Final Results

RNS Number : 5613D

Latham(James) PLC

27 June 2019

 

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 2019

Revenue for the financial year to 31 March 2019 was £235.1m, up 9.4% on last year's £214.9m. Volumes increased by 0.9%, with the majority of the growth being on direct business. The cost price of our products increased against the comparative 12 months and fluctuated more than in previous years. However cost prices on some imported plywood have shown price weakness in the last quarter of the year.

Gross profit for the financial year to 31 March 2019 was 17.2% compared with 17.6% in the previous financial year. This figure includes warehouse costs, which have increased due to planned extended working hours, further investment in our racking systems and some increased rents at our leased sites.

Profit before tax is £15.3m, up £0.1m on last year's £15.2m. As reported at the half year, the High Court made a judgment confirming that pension schemes are required to equalise male and female Guaranteed Minimum Pensions ("GMP"). The trustees have assessed this one-off cost and £0.7m has been provided to cover this. In addition profit before tax this year includes a profit of £1.1m on the sale of our old Yate site, and last year included a profit of £1.3m on the sale of our old site in Wigston.

Profit after tax for the year is £12.4m, down from last year's £12.6 m

Earnings per ordinary share, adjusted for the effect of the property profit and the one off cost relating to GMP were 61.6p (2018: 57.9p) an increase of 6.4%.

As at 31 March 2019 net assets have increased to £98.0m (2018: £89.8m). Non current assets have increased by £2.7m from 31 March 2018, in part due to the continuing investment in our vehicle fleet and warehouse forklifts, plus also the acquisition of Abbey Wood Agencies Limited. Inventory levels have increased to £42.3m, partly due to the increase in unit cost of the stock as well as our planned Brexit stock. Trade receivables have continued to show good debtors day figures with there being another low bad debt charge of 0.23% of revenue. Cash and cash equivalents of £15.5m (2018: £14.0m), remain strong with good cash flows from operating activities.

At 31 March 2019 the deficit of the defined benefit scheme under IAS19 (revised) was £8.7m, up £0.3m compared with £8.4m 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 12.9p per Ordinary Share (2018: 12.1p). The dividend is payable on 23 August 2019 to ordinary shareholders on the company's register at close of business on 2 August 2019. The ex-dividend date will be 1 August 2019. The total dividend per ordinary share of 17.9p for the year (2018: 16.6p) is covered 3.5 times by earnings (2018: 3.9 times). 

Current and future trading

We have had a positive start to the year with sales per working day 4.5 % higher for April and May than the corresponding period last year, excluding Abbey Woods. Margins have also improved compared to the second half of 2018/19.  The acquisition and integration of Abbey Woods has gone very well, and we now have a great platform to develop sales in Ireland.  We continue to see growth in sales of added value timber and panel products, although volume growth in our core products is proving more challenging. Prices on some of our commodity panels are showing signs of weakness, partly due to over stocking within our industry. I am pleased to report that there is a good level of activity for the majority of both our timber and panel customers.  Despite the strong start to the year, there is still 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, and look for opportunities to grow the business through any suitable acquisitions to support market sectors we are looking to grow and also identify new products in market sectors where we are focussing our efforts. We will continue to invest in our warehouses and extend the working day at our depots to ensure that we meet the delivery needs of our existing and new customers. The focus will be major racking investment in Purfleet and Thurrock, and Gateshead where we have now gained planning permission to develop the site to improve the yard layout and provide new offices. Our Fareham depot will join Yate and Leeds in working a 24 hour shift system. I am pleased to report that our focus on the A&D specification sector is leading to a growing number of specifications for our products, and this is an area we will continue to develop as we build our future order book.

Nick Latham

Chairman

26 June 2019

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: [phone]
Nick Latham, Chairman David Dunmow, Finance Director
SP Angel Corporate Finance LLP Nominated Adviser and Broker	Tel: [phone]
Matthew Johnson / Charlie Bouverat Abigail Wayne

JAMES LATHAM PLC

CONSOLIDATED INCOME STATEMENT

For the year to 31 March 2019

	Audited	Audited
	Year to 31 March  2019	Year to 31 March 2018
	£000	£000
Revenue	235,132	214,919
Cost of sales (including warehouse costs)	(194,686)	(177,145)
Gross profit	40,446	37,774
Selling and distribution costs	(18,082)	(16,277)
Administrative expenses	(7,896)	(7,106)
Operating Profit	14,468	14,391
Profit on disposal of property	1,052	1,276
Finance income	71	37
Finance costs	(256)	(488)
Profit before tax	15,335	15,216
Tax expense	(2,913)	(2,570)
Profit after tax attributable to owners of the parent company	12,422	12,646
Earnings per ordinary share (basic)	63.1p	64.4p
Earnings per ordinary share (diluted)	63.0p	64.1p
Earnings per ordinary share (basic, excluding GMP equalisation and profit on disposal of property)	61.6p	57.9p
Earnings per ordinary share (diluted, excluding GMP equalisation and profit on disposal of property)	61.5p	57.6p

All results relate to continuing operations.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year to 31 March 2019

	Audited	Audited
	2019	2018
	£000	£000
Profit after tax attributable to owners of the parent company	12,422	12,646
Other comprehensive income
Actuarial (loss)/gain on defined benefit pension scheme	(1,360)	7,948
Deferred tax relating to components of other comprehensive income	314	(1,262)
Foreign translation charge	(31)	-
Other comprehensive income for the year, net of tax	(1,077)	6,686
Total comprehensive income attributable to owners of the parent company	11,345	19,332

JAMES LATHAM PLC                                                           COMPANY REGISTRATION NUMBER 65619

CONSOLIDATED BALANCE SHEET

At 31 March 2019

	Audited	Audited
	2019	2018
	£000	£000
Assets
Non-current assets
Goodwill	523	237
Other intangible assets	1,989	1
Property, plant and equipment	34,159	33,831
Deferred tax asset	1,577	1,491
Total non-current assets	38,248	35,560
Current assets
Inventories	42,350	40,068
Trade and other receivables	42,613	41,508
Cash and cash equivalents	15,541	13,989
Assets held for sale	-	638
Total current assets	100,504	96,203
Total assets	138,752	131,763
Current liabilities
Trade and other payables	27,113	28,648
Tax payable	1,193	1,292
Total current liabilities	28,306	29,940
Non-current liabilities
Interest bearing loans and borrowings	597	987
Retirement and other benefit obligation	8,714	8,382
Other payables	413	291
Deferred tax liabilities	2,762	2,374
Total non-current liabilities	12,486	12,034
Total liabilities	40,792	41,974
Net assets	97,960	89,789
Capital and reserves
Issued capital	5,430	5,040
Share-based payment reserve	259	184
Own shares	(923)	(529)
Capital reserve	3	3
Retained earnings	93,191	85,091
Total equity attributable to equity shareholders of the parent company	97,960	89,789

The Company's profit for the year was £679,000 (2018: £1,481,000).

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 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)
Write down on conversion of ESOP shares	-	-	15	-	(15)	-
Exercise of options	-	(19)	-	-	19	-
Transfer of treasury shares	-	-	(414)	-	414	-
Deferred tax on share options	-	-	-	-	(43)	(43)
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
Profit for the year	-	-	-	-	12,422	12,422
Other comprehensive income:
Actuarial loss on defined benefit pension scheme	-	-	-	-	(1,360)	(1,360)
Deferred tax relating to components of other comprehensive income	-	-	-	-	314	314
Foreign translation charge	-	-	-	-	(31)	(31)
Total comprehensive income for the year	-	-	-	-	11,345	11,345
Transactions with owners:
Dividends	-	-	-	-	(3,363)	(3,363)
Exercise of options	-	(19)	-	-	19	-
Transfer of treasury shares	-	-	(82)	-	82	-
Deferred tax on share options	-	-	-	-	31	31
Purchase of preference shares	390	-	(478)	-	-	(88)
Write down on conversion of ESOP shares	-	-	14	-	(14)	-
Change in investment in ESOP shares	-	-	152	-	-	152
Share-based payment expense	-	94	-	-	-	94
Total transactions with owners	390	75	(394)	-	(3,245)	(3,174)
Balance at 31 March 2019 - audited	5,430	259	(923)	3	93,191	97,960

JAMES LATHAM PLC

CONSOLIDATED CASH FLOW STATEMENT

For the year to 31 March 2019

	Audited	Audited
	2019	2018
	£000	£000
Net cash flow from operating activities
Cash generated from operations	10,267	11,251
Interest paid	(8)	(1)
Income tax paid	(2,651)	(2,797)
Net cash inflow from operating activities	7,608	8,453
Cash flows from investing activities
Interest received and similar income	71	37
Acquisition of businesses	(1,604)	-
Purchase of property, plant and equipment	(2,362)	(10,840)
Proceeds from sale of property, plant and equipment	1,743	2,186
Net cash outflow from investing activities	(2,152)	(8,617)
Cash flows from financing activities
Purchase of treasury shares	(478)	-
Equity dividends paid	(3,363)	(3,014)
Preference dividend paid	(63)	(79)
Net cash outflow from financing activities	(3,904)	(3,093)
(Decrease)/increase in cash and cash equivalents for the year	1,552	(3,257)
Cash and cash equivalents at beginning of the year	13,989	17,246
Cash and cash equivalents at end of the year	15,541	13,989

 

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 2018 and 31 March 2019, 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 12.9p per ordinary share, which will absorb £2,537,000 (2018: 12.1p absorbing £2,379,000), payable on 23 August 2019 to shareholders on the Register at the close of business on 2 August 2019.  The ex-dividend date is 1 August 2019.

The figures for the year ended 31 March 2018 and as at 31 March 2019 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 2019 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 2019 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 2018 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 26 June 2019.

4.   Net cash flow from operating activities

Year to 31 March 2019 audited Year to 31 March 2018 audited £000 £000 Profit before tax 15,335 15,216 Adjustment for finance income and cost 185 451 Depreciation, amortisation and impairment 2,036 1,941 Profit on disposal of property, plant and equipment (1,079) (1,444) Increase in inventories (2,282) (4,560) Increase in receivables (1,105) (1,432) (Decrease)/increase in payables (1,825) 1,526 Retirement benefits non cash amounts (1,213) (703) Translation non cash amounts (31) - Share-based payments non cash amounts 94 95 Own shares non cash amounts 152 161 Cash generated from operations 10,267 11,251

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 21 August 2019 at 12.30pm.

 

END

 

 

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