A growing pipeline of construction projects and an expanding range of niche timber and panel products to match it saw operating profit at James Latham (LTHM) soar 19 per cent to £6.5m in the six months to September. That news, and a comment suggesting trading is getting even better, sent the shares up 5 per cent.
The supplier of decking, hardwood flooring, natural acrylic stone and laminates experienced robust demand for decorative panels and doors. Most popular were James Latham's environmentally-friendly wood solution Accoya and WoodEx, its engineered timber product for the joinery sector.
Strong sales of niche, higher-margin engineered wood solutions helped offset a number of headwinds to keep gross margins stable at 17.8 per cent. Aside from a competitive plywood market, profits were impacted by a decision to extend opening hours to satisfy demand and the introduction of new services offering customers smaller order sizes and later cut-off times for next-day delivery. But the company continued to enjoy preferential pricing from suppliers by using its growing cash pile to pay them faster. A portion of these funds will be used to relocate the group's two oldest depots.
House broker Northland Capital forecasts adjusted EPS of 44.8p for the year to March 2016, up from 39.7p in FY2015.
| JAMES LATHAM (LTHM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 683p | MARKET VALUE: | £133m | |
| TOUCH: | 670-695p | 12-MONTH HIGH: | 753p | LOW: 503p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 349p | NET CASH: | £11.4m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 89.1 | 5.2 | 20.5 | 3.7 |
| 2015 | 96.2 | 6.3 | 25.8 | 4.0 |
| % change | +8 | +21 | +26 | +8 |
Ex-div: 7 Jan Payment: 29 Jan | ||||
