Chairman’s statement
I am very pleased to report good trading results for the financial year to 31 March 2025.
The financial year to 31 March 2025 was a year that started off with challenging market conditions, but one where we were expecting market conditions to improve during the second half of this financial year. However, we did not see the expected improvement until the final quarter. Product values were stable for the first half of the year, but we saw some weakness in our commodity products in the second half of the year. During the second half of the year we saw a significant competitor go into administration which caused some short term pressure on margins in some products groups as they quickly turned their stock into cash.
Global supply chains have been much easier this year, although container rates did fluctuate quite dramatically during the course of the year. Due to the market conditions, we did see a continuing trend of a shift in product mix to some lower value products as customers looked to purchase cheaper and more cost effective products.
Despite all these challenges, these positive results are a further demonstration of the ability of the business to make the most of any market conditions and turn them into opportunities.
Revenue for the financial year to 31 March 2025 was £366.6m, up slightly on last year’s £366.5m. Like for like volumes taking into account working days and acquisitions, increased by 2.2%, with growth of 2.4% on delivered business from our own warehouses. The cost price of our products is on average 3.5% higher (2024: 3.4% lower) than at the start of the financial year. We continue to see a move in the product mix of our sales towards cheaper alternative products. Whilst we have gained market share in these products, the lower price per tonne has resulted in reduced revenues.
Gross profit percentage for the financial year to 31 March 2025 was 16.8% compared with 16.9% in the previous financial year, with product mix and a more competitive environment resulting in margins reducing slightly below our long term average. Despite inflation remaining high, operational overheads have been well controlled. Included within overheads is £2.5m one-off pension charge relating to a change in the definition of pensionable salaries. Despite this, there is still a considerable surplus recorded under IAS19 for the final salary pension scheme.
Profit before tax is £24.3m, compared with last year’s £30.3m. Profit after tax for the year is £18.1m compared with last year’s £22.7m. Earnings per ordinary share is 90.1p compared with last year’s 112.7p.
As at 31 March 2025 net assets have increased to £220.5m (2024: £218.6m). Inventory levels have increased to £65.7m from £61.7m last year. Current trade and other receivables at the year end were £0.6m higher than the previous year with our measure of debtors days unchanged from the previous year. Bad debts have remained small at 0.13% (2024: 0.11%) of revenues. Cash and cash equivalents of £65.5m (2024: £75.9m) remain strong.
Final dividend
The Board has declared a final dividend of 27.3p per Ordinary Share (2024: 26.0p). The dividend is payable on 22 August 2025 to ordinary shareholders on the Company’s register at close of business on 1 August 2025. The ex-dividend date will be 31 July 2025. The total dividend per ordinary share of 35.25p for the year (2024: 33.75p) is covered 2.6 times by earnings (2024: 3.3 times), not including the special dividend of 45p per ordinary share which was declared in the previous financial year.
Current and future trading
The gradual trend to improved market conditions that we have seen in the final quarter of this financial year has continued into the new financial year, with a slight improvement in the trading margin and also our trading volumes. We are not seeing any price weakness in our product portfolio, and our manufacturers have significant cost pressures on raw materials and wages which should lead to some price inflation over the coming financial year. Demand for our solid timber products, which has been more challenging during this financial year, are showing signs of improvement which we believe will continue.
The majority of our customers are more confident at the moment, with better orders books than at the same period last year.
We are mindful of the geopolitical risks, including the effect that tariffs could have on some of our products which could cause some unexpected challenges during the course of the current financial year. Container rates have been fluctuating due to uncertainties with tariffs. The 90 day tariff reprieve has created an increase in short term freight causing prices to increase, but this could change quite quickly.
Development Strategy
The board are continually focused on developing the business and ensuring that the business is in the best position to make the most of all the future opportunities that will arise.
The service levels and product range we offer our customers continues to be critical to our future success. Following our complete end to end review of our supply chain, the outcome was that we should consider investing in a National Distribution Centre. This facility would enable the business to further improve the service it offers to our customers, increase our product range and most importantly allow the business to take control of its supply chain so that our customers can rely on the exceptional service that we give. We are currently reviewing the options, and once finalised, this is expected to be a two to three year project. The consideration of this investment shows our intention to remain market leader in our sector and future proof the business for many years to come.
During this financial year we implemented a warehouse management system (“WMS”) into our Thurrock depot which has been a huge success. We are currently working on rolling this out through the business over the next few years.
We have purchased our site in Scotland and also invested in more melamine racking to further improve our product range for our customers. We continue to invest in racking at our sites to maximise the space and increase the product range for our customers.
We have been through a rebranding process where we now have renamed Dresser Mouldings as Latham Timber Manufacturing, IJK are now James Latham Ireland and Abbey Woods are James Latham Dublin.
Nick Latham
CONSOLIDATED INCOME STATEMENT
| unaudited | audited | |
| Year to 31 March 2025 | Year to 31 March 2024 | |
| £000 | £000 | |
| Revenue | 366,610 | 366,514 |
| Cost of sales (including warehouse costs) | (305,162) | (304,415) |
| Gross profit | 61,448 | 62,099 |
| Selling and distribution costs | (27,407) | (24,225) |
| Administrative expenses | (13,848) | (11,731) |
| Operating Profit | 20,193 | 26,143 |
| Finance income | 4,435 | 4,313 |
| Finance costs | (347) | (194) |
| Profit before tax | 24,281 | 30,262 |
| Tax expense | (6,135) | (7,601) |
| Profit after tax attributable to owners of the parent company | 18,146 | 22,661 |
| Earnings per ordinary share (basic) | 90.1p | 112.7p |
| Earnings per ordinary share (diluted) | 89.9p | 112.6p |