dividend of 12.1p per Ordinary Share (2017: 10.85p). The dividend is payable on 24 August 2018 to ordinary shareholders on the company's register at close of business on 3 August 2018. The ex-dividend date will be 2 August 2018.

The total dividend per ordinary share of 16.6p for the year (2017: 15.35p) is covered 3.9 times by earnings (2017: 3.6 times).

Current and future trading

This year has started well with sales per working day 9.8% higher for April and May than the corresponding period last year. Margins are very slightly lower than the second half of 2017/8. We are seeing growth in sales of added value timber and panel products from our decision to invest in specialist sales staff last year, although volume growth in our core products is proving more challenging. Despite the strong start to the year, there is increasing uncertainty surrounding the economic outlook, but we remain confident that we are in a strong position to continue to grow the business.

Development Strategy

The directors will continue to develop the business. This will be done by a combination of investing in our current warehouse facilities, with the emphasis this year on Purfleet, Thurrock and Gateshead, and further extending our hours of operation. We are also looking at geographical growth, and focusing on developing sales of our key product areas. In addition to our showroom at the Business Design Centre in Islington, we are in the process of opening a design centre in Manchester as we continue to focus our efforts in the A&D specification sector.

Nick Latham

Chairman

27 June 2018

Enquiries

James Latham plc	Tel: [phone]
Nick Latham, Chairman David Dunmow, Finance Director
Northland Capital Partners Limited Nominated Adviser and Broker	Tel: [phone]
Matthew Johnson / Edward Hutton John Howes

JAMES LATHAM PLC

CONSOLIDATED INCOME STATEMENT

For the year to 31 March 2018

	Audited	Audited
	Year to 31 March  2018	Year to 31 March 2017
	£000	£000
Revenue	214,919	198,808
Cost of sales (including warehouse costs)	(177,145)	(162,709)
Gross profit	37,774	36,099
Selling and distribution costs	(16,277)	(15,457)
Administrative expenses	(7,106)	(6,463)
Operating Profit	14,391	14,179
Profit on disposal of property	1,276	-
Finance income	37	56
Finance costs	(488)	(408)
Profit before tax	15,216	13,827
Tax expense	(2,570)	(2,846)
Profit after tax attributable to owners of the parent company	12,646	10,981
Earnings per ordinary share (basic)	64.4p	56.0p
Earnings per ordinary share (diluted)	64.1p	55.8p

All results relate to continuing operations.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year to 31 March 2018

	Audited	Audited
	2018	2017
	£000	£000
Profit after tax attributable to owners of the parent company	12,646	10,981
Other comprehensive income
Actuarial gain/(loss) on defined benefit pension scheme	7,948	(7,543)
Deferred tax relating to components of other comprehensive income	(1,262)	1,358
Other comprehensive income for the year, net of tax	6,686	(6,185)
Total comprehensive income attributable to owners of the parent company	19,332	4,796

JAMES LATHAM PLC                                                           COMPANY REGISTRATION NUMBER 65619

CONSOLIDATED BALANCE SHEET

At 31 March 2018

	Audited	Audited
	2018	2017
	£000	£000
Assets
Non-current assets
Goodwill	237	237
Other intangible assets	1	1
Property, plant and equipment	33,831	26,312
Deferred tax asset	1,491	2,904
Total non-current assets	35,560	29,454
Current assets
Inventories	40,068	35,508
Trade and other receivables	41,508	40,076
Cash and cash equivalents	13,989	17,246
Assets held for sale	638	-
Total current assets	96,203	92,830
Total assets	131,763	122,284
Current liabilities
Trade and other payables	28,648	27,063
Tax payable	1,292	1,517
Total current liabilities	29,940	28,580
Non-current liabilities
Interest bearing loans and borrowings	987	987
Retirement and other benefit obligation	8,382	16,625
Other payables	291	349
Deferred tax liabilities	2,374	2,485
Total non-current liabilities	12,034	20,446
Total liabilities	41,974	49,026
Net assets	89,789	73,258
Capital and reserves
Issued capital	5,040	5,040
Share-based payment reserve	184	108
Own shares	(529)	(291)
Capital reserve	3	3
Retained earnings	85,091	68,398
Total equity attributable to equity shareholders of the parent company	89,789	73,258

The Company's profit for the year and total comprehensive income for the year were £1,481,000 (2017: £1,266,000) and £1,481,000 (2017: £1,266,000) respectively.

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 2016 - audited	5,040	56	(441)	3	66,525	71,183
Profit for the year	-	-	-	-	10,981	10,981
Other comprehensive income:
Actuarial loss on defined benefit pension scheme	-	-	-	-	(7,543)	(7,543)
Deferred tax relating to components of other comprehensive income	-	-	-	-	1,358	1,358
Total comprehensive income for the year	-	-	-	-	4,796	4,796
Transactions with owners:
Dividends	-	-	-	-	(2,894)	(2,894)
Write down on conversion of ESOP shares	-	-	52	-	(52)	-
Exercise of options	-	(19)	-	-	19	-
Deferred tax on share options	-	-	-	-	4	4
Change in investment in ESOP shares	-	-	98	-	-	98
Share-based payment expense	-	71	-	-	-	71
Total transactions with owners	-	52	150	-	(2,923)	(2,721)
Balance at 31 March 2017 - audited	5,040	108	(291)	3	68,398	73,258
Profit for the year	-	-	-	-	12,646	12,646
Other comprehensive income:
Actuarial gain on defined benefit pension scheme	-	-	-	-	7,948	7,948
Deferred tax relating to components of other comprehensive income	-	-	-	-	(1,262)	(1,262)
Total comprehensive income for the year	-	-	-	-	19,332	19,332
Transactions with owners:
Dividends	-	-	-	-	(3,014)	(3,014)
Exercise of options	-	(19)	-	-	19	-
Transfer of treasury shares	-	-	(414)	-	414	-
Deferred tax on share options	-	-	-	-	(43)	(43)
Write down on conversion of ESOP shares	-	-	15	-	(15)	-
Change in investment in ESOP shares	-	-	161	-	-	161
Share-based payment expense	-	95	-	-	-	95
Total transactions with owners	-	76	(238)	-	(2,639)	(2,801)
Balance at 31 March 2018 - audited	5,040	184	(529)	3	85,091	89,789

JAMES LATHAM PLC

CONSOLIDATED CASH FLOW STATEMENT

For the year to 31 March 2018

	Audited	Audited
	2018	2017
	£000	£000
Net cash flow from operating activities
Cash generated from operations	11,251	11,902
Interest paid	(1)	(2)
Income tax paid	(2,797)	(2,646)
Net cash inflow from operating activities	8,453	9,254
Cash flows from investing activities
Interest received and similar income	37	56
Purchase of property, plant and equipment	(10,840)	(6,045)
Proceeds from sale of property, plant and equipment	2,186	122
Net cash outflow from investing activities	(8,617)	(5,867)
Cash flows from financing activities
Equity dividends paid	(3,014)	(2,894)
Preference dividend paid	(79)	(79)
Net cash outflow from financing activities	(3,093)	(2,973)
(Decrease)/increase in cash and cash equivalents for the year	(3,257)	414
Cash and cash equivalents at beginning of the year	17,246	16,832
Cash and cash equivalents at end of the year	13,989	17,246

 

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 Financial Reporting Standards ('IFRS') as adopted by the EU set out in the Group accounts for the years ended 31 March 2017 and 31 March 2018, 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 12.1p per ordinary share, which will absorb £2,379,000 (2017: 10.85p absorbing £2,127,000), payable on 24 August 2018 to shareholders on the Register at the close of business on 3 August 2018.  The ex-dividend date is 2 August 2018.

The figures for the year ended 31 March 2018 and as at 31 March 2018 have been extracted from the audited statutory accounts for that year, which have yet to be delivered to the Registrar of Companies and which 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 2018 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 2018 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 2017 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 27 June 2018.

4.   Net cash flow from operating activities

Year to 31 March 2018 audited Year to 31 March 2017 audited £000 £000 Profit before tax 15,216 13,827 Adjustment for finance income and cost 451 352 Depreciation, amortisation and impairment 1,941 1,822 Profit on disposal of property, plant and equipment (1,444) (95) Write down of intangible asset - 86 Increase in inventories (4,560) (2,105) Increase in receivables (1,432) (4,788) Increase in payables 1,526 3,536 Retirement benefits non cash amounts (703) (902) Share-based payments non cash amounts 95 71 Own shares non cash amounts 161 98 Cash generated from operations 11,251 11,902

5.   The Annual General Meeting of James Latham plc will be held at Unit 1 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU on 22 August 2018 at 12.30pm.

 

END

 

 

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