Pre-tax profits slipped a little at the half-way stage for James Latham, but take out a one-off additional receipt of £0.36m relating to the sale of the Clapton site, which boosted last year's numbers, and profits were pretty much unchanged.
Turnover at the timber merchant in both timber and panel products rose 12 per cent through a combination of increased volumes and higher prices, but trading margins, especially in the second quarter, came under pressure, which accounted for the flat profits performance.
However, the group still managed to achieve record sales in both August and September, and a new, bigger site has been bought in Leeds, which is currently being fitted out, with business transferring there starting in December. And the recently acquired timber merchant DLH UK, now trading as LDT, performed better than expected. Trading since the half-year end has been steady, although margins remain under pressure.
The group continues to benefit from cash settlement discount from suppliers, and while bad debts are down from a year earlier, they are likely to remain a concern over the coming months.
Northland Capital is forecasting full-year adjusted pre-tax profits of £6.6m and EPS of 25p (2011: £8m/30.8p).
| JAMES LATHAM (LTHM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 228p | MARKET VALUE: | £44m | |
| TOUCH: | 225-230p | 12-MONTH HIGH: | 270p | LOW: 191p |
| DIVIDEND YIELD: | 4.1% | PE RATIO: | 8 | |
| NET ASSET VALUE: | 232p | NET CASH: | £0.2m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 66.0 | 4.59 | 17.8 | 3.0 |
| 2011 | 74.2 | 4.16 | 16.1 | 3.0 |
| % change | +12 | -9 | -10 | - |
Ex-div: 4 Jan Payment: 25 Jan | ||||
