James Latham (LTHM) imports and distributes wood-based sheet materials, and while turnover rose in the half year to September 2017, profit was down due to sterling’s weakness and because it was unable to pass on all the increased prices demanded by manufacturers.
Inevitably gross margins fell from 18.7 per cent to 17.3 per cent, although there are signs that these are starting to stabilise, especially since supply disruptions from some of its key suppliers’ manufacturing facilities appear to have been resolved. Trading in the second half has started well, with both revenue and margins showing a slight improvement.
In July, the company completed the move of its Yate depot to a new modern facility, with £100,000 of one-off costs incurred. Following on from this, the Wigston depot is moving to a site closer to the motorway network in Leicester, with completion expected ahead of schedule in January 2018. And while the pension fund deficit remains sensitive to changes in the discount rate, the shortfall at the half-year end was virtually halved from March 2017 to £8.5m.
Analysts at Northland are forecasting adjusted pre-tax profit for the year to March 2018 of £13.8m and EPS of 55.4p (from £12.9m and 53.5p in FY2017).
| JAMES LATHAM (LTHM) | ||||
| ORD PRICE: | 842.5p | MARKET VALUE: | £165m | |
| TOUCH: | 825-860p | 12-MONTH HIGH: | 958p | LOW: 695p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 428p | NET CASH: | £11.6m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 100 | 7.66 | 31.2 | 4.5 |
| 2017 | 107 | 6.72 | 27.8 | 4.5 |
| % change | +7 | -12 | -11 | - |
| Ex-div: | 4 Jan | |||
| Payment: | 26 Jan |
