Last checked at 30 Nov 2017 07:00
James Latham plc
("James Latham" or the "Company")
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2017
Chairman's statement
Unaudited results for the six months trading to 30 September 2017
Revenue for the six months ended 30 September 2017 was £107.3m, up 7% on £100.3m for the same period last year. We have seen volumes continue to grow especially through our own warehouses where they are up nearly 8%. The cost price of our products overall continues to increase in comparison to the comparative six months. This is in part down to the weakening of sterling following the European Union Referendum, but also in this six months we have seen manufacturers increasing prices, and we have not been able to pass all these increases onto our customers.
Gross margin for the six month period ended 30 September 2017 was 17.3% compared with 18.7% in the comparative six months. This gross margin is similar to the 17.6% achieved in the second half of 2016/7, and we believe margins are starting to stabilise. We were also affected in this half year by some disruption to supplies from some of our key suppliers' manufacturing facilities, which are now getting back to normal.
Selling and distribution costs were 6.4% higher than last year. Distribution costs rise in line with volumes, and we monitor costs per tonne which are up by less than 2%. We have also invested in new specialist sales staff to develop the markets where we see potential for good future growth.
In July we successfully completed the move of our Yate depot to a new modern facility. I am very grateful to all of the staff involved in the move, who were very effective at minimising the disruption to the business and I am pleased to report the new facility is already performing ahead of our expectations. In this half year we incurred approximately £100,000 of one off costs relating to the move.
Profit before tax was £6.7m, down 12.2% on the comparative period's profit of £7.7m. Earnings per ordinary share were 27.8p (2016: 31.2p) a decrease of 10.9%.
As at 30 September 2017 net assets have increased to £83.8m (30.9.16: £64.5m). Fixed assets have increased by £5.6m from 31 March 2017, the majority of this being the remaining cost of the new warehouse at Yate and the start of the investment in the new warehouse at Leicester. Stock levels have remained stable throughout the period. Trade Receivables have continued to show good debtors day figures with there being another low bad debt charge of under 0.15% of turnover in the first six months. Cash and cash equivalents of £12.6m (30.9.16: £16.1m), remain strong with strong cash flows from operating activities.
The calculation of the pension deficit remains very sensitive to changes in assumptions, and the pension deficit under IAS19 is now calculated as decreasing from £16.6m at 31 March 2017 to £8.5m. This is largely due to updated membership data and an increase in the discount rate. Positive asset performance and changes to the mortality base tables also reduced the net liability. The triennial actuarial valuation as at 31 March 2017 is currently being calculated.
Interim dividend
The Board has declared an interim dividend of 4.5p per Ordinary Share (2016: 4.5p), which is covered 6.2 times (2016: 6.9 times). The dividend is payable on 26 January 2018 to ordinary shareholders on the Company's Register at close of business on 5 January 2018. The ex-dividend date will be 4 January 2018.
Current and future trading
The second half of 2017/18 has started well with growing revenues at slightly higher margins. Trading conditions continue to be mixed, but despite the uncertainties in the economy, we and our customers remain busy. We are confident in the long term prospects of our key product drivers, and this underpins our plan to continue to invest in our business to further improve the offering to our customers. Following the successful relocation of our Yate depot, we are looking forward to a relocation of our Wigston depot to a site closer to the motorway network in Leicester ahead of schedule in January 2018.
Nick Latham
Chairman
30 November 2017
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 |
Nick Latham, Chairman | |
David Dunmow, Finance Director | |
Northland Capital Partners Limited Nominated Adviser and Broker | Tel: 020 3861 6625 |
Matthew Johnson / Edward Hutton (Corporate Finance) Bob Pountney / John Howes (Corporate Broking) |
JAMES LATHAM PLC | |||
CONSOLIDATED INCOME STATEMENT | |||
For the six months to 30 September 2017 | |||
Six months to 30 Sept. 2017 unaudited | Six months to 30 Sept. 2016 unaudited | Year to 31 March 2017 audited | |
£000 | £000 | £000 | |
Revenue | 107,335 | 100,334 | 198,808 |
Cost of sales (including warehouse costs) | (88,810) | (81,582) | (162,709) |
Gross profit | 18,525 | 18,752 | 36,099 |
Selling and distribution costs | (8,391) | (7,889) | (15,457) |
Administrative expenses | (3,178) | (3,027) | (6,463) |
Operating profit | 6,956 | 7,836 | 14,179 |
Finance income | 15 | 33 | 56 |
Finance costs | (248) | (209) | (408) |
Profit before tax | 6,723 | 7,660 | 13,827 |
Tax expense | (1,262) | (1,545) | (2,846) |
Profit after tax attributable to owners of the parent company | 5,461 | 6,115 | 10,981 |
Earnings per ordinary share (basic) | 27.8p | 31.2p | 56.0p |
Earnings per ordinary share (diluted) | 27.7p | 31.1p | 55.8p |
All results relate to continuing operations. |
JAMES LATHAM PLC | |||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||
For the six months to 30 September 2017 | |||
Six months to 30 Sept. 2017 unaudited | Six months to 30 Sept. 2016 unaudited | Year to 31 March 2017 audited | |
£000 | £000 | £000 | |
Profit after tax | 5,461 | 6,115 | 10,981 |
Other Comprehensive income | |||
Actuarial gains/(losses) on defined benefit pension scheme | 8,515 | (13,313) | (7,543) |
Deferred tax relating to components of other comprehensive income | (1,430) | 2,396 | 1,362 |
Other comprehensive income for the period, net of tax | 7,085 | (10,917) | (6,181) |
Total comprehensive income, attributable to owners of the parent company | 12,546 | (4,802) | 4,800 |
JAMES LATHAM PLC | |||
CONSOLIDATED BALANCE SHEET | |||
At 30 September 2017 | |||
As at 30 Sept. 2017 unaudited | As at 30 Sept. 2016 unaudited | As at 31 March 2017 audited | |
£000 | £000 | £000 | |
ASSETS | |||
Non-current assets | |||
Goodwill | 237 | 237 | 237 |
Intangible assets | 1 | 89 | 1 |
Property, plant and equipment | 31,939 | 25,315 | 26,312 |
Deferred tax asset | 1,546 | 4,245 | 2,904 |
Total non-current assets | 33,723 | 29,886 | 29,454 |
Current assets | |||
Inventories | 35,915 | 35,065 | 35,508 |
Trade and other receivables | 43,523 | 38,003 | 40,076 |
Cash and cash equivalents | 12,585 | 16,102 | 17,246 |
Non-current assets held for sale | 641 | - | - |
Total current assets | 92,664 | 89,170 | 92,830 |
Total assets | 126,387 | 119,056 | 122,284 |
Current liabilities | |||
Trade and other payables | 28,961 | 25,730 | 27,063 |
Current tax payable | 1,332 | 1,590 | 1,517 |
Total current liabilities | 30,293 | 27,320 | 28,580 |
Non-current liabilities | |||
Interest bearing loans and borrowings | 987 | 987 | 987 |
Retirement and other benefit obligation | 8,470 | 23,208 | 16,625 |
Other payables | 320 | 377 | 349 |
Deferred tax liabilities | 2,485 | 2,686 | 2,485 |
Total non-current liabilities | 12,262 | 27,258 | 20,446 |
Total liabilities | 42,555 | 54,578 | 49,026 |
Net assets | 83,832 | 64,478 | 73,258 |
Capital and reserves | |||
Issued capital | 5,040 | 5,040 | 5,040 |
Share-based payment reserve | 153 | 70 | 108 |
Own shares | (180) | (344) | (291) |
Capital reserve | 3 | 3 | 3 |
Retained earnings | 78,816 | 59,709 | 68,398 |
Total equity attributable to shareholders of the parent company | 83,832 | 64,478 | 73,258 |
JAMES LATHAM PLC | |||
CONSOLIDATED CASH FLOW STATEMENT | |||
For the six months to 30 September 2017 | |||
Six months to 30 Sept 2017 unaudited | Six months to 30 Sept 2016 unaudited | Year to 31 March 2017 audited | |
£000 | £000 | £000 | |
Net cash flow from operating activities | |||
Cash generated from operations | 6,155 | 6,665 | 11,902 |
Interest paid | (2) | (2) | (2) |
Income tax paid | (1,517) | (1,376) | (2,646) |
Net cash inflow from operating activities | 4,636 | 5,287 | 9,254 |
Cash flows from investing activities | |||
Interest received and similar income | 15 | 33 | 56 |
Purchase of property, plant and equipment | (7,163) | (4,035) | (6,045) |
Proceeds from sale of property, plant and equipment | 19 | 41 | 122 |
Net cash outflow from investing activities | (7,129) | (3,961) | (5,867) |
Cash flows before financing activities | |||
Equity dividends paid | (2,129) | (2,017) | (2,894) |
Preference dividend paid | (39) | (39) | (79) |
Net cash outflow from financing activities | (2,168) | (2,056) | (2,973) |
(Decrease)/increase in cash and cash equivalents for the period | (4,661) | (730) | 414 |
Cash and cash equivalents at beginning of the period | 17,246 | 16,832 | 16,832 |
Cash and cash equivalents at end of the period | 12,585 | 16,102 | 17,246 |
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 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) |
Transaction 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 |
Profit for the period | - | - | - | - | 4,866 | 4,866 |
Other comprehensive income: | ||||||
Actuarial gain on defined benefit pension scheme | - | - | - | - | 5,770 | 5,770 |
Deferred tax relating to components of other comprehensive income | - | - | - | - | (1,034) | (1,034) |
Total comprehensive income for the period | - | - | - | - | 9,602 | 9,602 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (877) | (877) |
Exercise of options | - | (16) | - | - | 16 | - |
Write down on conversions of ESOP shares | - | - | 52 | - | (52) | - |
Change in investment in ESOP shares | - | - | 1 | - | - | 1 |
Share-based payment expense | - | 54 | - | - | - | 54 |
Total transactions with owners | - | 38 | 53 | - | (913) | (822) |
Balance at 31 March 2017 (audited) | 5,040 | 108 | (291) | 3 | 68,398 | 73,258 |
Profit for the period | - | - | - | - | 5,461 | 5,461 |
Other comprehensive income: | ||||||
Actuarial gain on defined benefit pension scheme | - | - | - | - | 8,515 | 8,515 |
Deferred tax relating to components of other comprehensive income | - | - | - | - | (1,430) | (1,430) |
Total comprehensive income for the period | - | - | - | - | 12,546 | 12,546 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (2,129) | (2,129) |
Exercise of options | - | (3) | - | - | 3 | - |
Write down on conversions of ESOP shares | - | - | 2 | - | (2) | - |
Change in investment in ESOP shares | - | - | 109 | - | - | 109 |
Share-based payment expense | - | 48 | - | - | - | 48 |
Total transactions with owners | - | 45 | 111 | - | (2,128) | (1,972) |
Balance at 30 September 2017 (unaudited) | 5,040 | 153 | (180) | 3 | 78,816 | 83,832 |
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 2018 and on the basis of the accounting policies to be used in those financial statements. The figures for the year ended 31 March 2017 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 (2017: 4.5p absorbing £880,000), payable on 26 January 2018 to shareholders on the Register at the close of business on 5 January 2018. The ex-dividend date is 4 January 2018. | |||
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 2017 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 2017 unaudited | Six months to 30 Sept 2016 unaudited | Year to 31 March 2017 audited | |
£000 | £000 | £000 | |
Net profit attributable to ordinary shareholders | 5,461 | 6,115 | 10,981 |
Number '000 | Number '000 | Number '000 | |
Weighted average share capital | 19,629 | 19,590 | 19,601 |
Add: diluted effect of share capital options issued | 108 | 85 | 82 |
Weighted average share capital for diluted earnings per ordinary share calculation | 19,737 | 19,675 | 19,683 |
5. Net cash flow from operating activities | |||
Six months to 30 Sept 2017 unaudited | Six months to 30 Sept 2016 unaudited | Year to 31 March 2017 audited
| |
Profit before tax | 6,723 | 7,660 | 13,827 |
Adjustment for finance income and expenditure | 233 | 176 | 352 |
Depreciation and amortisation | 885 | 829 | 1,822 |
Profit on disposal of property, plant and equipment | (9) | (35) | (95) |
Write down of intangible asset | - | - | 86 |
Increase in inventories | (407) | (1,662) | (2,105) |
Increase in receivables | (3,447) | (2,715) | (4,788) |
Increase in payables | 1,867 | 2,228 | 3,536 |
Own shares non cash amounts | 109 | 97 | 98 |
Retirement benefits non cash amounts | 153 | 70 | (902) |
Share-based payments non cash amounts | 48 | 17 | 71 |
Cash generated from operations | 6,155 | 6,665 | 11,902 |
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 | |||