Revenue, earning fall for James Latham

(Sharecast News) - Timber and panel products specialist James Latham posted a slight decline in revenue and profitability for the six months ended 30 September on Thursday, citing market pressures and changing product dynamics. The AIM-traded company said revenue for the period fell 2.3% to £186.6m, as sales volumes rose 4.1% but shifted toward lower-priced products.

Gross profit margins decreased to 16.3% from 16.8% due to price competition, particularly in timber products affected by the diversion of cheaper uncertified hardwoods to the UK market under new EU deforestation regulations.

Operating profit dropped to £11.3m, down from £14.5m a year earlier, while profit before tax fell to £13.6m from £16.4m.

Earnings per share declined to 50.5p compared with 61.5p a year earlier.

Despite the lower earnings, net assets grew to £210.4m, and cash reserves increased to £67.5m, bolstered by effective cost management and improved interest receipts.

The board declared an interim dividend of 7.95p per share, up from 7.75p last year, to be paid on 24 January.

James Latham noted continued market challenges, including competitor insolvencies and aggressive inventory clearance efforts, which had pressured margins but created opportunities to expand market share.

The firm said it had added new panel product brands and specialist sales staff to enhance its offering.

Looking ahead, the company announced plans to establish a national distribution centre within three years to improve stock management and support its depot network.

While current trading volumes and margins remained stable, the board said it expected full-year results to fall slightly below last year's performance, with market improvement now anticipated by mid-2025.

At 0945 GMT, shares in James Latham were down 10.47% at 1,155p.

Reporting by Josh White for Sharecast.com.