Half-year Report

RNS Number : 9933P

Latham(James) PLC

24 November 2016

 

James Latham plc

("James Latham" or "the Company")

HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016 

Chairman's statement

I am pleased to report good results for the six months to 30 September 2016.

Results

The results are better than the same period last year.  Revenue for the six months to 30 September 2016 was £100.3m, up 4.2 per cent on £96.2m for the same period last year.  The operating profit was £7.8m, 21.3 per cent up on £6.5m last year. Profit before tax was £7.7m, up 22.4 per cent on last year's £6.3m.  Earnings per ordinary share were 31.2p (2015: 25.8p) an increase of 20.9 per cent.

As at 30 September 2016 net assets had reduced to £64.5m (2015: £67.8m) with cash and cash equivalents of £16.1m (2015: £12.4m).  The actuarial calculation of the pension deficit is very sensitive to changes in the discount rate, and due to the fall in corporate bond yields, the pension deficit is calculated as increasing from £7.7m to £23.2m.  However the scheme investments have grown faster than the scheme assumptions.

Interim dividend

The Board has declared an increased interim dividend of 4.5p per Ordinary Share (2015: 4.0p), which is covered 6.9 times (2015: 6.5 times).  The dividend is payable on 27 January 2017 to ordinary shareholders on the Company's Register at close of business on 6 January 2017.  The ex-dividend date will be 5 January 2017.

Six months trading to 30 September 2016

In trading conditions which have been different for the various markets that we serve, group revenue has grown by £4.1m as a result of higher prices of imported goods resulting from the fall in the value of sterling with small gains from sales volumes and product mix.  

Trading margins for the six months to 30 September 2016 are higher than for the previous year.  Overheads have been well controlled.  Bad debts have remained lower than expected.  We continue to take advantage of cash settlement discounts from suppliers where this represents a good return.

Current and future trading

Management information shows growing revenue for October and the first half of November, at slightly lower margins.  The weakness of sterling, whilst increasing prices, could put pressure on margins in the coming months.  Market conditions continue to be difficult in some areas, while improving in others.  We are in a good position with our wide range of customers and we are trading comfortably in line with market expectations.  We are progressing with our plans to relocate our two oldest depots.  Construction work has started on the new Yate site and terms have been agreed for the new Wigston site, subject to planning.

Peter Latham

Chairman

23 November 2016

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.

Enquiries

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

JAMES LATHAM PLC
CONSOLIDATED INCOME STATEMENT
For the six months to 30 September 2016
	Six months to 30 Sept. 2016 unaudited	Six months to 30 Sept. 2015 unaudited	Year to                31 March 2016 audited
	£000	£000	£000
Revenue	100,334	96,209	185,929
Cost of sales (including warehouse costs)	(81,582)	(78,975)	(151,389)
Gross profit	18,752	17,234	34,540
Selling and distribution costs	(7,889)	(7,674)	(15,129)
Administrative expenses	(3,027)	(3,099)	(6,170)
Operating profit	7,836	6,461	13,241
Finance income	33	25	56
Finance costs	(209)	(227)	(421)
Profit before tax	7,660	6,259	12,876
Tax expense	(1,545)	(1,257)	(2,410)
Profit after tax attributable to owners of the parent company	6,115	5,002	10,466
Earnings  per ordinary share (basic)	31.2p	25.8p	53.7p
Earnings  per ordinary share (diluted)	31.1p	25.5p	53.5p
All results relate to continuing operations.

JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months to 30 September 2016
	Six months to 30 Sept. 2016 unaudited	Six months to 30 Sept. 2015 unaudited	Year to                31 March 2016 audited
	£000	£000	£000
Profit after tax	6,115	5,002	10,466
Other Comprehensive income
Actuarial (losses)/gains on defined benefit pension scheme	(13,313)	2,766	825
Deferred tax relating to components of other comprehensive income	2,396	(491)	(219)
Other comprehensive income for the period, net of tax	(10,917)	2,275	606
Total comprehensive income, attributable to owners of the parent company	(4,802)	7,277	11,072

JAMES LATHAM PLC
CONSOLIDATED BALANCE SHEET
At 30 September 2016
	As at 30 Sept. 2016 unaudited	As at 30 Sept. 2015 unaudited	As at 31 March 2016 audited
	£000	£000	£000
ASSETS
Non-current assets
Goodwill	237	237	237
Intangible assets	89	97	93
Property, plant and equipment	25,315	21,477	22,111
Deferred tax asset	4,245	1,773	1,802
Total non-current assets	29,886	23,584	24,243
Current assets
Inventories	35,065	32,419	33,403
Trade and other receivables	38,003	37,612	35,288
Cash and cash equivalents	16,102	12,432	16,832
Total current assets	89,170	82,463	85,523
Total assets	119,056	106,047	109,766
Current liabilities
Trade and other payables	25,730	24,917	23,471
Current tax payable	1,590	1,297	1,376
Total current liabilities	27,320	26,214	24,847
Non-current liabilities
Interest bearing loans and borrowings	987	987	987
Retirement and other benefit obligation	23,208	7,679	9,657
Other payables	377	435	406
Deferred tax liabilities	2,686	2,961	2,686
Total non-current liabilities	27,258	12,062	13,736
Total liabilities	54,578	38,276	38,583
Net assets	64,478	67,771	71,183
Capital and reserves
Issued capital	5,040	5,040	5,040
Share-based payment reserve	70	172	56
Own shares	(344)	(235)	(441)
Capital reserve	3	3	3
Retained earnings	59,709	62,791	66,525
Total equity attributable to owners of the parent company	64,478	67,771	71,183

JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six months to 30 September 2016
	Six months to 30 Sept 2016 unaudited	Six months to 30 Sept 2015 unaudited	Year to                31 March 2016 audited
	£000	£000	£000
Net cash flow from operating activities
Cash generated from operations	6,665	4,055	11,704
Interest paid	(2)	(25)	(23)
Income tax paid	(1,376)	(909)	(2,016)
Net cash inflow from operating activities	5,287	3,121	9,665
Cash flows from investing activities
Interest received and similar income	33	25	56
Purchase of property, plant and equipment	(4,035)	(608)	(2,056)
Proceeds from sale of property, plant and equipment	41	46	136
Net cash outflow from investing activities	(3,961)	(537)	(1,864)
Cash flows before financing activities
Borrowings repaid during the period	-	(907)	(907)
Equity dividends paid	(2,017)	(1,707)	(2,484)
Preference dividend paid	(39)	(39)	(79)
Net cash outflow from financing activities	(2,056)	(2,653)	(3,470)
(Decrease)/increase in cash and cash equivalents for the period	(730)	(69)	4,331
Cash and cash equivalents at beginning of the period	16,832	12,501	12,501
Cash and cash equivalents at end of the period	16,102	12,432	16,832

JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to owners of the parent company
	Issued capital £000	Share-based payment reserve £000	Own shares £000	Capital reserve £000	Retained earnings £000	Total equity £000
As at 1 April 2015 (audited)	5,040	143	(177)	3	57,222	62,231
Profit for the period	-	-	-	-	5,002	5,002
Other comprehensive income:
Actuarial gain on defined benefit pension scheme	-	-	-	-	2,766	2,766
Deferred tax relating to components of other comprehensive income	-	-	-	-	(491)	(491)
Total comprehensive income for the period	-	-	-	-	7,277	7,277
Transaction with owners:
Dividends	-	-	-	-	(1,707)	(1,707)
Write down on conversions of ESOP shares	-	-	1	-	(1)	-
Change in investment in ESOP shares	-	-	(59)	-	-	(59)
Share-based payment expense	-	29	-	-	-	29
Total transactions with owners	-	29	(58)	-	(1,708)	(1,737)
Balance at 30 September 2015 (unaudited)	5,040	172	(235)	3	62,791	67,771
Profit for the period	-	-	-	-	5,464	5,464
Other comprehensive income:
Actuarial loss on defined benefit pension scheme	-	-	-	-	(1,941)	(1,941)
Deferred tax relating to components of other comprehensive income	-	-	-	-	272	272
Total comprehensive income for the period	-	-	-	-	3,795	3,795
Transactions with owners:
Dividends	-	-	-	-	(777)	(777)
Transfer of treasury shares	-	-	(1,385)	-	1,385	-
Write down on conversions of ESOP shares	-	-	818	-	(818)	-
Conversion of ESOP shares	-	-	507	-	-	507
Exercise of options	-	(149)	-	-	149	-
Change in investment in ESOP shares	-	-	(146)	-	-	(146)
Share-based payment expense	-	33	-	-	-	33
Total transactions with owners	-	(116)	(206)	-	(61)	(383)
Balance at 31 March 2016 (audited)	5,040	56	(441)	3	66,525	71,183
Profit for the period	-	-	-	-	6,115	6,115
Other comprehensive income:
Actuarial loss on defined benefit pension scheme	-	-	-	-	(13,313)	(13,313)
Deferred tax relating to components of other comprehensive income	-	-	-	-	2,396	2,396
Total comprehensive income for the period	-	-	-	-	(4,802)	(4,802)
Transactions with owners:
Dividends	-	-	-	-	(2,017)	(2,017)
Exercise of options	-	(3)	-	-	3	-
Change in investment in ESOP shares	-	-	97	-	-	97
Share-based payment expense	-	17	-	-	-	17
Total transactions with owners	-	14	97	-	(2,014)	(1,903)
Balance at 30 September 2016 (unaudited)	5,040	70	(344)	3	59,709	64,478

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 of International Financial Reporting Standards ('IFRS') as adopted by the EU that are expected to be applicable to the financial statements for the year ending 31 March 2017 and on the basis of the accounting policies to be used in those financial statements.  The figures for the year ended 31 March 2016 are extracted from the statutory accounts of the group for that period.
2.  The directors propose an interim dividend of 4.5p per ordinary share which will absorb £880,000 (2016: 4.0p absorbing £780,000), payable on 27 January 2017 to shareholders on the Register at the close of business on 6 January 2017. The ex-dividend date is 5 January 2017.
3.  This half yearly report does not constitute financial statutory accounts within the meaning of section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2016 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 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 year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
	Six months to 30 Sept 2016 unaudited	Six months to 30 Sept 2015 unaudited	Year to 31 March 2016 audited
	£000	£000	£000
Net profit attributable to ordinary shareholders	6,115	5,002	10,466
	Number '000	Number '000	Number '000
Weighted average share capital	19,590	19,399	19,493
Add: diluted effect of share capital options issued	85	203	65
Weighted average share capital for diluted earnings per ordinary share calculation	19,675	19,602	19,558

5.  Net cash flow from operating activities
	Six months to 30 Sept 2016 unaudited	Six months to 30 Sept 2015 unaudited	Year to 31 March 2016 audited
Profit before tax	7,660	6,259	12,876
Adjustment for finance income and expenditure	176	202	365
Depreciation and amortisation	829	728	1,515
Profit on disposal of property, plant and equipment	(35)	(38)	(97)
Increase in inventories	(1,662)	(513)	(1,497)
Increase in receivables	(2,715)	(3,399)	(1,075)
Increase in payables	2,228	993	(480)
Own shares non cash amounts	97	(58)	302
Retirement benefits non cash amounts	70	(148)	(267)
Share-based payments non cash amounts	17	29	62
Cash generated from operations	6,665	4,055	11,704
6.  Copies of this statement will be posted on our website, www.lathams.co.uk.  A copy can be emailed or posted upon application to the Company Secretary, James Latham plc, Unit 3 Swallow Park, Finway Road Hemel Hempstead, Herts, HP2 7QU, or by email to [e-mail]

 

END

 

 

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