Last checked at 22 Jun 2017 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 2017.
Group revenue for the financial year to 31 March 2017 was £198.8m, 6.9% up on last year's £185.9m. The operating profit was £14.2m, up £1.0m from £13.2m.
Finance income was £56,000 against £56,000 last year. Finance costs, which are principally interest on the pension scheme deficit as calculated under IAS19 (revised), were £408,000 against £421,000 last year.
Pre-tax profit was £13.8m, up £0.9m from £12.9m last year. Post-tax profit for the year is £11.0m, up from last year's figure of £10.5m.
Earnings per share were 56.0p compared to last year's 53.7p.
Net assets (total equity) were £73.3m compared to £71.2m last year.
At the year end the Group's cash reserves stood at £17.2m compared to £16.8m last year.
Final dividend
The directors recommend a final dividend of 10.85p per ordinary share (2016 10.3p). The final dividend will be paid on 25 August 2017 to shareholders on the register at the close of business on 4 August 2017. The shares will become ex-dividend on 3 August 2017.
The total dividend per ordinary share of 15.35p for the year is covered 3.6 times by earnings (2016: 3.8 times).
Financial year 2016/17
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 higher prices resulting from the weakness of sterling against both the dollar and the euro and to increased volumes ex-warehouse. Year on year increases in both revenue and volume for the fourth quarter was particularly encouraging. The gross margin, before warehouse costs, was down by 0.3 percentage points, due to competitive pressures and higher stock replacement costs.
Panel and Timber prices rose sharply during the year, due to the weakness in sterling. Focus panel products including melamine panels and door blanks, continued to show good growth. Our high quality certified sustainable hardwood for the joinery sector also showed good growth.
Overheads have been well controlled in spite of higher volumes through the warehouses and bad debts were low overall for the year.
Pension Scheme
At 31 March 2017 the deficit of the defined benefit scheme under IAS19 (revised) was £16.6m up £6.9m compared with £9.7m last year, but down from £23.2m at 30 September 2016. These variations are the result of the changes in the corporate bond yield used to calculate the present value of the scheme's liabilities, offset by the increases in the value of scheme assets, and reflects the volatility of the accounting for this scheme.
Current financial year 2017/18
This year like for like revenue, both in panels and timber, is 3% higher for April and May than the corresponding period last year which had two more working days. However the gross margin is still under pressure.
Development strategy
The directors continue to identify opportunities for growth and to introduce and promote new products. Construction of the new, up-graded site for our Yate operation is nearing completion and the move is planned for July. Negotiations are at an advanced stage for the construction of a new site for our Wigston unit and relocation is expected by the end of the financial year.
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
21 June 2017.
JAMES LATHAM PLCCONSOLIDATED INCOME STATEMENT
For the year to 31 March 2017
Audited | Audited | |
Year to 31 March 2017 | Year to 31 March 2016 | |
£000 | £000 | |
Revenue | 198,808 | 185,929 |
Cost of sales (including warehouse costs) | (162,709) | (151,389) |
| Gross profit | 36,099 | 34,540 |
Selling and distribution costs | (15,457) | (15,129) |
| Administrative expenses | (6,463) | (6,170) |
| Operating Profit | 14,179 | 13,241 |
Finance income | 56 | 56 |
Finance costs | (408) | (421) |
Profit before tax | 13,827 | 12,876 |
Tax expense | (2,846) | (2,410) |
Profit after tax attributable to owners of the parent company | 10,981 | 10,466 |
Earnings per ordinary share (basic) | 56.0p | 53.7p |
Earnings per ordinary share (diluted) | 55.8p | 53.5p |
All results relate to continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year to 31 March 2017Audited | Audited | |
| 2017 | 2016 | |
£000 | £000 | |
Profit after tax attributable to owners of the parent company | 10,981 | 10,466 |
Other comprehensive income | ||
Actuarial (loss)/gain on defined benefit pension scheme | (7,543) | 825 |
Deferred tax relating to components of other comprehensive income |
1,362 |
(219) |
Other comprehensive income for the year, net of tax | (6,181) | 606 |
Total comprehensive income attributable to owners of the parent company |
4,800 |
11,072 |
CONSOLIDATED BALANCE SHEET
At 31 March 2017
Audited | Audited | |
2017 | 2016 | |
| £000 | £000 |
Assets | ||
Non-current assets | ||
Goodwill | 237 | 237 |
Other intangible assets | 1 | 93 |
Property, plant and equipment | 26,312 | 22,111 |
Deferred tax asset | 2,904 | 1,802 |
| Total non-current assets | 29,454 | 24,243 |
| ||
Current assets | ||
Inventories | 35,508 | 33,403 |
Trade and other receivables | 40,076 | 35,288 |
Cash and cash equivalents | 17,246 | 16,832 |
| Total current assets | 92,830 | 85,523 |
Total assets | 122,284 | 109,766 |
|
|
|
Current liabilities | ||
Trade and other payables | 27,063 | 23,471 |
Tax payable | 1,517 | 1,376 |
Total current liabilities | 28,580 | 24,847 |
Non-current liabilities | ||
Interest bearing loans and borrowings | 987 | 987 |
Retirement and other benefit obligation | 16,625 | 9,657 |
Other payables | 349 | 406 |
Deferred tax liabilities | 2,485 | 2,686 |
Total non-current liabilities | 20,446 | 13,736 |
Total liabilities | 49,026 | 38,583 |
| Net assets | 73,258 | 71,183 |
Capital and reserves | ||
Issued capital | 5,040 | 5,040 |
| Share-based payment reserve | 108 | 56 |
Own shares | (291) | (441) |
| Capital reserve | 3 | 3 |
Retained earnings | 68,398 | 66,525 |
| Total equity attributable to equity shareholders of the parent company |
73,258 |
71,183 |
The Company's profit for the year and total comprehensive income for the year were £1,266,000 (2016: loss of £551,000)and £1,270,000 (2016: loss of £631,000) respectively.
JAMES LATHAM PLCCONSOLIDATED STATEMENT OF CHANGES IN EQUITYAttributable 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 2015 - audited | 5,040 | 143 | (177) | 3 | 57,222 | 62,231 |
Profit for the year | - | - | - | - | 10,466 | 10,466 |
| Other comprehensive income: | ||||||
Actuarial gain 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) |
Write down on conversion of ESOP shares | - | - | 819 | - | (819) | - |
Exercise of options | - | (149) | - | - | 149 | - |
Transfer of treasury shares | - | - | (1,385) | - | 1,385 | - |
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 |
Profit for the year | - | - | - | - | 10,981 | 10,981 |
| Other comprehensive income: | ||||||
Actuarial loss on defined benefit pension scheme | - | - | - | - | (7,543) | (7,543) |
Deferred tax relating to components of other comprehensive income | - | - | - | - | 1,362 | 1,362 |
Total comprehensive income for the year | - | - | - | - | 4,800 | 4,800 |
| Transactions with owners: | ||||||
Dividends | - | - | - | - | (2,894) | (2,894) |
Exercise of options | - | (19) | - | - | 19 | - |
Write down on conversion of ESOP shares | - | - | 52 | - | (52) | - |
Change in investment in ESOP shares | - | - | 98 | - | - | 98 |
Share-based payment expense | - | 71 | - | - | - | 71 |
Total transactions with owners | - | 52 | 150 | - | (2,927) | (2,725) |
Balance at 31 March 2017 - audited | 5,040 | 108 | (291) | 3 | 68,398 | 73,258 |
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENTFor the year to 31 March 2017Audited | Audited | |
2017 | 2016 | |
£000 | £000 | |
Net cash flow from operating activities | ||
Cash generated from operations | 11,902 | 11,704 |
Interest paid | (2) | (23) |
Income tax paid | (2,646) | (2,016) |
Net cash inflow from operating activities | 9,254 | 9,665 |
Cash flows from investing activities | ||
Interest received and similar income | 56 | 56 |
Purchase of property, plant and equipment | (6,045) | (2,056) |
Proceeds from sale of property, plant and equipment |
122 |
136 |
Net cash outflow from investing activities | (5,867) | (1,864) |
Cash flows from financing activities | ||
Borrowings repaid during the year | - | (907) |
Equity dividends paid | (2,894) | (2,484) |
Preference dividend paid | (79) | (79) |
Net cash outflow from financing activities | (2,973) | (3,470) |
Increase in cash and cash equivalents for the year | 414 | 4,331 |
Cash and cash equivalents at beginning of the year | 16,832 | 12,501 |
Cash and cash equivalents at end of the year | 17,246 | 16,832 |
JAMES LATHAM PLC Notes to the audited preliminary financial information
1. The financial information presented in this report is audited and has 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 2016 and 31 March 2017.
2. The directors propose a final dividend of 10.85p per ordinary share, which will absorb £2,127,000 (2016: 10.3p absorbing £2,019,000), payable on 25 August 2017 to shareholders on the Register at the close of business on 4 August 2017. The ex-dividend date is 3 August 2017.
The figures for the year ended 31 March 2017 and as at 31 March 2017 have been extracted from the audited statutory accounts for that year, which have yet to be delivered to the Registrar of Companies and which have 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. The preliminary financial information 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 2017 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 the statutory financial statements for the year ended 31 March 2017 is unqualified and does not include reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and does not contain any statement under Section 498(2) or (3) of the Companies Act 2006.
Statutory accounts for the year ended 31 March 2016 have been filed with the Registrar of Companies. The auditor's report on those accounts was unqualified and did not include 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) and (3) of the Companies Act 2006.
3. This announcement was approved and authorised for issue by the Board of Directors on 21 June 2017.
4. Net cash flow from operating activities
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5. The Annual General Meeting of James Latham plc will be held at Gallery Level, Business Design Centre, 52 Upper Street, London, N1 0QH on 23 August 2017 at 12.30pm.