27 Nov 2014 07:00
James Latham plc
("James Latham" or the "Company")
HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2014
Chairman's statement
I am pleased to report good results for the six months to 30 September 2014, in trading conditions which have continued to improve.
Results
The results are better than the same period last year. Revenue for the six months to 30 September 2014 was £89.1m, up 8.4 per cent on £82.2m for the same period last year. The operating profit was £5.4m, 18.8 per cent up on £4.6m last year. Finance Income was £21,000 (2013: £14,000) and Finance Costs were £263,000 (2013: £423,000), reflecting interest on the lower pension scheme deficit. Profit before tax was £5.2m, up 24.7 per cent on last year's £4.2m. Earnings per ordinary share were 20.5p (2013: 16.9p) an increase of 21.3 per cent.
As at 30 September 2014 shareholder funds had increased to £63.3m (2013: £51.5m) with cash and cash equivalents of £12.6m (2013: £5.7m).
Interim dividend
The Board has declared an interim dividend of 3.7p per Ordinary Share (2013: 3.4p), which is covered 5.5 times (2013: 5.0 times). The dividend is payable on 30 January 2015 to ordinary shareholders on the Company's Register at close of business on 9 January 2015. The ex-dividend date will be 8 January 2015.
Six months trading to 30 September 2014
In improving trading conditions, group revenue has grown by £6.9m, as a result of higher sales volumes. This growth was mainly in panel products, although timber also saw good improvement, with increased sales in Accoya® and WoodEx, our engineered wood sections.
Trading margins for the six months to 30 September 2014 have improved on the previous year. Overheads have been controlled, although higher selling and distribution costs reflect higher volumes handled and more sales people directed at target markets. Despite our collection of debts having improved, we saw in the first quarter of the year several unexpected bad debts which have contributed to the increase in administrative expenses. This experience was not repeated in the second quarter of the year. 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 £5.47m from £9.28m in March. The triennial actuarial valuation at 30 September 2014 is substantially complete and indications are that the deficit is reduced. This will result in lower deficit recovery payments from 1 April 2015. Both the IAS19R and triennial valuations are very sensitive to small changes in gilt and corporate bond yields.
Current and future trading
The management accounts and information show growing revenue for October and the first half of November, at continually improving margins. We are trading comfortably in line with market expectations. We are progressing with our plans to relocate our two oldest depots. Our wide range of customers is generally busier than this time last year and the Company is in a strong position to meet increasing demand.
Peter Latham
Chairman
27 November 2014.
James Latham plc | Tel: 01442 849 100 |
Peter Latham, Chairman | |
David Dunmow, Finance Director | |
Northland Capital Partners Ltd Nomad and Broker | Tel: 020 7382 1100 |
Matthew Johnson / Edward Hutton |
JAMES LATHAM PLC | |||
CONSOLIDATED BALANCE SHEET | |||
At 30 September 2014 | |||
As at 30 Sept. 2014 unaudited | As at 30 Sept. 2013 unaudited | As at 31 March 2014 audited | |
£000 | £000 | £000 | |
ASSETS | |||
Non-current assets | |||
Goodwill | 237 | 237 | 237 |
Intangible assets | 104 | 112 | 108 |
Property, plant and equipment | 22,056 | 23,238 | 22,647 |
Total non-current assets | 22,397 | 23,587 | 22,992 |
Current assets | |||
Inventories | 28,639 | 27,984 | 27,937 |
Trade and other receivables | 35,617 | 34,091 | 32,842 |
Cash and cash equivalents | 12,592 | 5,672 | 11,234 |
Total current assets | 76,848 | 67,747 | 72,013 |
Total assets | 99,245 | 91,334 | 95,005 |
Current liabilities | |||
Trade and other payables | 25,278 | 22,346 | 23,191 |
Current portion of interest bearing loans and borrowings | 242 | 234 | 238 |
Current tax payable | 1,005 | 846 | 1,017 |
Total current liabilities | 26,525 | 23,426 | 24,446 |
Non-current liabilities | |||
Interest bearing loans and borrowings | 1,768 | 2,010 | 1,890 |
Retirement and other benefit obligation | 5,473 | 13,695 | 9,267 |
Other payables | 492 | 550 | 520 |
Deferred tax liabilities | 1,649 | 125 | 774 |
Total non-current liabilities | 9,382 | 16,380 | 12,451 |
Total liabilities | 35,907 | 39,806 | 36,897 |
Net assets | 63,338 | 51,528 | 58,108 |
Capital and reserves | |||
Issued capital | 5,040 | 5,040 | 5,040 |
Share-based payment reserve | 152 | 135 | 123 |
Own shares | (226) | (208) | (175) |
Capital reserve | 3 | 3 | 3 |
Retained earnings | 58,369 | 46,558 | 53,117 |
Total equity attributable to owners of the parent company | 63,338 | 51,528 | 58,108 |
JAMES LATHAM PLC | |||
CONSOLIDATED INCOME STATEMENT | |||
For the six months to 30 September 2014 | |||
Six months to 30 Sept. 2014 unaudited | Six months to 30 Sept. 2013 unaudited | Year to 31 March 2014 audited | |
£000 | £000 | £000 | |
Revenue | 89,120 | 82,210 | 163,117 |
Cost of sales (including warehouse costs) | (73,281) | (68,273) | (134,688) |
Gross profit | 15,839 | 13,937 | 28,429 |
Selling and distribution costs | (7,031) | (6,449) | (12,941) |
Administrative expenses | (3,392) | (2,931) | (6,016) |
Exceptional adjustment to defined benefit pension cost | - | - | 1,797 |
Other operating income | 3 | 3 | 6 |
(10,420) | (9,377) | (17,154) | |
Operating profit | 5,419 | 4,560 | 11,275 |
Finance income | 21 | 14 | 27 |
Finance costs | (263) | (423) | (823) |
Profit before tax | 5,177 | 4,151 | 10,479 |
Tax expense | (1,209) | (886) | (1,888) |
Profit after tax attributable to owners of the parent company | 3,968 | 3,265 | 8,591 |
Earnings per ordinary share (basic) | 20.5p | 16.9p | 44.3p |
Earnings per ordinary share (diluted) | 20.3p | 16.7p | 43.9p |
All results relate to continuing operations. |
JAMES LATHAM PLC | |||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||
For the six months to 30 September 2014 | |||
Six months to 30 Sept. 2014 unaudited | Six months to 30 Sept. 2013 unaudited | Year to 31 March 2014 audited | |
£000 | £000 | £000 | |
Profit after tax | 3,968 | 3,265 | 8,591 |
Other Comprehensive income | |||
Actuarial gains on defined benefit pension scheme | 3,492 | 3,004 | 5,543 |
Deferred tax relating to components of other comprehensive income | (661) | (890) | (1,508) |
Other comprehensive income for the period, net of tax | 2,831 | 2,114 | 4,035 |
Total comprehensive income, attributable to owners of the parent company | 6,799 | 5,379 | 12,626 |
JAMES LATHAM PLC | |||
CONSOLIDATED CASH FLOW STATEMENT | |||
For the six months to 30 September 2014 | |||
Six months to 30 Sept 2014 unaudited | Six months to 30 Sept 2013 unaudited | Year to31 March 2014 audited | |
£000 | £000 | £000 | |
Net cash flow from operating activities | |||
Cash generated from operations | 4,211 | 712 | 8,036 |
Interest paid | (24) | (25) | (45) |
Income tax paid | (1,007) | (539) | (1,339) |
Net cash inflow from operating activities | 3,180 | 148 | 6,652 |
Cash flows from investing activities | |||
Interest received and similar income | 21 | 14 | 27 |
Purchase of property, plant and equipment | (137) | (1,041) | (1,181) |
Net cash outflow from investing activities | (116) | (1,027) | (1,154) |
Cash flows before financing activities | |||
Borrowings repaid during the period | (118) | (113) | (229) |
Equity dividends paid | (1,549) | (1,372) | (2,031) |
Preference dividend paid | (39) | (39) | (79) |
Net cash outflow from financing activities | (1,706) | (1,524) | (2,339) |
Increase/(decrease) in cash and cash equivalents for the period | 1,358 | (2,403) | 3,159 |
Cash and cash equivalents at beginning of the period | 11,234 | 8,075 | 8,075 |
Cash and cash equivalents at end of the period | 12,592 | 5,672 | 11,234 |
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 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 pension scheme | - | - | - | - | 3,004 | 3,004 |
Deferred tax relating to components of other comprehensive income | - | - | - | - | (890) | (890) |
Total comprehensive income for the year | - | - | - | - | 5,379 | 5,379 |
Transaction 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 |
Profit for the period | - | - | - | - | 5,326 | 5,326 |
Other comprehensive income: | ||||||
Actuarial gain on defined pension scheme | - | - | - | - | 2,539 | 2,539 |
Deferred tax relating to components of other comprehensive income | - | - | - | - | (618) | (618) |
Total comprehensive income for the period | - | - | - | - | 7,247 | 7,247 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (659) | (659) |
Write down on conversions of ESOP shares | - | - | 77 | - | (77) | - |
Exercise of options | - | (48) | - | - | 48 | - |
Change in investment in ESOP shares | - | - | (44) | - | - | (44) |
Share-based payment expense | - | 36 | - | - | - | 36 |
Total transactions with owners | - | (12) | 33 | - | (688) | (667) |
Balance at 31 March 2014 (audited) | 5,040 | 123 | (175) | 3 | 53,117 | 58,108 |
Profit for the period | - | - | - | - | 3,968 | 3,968 |
Other comprehensive income: | ||||||
Actuarial gain on defined benefit pension scheme | - | - | - | - | 3,492 | 3,492 |
Deferred tax relating to components of other comprehensive income | - | - | - | - | (661) | (661) |
Total comprehensive income for the period | - | - | - | - | 6,799 | 6,799 |
Transactions with owners: | ||||||
Dividends | - | - | - | - | (1,549) | (1,549) |
Write down on conversions of ESOP shares | - | - | 2 | - | (2) | - |
Exercise of options | - | (4) | - | - | 4 | - |
Change in investment in ESOP shares | - | - | (53) | - | - | (53) |
Share-based payment expense | - | 33 | - | - | - | 33 |
Total transactions with owners | - | 29 | (51) | - | (1,547) | (1,569) |
Balance at 30 September 2014 (unaudited) | 5,040 | 152 | (226) | 3 | 58,369 | 63,338 |
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 2015 and on the basis of the accounting policies to be used in those financial statements. The figures for the year ended 31 March 2014 are extracted from the statutory accounts of the group for that period. | |||
2. The directors propose an interim dividend of 3.7p per ordinary share which will absorb £770,000 (2014: 3.4p absorbing £660,000), payable on 30 January 2015 to shareholders on the Register at the close of business on 9 January 2015. The ex-dividend date is 8 January 2015. | |||
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 2014 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 2014 unaudited | Six months to 30 Sept 2013 unaudited | Year to 31 March 2014 audited | |
£000 | £000 | £000 | |
Net profit attributable to ordinary shareholders | 3,968 | 3,265 | 8,591 |
Number '000 | Number '000 | Number '000 | |
Weighted average share capital | 19,393 | 19,376 | 19,385 |
Add: diluted effect of share capital options issued | 196 | 179 | 182 |
Weighted average share capital for diluted earnings per ordinary share calculation | 19,589 | 19,555 | 19,567 |
5. Net cash flow from operating activities | |||
Six months to 30 Sept 2014 unaudited | Six months to 30 Sept 2013 unaudited | Year to 31 March 2014 audited
| |
Profit before tax | 5,177 | 4,151 | 10,479 |
Adjustment for finance income and expenditure | 242 | 409 | 796 |
Depreciation and impairment | 729 | 768 | 1,503 |
Loss on disposal of property, plant and equipment | 3 | 3 | 3 |
Increase in inventories | (702) | (1,562) | (1,715) |
Increase in receivables | (2,775) | (5,414) | (3,965) |
Increase in payables | 2,059 | 2,756 | 3,571 |
Own shares non cash amounts | 33 | 10 | (34) |
Retirement benefits non cash amounts | (502) | (453) | (2,682) |
Share-based payments non cash amounts | (53) | 44 | 80 |
Cash generated from operations | 4,211 | 712 | 8,036 |
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 | |||
Latham Timber (LTHM)