Last checked at 25 Nov 2020 07:00
James Latham plc
("James Latham" or the "Company")
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2020
Chairman's statement
Unaudited results for the six months trading to 30 September 2020
Revenue for the six months ended 30 September 2020 was £107.0m, down 14.8% on £125.6m for the same period last year. Revenue in Q2 was 5.3% up on the same period last year highlighting the strong recovery from Q1 which as previously reported was significantly impacted by the first lockdown. Month on month trends continue to improve with September being ahead of the same month last year. We have had strong volume growth in both delivered and direct commodity panel products. Cost prices on both timber and panels have been slowly rising during the period. All sites have coped very well with the local lockdowns and all the other challenges that they have faced during this unprecedented period.
Gross profit, which includes warehouse costs, for the six month period ended 30 September 2020 was 16.9% compared with 17.4% in the comparative six months. Overheads have been very well controlled during the 6 months.
Operating profit was £6.5m, down 22.7% on the £8.5m profit for the same period last year. Profit before tax was £6.3m compared with £8.3m for the same period last year. Earnings per ordinary share were 25.6p (2019: 33.8 p) a decrease of 24.3%.
As at 30 September 2020 net assets are £109.1m (2019: £97.6m). Stock volume levels have remained stable throughout the six months, although the strong sales at the end of Q2 resulted in a temporary reduction in our inventory values. Trade receivables have continued to show good debtor day figures, with bad debts at a very low figure. Cash and cash equivalents of £26.1m (2019: £16.5m) remain strong due to the reduced inventory figures and also good collections of our trade receivables. We continue to take advantage of additional early settlement discount opportunities with our suppliers.
These positive results are a good indication of the strength of our business model, and the importance of having a diversified customer base.
The calculation of the pension deficit remains very sensitive to changes in assumptions, and the pension deficit under IAS19 is calculated as decreasing from £11.8m at 31 March 2020 to £8.8m at 30 September 2020. This is largely due to a recovery in the plan asset valuations, although discount rates continue to fall which add to the deficit.
Interim dividend
The Board has declared an increased interim dividend of 5.7p per Ordinary Share (2019: 5.5p), which is covered 4.5 times (2019: 6.1 times). The dividend is payable on 29 January 2021 to ordinary shareholders on the Company's Register at close of business on 4 January 2021. The ex-dividend date will be 31 December 2020.
Current and future trading
The second half of 2020/21 has started strongly with margins slightly ahead of the previous period. We are seeing significant increased volumes of commodity products, but reduced volumes of some of our added value panel products which predominantly go into market sectors that have been adversely affected by the COVID-19 pandemic, such as hospitality, exhibitions and shopfitting. Purchase prices of many of our commodity panel products continue to rise with some extended lead times. The majority of our customers are busy, and we remain confident that we will have a strong end to our financial year. The investment in our Gateshead facility is now complete, and we are mid-way through a large racking project at our Thurrock facility which will improve the stock holding and efficiency of the warehouse. This project will be completed by end March 2021.
We have been working for some time in preparation for Brexit and have acted on the risks to our business. Our supply chain team have been working closely with suppliers and intermediaries and have identified the best routes to market, and we have increased stock levels of those products most at risk of disruption.
We remain committed to continued investment in the business, both in our existing depots and in looking for other opportunities to grow our market position.
Nick Latham
Chairman
25 November 2020
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
For further information please visit www.lathams.co.uk or contact:
James Latham plc | Tel: 01442 849 100 |
Nick Latham, Chairman | |
David Dunmow, Finance Director | |
SP Angel Corporate Finance LLP | |
Matthew Johnson / Charlie Bouverat (Corporate Finance) | Tel: 0203 470 0470 |
Abigail Wayne (Corporate Broking) |
JAMES LATHAM PLC | |||
CONSOLIDATED INCOME STATEMENT | |||
For the six months to 30 September 2020 | |||
Six months to 30 Sept. 2020 unaudited | Six months to 30 Sept. 2019 unaudited | Year to 31 March 2020 audited | |
£000 | £000 | £000 | |
Revenue | 107,034 | 125,609 | 247,100 |
Cost of sales (including warehouse costs) | (88,985) | (103,726) | (203,656) |
Gross profit | 18,049 | 21,883 | 43,444 |
Selling and distribution costs | (7,449) | (9,703) | (19,251) |
Administrative expenses | (4,056) | (3,712) | (8,196) |
Operating profit | 6,544 | 8,468 | 15,997 |
Finance income | 5 | 46 | 82 |
Finance costs | (236) | (198) | (417) |
Profit before tax | 6,313 | 8,316 | 15,662 |
Tax expense | (1,215) | (1,630) | (3,181) |
Profit after tax attributable to owners of the parent company | 5,098 | 6,686 | 12,481 |
Earnings per ordinary share (basic) | 25.6p | 33.8p | 63.1p |
Earnings per ordinary share (diluted) | 25.6p | 33.8p | 63.0p |
All results relate to continuing operations. |
JAMES LATHAM PLC | |||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||
For the six months to 30 September 2020 | |||
Six months to 30 Sept. 2020 unaudited | Six months to 30 Sept. 2019 unaudited | Year to 31 March 2020 audited | |
£000 | £000 | £000 | |
Profit after tax | 5,098 | 6,686 | 12,481 |
Other Comprehensive income | |||
Actuarial gains/(loss) on defined benefit pension scheme | 1,923 | (6,767) | (4,823) |
Deferred tax relating to components of other comprehensive income | (365) | 1,150 | 916 |
Foreign translation credit | 23 | 12 | 80 |
Other comprehensive income for the period, net of tax | 1,581 | (5,605) | (3,827) |
Total comprehensive income, attributable to owners of the parent company | 6,679 | 1,081 | 8,654 |
JAMES LATHAM PLC | |||
CONSOLIDATED BALANCE SHEET | |||
At 30 September 2020 | |||
As at 30 Sept. 2020 unaudited | As at 30 Sept. 2019 unaudited | As at 31 March 2020 audited | |
£000 | £000 | £000 | |
ASSETS | |||
Non-current assets | |||
Goodwill | 872 | 523 | 872 |
Intangible assets | 1,738 | 1,905 | 1,822 |
Property, plant and equipment | 35,477 | 34,581 | 35,952 |
Right-of-use-asset | 4,629 | 4,344 | 4,895 |
Deferred tax asset | 1,694 | 2,560 | 2,258 |
Total non-current assets | 44,410 | 43,913 | 45,799 |
Current assets | |||
Inventories | 41,360 | 42,501 | 44,288 |
Trade and other receivables | 44,764 | 45,697 | 47,046 |
Cash and cash equivalents | 26,159 | 16,538 | 16,950 |
Total current assets | 112,283 | 104,736 | 108,284 |
Total assets | 156,693 | 148,649 | 154,083 |
Current liabilities | |||
Lease liabilities | 1,242 | 1,143 | 1,178 |
Trade and other payables | 30,122 | 28,321 | 28,686 |
Current tax payable | - | 86 | - |
Total current liabilities | 31,364 | 29,550 | 29,864 |
Non-current liabilities | |||
Interest bearing loans and borrowings | 592 | 592 | 592 |
Lease liabilities | 3,579 | 3,252 | 3,857 |
Retirement and other benefit obligation | 8,774 | 14,637 | 11,812 |
Other payables | - | 180 | 392 |
Deferred tax liabilities | 3,264 | 2,856 | 3,289 |
Total non-current liabilities | 16,209 | 21,517 | 19,942 |
Total liabilities | 47,573 | 51,067 | 49,806 |
Net assets | 109,120 | 97,582 | 104,277 |
Capital and reserves | |||
Issued capital | 5,040 | 5,040 | 5,040 |
Share-based payment reserve | 96 | 89 | 25 |
Own shares | (542) | (891) | (619) |
Capital reserve | 398 | 398 | 398 |
Retained earnings | 104,128 | 92,946 | 99,433 |
Total equity attributable to shareholders of the parent company | 109,120 | 97,582 | 104,277 |
JAMES LATHAM PLC | |||
CONSOLIDATED CASH FLOW STATEMENT | |||
For the six months to 30 September 2020 | |||
Six months to 30 Sept 2020 unaudited | Six months to 30 Sept 2019 unaudited | Year to 31 March 2020 audited | |
£000 | £000 | £000 | |
Net cash flow from operating activities | |||
Cash generated from operations | 13,565 | 8,040 | 13,528 |
Interest paid | - | (3) | (3) |
Income tax paid | (950) | (2,552) | (3,851) |
Net cash inflow from operating activities | 12,615 | 5,485 | 9,674 |
Cash flows from investing activities | |||
Interest received and similar income | 5 | 46 | 82 |
Acquisition of businesses net of cash acquired | - | - | (578) |
Purchase of property, plant and equipment | (785) | (1,512) | (3,886) |
Proceeds from sale of property, plant and equipment | 6 | 119 | 152 |
Net cash outflow from investing activities | (774) | (1,347) | (4,230) |
Cash flows before financing activities | |||
Sale of treasury shares | - | - | 1,036 |
Purchase of treasury shares | - | (5) | - |
Lease liability payments | (621) | (572) | (1,390) |
Equity dividends paid | (1,987) | (2,540) | (3,633) |
Preference dividend paid | (24) | (24) | (48) |
Cash outflow from financing activities | (2,632) | (3,141) | (4,035) |
Increase in cash and cash equivalents for the period | 9,209 | 997 | 1,409 |
Cash and cash equivalents at beginning of the period | 16,950 | 15,541 | 15,541 |
Cash and cash equivalents at end of the period | 26,159 | 16,538 | 16,950 |
JAMES LATHAM PLC
| ||||||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | ||||||
Attributable to owners of the parent company | ||||||
Issued capital £000 | Share-based payment reserve £000 | Own shares £000 | Capital reserve £000 | Retained earnings £000 | Total equity £000 | |
As at 1 April 2019 (audited) | 5,040 | 259 | (923) | 3 | 93,427 | 98,177 |
Profit for the period | - | - | - | - | 6,686 | 6,686 |
Other comprehensive income: | ||||||
Actuarial loss on defined benefit pension scheme | - | - | - | - | (6,767) | (6,767) |
Deferred tax relating to components of other comprehensive income | - | - | - | - | 1,150 | 1,150 |
Foreign translation charge | - | - | - | - | 12 | 12 |
Total comprehensive income for the period | - | - | - | - | 1,081 | 1,081 |
Transaction with owners: | ||||||
Dividends | - | - | - | - | (2,540) | (2,540) |
Exercise of options | - | (181) | (520) | - | 1,488 | 787 |
Deferred tax on share options | - | (32) | - | - | (32) | (64) |
Purchase of preference shares | 5 | - | - | - | - | 5 |
Cancellation of preference shares | (395) | - | 478 | 395 | (478) | - |
Change in investment in ESOP shares | - | - | 74 | - | - | 74 |
Share-based payment expense | - | 43 | - | - | - | 43 |
Total transactions with owners | (390) | (170) | 32 | 395 | (1,562) | (1,676) |
Balance at 30 September 2019 (unaudited) | 5,040 | 89 | (891) | 398 | 92,946 | 97,582 |
Profit for the period | - | - | - | - | 5,795 | 5,795 |
Other comprehensive income: | ||||||
Actuarial gain on defined benefit pension scheme | - | - | - | - | 1,944 | 1,944 |
Deferred tax relating to components of other comprehensive income | - | - | - | - | (234) | (234) |
Foreign translation charge | - | - | - | - | 68 | 68 |
Total comprehensive income for the period | - | - | - | - | 7,573 | 7,573 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (1,093) | (1,093) |
Exercise of options | - | (72) | 259 | - | (25) | 162 |
Deferred tax on share options | - | (13) | - | - | 32 | 19 |
Change in investment in ESOP shares | - | - | 13 | - | - | 13 |
Share-based payment expense | - | 21 | - | - | - | 21 |
Total transactions with owners | - | (64) | 272 | - | (1,086) | (878) |
Balance at 31 March 2020 (audited) | 5,040 | 25 | (619) | 398 | 99,433 | 104,277 |
Profit for the period | - | - | - | - | 5,098 | 5,098 |
Other comprehensive income: | ||||||
Actuarial gain on defined benefit pension scheme | - | - | - | - | 1,923 | 1,923 |
Deferred tax relating to components of other comprehensive income | - | - | - | - | (365) | (365) |
Foreign translation charge | - | - | - | - | 23 | 23 |
Total comprehensive income for the period | - | - | - | - | 6,679 | 6,679 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (1,987) | (1,987) |
Exercise of options | - | (8) | - | - | 3 | (5) |
Change in investment in ESOP shares | - | - | 77 | - | - | 77 |
Share-based payment expense | - | 79 | - | - | - | 79 |
Total transactions with owners | - | 71 | 77 | - | (1,984) | (1,836) |
Balance at 30 September 2020 (unaudited) | 5,040 | 96 | (542) | 398 | 104,128 | 109,120 |
JAMES LATHAM PLC | |||
NOTES TO THE HALF YEARLY REPORT | |||
1. The results presented in this report are unaudited and they have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards ('IFRS') as adopted by the EU and on the basis of the accounting policies expected to be used in the financial statements for the year ending 31 March 2021. The half yearly report does not include all the disclosures that would be required for full compliance with IFRS. The figures for the year ended 31 March 2020 are extracted from the statutory accounts of the group for that period. | |||
2. The directors propose an interim dividend of 5.7p per ordinary share which will absorb £1,133,000 (2019: 5.5p absorbing £1,085,000), payable on 29 January 2021 to shareholders on the Company's Register at the close of business on 4 January 202. The ex-dividend date is 31 December 2020. | |||
3. This half yearly report does not constitute statutory financial accounts within the meaning of section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2020 were filed with the Registrar of Companies. The audit report on those financial statements was not qualified and did not contain a 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) or (3) of the Companies Act 2006. The half yearly report has not been audited by the Company's auditor. | |||
4. Earnings per ordinary share is calculated by dividing the net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. | |||
Six months to 30 Sept 2020 unaudited | Six months to 30 Sept 2019 unaudited | Year to 31 March 2020 audited | |
£000 | £000 | £000 | |
Net profit attributable to ordinary shareholders | 5,098 | 6,686 | 12,481 |
Number '000 | Number '000 | Number '000 | |
Weighted average share capital | 19,876 | 19,759 | 19,781 |
Add: diluted effect of share capital options issued | 26 | 33 | 23 |
Weighted average share capital for diluted earnings per ordinary share calculation | 19,902 | 19,792 | 19,804 |
5. Net cash flow from operating activities | |||
Six months to 30 Sept 2020 unaudited | Six months to 30 Sept 2019 unaudited | Year to 31 March 2020 audited | |
£000 | £000 | £000 | |
Profit before tax | 6,313 | 8,316 | 15,662 |
Adjustment for finance income and expenditure | 231 | 152 | 335 |
Depreciation and amortisation | 2,017 | 1,797 | 3,790 |
Profit on disposal of property, plant and equipment | (6) | (119) | (121) |
Increase in inventories | 2,928 | (151) | (1,659) |
Increase in receivables | 2,193 | (3,084) | (3,963) |
Increase/(decrease) in payables | 962 | 1,162 | 1,244 |
Own shares non cash amounts | 77 | 853 | - |
Retirement benefits non cash amounts | (1,247) | (941) | (1,904) |
Translation non cash amounts | 23 | 12 | 80 |
Share-based payments non cash amounts | 74 | 43 | 64 |
Cash generated from operations | 13,565 | 8,040 | 13,528 |
6. Copies of this statement will be posted on our website, www.lathams.co.uk. A copy can be emailed or posted upon application to the Company Secretary, James Latham plc, Unit 3 Swallow Park, Finway Road Hemel Hempstead, Herts, HP2 7QU, or by email to plc@lathams.co.uk | |||