5th Dec 2007 07:00
Latham(James) PLC05 December 2007 JAMES LATHAM PLCINTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007 Chairman's statement I am very pleased to report an increase in pre-tax profit of 56% for the firsthalf year compared with the same period last year. The interim dividend has beenincreased by 25%. In November the leased head office and warehouse at HemelHempstead was purchased for £5.25m - the balance sheet remains strong. Results These results are the first to be presented under International FinancialReporting Standards and previously reported figures have been restated. A fullreconciliation is shown in the notes accompanying this statement. Sales for the 6 months to 30 September 2007 were £59,326,000 compared with£49,072,000 for the same period last year, a 21% increase. The operating profitrose by 56% to £4,209,000 compared with £2,690,000 last year. Pre-tax profit at£4,578,000 was up 56% on last year's £2,936,000. Earnings per Ordinary Share are16.0p (2006 9.8p). Interim Dividend The Board has declared an interim dividend of 2.5p per Ordinary Share (20062.0p), which is covered 6.4 times (2006 4.9 times). The dividend is payable on24 January 2008 to Ordinary shareholders on the Company's Register at the closeof business on 4 January 2008. The ex-dividend date is 2 January 2008. Six Months Trading to 30 September 2007. After the strong trading performance last year, Lathams Ltd has performed wellin the six months to 30 September 2007. The Company, which distributes panelproducts, hardwoods and softwoods, benefited from steady demand and higherprices which helped increase both the volume of sales and margins. Volumes werehigher in the period July to September. Current & Future Trading The management accounts show good levels of trading in October and November -however prices have dropped slightly on products that are not in short supplyand as a result margins have returned to their more usual levels. While demandfrom our merchant customers has slowed, other customer groups continue to showhigh demand levels. Trading conditions in terms of supply, demand and pricingcan change rapidly in this industry; we are monitoring the markets to be in agood position to respond early to any adverse trends. The Company's strategy ofbecoming less dependent on commodity products, where prices and margins areprone to wide fluctuations, will be beneficial in what are becoming toughertrading conditions. The strong growth in the existing business has absorbed working capital. Inaddition to this, plans to relocate two depots to larger premises areprogressing and we expect to announce the opening of a new site before the yearend. Peter LathamChairman5 December 2007 For Further Enquiries: James Latham PlcPeter Latham, Chairman Tel: 01442 849 100David Dunmow, Finance Director Tel: 01442 849 100 Blue Oar Securities PlcMike Coe, Director, Corporate Finance Tel: 0117 933 0020 JAMES LATHAM PLCCONSOLIDATED BALANCE SHEETAs at 30 September 2007 As at 30 Sept As at 30 Sept As at 31 March 2007 unaudited 2006 unaudited 2007 unauditedAssets £000 £000 £000 Non-current assets Property, plant and equipment 11,323 11,296 11,226Goodwill 237 395 237Other receivables 500 4,419 500Deferred tax assets - 866 155Total non-current assets 12,060 16,976 12,118 Current assets Inventories 18,178 16,956 16,405Trade receivables 23,690 19,887 20,707Other current assets 7,320 7,729 6,733Cash and cash equivalents 7,906 1,251 8,872Total current assets 57,094 45,823 52,717 Total assets 69,154 62,799 64,835 Current liabilitiesTrade and other payables 19,563 15,957 17,407Current portion of interest bearing loans and borrowings 735 723 737Current tax payable 1,199 144 205Total current liabilities 21,497 16,824 18,349 Non-current liabilitiesInterest bearing loans and borrowings 1,052 1,701 1,419Retirement benefit obligation 240 4,866 3,033Other payables 227 140 245Long term provisions - 249 108Deferred tax liabilities 683 - -Total non-current liabilities 2,202 6,956 4,805 Total liabilities 23,699 23,780 23,154 Net assets 45,455 39,019 41,681 Capital and reservesIssued capital 5,040 5,040 5,040Share-based payment reserve 75 43 56 Capital reserve 3 3 3Own shares (349) (385) (170) Accumulated profits 40,686 34,318 36,752Total equity 45,455 39,019 41,681 The 30 September 2006 and 31 March 2007 results have been restated following theadoption of International Financial Reporting Standards ("IFRS") - see note 1. JAMES LATHAM PLCCONSOLIDATED INCOME STATEMENTFor the six months to 30 September 2007 Six months to Six months to Year to 30 Sept 2007 30 Sept 2006 31 March 2007 unaudited unaudited unaudited £000 £000 £000 Revenue 59,326 49,072 99,662 Cost of sales (including warehouse costs) (48,323) (40,281) (82,031) Gross profit 11,003 8,791 17,631 Selling and distribution costs (4,423) (4,049) (8,231)Administration expenses (2,390) (2,149) (4,614)Other operating income 19 97 208 (6,794) (6,101) (12,637)Operating Profit 4,209 2,690 4,994 Finance income 424 389 861Finance costs (55) (143) (227) Profit before tax 4,578 2,936 5,628 Income tax expense (1,388) (985) (1,533) Profit after tax 3,190 1,951 4,095 Earnings per ordinary share (basic) 16.0p 9.8p 20.6pEarnings per ordinary share (diluted) 15.9p 9.8p 20.6p The 30 September 2006 and 31 March 2007 results have been restated following theadoption of International Financial Reporting Standards ("IFRS") - see note 1. JAMES LATHAM PLCCONSOLIDATED CASH FLOW STATEMENTFor the six months to 30 September 2007 Six months to Six months to Year to 30 Sept 2007 30 Sept 2006 31 March 2007 unaudited unaudited unaudited £000 £000 £000Net cash flow from operating activitiesCash inflow/(outflow) from operating activities 64 (1,341) 3,240Special contribution to pension fund - (4,500) (5,000)Interest paid (19) (135) (163)Income tax paid (336) (598) (757)Preference dividend paid (39) (39) (79) Net cash outflow from operating activities (330) (6,613) (2,759) Cash flows from investing activitiesInterest received and similar income 276 142 889Purchase of property, plant and equipment (313) (76) (186)Proceeds from sale of property, plant and equipment 7 - 3,946Proceeds from sale of investment in subsidiary undertaking 1,019 9,281 9,228 Net cash from investing activities 989 9,347 13,877 Cash flows before financing activitiesBank loans repaid during the period (357) (1,857) (2,214)Finance leases repaid during the period (13) (6) (23)Equity dividend paid (1,076) (880) (1,278)Purchase of own shares (188) (168) (130)Proceeds of sale of own shares 9 29 - Net cash outflow from financing activities (1,625) (2,882) (3,645) (Decrease) increase in cash and cash equivalents for theperiod (966) (148) 7,473 Cash and cash equivalents at the beginning of the period 8,872 1,399 1,399 Cash and cash equivalents at the end of the period 7,906 1,251 8,872 The 30 September 2006 and 31 March 2007 results have been restated following theadoption of International Financial Reporting Standards ("IFRS") - see note 1. JAMES LATHAM PLCCONSOLIDATED STATEMENT OF TOTAL RECOGNISED INCOME AND EXPENSEFor the six months to 30 September 2007 Six months to Six months to Year to 30 Sept 2007 30 Sept 2006 31 March 2007 unaudited unaudited unaudited £000 £000 £000 Profit after tax 3,190 1,951 4,095Actual return less expected return on pension scheme assets (481) (1,029) (114)Experience gains and losses arising from pension schemeliabilities - - (1)Changes in assumptions underlying the present value ofpension scheme liabilities 3,111 313 673Movement in deferred tax relating to actuarial (gain) loss onpension scheme (811) 215 (167) Total recognised income and expense for the period 5,009 1,450 4,486 CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the six months to 30 September 2007 Six months to Six months to Year to 30 Sept 2007 30 Sept 2006 31 March 2007 unaudited unaudited unaudited £000 £000 £000 Profit attributable to shareholders 3,190 1,951 4,095Dividends (1,076) (880) (1,278) 2,114 1,071 2,817Other recognised gains and losses relating to the period 1,820 (501) 391Change in investment in own shares (179) (134) (123)Change in Share-based payment reserve 19 20 33Movement in the period 3,774 456 3,118Opening shareholders' funds 41,681 38,563 38,563Closing shareholders' funds 45,455 39,019 41,681 JAMES LATHAM PLC Notes to the Half Yearly Report 1. The results presented in this report are unaudited. James Latham Plchas adopted International Financial Reporting Standards ("IFRS") this year,having previously applied UK accounting standards. This half yearly report isthe first that the company has prepared under IFRS and they have been preparedin accordance with the IFRS accounting policies that management expect to applyin the 31 March 2008 IFRS-compliant full financial statements. The comparativeresults for the six months ended 30 September 2006 and the year ended 31 March2007 have been restated accordingly. Reconciliations from the previously statedUK GAAP financial information together with explanations and the revisedaccounting policies are set out in note 5. 2. The directors propose an interim dividend of 2.5p per ordinary sharewhich will absorb £504,000 (2006: 2.0p absorbing £403,000), payable on 24January 2008 to shareholders on the Register at the close of business on 4January 2008. The ex-dividend date is 2 January 2008. 3. This half yearly report does not constitute financial statutoryaccounts within the meaning of section 240 of the Companies Act 1985. Statutoryaccounts for the year ended 31 March 2007 (prepared in accordance with UK GAAP)were prepared and filed with the Registrar of Companies and received anunqualified audit report and did not contain a statement under section 237 (2)or (3) of the Companies Act 1985. 4. As explained in note 1, the group will be presenting its financialstatements in accordance with IFRS for the first time in the 31 March 2008 fullyear financial statements. Set out below are the accounting policies that differfrom the full financial statements prepared at 31 March 2007 that managementexpect to apply in the 31 March 2008 IFRS-compliant full year financialstatements. Intangible assets - goodwill Following initial recognition, goodwill is measured at cost less any accumulatedimpairment losses. For the purposes of impairment testing, goodwill is allocatedto the group's cash-generating units that are expected to benefit from thesynergies of the combination, irrespective of whether other assets orliabilities of the group are assigned to those units. Goodwill is reviewed for impairment annually or more frequently if there is anindication of impairment. Impairment for goodwill is determined by assessing therecoverable amount of the cash-generating unit to which the goodwill relates.Where the recoverable amount of the cash-generating unit is less than thecarrying value of the cash-generating unit to which the goodwill has beenallocated, an impairment loss is recognised. Impairment losses to goodwillcannot be reversed in future periods. Cash and cash equivalents Cash and cash equivalents comprise cash at banks and in hand and short termdeposits with an original maturity of 3 months or less. For the purpose of the consolidated cash flow statement, cash and cashequivalents consist of cash and cash equivalents as defined above, net ofoutstanding bank overdrafts. Leases Leases are classified as finance leases whenever the terms of the lease transfersignificantly all the risks and rewards of ownership of the lessee. All otherleases are classified as operating leases. Finance leases are capitalised on commencement of the lease at the lower of thefair value of the asset and the present value of the minimum lease payments.Each payment is allocated between the liability and the finance charges so as toachieve a constant rate of interest on the finance balance outstanding. Therental obligations, net of finance charges, are included in trade and otherpayables. The finance charges are charges to the income statement over the lease period soas to produce a constant periodic rate of interest on the remaining balance ofthe liability for each period. Payments under operating leases are charged to the income statement on astraight-line basis of the term of the lease. Taxation The tax expense in the income statement represents the sum of tax currentlypayable and deferred tax. Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of the assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit, and is accounted for using the balance sheet liability method. Deferredtax liabilities are generally recognised for all taxable temporary differencesand deferred tax assets are recognised to the extent that it is likely thattaxable profits will be available, against which deductible temporarydifferences can be utilised. Such assets and liabilities are not recognised ifthe temporary difference arises from goodwill or from the initial recognition(other than in a business combination) of other assets and liabilities in atransaction that affects neither the tax profit nor the accounting profit. The carrying value of deferred tax assets is reviewed at each balance sheet dateand reduced to the extent that it is no longer probable that sufficient taxableprofits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rate that is expected to apply in theperiod when the liability is settled or an asset is realised. Deferred tax ischarged or credited to the income statement, except when it relates to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity. 5. Explanation of transition to IFRS The reconciliations of equity at 1 April 2006 (date of transition to IFRS), at31 March 2007 (date of last UK GAAP financial statements) and at 30 September2006 have been included below to enable a comparison of the 2007 half yearlyfigures with those published in the corresponding period of the previous year.In addition there is also a reconciliation of the UK GAAP profit for the yearended 31 March 2007 and the six months ended 30 September 2006 to the profitrestated under IFRS. The significant changes as a result of the transition to IFRS and of adoptingthe IFRS group accounting policies are described below. a. FRS 3 Business combinations IFRS 3 prohibits the amortisation of goodwill. The standard requiresgoodwill to be carried at cost less impairment. Goodwill has been restated atthe original value of the business combination at 1 April 2006 and anyamortisation previously charged has been reversed. As permitted by IFRS1,business combinations prior to 1 April 2006 have not been restated. b. IAS 12 Income taxes IAS 12 requires entities to calculate deferred taxation based on temporarydifferences, which are defined as the difference between the carrying amount ofassets/liabilities and their tax base. The increase in deferred tax liabilitiesas a result of the transition to IFRS is from the potential gain on therevaluation of fixed assets, the potential gain on the roll-over relief claimedon certain fixed assets and the removal of the discount applied to the deferredtax liability under UK GAAP c. IAS 16 Property, plant and equipment In accordance with IFRS 1, the group has elected, where appropriate, totake the revalued carrying amount of certain properties as the "deemed cost" ontransition to IFRS. d. IAS 19 Employee benefits As the group has an obligation to its employees to pay accrued holidayentitlement, IAS 19 requires it to accrue for holidays earned by its employees,but not taken, by the balance sheet date. Under UK GAPP, the defined benefit pension scheme was presented in thebalance sheet net of deferred tax. IAS 19 also requires the defined pensionscheme to be shown gross with the deferred tax asset relating to the pensionscheme liability being presented as part of the deferred tax asset or liability. e. IAS 39 Financial instruments: recognition and measurement IAS 39 requires the group to provide for currency hedges that mature afterthe period end. Reconciliations The following tables reconcile the previously reported UK GAAP numberswith those now presented under IFRS. 6. Copies of this statement will be sent to all shareholders and will also beavailable on written applications to the Company Secretary, James Latham plc,Unit 3 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU. Reconciliation of UK GAAP profit to IFRS profit for the period ended 30September 2006 IAS 19 IFRS 3 Employee Business As at benefits - combinations - 30 Sept. holiday pay goodwill 2006 IFRS £000 £000 £000 £000 Revenue 49,072 49,072Cost of sales (including warehouse (40,281) (40,281)costs) Gross profit 8,791 8,791Selling and distribution costs (4,049) (4,049)Administration expenses (2,180) 21 10 (2,149)Other operating income 97 97 (6,132) 21 10 (6,101) Operating Profit 2,659 21 10 2,690Finance income 389 389Finance costs (143) (143) Profit before tax 2,905 21 10 2,936Income tax expense (985) (985) Profit after tax 1,920 21 10 1,951 Earnings per ordinary share (basic) 9.5p 9.8p Earnings per ordinary share 9.5p 9.8p(diluted) Reconciliation of UK GAAP profit to IFRS profit for the six months ended 31March 2007 IAS 19 IFRS 3 IAS 39 IAS 12 Employee Business Financial Income benefits - combinations - instruments taxes - holiday pay goodwill - currency deferred As at hedging tax 31 March IFRS 2007 £000 £000 £000 £000 £000 £000 Revenue 99,662 99,662Cost of sales (including warehouse (82,031) (82,031)costs) Gross profit 17,631 17,631 Selling and distribution costs (8,231) (8,231)Administration expenses (4,536) (3) (33) (42) (4,614)Other operating income 208 208 (12,559) (3) (33) (42) (12,637) Operating Profit 5,072 (3) (33) (42) 4,994Finance income 861 861Finance costs (227) (227) Profit before tax 5,706 (3) (33) (42) 5,628Income tax expense (1,635) 102 (1,533) Profit after tax 4,071 (3) (33) (42) 102 4,095 Earnings per ordinary share 20.5p 20.6p(basic) Earnings per ordinary share 20.4p 20.6p(diluted) Reconciliation of UK GAAP equity shareholders' funds to IFRS equityshareholders' funds at 1 April 2006 IAS 12 IAS19 Income Employee IAS 19 IFRS 3 taxes - benefits - IAS 16 Employee Business deferred pension Property, benefits - combinations - tax scheme plant and UK GAAP holiday pay goodwill equipment IFRS £000 £000 £000 £000 £000 £000 £000Assets Non-current assets Property, plant and equipment 11,438 11,438Goodwill 362 33 395Other receivables 5,919 5,919Deferred tax assets 693 (1,287) 2,111 1,517Total non-current assets 18,412 33 (1,287) 2,111 19,269 Current assets Inventories 13,746 13,746Trade receivables 18,025 18,025Other current assets 13,355 13,355Cash and cash equivalents 1,399 1,399Total current assets 46,525 46,525 Total assets 64,937 33 (1,287) 2,111 65,794 Current liabilitiesTrade and other payables 14,773 85 14,858Current portion of interestbearing loans and borrowings 2,227 2,227Current tax payable 623 623Total current liabilities 17,623 85 17,708 Non-current liabilitiesInterest bearing loans and 2,060 2,060borrowingsRetirement benefit obligation 4,927 2,111 7,038Other payables 268 268Long term provisions 157 157Total non-current liabilities 7,412 2,111 9,523 Total liabilities 25,035 85 2,111 27,231 Net assets 39,902 (85) 33 (1,287) - 38,563 Capital and reservesIssued capital 5,040 5,040Share-based payment reserve 16 16Capital reserve 3 3Revaluation reserve 758 (227) (531) -Own shares (40) (40)Accumulated profits 34,125 (85) 33 (1,060) 531 33,544 Total equity 39,902 (85) 33 (1,287) - 38,563 Reconciliation of UK GAAP equity shareholders' funds to IFRS equityshareholders' funds at 30 September 2006 IAS 12 IAS19 Income Employee IAS 19 IFRS 3 taxes - benefits - IAS 16 Employee Business deferred pension Property, benefits - combinations - tax scheme plant and UK GAAP holiday pay goodwill equipment IFRS £000 £000 £000 £000 £000 £000 £000AssetsNon-current assetsProperty, plant and equipment 11,296 11,296Goodwill 352 43 395Other receivables 4,419 4,419Deferred tax assets 693 (1,287) 1,460 866Total non-current assets 16,760 43 (1,287) 1,460 16,976 Current assets Inventories 16,956 16,956Trade receivables 19,887 19,887Other current assets 7,729 7,729Cash and cash equivalents 1,251 1,251Total current assets 45,823 45,823 Total assets 62,583 43 (1,287) 1,460 62,799 Current liabilitiesTrade and other payables 15,893 64 15,957Current portion of interestbearing loans and borrowings 723 723Current tax payable 144 144Total current liabilities 16,760 64 16,824 Non-current liabilitiesInterest bearing loans and 1,701 1,701borrowingsRetirement benefit obligation 3,406 1,460 4,866Other payables 140 140Long term provisions 249 249Total non-current liabilities 5,496 1,460 6,956 Total liabilities 22,256 64 1,460 23,780 Net assets 40,327 (64) 43 (1,287) - 39,019 Capital and reservesIssued capital 5,040 5,040Share-based payment reserve 43 43Capital reserve 3 3Revaluation reserve 758 (227) (531) -Own shares (385) (385)Accumulated profits 34,868 (64) 43 (1,060) 531 34,318 Total equity 40,327 (64) 43 (1,287) - 39,019 Reconciliation of UK GAAP equity shareholders' funds to IFRS equityshareholders' funds at 31 March 2007 IAS 39 IAS 12 IAS19 Financial Income Employee IAS 19 instruments - taxes - benefits - IAS 16 Employee currency deferred pension Property, benefits - hedging tax scheme plant and UK GAAP holiday pay equipment IFRS £000 £000 £000 £000 £000 £000 £000AssetsNon-current assetsProperty, plant and equipment 11,226 11,226Goodwill 237 237Other receivables 500 500Deferred tax assets 430 (1,185) 910 155Total non-current assets 12,393 (1,815) 910 12,118 Current assets Inventories 16,405 16,405Trade receivables 20,707 20,707Other current assets 6,733 6,733Cash and cash equivalents 8,872 8,872Total current assets 52,717 52,717 Total assets 65,110 (1,185) 910 64,835 Current liabilitiesTrade and other payables 17,277 88 42 17,407Current portion of interestbearing loans and borrowings 737 737Current tax payable 205 205Total current liabilities 18,219 88 42 18,349 Non-current liabilitiesInterest bearing loans and 1,419 1,419borrowingsRetirement benefit obligation 2,123 910 3,033Other payables 245 245Long term provisions 108 108Total non-current liabilities 3,895 910 4,805 Total liabilities 22,114 88 42 910 23,154 Net assets 42,996 (88) (42) (1,185) - 41,681 Capital and reservesIssued capital 5,040 5,040Share-based payment reserve 56 56Capital reserve 3 3Revaluation reserve 758 (227) (531) -Own shares (170) (170)Accumulated profits 37,309 (88) (42) (958) 531 36,752 Total equity 42,996 (88) (42) (1,185) - 41,681 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Latham Timber