Latham(James) PLC Final Results (7999I)

TIDMLTHM

RNS Number : 7999I

Latham(James) PLC

22 June 2017

James Latham Plc

("James Latham" or the "Group")

Final Results

I am pleased to report good trading results for the financial year to 31 March 2017.

Group revenue for the financial year to 31 March 2017 was GBP198.8m, 6.9% up on last year's GBP185.9m. The operating profit was GBP14.2m, up GBP1.0m from GBP13.2m.

Finance income was GBP56,000 against GBP56,000 last year. Finance costs, which are principally interest on the pension scheme deficit as calculated under IAS19 (revised), were GBP408,000 against GBP421,000 last year.

Pre-tax profit was GBP13.8m, up GBP0.9m from GBP12.9m last year. Post-tax profit for the year is GBP11.0m, up from last year's figure of GBP10.5m.

Earnings per share were 56.0p compared to last year's 53.7p.

Net assets (total equity) were GBP73.3m compared to GBP71.2m last year.

At the year end the Group's cash reserves stood at GBP17.2m compared to GBP16.8m last year.

Final dividend

The directors recommend a final dividend of 10.85p per ordinary share (2016 10.3p). The final dividend will be paid on 25 August 2017 to shareholders on the register at the close of business on 4 August 2017. The shares will become ex-dividend on 3 August 2017.

The total dividend per ordinary share of 15.35p for the year is covered 3.6 times by earnings (2016: 3.8 times).

Financial year 2016/17

The Group's results are based on the trading of Lathams Limited, a specialist panel and timber distributor. Revenue continued to grow during the year due to higher prices resulting from the weakness of sterling against both the dollar and the euro and to increased volumes ex-warehouse. Year on year increases in both revenue and volume for the fourth quarter was particularly encouraging. The gross margin, before warehouse costs, was down by 0.3 percentage points, due to competitive pressures and higher stock replacement costs.

Panel and Timber prices rose sharply during the year, due to the weakness in sterling. Focus panel products including melamine panels and door blanks, continued to show good growth. Our high quality certified sustainable hardwood for the joinery sector also showed good growth.

Overheads have been well controlled in spite of higher volumes through the warehouses and bad debts were low overall for the year.

Pension Scheme

At 31 March 2017 the deficit of the defined benefit scheme under IAS19 (revised) was GBP16.6m up GBP6.9m compared with GBP9.7m last year, but down from GBP23.2m at 30 September 2016. These variations are the result of the changes in the corporate bond yield used to calculate the present value of the scheme's liabilities, offset by the increases in the value of scheme assets, and reflects the volatility of the accounting for this scheme.

Current financial year 2017/18

This year like for like revenue, both in panels and timber, is 3% higher for April and May than the corresponding period last year which had two more working days. However the gross margin is still under pressure.

Development strategy

The directors continue to identify opportunities for growth and to introduce and promote new products. Construction of the new, up-graded site for our Yate operation is nearing completion and the move is planned for July. Negotiations are at an advanced stage for the construction of a new site for our Wigston unit and relocation is expected by the end of the financial year.

The Group is in a strong financial position to take advantage of opportunities for further business growth, as and when they arise.

Peter Latham

Chairman

21 June 2017.

JAMES LATHAM PLC

CONSOLIDATED INCOME STATEMENT

For the year to 31 March 2017

 
                                    Audited       Audited 
-------------------------------  ------------  ------------ 
                                  Year to 31    Year to 31 
                                   March 2017    March 2016 
-------------------------------  ------------  ------------ 
                                    GBP000        GBP000 
-------------------------------  ------------  ------------ 
 
 Revenue                              198,808       185,929 
 
 Cost of sales (including 
  warehouse costs)                  (162,709)     (151,389) 
-------------------------------  ------------  ------------ 
 
 Gross profit                          36,099        34,540 
 
 Selling and distribution 
  costs                              (15,457)      (15,129) 
 Administrative expenses              (6,463)       (6,170) 
 Operating Profit                      14,179        13,241 
 
 Finance income                            56            56 
 Finance costs                          (408)         (421) 
-------------------------------  ------------  ------------ 
 
 Profit before tax                     13,827        12,876 
 
 Tax expense                          (2,846)       (2,410) 
-------------------------------  ------------  ------------ 
 
 Profit after tax attributable 
  to owners of the parent 
  company                              10,981        10,466 
===============================  ============  ============ 
 
 Earnings per ordinary 
  share (basic)                         56.0p         53.7p 
===============================  ============  ============ 
 Earnings per ordinary 
  share (diluted)                       55.8p         53.5p 
===============================  ============  ============ 
 

All results relate to continuing operations.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year to 31 March 2017

 
                                        Audited   Audited 
-------------------------------------  --------  --------- 
                                         2017       2016 
-------------------------------------  --------  --------- 
                                        GBP000     GBP000 
-------------------------------------  --------  --------- 
 Profit after tax attributable 
  to owners of the parent company        10,981     10,466 
 
 Other comprehensive income 
 Actuarial (loss)/gain on defined 
  benefit pension scheme                (7,543)        825 
 Deferred tax relating to components 
  of other comprehensive income           1,362      (219) 
-------------------------------------  --------  --------- 
 Other comprehensive income 
  for the year, net of tax              (6,181)        606 
-------------------------------------  --------  --------- 
 Total comprehensive income 
  attributable to owners of the 
  parent company                          4,800     11,072 
=====================================  ========  ========= 
 

JAMES LATHAM PLC COMPANY REGISTRATION NUMBER 65619

CONSOLIDATED BALANCE SHEET

At 31 March 2017

 
                                  Audited    Audited 
-------------------------------  ---------  --------- 
                                    2017       2016 
-------------------------------  ---------  --------- 
                                   GBP000     GBP000 
-------------------------------  ---------  --------- 
 Assets 
 Non-current assets 
 Goodwill                              237        237 
 Other intangible assets                 1         93 
 Property, plant and equipment      26,312     22,111 
 Deferred tax asset                  2,904      1,802 
 Total non-current assets           29,454     24,243 
 
 Current assets 
 Inventories                        35,508     33,403 
 Trade and other receivables        40,076     35,288 
 Cash and cash equivalents          17,246     16,832 
 Total current assets               92,830     85,523 
-------------------------------  ---------  --------- 
 Total assets                      122,284    109,766 
-------------------------------  ---------  --------- 
 
 Current liabilities 
 Trade and other payables           27,063     23,471 
 Tax payable                         1,517      1,376 
-------------------------------  ---------  --------- 
 Total current liabilities          28,580     24,847 
 
 Non-current liabilities 
 Interest bearing loans 
  and borrowings                       987        987 
 Retirement and other benefit 
  obligation                        16,625      9,657 
 Other payables                        349        406 
 Deferred tax liabilities            2,485      2,686 
-------------------------------  ---------  --------- 
 Total non-current liabilities      20,446     13,736 
-------------------------------  --------- 
 Total liabilities                  49,026     38,583 
-------------------------------  ---------  --------- 
 
 Net assets                         73,258     71,183 
===============================  =========  ========= 
 
 Capital and reserves 
 Issued capital                      5,040      5,040 
 Share-based payment reserve           108         56 
 Own shares                          (291)      (441) 
 Capital reserve                         3          3 
 Retained earnings                  68,398     66,525 
-------------------------------  ---------  --------- 
 Total equity attributable 
  to equity shareholders 
  of the parent company             73,258     71,183 
===============================  =========  ========= 
 

The Company's profit for the year and total comprehensive income for the year were GBP1,266,000 (2016: loss of GBP551,000)and GBP1,270,000 (2016: loss of GBP631,000) respectively.

JAMES LATHAM PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to the owners of the parent company

 
                                        Share-based 
                                          payment 
                              Issued      reserve        Own       Capital     Retained     Total 
                              capital                   shares     reserve     earnings     Equity 
                             GBP'000      GBP'000     GBP'000     GBP'000     GBP'000     GBP'000 
 Balance at 1 April 
  2015 - audited                5,040           143      (177)           3       57,222     62,231 
 Profit for the 
  year                              -             -          -           -       10,466     10,466 
 Other comprehensive 
  income: 
 Actuarial gain 
  on defined benefit 
  pension scheme                    -             -          -           -          825        825 
 Deferred tax relating 
  to components 
  of other comprehensive 
  income                            -             -          -           -        (219)      (219) 
                           ----------  ------------  ---------  ----------  -----------  --------- 
 Total comprehensive 
  income for the 
  year                              -             -          -           -       11,072     11,072 
 Transactions with 
  owners: 
 Dividends                          -             -          -           -      (2,484)    (2,484) 
 Write down on 
  conversion of 
  ESOP shares                       -             -        819           -        (819)          - 
 Exercise of options                -         (149)          -           -          149          - 
 Transfer of treasury 
  shares                            -             -    (1,385)           -        1,385          - 
 Conversions of 
  ESOP shares                       -             -        507           -            -        507 
 Change in investment 
  in ESOP shares                    -             -      (205)           -            -      (205) 
 Share-based payment 
  expense                           -            62          -           -            -         62 
                           ----------  ------------  ---------  ----------  -----------  --------- 
 Total transactions 
  with owners                       -          (87)      (264)           -      (1,769)    (2,120) 
 Balance at 31 
  March 2016 - audited          5,040            56      (441)           3       66,525     71,183 
 Profit for the 
  year                              -             -          -           -       10,981     10,981 
 Other comprehensive 
  income: 
 Actuarial loss 
  on defined benefit 
  pension scheme                    -             -          -           -      (7,543)    (7,543) 
 Deferred tax relating 
  to components 
  of other comprehensive 
  income                            -             -          -           -        1,362      1,362 
                           ----------  ------------  ---------  ----------  -----------  --------- 
 Total comprehensive 
  income for the 
  year                              -             -          -           -        4,800      4,800 
 Transactions with 
  owners: 
 Dividends                          -             -          -           -      (2,894)    (2,894) 
 Exercise of options                -          (19)          -           -           19          - 
 Write down on 
  conversion of 
  ESOP shares                       -             -         52           -         (52)          - 
 Change in investment 
  in ESOP shares                    -             -         98           -            -         98 
 Share-based payment 
  expense                           -            71          -           -            -         71 
                           ----------  ------------  ---------  ----------  -----------  --------- 
 Total transactions 
  with owners                       -            52        150           -      (2,927)    (2,725) 
 Balance at 31 
  March 2017 - audited          5,040           108      (291)           3       68,398     73,258 
                           ==========  ============  =========  ==========  ===========  ========= 
 

JAMES LATHAM PLC

CONSOLIDATED CASH FLOW STATEMENT

For the year to 31 March 2017

 
                                   Audited   Audited 
--------------------------------  --------  -------- 
                                    2017      2016 
--------------------------------  --------  -------- 
                                   GBP000    GBP000 
--------------------------------  --------  -------- 
 Net cash flow from operating 
  activities 
 Cash generated from operations     11,902    11,704 
 Interest paid                         (2)      (23) 
 Income tax paid                   (2,646)   (2,016) 
--------------------------------  --------  -------- 
 Net cash inflow from 
  operating activities               9,254     9,665 
--------------------------------  --------  -------- 
 
 Cash flows from investing 
  activities 
 Interest received and 
  similar income                        56        56 
 Purchase of property, 
  plant and equipment              (6,045)   (2,056) 
 Proceeds from sale of 
  property, plant and equipment        122       136 
 Net cash outflow from 
  investing activities             (5,867)   (1,864) 
--------------------------------  --------  -------- 
 
 Cash flows from financing 
  activities 
 Borrowings repaid during 
  the year                               -     (907) 
 Equity dividends paid             (2,894)   (2,484) 
 Preference dividend paid             (79)      (79) 
 Net cash outflow from 
  financing activities             (2,973)   (3,470) 
--------------------------------  --------  -------- 
 Increase in cash and 
  cash equivalents for 
  the year                             414     4,331 
================================  ========  ======== 
 Cash and cash equivalents 
  at beginning of the year          16,832    12,501 
--------------------------------  --------  -------- 
 Cash and cash equivalents 
  at end of the year                17,246    16,832 
================================  ========  ======== 
 

JAMES LATHAM PLC

Notes to the audited preliminary financial information

1. The 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 2016 and 31 March 2017.

2. The directors propose a final dividend of 10.85p per ordinary share, which will absorb GBP2,127,000 (2016: 10.3p absorbing GBP2,019,000), payable on 25 August 2017 to shareholders on the Register at the close of business on 4 August 2017. The ex-dividend date is 3 August 2017.

The figures for the year ended 31 March 2017 and as at 31 March 2017 have been extracted from the audited statutory accounts for that year, which have yet to be delivered to the Registrar of Companies and which have been prepared in accordance with International Financial Reporting Standards (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 2017 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 2017 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 2016 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 21 June 2017.

   4.   Net cash flow from operating activities 
 
                                         Year to         Year to 
                                          31 March        31 March 
                                        2017 audited    2016 audited 
 
   Profit before tax                          13,827          12,876 
   Adjustment for finance income 
    and cost                                     352             365 
   Depreciation, amortisation 
    and impairment                             1,822           1,515 
   Profit on disposal of property, 
    plant and equipment                         (95)            (97) 
   Write down of intangible asset                 86               - 
   Increase in inventories                   (2,105)         (1,497) 
   Increase in receivables                   (4,788)         (1,075) 
   Increase/(decrease) in payables             3,536           (480) 
   Retirement benefits non cash 
    amounts                                    (902)           (267) 
   Share-based payments non cash 
    amounts                                       71              62 
   Own shares non cash amounts                    98             302 
                                      --------------  -------------- 
   Cash generated from operations             11,902          11,704 
                                      --------------  -------------- 
 

5. The Annual General Meeting of James Latham plc will be held at Gallery Level, Business Design Centre, 52 Upper Street, London, N1 0QH on 23 August 2017 at 12.30pm.

This information is provided by RNS

The company news service from the London Stock Exchange

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June 22, 2017 02:00 ET (06:00 GMT)