Last checked at 29 Nov 2012 07:00
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2012
Chairman's statement
I am pleased to report good results for the six months to 30 September 2012, in trading conditions which have been as difficult as at any time since early 2009.
Results
Overall the results are similar to the same period last year. Revenue for the six months to 30 September 2012 was £74,789,000 compared to £74,207,000 for the same period last year. The operating profit was £4,283,000, compared to £4,382,000 last year. Finance Income was £13,000 (2011: £26,000) and Finance Costs were £508,000 (2011: £249,000), reflecting higher assumed interest on the increased pension scheme deficit. There was a profit of £257,000 on the sale of the Ossett site, following the relocation of the site to a new depot in Leeds. Profit before tax was £4,045,000, down from last year's £4,159,000. Earnings per ordinary share were 16.4p (2011: 16.1p).
As at 30 September 2012 shareholder funds had increased to £47.2m (30.9.2011: £44.7m) with cash and cash equivalents of £5.2m (2011: £3.9m).
Interim dividend
The Board has declared an interim dividend of 3.1p per Ordinary Share (2011: 3.0p), which is covered 5.3 times (2011: 5.4 times). The dividend is payable on 23 January 2013 to ordinary shareholders on the Company's Register at close of business on 4 January 2013. The ex-dividend date will be 2 January 2013.
Six months trading to 30 September 2012.
In difficult trading conditions, group revenue has grown by £582,000 helped by late orders for the Olympic venues. Both prices and volumes remained at similar levels to the previous six months although the summer months were quieter than we have seen in recent years. Panel products showed good growth, although trade in timber products declined, with weaknesses and bad debts in the joinery sector.
Trading margins for the six months to 30 September 2012, whilst still under pressure, have slowly improved over the last year. Overheads have been well controlled and the move of our largest depot from Ossett to Leeds was achieved with little impact on day to day trading. Cash balances at the end of September 2012 were £5.2m. We continue to take advantage of cash settlement discounts from suppliers where this represents a good return on our cash.
Pension scheme
The IAS19 valuation shows that the scheme deficit has increased to £14.9m from £12.3m in March. This is mainly because the reduction in AA grade bond yields has increased the present value of pension scheme liabilities. This measure is very volatile. The trustees and the company have agreed a recovery plan to pay off the actuarial deficit over ten years.
Current & 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 are seeing insurance cover withdrawn or reduced on a number of customers. Trading levels have been exceptionally volatile this year and business confidence is very fragile. This makes it very difficult to predict far into the future.
Peter Latham
Chairman
29 November 2012
JAMES LATHAM PLC | |||
CONSOLIDATED BALANCE SHEET | |||
At 30 September 2012 | |||
As at 30 Sept. 2012 unaudited | As at 30 Sept. 2011 unaudited | As at 31 March 2012 audited | |
£000 | £000 | £000 | |
ASSETS | |||
Non-current assets | |||
Goodwill | 237 | 237 | 237 |
Intangible assets | 120 | 127 | 123 |
Property, plant and equipment | 22,662 | 21,588 | 22,673 |
Deferred tax asset | 420 | - | - |
Total non-current assets | 23,439 | 21,952 | 23,033 |
Current assets | |||
Inventories | 25,160 | 25,399 | 24,829 |
Trade and other receivables | 31,290 | 32,212 | 29,133 |
Cash and cash equivalents | 5,171 | 3,881 | 7,004 |
Non-current assets held for sale | - | - | 758 |
Total current assets | 61,621 | 61,492 | 61,724 |
Total assets | 85,060 | 83,444 | 84,757 |
Current liabilities | |||
Trade and other payables | 18,851 | 20,094 | 20,207 |
Current portion of interest bearing loans and borrowings | 207 | 340 | 1,161 |
Current tax payable | 911 | 987 | 760 |
Total current liabilities | 19,969 | 21,421 | 22,128 |
Non-current liabilities | |||
Interest bearing loans and borrowings | 2,308 | 3,347 | 2,403 |
Retirement and other benefit obligation | 14,924 | 12,479 | 12,316 |
Other payables | 613 | 676 | 641 |
Deferred tax liabilities | - | 819 | 345 |
Total non-current liabilities | 17,845 | 17,321 | 15,705 |
Total liabilities | 37,814 | 38,742 | 37,833 |
Net assets | 47,246 | 44,702 | 46,924 |
Capital and reserves | |||
Issued capital | 5,040 | 5,040 | 5,040 |
Share-based payment reserve | 84 | 111 | 144 |
Own shares | (256) | (359) | (356) |
Capital reserve | 3 | 3 | 3 |
Retained earnings | 42,375 | 39,907 | 42,093 |
Total equity attributable to equity shareholders of the parent company | 47,246 | 44,702 | 46,924 |
JAMES LATHAM PLC | |||
CONSOLIDATED INCOME STATEMENT | |||
For the six months to 30 September 2012 | |||
Six months to 30 Sept. 2012 unaudited | Six months to 30 Sept. 2011 unaudited | Year to 31 March 2012 audited | |
£000 | £000 | £000 | |
Revenue | 74,789 | 74,207 | 143,645 |
Cost of sales (including warehouse costs) | (61,689) | (61,091) | (118,564) |
Gross profit | 13,100 | 13,116 | 25,081 |
Selling and distribution costs | (6,081) | (5,872) | (11,687) |
Administrative expenses | (2,741) | (2,892) | (5,702) |
Other operating income | 5 | 30 | 31 |
(8,817) | (8,734) | (17,358) | |
Operating profit | 4,283 | 4,382 | 7,723 |
Profit on disposal of property, plant and equipment | 257 | - | - |
Finance income | 13 | 26 | 43 |
Finance costs | (508) | (249) | (580) |
Profit before tax | 4,045 | 4,159 | 7,186 |
Tax expense | (891) | (1,086) | (1,116) |
Profit after tax attributable to owners of the parent company | 3,154 | 3,073 | 6,070 |
Earnings per ordinary share (basic) | 16.4p | 16.1p | 31.9p |
Earnings per ordinary share (diluted) | 16.3p | 15.9p | 31.4p |
All results relate to continuing operations. |
JAMES LATHAM PLC | |||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||
For the six months to 30 September 2012 | |||
Six months to 30 Sept. 2012 unaudited | Six months to 30 Sept. 2011 unaudited | Year to 31 March 2012 audited | |
£000 | £000 | £000 | |
Profit after tax | 3,154 | 3,073 | 6,070 |
Other Comprehensive income | |||
Actuarial losses on defined benefit pension scheme | (2,738) | (4,171) | (4,304) |
Deferred tax relating to components of other comprehensive income | 765 | 1,081 | 973 |
Other comprehensive income for the period, net of tax | (1,973) | (3,090) | (3,331) |
Total comprehensive income, attributable to owners of the parent company | 1,181 | (17) | 2,739 |
JAMES LATHAM PLC | |||
CONSOLIDATED CASH FLOW STATEMENT | |||
For the six months to 30 September 2012 | |||
Six months to 30 Sept 2012 unaudited | Six months to 30 Sept 2011 unaudited | Year to 31 March 2012 audited | |
£000 | £000 | £000 | |
Net cash flow from operating activities | |||
Cash generated from operations | 1,249 | 150 | 7,039 |
Interest paid | (469) | (210) | (48) |
Income tax paid | (740) | (1,115) | (1,954) |
Net cash inflow/(outflow) from operating activities | 40 | (1,175) | 5,037 |
Cash flows from investing activities | |||
Interest received and similar income | 13 | 15 | 50 |
Purchase of property, plant and equipment | (564) | (3,560) | (5,922) |
Proceeds from sale of property, plant and equipment | 1,050 | 9 | 25 |
Net cash inflow/(outflow) from investing activities | 499 | (3,536) | (5,847) |
Cash flows before financing activities | |||
Finance leases repaid | - | (11) | (11) |
Borrowings repaid during the period | (1,049) | - | (168) |
Borrowings received during the period | - | 2,700 | 2,700 |
Equity dividends paid | (1,284) | (1,171) | (1,741) |
Preference dividend paid | (39) | (39) | (79) |
Net cash (outflow)/inflow from financing activities | (2,372) | 1,479 | 701 |
Decrease in cash and cash equivalents for the period | (1,833) | (3,232) | (109) |
Cash and cash equivalents at beginning of the period | 7,004 | 7,113 | 7,113 |
Cash and cash equivalents at end of the period | 5,171 | 3,881 | 7,004 |
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 2011 | 5,040 | 79 | (401) | 3 | 41,095 | 45,816 |
Profit for the year | - | - | - | - | 6,070 | 6,070 |
Other comprehensive income: | ||||||
Actuarial loss on defined pension scheme | - | - | - | - | (4,304) | (4,304) |
Deferred tax relating to components of other comprehensive income | - | - | - | - | 973 | 973 |
Total comprehensive income for the year | - | - | - | - | 2,739 | 2,739 |
Transaction with owners: | ||||||
Dividends | - | - | - | - | (1,741) | (1,741) |
Change in investment in ESOP shares | - | - | 45 | - | - | 45 |
Share-based payment expense | - | 65 | - | - | - | 65 |
Total transactions with owners | - | 65 | 45 | - | (1,741) | (1,631) |
Balance at 31 March 2012 | 5,040 | 144 | (356) | 3 | 42,093 | 46,924 |
Profit for the period | - | - | - | - | 3,154 | 3,154 |
Other comprehensive income: | ||||||
Actuarial loss on defined benefit pension scheme | - | - | - | - | (2,738) | (2,738) |
Deferred tax relating to components of other comprehensive income | - | - | - | - | 765 | 765 |
Total comprehensive income for the period | - | - | - | - | 1,181 | 1,181 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (1,284) | (1,284) |
Transfer of treasury shares | - | - | (562) | - | 562 | - |
Conversions of ESOP shares | - | - | 259 | - | (259) | - |
Exercise of options | - | (82) | - | - | 82 | - |
Change in investment in ESOP shares | - | - | 403 | - | - | 403 |
Share-based payment expense | - | 22 | - | - | - | 22 |
Total transactions with owners | - | (60) | 100 | - | (899) | (859) |
Balance at 30 September 2012 | 5,040 | 84 | (256) | 3 | 42,375 | 47,246 |
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 ended 31 March 2013 and on the basis of the accounting policies to be used in those financial statements. The figures for the year ended 31 March 2012 are extracted from the statutory accounts of the group for that period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2. The directors propose an interim dividend of 3.1p per ordinary share which will absorb £600,000 (2012: 3.0p absorbing £571,000), payable on 23 January 2013 to shareholders on the Register at the close of business on 4 January 2013. The ex-dividend date is 2 January 2013. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2012 were prepared and 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 an 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 auditors. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 2012 unaudited | Six months to 30 Sept 2011 unaudited | Year to 31 March 2012 audited | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
£000 | £000 | £000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net profit attributable to ordinary shareholders | 3,154 | 3,073 | 6,070 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Number '000 | Number '000 | Number '000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average share capital | 19,207 | 19,038 | 19,044 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Add: diluted effect of share capital options issued | 111 | 270 | 268 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average share capital for diluted earnings per ordinary share calculation | 19,318 | 19,308 | 19,312 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
5. Net cash flow from operating activities
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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, HP2 7QU, or by email to plc@lathams.co.uk | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||