Interim Results

24 Nov 2006 07:00

Latham(James) PLC24 November 2006 James Latham plcUnaudited Interim ResultsSix Months Ended 30 September 2006 Chairman's Statement These are the first results since the disposal of Nevill Long Ltd on 31 March2006. I am pleased to report an improvement in pre-tax profit of 5.3% for thefirst half year compared with the same period last year. The balance sheetremains strong and there has been a further reduction in the underfunding of thepension scheme since this time last year. The interim dividend has beenincreased by 25%. Results Sales from continuing activities for the 6 months to 30 September 2006 were£49,072,000 against £47,430,000 last year, a 3.5% increase. The operating profit from continuing activities rose by 40.2% to £2,606,000compared with £1,859,000 last year. Pre-tax profit at £2,905,000 was up 5.3% on last year's £2,759,000 whichincluded the profit contribution from Nevill Long Ltd. Earnings per Ordinary Share are 9.6p (2005 9.6p). Interim Dividend The Board has declared an interim dividend of 2.0p per Ordinary Share (20051.6p) which is covered 4.8 times (2005 6.0 times). It is payable on 24 January2007 to Ordinary shareholders on the Company's Register at the close of businesson 05 January 2007. The ex-dividend date is 03 January 2007. Six Months Trading to 30 September 2006 After a disappointing first six months last year, Lathams Ltd has performed verysatisfactorily in the six months to 30 September 2006. The Company, whichdistributes hardwoods, softwoods and panel products is, by design, becoming lessdependant on commodity products where prices and margins are more prone to widefluctuations. Price increases in the first half of the financial year have had a beneficialeffect on sales and particularly on margins and the increased profit at LathamsLtd has replaced the shortfall in profit due to the sale of Nevill Long Ltd on31 March 2006. Current & Future Trading Last year the Company experienced a difficult third quarter from October toDecember 2005. This year our management accounts show better trading in Octoberand so far November is looking reasonably favourable. Whilst we expect prices to remain generally firm and a continuation of somerestrictions in supply, there are signs of weakness in some countries that arecurrently not major suppliers to the UK market. We are conscious that tradingconditions in terms of supply, demand and prices can change rapidly so we arekeeping a watchful eye on the situation to try to minimise any downside affects. The Directors continue to attach great importance to the sourcing of legal andsustainable supplies of timber products for resale which we believe will standthe Company in good stead in the future. Lathams Ltd is now the only trading company of James Latham plc after thedisposal of subsidiaries. It is not the intention of the Board to downsize theCompany but rather to develop our remaining core timber products distributionbusiness as opportunities arise. We are in a strong position. Further cash ofsome £10 million is due to be received in the next 12 months from the deferredpayments for the Clapton site and the sale of Nevill Long. This sum iscurrently shown under debtors in the balance sheet. Pension Scheme The funding position of the Company's final salary pension scheme is continuallychanging in line with the rise and fall of the liabilities and assets. Aftervery substantial contributions in the recent past, the scheme actuary's estimateas at 30 June 2006 indicated that the funding position has improvedsignificantly to about 90% on an ongoing basis. Since then an additionalsubstantial contribution has been made which will have further improved theposition. Chairman Next month I retire and Peter Latham takes over as Chairman. I would like towish him every success in the role and also express my thanks to him, the otherdirectors, the staff and shareholders for their support over the past few years. Early in 2007 your Company celebrates 250 years of trading and we are proud ofthe fact that a family member has been at the helm every year since 1757. Roger LathamExecutive Chairman24 November 2006 JAMES LATHAM PLCCONSOLIDATED BALANCE SHEETAs at 30 September 2006 As at 30 Sept As at 30 Sept As at 31 March 2006 unaudited 2005 unaudited 2006 audited (as restated) (as restated) £000 £000 £000Fixed assets Intangible fixed assets 352 717 362Tangible fixed assets 11,296 11,826 11,438 11,648 12,543 11,800Current assets Stocks - goods for resale 16,956 16,924 13,746Debtors amounts falling due within one year 28,309 30,163 32,073Debtors: amounts falling due after more than one year 4,419 7,753 5,919Cash at bank and in hand 1,251 35 1,399 50,935 54,875 53,137Creditors: amounts falling due within one year (16,760) (20,087) (17,623)Net current assets 34,175 34,788 35,514 Total assets less current liabilities 45,823 47,331 47,314Creditors: amounts falling due after more than one year (1,841) (4,123) (2,208)Provisions for liabilities and charges Deferred taxation - (62) -Other provisions (249) (191) (277)Net assets excluding pension liability 43,733 42,955 44,829 Net pension liability (3,406) (9,115) (4,927)Total net assets 40,327 33,840 39,902 Represented by:Capital and reserves Called up share capital 5,040 5,040 5,040Less investment in own shares (385) (213) (251)Share-based payment reserve 43 3 23Capital reserve 3 3 3Revaluation reserve 758 758 758Profit and loss account 34,868 28,249 34,329Equity shareholders' funds 40,327 33,840 39,902 JAMES LATHAM PLCCONSOLIDATED PROFIT AND LOSS ACCOUNTFor the six months to 30 September 2006 Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 unaudited unaudited audited (as restated) (as restated) £000 £000 £000Turnover Continuing activities 49,072 47,430 90,650Discontinued activities - 12,833 24,217 49,072 60,263 114,867 Cost of sales (including warehouse costs) (40,281) (49,799) (94,937) Gross profit 8,791 10,464 19,930 Selling and distribution costs (4,049) (4,678) (9,272)Administrative expenses (2,233) (3,280) (5,892)Other operating income 97 100 202Operating profit Continuing activities 2,606 1,859 3,419Discontinued activities - 747 1,549 2,606 2,606 4,968Profit on disposal of subsidiary company 53 - 6,229Loss on disposal of fixed asset - - (8)Net interest receivable 246 153 439 Profit on ordinary activities before taxation 2,905 2,759 11,628 Tax on profit on ordinary activities (985) (810) (1,916) Profit on ordinary activities after taxation 1,920 1,949 9,712 Dividend paid - ordinary (880) (731) (2,449)Retained profit 1,040 1,218 7,263 Earnings per ordinary share (basic) 9.6p 9.6p 48.3pEarnings per ordinary share (diluted) 9.6p 9.6p 48.2p JAMES LATHAM PLCCONSOLIDATED CASH FLOW STATEMENTFor the six months to 30 September 2006 Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 unaudited unaudited audited £000 £000 £000Cash flow from operating activities (1,341) (27) 5,489 Special contribution to pension fund (4,500) - (4,000) (5,841) (27) 1,489 Returns on investments and servicing of finance Interest received and similar income 142 254 1,488Interest paid (135) (152) (380)Preference dividend paid (39) (39) (79)Net cash inflow from returns on investments and servicing (32) 63 1,029of financeTaxation (598) (2,120) (2,345) Capital expenditure Purchase of tangible fixed assets (76) (266) (417)Purchase of intangible fixed assets - - -Proceeds of sale of tangible fixed assets and property 9,281 1,500 4,809Net cash flow from capital expenditure 9,205 1,234 4,392Equity dividends paid (880) (731) (2,449) Cash inflow before financing 1,854 (1,581) 2,116 Financing Bank loans repaid during the period (1,857) (357) (714)Finance leases repaid during the period (6) (8) (25)Purchase of own shares (168) (10) (36)Proceeds of sale of own shares 29 104 92Net cash outflow from financing (2,002) (271) (683)(Decrease) increase in cash for the period (148) (1,852) 1,433 (Decrease) increase in cash for the period (148) (1,852) 1,433Movement in borrowings 1,863 271 739Movement in net debt for the year 1,715 (1,581) 2,172Net debt at 1 April 2006 (restated) (2,887) (5,059) (5,059)Net debt at 30 September 2006 (1,172) (6,640) (2,887) JAMES LATHAM PLCCONSOLIDATED STATEMENT OF TOTAL RECOGNISEDGAINS AND LOSSES For the six months to 30 September 2006 Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 unaudited unaudited audited (as restated) (as restated) £000 £000 £000Profit for the period 1,920 1,949 9,712Actual return less expected return on pension scheme assets (1,029) 2,030 3,950Experience gains and losses arising from pension schemeliabilities - - 1,028Changes in assumptions underlying the present value ofpension scheme liabilities 313 (2,349) (5,242)Movement in deferred tax relating to actuarial loss onpension scheme 215 96 79Total recognised gains and losses relating to the period 1,419 1,726 9,527 RECONCILIATION OF MOVEMENT SHAREHOLDERS' FUNDSFor the six months to 30 September 2006 Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006 unaudited unaudited audited (as restated) (as restated) £000 £000 £000Profit attributable to shareholders 1,920 1,949 9,712Dividends (880) (731) (2,449) 1,040 1,218 7,263Other recognised gains and losses relating to the period (501) (223) (185)Change in investment in own shares (134) 90 49Movement in share based payment reserve 20 3 23Movement in the period 425 1,088 7,150Opening shareholders' funds 39,902 32,752 32,752Closing shareholders' funds 40,327 33,840 39,902 JAMES LATHAM PLC Notes to the preliminary announcement 1. The results for the six months ended 30 September 2006 are unauditedand prepared on the basis of the accounting policies set out in the Groupstatutory accounts for the year ended 31 March 2006, except as modified for theintroduction of newly adopted accounting standard FRS 20 : Share-based paymentas set out in note 5. The results for the year ended 31 March 2006 (prior toadjustment for adoption of FR S20) are extracted from the statutory accounts,and which have been filed with the Registrar of Companies. 2. The directors propose an interim dividend of 2.0p per ordinary sharewhich will absorb £403,000 (2005: 1.6p absorbing £322,000), payable on 24January 2007 to shareholders on the Register at the close of business on 5January 2007. The ex-dividend date is 3 January 2007. 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 2006 the earnings per ordinary shareexcluding the sale of Nevill Long was 17.1p (restated). 5. The accounts have been prepared on the basis of the accounting policiesset out in the audited accounts for the year ended 31 March 2006 except for theimplementation of FRS 20 Share-based payment, which has been applied to allgrants of equity instruments after 7 November 2002 that were unvested at 1 April2006. Equity settled share based payments (share options) are measured at fairvalue at the date of grant. The fair value determined at the grant date isexpensed on a straight-line basis over the vesting period based on thedirectors' estimate of shares that will eventually vest. Fair value is measuredby use of the Black-Scholes model. All comparative figures have been reinstated to reflect this standard The effect of adopting this accounting standard has been as follows: Six months to Six months to Year to 30 Sept 2006 30 Sept 2005 31 March 2006Profit and loss account unaudited unaudited audited £000 £000 £000Profit after tax before adoption of new accountingstandards 1,940 1,952 9,728FRS 20 adjustment (20) (3) (16)Restated profit after tax after adoption of new accountingstandards 1,920 1,949 9,712 Balance sheet There is no impact on shareholders' funds at 30 September 2006, 30 September2005 and 31 March 2006. 6. Copies of this statement will be sent to all shareholders and will also beavailable 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