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.

Nick Latham

Chairman

29 June 2022

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018

For further information please visit www.lathamtimber.co.uk or contact:

JAMES LATHAM PLC

CONSOLIDATED INCOME STATEMENT

For the year to 31 March 2022

All results relate to continuing operations.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year to 31 March 2022

* see Note 3

JAMES LATHAM PLC                                                                                   COMPANY REGISTRATION NUMBER 65619

CONSOLIDATED BALANCE SHEET

At 31 March 2022                                                                                                                              

* see Note 3

JAMES LATHAM PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to the owners of the parent company

* see Note 3

JAMES LATHAM PLC

CONSOLIDATED CASH FLOW STATEMENT

For the year to 31 March 2022

JAMES LATHAM PLC

Notes to the unaudited preliminary financial information

1.   The preliminary financial information presented in this report is unaudited and has been prepared in accordance with the recognition and measurement principles of International Accounting Standards in conformity with the requirements of the Companies Act 2006 set out in the Group accounts for the years ended 31 March 2021 and 31 March 2022, and does not contain all the information to be disclosed in financial statements prepared in accordance with IFRS.

2.   The directors propose a final dividend of 27.0p per ordinary share, which will absorb £5,379,000 (2021: 15.5p absorbing £3,082,000), payable on 2 September 2022 to shareholders on the Register at the close of business on 5 August 2022.  The ex-dividend date is 4 August 2022.

3.   The figures for the year ended 31 March 2021 and as at 31 March 2022 are unaudited. Other than the adjustment referred to below, the figures relating to 31 March 2021 have been extracted from the statutory accounts for that year. The statutory accounts for the year ended 31 March 2022 have yet to be delivered to the Registrar of Companies and have been prepared in accordance with UK-adopted International Accounting Standards.  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 2022 will be delivered to the Registrar of Companies and sent to Shareholders in due course.  The Annual Report and Accounts may also be viewed in due course on James Latham plc's website at www.lathamtimber.co.uk

Statutory accounts for the year ended 31 March 2021 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.

The 31 March 2021 defined benefit pension scheme deficit has been restated to take account of the requirement in IFRIC 14 to consider the present value of future benefits available in the form of reduced contributions and/or repayments, taking into account the deficit recovery plan the Group was committed to at 31 March 2021. The effect of this is to reduce the deferred tax asset by £487,000, increase the retirement and other benefit obligation by £3,372,000 with a corresponding reduction of £3,859,000 in the other comprehensive income for the year. There is no change to profits or cash flows resulting from this correction. The results for the year ended 31 March 2021 are presented as unaudited in this preliminary statement while the Company's auditors complete the audit of the restated accounts.

4.   This announcement was approved and authorised for issue by the Board of Directors on 29 June 2022.

5.   Net cash flow from operating activities

6.   Earnings per ordinary share is calculated by dividing the net profit for the period attributable to ordinary        shareholders by the weighted average number of ordinary shares outstanding during the period.

7.   The Annual General Meeting of James Latham plc will be held at Unit 1 Swallow Park, Finway Road, Hemel Hempstead, Herts, HP2 7QU on 31 August 2022 at 12.30pm.