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Latham(James) PLC  -  LTHM   

Half-year Report

Released 07:00 30-Nov-2017

RNS Number : 9170X
Latham(James) PLC
30 November 2017
 

James Latham plc

 

("James Latham" or the "Company")

 

 

HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2017 

 

Chairman's statement

 

Unaudited results for the six months trading to 30 September 2017

 

Revenue for the six months ended 30 September 2017 was £107.3m, up 7% on £100.3m for the same period last year.  We have seen volumes continue to grow especially through our own warehouses where they are up nearly 8%. The cost price of our products overall continues to increase in comparison to the comparative six months. This is in part down to the weakening of sterling following the European Union Referendum, but also in this six months we have seen manufacturers increasing prices, and we have not been able to pass all these increases onto our customers.

 

Gross margin for the six month period ended 30 September 2017 was 17.3% compared with 18.7% in the comparative six months. This gross margin is similar to the 17.6% achieved in the second half of 2016/7, and we believe margins are starting to stabilise. We were also affected in this half year by some disruption to supplies from some of our key suppliers' manufacturing facilities, which are now getting back to normal.  

 

Selling and distribution costs were 6.4% higher than last year. Distribution costs rise in line with volumes, and we monitor costs per tonne which are up by less than 2%. We have also invested in new specialist sales staff to develop the markets where we see potential for good future growth.

 

In July we successfully completed the move of our Yate depot to a new modern facility. I am very grateful to all of the staff involved in the move, who were very effective at minimising the disruption to the business and I am pleased to report the new facility is already performing ahead of our expectations. In this half year we incurred approximately £100,000 of one off costs relating to the move.

 

Profit before tax was £6.7m, down 12.2% on the comparative period's profit of £7.7m.  Earnings per ordinary share were 27.8p (2016: 31.2p) a decrease of 10.9%.

 

As at 30 September 2017 net assets have increased to £83.8m (30.9.16: £64.5m). Fixed assets have increased by £5.6m from 31 March 2017, the majority of this being the remaining cost of the new warehouse at Yate and the start of the investment in the new warehouse at Leicester. Stock levels have remained stable throughout the period. Trade Receivables have continued to show good debtors day figures with there being another low bad debt charge of under 0.15% of turnover in the first six months. Cash and cash equivalents of £12.6m (30.9.16: £16.1m), remain strong with strong cash flows from operating activities.

 

The calculation of the pension deficit remains very sensitive to changes in assumptions, and the pension deficit under IAS19 is now calculated as decreasing from £16.6m at 31 March 2017 to £8.5m.  This is largely due to updated membership data and an increase in the discount rate. Positive asset performance and changes to the mortality base tables also reduced the net liability. The triennial actuarial valuation as at 31 March 2017 is currently being calculated.

 

Interim dividend

 

The Board has declared an interim dividend of 4.5p per Ordinary Share (2016: 4.5p), which is covered 6.2 times (2016: 6.9 times).  The dividend is payable on 26 January 2018 to ordinary shareholders on the Company's Register at close of business on 5 January 2018.  The ex-dividend date will be 4 January 2018.

 

 

Current and future trading

 

The second half of 2017/18 has started well with growing revenues at slightly higher margins.  Trading conditions continue to be mixed, but despite the uncertainties in the economy, we and our customers remain busy. We are confident in the long term prospects of our key product drivers, and this underpins our plan to continue to invest in our business to further improve the offering to our customers.  Following the successful relocation of our Yate depot, we are looking forward to a relocation of our Wigston depot to a site closer to the motorway network in Leicester ahead of schedule in January 2018.

 

 

 

Nick Latham

Chairman

30 November 2017

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No 596/2014.

 

Enquiries

 

James Latham plc

Tel:  01442 849 100

Nick Latham, Chairman


David Dunmow, Finance Director




Northland Capital Partners Limited 

Nominated Adviser and Broker

Tel:  020 3861 6625

Matthew Johnson / Edward Hutton (Corporate Finance)

Bob Pountney / John Howes (Corporate Broking)




 

JAMES LATHAM PLC




CONSOLIDATED INCOME STATEMENT








For the six months to 30 September 2017









Six months to 30 Sept. 2017 unaudited

Six months to 30 Sept. 2016 unaudited

Year to                31 March 2017 audited






£000

£000

£000





Revenue

107,335

100,334

198,808





Cost of sales (including warehouse costs)

(88,810)

(81,582)

(162,709)





Gross profit

18,525

18,752

36,099





Selling and distribution costs

(8,391)

(7,889)

(15,457)

Administrative expenses

(3,178)

(3,027)

(6,463)





Operating profit

6,956

7,836

14,179





Finance income

15

33

56

Finance costs

(248)

(209)

(408)





Profit before tax

6,723

7,660

13,827





Tax expense

(1,262)

(1,545)

(2,846)





Profit after tax attributable to owners of the parent company

5,461

6,115

10,981





Earnings  per ordinary share (basic)

27.8p

31.2p

56.0p





Earnings  per ordinary share (diluted)

27.7p

31.1p

55.8p









All results relate to continuing operations.




 



 

JAMES LATHAM PLC








CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME








For the six months to 30 September 2017









Six months to 30 Sept. 2017 unaudited

Six months to 30 Sept. 2016 unaudited

Year to                31 March 2017 audited






£000

£000

£000





Profit after tax

5,461

6,115

10,981

Other Comprehensive income




Actuarial gains/(losses) on defined benefit pension scheme

8,515

(13,313)

(7,543)

Deferred tax relating to components of other comprehensive income

(1,430)

2,396

1,362

Other comprehensive income for the period, net of tax

7,085

(10,917)

(6,181)

Total comprehensive income, attributable to owners of the parent company

12,546

(4,802)

4,800

 



 

JAMES LATHAM PLC




CONSOLIDATED BALANCE SHEET








At 30 September 2017













£000

£000

£000

ASSETS




Non-current assets




Goodwill

237

237

237

Intangible assets

1

89

1

Property, plant and equipment

31,939

25,315

26,312

Deferred tax asset

1,546

4,245

2,904

Total non-current assets

33,723

29,886

29,454





Current assets




Inventories

35,915

35,065

35,508

Trade and other receivables

43,523

38,003

40,076

Cash and cash equivalents

12,585

16,102

17,246

Non-current assets held for sale

641

-

-

Total current assets

92,664

89,170

92,830









Total assets

126,387

119,056

122,284





Current liabilities




Trade and other payables

28,961

25,730

27,063

Current tax payable

1,332

1,590

1,517

Total current liabilities

30,293

27,320

28,580





Non-current liabilities




Interest bearing loans and borrowings

987

987

987

Retirement and other benefit obligation

8,470

23,208

16,625

Other payables

320

377

349

Deferred tax liabilities

2,485

2,686

2,485

Total non-current liabilities

12,262

27,258

20,446









Total liabilities

42,555

54,578

49,026









Net assets

83,832

64,478

73,258





Capital and reserves




Issued capital

5,040

5,040

5,040

Share-based payment reserve

153

70

108

Own shares

(180)

(344)

(291)

Capital reserve

3

3

3

Retained earnings

78,816

59,709

68,398





Total equity attributable to shareholders of the parent company

83,832

64,478

73,258



 

JAMES LATHAM PLC








CONSOLIDATED CASH FLOW STATEMENT








For the six months to 30 September 2017









Six months to 30 Sept 2017 unaudited

Six months to 30 Sept 2016 unaudited

Year to                31 March 2017 audited






£000

£000

£000

Net cash flow from operating activities




Cash generated from operations

6,155

6,665

11,902

Interest paid

(2)

(2)

(2)

Income tax paid

(1,517)

(1,376)

(2,646)

Net cash inflow from operating activities

4,636

5,287

9,254





Interest received and similar income

15

33

56

Purchase of property, plant and equipment

(7,163)

(4,035)

(6,045)

Proceeds from sale of property, plant and equipment

19

41

122

Net cash outflow from investing activities

(7,129)

(3,961)

(5,867)





Cash flows before financing activities




Equity dividends paid

(2,129)

(2,017)

(2,894)

Preference dividend paid

(39)

(39)

(79)

Net cash outflow from financing activities

(2,168)

(2,056)

(2,973)





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

(4,661)

(730)

414





Cash and cash equivalents at beginning of the period

17,246

16,832

16,832





Cash and cash equivalents at end of the period

12,585

16,102

17,246

 

 



 

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 2016 (audited)

5,040

56

(441)

3

66,525

71,183

Profit for the period

-

-

-

-

6,115

6,115

Other comprehensive income:







Actuarial loss on defined benefit pension scheme

-

-

-

-

(13,313)

(13,313)

Deferred tax relating to components of other comprehensive income

-

-

-

-

2,396

2,396

Total comprehensive income for the period

-

-

-

-

(4,802)

(4,802)

Transaction with owners:







Dividends

-

-

-

-

(2,017)

(2,017)

Exercise of options

-

(3)

-

-

3

-

Change in investment in ESOP shares

-

-

97

-

-

97

Share-based payment expense

-

17

-

-

-

17

Total transactions with owners

-

14

97

-

(2,014)

(1,903)

Balance at 30 September 2016 (unaudited)

5,040

70

(344)

3

59,709

64,478

Profit for the period

-

-

-

-

4,866

4,866

Other comprehensive income:







Actuarial gain on defined benefit pension scheme

-

-

-

-

5,770

5,770

Deferred tax relating to components of other comprehensive income

-

-

-

-

(1,034)

(1,034)

Total comprehensive income for the period

-

-

-

-

9,602

9,602

Transactions with owners:







Dividends

-

-

-

-

(877)

(877)

Exercise of options

-

(16)

-

-

16

-

Write down on conversions of ESOP shares

-

-

52

-

(52)

-

Change in investment in ESOP shares

-

-

1

-

-

1

Share-based payment expense

-

54

-

-

-

54

Total transactions with owners

-

38

53

-

(913)

(822)

Balance at 31 March 2017 (audited)

5,040

108

(291)

3

68,398

73,258

Profit for the period

-

-

-

-

5,461

5,461

Other comprehensive income:







Actuarial gain on defined benefit pension scheme

-

-

-

-

8,515

8,515

Deferred tax relating to components of other comprehensive income

-

-

-

-

(1,430)

(1,430)

Total comprehensive income for the period

-

-

-

-

12,546

12,546

Transactions with owners:







Dividends

-

-

-

-

(2,129)

(2,129)

Exercise of options

-

(3)

-

-

3

-

Write down on conversions of ESOP shares

-

-

2

-

(2)

-

Change in investment in ESOP shares

-

-

109

-

-

109

Share-based payment expense

-

48

-

-

-

48

Total transactions with owners

-

45

111

-

(2,128)

(1,972)

Balance at 30 September 2017 (unaudited)

5,040

153

(180)

3

78,816

83,832

 

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 2018 and on the basis of the accounting policies to be used in those financial statements.  The figures for the year ended 31 March 2017 are extracted from the statutory accounts of the group for that period.


2.  The directors propose an interim dividend of 4.5p per ordinary share which will absorb £880,000 (2017: 4.5p absorbing £880,000), payable on 26 January 2018 to shareholders on the Register at the close of business on 5 January 2018. The ex-dividend date is 4 January 2018.


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 2017 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 2017 unaudited

Six months to 30 Sept 2016 unaudited

Year to 31 March 2017 audited


£000

£000

£000





Net profit attributable to ordinary shareholders

5,461

6,115

10,981






Number '000

Number '000

Number '000

Weighted average share capital

19,629

19,590

19,601

Add: diluted effect of share capital options issued

108

85

82

Weighted average share capital for diluted earnings per ordinary share calculation

19,737

19,675

19,683







 

5.  Net cash flow from operating activities



Six months to 30 Sept 2017 unaudited

Six months to 30 Sept 2016 unaudited

Year to 31 March 2017 audited

 

Profit before tax

6,723

7,660

13,827

Adjustment for finance income and expenditure

233

176

352

Depreciation and amortisation

885

829

1,822

Profit on disposal of property, plant and equipment

(9)

(35)

(95)

Write down of intangible asset

-

-

86

Increase in inventories

(407)

(1,662)

(2,105)

Increase in receivables

(3,447)

(2,715)

(4,788)

Increase in payables

1,867

2,228

3,536

Own shares non cash amounts

109

97

98

Retirement benefits non cash amounts

153

70

(902)

Share-based payments non cash amounts

48

17

71

Cash generated from operations

6,155

6,665

11,902


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

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Half-year Report - RNS