Last checked at 24 Nov 2016 07:00
James Latham plc
("James Latham" or "the Company")
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2016
Chairman's statement
I am pleased to report good results for the six months to 30 September 2016.
Results
The results are better than the same period last year. Revenue for the six months to 30 September 2016 was £100.3m, up 4.2 per cent on £96.2m for the same period last year. The operating profit was £7.8m, 21.3 per cent up on £6.5m last year. Profit before tax was £7.7m, up 22.4 per cent on last year's £6.3m. Earnings per ordinary share were 31.2p (2015: 25.8p) an increase of 20.9 per cent.
As at 30 September 2016 net assets had reduced to £64.5m (2015: £67.8m) with cash and cash equivalents of £16.1m (2015: £12.4m). The actuarial calculation of the pension deficit is very sensitive to changes in the discount rate, and due to the fall in corporate bond yields, the pension deficit is calculated as increasing from £7.7m to £23.2m. However the scheme investments have grown faster than the scheme assumptions.
Interim dividend
The Board has declared an increased interim dividend of 4.5p per Ordinary Share (2015: 4.0p), which is covered 6.9 times (2015: 6.5 times). The dividend is payable on 27 January 2017 to ordinary shareholders on the Company's Register at close of business on 6 January 2017. The ex-dividend date will be 5 January 2017.
Six months trading to 30 September 2016
In trading conditions which have been different for the various markets that we serve, group revenue has grown by £4.1m as a result of higher prices of imported goods resulting from the fall in the value of sterling with small gains from sales volumes and product mix.
Trading margins for the six months to 30 September 2016 are higher than for the previous year. Overheads have been well controlled. Bad debts have remained lower than expected. We continue to take advantage of cash settlement discounts from suppliers where this represents a good return.
Current and future trading
Management information shows growing revenue for October and the first half of November, at slightly lower margins. The weakness of sterling, whilst increasing prices, could put pressure on margins in the coming months. Market conditions continue to be difficult in some areas, while improving in others. We are in a good position with our wide range of customers and we are trading comfortably in line with market expectations. We are progressing with our plans to relocate our two oldest depots. Construction work has started on the new Yate site and terms have been agreed for the new Wigston site, subject to planning.
Peter Latham
Chairman
23 November 2016
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
Enquiries
James Latham plc | Tel: 01442 849 100 |
David Dunmow, Finance Director | |
Northland Capital Partners Limited Nominated Adviser and Broker | Tel: 0203 861 6625 |
Matthew Johnson / Edward Hutton |
JAMES LATHAM PLC | |||
CONSOLIDATED INCOME STATEMENT | |||
For the six months to 30 September 2016 | |||
Six months to 30 Sept. 2016 unaudited | Six months to 30 Sept. 2015 unaudited | Year to 31 March 2016 audited | |
£000 | £000 | £000 | |
Revenue | 100,334 | 96,209 | 185,929 |
Cost of sales (including warehouse costs) | (81,582) | (78,975) | (151,389) |
Gross profit | 18,752 | 17,234 | 34,540 |
Selling and distribution costs | (7,889) | (7,674) | (15,129) |
Administrative expenses | (3,027) | (3,099) | (6,170) |
Operating profit | 7,836 | 6,461 | 13,241 |
Finance income | 33 | 25 | 56 |
Finance costs | (209) | (227) | (421) |
Profit before tax | 7,660 | 6,259 | 12,876 |
Tax expense | (1,545) | (1,257) | (2,410) |
Profit after tax attributable to owners of the parent company | 6,115 | 5,002 | 10,466 |
Earnings per ordinary share (basic) | 31.2p | 25.8p | 53.7p |
Earnings per ordinary share (diluted) | 31.1p | 25.5p | 53.5p |
All results relate to continuing operations. |
JAMES LATHAM PLC | |||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||
For the six months to 30 September 2016 | |||
Six months to 30 Sept. 2016 unaudited | Six months to 30 Sept. 2015 unaudited | Year to 31 March 2016 audited | |
£000 | £000 | £000 | |
Profit after tax | 6,115 | 5,002 | 10,466 |
Other Comprehensive income | |||
Actuarial (losses)/gains on defined benefit pension scheme | (13,313) | 2,766 | 825 |
Deferred tax relating to components of other comprehensive income | 2,396 | (491) | (219) |
Other comprehensive income for the period, net of tax | (10,917) | 2,275 | 606 |
Total comprehensive income, attributable to owners of the parent company | (4,802) | 7,277 | 11,072 |
JAMES LATHAM PLC | |||
CONSOLIDATED BALANCE SHEET | |||
At 30 September 2016 | |||
As at 30 Sept. 2016 unaudited | As at 30 Sept. 2015 unaudited | As at 31 March 2016 audited | |
£000 | £000 | £000 | |
ASSETS | |||
Non-current assets | |||
Goodwill | 237 | 237 | 237 |
Intangible assets | 89 | 97 | 93 |
Property, plant and equipment | 25,315 | 21,477 | 22,111 |
Deferred tax asset | 4,245 | 1,773 | 1,802 |
Total non-current assets | 29,886 | 23,584 | 24,243 |
Current assets | |||
Inventories | 35,065 | 32,419 | 33,403 |
Trade and other receivables | 38,003 | 37,612 | 35,288 |
Cash and cash equivalents | 16,102 | 12,432 | 16,832 |
Total current assets | 89,170 | 82,463 | 85,523 |
Total assets | 119,056 | 106,047 | 109,766 |
Current liabilities | |||
Trade and other payables | 25,730 | 24,917 | 23,471 |
Current tax payable | 1,590 | 1,297 | 1,376 |
Total current liabilities | 27,320 | 26,214 | 24,847 |
Non-current liabilities | |||
Interest bearing loans and borrowings | 987 | 987 | 987 |
Retirement and other benefit obligation | 23,208 | 7,679 | 9,657 |
Other payables | 377 | 435 | 406 |
Deferred tax liabilities | 2,686 | 2,961 | 2,686 |
Total non-current liabilities | 27,258 | 12,062 | 13,736 |
Total liabilities | 54,578 | 38,276 | 38,583 |
Net assets | 64,478 | 67,771 | 71,183 |
Capital and reserves | |||
Issued capital | 5,040 | 5,040 | 5,040 |
Share-based payment reserve | 70 | 172 | 56 |
Own shares | (344) | (235) | (441) |
Capital reserve | 3 | 3 | 3 |
Retained earnings | 59,709 | 62,791 | 66,525 |
Total equity attributable to owners of the parent company | 64,478 | 67,771 | 71,183 |
JAMES LATHAM PLC | |||
CONSOLIDATED CASH FLOW STATEMENT | |||
For the six months to 30 September 2016 | |||
Six months to 30 Sept 2016 unaudited | Six months to 30 Sept 2015 unaudited | Year to 31 March 2016 audited | |
£000 | £000 | £000 | |
Net cash flow from operating activities | |||
Cash generated from operations | 6,665 | 4,055 | 11,704 |
Interest paid | (2) | (25) | (23) |
Income tax paid | (1,376) | (909) | (2,016) |
Net cash inflow from operating activities | 5,287 | 3,121 | 9,665 |
Cash flows from investing activities | |||
Interest received and similar income | 33 | 25 | 56 |
Purchase of property, plant and equipment | (4,035) | (608) | (2,056) |
Proceeds from sale of property, plant and equipment | 41 | 46 | 136 |
Net cash outflow from investing activities | (3,961) | (537) | (1,864) |
Cash flows before financing activities | |||
Borrowings repaid during the period | - | (907) | (907) |
Equity dividends paid | (2,017) | (1,707) | (2,484) |
Preference dividend paid | (39) | (39) | (79) |
Net cash outflow from financing activities | (2,056) | (2,653) | (3,470) |
(Decrease)/increase in cash and cash equivalents for the period | (730) | (69) | 4,331 |
Cash and cash equivalents at beginning of the period | 16,832 | 12,501 | 12,501 |
Cash and cash equivalents at end of the period | 16,102 | 12,432 | 16,832 |
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 2015 (audited) | 5,040 | 143 | (177) | 3 | 57,222 | 62,231 |
Profit for the period | - | - | - | - | 5,002 | 5,002 |
Other comprehensive income: | ||||||
Actuarial gain on defined benefit pension scheme | - | - | - | - | 2,766 | 2,766 |
Deferred tax relating to components of other comprehensive income | - | - | - | - | (491) | (491) |
Total comprehensive income for the period | - | - | - | - | 7,277 | 7,277 |
Transaction with owners: | ||||||
Dividends | - | - | - | - | (1,707) | (1,707) |
Write down on conversions of ESOP shares | - | - | 1 | - | (1) | - |
Change in investment in ESOP shares | - | - | (59) | - | - | (59) |
Share-based payment expense | - | 29 | - | - | - | 29 |
Total transactions with owners | - | 29 | (58) | - | (1,708) | (1,737) |
Balance at 30 September 2015 (unaudited) | 5,040 | 172 | (235) | 3 | 62,791 | 67,771 |
Profit for the period | - | - | - | - | 5,464 | 5,464 |
Other comprehensive income: | ||||||
Actuarial loss on defined benefit pension scheme | - | - | - | - | (1,941) | (1,941) |
Deferred tax relating to components of other comprehensive income | - | - | - | - | 272 | 272 |
Total comprehensive income for the period | - | - | - | - | 3,795 | 3,795 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (777) | (777) |
Transfer of treasury shares | - | - | (1,385) | - | 1,385 | - |
Write down on conversions of ESOP shares | - | - | 818 | - | (818) | - |
Conversion of ESOP shares | - | - | 507 | - | - | 507 |
Exercise of options | - | (149) | - | - | 149 | - |
Change in investment in ESOP shares | - | - | (146) | - | - | (146) |
Share-based payment expense | - | 33 | - | - | - | 33 |
Total transactions with owners | - | (116) | (206) | - | (61) | (383) |
Balance at 31 March 2016 (audited) | 5,040 | 56 | (441) | 3 | 66,525 | 71,183 |
Profit for the period | - | - | - | - | 6,115 | 6,115 |
Other comprehensive income: | ||||||
Actuarial loss on defined benefit pension scheme | - | - | - | - | (13,313) | (13,313) |
Deferred tax relating to components of other comprehensive income | - | - | - | - | 2,396 | 2,396 |
Total comprehensive income for the period | - | - | - | - | (4,802) | (4,802) |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (2,017) | (2,017) |
Exercise of options | - | (3) | - | - | 3 | - |
Change in investment in ESOP shares | - | - | 97 | - | - | 97 |
Share-based payment expense | - | 17 | - | - | - | 17 |
Total transactions with owners | - | 14 | 97 | - | (2,014) | (1,903) |
Balance at 30 September 2016 (unaudited) | 5,040 | 70 | (344) | 3 | 59,709 | 64,478 |
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 of International Financial Reporting Standards ('IFRS') as adopted by the EU that are expected to be applicable to the financial statements for the year ending 31 March 2017 and on the basis of the accounting policies to be used in those financial statements. The figures for the year ended 31 March 2016 are extracted from the statutory accounts of the group for that period. | |||
2. The directors propose an interim dividend of 4.5p per ordinary share which will absorb £880,000 (2016: 4.0p absorbing £780,000), payable on 27 January 2017 to shareholders on the Register at the close of business on 6 January 2017. The ex-dividend date is 5 January 2017. | |||
3. This half yearly report does not constitute financial statutory accounts within the meaning of section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2016 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 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 year attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. | |||
Six months to 30 Sept 2016 unaudited | Six months to 30 Sept 2015 unaudited | Year to 31 March 2016 audited | |
£000 | £000 | £000 | |
Net profit attributable to ordinary shareholders | 6,115 | 5,002 | 10,466 |
Number '000 | Number '000 | Number '000 | |
Weighted average share capital | 19,590 | 19,399 | 19,493 |
Add: diluted effect of share capital options issued | 85 | 203 | 65 |
Weighted average share capital for diluted earnings per ordinary share calculation | 19,675 | 19,602 | 19,558 |
5. Net cash flow from operating activities | |||
Six months to 30 Sept 2016 unaudited | Six months to 30 Sept 2015 unaudited | Year to 31 March 2016 audited
| |
Profit before tax | 7,660 | 6,259 | 12,876 |
Adjustment for finance income and expenditure | 176 | 202 | 365 |
Depreciation and amortisation | 829 | 728 | 1,515 |
Profit on disposal of property, plant and equipment | (35) | (38) | (97) |
Increase in inventories | (1,662) | (513) | (1,497) |
Increase in receivables | (2,715) | (3,399) | (1,075) |
Increase in payables | 2,228 | 993 | (480) |
Own shares non cash amounts | 97 | (58) | 302 |
Retirement benefits non cash amounts | 70 | (148) | (267) |
Share-based payments non cash amounts | 17 | 29 | 62 |
Cash generated from operations | 6,665 | 4,055 | 11,704 |
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 | |||