TIDMLTHM
RNS Number : 2949E
Latham(James) PLC
29 June 2023
James Latham plc
("James Latham" or "the Company")
Preliminary Results
Chairman's statement
I am very pleased to report excellent trading results for the
financial year to 31 March 2023. These results follow the
unprecedented trading results for the year to 31 March 2022 where
we benefitted from our strong relationships with our suppliers and
our balance sheet strength, in navigating the global supply chain
issues and significant increases in the market prices for our
products.
The financial year to 31 March 2023 saw a gradual return to more
normal market conditions, with supply chains becoming easier and
cost prices of our products stabilising. New challenges arose with
inflation increasing rapidly throughout much of the year, with
increased energy costs, due in part to the conflict in Ukraine. The
impact of inflation has been felt throughout the economy with a
reduction in both confidence levels and macroeconomic growth
forecasts. Our markets though remained resilient to these
challenges.
Revenue for the financial year to 31 March 2023 was GBP408.4m,
up 6.0% on last year's GBP385.4m. Like for like volumes taking into
account working days and acquisitions, increased by 5.3%, with the
growth mainly on delivered business from our own warehouses. The
cost price of our products is on average 6.5% higher (2022: 36.2%
higher) than at the start of the financial year.
Gross profit percentage for the financial year to 31 March 2023
was 19.6% compared with 23.8% in the previous financial year, as
the margins return to more normal levels. This figure includes
warehouse costs and seven depots now run extended shift systems to
improve our service levels.
Profit before tax is GBP44.5m, compared with last year's
GBP57.9m. Profit after tax for the year is GBP35.9m compared with
last year's GBP45.6m. Earnings per ordinary share is 179.5p
compared with last year's 229.3p.
As at 31 March 2023 net assets have increased to GBP195.9m
(2022: GBP164.0m). Inventory levels have reduced to GBP67.5m from
GBP74.2m last year as the easing of supply chain conditions meant
we could reduce the investment we made last year in additional
inventories. Trade and other receivables at the year end were
GBP1.5m lower than the previous year with debtor days remaining the
same as the previous year. Despite the challenges of the economic
environment, bad debts have remained small at 0.1% of revenues.
Cash and cash equivalents of GBP62.6m (2022: GBP37.0m) remain
strong with good cash flows from operating activities.
Final dividend
The Board has declared a final dividend of 20.8p per Ordinary
Share (2022: 19.0p) plus a special dividend of 8.0p (2022: 8.0p) to
reflect the exceptional performances both this year and the
previous year. The dividend is payable on 25 August 2023 to
ordinary shareholders on the Company's register at close of
business on 4 August 2023. The ex-dividend date will be 3 August
2023. The total dividend per ordinary share of 36.05p for the year
(2022: 33.5p) is covered 5.0 times by earnings (2022: 6.8
times).
Current and future trading
The gradual trend of a more competitive market place has
continued into the new financial year, with margins having returned
to the longer term average. We have seen price weakness in a few of
our key product areas, as the supply issues have become much
easier, but our product values are still considerably higher than
they were before the COVID-19 pandemic.
Although we have seen some weakness in prices, our manufacturers
still have significant cost pressures on raw materials, energy and
wages which should temper any price weakness. Our overall volumes
have continued to increase compared with the previous financial
year, but there has been a shift in product mix to some lower value
products, in part due to product replacement and value engineering
by our customers.
We are mindful that this year will continue to be affected by
macroeconomic concerns as the year progresses, with inflation
remaining high, and the geopolitical back drop causing uncertainty,
but the fundamentals within the majority of the market sectors in
which we operate are stable at this stage. We have a concern that
the market in Europe is quiet, and this could cause manufacturers
to export cheaper product to the UK market, and negatively affect
product values.
The group has demonstrated its ability to deliver great results
in challenging circumstances due to the ability of the team to work
together to manage the challenges, and seize opportunities as they
present themselves, and this will continue. The board is therefore
very aware that the results for the last two years have been
exceptional, and far beyond the profits earned before the start of
the COVID-19 pandemic. The board's challenge is to navigate the
business towards what is a more normal and realistic profit
achievement which takes into account the market conditions we are
operating in and the inflationary overhead pressures that all
companies are facing.
Development Strategy
Our business, like many others, have faced numerous challenges
over the past two years, and these challenges have helped the board
identify opportunities to develop the business. The service levels
and product mix that we offer our customers are becoming ever more
critical, so we are currently focusing on a comprehensive end to
end review of our supply chain in order to future proof our
business and ensure that we can meet and exceed our future customer
expectations.
We have invested in some melamine racking at IJK Timber, our
recent acquisition in Belfast, to allow them to increase their
product offering. The longer term objective is to relocate this
business to a modern facility to allow them to stock the full range
of our products and grow their market share. The Yate site
development was completed in mid August 2022, which resulted in a
25% increase in capacity that will allow the depot to further
develop the business and grow market share. Our largest timber site
in Purfleet is now operating a 24/5 warehouse which will enable
increased volumes through the business, and now seven sites are
operating 24 hours a day, 5 days a week.
During the year we will be upgrading our ERP computer system
which will create efficiencies for the business, enable us to
integrate a modern warehouse management system, and provide further
opportunities to introduce best in class computer software.
We are planning to purchase our site at Abbey Woods in Dublin in
the autumn of 2023, with the plan to modernise the site and allow
us to use part of the warehouse that was used by the previous
landlord, which will give us about 15% more capacity.
Environmental, Social and Governance (ESG) issues have always
been important to the board, and we plan to integrate our ESG
values into all of our strategic decisions and incorporate
performance measures to monitor our success. We are planning to
increase use of electric vehicles and will start adding solar
panels to our depots in order to accelerate the move to a net zero
carbon position.
The board remains focused on identifying acquisitions that
either help develop sales in specific market sectors, enable the
business to sell a wider product range to our existing customers,
or any geographical opportunities that arise.
Nick Latham
Chairman
28 June 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European (Withdrawal)
Act 2018
For further information please visit www.lathamtimber.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 Tel: 0203 470 0470
Finance)
Abigail Wayne / Rob Rees (Corporate Broking)
JAMES LATHAM PLC
CONSOLIDATED INCOME STATEMENT
For the year to 31 March 2023
unaudited audited
--------------------------------------- ----------------- -----------------
Year to 31 March Year to 31 March
2023 2022
--------------------------------------- ----------------- -----------------
GBP000 GBP000
--------------------------------------- ----------------- -----------------
Revenue 408,370 385,368
Cost of sales (including warehouse
costs) (328,361) (293,839)
--------------------------------------- ----------------- -----------------
Gross profit 80,009 91,529
Selling and distribution costs (24,214) (22,151)
Administrative expenses (12,097) (11,213)
Operating Profit 43,698 58,165
Finance income 1,071 29
Finance costs (258) (242)
--------------------------------------- ----------------- -----------------
Profit before tax 44,511 57,952
Tax expense (8,593) (12,310)
--------------------------------------- ----------------- -----------------
Profit after tax attributable
to owners of the parent company 35,918 45,642
======================================= ================= =================
Earnings per ordinary share (basic) 179.5p 229.3p
======================================= ================= =================
Earnings per ordinary share (diluted) 179.2p 228.3p
======================================= ================= =================
All results relate to continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year to 31 March 2023
unaudited audited
------------------------------------------- ---------- ---------
2023 2022
------------------------------------------- ---------- ---------
GBP000 GBP000
------------------------------------------- ---------- ---------
Profit after tax attributable to owners
of the parent company 35,918 45,642
Other comprehensive income
Actuarial gain on defined benefit pension
scheme 1,407 3,625
Deferred tax relating to components
of other comprehensive income (632) (424)
Foreign translation charge 233 (29)
------------------------------------------- ---------- ---------
Other comprehensive income for the year,
net of tax 1,008 3,172
------------------------------------------- ---------- ---------
Total comprehensive income attributable
to owners of the parent company 36,926 48,814
=========================================== ========== =========
JAMES LATHAM PLC COMPANY REGISTRATION NUMBER 65619
CONSOLIDATED BALANCE SHEET
For the year to 31 March 2023
unaudited audited
--------------------------------------- ---------- ---------
2023 2022
--------------------------------------- ---------- ---------
GBP000 GBP000
--------------------------------------- ---------- ---------
Assets
Non-current assets
Goodwill 1,193 1,372
Other intangible assets 1,319 1,487
Property, plant and equipment 37,440 36,935
Right-of-use-assets 5,817 4,154
Retirement and other benefit
obligation 7,221 1,119
Deferred tax asset - 154
Total non-current assets 52,990 45,221
Current assets
Inventories 67,489 74,230
Trade and other receivables 66,782 68,332
Cash and cash equivalents 62,609 37,030
Tax receivable 490 -
Total current assets 197,370 179,592
--------------------------------------- ---------- ---------
Total assets 250,360 224,813
--------------------------------------- ---------- ---------
Current liabilities
Lease liabilities 879 1,275
Trade and other payables 41,066 50,876
Tax payable - 400
Total current liabilities 41,945 52,551
Non-current liabilities
Interest bearing loans and borrowings 592 592
Lease liabilities 5,130 3,133
Deferred tax liabilities 7,118 4,566
--------------------------------------- ---------- ---------
Total non-current liabilities 12,840 8,291
--------------------------------------- ----------
Total liabilities 54,785 60,842
--------------------------------------- ---------- ---------
Net assets 195,575 163,971
======================================= ========== =========
Capital and reserves
Issued capital 5,040 5,040
Share-based payment reserve 124 387
Own shares - (873)
Capital reserve 398 398
Retained earnings 190,013 159,019
--------------------------------------- ---------- ---------
Total equity attributable to
equity shareholders of the parent
company 195,575 163,971
163,971 163,971
======================================= ========== =========
JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to the owners of the parent company
Share-based
Issued payment Own shares Capital Retained Total
capital reserve reserve earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 April
2021 - audited 5,040 167 (471) 398 113,950 119,084
Profit for the year - - - - 45,642 45,642
Other comprehensive
income:
Actuarial gain/(loss)
on defined benefit
pension scheme - - - - 3,625 3,625
Deferred tax relating
to components of other
comprehensive income - - - - (424) (424)
Foreign translation
charge - - - - (29) (29)
---------- ------------ ------------- ---------- ----------- ---------
Total comprehensive
income for the year - - - - 48,814 48,814
Transactions with
owners:
Dividends - - - - (4,379) (4,379)
Exercise of options - (24) 228 - 4 208
Deferred tax on share
options - 75 - - - 75
Transfer of treasury
shares - - (630) - 630 -
Share-based payment
expense - 169 - - - 169
---------- ------------ ------------- ---------- ----------- ---------
Total transactions
with owners - 220 (402) - (3,745) (3,927)
Balance at 31 March
2022 - audited 5,040 387 (873) 398 159,019 163,971
Profit for the year - - - - 35,918 35,918
Other comprehensive
income:
Actuarial gain/(loss)
on defined benefit
pension scheme - - - - 1,407 1,407
Deferred tax relating
to components of other
comprehensive income - - - - (632) (632)
Foreign translation
charge - - - - 233 233
---------- ------------ ------------- ---------- ----------- ---------
Total comprehensive
income for the year - - - - 36,926 36,926
Transactions with
owners:
Dividends - - - - (6,825) (6,825)
Exercise of options - (386) 1,397 - 369 1,380
Deferred tax on share
options - (59) - - - (59)
Transfer to retained
earnings - - (524) - 524 -
Share-based payment
expense - 182 - - - 182
---------- ------------ ------------- ---------- ----------- ---------
Total transactions
with owners - (263) 873 - (5,932) (5,322)
Balance at 31 March
2023 - unaudited 5,040 124 - 398 190,013 195,575
========== ============ ============= ========== =========== =========
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year to 31 March 2023
unaudited audited
--------------------------------------- ---------- ---------
2023 2022
--------------------------------------- ---------- ---------
GBP000 GBP000
--------------------------------------- ---------- ---------
Net cash flow from operating
activities
Cash generated from operations 43,864 30,983
Interest paid (53) (59)
Income tax paid (7,498) (10,259)
--------------------------------------- ---------- ---------
Net cash inflow from operating
activities 36,313 20,665
--------------------------------------- ---------- ---------
Cash flows from investing activities
Interest received and similar
income 822 29
Acquisition of businesses net
of cash and cash equivalents
acquired - (2,238)
Purchase of property, plant
and equipment (3,304) (4,319)
Proceeds from sale of property,
plant and equipment 72 62
Net cash outflow from investing
activities (2,410) (6,466)
--------------------------------------- ---------- ---------
Cash flows from financing activities
Lease liability payments (1,499) (1,408)
Equity dividends paid (6,825) (4,379)
Net cash outflow from financing
activities (8,324) (5,787)
--------------------------------------- ---------- ---------
Increase in cash and cash equivalents
for the year 25,579 8,412
======================================= ========== =========
Cash and cash equivalents at
beginning of the year 37,030 28,618
--------------------------------------- ---------- ---------
Cash and cash equivalents at
end of the year 62,609 37,030
======================================= ========== =========
JAMES LATHAM PLC
Notes to the unaudited preliminary financial information
1. The preliminary financial information presented in this
report is unaudited and has been prepared in accordance with the
recognition and measurement principles of UK adopted International
Accounting Standards in conformity with the requirements of the
Companies Act 2006 set out in the Group accounts for the years
ended 31 March 2022 and 31 March 2023, and does not contain all the
information to be disclosed in financial statements prepared in
accordance with IFRS.
2. The directors propose a final dividend of 28.8p per ordinary
share, which will absorb GBP5,789,000 (2022: 27.0p absorbing
GBP5,379,000), payable on 25 August 2023 to shareholders on the
Register at the close of business on 4 August 2023. The ex-dividend
date is 3 August 2023.
3. The figures for the year ended 31 March 2023 are unaudited.
The figures relating to 31 March 2022 have been extracted from the
statutory accounts for that year. The statutory accounts for the
year ended 31 March 2023 have yet to be delivered to the Registrar
of Companies and have been prepared in accordance with UK-adopted
International Accounting Standards. The preliminary financial
information does not constitute statutory accounts within the
meaning of Section 434 of the Companies Act 2006, and does not
contain all the information required to be disclosed in a full set
of IFRS financial statements.
Statutory accounts for the year ended 31 March 2023 will be
delivered to the Registrar of Companies and sent to Shareholders in
due course. The Annual Report and Accounts may also be viewed in
due course on James Latham plc's website at
www.lathamtimber.co.uk
Statutory accounts for the year ended 31 March 2022 have been
filed with the Registrar of Companies. The auditor's report on
those accounts was unqualified and did not include 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) and (3) of the Companies Act 2006.
4. This announcement was approved and authorised for issue by
the Board of Directors on 28 June 2023.
5. Net cash flow from operating activities
Year to Year to 31
31 March March 2022
2023 unaudited audited
GBP000 GBP000
Profit before tax 44,511 57,952
Adjustment for finance income and cost (813) 213
Depreciation and amortisation 4,173 4,128
Impairment 179 -
(Profit)/loss on disposal of property,
plant and equipment (46) 50
Decrease/(increase) in inventories 6,741 (23,990)
Decrease/(increase) in receivables 1,550 (18,034)
(Decrease)/increase in payables (8,167) 13,940
Retirement benefits (4,446) (3,445)
Share-based payments non cash amounts 182 169
Cash generated from operations 43,864 30,983
---------------- ------------
6. 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.
Year to Year to 31
31 March March 2022
2023 unaudited audited
GBP000 GBP000
Net profit attributable to ordinary shareholders 35,918 45,642
================ ============
Number '000 Number '000
Weighted average share capital 20,009 19,905
Add: diluted effect of share capital
options issued 31 85
Weighted average share capital for diluted
earnings per ordinary share calculation 20,040 19,990
---------------- ------------
7. The Annual General Meeting of James Latham plc will be held
at the Leverstock Suite, Holiday Inn, Breakspear Way, Hemel
Hempstead, Hertfordshire, HP2 4UA on Wednesday 23 August 2023 at
12.30pm.
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END
FR BLGDLXUDDGXI
(END) Dow Jones Newswires
June 29, 2023 02:00 ET (06:00 GMT)
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