Last checked at 29 Jun 2010 07:00
James Latham plc
("James Latham", the "Company")
Full Year Results
In what has been another difficult year for the economy as a whole, I am pleased to report the results for the financial year to 31 March 2010 which show a good trading performance and a strong balance sheet.
Group revenue in the financial year to 31 March 2010 was £115,372,000, 1.3% up on last year's £113,904,000 after being 5.9% behind at six months.
Operating profit increased by 69% to £6,437,000 from £3,812,000 last year.
Finance income was £43,000 against £647,000 last year. The main reason for the drop is the lower prevailing interest rates. Financial costs, which are principally interest on the pension scheme deficit as calculated under IAS19, were £893,000 against £287,000.
Pre-tax profit was £5,587,000 and has increased from last year's figure of £4,172,000.
Profit after tax was £4,113,000 compared to £2,268,000 last year.
Earnings per share was 21.5p compared to last year's 11.8p .
Net assets (total equity) are £42,235,000.
The company's cash reserves stood at £10,545,000 at 31 March 2010.
Final dividend
The directors recommend a final dividend of 5.25p per ordinary share (2009 4.25p). The final dividend will be paid on 27 August 2010 to shareholders on the register at the close of business on 6 August 2010. The shares will become ex-dividend on 4 August 2010.
The total dividend per ordinary share of 7.75p for the year is covered 2.8 times by earnings.
Financial year 2009/10
The Group's results are based on the trading of Lathams Limited, a specialist panel and timber distributor. Revenue was 1.3% higher and the gross margin percentage was 1 percentage point higher than the previous year.
The international market for hardwood and panel products fell sharply in the second half of 2008/09 resulting in falling timber product prices. In addition, de-stocking and a slowdown in economic activity resulted in weak demand for goods in the UK. This continued into the opening months of 2009/10, with lower volumes and prices. However, as the year progressed, supply was cut, prices stabilised and volumes gradually improved. Turnover in January and February held up well considering the adverse weather experienced in most parts of the country.
Prior to the start of the year the Directors implemented a cost reduction programme and saving in most areas of the business has been an important element in the improved results.
Bad debts returned to more normal levels and the deterioration that we had anticipated over the Christmas period did not materialise. Earlier in the year, credit insurance was reduced or withdrawn on a significant number of customers with account balances over £40,000 but this eased later in the year.
It has been tough driving forward turnover and profit at the newer branches, but progress has been made during the year.
Current financial year 2010/11
The improved level of demand seen in the second half of last year has continued into the first quarter. Part of this is the result of customer restocking in anticipation of rising prices but customers appear busier than last year. Volumes are generally higher and prices are firmer. Managing customer credit levels continues to be difficult.
The future level of demand continues to be uncertain, as cuts in Government spending will affect some areas of activity. With demand still fragile, it is unclear how quickly higher prices will be established. It is a difficult climate in which to forecast far ahead.
Development strategy
The Directors continue to review the company's various activities and are adding resources to areas where they have identified opportunities for growth, such as hardwood flooring, door blanks and decorative panels. We have been working closely with suppliers to introduce new products. With both global and UK levels of demand uncertain, purchasing commitments are being carefully monitored. The company is in a strong financial position to take advantage of opportunities that will occur in the current trading climate.
Peter Latham
Chairman
29 June 2010
For further enquiries please visit www.lathams.co.uk or contact:
| James Latham Plc |
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| Peter Latham, Chairman | Tel: 01442 849 100 |
| David Dunmow, Finance Director | Tel: 01442 849 100 |
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| Astaire Securities Plc |
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| Shane Gallwey | Tel: 020 7492 4775 |
JAMES LATHAM PLC CONSOLIDATED INCOME STATEMENT
For the year to 31 March 2010
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| Unaudited | Audited |
| | Year to 31 March 2010 | Year to 31 March 2009 |
|
| £000 | £000 |
| |
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Revenue | 115,372 | 113,904 |
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Cost of sales (including warehouse costs) | (94,838) | (95,759) |
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| Gross profit | 20,534 | 18,145 |
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Selling and distribution costs | (9,435) | (9,507) |
| Administrative expenses | (4,749) | (5,009) |
| Other operating income | 87 | 183 |
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| (14,097) | (14,333) |
| Operating Profit | 6,437 | 3,812 |
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|
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| Finance income | 43 | 647 |
Finance costs | (893) | (287) |
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Profit before tax | 5,587 | 4,172 |
| | | |
Tax expense | (1,474) | (1,904) |
| | | |
Profit after tax attributable to equity shareholders of the parent company | 4,113 | 2,268 |
| | | |
Earnings per ordinary share (basic) | 21.5p | 11.8p |
Earnings per ordinary share (diluted) | 21.3p | 11.7p |
All results relate to continuing operations
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year to 31 March 2010|
| Unaudited | Audited | |
|
| Year to 31 March 2010 | Year to 31 March 2009 | |
|
| £000 | £000 | |
| Profit after tax | 4,113 | 2,268 | |
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| Other comprehensive income |
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| Actuarial losses on pension scheme | (3,387) | (312) | |
| Deferred tax effect of actuarial losses on pension scheme | 943 | 48 | |
| Other comprehensive income | (2,444) | (264) | |
| Total comprehensive income, attributable to owners of the parent company |
1,669 |
2,004 | |
CONSOLIDATED BALANCE SHEET
At 31 March 2010
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| Unaudited | Audited | |
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| As at 31 March 2010 | As at 31 March 2009 | |
|
| £000 | £000 | |
| Assets |
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| |
| Non-current assets |
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| |
| Goodwill | 237 | 237 | |
| Intangible assets | 138 | 146 | |
| Property, plant and equipment | 18,359 | 18,496 | |
| Total non-current assets | 18,734 | 18,879 | |
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| Current assets |
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| Inventories | 19,210 | 16,251 | |
| Trade and other receivables | 23,658 | 21,334 | |
| Cash and cash equivalents | 10,545 | 10,718 | |
| Total current assets | 53,413 | 48,303 | |
| Total assets | 72,147 | 67,182 | |
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| Current liabilities |
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| Trade and other payables | 16,934 | 14,914 | |
| Current portion of interest bearing loans and borrowings | 21 | 21 | |
| Current tax payable | 878 | 265 | |
| Total current liabilities | 17,833 | 15,200 | |
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| Non-current liabilities |
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| Interest bearing loans and borrowings | 998 | 1,020 | |
| Retirement and other benefit obligation | 8,311 | 5,244 | |
| Other payables | 855 | 886 | |
| Deferred tax liabilities | 1,915 | 2,941 | |
Total non-current liabilities | 12,079 | 10,091 | |
| Total liabilities | 29,912 | 25,291 | |
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| Net assets | 42,235 | 41,891 | |
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| Capital and reserves |
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| Issued capital | 5,040 | 5,040 | |
| Share-based payment reserve | 30 | 1 | |
| Own shares | (203) | (139) | |
| Capital reserve | 3 | 3 | |
| Retained earnings | 37,365 | 36,986 | |
| Total equity attributable to owners of the parent company | 42,235 | 41,891 | |
JAMES LATHAM PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
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Issued capital | Share-based payment reserve |
Own shares |
Capital reserve |
Retained earnings |
Total equity |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| At 1 April 2008 | 5,040 | 95 | (429) | 3 | 37,412 | 42,121 |
| Profit for the year | - | - | - | - | 2,268 | 2,268 |
| Other comprehensive income |
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| Actuarial losses on pension scheme | - | - | - | - | (264) | (264) |
| Total comprehensive income for the year | - | - | - | - | 2,004 | 2,004 |
| Transactions with owners |
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| Dividends | - | - | - | - | (1,562) | (1,562) |
| Purchase of treasury shares | - | - | - | - | (799) | (799) |
| Change in investment in ESOP shares | - | - | 126 | - | - | 126 |
| Transfer of share-based payment reserve on exercise of options | - | (95) | - | - | 95 | - |
| Capital loss on conversion of ESOP shares | - | - | 164 | - | (164) | - |
| Share-based payment expense | - | 1 | - | - | - | 1 |
| Total transactions with owners | - | (94) | 290 | - | (2,430) | (2,234) |
| Balance at 31 March 2009 | 5,040 | 1 | (139) | 3 | 36,986 | 41,891 |
| Profit for the year | - | - | - | - | 4,113 | 4,113 |
| Other comprehensive income |
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| Actuarial losses on pension scheme | - | - | - | - | (2,444) | (2,444) |
| Total comprehensive income for the year | - | - | - | - | 1,669 | 1,669 |
| Transactions with owners |
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| Dividends | - | - | - | - | (1,290) | (1,290) |
| Change in investment in ESOP shares | - | - | (64) | - | - | (64) |
| Share-based payment expense | - | 29 | - | - | - | 29 |
| Total transactions with owners | - | 29 | (64) | - | (1,290) | (1,325) |
| Balance at 31 March 2010 | 5,040 | 30 | (203) | 3 | 37,365 | 42,235 |
JAMES LATHAM PLC
CONSOLIDATED CASH FLOW STATEMENT For the year to 31 March 2010|
| Unaudited | Audited |
|
| Year to 31 March 2010 | Year to 31 March 2009 |
|
| £000 | £000 |
Net cash flow from operating activities |
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Cash generated from operations | 2,757 | 4,997 |
Interest paid | (5) | (224) |
Income tax received/(paid) | (943) | 461 |
Net cash inflow from operating activities | 1,809 | 5,234 |
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| Cash flows from investing activities |
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| Interest received and similar income | 39 | 655 |
| Purchase of property, plant and equipment | (568) | (1,647) |
| Purchase of intangible asset | - | (4) |
| Proceeds from sale of property, plant and equipment | 2 | 46 |
| Proceeds from prior year sale of property and investment in subsidiary undertaking |
- |
500 |
Net cash used in investing activities | (527) | (450) |
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| Cash flows from financing activities |
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Bank loans repaid during the year | - | (357) |
Finance leases repaid during the year | (22) | (21) |
Equity dividends paid | (1,290) | (1,562) |
Preference dividend paid | (79) | (79) |
Purchase of own shares | (64) | (186) |
Sale of own shares | - | 313 |
Purchase of treasury shares | - | (799) |
Net cash used in financing activities | (1,455) | (2,691) |
(Decrease)/increase in cash and cash equivalents for the year | (173) | 2,093 |
Cash and cash equivalents at beginning of the year | 10,718 | 8,625 |
Cash and cash equivalents at end of the year | 10,545 | 10,718 |
JAMES LATHAM PLC Notes to the preliminary financial information
1. The results presented in this report are unaudited and they have been prepared in accordance with the IFRS (as adopted by the EU) accounting policies set out in the Group accounts for the year ended 31 March 2009 and those set out in the Group accounts for the year ended 31 March 2010. The figures for the year ended 31 March 2009 have been audited.
2. The directors propose a final dividend of 5.25p per ordinary share, which will absorb £1,003,000 (2009: 4.25p absorbing £818,000), payable on 27 August 2010 to shareholders on the Register at the close of business on 6 August 2010. The ex-dividend date is 4 August 2010.
3. The financial information in this announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006 for the years ended 31 March 2010 or 2009. The statutory financial statements for the year ended 31 March 2010 will be finalised and signed on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The financial information for the year ended 31 March 2009 is derived from the statutory accounts for that year. The auditor reported on those statutory accounts which have been delivered to the Registrar of Companies and which did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
4. This announcement was approved by the Board of Directors on 28 June 2010.
5. The Annual General Meeting of James Latham plc will be held at Unit 3 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU on 25 August 2010 at 12.30pm.
The Annual Report and Accounts for the year ended 31 March 2010 will be sent to all shareholders in due course. The Annual Report and Accounts may also be viewed in due course on James Latham plc's website at www.lathams.co.uk