James Latham (LTHM) reported an increase in distribution at the half-year mark, on the back of a more favourable product mix, which generated rising sales and a 34 basis point increase in the gross margin to 17.42 per cent.
The timber and panel products distributor saw increased delivered volumes in its core business, with marked growth in its added value products. The recent acquisition of Dresser Mouldings, a specialist timber and cladding processor, should help to drive the top line, although its immediate impact on unit profitability is difficult to assess at this stage.
The company also noted an increase in sales at Abbey Woods, the Irish timber distributor acquired in February 2019, and an improvement in panel product volumes, although profitability was constrained by price falls on most of its commodity panel products. The increased volumes fed through to rising warehouse and distribution costs, as overall man-hours increased now that three of its depots work 24 hours a day for five days a week - although this hardly constitutes a bear point.
| JAMES LATHAM (LTHM) | ||||
| ORD PRICE: | 938p | MARKET VALUE: | £ 187m | |
| TOUCH: | 915-960p | 12-MONTH HIGH: | 943p | LOW: 608p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 490p | NET CASH: | £15.9m † | |
| Half-year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 118 | 8.67 | 36.9 | 5.0 |
| 2019 | 126 | 8.32 | 33.8 | 5.5 |
| % change | +6 | -4 | -8 | +10 |
| Ex-div: | 02 Jan | |||
| Payment: | 24 Jan | |||
| † Excludes £4.4m in lease liabilities. | ||||
