Latham Timber Regulatory News (LTHM)

24 Nov 2005 07:00

Latham(James) PLC24 November 2005 JAMES LATHAM PLC ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2005 CHAIRMAN'S STATEMENT I am pleased to report an improvement in the first half year's results; turnoverup 10.8%, pre-tax profit up 35.3%, earnings per share up 45.5%, interim dividendincreased by 6.7% and a special dividend of 7.0p. The presentation of the figures reflects the introduction of new AccountingStandards FRS17, FRS21 and FRS25, and the previous year's figures have beenrestated. Results Group turnover at £60,263,000 is 10.8% ahead of the £54,375,000 for the firstsix months last year. Gross profit and operating profit have increased by 10.0% and 7.3% respectively. Pre-tax profit is £2,762,000 against last year's £2,041,000, an increase of35.3%. The interest receivable on the deferred payment for the Clapton siteamounts to £367,500 (2004 nil) and is included in the profit. Earnings per Ordinary Share are 9.6p (2004 6.6p). Compared to the position at 30 September 2004, the balance sheet has beenstrengthened by the sale of the Clapton site. Deferred payments for the siteare included under debtors falling due within one year and after more than oneyear. Six Months Trading to 30 September 2005 Lathams Ltd, the timber and panel products distribution company, encounteredmore difficult trading conditions compared to last year. Although sales were7.3% up, the gross margin percentage fell and with increased overheads, the netprofit was lower. Last year the margin benefited from exceptional, albeit shortlived, price increases. Nevill Long Ltd, trading in ceiling, drylining and partitioning systems, hasproduced excellent results. It has gained market share and improved itsmargins. Current Trading Lathams Ltd is experiencing a reduction in demand from some customers who areless busy than earlier in the year. This is having the effect of increasingcompetition for the available business. Nevill Long Ltd continues its run of strong sales at good margins. Full Year As previously stated, with the more difficult market conditions beingencountered by Lathams Ltd, we expect trading in the second half year to be lessbuoyant than in the first half. We believe, however, that trading will meetmarket expectations for the full year. Interim Dividend The Board has declared an interim dividend of 1.6p per Ordinary Share (2004:1.5p), which is covered 6.0 times (2004: 5.1 times), and is payable on 25January 2006 to ordinary shareholders on the Company's Register at the close ofbusiness on 6 January 2006. The ex-dividend date is 4 January 2006. Proceeds of the sale of the Clapton site The Board has undertaken a review of the uses for the proceeds from the sale ofthe Clapton site, and whilst still looking at opportunities to grow thebusiness, has decided to pay a special dividend to ordinary shareholders and tomake an immediate payment into the Company's final salary pension scheme. Special Dividend The Board has declared a special dividend of 7.0p per Ordinary Share which ispayable on 25 January 2006 to ordinary shareholders on the Company's Register atthe close of business on 6 January 2006. The ex-dividend date is 4 January2006. Added to the interim dividend, this makes a total dividend of 8.6p perOrdinary Share payable. Pension Scheme The recent triennial actuarial valuation of the final salary pension schemeshows a substantial deficit of £10.5 million, on an ongoing basis, havingadjusted the mortality assumption to the best available information and with thecurrent split of assets in gilts and equities to match liabilities. With the approval of the Trustees of the scheme, the Board has decided that theCompany will contribute £9 million in the short term, which will reduce theongoing monthly contributions to a manageable level and will reduce the amountof the risk based levy payable annually to the Pension Protection Fund. The £9 million will be financed by £3 million from the deferred payment for theClapton site to be received in December 2005, from bank loans of approximately£5.5 million and the balance from the Company's resources. Further deferredpayments for the Clapton site due in December 2006 and December 2007 will beused to repay the bank loans. Roger LathamExecutive Chairman24 November 2005 CONSOLIDATED BALANCE SHEET As at 30 September 2005 As at 30 Sept As at 30 Sept 2004 As at 31 March 2005 unaudited unaudited 2005 audited (as restated) (as restated) £000 £000 £000Fixed assets Intangible fixed assets 717 764 740Tangible fixed assets 11,826 13,709 11,823 12,543 14,473 12,563Current assets Stocks - goods for resale 16,924 17,631 18,645Debtors amounts falling due within one year 30,163 24,813 29,001Debtors: amounts falling due after more than one year 7,753 - 7,753Cash at bank and in hand 35 587 148 54,875 43,031 55,547 Creditors: amounts falling due within one year (20,087) (23,616) (21,628)Net current assets 34,788 19,415 33,919 Total assets less current liabilities 47,331 33,888 46,482Creditors: amounts falling due after more than one year (4,123) (4,281) (4,497)Provisions for liabilities and charges Deferred taxation (62) (177) (62)Other provisions (191) (355) (339)Net assets excluding pension liability 42,955 29,075 41,584 Net pension liability (9,115) (10,070) (8,832)Total net assets 33,840 19,005 32,752 Represented by:Capital and reserves Called up share capital 5,040 5,040 5,040Less investment in own shares (213) (5) (300)Capital reserve 3 3 3Revaluation reserve 758 149 758Profit and loss account 28,252 13,818 27,251Shareholders' funds 33,840 19,005 32,752 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months to 30 September 2005 Six months to 30 Six months to 30 Year to 31 Sept 2005 Sept 2004 March 2005 unaudited unaudited audited (as restated) (as restated) £000 £000 £000Turnover 60,263 54,375 108,240 Cost of sales (including warehouse costs) (49,799) (44,865) (89,811)Gross profit 10,464 9,510 18,429 Selling and distribution costs (4,678) (3,956) (8,322)Administrative expenses (3,277) (3,214) (6,141)Other operating income 100 91 182 (7,855) (7,079) (14,281)Operating Profit 2,609 2,431 4,148 Profit on disposal of fixed asset - - 17,806Net interest 153 (390) (360)Profit on ordinary activities before taxation 2,762 2,041 21,594Tax on profit on ordinary activities (810) (624) (4,282)Profit on ordinary activities after taxation 1,952 1,417 17,312 Dividends paid - ordinary (731) (630) (2,426)Retained profit 1,221 787 14,886 Earnings per ordinary share (basic) 9.6p 6.6p 85.7pEarnings per ordinary share (diluted) 9.6p 6.6p 85.7p CONSOLIDATED CASH FLOW STATEMENT For the six months to 30 September 2005 Six months to 30 Six months to Year to 31 Sept 2005 30 Sept 2004 March 2005 unaudited unaudited audited (as restated) (as restated) £000 £000 £000Cash flow from operating activities (27) (628) (336) Returns on investments and servicing of finance Interest received and similar income 254 183 493Interest paid (152) (170) (311)Preference dividend paid (39) (39) (79)Net cash inflow from returns on investments and servicing of 63 (26) 103financeTaxation (2,120) (316) (2,020) Capital expenditure Purchase of tangible fixed assets (266) (892) (1,235)Purchase of intangible fixed assets - (395) (395)Proceeds of sale of tangible fixed assets and property 1,500 - 6,613Net cash flow from capital expenditure 1,234 (1,287) 4,983Equity dividends paid (731) (619) (2,416) Cash inflow before financing (1,581) (2,876) 314Financing Bank loans repaid during the period (357) (357) (714) Bank loans obtained during the period - 1,500 1,500 Finance lease repaid during the period (8) (1) (26) Purchase of own shares (10) (4) (312) Proceeds of sale of own shares 104 199 211 Net cash (outflow) inflow from financing (271) 1,337 659 (Decrease) increase in cash for the period (1,852) (1,539) 973 Six months to 30 Six months to Year to 31 Sept 2005 30 Sept 2004 March 2005 unaudited unaudited audited (as restated) (as restated) £000 £000 £000 (Decrease) increase in cash for the period (1,852) (1,539) 973 Finance leases acquired during the period - (66) (66) Cash outflow (inflow) from decrease in debt and lease 271 (1,142) (760)financing Movement in net debt for the year (1,581) (2,747) 147 Net debt at 1 April 2005 (restated) (5,059) (5,206) (5,206) Net debt at 30 September 2005 (6,640) (7,953) (5,059) CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the six months to 30 September 2005 Six months to 30 Six months to Year to 31 Sept 2005 unaudited 30 Sept 2004 March 2005 unaudited audited (as restated) (as restated) £000 £000 £000Profit for the period 1,952 1,417 17,312Actual return less expected return on pension scheme assets 2,030 219 439Experience gains and losses arising from pension scheme - 37 75liabilities Changes in assumptions underlying the present value of pension (2,349) (338) (676)scheme liabilities Movement in deferred tax relating to actuarial 96 25 48loss on pension schemeTotal recognised gains and losses relating to the period 1,729 1,360 17,198Prior year adjustment - FRS17 "Retirement benefits" (9,720) - -Total gains and losses recognised since the last annual report (7,991) 1,360 17,198 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS For the six months to 30 September 2005 Six months to 30 Six months to Year to 31 Sept 2005 unaudited 30 Sept 2004 March 2005 unaudited audited (as restated) (as restated) £000 £000 £000Profit attributable to shareholders 1,952 1,417 17,312Dividends (731) (630) (2,426) 1,221 787 14,886Other recognised gains and losses relating to the period (223) (57) (114)Change in investment in own shares 90 200 (95)Movement in the period 1,088 930 14,677Opening shareholders' funds - as previously stated 42,723 27,927 27,927 Change in accounting policies:FRS17 - recognition of pension liability, net of SSAP 24 (9,720) (9,495) (9,495)adjustmentFRS21 - accounting for dividends on a "declared" basis 736 630 630FRS25 - reclassification of preference shares as a liability (987) (987) (987)Opening shareholders' funds - restated 32,752 18,075 18,075Closing shareholders' funds 33,840 19,005 32,752 NOTES: 1. The results for the six months ended 30 September 2005 and 30 September 2004 are unaudited and prepared on the basis of the accounting policies set out in the Group statutory accounts for the year ended 31 March 2005, except as modified for the introduction of newly adopted accounting standards as set out in note 5. The results for the year ended 31 March 2005 (prior to adjustment for adoption of FRS17, FRS21 and FRS25) are extracted from the statutory accounts, on which the auditors issued an unqualified report, andwhich have been filed with the Registrar of Companies. 2. The directors declare an interim dividend of 1.6p per ordinary share,which will absorb £322,560 (2004: 1.5p absorbing £302,400), payable on 25January 2006 to shareholders on the Register at the close of business on 6January 2006. The ex-dividend date is 4 January 2006. In addition, the directorsdeclare a special dividend of 7p per ordinary share, which will absorb£1,411,000 payable on 25 January 2006 to shareholders on the Register at theclose of business on 6 January 2006. The ex-dividend date is 4 January 2006. 3. This statement does not comprise full accounts within the meaning ofSection 240 of the Companies Act 1985. 4. For the year ended 31 March 2005. the earnings per ordinary shareexcluding the sale of Clapton was 13.4p. (restated). 5. The accounts have been prepared using new accounting standards asdetailed below: a) FRS17 "Retirement benefits": This requires that the group pensionliability be recognised in the financial statements. b) FRS21 "Events after the balance sheet date": This requires thatproposed dividends are not accrued for in accounts, but are recognised uponproposal. Final dividends at 31 March and interim dividends at 30 September aretherefore not included in the above figures. c) FRS25 "Financial instruments": This requires that preference shares aredisclosed as part of creditors: amounts falling due after more than one year,rather than as share capital. All comparative figures have been restated to reflect these standards. The effect of adopting these accounting standards have been as follows: Six months to 30 Six months to Year to 31 Sept 2005 30 Sept 2004 March 2005 unaudited unaudited audited (as restated) (as restated)Profit and loss account £000 £000 £000Profit before adoption of new accounting standards 2,019 1,221 14,891Decrease in pension costs 213 204 551Increase in interest payable (299) (355) (710)Change in deferred taxation 26 45 48Accounting for dividends on a "declared" basis (738) (328) 106Restated profit after adoption of new accounting standards 1,221 787 14,886 Statement of total recognised gains and lossesRecognition of change in pension liability during the period (223) (57) (114)Recognition of pension fund liability at 1 April 2005 (10,100) - -Change in other gains and losses after adopting new accounting (10,323) (57) (144)standards Balance sheetNet assets before adopting new standards 44,830 29,348 42,723Recognition of pension liability, net of SSAP24 adjustment (10,383) (9,481) (10,100)Deferred tax on SSAP24 adjustment 380 (177) 380Accounting for dividends on a "declared" basis - 302 736Preference shares disclosed as a liability (987) (987) (987)Net assets as restated 33,840 19,005 32,752 6. Copies of this statement will be sent to all shareholders and will alsobe available on written applications to the Company Secretary, James Latham plc,Unit 3 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU. This information is provided by RNS The company news service from the London Stock Exchange