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Latham(James) PLC  -  LTHM   

Half-year Report

Released 07:00 29-Nov-2018

RNS Number : 8304I
Latham(James) PLC
29 November 2018
 

James Latham plc

 

("James Latham" or the "Company")

 

HALF YEARLY RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2018

 

Chairman's statement

 

Unaudited results for the six months trading to 30 September 2018

 

Revenue for the six months ended 30 September 2018 was £118.2m, up 10.2% on £107.3m for the same period last year. Volumes increased by 1.5%, mainly through an increase in direct business, and product prices increased by 7.8%, against the comparative six months. The remaining increase in revenue arose due to changing product mix, with increased sales of lower volume, higher priced products.

 

Gross margin for the six month period ended 30 September 2018 was 17.1% compared with 17.3% in the comparative six months, which is partly explained by the increase in direct business which is at a lower margin. This figure includes warehouse costs, which have increased by 4.9% due to the increased cost of operating from the two new depots at Yate and Leicester. Both relocated sites are performing well.

 

Selling and distribution costs were 3.4% higher than the comparative period last year. Transport costs per tonne have increased by 3.0%, where increased fuel costs have been partially offset by reduced external haulier costs.

 

Administrative expenses are higher than last year, mainly due to an increase in bad debts compared with a low charge in the comparative six months. Despite this increase in bad debts, total bad debts are still on budget.

 

Operating profit was £7.7m, up 10.0% on the comparative period's operating profit of £7.0m. Profit before tax of £8.7m (2017: £6.7m) includes a profit of £1.1m on the sale of our old Yate site. Earnings per ordinary share were 36.9p (2017: 27.8p) an increase of 32.7%.

 

As at 30 September 2018 net assets have increased to £98.6m (2017: £83.8m). Stock volume levels have remained stable throughout the six months. Trade Receivables have continued to show good debtors day figures. Cash and cash equivalents of £12.9m (2017: £12.6m), remain strong and we continue to take advantage of additional early settlement discount opportunities with our suppliers.

 

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 £8.4m at 31 March 2018 to £3.1m at 30 September 2018.  This is largely due to positive asset performance and an increase in the discount rate. Following the finalisation of the triennial actuarial valuation as at 31 March 2017, the Company has agreed a recovery plan with the trustees of £2.0m per annum until 31 March 2024. Since the end of the half year, the High Court made a judgement confirming that pension schemes are required to equalise male and female Guaranteed Minimum Pensions. The effect of this decision is still being assessed by the Trustees, but is likely to increase the pension scheme liabilities by approximately £1m.

 

 

Interim dividend

 

The Board has declared an increased interim dividend of 5.0p per Ordinary Share (2017: 4.5p), which is covered 7.4 times (2017: 6.2 times).  The dividend is payable on 25 January 2019 to ordinary shareholders on the Company's Register at close of business on 4 January 2019.  The ex-dividend date will be 3 January 2019.

 

 

Current and future trading

 

The second half of 2018/19 has started well with revenues continuing to grow. Margins however are slightly down, with price rises being more difficult to absorb by the market. Our customers remain busy and are reporting good order books. The economic outlook though is affected by the uncertainty caused by the Brexit negotiations and we will not be immune to any slowdown in the UK economy. We have reviewed our key European suppliers and have put plans in place to hold more stocks for a period of time in the first half of 2019 in order to mitigate any supply issues over that period. We are continuing to invest in the business, with extensive racking projects started at our Purfleet and Thurrock depots, and the planned redevelopment of our Gateshead site in order to make the most efficient use of the space.

 

 

Nick Latham

Chairman

29 November 2018

 

 

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)

Abigail Wayne / Rob Rees (Corporate Broking)


 

 

 

 

 

 

JAMES LATHAM PLC




CONSOLIDATED INCOME STATEMENT








For the six months to 30 September 2018









Six months to 30 Sept. 2018 unaudited

Six months to 30 Sept. 2017 unaudited

Year to                31 March 2018 audited






£000

£000

£000





Revenue

118,160

107,335

214,919





Cost of sales (including warehouse costs)

(97,974)

(88,810)

(177,145)





Gross profit

20,186

18,525

37,774





Selling and distribution costs

(8,679)

(8,391)

(16,277)

Administrative expenses

(3,782)

(3,178)

(7,106)





Operating profit

7,725

6,956

14,391





Profit on disposal of property

1,052

-

1,276

Finance income

32

15

37

Finance costs

(141)

(248)

(488)





Profit before tax

8,668

6,723

15,216





Tax expense

(1,418)

(1,262)

(2,570)





Profit after tax attributable to owners of the parent company

7,250

5,461

12,646





Earnings  per ordinary share (basic)

36.9p

27.8p

64.4p





Earnings  per ordinary share (diluted)

36.8p

27.7p

64.1p









All results relate to continuing operations.




 



 

JAMES LATHAM PLC








CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME








For the six months to 30 September 2018









Six months to 30 Sept. 2018 unaudited

Six months to 30 Sept. 2017 unaudited

Year to                31 March 2018 audited






£000

£000

£000





Profit after tax

7,250

5,461

12,646

Other Comprehensive income




Actuarial gains on defined benefit pension scheme

4,444

8,515

7,948

Deferred tax relating to components of other comprehensive income

(673)

(1,430)

(1,262)

Other comprehensive income for the period, net of tax

3,771

7,085

6,686

Total comprehensive income, attributable to owners of the parent company

11,021

12,546

19,332

 



 

JAMES LATHAM PLC




CONSOLIDATED BALANCE SHEET








At 30 September 2018









As at 30 Sept. 2018 unaudited

As at 30 Sept. 2017 unaudited

As at 31 March 2018 audited






£000

£000

£000

ASSETS




Non-current assets




Goodwill

237

237

237

Intangible assets

1

1

1

Property, plant and equipment

33,979

31,939

33,831

Deferred tax asset

582

1,546

1,491

Total non-current assets





Current assets




Inventories

41,462

35,915

40,068

Trade and other receivables

43,082

43,523

41,508

Cash and cash equivalents

12,864

12,585

13,989

Non-current assets held for sale

-

641

638

Total current assets

97,408

92,664

96,203









Total assets

132,207

126,387

131,763





Current liabilities




Trade and other payables

25,743

28,961

28,648

Current tax payable

1,272

1,332

1,292

Total current liabilities

27,015

30,293

29,940





Non-current liabilities




Interest bearing loans and borrowings

987

987

987

Retirement and other benefit obligation

3,072

8,470

8,382

Other payables

262

320

291

Deferred tax liabilities

2,283

2,485

2,374

Total non-current liabilities

6,604

12,262

12,034









Total liabilities

33,619

42,555

41,974









Net assets

98,588

83,832

89,789





Capital and reserves




Issued capital

5,040

5,040

5,040

Share-based payment reserve

235

153

184

Own shares

(423)

(180)

(529)

Capital reserve

3

3

3

Retained earnings

93,733

78,816

85,091





Total equity attributable to shareholders of the parent company

98,588

83,832

89,789



 

JAMES LATHAM PLC








CONSOLIDATED CASH FLOW STATEMENT








For the six months to 30 September 2018









Six months to 30 Sept 2018 unaudited

Six months to 30 Sept 2017 unaudited

Year to                31 March 2018 audited






£000

£000

£000

Net cash flow from operating activities




Cash generated from operations

1,972

6,155

11,251

Interest paid

(1)

(2)

(1)

Income tax paid

(1,292)

(1,517)

(2,797)

Net cash inflow from operating activities

679

4,636

8,453





Cash flows from investing activities




Interest received and similar income

32

15

37

Purchase of property, plant and equipment

(1,136)

(7,163)

(10,840)

Proceeds from sale of property, plant and equipment

1,718

19

2,186

Net cash inflow/(outflow) from investing activities

614

(7,129)

(8,617)





Cash flows before financing activities




Equity dividends paid

(2,379)

(2,129)

(3,014)

Preference dividend paid

(39)

(39)

(79)

Net cash outflow from financing activities

(2,418)

(2,168)

(3,093)





Decrease in cash and cash equivalents for the period

(1,125)

(4,661)

(3,257)





Cash and cash equivalents at beginning of the period

13,989

17,246

17,246





Cash and cash equivalents at end of the period

12,864

12,585

13,989

 

 



 

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 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

Transaction with owners:







Dividends

-

-

-

-

(2,129)

(2,129)

Write down on conversion of ESOP shares

-

-

2

-

(2)

-

Exercise of options

-

(3)

-

-

3

-

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

Profit for the period

-

-

-

-

7,185

7,185

Other comprehensive income:







Actuarial loss on defined benefit pension scheme

-

-

-

-

(567)

(567)

Deferred tax relating to components of other comprehensive income

-

-

-

-

168

168

Total comprehensive income for the period

-

-

-

-

6,786

6,786

Transactions with owners:







Dividends

-

-

-

-

(885)

(885)

Transfer of treasury shares

-

-

(414)

-

414

-

Exercise of options

-

(16)

-

-

16

-

Deferred tax on share options

-

-

-

-

(43)

(43)

Write down on conversions of ESOP shares

-

-

13

-

(13)

-

Change in investment in ESOP shares

-

-

52

-

-

52

Share-based payment expense

-

47

-

-

-

47

Total transactions with owners

-

31

(349)

-

(511)

(829)

Balance at 31 March 2018 (audited)

5,040

184

(529)

3

85,091

89,789

Profit for the period

-

-

-

-

7,250

7,250

Other comprehensive income:







Actuarial gain on defined benefit pension scheme

-

-

-

-

4,444

4,444

Deferred tax relating to components of other comprehensive income

-

-

-

-

(673)

(673)

Total comprehensive income for the period

-

-

-

-

11,021

11,021

Transactions with owners:







Dividends

-

-

-

-

(2,379)

(2,379)

Change in investment in ESOP shares

-

-

106

-

-

106

Share-based payment expense

-

51

-

-

-

51

Total transactions with owners

-

51

106

-

(2,379)

(2,222)

Balance at 30 September 2018 (unaudited)

5,040

235

(423)

3

93,733

98,588

 

JAMES LATHAM PLC


NOTES TO THE HALF YEARLY REPORT



1. The results presented in this report are unaudited and have been prepared in accordance with the recognition and measurement requirements 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 2019 and on the basis of the accounting policies to be used in those financial statements.  The half yearly report does not include all the information and disclosures required in financial statements prepared in accordance with IFRS and should be read in conjunction with the accounts for the year ended 31 March 2018. The figures for the year ended 31 March 2018 are extracted from the statutory accounts of the group for that period.

 

The Group has adopted IFRS 15 - Revenue from Contracts with Customers and IFRS 9 - Financial Instruments in the half yearly report, the impact of which is set out below:

 

(i) IFRS 15 'Revenue from Contracts with Customers'

IFRS 15 - Revenue from Contracts with Customers establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It has replaced existing revenue recognition guidance, including IAS 18 Revenue. IFRS 15 sets out the requirements for recognising revenue from contracts with customers. The standard requires entities to apportion revenue earned from contracts to individual promises, or performance obligations, on a stand-alone selling price basis, based on a five-step model (identification of contracts; performance obligations; transaction prices; allocation of price to performance obligations; and recognition of revenue). Revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. It has replaced existing revenue recognition guidance, including IAS 18 Revenue.  IFRS 15 is effective for annual periods beginning on or after 1 January 2018.

 

 (ii) IFRS 9 'Financial Instruments'

IFRS 9 'Financial Instruments' determines the basis of the financial instrument and how a financial asset should be classified and measured. It also provides a forward-looking expected losses impairment model for financial assets, including trading receivables, and includes amendments to classification and measurement of financial instruments.  It has replaced existing standard IAS 39 'Financial Instruments: Recognition and Measurement'. IFRS 9 is effective for annual periods beginning on or after 1 January 2018.

 

The directors have assessed the impact of the adoption IFRS 15 and IFRS 9 and there has been no material impact on the financial statements of the Group as a result of these standards coming into effect.

 

 


2.  The directors propose an interim dividend of 5.0p per ordinary share which will absorb £980,000 (2017: 4.5p absorbing £880,000), payable on 25 January 2019 to shareholders on the Company's Register at the close of business on 4 January 2019. The ex-dividend date is 3 January 2019.


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 2018 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 2018 unaudited

Six months to 30 Sept 2017 unaudited

Year to 31 March 2018 audited


£000

£000

£000





Net profit attributable to ordinary shareholders

7,250

5,461

12,646






Number '000

Number '000

Number '000

Weighted average share capital

19,661

19,629

19,640

Add: diluted effect of share capital options issued

41

108

85

Weighted average share capital for diluted earnings per ordinary share calculation

19,702

19,737

19,725





5.  Net cash flow from operating activities



Six months to 30 Sept 2018 unaudited

Six months to 30 Sept 2017 unaudited

Year to 31 March 2018 audited


£000

£000

£000





Profit before tax

8,668

6,723

15,216

Adjustment for finance income and expenditure

109

233

451

Depreciation and amortisation

970

885

1,941

Profit on disposal of property, plant and equipment

(1,062)

(9)

(1,444)

Increase in inventories

(1,394)

(407)

(4,560)

Increase in receivables

(1,574)

(3,447)

(1,432)

(Decrease)/increase in payables

(2,935)

1,867

1,526

Own shares non cash amounts

106

109

161

Retirement benefits non cash amounts

(967)

153

(703)

Share-based payments non cash amounts

51

48

95

Cash generated from operations

1,972

6,155

11,251


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 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.
 
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Half-year Report - RNS