Last checked at 28 Nov 2013 07:00
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2013
Chairman's statement
I am pleased to report good results for the six months to 30 September 2013, in trading conditions which after a low point in the March 2013 quarter, have shown a steady improvement.
Results
Overall the results are better than the same period last year. Revenue for the six months to 30 September 2013 was £82.2m up almost 10 per cent on £74.9m for the same period last year. The operating profit was £4.6m, 8.7 per cent up on £4.2m last year. Finance Income was £14,000 (2012: £13,000) and Finance Costs were £423,000 (2012: £376,000), reflecting higher assumed interest on the pension scheme deficit. Profit before tax was £4.15m, up on last year's £4.09m. Last years results included a profit of £257,000 on the sale of the Ossett site. Earnings per ordinary share were 16.9p (2012: 16.6p).
As at 30 September 2013 shareholder funds had increased to £51.5m (30.9.2012: £47.2m) with cash and cash equivalents of £5.7m (2012: £5.2m)
Interim dividend
The Board has declared an interim dividend of 3.4p per Ordinary Share (2012: 3.1p), which is covered 5.0 times (2012: 5.3 times). The dividend is payable on 31 January 2014 to ordinary shareholders on the Company's Register at close of business on10 January 2014. The ex-dividend date will be 8 January 2014.
Six months trading to 30 September 2013.
In improving trading conditions, group revenue has grown by £7.4m, as a result of higher sales volumes. This growth was mainly in panel products, although timber saw good improvement from the dip experienced in the March 2013 quarter.
Trading margins for the six months to 30 September 2013 have remained under competitive pressure and are slightly down on the previous year. Overheads have been well controlled, although higher selling and distribution costs reflect higher volumes handled and more sales people directed at target markets. Cash balances at the end of September 2013 were £5.7m (2012: £5.2m). We continue to take advantage of cash settlement discounts from suppliers where this represents a good return.
Pension scheme
The IAS19R valuation shows that the scheme deficit has decreased to £13.7m from £16.8m in March. Although scheme assets have seen a good increase, AA grade bond yields which are used to calculate the present value of pension scheme liabilities remain historically low. This measure is very volatile. The trustees and the company have an agreed recovery plan to pay off the actuarial deficit over ten years.
Current and future trading
The management accounts and information show growing revenue for October and the first half of November, at slightly improved margins. Bad debts have been below our expectations but will remain a concern over the next few months. We have a wide range of customers who are generally busier and more confident about future prospects than this time last year. The company is in a strong position to meet increasing demand.
Peter Latham
Chairman
28 November 2013
James Latham Plc | Tel: 01442 849 100 |
Peter Latham, Chairman | |
David Dunmow, Finance Director | |
Northland Capital Partners - Nomad & Broker | Tel: 020 7796 8800 |
Louis Castro / Matthew Johnson | |
JAMES LATHAM PLC | |||
CONSOLIDATED BALANCE SHEET | |||
At 30 September 2013 | |||
As at 30 Sept. 2013 unaudited | As at 30 Sept. 2012 unaudited | As at 31 March 2013 audited | |
£000 | £000 | £000 | |
ASSETS | |||
Non-current assets | |||
Goodwill | 237 | 237 | 237 |
Intangible assets | 112 | 120 | 115 |
Property, plant and equipment | 23,238 | 22,662 | 22,965 |
Deferred tax asset | - | 420 | 803 |
Total non-current assets | 23,587 | 23,439 | 24,120 |
Current assets | |||
Inventories | 27,984 | 25,160 | 26,222 |
Trade and other receivables | 34,091 | 31,290 | 28,877 |
Cash and cash equivalents | 5,672 | 5,171 | 8,075 |
Total current assets | 67,747 | 61,621 | 63,174 |
Total assets | 91,334 | 85,060 | 87,294 |
Current liabilities | |||
Trade and other payables | 22,346 | 18,851 | 19,561 |
Current portion of interest bearing loans and borrowings | 234 | 207 | 229 |
Current tax payable | 846 | 911 | 537 |
Total current liabilities | 23,426 | 19,969 | 20,327 |
Non-current liabilities | |||
Interest bearing loans and borrowings | 2,010 | 2,308 | 2,128 |
Retirement and other benefit obligation | 13,695 | 14,924 | 16,793 |
Other payables | 550 | 613 | 579 |
Deferred tax liabilities | 125 | - | - |
Total non-current liabilities | 16,380 | 17,845 | 19,500 |
Total liabilities | 39,806 | 37,814 | 39,827 |
Net assets | 51,528 | 47,246 | 47,467 |
Capital and reserves | |||
Issued capital | 5,040 | 5,040 | 5,040 |
Share-based payment reserve | 135 | 84 | 91 |
Own shares | (208) | (256) | (218) |
Capital reserve | 3 | 3 | 3 |
Retained earnings | 46,558 | 42,375 | 42,551 |
Total equity attributable to owners of the parent company | 51,528 | 47,246 | 47,467 |
JAMES LATHAM PLC | |||
CONSOLIDATED INCOME STATEMENT | |||
For the six months to 30 September 2013 | |||
Six months to 30 Sept. 2013 unaudited | Six months to 30 Sept. 2012 unaudited | Year to 31 March 2013 audited | |
(restated) | (restated) | ||
£000 | £000 | £000 | |
Revenue | 82,210 | 74,789 | 143,069 |
Cost of sales (including warehouse costs) | (68,273) | (61,697) | (117,847) |
Gross profit | 13,937 | 13,092 | 25,222 |
Selling and distribution costs | (6,449) | (6.102) | (12,093) |
Administrative expenses | (2,931) | (2,801) | (5,766) |
Other operating income | 3 | 5 | 6 |
(9,377) | (8,898) | (17,853) | |
Operating profit | 4,560 | 4,194 | 7,369 |
Profit on disposal of property | - | 257 | 257 |
Finance income | 14 | 13 | 26 |
Finance costs | (423) | (376) | (683) |
Profit before tax | 4,151 | 4,088 | 6,969 |
Tax expense | (886) | (901) | (1,448) |
Profit after tax attributable to owners of the parent company | 3,265 | 3,187 | 5,521 |
Earnings per ordinary share (basic) | 16.9p | 16.6p | 28.9p |
Earnings per ordinary share (diluted) | 16.7p | 16.5p | 28.7p |
All results relate to continuing operations. |
JAMES LATHAM PLC | |||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||
For the six months to 30 September 2013 | |||
Six months to 30 Sept. 2013 unaudited | Six months to 30 Sept. 2012 unaudited | Year to 31 March 2013 audited | |
(restated) | (restated) | ||
£000 | £000 | £000 | |
Profit after tax | 3,265 | 3,187 | 5,521 |
Other Comprehensive income | |||
Actuarial gains/(losses) on defined benefit pension scheme | 3.004 | (2,781) | (4,919) |
Deferred tax relating to components of other comprehensive income | (890) | 775 | 1,350 |
Other comprehensive income for the period, net of tax | 2,114 | (2,006) | (3,569) |
Total comprehensive income, attributable to owners of the parent company | 5,379 | 1,181 | 1,952 |
JAMES LATHAM PLC | |||
CONSOLIDATED CASH FLOW STATEMENT | |||
For the six months to 30 September 2013 | |||
Six months to 30 Sept 2013 unaudited | Six months to 30 Sept 2012 unaudited | Year to 31 March 2013 audited | |
£000 | £000 | £000 | |
Net cash flow from operating activities | |||
Cash generated from operations | 712 | 821 | 5,829 |
Interest paid | (25) | (41) | (64) |
Income tax paid | (539) | (740) | (1,469) |
Net cash inflow from operating activities | 148 | 40 | 4,296 |
Cash flows from investing activities | |||
Interest received and similar income | 14 | 13 | 26 |
Purchase of property, plant and equipment | (1,041) | (564) | (1,517) |
Proceeds from sale of property, plant and equipment | - | 1,050 | 1,070 |
Net cash (outflow)/inflow from investing activities | (1,027) | 499 | (421) |
Cash flows before financing activities | |||
Borrowings repaid during the period | (113) | (1,049) | (1,207) |
Equity dividends paid | (1,372) | (1,284) | (1,883) |
Preference dividend paid | (39) | (39) | (79) |
Sale of own shares | - | - | 365 |
Net cash outflow from financing activities | (1,524) | (2,372) | (2,804) |
Decrease in cash and cash equivalents for the period | (2,403) | (1,833) | 1,071 |
Cash and cash equivalents at beginning of the period | 8,075 | 7,004 | 7,004 |
Cash and cash equivalents at end of the period | 5,672 | 5,171 | 8,075 |
JAMES LATHAM PLC
| ||||||
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | ||||||
Issued capital £000 | Share-based payment reserve £000 | Own shares £000 | Capital reserve £000 | Retained earnings £000 | Total equity £000 | |
As at 1 April 2012 (audited) | 5040 | 144 | (356) | 3 | 42,093 | 46,924 |
Profit for the period (restated) | - | - | - | - | 3,187 | 3,187 |
Other comprehensive income: | ||||||
Actuarial loss on defined pension scheme (restated) | - | - | - | - | (2,781) | (2,781) |
Deferred tax relating to components of other comprehensive income (restated) | - | - | - | - | 775 | 775 |
Total comprehensive income for the year | - | - | - | - | 1,181 | 1,181 |
Transaction with owners: | ||||||
Dividends | - | - | - | - | (1,284) | (1,284) |
Transfer of treasury shares | - | - | (562) | - | 562 | - |
Conversion of ESOP shares | - | - | 259 | - | (259) | - |
Sale of own shares | - | - | 365 | - | - | 365 |
Exercise of options | - | (82) | - | - | 82 | - |
Change in investment in ESOP shares | - | - | 38 | - | - | 38 |
Share-based payment expense | - | 22 | - | - | - | 22 |
Total transactions with owners | - | (60) | 100 | - | (899) | (859) |
Balance at 30 September 2012 (unaudited) | 5,040 | 84 | (256) | 3 | 42,375 | 47,246 |
Profit for the period (restated) | - | - | - | - | 2,334 | 2,334 |
Other comprehensive income: | ||||||
Actuarial loss on defined pension scheme (restated) | - | - | - | - | (2,138) | (2,138) |
Deferred tax relating to components of other comprehensive income (restated) | - | - | - | - | 575 | 575 |
Total comprehensive income for the period | - | - | - | - | 771 | 771 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (599) | (599) |
Conversions of ESOP shares | - | - | 34 | - | (34) | - |
Exercise of options | - | (38) | - | - | 38 | - |
Change in investment in ESOP shares | - | - | 4 | - | - | 4 |
Share-based payment expense | - | 45 | - | - | - | 45 |
Total transactions with owners | - | 7 | 38 | - | (595) | (550) |
Balance at 31 March 2013 (audited) | 5,040 | 91 | (218) | 3 | 42,551 | 47,467 |
Profit for the period | - | - | - | - | 3,265 | 3,265 |
Other comprehensive income: | ||||||
Actuarial gain on defined benefit pension scheme | - | - | - | - | 3,004 | 3,004 |
Deferred tax relating to components of other comprehensive income | - | - | - | - | (890) | (890) |
Total comprehensive income for the period | - | - | - | - | 5,379 | 5,379 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (1,372) | (1,372) |
Change in investment in ESOP shares | - | - | 10 | - | - | 10 |
Share-based payment expense | - | 44 | - | - | - | 44 |
Total transactions with owners | - | 44 | 10 | - | (1,372) | (1,318) |
Balance at 30 September 2013 (unaudited) | 5,040 | 135 | (208) | 3 | 46,558 | 51,528 |
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 2014 and on the basis of the accounting policies to be used in those financial statements. The figures for the year ended 31 March 2013 are extracted from the statutory accounts of the group for that period. | |||
For the financial statements for the year ended 31 March 2014 the group had adopted IAS 19 (revised) "Employee Benefits" where past service costs will be recognised as an expense at the earlier of the date when the plan amendment or curtailment occurs and the entity recognises related restructuring costs or termination benefits and where only interest income on plan assets will recognised in the profit and loss account with other changes in the fair value of plan assets being recognised in other comprehensive income. While this has not impacted the Retirement and other benefit obligation or net assets of the group as at 31 March 2013, the impact to the Consolidated Income Statement and the Consolidated Statement of Comprehensive income for the year then ended are as follows: | |||
Cost of Sales increasing by £16,000; Selling and Distribution increasing by £42,000; Administration increasing by £119,000; Finance costs decreasing by £264,000; Tax expense increasing by £20,000; Profit after tax increasing by £67,000; Actuarial losses on defined pension scheme increasing by £87,000 and deferred taxation on the actuarial loss increasing by £20,000. Appropriate corresponding adjustments have also been made to the results for the 6 month period ended 30 September 2012. | |||
2. The directors propose an interim dividend of 3.4p per ordinary share which will absorb £660,000 (2013: 3.1p absorbing £571,000), payable on 31 January 2014 to shareholders on the Register at the close of business on 10 January 2014. The ex-dividend date is 8 January 2014. | |||
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 2013 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 2013 unaudited | Six months to 30 Sept 2012 unaudited | Year to 31 March 2013 audited | |
£000 | £000 | £000 | |
(restated) | (restated) | ||
Net profit attributable to ordinary shareholders | 3,265 | 3,187 | 5,521 |
Number '000 | Number '000 (restated) | Number '000 (restated) | |
Weighted average share capital | 19,376 | 19,207 | 19,217 |
Add: diluted effect of share capital options issued | 179 | 111 | 141 |
Weighted average share capital for diluted earnings per ordinary share calculation | 19,555 | 19,318 | 19,358 |
5. Net cash flow from operating activities | |||
Six months to 30 Sept 2013 unaudited | Six months to 30 Sept 2012 unaudited (restated) | Year to 31 March 2013 audited (restated) | |
Profit before tax | 4,151 | 4,088 | 6,969 |
Adjustment for finance income and expenditure | 409 | 363 | 657 |
Depreciation and impairment | 768 | 575 | 1,208 |
Loss/(profit) on disposal of property, plant and equipment | 3 | (289) | (287) |
Increase in inventories | (1,562) | (331) | (1,393) |
(Increase)/decrease in receivables | (5,414) | (2,157) | 256 |
Increase/(decrease) in payables | 2,756 | (1,384) | (663) |
Own shares non cash amounts | 10 | 403 | 42 |
Retirement benefits non cash amounts | (453) | (469) | (1,027) |
Share-based payments non cash amounts | 44 | 22 | 67 |
Cash generated from operations | 712 | 821 | 5,829 |
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. | |||