Last checked at 24 Jun 2015 07:00
James Latham Plc
("James Latham" or the "Group")
Final Results
I am pleased to report good trading results for the financial year to 31 March 2015.
Group revenue for the financial year to 31 March 2015 was £174.9m, 7.2% up on last year's £163.1m. The operating profit was £10.6m, up £1.1m from £9.5m, which together with pre-tax profit, post-tax profit and earnings per share shown below is adjusted to exclude £1.8m of exceptional gains relating to the pension scheme, last year. The higher volume traded this year has increased costs, notably in distribution.
Finance income was £46,000 against £27,000 last year. Finance costs, which are principally interest on the pension scheme deficit as calculated under IAS19 (revised) were £503,000 against £823,000 last year
Pre-tax profit was £10.1m, up £1.4m from an adjusted profit of £8.7m last year. The tax charge represents a rate of 22.6% up from last year's 18.0% which benefited from a credit due to a reduction in rates of tax used in deferred tax calculations. Post- tax profit for the year is £7.8m, up from last year's adjusted figure of £6.8m.
Earnings per share were 40.3p compared to last year's adjusted 36.9p.
Net assets (total equity) were £62.2m compared to £58.1m last year
At the year end the group's cash reserves stood at £12.5m compared to £11.2m last year.
Final dividend
The directors recommend a final dividend of 8.8p per ordinary share (2014 8.0p). The final dividend will be paid on 28 August 2015 to shareholders on the register at the close of business on 7 August 2015. The shares will become ex-dividend on 6 August 2015.
The total dividend per ordinary share of 12.5p for the year is covered 3.2 times by earnings (2014: 3.2 times).
Financial year 2014/15
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 was slightly lower in the second half year, because 2013/14 had been a very strong final quarter. Both panels and timber grew revenues throughout the year. The gross margin per cent, before warehouse costs, increased by 0.4 percentage points, due to a better product mix.
Timber and panel prices remained steady throughout the year. Focus panel products including Melamine Panels and Door Blanks, continued to show good growth. Accoya modified wood and WoodEx, our brand of engineered timber for the joinery sector, were particularly successful this year.
Overheads have been controlled, and are within our budget forecast, but higher than last year's due to the extra volumes, smaller order size and later order times for next day delivery. Staff numbers have increased during the year, with sales staff recruited in areas of the business where we see opportunities. Bad debts were low overall for the year, despite the relatively high level seen in the first quarter of the financial year.
Pension Scheme
The Company and the Trustees of the James Latham plc Pension and Assurance Scheme have approved the triennial valuation dated 31 March 2014 with the scheme Actuary. This valuation shows a shortfall of assets of £1,546,000 compared to a shortfall of £9,030,000 in the previous valuation dated 31 March 2011. The Company has agreed a recovery plan over two years with the Trustees, and will continue its previous recovery plan, paying £1,155,000 in the year to 31 March 2015 and then £420,000 in the year to 31 March 2016.
At 31 March 2015 the deficit of the defined benefit scheme under IAS19 (revised) was £10.4m up £1.1m compared with £9.3m last year. This increase is the result of the fall in the corporate bond yield used to calculate the present value of the scheme's liabilities and reflects the volatility of the accounting for this scheme.
Current financial year 2015/16
This year so far revenues are 7% higher for April and May than the corresponding period last year, both in panels and timber. The gross margin is also higher. It is a steady start to the year and generally customers are busier than they were for the final quarter of last year.
The panels market remains particularly competitive, although we are seeing 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. Investment in the business continues and plans are being drawn up to upgrade our two older sites at Yate and Wigston over the next two to three years, to emulate the success that investment in new facilities has delivered elsewhere.
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
23 June 2015.
JAMES LATHAM PLCCONSOLIDATED INCOME STATEMENT
For the year to 31 March 2015
Audited | Audited | |
Year to 31 March 2015 | Year to 31 March 2014 | |
£000 | £000 | |
Revenue | 174,855 | 163,117 |
Cost of sales (including warehouse costs) | (143,978) | (134,688) |
| Gross profit | 30,877 | 28,429 |
Selling and distribution costs | (14,082) | (12,941) |
| Administrative expenses | (6,237) | (6,016) |
| Exceptional adjustment to defined benefit pension cost |
- |
1,797 |
Other operating income | 6 | 6 |
| Operating Profit | 10,564 | 11,275 |
Finance income | 46 | 27 |
Finance costs | (503) | (823) |
Profit before tax | 10,107 | 10,479 |
Tax expense | (2,285) | (1,888) |
Profit after tax attributable to owners of the parent company | 7,822 | 8,591 |
Earnings per ordinary share (basic) | 40.3p | 44.3p |
Earnings per ordinary share (diluted) | 40.0p | 43.9p |
Earnings per ordinary share (basic, excluding exceptional adjustment net of tax) | 40.3p | 36.9p |
Earnings per ordinary share (diluted, excluding exceptional adjustment net of tax) | 40.0p | 36.6p |
All results relate to continuing operations
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year to 31 March 2015Audited | Audited | ||
| Year to 31 March 2015 | Year to 31 March 2014 | ||
£000 | £000 | ||
Profit after tax | 7,822 | 8,591 | |
Other comprehensive income | |||
Actuarial (loss)/gain on defined benefit pension scheme | (1,849) | 5,543 | |
Deferred tax relating to components of other comprehensive income |
434 |
(1,508) | |
Other comprehensive income for the year, net of tax | (1,415) | 4,035 | |
Total comprehensive income attributable to owners of the parent company |
6,407 |
12,626 | |
CONSOLIDATED BALANCE SHEET
At 31 March 2015
Audited | Audited | ||
As at 31 March 2015 | As at 31 March 2014 | ||
| £000 | £000 | |
Assets | |||
Non-current assets | |||
Goodwill | 237 | 237 | |
Other intangible assets | 101 | 108 | |
Property, plant and equipment | 21,601 | 22,647 | |
| Total non-current assets | 21,939 | 22,992 | |
| |||
Current assets | |||
Inventories | 31,906 | 27,937 | |
Trade and other receivables | 34,213 | 32,842 | |
Cash and cash equivalents | 12,501 | 11,234 | |
| Total current assets | 78,620 | 72,013 | |
Total assets | 100,559 | 95,005 | |
|
|
| |
Current liabilities | |||
Trade and other payables | 23,893 | 23,191 | |
Interest bearing loans and borrowings | 907 | 238 | |
Tax payable | 947 | 1,017 | |
Total current liabilities | 25,747 | 24,446 | |
Non-current liabilities | |||
Interest bearing loans and borrowings | 987 | 1,890 | |
Retirement and other benefit obligation | 10,430 | 9,267 | |
Other payables | 464 | 520 | |
Deferred tax liabilities | 700 | 774 | |
Total non-current liabilities | 12,581 | 12,451 | |
Total liabilities | 38,328 | 36,897 | |
| Net assets | 62,231 | 58,108 | |
Capital and reserves | |||
Issued capital | 5,040 | 5,040 | |
| Share-based payment reserve | 143 | 123 | |
Own shares | (177) | (175) | |
| Capital reserve | 3 | 3 | |
Retained earnings | 57,222 | 53,117 | |
| Total equity attributable to equity shareholders of the parent company |
62,231 |
58,108 | |
JAMES LATHAM PLCCONSOLIDATED 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 2013 - audited | 5,040 | 91 | (218) | 3 | 42,551 | 47,467 |
Profit for the year | - | - | - | - | 8,591 | 8,591 |
| Other comprehensive income: | ||||||
Actuarial gain on defined benefit pension scheme | - | - | - | - | 5,543 | 5,543 |
Deferred tax relating to components of other comprehensive income |
- |
- |
- |
- |
(1,508) |
(1,508) |
Total comprehensive income for the year | - | - | - | - | 12,626 | 12,626 |
| Transactions with owners: | ||||||
Dividends | - | - | - | - | (2,031) | (2,031) |
Write down on conversion of ESOP shares | - | - | 77 | - | (77) | - |
Exercise of options | - | (48) | - | - | 48 | - |
Change in investment in ESOP shares | - | - | (34) | - | - | (34) |
Share-based payment expense | - | 80 | - | - | - | 80 |
Total transactions with owners | - | 32 | 43 | - | (2,060) | (1,985) |
| Balance at 31 March 2014 - audited | 5,040 | 123 | (175) | 3 | 53,117 | 58,108 |
Profit for the year | - | - | - | - | 7,822 | 7,822 |
| Other comprehensive income: | ||||||
Actuarial loss 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) |
Exercise of options | - | (47) | - | - | 47 | - |
Write down on conversion of ESOP shares | - | - | 82 | - | (82) | - |
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 |
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENTFor the year to 31 March 2015Audited | Audited | |
Year to 31 March 2015 | Year to 31 March 2014 | |
£000 | £000 | |
Net cash flow from operating activities | ||
Cash generated from operations | 6,218 | 8,036 |
Interest paid | (44) | (45) |
Income tax paid | (1,996) | (1,339) |
Net cash inflow from operating activities | 4,178 | 6,652 |
Cash flows from investing activities | ||
Interest received and similar income | 46 | 27 |
Purchase of property, plant and equipment | (383) | (1,181) |
Proceeds from sale of property, plant and equipment |
6 |
- |
Net cash outflow from investing activities | (331) | (1,154) |
Cash flows from financing activities | ||
Borrowings repaid during the year | (234) | (229) |
Equity dividends paid | (2,267) | (2,031) |
Preference dividend paid | (79) | (79) |
Net cash outflow from financing activities | (2,580) | (2,339) |
Increase in cash and cash equivalents for the year | 1,267 | 3,159 |
Cash and cash equivalents at beginning of the year | 11,234 | 8,075 |
Cash and cash equivalents at end of the year | 12,501 | 11,234 |
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 2014 and 31 March 2015.
2. The directors propose a final dividend of 8.8p per ordinary share, which will absorb £1,711,000 (2014: 8.0p absorbing £1,555,000), payable on 28 August 2015 to shareholders on the Register at the close of business on 7 August 2015. The ex-dividend date is 6 August 2015.
3. The figures for the year ended 31 March 2015 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 2015 will be delivered to the Registrar of Companies and sent to Shareholders shortly.
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 2015.
Statutory accounts for the year ended 31 March 2014 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 23 June 2015.
5. Net cash flow from operating activities
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6. The Annual General Meeting of James Latham plc will be held at Unit 3 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU on 26 August 2015 at 12.30pm.
The Annual Report and Accounts for the year ended 31 March 2015 will be sent to all shareholders in due course. The Annual Report and Accounts may also be viewed in due course on James Latham plc's website at www.lathams.co.uk