Proposed Disposal of a Property Asset

Latham(James) PLC
19 January 2000



PROPOSED DISPOSAL OF A PROPERTY ASSET

James Latham plc ('the Company') announces the proposed disposal of a property
asset ('the Property'), comprising the Group's freehold premises at Clapton in
London.  The Contract has been entered into with Countryside Properties
('Countryside') by the Company subject to Shareholders' consent.  It is
because of its size in relation to the Group that the Disposal requires
Shareholders' consent at an Extraordinary General Meeting, to be held at
Leeside Wharf, Mount Pleasant Hill, Clapton, London E5 9NG, at 12 noon on
Friday, 4 February 2000.

Information on the Property and Lathams Limited

The Property comprises a 12.94 acre freehold site.  It is presently used as
the Group's headquarters and also represents the sales, storage and
distribution centre for the largest part of the Lathams Limited panel products
and timber trading operation, servicing the South East of England.  Following
the recent disposal of Latham Timber Centres (Holdings) Limited ('LTCH'),
details of which were announced on 13 October 1999, Lathams Limited comprises
approximately eighty per cent of the Group's continuing turnover.  Lathams
Limited is one of the UK's largest traders of panel products and is also one
of the UK's largest distributors of hardwoods.  It is proposed that the
activities carried on from the Property by the Group will be relocated to a
number of new smaller sites in and around London and the South East of
England.

Details of the Disposal

The Disposal is expected ultimately to raise not less than £6 million, before
costs, on the basis explained below.  A valuation report on the Property
prepared by Clifford Tee+Gale shows an existing use value of £2.4 million
(compared to a book value as at 30 September 1999 of approximately £1.94
million).

The present planning use of the Property is as a Defined Employment Area under
the Hackney Unitary Development Plan, being a designation by Hackney that this
property should be used for employment generating purposes.  Pursuant to the
Contract, Countryside must use all reasonable endeavours to procure a change
in the permitted use to facilitate redevelopment.  Completion of the Contract
is conditional on Countryside being successful in this regard.

If such change in planning permission is obtained, the detail of which cannot
be ascertained at this stage, the Property will then be valued at open market
valuation and the sale price calculated by reference to that.  A sliding scale
for calculating the purchase price apportions the benefit of an increased open
market value between the two parties.  In essence, the price will be
equivalent to a minimum of 91 per cent and a maximum of 92 per cent of open
market valuation.

Countryside is a major property developer and has, in the Directors' belief,
the resources and expertise necessary to maximise the opportunity presented by
the development of the Property.  The consideration to be paid by Countryside
recognises both this and the resources which Countryside will have to commit
to obtain planning permission.

 Background to and reasons for Disposal

For some time the Directors have been aware that the costs of handling
materials through the Clapton site are significantly higher than those
incurred at the Group's other regional distribution depots.  This results from
working within old buildings and an outdated site layout.  In addition, poor
road links restrict the tonnage which the business can efficiently transport
on and off the site.

The Directors have, therefore, sought the opportunity to move the Group's
activities from the Clapton site to better located premises, which can meet
the modern day demand for a handling and distribution operation of this
nature.

Effect of the Disposal on the Group's balance sheet and earnings

Because the Contract does not state a maximum purchase price for the Property,
it is not possible to state the net proceeds to Lathams of the Disposal. 
However, the Directors anticipate that the minimum price set out in the
Contract of £6 million (index linked) will be achieved within the three year
period of the Contract.  Included within unaudited consolidated net assets as
at 30 September 1999, is an amount of approximately £1.94 million relating to
the Property.

The Directors anticipate that a major benefit of the Disposal will be the cost
savings to be derived from the relocation explained above.  Consequently, it
is not possible to quantify the impact on earnings arising from the Disposal
beyond the minimum profit in excess of net book value of £4.06 million before
any provision for taxation on the basis set out above.

Current trading

Since 30 September 1999, trading volume has remained in line with the
improving trend highlighted by the unaudited interim results announced on 25
November 1999.

Net asset value

Unaudited consolidated net assets were £21.53 million as at 30 September 1999
but Shareholders should note that this does not include the impact of the
disposal of LTCH which occurred on 1 November 1999, which is expected to
result in an increase in net assets of approximately £3 million in the current
year.

Future prospects 

It is possible that it will take two and a half to three years for Countryside
to complete the Contract's conditions, which will give the Group sufficient
time to move the existing business at Clapton to new sites.  The Directors
anticipate that the proceeds from the disposal will more than cover the costs
of relocation, which initially are likely to be funded by short-term
borrowings to be repaid on completion of the Disposal.  Any excess proceeds
over the costs of relocation will be utilised by the Group in funding the
strategic initiatives within the core business, details of which are set out
below.

The sale of LTCH to Grafton Group plc, which was completed on 1 November 1999,
has provided the Group with a net cash injection in excess of £6 million.  The
funds raised from the sale of LTCH significantly reduces the Group's
dependence on bank borrowings and will enable the Directors to plan the move
from Clapton without the financial constraints which would otherwise have
limited their options.

 Within Lathams Limited the Directors intend to establish a new distribution
network in London and the South East of England and take advantage of other
opportunities as they arise nationally.  As part of a long term strategic plan
for the Lathams Limited importing and distribution business, the Group's
coverage in the South of England has already been improved by the opening last
year of a new depot in Eastleigh in Hampshire.

In addition, Nevill Long Limited, the Group's distributor of suspended
ceilings, partitioning and dry wall linings, via eight depots, is now well
established as a profitable and cash generative part of the Group.  The
Directors will be in a stronger position to take advantage of any
opportunities that may arise to expand this business following the Disposal.

Overall, the Directors consider that the Group enters the new millennium with
good prospects for growth.  Stronger trading volumes are evident from the
unaudited interim results.  The recent disposal of LTCH, together with the
Disposal of the Property, places the Group in a strong position financially to
take advantage of opportunities that are expected to arise out of the Group's
core activities.

Extraordinary General Meeting

A circular, containing full details of the proposed Disposal of the Property
along with the Company's unaudited interim results for the six months ended 30
September 1999 announced on 25 November 1999, is expected to be posted to
Shareholders today.  This will include notice of an Extraordinary General
Meeting to approve the Disposal and a form of proxy will be enclosed with the
document.

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.  Accordingly, the Directors
strongly and unanimously recommend Shareholders to vote in favour of the
resolution to be proposed at the Extraordinary General Meeting on Friday, 4
February 2000.

For further enquiries 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     0117 933 3344