James Latham profit chopped

James Latham tumbled Thursday after the timber merchant posted a big drop in annual profit, cut its dividend and warned that demand remains weak.Profit before tax for the year to 31 March 2009 slumped to £4.2m from £7.1m in 2008 on revenue down 3% to £113.9m. The group warned in March that the results would miss forecasts due to bad debts and rivals destocking. "The reduced level of demand seen in the second half of last year has continued into April and May," the group said today. But it did report evidence that margins are gradually improving from the "disappointing" levels of the March quarter. A drive to cut overheads and staffing levels has cut costs. "While the volume of business done is unlikely to grow over the next six months, margins should improve to more usual levels and there will be opportunities for profitable business as supply adjusts to current levels of demand," added the firm.The final dividend drops to 4.25p per share from 6.1p last time.