James Latham profit jumps thanks to direct business, disposal

James Latham’s shares climbed on Thursday after an increase in direct business drove interim profit and revenue growth.

The importer and distributor of timber and wood materials said that for the six-month period ended 30 September, revenue stood at £118.2m, up 10.2% compared to the year before, while profit before tax jumped by 28.9% to £8.7m.

The profit increase includes £1.1m of proceeds from the sale of the company’s old Yate site and revenue increases were attributed to a rise in direct business, higher prices and a changing product mix from the AIM traded outfit.

At 30 September James Latham had cash and cash equivalents of £12.9m, up from £12.6m at the same point last year, while the company upped its interim dividend from 4.5p per share to 5p.

"Our customers remain busy and are reporting good order books. The economic outlook though is affected by the uncertainty caused by the Brexit negotiations and we will not be immune to any slowdown in the UK economy. We have reviewed our key European suppliers and have put plans in place to hold more stocks for a period of time in the first half of 2019 in order to mitigate any supply issues," the company said.

Latham added that investment in the business continued, with “extensive” racking projects started at the Purfleet and Thurrock depots, as well as planning for a redevelopment of its Gateshead site in order to make efficient use of space.

James Latham’s shares were up 4.40% at 652.50p at 0943 GMT.