TIDMLTHM
RNS Number : 5989R
Latham(James) PLC
01 July 2020
James Latham PLC
("James Latham" or the "Company")
Final Results
Chairman's statement
I am pleased to report good trading results for the financial
year to 31 March 2020
Revenue for the financial year to 31 March 2020 was GBP247.1m,
up 5.1% on last year's GBP235.1m. Like for like volumes increased
by 1.8%, with the growth mainly on delivered business from our own
warehouses, with a reduction in direct volumes shipped from the
ports or from the manufacturers. The cost price of our products
steadily fell throughout the year, ending the year 3.3% lower than
the comparative twelve months. Abbey Wood in Ireland has been
successfully integrated into the Lathams business and is now
starting to provide a useful contribution to the Group's
results.
Gross profit for the financial year to 31 March 2020 was 17.6%
compared with 17.2% in the previous financial year. This figure
includes warehouse costs, which have increased due to extended
working hours with four of our depots now working 24 hours a day
and further investment in our racking systems.
Profit before tax is GBP15.7m, up GBP0.4m on last year's
GBP15.3m. Profit after tax for the year is GBP12.5m, up from last
year's GBP12.4 m
Earnings per share is 63.1p (2019: 63.1p). Adjusted earnings per
ordinary share (see Note 5), adjusted for the effect on the
introduction of IFRS 16 on Leasing this year and the previous
year's results of the property profit and the one off cost relating
to Guaranteed Minimum Pensions were 64.0p (2019: 61.6p) an increase
of 3.9%.
As at 31 March 2020 net assets have increased to GBP104.3m
(2019: GBP98.0m). We have adopted IFRS 16 on Leasing in these
results, which has had an insignificant effect on profit before.
Non current assets have increased by GBP7.5m from 31 March 2019.
GBP4.9m of this increase relates to the creation of a new asset
class of Right of Use Assets relating to the introduction of IFRS
16 on Leasing. In addition we acquired Dresser Mouldings (Rochdale)
Ltd for cash consideration of GBP1.0m, and have also invested
GBP1.0m in redeveloping the Gateshead warehouse. Inventory levels
have increased to GBP44.3m from GBP42.4m last year. Trade
receivables at the year end were GBP4.4m higher than the previous
year as we saw a reduction in cash received at the end of March due
to the COVID-19 pandemic. However trade receivables have now
returned close to normal levels. There was another low bad debt
charge of 0.20% of turnover for the year. Cash and cash equivalents
of GBP17.0m (2019: GBP15.5m), remain strong with good cash flows
from operating activities.
At 31 March 2020 the deficit of the defined benefit scheme under
IAS19 (revised) was GBP11.8m, up GBP3.1m compared with GBP8.7m last
year. The calculation of the pension deficit remains very sensitive
to changes in assumptions, and was affected by the reduction in
market values of investments at the end of March.
Final dividend
The Board has declared a final dividend of 10.0p per Ordinary
Share (2019: 12.9p). The dividend is payable on 4 September 2020 to
ordinary shareholders on the Company's register at close of
business on 7 August 2020. The ex-dividend date will be 6 August
2020. The total dividend per ordinary share of 15.5p for the year
(2019: 17.9p) is covered 4.1 times by earnings (2019: 3.5 times).
The board considers this level of dividend to be prudent given the
balance between the good results achieved in the year to 31 March
2020 and the difficult market conditions experienced during the
first quarter of the current financial year caused by the COVID-19
pandemic.
Current and future trading
The board responded quickly and decisively to protect the
business and the employees from COVID-19, with quick action to
reduce costs where possible, manage the stock and preserve cash.
COVID-19 has had a considerable affect on the start of our trading
year. We remained open at most of our distribution sites to support
NHS projects and other essential services, as well as servicing our
customers that managed to remain open. April was a particularly
challenging month with sales at 40% of April 2019 sales. We have
seen more customers coming back to work throughout May, with
positive trends on numbers of orders taken and total number of
trading customers, with sales at 60% of May 2019 sales. This
positive trend is continuing in June, and sales are expected to be
80% of June 2019 sales. I have been incredibly pleased at how our
staff have managed to work through this challenging period, and the
resilience of the business. The skill of our senior staff with the
support of the board has undoubtedly limited the negative impact of
COVID-19 on the business. The full impact of the virus and the
effect on the wider economy are impossible to predict at this
stage.
Development Strategy
The board believes that there are plenty of opportunities to
develop and grow our business. The strength of the business will
allow us to avoid the worst of any potential downturn in the
economy and seize on any opportunities to further develop the
business. We will continue to look to grow the business through any
suitable acquisitions to support key market sectors and also
identify new products in market sectors where we are focussing our
efforts. We will continue to invest in our warehouses and extend
the working day at our depots to ensure that we meet the future
delivery needs of our existing and new customers. Our focus will be
on completing the Gateshead site development, and a significant
racking project at our Thurrock facility. We have also fast tracked
our on line presence project, and the use of technology as we look
to drive more efficiencies into our business, to ensure we are in
the best place possible to deal with the future. There are clearly
challenges as we enter a post Brexit and COVID-19 world, but the
board remains confident that the Company is in a position of
strength which will allow us to plan for a positive future.
Nick Latham
Chairman
30 June 2020
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014.
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 Tel: 0203 470 0470
Finance)
Abigail Wayne (Corporate Broking)
JAMES LATHAM PLC
CONSOLIDATED INCOME STATEMENT
For the year to 31 March 2020
Audited Audited
--------------------------------------- ----------------- -----------------
Year to 31 March Year to 31 March
2020 2019
--------------------------------------- ----------------- -----------------
GBP000 GBP000
--------------------------------------- ----------------- -----------------
Revenue 247,100 235,132
Cost of sales (including warehouse
costs) (203,656) (194,686)
--------------------------------------- ----------------- -----------------
Gross profit 43,444 40,446
Selling and distribution costs (19,251) (18,082)
Administrative expenses (8,196) (7,896)
Operating Profit 15,997 14,468
Profit on disposal of property - 1,052
Finance income 82 71
Finance costs (417) (256)
--------------------------------------- ----------------- -----------------
Profit before tax 15,662 15,335
Tax expense (3,181) (2,913)
--------------------------------------- ----------------- -----------------
Profit after tax attributable
to owners of the parent company 12,481 12,422
======================================= ================= =================
Earnings per ordinary share (basic) 63.1p 63.1p
======================================= ================= =================
Earnings per ordinary share (diluted) 63.0p 63.0p
======================================= ================= =================
All results relate to continuing operations.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year to 31 March 2020
Audited Audited
------------------------------------------- -------- ---------
2020 2019
------------------------------------------- -------- ---------
GBP000 GBP000
------------------------------------------- -------- ---------
Profit after tax attributable to owners
of the parent company 12,481 12,422
Other comprehensive income
Actuarial loss on defined benefit pension
scheme (4,823) (1,360)
Deferred tax relating to components
of other comprehensive income 916 314
Foreign translation gain/(charge) 80 (31)
------------------------------------------- -------- ---------
Other comprehensive income for the year,
net of tax (3,827) (1,077)
------------------------------------------- -------- ---------
Total comprehensive income attributable
to owners of the parent company 8,654 11,345
=========================================== ======== =========
JAMES LATHAM PLC COMPANY REGISTRATION NUMBER 65619
CONSOLIDATED BALANCE SHEET
At 31 March 2020
Audited Audited
--------------------------------------- ---------- ---------
2020 2019
--------------------------------------- ---------- ---------
GBP000 GBP000
--------------------------------------- ---------- ---------
Assets
Non-current assets
Goodwill 872 523
Other intangible assets 1,822 1,989
Property, plant and equipment 35,952 34,159
Right-of-use-assets 4,895 -
Deferred tax asset 2,258 1,577
Total non-current assets 45,799 38,248
Current assets
Inventories 44,288 42,350
Trade and other receivables 47,046 42,613
Cash and cash equivalents 16,950 15,541
Total current assets 108,284 100,504
--------------------------------------- ---------- ---------
Total assets 154,083 138,752
--------------------------------------- ---------- ---------
Current liabilities
Lease liabilities 1,178 -
Trade and other payables 28,686 27,113
Tax payable - 1,193
--------------------------------------- ---------- ---------
Total current liabilities 29,864 28,306
Non-current liabilities
Interest bearing loans and borrowings 592 597
Lease liabilities 3,857 -
Retirement and other benefit
obligation 11,812 8,714
Other payables 392 413
Deferred tax liabilities 3,289 2,762
--------------------------------------- ---------- ---------
Total non-current liabilities 19,942 12,486
--------------------------------------- ----------
Total liabilities 49,806 40,792
--------------------------------------- ---------- ---------
Net assets 104,277 97,960
======================================= ========== =========
Capital and reserves
Issued capital 5,040 5,430
Share-based payment reserve 25 259
Own shares (619) (923)
Capital reserve 398 3
Retained earnings 99,433 93,191
--------------------------------------- ---------- ---------
Total equity attributable to
equity shareholders of the parent
company 104,277 97,960
======================================= ========== =========
The Company's profit for the year was GBP2,971,000 (2019:
GBP679,000).
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
2018 - audited 5,040 184 (529) 3 85,091 89,789
Profit for the year - - - - 12,422 12,422
Other comprehensive
income:
Actuarial loss on
defined benefit pension
scheme - - - - (1,360) (1,360)
Deferred tax relating
to components of other
comprehensive income - - - - 314 314
Foreign translation
charge - - - - (31) (31)
---------- ------------ ------------- ---------- ----------- ---------
Total comprehensive
income for the year - - - - 11,345 11,345
Transactions with
owners:
Dividends - - - - (3,363) (3,363)
Exercise of options - (19) - - 19 -
Deferred tax on share
options - - - - 31 31
Transfer of treasury
shares - - (82) - 82 -
Write down on conversion
of ESOP shares - - 14 - (14) -
Purchase of preference
shares 390 - (478) - - (88)
Change in investment
in ESOP shares - - 152 - - 152
Share-based payment
expense - 94 - - - 94
---------- ------------ ------------- ---------- ----------- ---------
Total transactions
with owners 390 75 (394) - (3,245) (3,174)
Balance at 31 March
2019 - audited 5,430 259 (923) 3 93,191 97,960
Change in accounting
policy (IFRS16) - - - - 291 291
Deferred tax on IFRS
16 - - - - (55) (55)
As at 1 April 2019
(as restated) 5,430 259 (923) 3 93,427 98,196
Profit for the year - - - - 12,481 12,481
Other comprehensive
income:
Actuarial loss on
defined benefit pension
scheme - - - - (4,823) (4,823)
Deferred tax relating
to components of other
comprehensive income - - - - 916 916
Foreign translation
charge - - - - 80 80
---------- ------------ ------------- ---------- ----------- ---------
Total comprehensive
income for the year - - - - 8,654 8,654
Transactions with
owners:
Dividends - - - - (3,633) (3,633)
Exercise of options - (253) (261) - 1,463 949
Deferred tax on share
options - (45) - - - (45)
Purchase of preference
shares 5 - - - - 5
Cancellation of preference
share (395) - 478 395 (478) -
Change in investment
in ESOP shares - - 87 - - 87
Share-based payment
expense - 64 - - - 64
---------- ------------ ------------- ---------- ----------- ---------
Total transactions
with owners (390) (234) 304 395 (2,648) (2,573)
Balance at 31 March
2020 - audited 5,040 25 (619) 398 99,433 104,277
========== ============ ============= ========== =========== =========
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT
For the year to 31 March 2020
Audited Audited
--------------------------------------- -------- --------
2020 2019
--------------------------------------- -------- --------
GBP000 GBP000
--------------------------------------- -------- --------
Net cash flow from operating
activities
Cash generated from operations 13,528 10,115
Interest paid (3) (8)
Income tax paid (3,851) (2,651)
--------------------------------------- -------- --------
Net cash inflow from operating
activities 9,674 7,456
--------------------------------------- -------- --------
Cash flows from investing activities
Interest received and similar
income 82 71
Acquisition of businesses net
of cash and cash equivalents
acquired (578) (1,604)
Purchase of property, plant
and equipment (3,886) (2,362)
Proceeds from sale of property,
plant and equipment 152 1,743
Net cash outflow from investing
activities (4,230) (2,152)
--------------------------------------- -------- --------
Cash flows from financing activities
Sale of treasury shares 1,036 152
Purchase of treasury shares - (478)
Lease liability payments (1,390) -
Equity dividends paid (3,633) (3,363)
Preference dividend paid (48) (63)
Net cash outflow from financing
activities (4,035) (3,752)
--------------------------------------- -------- --------
Increase in cash and cash equivalents
for the year 1,409 1,552
======================================= ======== ========
Cash and cash equivalents at
beginning of the year 15,541 13,989
--------------------------------------- -------- --------
Cash and cash equivalents at
end of the year 16,950 15,541
======================================= ======== ========
JAMES LATHAM PLC
Notes to the audited preliminary financial information
1. The preliminary financial information presented in this
report is audited and has been prepared in accordance with the
recognition and measurement principles of International Financial
Reporting Standards ('IFRS') as adopted by the EU set out in the
Group accounts for the years ended 31 March 2019 and 31 March 2020,
except for IFRS 16 'Leases" in respect of 31 March 2019, 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 10.0p per ordinary
share, which will absorb GBP1,990,000 (2019: 12.9p absorbing
GBP2,537,000), payable on 4 September 2020 to shareholders on the
Register at the close of business on 7 August 2020. The ex-dividend
date is 6 August 2020.
The figures for the year ended 31 March 2019 and as at 31 March
2020 have been extracted from the audited statutory accounts for
that year. The statutory accounts for the year ended 31 March 2020
have yet to be delivered to the Registrar of Companies and have
been prepared in accordance with IFRS as adopted by the EU and
those parts of the Companies Act 2006 that remain applicable to
companies reporting under IFRS. 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 2020 will be
delivered to the Registrar of Companies and sent to Shareholders
shortly. The Annual Report and Accounts may also be viewed in due
course on James Latham plc's website at www.lathams.co.uk
The audit report on the statutory financial statements for the
year ended 31 March 2020 is unqualified and does not include
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying the report and does not contain any
statement under Section 498(2) or (3) of the Companies Act
2006.
Statutory accounts for the year ended 31 March 2019 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.
3. This announcement was approved and authorised for issue by
the Board of Directors on 30 June 2020.
4. Net cash flow from operating activities
Year to Year to 31
31 March March 2019
2020 audited audited
GBP000 GBP000
Profit before tax 15,662 15,335
Adjustment for finance income and cost 335 185
Depreciation, amortisation and impairment 3,790 2,036
Profit on disposal of property, plant
and equipment (121) (1,079)
Increase in inventories (1,659) (2,282)
Increase in receivables (3,963) (1,105)
Increase)/(decrease) in payables 1,244 (1,825)
Retirement benefits non cash amounts (1,904) (1,213)
Translation non cash amounts 80 (31)
Share-based payments non cash amounts 64 94
Cash generated from operations 13,528 10,115
-------------- ------------
5. 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 2019
2020 audited audited
GBP000 GBP000
Net profit attributable to ordinary shareholders 12,481 12,422
GMP equalisation - 746
Profit on disposal of property - (1,052)
IFRS16 Leases 186 -
------------------- -------------------
Net profit attributable to ordinary shareholders
adjusted for GMP equalisation cost, profit
on disposal of property and IFRS16 Leases 12,667 12,116
=================== ===================
Number '000 Number '000
Weighted average share capital 19,781 19,674
Add: diluted effect of share capital options
issued 23 28
Weighted average share capital for diluted
earnings per ordinary share calculation 19,804 19,702
------------------- -------------------
The earnings per share figure is shown on the Income statement.
In the previous year, the earnings were stated after the profit on
a disposal of property and GMP equalisation and in the current
year, we have the effect of IFR16 leases. The figures below show
the earnings per share if these 3 items were excluded to show a
comparable figure:
Earnings per ordinary share (basic, excluding
GMP equalisation, profit on disposal of
property and IFR16 Leases) 64.0p 61.6p
====== ======
Earnings per ordinary share (diluted,
excluding GMP equalisation, profit on
disposal of property and IFRS 16 Leases) 64.0p 61.5p
====== ======
6. The Annual General Meeting of James Latham plc will be held
at Unit 1 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2
7QU on 2 September 2020 at 12.30pm.
Impact of COVID-19
Due to the current restrictions imposed due to the COVID-19
pandemic, the Annual General Meeting this year will not be open for
shareholders to attend in person. To ensure that your vote counts,
please submit your proxy form appointing the Chairman as your
proxy. Questions can be submitted in advance to plc@lathams.co.uk
and these will be answered during the meeting. Full voting details
and answers to questions will be posted on the Investor Page at
www.lathams.co.uk/investors .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FMMATMTAJBJM
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