Source - LSE Regulatory
RNS Number : 4939T
Latham(James) PLC
25 November 2021
 

James Latham plc

 ("James Latham" or the "Company")

 

HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2021

 

Chairman's statement

 

Unaudited results for the six months trading to 30 September 2021

 

Revenue for the six months ended 30 September 2021 was £193.9m, up 81.2% on £107.0m for the same period last year. Revenue in the six months to 30 September 2020 was significantly impacted by the first lockdown. Cost prices on both timber and panels have risen significantly since the start of the financial year, with average cost prices up over 25%. We have had strong volume growth in the first quarter of the financial year, although these volumes returned to normal levels in the second quarter, and overall volumes are 4.9% higher than in the six months to 31 March 2021. All sites are still operating with some COVID restrictions and I am very pleased with the way that we have grown revenues and maintained a safe environment for our staff to work in.

 

Gross profit percentage, which includes warehouse costs, for the six month period ended 30 September 2021 was 26.4% compared with 16.9% in the comparative six months. This six month period has been very turbulent with significant increases in the market prices for our products and well documented problems in the global supply chain leading to difficulties in obtaining regular supplies of inventory. We anticipated this issue and made sure that sufficient contracts were placed to ensure that our customers were not left short of stock. These significant increases in market prices did lead to a short-term improvement in margins as we worked through inventory purchased at competitive prices.

 

Overheads have been well controlled during the six months, although they are starting to increase with pressure on transport costs in particular.

 

Operating profit was £34.1m, up £27.6m on the £6.5m profit for the same period last year. Profit before tax was £34.0m compared with £6.3m for the same period last year. The tax charge of £7.5m represents an effective rate of 21.9%, which includes an increased charge for deferred taxation following the announcement of a future increase in corporation tax to 25%. Earnings per ordinary share were 133.5p compared with 25.6 p for the same period last year.

 

As at 30 September 2021 net assets are £146.4m (2020: £109.1m). Inventory has increased significantly, up to £69.1m from £41.3m. Apart from the increases due to the higher cost of our products, the supply chain has become extended leading to increased stocks on water from £7m to nearly £20m, as vessels are delayed both at the port of origin and the destination port. Trade and other receivables have increased by £23.65m to £68.4m due directly to the increases in revenues, but continue to show good debtor day figures, with bad debts remaining at a low figure.  Cash and cash equivalents of £24.5m (2020: £26.1m) have been important to allow us to increase our investment in working capital especially the inventory levels. We continue to take advantage of additional early settlement discount opportunities with our suppliers.

 

This six months has tested the strength of our business model and our impressive results reflect the hard work of all parts of the Company, but also are a reflection of the unprecedented market conditions of the first six months which are unlikely to be repeated.

 

The calculation of the pension deficit remains very sensitive to changes in assumptions, and the pension deficit under IAS19 is calculated as decreasing from £2.5m at 31 March 2021 to just £12,000 at 30 September 2021.  This is largely due to a recovery in the plan asset valuations although the discount rate has slightly reduced.

 

Interim dividend

 

The Board has declared an increased interim dividend of 6.5p per Ordinary Share (2020: 5.7p).  The dividend is payable on 21 January 2022 to ordinary shareholders on the Company's Register at close of business on 17 December 2021.  The ex-dividend date will be 16 December 2021.

 

 

Current and future trading

 

The second half of 2021/22 has started with slightly weaker volumes compared with the exceptional six months to 30 September 2021, and margins are returning to more normal levels. We have seen a reduction in prices of some commodity products but most products are seeing prices remaining firm. The challenges persist in our supply chain, with shipment delays, congestion at the ports and container prices at all time high levels. Inventory levels have remained high to ensure we can meet our customers' expectations. The issues with the supply chain could persist throughout 2022. It is difficult to predict when this may return to normal but when it does, this will significantly reduce the cost price of imported commodity products. There will be continued inflationary pressure on our overheads for the foreseeable future.

 

Some of our customers are a bit quieter, which is in part due to projects being delayed due to supply issues with non-timber products but overall we remain confident that we will have a good end to our financial year despite the challenges ahead of us. 

 

We are pleased that our acquisition of IJK Timber Group in Northern Ireland has completed successfully post period end and the integration into the Latham Group is proceeding according to plan. The investment in the large racking project at our Thurrock facility is now complete, and we have invested in state of the art machinery at Dresser Mouldings to improve the efficiency of the production process.

 

 

 

Nick Latham

Chairman

24 November 2021

 

 

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. 

For further information please visit www.lathams.co.uk or contact:

 

James Latham plc

Tel: 01442 849 100

Nick Latham, Chairman


David Dunmow, Finance Director






SP Angel Corporate Finance LLP


Matthew Johnson / Charlie Bouverat (Corporate Finance)

Tel: 0203 470 0470

Rob Rees (Corporate Broking)


 

 



 

JAMES LATHAM PLC




CONSOLIDATED INCOME STATEMENT








For the six months to 30 September 2021









Six months to 30 Sept. 2021 unaudited

Six months to 30 Sept. 2020 unaudited

Year to                31 March 2021 audited






£000

£000

£000





Revenue

193,937

107,034

250,162





Cost of sales (including warehouse costs)

(142,822)

(88,985)

(205,060)





Gross profit

51,115

18,049

45,102





Selling and distribution costs

(11,058)

(7,449)

(17,464)

Administrative expenses

(5,924)

(4,056)

(8,598)





Operating profit

34,133

6,544

19,040





Finance income

10

5

11

Finance costs

(112)

(236)

(453)





Profit before tax

34,031

6,313

18,598





Tax expense

(7,463)

(1,215)

(3,616)





Profit after tax attributable to owners of the parent company

26,568

5,098

14,982





Earnings per ordinary share (basic)

133.5p

25.6p

75.4p





Earnings per ordinary share (diluted)

133.0p

25.6p

75.2p









All results relate to continuing operations.




 



 

JAMES LATHAM PLC








CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME








For the six months to 30 September 2021









Six months to 30 Sept. 2021 unaudited

Six months to 30 Sept. 2020 unaudited

Year to                31 March 2021 audited






£000

£000

£000





Profit after tax

26,568

5,098

14,982

Other Comprehensive income




Actuarial gains on defined benefit pension scheme

1,047

1,923

6,717

Deferred tax relating to components of other comprehensive income

(199)

(365)

(1,276)

Foreign translation credit/(charge)

8

23

(58)

Other comprehensive income for the period, net of tax

856

1,581

5,383

Total comprehensive income, attributable to owners of the parent company

27,424

6,679

20,365

 



 

JAMES LATHAM PLC




CONSOLIDATED BALANCE SHEET








At 30 September 2021









As at 30 Sept. 2021 unaudited

As at 30 Sept. 2020 unaudited

As at 31 March 2021 audited






£000

£000

£000

ASSETS




Non-current assets




Goodwill

872

872

872

Intangible assets

1,570

1,738

1,655

Property, plant and equipment

36,153

35,477

35,342

Right-of-use-asset

3,789

4,629

4,064

Deferred tax asset

87

1,694

534

Total non-current assets

42,471

44,410

42,467





Current assets




Inventories

69,117

41,360

48,262

Trade and other receivables

68,414

44,764

48,003

Cash and cash equivalents

24,476

26,159

28,618

Total current assets

162,007

112,283

124,883









Total assets

204,478

156,693

167,350





Current liabilities




Lease liabilities

1,243

1,242

1,123

Trade and other payables

45,972

30,122

34,761

Current tax payable

3,220

-

-

Total current liabilities

50,435

31,364

35,884





Non-current liabilities




Interest bearing loans and borrowings

592

592

592

Lease liabilities

2,764

3,579

3,137

Retirement and other benefit obligation

12

8,774

2,561

Other payables

-

-

21

Deferred tax liabilities

4,273

3,264

3,339

Total non-current liabilities

7,641

16,209

9,650









Total liabilities

58,076

47,573

45,534









Net assets

146,402

109,120

121,816





Capital and reserves




Issued capital

5,040

5,040

5,040

Share-based payment reserve

268

96

167

Own shares

(326)

(542)

(471)

Capital reserve

398

398

398

Retained earnings

141,022

104,128

116,682





Total equity attributable to shareholders of the parent company

146,402

109,120

121,816



 

JAMES LATHAM PLC








CONSOLIDATED CASH FLOW STATEMENT








For the six months to 30 September 2021









Six months to 30 Sept 2021 unaudited

Six months to 30 Sept 2020 unaudited

Year to                31 March 2021 audited






£000

£000

£000

Net cash flow from operating activities




Cash generated from operations

4,620

13,565

21,374

Interest paid

(27)

(24)

(51)

Income tax paid

(2,850)

(950)

(3,191)

Net cash inflow from operating activities

1,743

12,591

18,132





Cash flows from investing activities




Interest received and similar income

10

5

11

Purchase of property, plant and equipment

(2,231)

(785)

(1,968)

Proceeds from sale of property, plant and equipment

42

6

8

Net cash outflow from investing activities

(2,179)

(774)

(1,949)





Cash flows before financing activities

Lease liability payments

(622)

(621)

(1,394)

Equity dividends paid

(3,084)

(1,987)

(3,121)

Cash outflow from financing activities

(3,706)

(2,608)

(4,515)





(Decrease)/increase in cash and cash equivalents for the period

(4,142)

9,209

11,668





Cash and cash equivalents at beginning of the period

28,618

16,950

16,950





Cash and cash equivalents at end of the period

24,476

26,159

28,618

 

 



 

JAMES LATHAM PLC

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

                                                                                      Attributable to owners of the parent company


Issued capital £000

Share-based payment reserve £000

Own shares £000

Capital reserve £000

Retained earnings £000

Total equity £000








As at 1 April 2020 (audited)

5,040

25

(619)

398

99,433

104,277

Profit for the period

-

-

-

-

5,098

5,098

Other comprehensive income:







Actuarial gain on defined benefit pension scheme

-

-

-

-

1,923

1,923

Deferred tax relating to components of other comprehensive income

-

-

-

-

(365)

(365)

Foreign translation charge

-

-

-

-

23

23

Total comprehensive income for the period

-

-

-

-

6,679

6,679

Transaction with owners:







Dividends

-

-

-

-

(1,987)

(1,987)

Exercise of options

-

(8)

-

-

3

(5)

Change in investment in ESOP shares

-

-

77

-

-

77

Share-based payment expense

-

79

-

-

-

79

Total transactions with owners

-

71

77

-

(1,984)

(1,836)

Balance at 30 September 2020 (unaudited)

5,040

96

(542)

398

104,128

109,120

Profit for the period

-

-

-

-

9,884

9,884

Other comprehensive income:







Actuarial gain on defined benefit pension scheme

-

-

-

-

4,794

4,794

Deferred tax relating to components of other comprehensive income

-

-

-

-

(911)

(911)

Foreign translation charge

-

-

-

-

(81)

(81)

Total comprehensive income for the period

-

-

-

-

13,686

13,686

Transactions with owners:







Dividends

-

-

-

-

(1,134)

(1,134)

Exercise of options

-

(12)

148

-

2

138

Deferred tax on share options

-

6

-

-

-

6

Change in investment in ESOP shares

-

-

(77)

-

-

(77)

Share-based payment expense

-

77

-

-

-

77

Total transactions with owners

-

71

71

-

(1,132)

(990)

Balance at 31 March 2021 (audited)

5,040

167

(471)

398

116,682

121,816

Profit for the period

-

-

-

-

26,568

26,568

Other comprehensive income:







Actuarial gain on defined benefit pension scheme

-

-

-

-

1,047

1,047

Deferred tax relating to components of other comprehensive income

-

-

-

-

(199)

(199)

Foreign translation charge

-

-

-

-

8

8

Total comprehensive income for the period

-

-

-

-

27,424

27,424

Transactions with owners:







Dividends

-

-

-

-

(3,084)

(3,084)

Exercise of options

-

-

(3)

-

-

(3)

Deferred tax on share options

-

25

-

-

-

25

Change in investment in ESOP shares

-

-

148

-

-

148

Share-based payment expense

-

76

-

-

-

76

Total transactions with owners

-

101

145

-

(3,084)

(2,838)

Balance at 30 September 2021 (unaudited)

5,040

268

(326)

398

141,022

146,402

 



 

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 principles of International Accounting Standards in conformity with the requirements of the Companies Act 2006 and on the basis of the accounting policies expected to be used in the financial statements for the year ending 31 March 2022. The half yearly report does not include all the disclosures that would be required for full compliance with IFRS. The figures for the year ended 31 March 2021 are extracted from the statutory accounts of the group for that period.


2. The directors propose an interim dividend of 6.5p per ordinary share which will absorb £1,293,000 (2020: 5.7p absorbing £1,133,000), payable on 21 January 2022 to shareholders on the Company's Register at the close of business on 17 December 2021. The ex-dividend date is 16 December 2021.


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 2021 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 to 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 period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.



Six months to 30 Sept 2021 unaudited

Six months to 30 Sept 2020 unaudited

Year to 31 March 2021 audited


£000

£000

£000





Net profit attributable to ordinary shareholders

26,568

5,098

14,982






Number '000

Number '000

Number '000

Weighted average share capital

19,896

19,876

19,882

Add: diluted effect of share capital options issued

79

26

31

Weighted average share capital for diluted earnings per ordinary share calculation

19,975

19,902

19,913





5. Net cash flow from operating activities



Six months to 30 Sept 2021 unaudited

Six months to 30 Sept 2020 unaudited

Year to 31 March 2021 audited


£000

£000

£000





Profit before tax

34,031

6,313

18,598

Adjustment for finance income and expenditure

102

231

442

Depreciation and amortisation

2,002

2,017

4,033

Loss/(profit) on disposal of property, plant and equipment

105

(6)

(6)

(Increase)/decrease in inventories

(20,855)

2,928

(3,974)

(Increase)/decrease in receivables

(20,585)

2,193

(878)

Increase in payables

11,264

1,062

5,779

Retirement benefits non cash amounts

(1,520)

(1,247)

(2,776)

Share-based payments non cash amounts

76

74

156

Cash generated from operations

4,620

13,565

21,374



6. Copies of this statement will be posted on our website, www.lathamtimber.co.uk/investors  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

 

 

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