James Latham (LTHM) H2 2024 earnings summary

Executive summary

• Revenue for the year ended 31 March 2024 was £366.5m, down 10.2% year-over-year, reflecting a return to normal market conditions after exceptional prior years.

• Net profit attributable to shareholders was £22.7m, a decrease of 36.9% compared to the previous year.

• Gross profit margin declined to 16.9% from 19.6% due to a shift in product mix and increased competition.

• Cash and cash equivalents increased to £75.9m, up 21.2% year-over-year, with strong operating cash flows.

• The Board declared a final dividend of 26.0p per share and a special dividend of 45p per share, reflecting strong cash balances.

Financial highlights

• Earnings per share were 112.7p, down 37.2% year-over-year.

• Operating profit was £26.1m, down from £43.7m last year.

• Return on capital employed was 12.1%, compared to 21.7% in the prior year.

• Inventory levels reduced to £61.7m, with improved stock control and a focus on lower value products.

• Pension scheme surplus increased to £15.9m, allowing for a contribution holiday.

Outlook and guidance

• Current trading is consistent with the second half of FY24, with stable volumes and margins.

• Freight rate increases are expected to impact cost prices for about 25% of products, but market prices are anticipated to adjust accordingly.

• Demand for panel products is slowly increasing, while timber demand remains challenging but is expected to improve.

• The Board remains mindful of geopolitical and macroeconomic uncertainties but notes improving market confidence.