Half-year Report

RNS Number : 3954G
Latham(James) PLC
25 November 2020
 

James Latham plc

 ("James Latham" or the "Company")

 

HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2020

 

Chairman's statement

 

Unaudited results for the six months trading to 30 September 2020

 

Revenue for the six months ended 30 September 2020 was £107.0m, down 14.8% on £125.6m for the same period last year.  Revenue in Q2 was 5.3% up on the same period last year highlighting the strong recovery from Q1 which as previously reported was significantly impacted by the first lockdown. Month on month trends continue to improve with September being ahead of the same month last year.  We have had strong volume growth in both delivered and direct commodity panel products. Cost prices on both timber and panels have been slowly rising during the period.  All sites have coped very well with the local lockdowns and all the other challenges that they have faced during this unprecedented period.

 

Gross profit, which includes warehouse costs, for the six month period ended 30 September 2020 was 16.9% compared with 17.4% in the comparative six months.  Overheads have been very well controlled during the 6 months.

 

Operating profit was £6.5m, down 22.7% on the £8.5m profit for the same period last year.  Profit before tax was £6.3m compared with £8.3m for the same period last year.  Earnings per ordinary share were 25.6p (2019: 33.8 p) a decrease of 24.3%.

 

As at 30 September 2020 net assets are £109.1m (2019: £97.6m).  Stock volume levels have remained stable throughout the six months, although the strong sales at the end of Q2 resulted in a temporary reduction in our inventory values.  Trade receivables have continued to show good debtor day figures, with bad debts at a very low figure.  Cash and cash equivalents of £26.1m (2019: £16.5m) remain strong due to the reduced inventory figures and also good collections of our trade receivables.  We continue to take advantage of additional early settlement discount opportunities with our suppliers.

 

These positive results are a good indication of the strength of our business model, and the importance of having a diversified customer base.

 

The calculation of the pension deficit remains very sensitive to changes in assumptions, and the pension deficit under IAS19 is calculated as decreasing from £11.8m at 31 March 2020 to £8.8m at 30 September 2020.  This is largely due to a recovery in the plan asset valuations, although discount rates continue to fall which add to the deficit.

 

Interim dividend

 

The Board has declared an increased interim dividend of 5.7p per Ordinary Share (2019: 5.5p), which is covered 4.5 times (2019: 6.1 times).  The dividend is payable on 29 January 2021 to ordinary shareholders on the Company's Register at close of business on 4 January 2021.  The ex-dividend date will be 31 December 2020.

 

 

Current and future trading

 

The second half of 2020/21 has started strongly with margins slightly ahead of the previous period.  We are seeing significant increased volumes of commodity products, but reduced volumes of some of our added value panel products which predominantly go into market sectors that have been adversely affected by the COVID-19 pandemic, such as hospitality, exhibitions and shopfitting.  Purchase prices of many of our commodity panel products continue to rise with some extended lead times.  The majority of our customers are busy, and we remain confident that we will have a strong end to our financial year.  The investment in our Gateshead facility is now complete, and we are mid-way through a large racking project at our Thurrock facility which will improve the stock holding and efficiency of the warehouse.  This project will be completed by end March 2021.

 

We have been working for some time in preparation for Brexit and have acted on the risks to our business.  Our supply chain team have been working closely with suppliers and intermediaries and have identified the best routes to market, and we have increased stock levels of those products most at risk of disruption.

 

We remain committed to continued investment in the business, both in our existing depots and in looking for other opportunities to grow our market position.

 

 

 

Nick Latham

Chairman

25 November 2020

 

 

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: 01442 849 100

Nick Latham, Chairman


David Dunmow, Finance Director






SP Angel Corporate Finance LLP


Matthew Johnson / Charlie Bouverat (Corporate Finance)

Tel: 0203 470 0470

Abigail Wayne (Corporate Broking)


 

 

 



 

JAMES LATHAM PLC




CONSOLIDATED INCOME STATEMENT








For the six months to 30 September 2020









Six months to 30 Sept. 2020 unaudited

Six months to 30 Sept. 2019 unaudited

Year to  31 March 2020 audited






£000

£000

£000





Revenue

107,034

125,609

247,100





Cost of sales (including warehouse costs)

(88,985)

(103,726)

(203,656)





Gross profit

18,049

21,883

43,444





Selling and distribution costs

(7,449)

(9,703)

(19,251)

Administrative expenses

(4,056)

(3,712)

(8,196)





Operating profit

6,544

8,468

15,997





Finance income

5

46

82

Finance costs

(236)

(198)

(417)





Profit before tax

6,313

8,316

15,662





Tax expense

(1,215)

(1,630)

(3,181)





Profit after tax attributable to owners of the parent company

5,098

6,686

12,481





Earnings per ordinary share (basic)

25.6p

33.8p

63.1p





Earnings per ordinary share (diluted)

25.6p

33.8p

63.0p









All results relate to continuing operations.




 



 

JAMES LATHAM PLC








CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME








For the six months to 30 September 2020









Six months to 30 Sept. 2020 unaudited

Six months to 30 Sept. 2019 unaudited

Year to  31 March 2020 audited






£000

£000

£000





Profit after tax

5,098

6,686

12,481

Other Comprehensive income




Actuarial gains/(loss) on defined benefit pension scheme

1,923

(6,767)

(4,823)

Deferred tax relating to components of other comprehensive income

(365)

1,150

916

Foreign translation credit

23

12

80

Other comprehensive income for the period, net of tax

1,581

(5,605)

(3,827)

Total comprehensive income, attributable to owners of the parent company

6,679

1,081

8,654

 



 

JAMES LATHAM PLC




CONSOLIDATED BALANCE SHEET








At 30 September 2020









As at 30 Sept. 2020 unaudited

As at 30 Sept. 2019 unaudited

As at 31 March 2020 audited






£000

£000

£000

ASSETS




Non-current assets




Goodwill

872

523

872

Intangible assets

1,738

1,905

1,822

Property, plant and equipment

35,477

34,581

35,952

Right-of-use-asset

4,629

4,344

4,895

Deferred tax asset

1,694

2,560

2,258

Total non-current assets

44,410

43,913

45,799





Current assets




Inventories

41,360

42,501

44,288

Trade and other receivables

44,764

45,697

47,046

Cash and cash equivalents

26,159

16,538

16,950

Total current assets

112,283

104,736

108,284









Total assets

156,693

148,649

154,083





Current liabilities




Lease liabilities

1,242

1,143

1,178

Trade and other payables

30,122

28,321

28,686

Current tax payable

-

86

-

Total current liabilities

31,364

29,550

29,864





Non-current liabilities




Interest bearing loans and borrowings

592

592

592

Lease liabilities

3,579

3,252

3,857

Retirement and other benefit obligation

8,774

14,637

11,812

Other payables

-

180

392

Deferred tax liabilities

3,264

2,856

3,289

Total non-current liabilities

16,209

21,517

19,942









Total liabilities

47,573

51,067

49,806









Net assets

109,120

97,582

104,277





Capital and reserves




Issued capital

5,040

5,040

5,040

Share-based payment reserve

96

89

25

Own shares

(542)

(891)

(619)

Capital reserve

398

398

398

Retained earnings

104,128

92,946

99,433





Total equity attributable to shareholders of the parent company

109,120

97,582

104,277



 

JAMES LATHAM PLC








CONSOLIDATED CASH FLOW STATEMENT








For the six months to 30 September 2020









Six months to 30 Sept 2020 unaudited

Six months to 30 Sept 2019 unaudited

Year to  31 March 2020 audited






£000

£000

£000

Net cash flow from operating activities




Cash generated from operations

13,565

8,040

13,528

Interest paid

-

(3)

(3)

Income tax paid

(950)

(2,552)

(3,851)

12,615

5,485

9,674





Cash flows from investing activities




Interest received and similar income

5

46

82

Acquisition of businesses net of cash acquired

-

-

(578)

Purchase of property, plant and equipment

(785)

(1,512)

(3,886)

Proceeds from sale of property, plant and equipment

6

119

152

Net cash outflow from investing activities

(774)

(1,347)

(4,230)





Cash flows before financing activities




Sale of treasury shares

-

-

1,036

Purchase of treasury shares

-

(5)

-

Lease liability payments

(621)

(572)

(1,390)

Equity dividends paid

(1,987)

(2,540)

(3,633)

Preference dividend paid

(24)

(24)

(48)

Cash outflow from financing activities

(2,632)

(3,141)

(4,035)





Increase in cash and cash equivalents for the period

9,209

997

1,409





Cash and cash equivalents at beginning of the period

16,950

15,541

15,541





Cash and cash equivalents at end of the period

26,159

16,538

16,950

 

 



 

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 2019 (audited)

5,040

259

(923)

3

93,427

98,177

Profit for the period

-

-

-

-

6,686

6,686

Other comprehensive income:







Actuarial loss on defined benefit pension scheme

-

-

-

-

(6,767)

(6,767)

Deferred tax relating to components of other comprehensive income

-

-

-

-

1,150

1,150

Foreign translation charge

-

-

-

-

12

12

Total comprehensive income for the period

-

-

-

-

1,081

1,081

Transaction with owners:







Dividends

-

-

-

-

(2,540)

(2,540)

Exercise of options

-

(181)

(520)

-

1,488

787

Deferred tax on share options

-

(32)

-

-

(32)

(64)

Purchase of preference shares

5

-

-

-

-

5

Cancellation of preference shares

(395)

-

478

395

(478)

-

Change in investment in ESOP shares

-

-

74

-

-

74

Share-based payment expense

-

43

-

-

-

43

Total transactions with owners

(390)

(170)

32

395

(1,562)

(1,676)

Balance at 30 September 2019 (unaudited)

5,040

89

(891)

398

92,946

97,582

Profit for the period

-

-

-

-

5,795

5,795

Other comprehensive income:







Actuarial gain on defined benefit pension scheme

-

-

-

-

1,944

1,944

Deferred tax relating to components of other comprehensive income

-

-

-

-

(234)

(234)

Foreign translation charge

-

-

-

-

68

68

Total comprehensive income for the period

-

-

-

-

7,573

7,573

Transactions with owners:







Dividends

-

-

-

-

(1,093)

(1,093)

Exercise of options

-

(72)

259

-

(25)

162

Deferred tax on share options

-

(13)

-

-

32

19

Change in investment in ESOP shares

-

-

13

-

-

13

Share-based payment expense

-

21

-

-

-

21

Total transactions with owners

-

(64)

272

-

(1,086)

(878)

Balance at 31 March 2020 (audited)

5,040

25

(619)

398

99,433

104,277

Profit for the period

-

-

-

-

5,098

5,098

Other comprehensive income:







Actuarial gain on defined benefit pension scheme

-

-

-

-

1,923

1,923

Deferred tax relating to components of other comprehensive income

-

-

-

-

(365)

(365)

Foreign translation charge

-

-

-

-

23

23

Total comprehensive income for the period

-

-

-

-

6,679

6,679

Transactions with owners:







Dividends

-

-

-

-

(1,987)

(1,987)

Exercise of options

-

(8)

-

-

3

(5)

Change in investment in ESOP shares

-

-

77

-

-

77

Share-based payment expense

-

79

-

-

-

79

Total transactions with owners

-

71

77

-

(1,984)

(1,836)

Balance at 30 September 2020 (unaudited)

5,040

96

(542)

398

104,128

109,120

 



 

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 principles of International Financial Reporting Standards ('IFRS') as adopted by the EU and on the basis of the accounting policies expected to be used in the financial statements for the year ending 31 March 2021. The half yearly report does not include all the disclosures that would be required for full compliance with IFRS. The figures for the year ended 31 March 2020 are extracted from the statutory accounts of the group for that period.


2.  The directors propose an interim dividend of 5.7p per ordinary share which will absorb £1,133,000 (2019: 5.5p absorbing £1,085,000), payable on 29 January 2021 to shareholders on the Company's Register at the close of business on 4 January 202. The ex-dividend date is 31 December 2020.


3. This half yearly report does not constitute statutory financial accounts within the meaning of section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2020 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 to 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 period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.



Six months to 30 Sept 2020 unaudited

Six months to 30 Sept 2019 unaudited

Year to 31 March 2020 audited


£000

£000

£000





Net profit attributable to ordinary shareholders

5,098

6,686

12,481






Number '000

Number '000

Number '000

Weighted average share capital

19,876

19,759

19,781

Add: diluted effect of share capital options issued

26

33

23

Weighted average share capital for diluted earnings per ordinary share calculation

19,902

19,792

19,804





5.  Net cash flow from operating activities



Six months to 30 Sept 2020 unaudited

Six months to 30 Sept 2019 unaudited

Year to 31 March 2020 audited


£000

£000

£000





Profit before tax

6,313

8,316

15,662

Adjustment for finance income and expenditure

231

152

335

Depreciation and amortisation

2,017

1,797

3,790

Profit on disposal of property, plant and equipment

(6)

(119)

(121)

Increase in inventories

2,928

(151)

(1,659)

Increase in receivables

2,193

(3,084)

(3,963)

Increase/(decrease) in payables

962

1,162

1,244

Own shares non cash amounts

77

853

-

Retirement benefits non cash amounts

(1,247)

(941)

(1,904)

Translation non cash amounts

23

12

80

Share-based payments non cash amounts

74

43

64

Cash generated from operations

13,565

8,040

13,528



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 plc@lathams.co.uk

 

 

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