Final Results

RNS Number : 9966B

Latham(James) PLC

23 June 2016

 

James Latham Plc

("James Latham" or the "Group")

Final Results

I am pleased to report very good trading results for the financial year to 31 March 2016.

Group revenue for the financial year to 31 March 2016 was £185.9m, 6.3% up on last year's £174.9m. The operating profit was £13.2m, up £2.6m from £10.6m.

Finance income was £56,000 against £46,000 last year. Finance costs, which are principally interest on the pension scheme deficit as calculated under IAS19 (revised), were £421,000 against £503,000 last year.

Pre-tax profit was £12.9m, up £2.8m from £10.1m last year. Post-tax profit for the year is £10.5m, up from last year's figure of £7.8m.

Earnings per share were 53.7p compared to last year's 40.3p.

Net assets (total equity) were £71.2m compared to £62.2m last year.

At the year end the Group's cash reserves stood at £16.8m compared to £12.5m last year. 

Final dividend

The directors recommend a final dividend of 10.3p per ordinary share (2015 8.8p).  The final dividend will be paid on 26 August 2016 to shareholders on the register at the close of business on 5 August 2016.  The shares will become ex-dividend on 4 August 2016.

The total dividend per ordinary share of 14.3p for the year is covered 3.8 times by earnings (2015: 3.2 times).

Financial year 2015/16

The Group's results are based on the trading of Lathams Limited, a specialist panel and timber distributor.  Revenue continued to grow during the year due to increased volumes both in ex-warehouse and direct business. Year on year growth slowed in the second half year. Both panels and timber grew revenues throughout the year. The gross margin, before warehouse costs, increased by 1.4 percentage points, due to the higher share taken by our specialist products; margins remained tight on commodity products.

Timber and panel prices fell slightly during the year, in spite of the weakness in sterling in the second half. Focus panel products including melamine panels and door blanks, continued to show good growth. Our high quality, certified sustainable hardwood and WoodEx, our brand of engineered timber for the joinery sector, showed good growth.

Overheads have been controlled, but higher than last year's due to the extra volumes and longer warehouse hours introduced to meet customers' demands. Staff numbers have increased during the year, with more warehouse staff to meet shift patterns and sales staff recruited in areas of the business where we see opportunities. Bad debts were low overall for the year.

Pension Scheme

At 31 March 2016 the deficit of the defined benefit scheme under IAS19 (revised) was £9.7m down £0.7m compared with £10.4m last year. This reduction is the result of the increase in the corporate bond yield used to calculate the present value of the scheme's liabilities, offset by the reduction in the value of scheme assets and reflects the volatility of the accounting for this scheme.

Current financial year 2016/17

This year like for like revenues are 4% higher for April and May than the corresponding period last year, both in panels and timber. The gross margin is also higher. While this is a steady start to the year, there are some signs that this growth is slowing and the fluctuating value of sterling and the uncertain outlook for business activity caused by the EU referendum, make the immediate future difficult to predict.

We continue to see encouraging growth in the newer decorative products we have introduced.

Development strategy

The directors continue to identify opportunities for growth and to introduce and promote new products; we have increased our resource focused on obtaining specifications for these. The plans to upgrade our two older sites at Yate and Wigston have progressed with site purchase and build contracts approved, subject to planning, for a new site in Yate which should be completed by the end of the financial year, and negotiations proceeding for the relocation of the Wigston site.

The Group is in a strong financial position to take advantage of opportunities for further business growth, as and when they arise.

Peter Latham

Chairman

22 June 2016.

JAMES LATHAM PLC

CONSOLIDATED INCOME STATEMENT

For the year to 31 March 2016

	Audited	Audited
	Year to 31 March 2016	Year to 31 March 2015
	£000	£000
Revenue	185,929	174,855
Cost of sales (including warehouse costs)	(151,389)	(143,978)
Gross profit	34,540	30,877
Selling and distribution costs	(15,129)	(14,082)
Administrative expenses	(6,170)	(6,231)
Operating Profit	13,241	10,564
Finance income	56	46
Finance costs	(421)	(503)
Profit before tax	12,876	10.107
Tax expense	(2,410)	(2,285)
Profit after tax attributable to owners of the parent company	10,466	7,822
Earnings per ordinary share (basic)	53.7p	40.3p
Earnings per ordinary share (diluted)	53.5p	40.0p

All results relate to continuing operations

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year to 31 March 2016

	Audited	Audited
	Year to 31 March 2016	Year to 31 March 2015
	£000	£000
Profit after tax	10,466	7,822
Other comprehensive income
Actuarial gain/(loss) on defined benefit pension scheme	825	(1,849)
Deferred tax relating to components of other comprehensive income	(219)	434
Other comprehensive income for the year, net of tax	606	(1,415)
Total comprehensive income attributable to owners of the parent company	11,072	6,407

JAMES LATHAM PLC

CONSOLIDATED BALANCE SHEET

At 31 March 2016

	Audited	Audited
	As at 31 March 2016	As at 31 March 2015
	£000	£000
Assets
Non-current assets
Goodwill	237	237
Other intangible assets	93	101
Property, plant and equipment	22,111	21,601
Deferred tax asset	1,802	2,259
Total non-current assets	24,243	24,198
Current assets
Inventories	33,403	31,906
Trade and other receivables	35,288	34,213
Cash and cash equivalents	16,832	12,501
Total current assets	85,523	78,620
Total assets	109,766	102,818
Current liabilities
Trade and other payables	23,471	23,893
Interest bearing loans and borrowings	-	907
Tax payable	1,376	947
Total current liabilities	24,847	25,747
Non-current liabilities
Interest bearing loans and borrowings	987	987
Retirement and other benefit obligation	9,657	10,430
Other payables	406	464
Deferred tax liabilities	2,686	2,959
Total non-current liabilities	13,736	14,840
Total liabilities	38,583	40,587
Net assets	71,183	62,231
Capital and reserves
Issued capital	5,040	5,040
Share-based payment reserve	56	143
Own shares	(441)	(177)
Capital reserve	3	3
Retained earnings	66,525	57,222
Total equity attributable to equity shareholders of the parent company	71,183	62,231

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 2014 - audited	5,040	123	(175)	3	53,117	58,108
Profit for the year	-	-	-	-	7,822	7,822
Other comprehensive income:
Actuarial gain on defined benefit pension scheme	-	-	-	-	(1,849)	(1,849)
Deferred tax relating to components of other comprehensive income	-	-	-	-	434	434
Total comprehensive income for the year	-	-	-	-	6,407	6,407
Transactions with owners:
Dividends	-	-	-	-	(2,267)	(2,267)
Write down on conversion of ESOP shares	-	-	82	-	(82)	-
Exercise of options	-	(47)	-	-	47	-
Change in investment in ESOP shares	-	-	(84)	-	-	(84)
Share-based payment expense	-	67	-	-	-	67
Total transactions with owners	-	20	(2)	-	(2,302)	(2,284)
Balance at 31 March 2015 - audited	5,040	143	(177)	3	57,222	62,231
Profit for the year	-	-	-	-	10,466	10,466
Other comprehensive income:
Actuarial loss on defined benefit pension scheme	-	-	-	-	825	825
Deferred tax relating to components of other comprehensive income	-	-	-	-	(219)	(219)
Total comprehensive income for the year	-	-	-	-	11,072	11,072
Transactions with owners:
Dividends	-	-	-	-	(2,484)	(2,484)
Exercise of options	-	(149)	-	-	149	-
Transfer of treasury shares	-	-	(1,385)	-	1,385	-
Write down on conversion of ESOP shares	-	-	819	-	(819)	-
Conversions of ESOP shares			507	-	-	507
Change in investment in ESOP shares	-	-	(205)	-	-	(205)
Share-based payment expense	-	62	-	-	-	62
Total transactions with owners	-	(87)	(264)	-	(1,769)	(2,120)
Balance at 31 March 2016 - audited	5,040	56	(441)	3	66,525	71,183

JAMES LATHAM PLC

CONSOLIDATED CASH FLOW STATEMENT

For the year to 31 March 2016

	Audited	Audited
	Year to 31 March 2016	Year to 31 March 2015
	£000	£000
Net cash flow from operating activities
Cash generated from operations	11,704	6,218
Interest paid	(23)	(44)
Income tax paid	(2,016)	(1,996)
Net cash inflow from operating activities	9,665	4,178
Cash flows from investing activities
Interest received and similar income	56	46
Purchase of property, plant and equipment	(2,056)	(383)
Proceeds from sale of property, plant and equipment	136	6
Net cash outflow from investing activities	(1,864)	(331)
Cash flows from financing activities
Borrowings repaid during the year	(907)	(234)
Equity dividends paid	(2,484)	(2,267)
Preference dividend paid	(79)	(79)
Net cash outflow from financing activities	(3,470)	(2,580)
Increase in cash and cash equivalents for the year	4,331	1,267
Cash and cash equivalents at beginning of the year	12,501	11,234
Cash and cash equivalents at end of the year	16,832	12,501

 

JAMES LATHAM PLC

 

Notes to the audited preliminary financial information

1.   The results presented in this report are audited and they have 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 2015 and 31 March 2016.

2.   The directors propose a final dividend of 10.3p per ordinary share, which will absorb £2,019,000 (2015: 8.8p absorbing £1,711,000), payable on 26 August 2016 to shareholders on the Register at the close of business on 5 August 2016.  The ex-dividend date is 4 August 2016.

3.   The figures for the year ended 31 March 2016 have been extracted from the audited statutory accounts for that year, which have yet to be delivered to the Registrar of Companies.  The financial information set out has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and those parts of the Companies Act 2006 that remain applicable to companies reporting under IFRS and 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 2016 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 these financial statements is unqualified and does not contain any statement under Section 498(2) or (3) of the Companies Act 2006, on the statutory financial statements for the year ended 31 March 2016.

Statutory accounts for the year ended 31 March 2015 have been filed with the Registrar of Companies.  The auditor's report on those accounts was unqualified and did not contain a statement under section 498(2) and (3) of the Companies Act 2006.

4.   This announcement was approved and authorised for issue by the Board of Directors on 22 June 2016.

5.   Net cash flow from operating activities

Year to 31 March 2016 audited Year to 31 March 2015 audited Profit before tax 12,876 10,107 Adjustment for finance income and expense 365 457 Depreciation and impairment 1,515 1,435 Profit on disposal of property, plant and equipment (97) (5) Increase in inventories (1,497) (3,969) Increase in receivables (1,075) (1,371) (Decrease)/increase in payables (480) 647 Retirement benefits non cash amounts (267) (1,066) Share-based payments non cash amounts 62 67 Own shares non cash amounts 302 (84) Cash generated from operations 11,704 6,218

6.   The Annual General Meeting of James Latham plc will be held at Gallery Level, Business Design Centre, 52 Upper Street, London, N1 0QH on 24 August 2016 at 12.30pm.

 

END

 

 

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