James Latham plc
(“James Latham” or “the Company”)
Preliminary Results
Chairman's statement
The financial year to 31 March 2022 was a year in which there were considerable challenges to the business. The economy bounced back from the effects of the COVID19 pandemic which put pressure on global supply chains and led to difficulties in obtaining regular supplies of inventory. In addition there were significant increases in the market prices for our products, mainly in the first half of the year. I am therefore very pleased to report unprecedented trading results for the financial year to 31 March 2022.
Revenue for the financial year to 31 March 2022 was £385.4m, up 54.0% on last year's £250.2m. Like for like volumes taking into account working days and acquisitions, increased by 11.9%, with the growth equally on delivered business from our own warehouses and direct volumes shipped from the ports or from the manufacturers. The cost price of our products is on average 36.2% higher (2021: 7.6% higher) than at the start of the financial year.
Gross profit percentage for the financial year to 31 March 2022 was 23.8% compared with 18.0% in the previous financial year, and 26.4% reported in the half year accounts. This figure includes warehouse costs and we are continuing to extend the shift systems to improve our service levels with six of our depots now working 24 hours a day.
Profit before tax is £58.0m, up £39.4m on last year's £18.6m. Profit after tax for the year is £45.6m, up from last year's £15.0m. Earnings per ordinary share is 229.3p (2021: 75.4p) an increase of 204.1%.
As at 31 March 2022 net assets have increased to £164.0m (2021: £118.0m). Inventory levels have increased to £74.2m from £48.2m last year. This is partly to do with increased inventory in our new business, IJK Timber, based in Northern Ireland, but mainly due to increases in prices for our products and extended lead times for our imported products. Trade and other receivables at the year end were £20.3m higher than the previous year due to the increase in revenues but are still showing an improvement on last year's debtor days. Despite the challenges of the economic environment, bad debts have remained small at 0.1% of revenues. Cash and cash equivalents of £37.0m (2021: £28.6m) remain strong with good cash flows from operating activities.
Final dividend
The Board has declared a final dividend of 27.0p per Ordinary Share (2021: 15.5p). This final dividend includes a payment of 8.0p per Ordinary Share to reflect the exceptional results for the year. The dividend is payable on 2 September 2022 to ordinary shareholders on the Company's register at close of business on 5 August 2022. The ex-dividend date will be 4 August 2022. The total dividend per ordinary share of 33.5p for the year (2021: 21.2p) is covered 6.8 times by earnings (2021: 3.6 times).
Current and future trading
The strong results seen in this financial year have continued into the new financial year, with volumes and margins comparable to those achieved in the second half of 2021/22. The supply of many of our key products has become a little easier but there are still a few notable challenges, including obtaining alternative supplies to replace products that previously were sourced from Russia. We are starting to see signs that cost prices are weakening in some of our major product groups, but the continuing supply chain issues and supplier cost pressures on raw material, logistics, power and other overheads, are tempering these price weaknesses.
I would like to thank all of our key suppliers for supporting us during this financial year. I think the true partnerships that we have developed over many years have stood us apart from our competitors during what has been a challenging period for us all.
During the year we purchased Sarcon (No 155) Ltd which trades as IJK Timber in Northern Ireland. This acquisition and subsequent integration into our systems have gone very well and we now have a great platform to develop panel product sales on the island of Ireland.
Despite the positive start to the year there is increasing uncertainty surrounding the macroeconomic outlook and continuing inflationary pressures on our overheads. At this stage the majority of our customers remain busy. We are confident in our ability to deal with the challenges as they arise, but we do not expect to repeat the exceptional results achieved in this financial year.
Development Strategy
The directors remain focussed on developing the business, and believe that the results demonstrate the flexibility of our business model to deal with all the challenges that we have faced in the last year. We will continue to invest in our current warehouse facilities, including extending the Yate warehouse to increase capacity and further extending the working day at Scotland, Gateshead and Purfleet. We will also complete phase 2 of the investment in new machinery at Dresser Mouldings to have a state of the art production facility to improve efficiencies and enable us to target more business.
In the summer we will be relocating our Head Office team to a new modern office in Hemel Hempstead, which will allow us to look at the opportunity to further develop the warehouse at Hemel Hempstead.
We will continue to look for acquisitions that either help with our strategy of developing sales in specific market sectors or any geographical opportunities that arise.
We recognise that the movement of product from suppliers or distribution centres to our customers is critical, and we will be reviewing this to identify any potential efficiencies that we can make to improve the service to our customers.