James Latham costs limit profits

The wood-based sheet materials importer has seen margins improve since the second half of its full year, but spiralling costs have hampered the company’s profitability in recent times. Warehouse costs increased due to a planned extension of working hours, while James Latham upped its investment in its racking systems and faced increased rents at some of its leased sites. We should expect further pressures on margins as the company plans further racking investment, while some labour costs should rise as its Fareham depot joins Yate and Leeds in adopting a 24-hour shift system. Inventory levels rose nearly 6 per cent to around £42.3mm in part due to the rise in unit cost of stock, as well as James Latham’s Brexit contingency stock.

Figures exclude the February acquisition of Abbey Woods, an Irish timber merchant and distributor of Accoya wood in Ireland, which it picked up for €1.8m (£1.6m) with a further payment of €300,000 to €400,000 due for net assets. A further €400,000 is payable to Abbey Woods’ vendors over the next two years, subject to turnover targets being met.