Last checked at 27 Nov 2008 07:00
JAMES LATHAM PLC
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2008
Chairman's statement
I am pleased to report satisfactory results for the six months to 30 September 2008 despite increasingly difficult trading conditions. It should be noted that this period's results are being compared with an exceptional equivalent period last year when margins in particular were very strong.
Results
Revenue for the six months to 30 September 2008 was £61,883,000 compared with £59,326,000 the same period last year, a 4.3% increase. The operating profit was £3,167,000, down from £4,209,000 last year. Profit before tax was £3,208,000, down from last year's £4,578,000. Earnings per ordinary share were 7.7p (2007: 16.0p). The IFRS treatment of Industrial Building Allowances for deferred taxation purposes, as explained in note 2, has contributed to the sharp fall in earnings per share. On a like for like basis with the equivalent period earnings per share would have been 11.8p.
As at 30 September 2008 shareholder funds were £39.9m (30.9.2007: £45.5m) with cash and cash equivalents of £4.6m (30.9.2007: £7.9m).
Interim dividend
The Board has declared an interim dividend of 2.0p per Ordinary Share (2007: 2.5p), which is covered 3.9 times (2007: 6.4 times). The dividend is payable on 22 January 2009 to ordinary shareholders on the Company's Register at close of business on 5 January 2009. The ex-dividend date is 31 December 2008.
Six months trading to 30 September 2008.
Group revenue held up well in the six months and represents an increase compared with the equivalent period last year even after the contribution from the new Scottish branch, which started trading in April 2008. This is in spite of big decreases in some market sectors, notably transport and the national merchants. During the period, the Group experienced a fall in revenue in panel products where prices were significantly lower for a major item, medium density fibreboard. However, the Group increased revenue for its solid timber products.
As expected, trading margins were weaker in all areas as a result of decreasing prices and increased competition. Margins for the period were similar to those achieved in the six months to 31 March 2008 although they are below the equivalent period last year, which was exceptionally strong. These figures include non-recurring costs of £300,000 in moving from the old sites at Eastleigh and Dudley and start up costs for Scotland.
Pension scheme
The triennial actuarial valuation of the pension scheme as at 31 March 2008 shows a deficit of £5.1m, in line with the IFRS19 deficit shown in the accounts to 31 March 2008. The Trustees and the Company have agreed a recovery plan of payments over seven years. In the period to 30 September 2008, there has been an increase in the deficit, net of deferred tax gain, of £1.7m.
Current & future trading
The management accounts show a small reduction in revenue for October when compared with last year and a further slowdown in November. Reduced levels of activity in many sectors and the climate of general uncertainty that pervades the UK economy are resulting in less business. Some sectors remain busy but customers are unwilling to commit forward and are placing smaller orders. The Scottish branch is making steady progress towards profitability and the moves to bigger premises at Fareham and Dudley will take time to repay the investment made in them. Based on current trading we would expect to meet market expectations for the year but with the rapidly changing state of the UK economy it is difficult to predict far ahead.
Peter Latham
Chairman
27 November 2008
For Further Enquiries:
| James Latham Plc | |
| Peter Latham, Chairman | Tel: 01442 849 100 |
| David Dunmow, Finance Director | Tel: 01442 849 100 |
| Blue Oar Securities Plc | |
| Mike Coe, Director, Corporate Finance | Tel: 0117 933 0020 |
JAMES LATHAM PLC
CONSOLIDATED INCOME STATEMENT
For the six months to 30 September 2008
| Six months to 30 Sept 2008 unaudited | Six months to 30 Sept 2007 unaudited | Year to 31 March 2008 audited | |
| £000 | £000 | £000 | |
| Revenue | 61,883 | 59,326 | 117,188 |
| Cost of sales (including warehouse costs) | (51,634) | (48,323) | (96,635) |
| Gross profit | 10,249 | 11,003 | 20,553 |
| Selling and distribution costs | (4,870) | (4,423) | (9,160) |
| Administrative expenses | (2,256) | (2,390) | (5,013) |
| Other operating income | 44 | 19 | 232 |
| (7,082) | (6,794) | (13,941) | |
| Operating Profit | 3,167 | 4,209 | 6,612 |
| Finance income | 191 | 424 | 642 |
| Finance costs | (150) | (55) | (130) |
| Profit before tax | 3,208 | 4,578 | 7,124 |
| Tax expense | (1,728) | (1,388) | (2,068) |
| Profit after tax attributable to equity shareholders of the parent company | 1,480 | 3,190 | 5,056 |
| Earnings per ordinary share (basic) | 7.7p | 16.0p | 25.7p |
| Earnings per ordinary share (diluted) | 7.7p | 15.9p | 25.6p |
All results relate to continuing operations
JAMES LATHAM PLC
CONSOLIDATED BALANCE SHEET
As at 30 September 2008
| As at 30 Sept 2008 unaudited | As at 30 Sept 2007 unaudited | As at 31 March 2008 audited | |
| £000 | £000 | £000 | |
| Assets | |||
| Non-current assets | |||
| Goodwill | 237 | 237 | 237 |
| Intangible assets | 150 | - | 149 |
| Property, plant and equipment | 18,290 | 11,323 | 17,515 |
| Other receivables | - | 500 | 333 |
| Total non-current assets | 18,677 | 12,060 | 18,234 |
| Current assets | |||
| Inventories | 19,744 | 18,178 | 18,181 |
| Trade and other receivables | 26,659 | 31,010 | 24,826 |
| Cash and cash equivalents | 4,606 | 7,906 | 8,625 |
| Total current assets | 51,009 | 57,094 | 51,632 |
| Total assets | 69,686 | 69,154 | 69,866 |
| Current liabilities | |||
| Trade and other payables | 18,591 | 19,563 | 18,681 |
| Current portion of interest bearing loans and borrowings | 21 | 735 | 378 |
| Current tax payable | - | 1,199 | - |
| Total current liabilities | 18,612 | 21,497 | 19,059 |
| Non-current liabilities | |||
| Interest bearing loans and borrowings | 1,030 | 1,052 | 1,041 |
| Retirement and other benefit obligation | 7,447 | 240 | 5,108 |
| Other payables | 639 | 227 | 644 |
| Deferred tax liabilities | 2,035 | 683 | 1,893 |
| Total non-current liabilities | 11,151 | 2,202 | 8,686 |
| Total liabilities | 29,763 | 23,699 | 27,745 |
| Net assets | 39,923 | 45,455 | 42,121 |
| Capital and reserves | |||
| Issued capital | 5,040 | 5,040 | 5,040 |
| Share-based payment reserve | - | 75 | 95 |
| Own shares | (107) | (349) | (429) |
| Capital reserve | 3 | 3 | 3 |
| Retained earnings | 34,987 | 40,686 | 37,412 |
| Total equity | 39,923 | 45,455 | 42,121 |
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the six months to 30 September 2008
| Six months to 30 Sept 2008 unaudited | Six months to 30 Sept 2007 unaudited | Year to 31 March 2008 audited | |
| £000 | £000 | £000 | |
| Net cash flow from operating activities | |||
| Cash generated from operations | (515) | 64 | 5,163 |
| Interest paid | (92) | (19) | (70) |
| Income tax paid | (799) | (336) | (1,237) |
| Net cash (outflow)/inflow from operating activities | (1,406) | (291) | 3,856 |
| Cash flows from investing activities | |||
| Interest received and similar income | 175 | 276 | 792 |
| Purchase of property, plant and equipment | (1,058) | (313) | (6,792) |
| Purchase of intangible asset | (5) | - | (150) |
| Proceeds from sale of property, plant and equipment | - | 7 | 48 |
| Proceeds from prior year sale of property and investment in subsidiary undertaking | 500 | 1,019 | 5,438 |
| Net cash (outflow)/inflow from investing activities | (388) | 989 | (664) |
| Cash flows before financing activities | |||
| Bank loans repaid during the period | (357) | (357) | (714) |
| Finance leases repaid during the period | (11) | (13) | (23) |
| Equity dividends paid | (1,179) | (1,076) | (1,572) |
| Preference dividend paid | (39) | (39) | (79) |
| Purchase of own shares | (150) | (188) | (259) |
| Sale of own shares | 310 | 9 | - |
| Purchase of treasury shares | (799) | - | (792) |
| Net cash outflow from financing activities | (2,225) | (1,664) | (3,439) |
| Decrease in cash and cash equivalents for the period | (4,019) | (966) | (247) |
| Cash and cash equivalents at beginning of the period | 8,625 | 8,872 | 8,872 |
| Cash and cash equivalents at end of the period | 4,606 | 7,906 | 8,625 |
JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF RECOGNISED
INCOME AND EXPENSE
For the six months to 30 September 2008
| Six months to 30 Sept 2008 unaudited | Six months to 30 Sept 2007 unaudited | Year to 31 March 2008 audited | |
| £000 | £000 | £000 | |
| Profit after tax | 1,480 | 3,190 | 5,056 |
| Actuarial (losses)/gains on pension scheme | (2,677) | 2,631 | (2,024) |
| Deferred tax effect of actuarial (losses)/gains on pension scheme | 750 | (811) | 567 |
| Deferred tax on share-based payment | - | - | 12 |
| Total income and expense, attributable to equity shareholders of the parent company | (447) | 5,010 | 3,611 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months to 30 September 2008
| Six months to 30 Sept 2008 unaudited | Six months to 30 Sept 2007 unaudited | Year to 31 March 2008 audited | |
| £000 | £000 | £000 | |
| Profit attributable to shareholders | (447) | 5,010 | 3,611 |
| Dividends | (1,179) | (1,076) | (1,572) |
| (1,626) | 3,934 | 2,039 | |
| Purchase of treasury shares | (799) | - | (792) |
| Change in investment in own shares | 322 | (179) | (259) |
| Change in Share-based payment reserve | (95) | 19 | 39 |
| Movement in the period | (2,198) | 3,774 | 1,027 |
| Opening shareholders' funds | 42,121 | 41,681 | 41,094 |
| Closing shareholders' funds | 39,923 | 45,455 | 42,121 |
Notes to the preliminary financial information
1. The results presented in this report are unaudited and they have been prepared in accordance with the IFRS accounting policies set out in the Group accounts for the year ended 31 March 2008 and those expected to apply in the year ended 31 March 2009.
2. During 2007 proposed amendments to the Industrial Buildings Allowances regime were announced. Substantive enactment took place on 2 July 2008. The effect of this enactment has increased the deferred tax liability in the consolidated balance sheet of these half yearly accounts by £803,000, with a corresponding charge to the consolidated income statement.
3. The directors propose a final dividend of 2.0p per ordinary share which will absorb £385,000 (2007: 2.5p absorbing £504,000), payable on 23 January 2009 to shareholders on the Register at the close of business on 5 January 2009. The ex-dividend date is 31 December 2008.
4. This half yearly report does not constitute financial statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 March 2008 were prepared and filed with the Registrar of Companies and received an unqualified audit report and did not contain a statement under section 237 (2) and (3) of the Companies Act 1985.
5. Copies of this statement will be sent to shareholders and will also be available on written application to the Company Secretary, James Latham plc, Unit 3 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU, and on the company's website, www.lathams.co.uk.