James Latham Reports Decrease in Half-Year Profit Despite Rising Sales

James Latham PLC Reports Half-Year Profit Drop Despite Rising Sales

James Latham PLC, a leading timber, panels, and decorative surfaces distributor based in Hemel Hempstead, England, reported a decrease in its half-year profit by 5.9% to GBP12.8 million in the six months ending in September, down from GBP13.6 million the previous year. This drop in profit occurred despite a 5.5% increase in revenue, which rose to GBP196.8 million from GBP186.6 million.

Stable Prices But Lower Margins Affect Earnings

During the same six-month period, the cost prices of both timber and panels remained stable. Although volume growth across both panels and timber products showed an increase of 6.8%, an expansion of the Latham Direct Timber business, which supplies customers directly at lower margins, contributed significantly to this growth. This, however, resulted in a slight decrease in overall gross profit margin, from 16.3% to 16.2%.

Second Half of Financial Year Begins With Similar Volumes and Margins

The subsequent six-month period has started with similar volumes to the previous period, along with comparable margins. James Latham PLC anticipates that product price stability will continue. However, the company also expressed some concern over the economic outlook, revealing a sense of nervousness among its customer base despite reasonable order books. The merchant sector continues to struggle for growth.

Small Increase in Share Dividend

The company increased its share dividend by 1.9%, from 7.95p to 8.1p per share. Despite this, shares in James Latham were down by 1.9% to 1,006.00p each around midday in London on Thursday.

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Article by Jeremy Cutler, Alliance News reporter

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