Latham (james) Share Discussion Threads

[c3479z] 23/4/2024 14:01

s p angel reiterates today eps of around 96p and t/o of 374m year end cash of 71m, but no increase next year, likely divi for this year of around 28p, 28p wonder if there would be any chance of a special divi? mentions that they're having to hold more stock due to longer supply chains because of trouble in Red Sea and some smaller competitors are feeling the pinch and dumping lower priced product at marked down price...also uncertified timber coming in from Europe, wonder if some of that originates from Russia? Overall, moderately positive and as anticipated.

Would add that LTHM is well-positioned- exceptionally well-invested company, holds mainly freeholds of depots some last valued ?before 2000 I believe and very strong trade relationships and balance sheet.

[davebowler] 23/4/2024 13:53

SP Angel research -
Forecasts maintained:
We are leaving our forecasts unchanged (FY24E PBT: £25.7m). We are forecasting a 6pp rise in the Group tax rate to 25% in FY24E but the impact of this on earnings is mostly offset by our projected rise in interest income to £2m. Our PBT forecast yields EPS of 96p in FY24E. Investment summary: Our PBT forecast represents a material decline from that delivered in FY23A of £44.5m but this merely represents a reversion to normal market conditions post COVID-19, a period in which the company was, in our view, over-earning from abnormal market conditions. The share price is now only 20% down from its 2022 peak of 1400p which arguably indicates that the market recognised at the time that trading conditions were unsustainable. The earnings base of the business, however, is materially higher than the pre-covid years of 2019-2021A (average PBT £16.5m over those three years). With a FY24E earnings multiple 12x, a modest discount to the overall market, c£71m of net cash and a sustainable dividend yield of 2.5%, we continue to rate the stock as Buy. Price Chart (p) Source: hl.co.uk Special Sits Research Simon Strong [e-mail] [phone] Equity Sales Richard Parlons [phone] Abigail Wayne [phone] Rob Rees [phone] Grant Barker [phone] Stock Data Ticker (AIM) LTHM LN Fiscal Year End 31 March Share Price Price Target 1160p 1600p Market Cap £232.5m EV Dividend Yield £166.5m 2.5% Yr High/Yr Low 1300p/955p inf

[kneecaps2] 28/3/2024 16:29

Alter you are a newboy! I first invested in this super company nearly 29 years ago and they have performed exceptionally well and I am sure this will continue well into the future.

[alter ego] 28/3/2024 15:43

I've held LTHM getting on for 14 years and believe they are very conservative about forecasts but equally focussed on managing the business for the long term. It's a family business of course so plenty of skin in the game and a wealth of experience too.

[davebowler] 28/3/2024 15:12

The mkt cap of £227m is only a bit higher than the last balance sheet NTAV of £202m. So at some point LTHM shareholders should receive a bonus from special divis, buybacks, etc.

It’s difficult to think of any other small cap with a balance sheet this ridiculously strong, so LTHM shares are absolutely copper-bottomed, for investors who want to sleep at night.

I have to stay at GREEN, due to this immense financial strength, and reasonable valuation (providing future profits don't slip)

[c3479z] 28/3/2024 13:31

agree gopher,
ought to be reasonable value on p/e of around 11 or less with almost a third of the cap backed by cash and now no pension deficit.

[gopher] 28/3/2024 12:02

Reasonable trading statement given sector is bit depressed at the moment, they were never going to beat last year bumper results.

[c3479z] 19/3/2024 20:13

at the Blackrock Throgmorton AGM, Dan Whiteside suggested that builders must be near or at their nadir, so has been investing in selected industrials and housebuilders, rmi merchants eg Rotork, Grafton, Bellway, Redrow, Howden, Gleeson, Crest Nicholson= may be the last not so clever....
could also apply to the likes of Latham with one-third of mkt cap in cash?

[1c3479z] 14/2/2024 21:59

bigger turnover in the shares yesterday,
so some loose stock around now,

[1c3479z] 07/2/2024 22:29

big turnover in the shares today, by LTHM standards.

[davebowler] 07/12/2023 16:54

SP Angel brokers-
Other side of the hump.
As market conditions have normalised, so too has LTHM’s earnings base. Operating margins have reduced now to a sustainable level and one from which the Group’s strategy of widening and increasing throughput can have a beneficial impact. Current markets conditions In H2E have stabilised and the Group’s increasing market share in lower value products is helping to offset any cyclical risk. We are Buyers. Key Highlights: ▪ Normalised returns. Group revenues reduced 11% YoY to £190.9m in H1A reflecting a high proportion of lower value products in the sales mix and more a competitive pricing environment. Volumes of business were largely unchanged YoY. ▪ Input prices falling. The price of both timber and panel products have seen prices fall in the first half of FY24E but the rate of decline is now slowing. Gross margins declined 260bp YoY to 16.8% reflecting the change in business mix and pricing environment. ▪ Overheads unchanged. Notably, overheads were down YoY despite the current inflationary environment. Combined sales, distribution costs and admin expenses declined 1.3% YoY to £17.6m. Interim operating profit fell 36% YoY to £14.5m, reflecting the reduced revenue profile and softer gross margins, leaving operating margins in H1A at 7.6% (versus 11% in the prior period). Finance income rose materially to £2.1m reflecting a higher deposit rate environment. Diluted EPS of 61.4p fell 35% in line with the decline in operating earnings. The interim dividend has been increased to 7.75p (+7% YoY). ▪ Strong balance sheet. Free cash flow in H1A amounted to £9.1m (FCF margin: 4.8%) leaving net cash closed at £66m (+5% YoY) as at September, equivalent to 330p per share. The Group pension scheme is now in surplus (£11.2m, +55% YoY) and the company will now cease its annual deficit funding of £3m pa. Forecasts maintained: We are leaving our forecasts unchanged (FY24E PBT: £25.7m). This figure is net of a small reduction in forecast gross margin to 17.0% (from 17.5%) but an upgrade in net interest income to £2.0m which allows for some working capital absorption in H2E. Post tax profits in H1A of £12.4m cover 65% of our full year forecast which we feel is conservative given the traditional low seasonality of the business (2023 H1A revenues 55% of total). Trading outlook: Current trading in H2E reflects market conditions similar to those seen in H1A i.e. both input and output prices, together with volumes, largely unchanged. Project deferrals rather than cancellations are a feature of UK market conditions but LTHM has been increasing its market share in lower value products to help offset this risk. The market remains competitive with European manufacturers exporting more to the UK which is seen to be having more robust trading conditions. Competitive environment: The UK market has seen some consolidation activity with PE acquiring comparable businesses to LTHM which has introduced some pricing volatility. LTHM however remains a very material player with c15% market share in the UK is well positioned with its strong balance sheet to benefit from any niche consolidation opportunities which may arise. Investment summary: The boom period seen in fiscal 2022/3 has now eased into what may be regarded as more normalised market conditions. The earnings base of the business in FY24E and beyond is best placed in the context of that generated in the years prior to COVID-19. The years 2018-2021A generated average net income of £13.1m and so our forecast of £19.3m in FY24E therefore represents a meaningful long-term improvement over the returns generated historically. Equally we can reasonably expect a gross margin profile to return to historical averages of around 17.5%. Management has a worthy organic growth strategy of widening the product base flowing through its distribution centres and increasing throughput. With net cash equivalent to around a third of the current share price, the stock trading on a FY24E earnings multiple of 11x with a highly sustainable dividend yield of 2.6% (with 3x cover), and the earnings multiple trading at a c25% discount to the AIM index (preextraordinary items), we are Buyers.

[mesb48] 30/11/2023 07:53

Pension payments ending, 7% div increase, lots to like. Feels to me like the ‘in line’ forecast comment is at risk of being beaten more than missed, but I guess they don’t like to come across as optimists.

[1c3479z] 29/11/2023 14:27

Results due tomorrow, share price Angel, the only coverage, suggests that cash on the balance sheet could amount to ?70m by year end next March: expect the results for previous 6 months to be all right, held up by the rise in interest rates on the cash, comments on recent trading and outlook will be the main interest.

[1c3479z] 23/8/2023 15:49

at the AGM, told that cash is placed with safe banking covenants eg Clydesdale bank attracting about base rate interest and has accumulated steadily through the year,previous year's cash balance was a good 20m less, if I remember correctly so also mentioned was their cash generation ability as the capex is limited and they apparently own most/all depots. according to annual report, wishing to relocate and expand the Belfast depot and take more space being vacated at their Dublin premises.
there are approx 180 drawing a pension and similar number of deferred members,
market expectations are presently t/o 395m, eps 95p, pretax profit 26m...though the figures can be taken with a pinch of salt as last year's market expectation was wildly out...and it's still relatively early in the year. Difficult to imagine any circumstance that could result in a marked outperformance of expectations presently and figures may come in lower than expectations would have thought depending on what happens to economy in next 9 months
Several congratulated on their achievement, thanked their hard work and performance in last 2 years and generosity to employees with approval from all of the gathered 20 or so, shareholders.

[cwa1] 23/8/2023 12:54

LOL :-)



The Chairman of James Latham is pleased to provide the following trading update at the Company's AGM being held today.



Revenue for the first four months of the current financial year, namely 1 April to 31 July 2023 is £128m. This represents a reduction in sales per working day of 12% compared with an increase of 15% against the same period last year. After two years of strong price growth, we continue to see price weakness in some of our key product areas, with average product prices overall down nearly 2% since the start of the current financial year. Volumes are slightly down on the same period last year, mainly down to a reduction in some direct business. Margins have returned to the longer term average achieved pre-pandemic. Overheads and resulting profit are in line with market expectations.



Our cash balances remain strong, and debtors days and bad debts remain consistent with the same period last year.



Most of our customers are still quite busy, but they are seeing signs of contracts being postponed rather than cancelled. The shift in product mix to more lower value products has continued, and we expect this will not change for the rest of the financial year as our customers look for more cost effective solutions.



The Company's interim results for the six months ending 30 September 2023 will be announced on 30 November 2023

[davidosh] 23/8/2023 12:07

No news or update from the company.....Agm today

[1c3479z] 13/8/2023 22:15

staff given just under 8% bonus last year according to the accounts, evidence of a very benevolent employer, helps with the cost of living and ties employees into the company so must have many longstanding employees and cuts down on training and recruitment cost. Just 26 paying remaining employees paying into the defined benefit pension scheme closed to new entrants in 2003, the youngest of whom is 46. Don't know how many are drawing a pension in retirement out of the scheme. Scheme benefits capped at 1% over CPI so quite generous presently.

timber prices 'back to pre-pandemic level' on R4 early morning report 14/8/23 today.

[wad collector] 09/8/2023 20:51

Plunged after you posted that!
It may not have gone anywhere, but compared to most of my holdings recently , that is a good thing.

[davidosh] 09/8/2023 10:47

Spawny....This piece by Maynard Paton may help you

[SharePad] Screening For My Next Long-Term Winner: JAMES LATHAM #LTHM

I selected 40-bagger James Latham because it traded on a remarkably low trailing P/E of 6:

[spawny100] 09/8/2023 08:27

This one has literally gone nowhere in a couple of years and doesn't have a chunky enough dividend to compete with instant access savings rates right now. What's the investment case here?

[wad collector] 07/7/2023 22:00

IC article today sits on the fence, with uncertain demand and margins ahead rates a hold. That was also their position 8 months ago. FWIW.

[1c3479z] 29/6/2023 08:52

no nonsense report and accounts and special dividend, over 60m cash on the accounts, should be able to withstand any more challenging market conditions ahead,

[1c3479z] 25/4/2023 11:38

thanks Maynard and interested to learn from your article that some of their freehold property is held at 1997 valuation, + depreciation so value well understated.
also their non-executive Fabian French is, I'm told, married to a Pippa Latham so his holding is effectively also 'family'. The other non-exec, Ms Kerrigan, doesn't have any shares, as far as I'm aware, but is chair of the remuneration committee, would have thought that she should be a shareholder in such a post? Though Directors are not overpaid at all or taking too much out of the business by today's standards and options not an issue.
Pension deficit/surplus volatile but should become less over the next period if the scheme was closed to new accruals in 2005 or 2009, forget which, and chance that payments into the scheme may reduce after next year,
agree that this is a conservative, old-style company, stuffed with tangibles with Finance Director who's been in post for donkey's years and said to be excellent in his post and educated experienced family continuity very similar to Goodwin.
also, it's on AIM, attractive to the likes of me.

[tmfmayn] 24/4/2023 09:26

Thanks 1c3479z and glad you liked the article. Fair point on the cash; £37m versus market cap of £239m is about 15%. Not sure if all that cash is 'surplus to requirements' though. Perhaps the cash position is all part and parcel of running the business in the 'Latham way', to ensure long-term ambitions are met and reassure customers, staff, suppliers etc during difficult times. Anyway, here is the SharePad article for anyone interested:

[SharePad] Screening For My Next Long-Term Winner: JAMES LATHAM #LTHM

I selected 40-bagger James Latham because it traded on a remarkably low trailing P/E of 6:

[1c3479z] 21/4/2023 14:45

excellent article by Maynard Paton on his website,
all metrics brilliant apart from FCF and operating margin put down to the competitive nature of their market, think though he could have discounted their balance sheet cash in assessing the overall valuation which on balance looks fair value to cheap. Buy towards £10-11 if it drops slightly.
also article in the Times pointing out the building homes for the future regulations which will bring in much greater use of timber frame especially in England by 2025. Most of the timber will be imported which is a strength of LTHM.
so ought to be good for both James's, James Jones and James Latham.