James Latham Interim Profit Rises, Stockpiling Timber Ahead Of Brexit

LONDON (Alliance News) - James Latham PLC on Thursday reported a rise in interim profit on, as the timber products firm upped its dividend payout and warned it is planning to stockpile wood in an effort to stave off any potential supply problems caused by Brexit.

Chairman Nick Latham said: "We have reviewed our key European suppliers and have put plans in place to hold more stocks for a period of time in the first half of 2019 in order to mitigate any supply issues over that period."

For the six months to September 30, James Latham's pretax profit increased 30% to GBP8.7 million from GBP6.7 million.

The company's revenue increased 10% to GBP118.2 million from GBP107.3 million.

James Latham attributed its rise in revenue to a 1.5% increase in volumes - from an increase in direct business - and a 7.8% increase in product prices from the comparative period a year ago.

The company also made a GBP1.1 million profit on the sale of its old Yate depot site.

James Latham's selling & distribution costs were up 3.6% in the first half to GBP8.7 million from GBP8.4 million a year before. The firm attributed this to a 3.0% rise in the transport costs per tonne - driven by higher fuel costs.

The company declared an 11% rise in its interim dividend to 5.0 pence per share from 4.5p.

Latham added: "The second half of 2019 has started well with revenues continuing to grow. Margins however are slightly down, with price rises being more difficult to absorb by the market. Our customers remain busy and are reporting good order books. The economic outlook though is affected by the uncertainty caused by the Brexit negotiations and we will not be immune to any slowdown in the UK economy."

The company also said it is "continuing to invest in the business". James Latham has started "extensive" racking projects at its Purfleet and Thurrock depots, as well as planned redevelopments of its Gateshead site - hoping to make it more efficient.

Shares in James Latham were up 9.6% Thursday at 684.9998 pence each.