DJ Latham(James) PLC Final Results
Group revenue for the financial year to 31 March 2016 was GBP185.9m, 6.3% up on last year’s GBP174.9m. The operating profit was GBP13.2m, up GBP2.6m from GBP10.6m.
Finance income was GBP56,000 against GBP46,000 last year. Finance costs, which are principally interest on the pension scheme deficit as calculated under IAS19 (revised), were GBP421,000 against GBP503,000 last year.
Pre-tax profit was GBP12.9m, up GBP2.8m from GBP10.1m last year. Post-tax profit for the year is GBP10.5m, up from last year’s figure of GBP7.8m.
Earnings per share were 53.7p compared to last year’s 40.3p.
Net assets (total equity) were GBP71.2m compared to GBP62.2m last year.
At the year end the Group’s cash reserves stood at GBP16.8m compared to GBP12.5m last year.
Final dividend
The directors recommend a final dividend of 10.3p per ordinary share (2015 8.8p). The final dividend will be paid on 26 August 2016 to shareholders on the register at the close of business on 5 August 2016. The shares will become ex-dividend on 4 August 2016.
The total dividend per ordinary share of 14.3p for the year is covered 3.8 times by earnings (2015: 3.2 times).
Financial year 2015/16
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 increased volumes both in ex-warehouse and direct business. Year on year growth slowed in the second half year. Both panels and timber grew revenues throughout the year. The gross margin, before warehouse costs, increased by 1.4 percentage points, due to the higher share taken by our specialist products; margins remained tight on commodity products.
Timber and panel prices fell slightly during the year, in spite of the weakness in sterling in the second half. Focus panel products including melamine panels and door blanks, continued to show good growth. Our high quality, certified sustainable hardwood and WoodEx, our brand of engineered timber for the joinery sector, showed good growth.
Overheads have been controlled, but higher than last year’s due to the extra volumes and longer warehouse hours introduced to meet customers’ demands. Staff numbers have increased during the year, with more warehouse staff to meet shift patterns and sales staff recruited in areas of the business where we see opportunities. Bad debts were low overall for the year.
Pension Scheme
At 31 March 2016 the deficit of the defined benefit scheme under IAS19 (revised) was GBP9.7m down GBP0.7m compared with GBP10.4m last year. This reduction is the result of the increase in the corporate bond yield used to calculate the present value of the scheme’s liabilities, offset by the reduction in the value of scheme assets and reflects the volatility of the accounting for this scheme.
Current financial year 2016/17
This year like for like revenues are 4% higher for April and May than the corresponding period last year, both in panels and timber. The gross margin is also higher. While this is a steady start to the year, there are some signs that this growth is slowing and the fluctuating value of sterling and the uncertain outlook for business activity caused by the EU referendum, make the immediate future difficult to predict.
We continue to see encouraging growth in the newer decorative products we have introduced.
Development strategy
The directors continue to identify opportunities for growth and to introduce and promote new products; we have increased our resource focused on obtaining specifications for these. The plans to upgrade our two older sites at Yate and Wigston have progressed with site purchase and build contracts approved, subject to planning, for a new site in Yate which should be completed by the end of the financial year, and negotiations proceeding for the relocation of the Wigston site.
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
Finance income was GBP56,000 against GBP46,000 last year. Finance costs, which are principally interest on the pension scheme deficit as calculated under IAS19 (revised), were GBP421,000 against GBP503,000 last year.
Pre-tax profit was GBP12.9m, up GBP2.8m from GBP10.1m last year. Post-tax profit for the year is GBP10.5m, up from last year’s figure of GBP7.8m.
Earnings per share were 53.7p compared to last year’s 40.3p.
Net assets (total equity) were GBP71.2m compared to GBP62.2m last year.
At the year end the Group’s cash reserves stood at GBP16.8m compared to GBP12.5m last year.
Final dividend
The directors recommend a final dividend of 10.3p per ordinary share (2015 8.8p). The final dividend will be paid on 26 August 2016 to shareholders on the register at the close of business on 5 August 2016. The shares will become ex-dividend on 4 August 2016.
The total dividend per ordinary share of 14.3p for the year is covered 3.8 times by earnings (2015: 3.2 times).
Financial year 2015/16
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 increased volumes both in ex-warehouse and direct business. Year on year growth slowed in the second half year. Both panels and timber grew revenues throughout the year. The gross margin, before warehouse costs, increased by 1.4 percentage points, due to the higher share taken by our specialist products; margins remained tight on commodity products.
Timber and panel prices fell slightly during the year, in spite of the weakness in sterling in the second half. Focus panel products including melamine panels and door blanks, continued to show good growth. Our high quality, certified sustainable hardwood and WoodEx, our brand of engineered timber for the joinery sector, showed good growth.
Overheads have been controlled, but higher than last year’s due to the extra volumes and longer warehouse hours introduced to meet customers’ demands. Staff numbers have increased during the year, with more warehouse staff to meet shift patterns and sales staff recruited in areas of the business where we see opportunities. Bad debts were low overall for the year.
Pension Scheme
At 31 March 2016 the deficit of the defined benefit scheme under IAS19 (revised) was GBP9.7m down GBP0.7m compared with GBP10.4m last year. This reduction is the result of the increase in the corporate bond yield used to calculate the present value of the scheme’s liabilities, offset by the reduction in the value of scheme assets and reflects the volatility of the accounting for this scheme.
Current financial year 2016/17
This year like for like revenues are 4% higher for April and May than the corresponding period last year, both in panels and timber. The gross margin is also higher. While this is a steady start to the year, there are some signs that this growth is slowing and the fluctuating value of sterling and the uncertain outlook for business activity caused by the EU referendum, make the immediate future difficult to predict.
We continue to see encouraging growth in the newer decorative products we have introduced.
Development strategy
The directors continue to identify opportunities for growth and to introduce and promote new products; we have increased our resource focused on obtaining specifications for these. The plans to upgrade our two older sites at Yate and Wigston have progressed with site purchase and build contracts approved, subject to planning, for a new site in Yate which should be completed by the end of the financial year, and negotiations proceeding for the relocation of the Wigston site.
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