Latham Timber Regulatory News (LTHM)

James Latham PLC

("James Latham" or the "Group")

Final Results

Chairman's statement

I am pleased to report good trading results for the financial year to 31 March 2018.

Revenue for the financial year to 31 March 2018 was £214.9m, up 8.1% on last year's £198.8m. We have seen volumes continue to grow, especially through our own warehouses where they are up 4.5%. The cost price of our products have increased in comparison to the previous twelve months. This is in part down to the weakening of sterling against the Euro, but also we have seen manufacturers continuing to increase their prices.

Gross margin for the financial year to 31 March 2018 was 17.6% compared with 18.2% in the previous financial year. It was particularly pleasing to see an improvement in the gross margin in the second half of the year, which was 17.9% compared with 17.3% in the first half of the year.

Selling and distribution costs were 5.3% higher than last year. Distribution costs rise in line with volumes, and we monitor costs per delivered tonne which are up by 2.3%.

Overheads have been well controlled when we consider that we have relocated both Yate and Leicester (Wigston) sites during the year. We have successfully minimised the relocation costs and double costs of owning two empty sites, which have cost us less than £150,000. Both sites are performing extremely well since their relocation, particularly in added value products where the new racking systems have allowed us to increase our stock range.

Profit before tax is £15.2m, up £1.4m on last year's £13.8m. This includes a profit of £1.3m on the sale of our Wigston site.

Post tax profit for the year is £12.6m, up from last year's £11.0m.

Earnings per ordinary share were 64.4p (2017: 56.0p) an increase of 15.0%.

As at 31 March 2018 net assets have increased to £89.8m (2017: £73.3m). Non-current assets have increased by £6.1m from 31 March 2017, with the investment in the two new sites as well as continuing investment in our vehicle fleet and warehouse forklifts. Inventory levels have increased to £40.1m, partly due to the increase in unit cost of the stock as well as an increase in volumes. Trade Receivables have continued to show good debtors day figures with there being another low bad debt charge of under 0.15% of revenue. Cash and cash equivalents of £14.0m (2017: £17.2m), remain strong with good cash flows from operating activities.

Pension Scheme

The company and the Trustees of the James Latham plc Pension and Assurance Scheme have approved the triennial valuation dated 31 March 2017 with the scheme actuary. This valuation shows a shortfall of assets of £12.1m compared to a shortfall of £1.5m in the previous valuation dated 31 March 2014. The company has agreed a recovery plan with the trustees of £2.0m per annum until 31 March 2024.

At 31 March 2018 the deficit of the defined benefit scheme under IAS19 (revised) was £8.4m, down £8.2m compared with £16.6m last year. The calculation of the pension deficit remains very sensitive to changes in assumptions.

Final dividend

The Board has declared a final dividend of 12.1p per Ordinary Share (2017: 10.85p). The dividend is payable on 24 August 2018 to ordinary shareholders on the company's register at close of business on 3 August 2018. The ex-dividend date will be 2 August 2018.

The total dividend per ordinary share of 16.6p for the year (2017: 15.35p) is covered 3.9 times by earnings (2017: 3.6 times).

Current and future trading

This year has started well with sales per working day 9.8% higher for April and May than the corresponding period last year. Margins are very slightly lower than the second half of 2017/8. We are seeing growth in sales of added value timber and panel products from our decision to invest in specialist sales staff last year, although volume growth in our core products is proving more challenging. Despite the strong start to the year, there is increasing uncertainty surrounding the economic outlook, but we remain confident that we are in a strong position to continue to grow the business.

Development Strategy

The directors will continue to develop the business. This will be done by a combination of investing in our current warehouse facilities, with the emphasis this year on Purfleet, Thurrock and Gateshead, and further extending our hours of operation. We are also looking at geographical growth, and focusing on developing sales of our key product areas. In addition to our showroom at the Business Design Centre in Islington, we are in the process of opening a design centre in Manchester as we continue to focus our efforts in the A&D specification sector.

Nick Latham

Chairman

27 June 2018

Enquiries

JAMES LATHAM PLC

For the year to 31 March 2018

All results relate to continuing operations.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED BALANCE SHEET

At 31 March 2018

The Company's profit for the year and total comprehensive income for the year were £1,481,000 (2017: £1,266,000) and £1,481,000 (2017: £1,266,000) respectively.

Attributable to the owners of the parent company

JAMES LATHAM PLC

1. The preliminary 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 2017 and 31 March 2018, and does not contain all the information to be disclosed in financial statements prepared in accordance with IFRS.

2. The directors propose a final dividend of 12.1p per ordinary share, which will absorb £2,379,000 (2017: 10.85p absorbing £2,127,000), payable on 24 August 2018 to shareholders on the Register at the close of business on 3 August 2018. The ex-dividend date is 2 August 2018.

The figures for the year ended 31 March 2018 and as at 31 March 2018 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 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 2018 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 2018 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 2017 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 27 June 2018.

4. Net cash flow from operating activities

5. The Annual General Meeting of James Latham plc will be held at Unit 1 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU on 22 August 2018 at 12.30pm.