J A M E S L A T H A M P L C
ANNUAL REPORT & ACCOUNTS 2015
Contents
Summary and Highlights
1 Financial Highlights and Calendar
2 Chairmans Statement
Strategic Report
James Latham plc and Our Objectives
4 Outline of Strategic Report
5
6 Key Performance Indicators
7 Operating Review
10 Financial Review
12 Principal Risks and Uncertainties
14 Corporate Responsibility
Corporate Governance
17 Corporate Governance Report
19 Directors and Advisors
20 Directors Remuneration Report
24 Directors Report
27 Statement of Directors Responsibilities
28
Independent Auditor’s Report
Financial Statements
29 Consolidated Income Statement
30 Consolidated Statement of Comprehensive Income
31 Consolidated Balance Sheet
32 Consolidated Statement of Changes in Equity
33 Consolidated Cash Flow Statement
34 Notes forming part of the Group Accounts
59 Company Balance Sheet
60 Notes to the Company Accounts
66 Notice of the Annual General Meeting
69 The Latham Group
1
3
2
4
Front cover:
1 Kronospan Mirror Gloss
2 Xylocleaf
3 Lifecycle Decking
4 LG HI-MACS ®
Financial Highlights for the year ended 31 March 2015
Financial Highlights
Year to 31 March
Turnover
Operating profit*
Operating margin*
Profit before taxation*
Earnings per share*
Total ordinary dividend per share
Equity shareholders’ funds
Cash and cash equivalents
* Adjusted for exceptional items
2015
£000
2014
£000
174,855
163,117
10,564
6.0%
10,107
40.3p
12.5p
62,231
12,501
9,478
5.8%
8,682
36.9p
11.4p
58,108
11,234
Increase
7.2%
11.4%
3.4%
16.4%
9.2%
9.6%
7.1%
11.3%
2013
£000
143,069
7,369
5.2%
6,969
28.7p
10.2p
47,467
8,075
Turnover (£000’s)
Adjusted EPS
Dividend
5
5
8
,
4
7
1
7
1
1
,
3
6
1
5
4
6
,
3
4
1
9
6
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,
3
4
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0
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0
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9
.
6
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.
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1
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7
.
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9
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9
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0
1
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
2011
2012
2013
2014
2015
Financial Calendar
Record date for final dividend 2015
AGM
Payment of final dividend
Interim 2015/16 results announcement
Interim dividend expected payment date
Preliminary announcement of 2015/16 results
AGM 2016
6 August 2015
26 August 2015
28 August 2015
26 November 2015
29 January 2016
23 June 2016
24 August 2016
JAMES LATHAM PLC ANNUAL REPORT 2015
1
Chairman’s Statement
I am pleased to report good trading results for the
financial year to 31 March 2015.
Group revenue for the financial year to 31 March 2015 was
£174.9m, 7.2% up on last year’s £163.1m. The operating
profit was £10.6m, up £1.1m from £9.5m, which, together
with pre-tax profit, post-tax profit and earnings per share
shown below, is adjusted to exclude £1.8m of exceptional
gains relating to the pension scheme last year. The higher
volume traded this year has increased costs, notably
in distribution.
Finance income was £46,000 against £27,000 last year.
Finance costs, which are principally interest on the
pension scheme deficit as calculated under IAS19
(revised) were £503,000 against £823,000 last year
Pre-tax profit was £10.1m, up £1.4m from an adjusted
profit of £8.7m last year. The tax charge represents a rate
of 22.6% up from last year’s 18.0% which benefited
from a credit due to a reduction in rates of tax used in
deferred tax calculations. Post-tax profit for the year is
£7.8m, up from last year’s adjusted figure of £6.8m.
Earnings per share were 40.3p compared to last year’s
adjusted 36.9p.
Net assets (total equity) were £62.2m compared to
£58.1m last year.
At the year end the group’s cash reserves stood at
£12.5m compared to £11.2m last year.
Final dividend
The directors recommend a final dividend of 8.8p per
ordinary share (2014 8.0p). The final dividend will be
paid on 28 August 2015 to shareholders on the register
at the close of business on 7 August 2015. The shares
will become ex-dividend on 6 August 2015.
The total dividend per ordinary share of 12.5p for the
year is covered 3.2 times by earnings (2014: 3.2 times).
Financial year 2014/15
The group’s results are based on the trading of Lathams
Limited, a specialist panel and timber distributor.
Revenue continued to grow during the year, due to
increased volumes both in ex-warehouse and direct
business. Year on year growth was slightly lower in the
second half year, because 2013/14 had been a very strong
final quarter. Both panels and timber grew revenues
throughout the year. The gross margin per cent, before
warehouse costs, increased by 0.4 percentage points,
due to a better product mix.
Timber and panel prices remained steady throughout
the year. Focus panel products including Melamine
Panels and Door Blanks, continued to show good
growth. Accoya modified wood and WoodEx, our
brand of engineered timber for the joinery sector, were
particularly successful this year.
Overheads have been controlled, and are within our
budget forecast, but higher than last year’s due to the
extra volumes, smaller order size and later order times
for next day delivery. Staff numbers have increased
during the year, with sales staff recruited in areas of the
business where we see opportunities. Bad debts were
low overall for the year, despite the relatively high level
seen in the first quarter of the financial year.
Pension Scheme
The Company and the Trustees of the James Latham plc
Pension and Assurance Scheme have approved the
triennial valuation dated 31 March 2014 with the scheme
Actuary. This valuation shows a shortfall of assets of
£1,546,000 compared to a shortfall of £9,030,000 in the
previous valuation dated 31 March 2011. The Company
has agreed a recovery plan over two years with the
Trustees, and will continue its previous recovery plan,
paying £1,155,000 in the year to 31 March 2015 and then
£420,000 in the year to 31 March 2016.
2
JAMES LATHAM PLC ANNUAL REPORT 2015
Chairman’s Statement
At 31 March 2015 the deficit of the defined benefit scheme
under IAS19 (revised) was £10.4m up £1.1m compared
with £9.3m last year. This increase is the result of the
fall in the corporate bond yield used to calculate the
present value of the scheme’s liabilities and reflects
the volatility of the accounting for this scheme.
Current financial year 2014/15
This year so far revenues are 7% higher for April and May
than the corresponding period last year, both in panels
and timber. The gross margin is also higher. It is a steady
start to the year and generally customers are busier than
they were for the final quarter of the last financial year.
The panels market remains particularly competitive,
although we are seeing encouraging growth in the
newer decorative products we have introduced.
Development strategy
The directors continue to identify opportunities for
growth and to introduce and promote new products.
Investment in the business continues and plans are
being drawn up to upgrade our two older sites at
Yate and Wigston over the next two to three years, to
emulate the success that investment in new facilities has
delivered elsewhere.
The group is in a strong financial position to take
advantage of opportunities for further business growth,
as and when they arise.
Directors and staff
From 1 April 2015 Andrew Wright was appointed as a
main board director. After serving on the trading board,
Lathams Limited, for a number of years he has
responsibility for product development and brings
valuable experience of our operations and markets.
There is a clear division of responsibilities with the main
board determining strategy and exercising corporate
governance and the trading board of Lathams Limited,
chaired by Chris Sutton, setting and monitoring
operations policy. Both boards are well balanced in
terms of skills and experience. Their support throughout
the year has been invaluable.
While the business is organised to give as much local
autonomy as possible and staff are targeted at depot
level, groups of senior staff meet regularly to coordinate
purchasing and sales strategy for the major product
groups of timber and panels. Group product champions
look after key product ranges backed by product
champions at each depot.
This year has been difficult for me personally following
my serious accident in April 2014. My recovery would
not have been as speedy without the support of my
family and colleagues. I would particularly like to thank
Meryl Bushell, who covered for me as Acting Chairman,
and the rest of the board for their help and support.
The company has continued to make progress during
the year in what remain challenging trading conditions.
We provide a high quality of customer service as measured
by our record fifth consecutive TTJ award of Timber
Trader of the Year and I would like to thank everyone
in the group for their individual contribution.
Peter Latham
Chairman, James Latham plc
23 June 2015
JAMES LATHAM PLC ANNUAL REPORT 2015
3
Strategic Report
Introduction
Outline of the Strategic Report
The directors present their strategic report for the year ended 31 March 2015.
The Strategic Report encompasses the following information.
Page
5
6
7
10
12
14
James Latham plc and Our Objectives
Key Performance Indicators
Operating Review
Financial Review
Principal Risks and Uncertainties
Corporate Responsibility
The Strategic Report was approved by the board of directors on 23rd June 2015
and signed on its behalf by:-
Peter Latham
David Dunmow
2
4
1
3
1 Accoya Cladding. 2 Xylocleaf.
3 Moralt Doors. 4 Decogloss.
4
JAMES LATHAM PLC ANNUAL REPORT 2015
Strategic Report
James Latham plc and Our Objectives
James Latham plc sets out to be the supplier of choice
throughout the UK for joinery, door and kitchen
manufacturers, shopfitters and other market sectors
offering a wide range of wood based panels, natural
acrylic stone, hardwoods, high grade softwoods, flooring,
cladding and decking. We also supply commodity and
specialist products to timber and builders’ merchants.
The company aims to increase the amount of legal and
sustainable product supplied into its marketplace.
The company traces its history back to James Latham
who traded in exotic hardwood in Liverpool in 1757.
His son had established a business in London by 1799.
It was taken public in 1965 and the shares are now quoted
on the AIM market. The Latham family owns over half
of the company shares and six members of the Latham
family, now in the 9th generation, work in the business.
The company believes that to provide the service
demanded, we need to be close to our customers.
We offer national coverage from eleven locations, as shown
in The Latham Group map on page 69. Having stock of
product in the right place at the right time is important
to provide this service. Commodity imports are held in
ports including Tilbury, Liverpool and Grangemouth.
This stock can be delivered directly to customers for
multi-pack orders, or transferred to the depots for onward
delivery. Around London we stock Panel Products and
Timber Products in separate warehouses whereas a full
range of products are held in our other locations around
Great Britain. We also hold a range of specialist products
in Leeds for national distribution and Leeds also offers
an efficient delivery service to Ireland.
Our core values are based on a business structure
that encourages an entrepreneurial spirit at depot level
while maintaining central financial control and trading
policy, reaping the benefits of scale from the size of the
group’s activities.
The company is well respected in its industry and
amongst its customers and suppliers for its principled
trading policies and its integrity.
The company was voted UK Timber
Trader of the Year in 2000, 2002,
2004, 2008, 2010, 2011, 2012, 2013
and 2014 in a vote of readers of the
Timber Trades Journal.
The company’s objectives are:
• To increase sales of third party certified sustainable
• To maximise shareholder value over the
timber products;
medium term;
• To provide a safe working environment for
• To grow the business profitably;
our staff;
• To maintain its presence in timber based
products but to extend the product range to
the existing customer base from an extended
distribution network;
• To improve service levels by upgrading warehouse
facilities to speed order picking and to cope with
an extended product range; and
• To employ well-trained, knowledgeable and
helpful staff.
“ Our mission is to continue to deliver improved returns by
supplying quality sustainable products with excellent staff
providing excellent service.”
JAMES LATHAM PLC ANNUAL REPORT 2015
5
Strategic Report
Key Performance Indicators
The group monitors its performance against the following Key Performance Indicators that we believe best reflect
our performance and progress. In addition to the KPI’s disclosed below, we have set out on page 15 the non-financial
KPI, monitoring the amount of timber certified as coming from sustainable and well-managed forests.
Turnover (£000’s)
Weight of product sold
per working day (tonnes)
Adjusted earnings
per share (pence)
5
5
8
,
4
7
1
7
1
1
,
3
6
1
9
6
0
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3
4
1
6
9
8
8
3
9
9
0
8
9
.
6
3
3
.
0
4
7
.
8
2
2013 2014 2015
2013 2014 2015
2013 2014 2015
Turnover up 7.2%
Tonnes per working
day up 4.7%
Adjusted earnings
per share up 9.2%
Debtors days
average
Stock turn
(times)
Cash (£000’s)
9
.
2
5
6
.
2
5
4
.
2
5
9
.
5
6
.
6
2
.
6
1
0
5
,
2
1
4
3
2
,
1
1
5
7
0
,
8
2013 2014 2015
2013 2014 2015
2013 2014 2015
This figure is adjusted to take
account of customer credit
terms and is compared with
our target of 53 days
This figure is compared
with our target of 6.7 times
and excludes stock being
processed in kilns
Cash balances
up £1,267,000
6
JAMES LATHAM PLC ANNUAL REPORT 2015
Strategic Report
Operating Review
borne fruits, with all bar one showing significant growth
in the last 12 months.
Our range of hardwood and softwood plywood has
gained market share based on quality, performance
and environmental credentials, attracting new and
regenerating old customers.
Turnover of MDF was steady throughout the year
showing a small volume increase in a static market.
One encouraging area has been a large increase in sales
of Medite Tricoya Extreme Durable MDF. Development
of added value OSB and its competitiveness versus
plywood has enabled us to grow sales into merchants
and manufacturers. During the year we launched
LuminFirePro, our high quality fire retardant (FR)
plywood. More FR products will be launched in the new
financial year.
A strategic PR, advertising and marketing plan is put in
place for each year, covering group and depot activities.
A more coordinated marketing approach saw our name
reach over 4,000,000 readers. Each year we target our
depots on their focus product sales and they achieved
more than £1m extra sales above their target.
Our policy of promoting our range to Architects, Designers
and Specifiers has seen us gain specification for many
products, including Koski Décor Eco, HI-MACS® acrylic
stone surfaces, Moralt door blanks and Valchromat,
a coloured throughout MDF. New and
improved
showrooms displaying our wide range of products
continues to attract existing and new customers, plus
trade associations such as ASDMA and IOM3.
Results for the year to 31 March 2015
The UK economy has continued to show the steady
growth started at the end of 2013 with demand remaining
good throughout the year. Our customers and the
timber trade in general remain optimistic for continued
steady growth.
Revenue for 2014/15 was £174.9m, £12m higher than
the previous year, reflecting improving volumes in both
panels and timber with some gently increasing prices.
The gross margin, the difference between the sales values
and the cost prices excluding warehouse costs, was 0.4
percentage points up on the previous year. Margins on
our specialised products improved, although continuing
competitive pressure in our markets made margin
improvement in other products difficult to achieve.
Staff numbers have increased this year, mainly in selling
and warehouse staff. We invested in additional sales staff,
with specific product knowledge and skills in key product
areas, in order to develop the markets for our more
specialised products, spending an increasing amount of
time with architects and designers. We have also found
this year that average order sizes are reducing, with
customers continuing to demand just in time supplies.
With the increase in business, this put pressure on our
operations team, and so more depots are introducing
longer shift systems, resulting in an increase in manpower.
Overhead cost control though has continued to be
important and we continually look to improve efficiency
and productivity.
For management purposes, the group is organised into
one trading division, timber importing and distribution,
carried out in each of the eleven locations trading
mainly in the United Kingdom. Within this one segment
performance in terms of revenue and trading margin of
the main product types are considered below.
Panel products (wood based sheet materials,
door blanks and natural acrylic stone)
Panel sales at £124.9m were 7.3% higher than last year,
with volumes up 4.9%. The group’s strategy continues to
be to target markets for decorative surfaces to include
veneered and melamine panels, laminates and HI-MACS®
natural acrylic stone plus flexible panels. We continue to
add new product lines to our decorative range.
These products are of higher value and generate more
gross profit. The decision to hold a strategic supplier
meeting with key panel suppliers in spring 2014 has
We sponsored these amazing Observatory style artist’s studios
supplying home grown and imported Larch which was charred to
clad the exterior as well as Accoya, Medite Tricoya Extreme and
Smartply which was used on the interiors.
JAMES LATHAM PLC ANNUAL REPORT 2015
7
Strategic Report
Operating Review
The Surface Design Show exhibition was a success
for us, generating a lot of interest in new product
launches that included additions to the Kronospan and
Egger surfaces range. Our product specialists converted
interest into real demand following the show.
Our HI-MACS® team was strengthened and now totals
13 people, giving us greater coverage across the UK
and Ireland. Sales showed a small growth in the year,
but we have in place a team to build on this during the
current year.
The Advanced Technical Panels team is the most
experienced in the market, with excellent product
knowledge, offering customers technical advice and the
widest offering of prefinished panels. Harlequin, a multi-
layered acrylic sheet, after a slow start, has developed a
small niche market.
Sales to importers, timber and builders merchants
showed good growth during the year. A wide range of
core fit-for-purpose and added value products, supplied
ex stock, has enabled our customers in this sector to
grow their sales.
During the course of the year, several of our team made
overseas visits to key suppliers in Indonesia, Malaysia,
Russia, Latvia and Finland, plus Spain, Belgium and other
European countries. It is important that we continue to
develop our relationships with our supply base.
Timber (Hardwood, modified softwood,
joinery quality softwood, cladding, decking
and hardwood flooring)
Timber sales, at £50.0m were 7.3% higher than last year
with volumes 1.9% higher. Joinery, kitchen and shopfitting
sectors have all provided us with sales and volume growth.
Our core business for African, European and North
American hardwood was reviewed during the year, with
a more strategic product and purchasing policy being put
into place. Supply issues in parts of Africa eased leading to
a large influx of product into the market during the second
half of the year, which impacted on sales and margins.
8
JAMES LATHAM PLC ANNUAL REPORT 2015
We continue to develop our range of certified Forest
Stewardship Council (FSC) and Programme for the
Endorsement of Forest Certification (PEFC) products.
Our supplier procurement strategy is largely based on the
Timber Trade Federation (TTF) Responsible Purchasing
Policy. Any supplier who does not meet this criteria will
not be considered. Product of Verified Legal Origin (VLO)
is also purchased.
The WoodEx brand, our own engineered hardwood and
softwood, continued to make significant inroads into
the joinery sector. Grandis 690+, made of laminated
eucalyptus, was launched in the second half of the year
and sales have been very good. The established range of
Sapele, Redwood and European Oak has also seen good
sales growth.
The largest growth area for our timber business has
been in Accoya Modified Wood. Very strong sales have
been achieved into the external joinery sector. Latham
Accoya-Clad has also been specified and used on some
prestigious contracts.
Profi-Deck and Lifecycle wood plastic composite decking
sales into merchants and to contractors have shown very
good growth. These products are considered to be high
quality and market leading. We have redefined our range
of Bausen flooring, removing some lines of solid flooring
and replacing with new engineered floors including the
Henshaw Range.
LDT have made a very useful contribution
to group profits. New sales staff and a
restructuring of the team has proven
to be beneficial. Very strong in the
African and decking sectors, LDT have
seen improvement in sales of North American hardwood.
LDT during the year targeted some export markets
and gained useful business. As part of their ongoing
development, LDT will look to increase their product
offering to the importer and merchant sectors.
We supplied White Oak, Walnut, Tulipwood and Cherry to ten up
and coming furniture designers for a unique design initiative by
the American Hardwood Export Council (AHEC) and Benchmark
Furniture for the London Design Festival.
Strategy for developing the business
The directors recognise that the strength of the group
is as a distributor of high quality timber and associated
products sourced using the TTF RPP from legal and
sustainable sources of supply to existing and new
customer bases. Our supply base has strengthened
during the course of the year with many of our partners
agreeing to a 3 year development plan.
Value added products now account for a significant
proportion of our sales. End user manufacturers are
receptive to new products that may provide them with
solutions or the ability to develop their own customer
offering. Development of our product offering is key
to our future success. The introduction of Xylocleaf,
a high definition melamine panel for shopfitting,
furniture, kitchens and bedrooms, plus Kydex, a
thermoformable plastic product for shopfitting, doors
and the transport sector, give our customers new and
innovative products.
Strategic Report
Operating Review
The group has invested in staff training with our
aim being to have the best sales and technical team
in the industry. Marketing of our products through
brochures, direct advertising, public relations, social
media and exhibitions is key to our success. In the
latter part of last year we re-launched our website
www.lathamtimber.co.uk. Working with our staff and
suppliers we aim to offer our existing and potential
customer base a first class service of fit for purpose, legal
and sustainable products.
Market place
The group’s business is widely spread throughout many
sectors of the UK economy.
Market sector
Customer group Lathams
sales value %
2015 2014
Construction/housing
Merchants
Joiners
Builders
Kitchen manufacturers
Door manufacturers
Retail
Shopfitters
Laminators/Veneerers
Furniture manufacturers
Vehicle builders
Exhibition fitters
Transport
Exhibitions
Cash sales
Other importers
Other sectors
17
22
17
21
5
4
3
5
5
8
2
3
7
5
4
3
6
5
9
2
3
7
10
9
10
8
100
100
Martin Cassidy, Melamine Product Champion at our
Scotland depot.
TOTAL
End products are used in both the public and private
sectors. Our top ten customers account for 11% of sales
and our top 25 customers represent 17% of sales.
Our core commodity range of panels and timber is
constantly reviewed with new lines being stocked if we
believe they will meet our customer’s requirements.
Our Leeds depot acts as a central warehouse for a large
range of Egger and Kronospan laminates, totalling nearly
400 decors. These are available on a national basis for
next day delivery to our customer base. We will continue
to develop our laminate offering during the year.
We will continue to look to develop new markets,
including Ireland and other export markets. We will also
continue to invest in our depots, with advanced plans
drawn up for relocating our Yate and Wigston depots
over the next two years, as well as improvements to
racking systems in our Thurrock, Hemel Hempstead
and Purfleet depots. We will also consider acquisitions
where opportunities arise, to enhance our product
range or geographical coverage.
JAMES LATHAM PLC ANNUAL REPORT 2015
9
Strategic Report
Financial Review
Introduction
This report provides a commentary on how the group
has performed against the financial objectives during
this year, together with a review of its financial risks.
I believe we met our financial objectives for this year,
enhancing our position in the market and maintaining
a strong balance sheet.
Financial objectives
The board of directors remain committed to the long
term improvement in shareholder value, which we
believe we can achieve by:
• Improving profitability by maximising gross margins.
• Increasing group market share through improving
facilities at our existing depots.
• Identifying expansion and acquisition opportunities,
where the return on capital is at least equal to that of
the existing group.
• Controlling cashflows to maximise cash available for
the business and shareholders.
• Identifying and managing risks, with particular
emphasis on the pension scheme liability.
• Maintaining dividend cover at between 2.5 times and
4 times earnings.
Financial review
A commentary on the group’s trading results is set
out in the Operating Review on pages 7-9, and the key
figures are considered below, with emphasis on the
financial figures.
Operating profit
Revenues increased by 7.2% to £174.9m. A key focus
of the board throughout this year has been managing
margins to enable us to remain competitive in commodity
products but grow margins in our focus products. Gross
profit improved slightly to 17.7% from 17.4%, reflecting
this although we have seen increases in our warehouse
costs per tonne of product delivered. Increases in
volumes through the warehouse, reduced order values
and more demanding lead times from our customers,
have resulted in higher warehouse costs. Two of our
depots have moved to 24 hour working and others
introduced longer shifts as we aim to maintain service
levels in the most efficient manner.
10
JAMES LATHAM PLC ANNUAL REPORT 2015
David Dunmow
Finance Director and Company Secretary
Selling and distribution costs
increased by 8.8%.
These costs include the direct cost of transport.
We monitor transport costs by reviewing costs per
tonne of product delivered, and during this year the
cost per tonne increased by 4.7% over last year,
despite the reduction in fuel prices. Whilst the costs
of running our own fleet of vehicles reduced this year,
costs of hauliers have increased. Increased sales staff, in
both specialised product areas and trainees, are expected
to produce improved revenues and profits in the years
to come.
Costs in each location are monitored closely by the board
through the quarterly board meetings at each depot.
Operating profit, excluding the exceptional pension
credit last year, increased 11.4% to £10.6m. Group net
profit before taxation, excluding the exceptional pension
credit last year, increased to £10.1m from £8.7m last year.
The taxation charge of £2.3m represents an effective
rate of 22.6%, compared with 18.0% last year, which
benefitted from a one-off deferred tax credit. The group’s
profits arise wholly in the UK and the group’s tax charge
will reflect the UK corporation tax rate.
Pension scheme
At 31 March 2015 the deficit of the defined benefit scheme
under International Financial Reporting Standards was
£10.4m compared with £9.3m last year. Discount rates,
represented by yields on corporate bonds, continue to
fall, reducing from 4.5% to 3.2% during this year, which
on its own added over £11m to the liabilities. Investment
returns outperformed the actuarial expectations, and
Gross IAS19 deficit £000’s
2011
2012
2013
2014
2015
1
6
5
,
8
6
1
3
,
2
1
3
9
7
,
6
1
7
6
2
,
9
0
3
4
,
0
1
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
12000
13000
14000
15000
16000
there were benefits to changes in some demographic
assumptions. In note 18.2 to the accounts, we have
provided some sensitivity analysis around the various
assumptions used to illustrate this volatility.
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
12000
13000
14000
15000
16000
This year, the triennial valuation to 31 March 2014 was
completed. This resulted in a much reduced deficit
of £1.5m. A deficit recovery plan was agreed with the
pension scheme trustees to pay £1.1m in the year to
31 March 2015 with a further £0.4m in the year to
31 March 2016.
1
0
5
.
2
1
4
3
2
,
1
1
3
1
1
,
7
4
0
0
,
7
5
7
0
,
8
The group is constantly assessing the risks in the pension
scheme, and this year has maintained a cap on pensionable
salary increases to a maximum of 1% over CPI.
2011
2013
2014
2015
2012
Cash flow and working capital
At the end of the year cash balances of £12.5m were
held, up from £11.2m last year. The cash is being held as
short term deposits providing funds for short term
working capital fluctuations and allowing us to make
capital investments when opportunities arise. The lowest
amount of cash held during the year was £5.9m. Part of
this cash will be also used to finance the relocations
of Yate and Wigston during the next two years. Interest
rates have remained at record lows throughout the year
so we have continued to use our cash to obtain cash
settlement terms with most of our major suppliers
allowing us to earn £864,000 of discounts received
compared with £746,000 last year.
The timber
importing and distribution business
requires considerable working capital investment in
stock and debtors.
Strategic Report
Financial Review
Control of cash flow from customers is closely monitored.
The key performance indicator of debtors days, taking
into account our credit terms, has moved from 52.6 days
to 52.4 days. Bad debts this year, despite the difficult first
quarter, ended up at 0.15% of turnover against a budget
of 0.4%, and last year of 0.11%. I am very grateful for the
work our excellent credit control team have done this
year in getting right the difficult balance of dealing with
our customers, dealing with our depots and collecting our
debts. At the year end, the amount of outstanding debt
being dealt with by our solicitors was at an all time low.
The company policy is that all customers with outstanding
balances exceeding £40,000 are covered by credit
insurance policies. Where credit insurance is unavailable,
a sub-committee of the board review financial reports to
approve new credit limits. The amount of debtors over
£40,000 covered by credit insurance has improved to
95% from 90% last year.
2012
2011
2014
2015
Stock turnover targets are set and monitored on a
monthly basis, and senior management has access to
2013
real time stock levels. Stock turn is 6.2 times compared
with 6.6 times last year. Whilst stockturn has improved
on some of our specialist products, we suffered from
some erratic shipments of commodity product in the final
quarter of the year, resulting in some over stocking which
we are currently working through.
0
3
4
,
0
1
6
1
3
,
2
1
3
9
7
,
6
1
1
6
5
,
8
7
6
2
,
9
Cash and Cash Equivalents
1
0
5
.
2
1
4
3
2
,
1
1
3
1
1
,
7
4
0
0
,
7
5
7
0
,
8
2011
2012
2013
2014
2015
JAMES LATHAM PLC ANNUAL REPORT 2015
11
The cash deposits and available bank facilities reduce our
liquidity risk. Cash flow forecasts are monitored against
actual cash flows to ensure that adequate facilities are
maintained to meet the future needs of the business.
The board reviews re-forecasted profits and cash flows on
a quarterly basis. The bank loan was taken out at a fixed
rate of interest in order to reduce the interest rate risk.
Insurance products and external credit reference agencies
help reduce our credit risk.
The Audit Committee reviews the group’s risk register as
part of its regular monitoring process.
David Dunmow Finance Director
Strategic Report
Financial Review
Capital investment
During the year, we invested £0.4m into new fixed assets.
We now own all our lorries and mechanical plant and
this year have benefitted from the ability to run this
equipment on for longer than we would previously have
done under leasing arrangements. We expect that next
years capital expenditure on lorries and plant will return
to normal levels, as older equipment is replaced.
Net assets at the year end were £62.2m (2014 £58.1m).
The group’s adjusted pre-tax return on capital for the
year was 16.6% (2014 15.8%), which continues to be
above our weighted average cost of capital.
Financial risk management
In the course of our business, the group is exposed
to currency risk, interest rate risk, liquidity risk and
credit risk. The overall aim of the group’s financial risk
management strategy is to mitigate any potential negative
effects on the group’s assets and profitability. The group
manages these risks in accordance with group policies,
and does not take speculative positions.
As the group trades predominantly in the UK, the market
price of our products tends to fluctuate in line with
currency spot prices. Speculative positions on currencies
are not entered into. Comparing against spot prices, we
had a positive tracking error of less than 0.1% during this
year. Our LDT division can have stock tied up in kilns
for six to nine months, and we enter into currency swaps
to ensure that this stock is costed at spot price when it
becomes available for sale.
Principal Risks and Uncertainties
The group operates in a market and an industry which by their nature are subject to a number of inherent risks.
We attempt to control these risks by adopting appropriate strategies and maintaining strong systems of internal
control. These strategies however do not attempt to eliminate risk, but control the risks that we believe are
appropriate to take to generate acceptable shareholder returns. Details of the group’s risk management processes are
given in the Corporate Governance report on page 17.
We have considered opposite the current risk factors that are considered by the board to be material. However, in a
changing world, new risks may appear or immaterial risks may become more important, and the directors will develop
appropriate strategies as these risks appear.
12
JAMES LATHAM PLC ANNUAL REPORT 2015
Strategic Report
Principal Risks and Uncertainties
Inherent risk
Risk Description
Risk Mitigation
Market
Conditions
Competition
from new
and existing
businesses
Inventory
levels move
out of line
with sales
requirements
and market
prices.
The group’s sales are predominantly UK based so
it is exposed to any slowdown in the UK economy.
Negative or uncertain economic conditions could
affect our customers business resulting in them
reducing purchases from our group.
Competitive pressures from existing businesses
and new entrants to the market could reduce
prices, margins and profitability.
Product shortages can lead to high prices and
over purchasing throughout the trade, resulting
in excessive stock holding. Weaker prices lead
to stock reduction throughout the supply chain,
which magnifies the reduction in demand and
then leads to even sharper falls in price. Erratic
shipments can result in stock excess and shortages
in specific special products.
The market for certain product lines changes,
resulting in them becoming overvalued and
slow moving.
Supplier
political risks
or failure
could result in
shortages of
product
Although far more of the group’s purchases now
come from Europe and North America, it has
significant dealings with countries where the
political climate is less stable, resulting in a strategic
threat to the supply of product to the group.
The group is reliant on certain suppliers for certain
product ranges and their inability to meet our
demand due to financial or production difficulties
could result in stock shortages.
The distribution of our customers across the UK economic sectors helps
reduce the impact of slowdown in any one sector. Regular financial information
helps the board assess current trends.
An assessment of the market and competitor activity is discussed at each
depot’s quarterly board meeting. This includes an assessment of our routes
to market as challenges to our depot structure and operations emerge and
assessment of our pricing strategies.
To mitigate this risk, the group has a strict policy of stock level targets by depot.
These are monitored monthly by the board which centrally controls the purchase
of stocks and takes a group view on the action to be taken to limit the group’s
exposure to rapidly changing price levels. Live stock level reports and predictive
tools are available for our managers to monitor current and future levels.
The group’s reduced reliance on commodity items has reduced this risk of
over exposure to low value, high volume and price sensitive items, although
as an important area for us, this risk cannot be completely removed.
The board has set strict guidelines relating to purchases where the
specification is unique to a particular customer, and has policies in place to
ensure that no individual can commit the group to a purchase greater than
his/her authorised limit.
Slow moving stocks are monitored regularly and action taken to mitigate the risk.
To mitigate the risk from these pressures, the groups dealings are spread
across a large number of countries of supply. The group keeps informed of
developments in higher risk producer countries through involvement in work
by the Royal Institute of International Affairs (Chatham House).
We maintain close relationships with our suppliers to ensure that we are
pre-warned of difficulties of supply. We maintain relationships with suppliers
of alternative products.
Reputational
Risk
Over many years the group has built up a reputation
for integrity and responsible trading and is
aware that this can be easily damaged with the
consequential cost to the Latham brand.
Policies are in place which cover standards of behaviour and good governance.
On the purchasing side the group has a strong risk based responsible
purchasing policy managed by our Environmental Manager to minimise possible
damage to its reputation and legal risk from dealing in illegal products.
Defined Benefit
pension scheme
funding could
increase
The group is required by law to maintain a
minimum funding level in relation to its obligations
to provide pensions to members of the pension
scheme. This level of funding is dependent on
a series of external factors, such as investment
performance, life expectancy and gilt yields.
Significant changes in these areas can also have
a significant effect on the funding levels. The
sensitivity of the funding level to these factors is
disclosed in note 18.2 in the notes to the accounts.
Information
technology
failures impact
our ability to
trade
The operations of the group depend to a large
extent on the availability and reliability of our
information technology systems. A failure
of systems, either of hardware, software or
communications, for an extended period of time
could impact our ability to trade.
The scheme has been closed to new entrants for many years. The board
regularly reviews the investment strategy and performance of the pension
scheme investments, and has set a cap on pensionable salaries of 1% above CPI.
Our main computer servers are located in a secure site away from the trading
operations, hosted in an external data centre. The systems are monitored 24
hours a day and maintenance work carried out on an ongoing basis.
Back ups are held offsite, and shortly a system will be introduced to mirror our
systems in a separate data centre to provide extra resilience.
Software maintenance contracts ensure that our business critical software is up
to date, allowing software problems to be resolved quickly.
Inability to
trade from a
depot
Inability to trade from a depot due to an incident,
internally or externally, could cause loss of revenue
and profits.
Disaster recovery plans are in place at group and depot levels. These are
reviewed by the Audit Committee and the board, as well as discussed at depot
level. Insurance policies are in place to cover increased cost of working.
Our distribution network, as well as our inventories held at various ports, allow
us to manage customers requirements from a different location.
JAMES LATHAM PLC ANNUAL REPORT 2015
13
Strategic Report
Corporate Responsibility
At James Latham plc, we are conscious of our corporate
responsibilities to all our stakeholders and to society as
a whole. Health and safety, environmental matters, staff
training and equal opportunities are key areas relevant
to the group’s business. We also maintain contact with
and support both the local and the wider community.
A substantial amount of management time is devoted
to Corporate Social Responsibility issues, as we believe
that these enhance our standing with customers and
suppliers to the benefit of all stakeholders.
Health and Safety – Providing a safe working
environment
The handling of timber and panel products, both
manually and mechanically, and the stacking and storage
of these products at height, can be dangerous activities.
We are very active in assessing and minimising the risks
in all areas of the business and educating the workforce
to provide as safe a working environment as possible
for all people that come into contact with James Latham
plc. We spend an increasing amount of time and money
on this activity. We employ a full-time Health and Safety
Advisor who reports to the board regularly, attends board
meetings twice a year and chairs regular health and safety
meetings at all depots. We have a 3-year action plan
and all sites are subject to regular audits. Management
and employees are actively involved in improving our
safety record, which is high on everyone’s agenda.
All employees take a personal responsibility for making
sure their actions and behaviour maintain safety for all.
In addition, we recognise that safety extends beyond
our warehouses. We regularly monitor vehicle accidents
in our lorries and company cars to assess whether
further training is required. We operate a programme
of lorry driver mentoring and are introducing the FORS
(Fleet Operator Recognition Scheme). Our lorries all
have tracking devices fitted which provide alerts and
information on speed as well as the route taken. We are
introducing a system of cameras installed in each lorry to
not only provide retrospective footage for training and
insurance purposes, but also to provide improved rear
and side visibility to our drivers.
Environmental
The directors of James Latham plc recognise that the
company has a responsibility to the environment,
customers, suppliers, shareholders and staff to base its
commercial activities on well-managed forests and to
reduce any negative environmental impact of its trading
as far as is reasonably practical.
With best practices observed, timber products are the
ultimate sustainable and recyclable materials, requiring
low energy to process and being thermally efficient in
use. Timber from well-managed forests absorbs carbon
in growing and locks in carbon in use. It is sustainable,
producing a regular crop and puts value into growing
forests so helping to reduce land clearance for other uses.
A lifecycle assessment study published by Wood for
Good, showed that timber has the lowest embodied
carbon impact of any mainstream building material.
It shows that all timber products are in fact carbon
negative at the point of delivery, i.e. the amount of
carbon dioxide absorbed by the tree by photosynthesis
during growth,
is greater than all the emissions
associated with harvesting, processing, manufacture,
transport and installation.
Timber from poorly managed forests destroys biodiver-
sity, leads to soil erosion and damages watercourses.
As part of the FSC forestry management criteria, FSC suppliers support the local community. Piers Latham visited the Bao Jin village school
in China to present prizes, and Latham tee-shirts, to the scholars.
14
JAMES LATHAM PLC ANNUAL REPORT 2015
Strategic Report
Corporate Responsibility
It ruins the lifestyle of traditional forest dwellers. Forest
burning adds to carbon emission and harms air quality
in the region. Purchasing from those involved in corrupt
practices undermines national governance.
The group sets targets each year to increase the amount
of timber and timber based products that are certified by
recognised international organisations such as PEFC and
FSC, as coming from sustainable and well-managed forests.
It is therefore essential that we ensure our timber
is legally harvested and comes from well managed
forests. The group recognises that the independent
certification of forests and of the supply chain is the
best means of providing assurance that timber comes
from legal and well managed forests. Where possible it
purchases material certified by the Programme for the
Endorsement of Forest Certification schemes (PEFC)
or the Forest Stewardship Council (FSC). As well as
providing assurances on the timber itself, these schemes
also provide checks on the welfare of the forest workers
and indigenous population.
The group has third party audited chain of custody for
timber supplied as certified by PEFC, FSC and other
schemes. This is to ensure that claims made about
certification can be proved.
The group has signed up to the WWF UK ‘Forest
Campaign’ committing to purchasing only certified
legal and sustainable timber products by 2020 and to
publically showing progress towards this target. We jointly
sponsored WWF’s Forest Reception to promote this
scheme at the House of Commons in March 2015.
In some parts of the world, timber certified by one
of the internationally recognised schemes is not
available. The group is committed to purchasing all
timber from legal sources and to seek confirmation
from suppliers that they are operating in accordance
with the laws of their country. Where the risk of
corruption or illegal logging is high, we seek third party
audited proof of legality.
Chinese FSC certified Eucalyptus forest, visited by Piers Latham.
The figures for the relevant calendar years are given below.
FSC
PEFC 3rd party
verified legal Negligible
Panels
2013
71%
17%
3%
2014
69%
20%
4%
Timber 2013
36%
18%
35%
2014
40%
16%
33%
TOTAL 2015
target
66%
20%
-
9%
7%
11%
11%
-
The European Timber Regulation (EUTR),
which came into force in March 2013,
places an obligation on the first placer of
timber on the European market to ensure
that the timber has been legally sourced
and traded, to operate a risk assessment process and to
take mitigating measures to minimise the risk of illegality.
We have a rigorous system for assessing our supply chains
and are committed to only purchasing product with
negligible risk status. We will not trade in timber species
prohibited under Appendix 1 of CITES legislation and
obtain the appropriate documents for the very limited
trade we do in all other CITES listed timber species.
For a number of years the company has had risk
assessment tools in place to monitor suppliers through
the Timber Trade Federation Responsible Purchasing
Policy and Code of Conduct. The risk assessment seeks
to provide the clearest practicable information regarding
the sources of raw material used in the manufacture
of wood products. We have supported the National
Measurement Office, the UK competent authority
charged with enforcement of the EUTR, in staff training
by giving them access to our due diligence system and
having meetings with representatives of other European
agencies to share our experiences.
We publish our commitment to the environment
regularly in our product guide, specific literature and on
our website, www.lathamtimber.co.uk. We give clear
guidance to our customers about the importance of
JAMES LATHAM PLC ANNUAL REPORT 2015
15
Strategic Report
Corporate Responsibility
buying timber that can be demonstrated to be legal and
from well-managed forests. This is a condition of contract
to supply the UK Government and many environmentally
aware customers. Company staff give presentations to
customer trade associations and at customer premises.
Informing suppliers and supporting certification
Our senior staff have spoken about the importance of
independent certification of forests and supply chains
at EU and UK conferences for groups of suppliers in
Ghana, Cameroon, Congo Brazzaville, Gabon, Peninsular
Malaysia, Sarawak, Sabah and China. Company buyers
have visited individual suppliers in Europe, Russia, China,
Indonesia, Malaysia, the United States, Uruguay, Brazil
and Argentina giving the same message. Group buyers
have visited individual suppliers auditing the source of
logs. The group has been helping promote the EU Forest
Law Enforcement, Governance and Trade Initiative to
prevent illegal logging by giving press and film interviews
and speaking at the FLEGT review meeting in Brussels.
The group has supported and funded suppliers in Africa
and China working under the EU funded Timber Trade
Action Plan which is a step-by-step approach towards
certification. Our Chairman contributes a considerable
amount of his own time too as a director of the
PEFC International Board, the Timber Trade Federation
environmental committee and to promoting PEFC and
FSC certified products with chain of custody certification.
recognize
that alongside our
Local environmental issues
timber
We also
environmental policy, we have a responsibility to
minimise our local environment footprint. We have
developed an environmental management system
which is accredited under ISO14001. This commits us
to considering energy efficient options for lighting,
heating and ventilation before making purchasing
decisions. Vehicle procurement considerations include
reduction of emissions and improved fuel efficiency.
Our employees
The group’s ability to achieve its commercial objectives
and to serve the needs of its customers in a profitable
and competitive manner depends on the contribution
of its employees. Employees are encouraged to develop
their contribution to the business wherever they
happen to work. The group regularly keeps employees
up to date with financial and other information.
Quarterly meetings are held in each location, chaired by
a board member, where employees’ views concerning
the performance of their profit centre are considered.
To encourage the involvement of employees in the
group’s performance, share option schemes are
operated together with bonuses linked to performance.
The group’s employment policies do not discriminate
between employees, or potential employees, on the
grounds of age, gender, disability, sexual orientation,
colour, ethnic origin or religious belief. The sole criterion
for selection or promotion is the suitability of any
applicant for the job. The group’s pay policy is to ensure
that every employee, other than trainees, are paid the
Living Wage.
It is the policy of the group to train and develop
employees to ensure that they are equipped to undertake
the tasks for which they are employed, and to provide the
opportunity for career development equally and without
discrimination. Training and development is provided
and is available to all levels and categories of staff.
Internal courses are run on the technical aspects of our
products, along side general management, sales and
presentation skills courses.
The company seeks to minimise the use of packaging
material and to recycle discarded packaging material
and paper where it is practicable to do so, to avoid these
materials entering landfill.
We give support, both in staff time and financially, to
community projects local to our depots through schools,
sports teams and charities. We also have entered into
a three year agreement to give financial support to the
National Forest project.
Luke Bell at our Fareham depot.
16
JAMES LATHAM PLC ANNUAL REPORT 2015
Corporate Governance
Corporate Responsibility / Corporate Governance Report
We have a successful program of introducing trainees
from school or college. All depots either have trainees or
have plans in place to recruit during the year. Trainees
are put through external courses obtaining qualifications,
including NVQs in Sales and Warehousing and the
Wood Society exams covering the properties and uses of
timber and panel products. This year Carley Willams and
Dan Mahoney, from our Thurrock depot, were runners
up in the Timber Trades Journal Career Development
Award, open to trainees under 25 throughout the timber
trade. Jacob Sheen, from our Leeds branch, was also
nominated. This is the fourth year in a row that our
trainees have been nominated for this award.
In the current financial year we are planning again to
sponsor a James Latham Timber Engineering Scholar
through an MSc Timber Engineering program at
Edinburgh Napier University.
Details of the number of employees and their related
costs can be found in note 4 to the accounts.
The e-Tree Initiative
James Latham plc has signed up to
the e-Tree initiative organised by our
registrars Computershare. e-Tree TM is a
programme designed to help companies
promote eCommunications to their shareholders, whilst
also allowing them to make a valuable contribution to
the environment.
As a shareholder in James Latham plc, whenever you
opt in to receive your designated communications
online, eTree will make a donation to the Woodland
Trust. So we are doing our bit, while you are making
your life easier.
To register please visit www.etreeuk.com/jameslatham.
You will need your shareholder number, which is
contained either on your share certificate or on your
latest dividend voucher.
Please help us to reduce costs and support a very
worthwhile cause.
Corporate Governance Report
The directors believe that good corporate governance,
involving risk appraisal and management, prudent
decision making, open communication and business
efficiency, is important for the long term benefit of the
stakeholders in our group. This year we have agreed
to comply with the 12 principles contained within the
Quoted Companies Alliance Corporate Governance
Code for Small and Mid-Size Quoted Companies 2013,
and will show below how we have applied this code.
The Board of Directors
The company is governed by a board of directors
consisting of the Chairman, Peter Latham, four other
executive directors and two non-executive directors.
Andrew Wright became a fifth executive director on
1 April 2015. Each director has a vote and no individual
or small group of individuals dominates the board’s
decision making. Between April and August 2014,
following Peter Latham’s absence from the business,
Meryl Bushell took over as acting Chairman.
The board has a formal schedule of matters referred
to it for decision, with at least one specific strategy
meeting being held each year. Agendas and board packs
are discussed and circulated in advance of the meetings
to ensure that all directors have adequate time to
research and take part in discussions on the key issues,
as well as giving the non-executive directors time to
add matters of their particular interest to the agenda.
In the year to 31 March 2015, the board met five times,
with all directors attending each meeting other than
Peter Latham, who missed two meetings through illness.
The board is responsible for group strategy, corporate
responsibility
including health and safety and
environmental issues, acquisition policy, bribery policy,
approval of major capital expenditure and monitoring
the key operational and financial risks. It also reviews
the strategy and budgets for the trading subsidiaries
and monitors the progress towards their long term
objectives. All directors have access to the company
secretary or to independent professional advice, if
required, at the company’s expense. New directors
receive training from the company NOMAD on their
responsibilities under the AIM rules.
In addition to the scheduled meetings, the non-
executives attended the group annual operational
budget and strategy meeting, as well as making
individual visits to operational sites. Key financial
information is circulated to directors on a monthly basis
outside of the board meetings.
JAMES LATHAM PLC ANNUAL REPORT 2015
17
Corporate Governance
Corporate Governance Report
The board has decided that the directors will retire by
rotation and the executive directors will be re-elected
at least every three years. The board regularly reviews
the skills and experience of the directors and assesses
the effectiveness of individual directors and the board
as a whole.
The Audit Committee
The Audit Committee is chaired by Pippa Latham
and includes Meryl Bushell and Nick Latham. David
Dunmow also attends the meetings of the committee.
The committee meets at least three times a year to
review internal controls within the group. The duties of
the audit committee include, on behalf of the board, a
review of effectiveness of the group’s financial reporting
and internal control policies, and procedures for the
identification, assessment and reporting of risk.
It also keeps under review the scope and results
of the external audit, its cost effectiveness and the
independence and objectivity of the external auditor,
including recommending their re-appointment to
the board. This includes a review of the non-audit
work performed to ensure that such work would not
impair their independence or objectivity in carrying out
the audit.
The audit committee receives a report from the external
auditor following the annual audit which provides details
of the significant financial reporting estimates and
judgements made during the preparation of the group’s
annual accounts. No matters of material significance were
identified by the external auditors during the course of
the audit.
Once a year the auditor meets with the non-executive
directors only.
The Remuneration and Nominations Committee report
is contained on page 20.
Financial reporting
The directors have a commitment to best practice in the
group’s external financial reporting in order to present a
balanced and comprehensible assessment of the group’s
financial position and prospects to its shareholders,
employees, customers, suppliers and other third parties.
This commitment encompasses all published information
including but not limited to the year end and half yearly
accounts, regulatory news announcements and other
public information.
18
JAMES LATHAM PLC ANNUAL REPORT 2015
Internal controls
The board has established systems of internal control
as appropriate for the size of the group. The day to day
operation of the system of internal control is under the
control of executive directors and senior management.
The system is designed to manage rather than eliminate
risk. Any system of internal control can however only
provide reasonable, but not absolute, assurance against
material misstatement and loss. No material breaches of
internal controls were reported during the year.
Risk assessment
Procedures for identifying, quantifying and managing
the risks, financial or otherwise, faced by the group
have been in place throughout the year under review.
The processes for identifying and managing the key
risks to the business are communicated regularly to
all staff, who are made aware of the areas for which
they are responsible. Such processes include strategic
planning, maintenance and review of a risk register,
the appointment of appropriately qualified staff, regular
reporting and monitoring of performance against
budgets and other performance targets, and effective
control over capital expenditure.
Whistleblowing
The group has established procedures whereby employees
of the group may, in confidence, raise concerns relating to
matters of potential fraud or other improprieties. These
procedures also cover other issues affecting employees
including health and safety issues. The audit committee
is confident that these ‘whistleblowing’ arrangements
are satisfactory and will enable the proportionate and
independent investigation of such matters and appropriate
follow-up action to be taken.
Review of effectiveness of financial controls
The directors confirm that they have reviewed the
effectiveness of the system of internal control for
the year under review and to the date of approval of the
Annual Report and Accounts through the monitoring
process described above.
Relations with shareholders
The company is committed to maintaining good
communications with
any
published financial statements and Stock Exchange
announcements also posted on to our
investors
website, www.lathams.co.uk.
shareholders with
Corporate Governance
Directors and Advisors
Piers Latham BSc Executive Director
Piers Latham, age 44, has worked in the company
for 22 years and was appointed to the board in 2014.
He is a director of Lathams Limited and Chairman of
the Trustees of the James Latham plc Pension and
Assurance Scheme. He is also Chairman of the Wood
Industry Board and a Trustee of ProSkills UK, an
organisation promoting the development of industrial
skills and apprenticeships.
Andrew Wright Executive Director
Andrew Wright, age 50, has worked in the company
for 14 years and was appointed to the board in 2015.
He is a director of Lathams Limited and is a board
member of the North West Timber Trade Association.
Pippa Latham MA MBA ACIS FCMA CGMA
Non-Executive Director
Pippa Latham, age 54, joined the company in 1990
from a previous career in investment banking and
management consulting. She was Company Secretary
from 1994 to 2005 and was appointed to the board as
a non-executive director in 2005. She chairs the Audit
Commitee and is a member of the Remuneration
and Nominations Committee. She is an investment
manager for the Timber Trades Benevolent Society
and principal of Pippa Latham Associates, company
secretary and corporate governance consultants. She
is a non-executive director for W Lucy and Co Limited.
Meryl Bushell BA MSc FCIPS
Non-Executive Director
Meryl Bushell, age 60, was appointed a non-executive
director in 2008. She has many years senior management
experience with BT including several years as Chief
Procurement Officer for the BT Group. She chairs the
Remuneration and Nominations Committee and is a
member of the Audit Commitee. She is a previous
member of the Board of Management of the Chartered
Institute of Purchasing and Supply and a previous
director of Invest in Gateway London Limited, South
London Healthcare NHS Trust and of SupplierForce.
Registrars
Computershare Investor
Services plc
The Pavilions
Bridgwater Road
Bristol BS13 8FB
Bankers
Royal Bank of Scotland
Major Corporate Banking
280 Bishopsgate
London EC2M 4RB
Clydesdale Bank
St Albans Financial
Solutions Centre
Verulam Point
4th Floor
Station Way
St Albans AL1 5HE
Stockbrokers and
Nominated Adviser
Northland Capital Partners
131 Finsbury Pavement
London EC1A 1NT
Pension Advisor
Mercer
Tower Place West
London EC3R 5BU
Independent Auditor
Baker Tilly UK Audit LLP
25 Farringdon Street
London EC4A 4AB
Registered Office
James Latham plc
Unit 3 Swallow Park
Finway Road
Hemel Hempstead
Herts HP2 7QU
Registered Number 65619
Registered in England
and Wales
Directors’ biographies
to
for
Peter Latham OBE BA FIMMM Chairman
Peter Latham, age 64, has worked in the company
for 42 years and was appointed to the board in 1983.
He is a director of Lathams Limited and provides
advice
the Audit and Remuneration and
Nominations Committees. He is a director of the
Programme
the Endorsement of Forest
Certification schemes (PEFC) International board,
an independent non-governmental organisation,
which has certified the largest area of world
forests. He is a member and past chairman of the
industry’s environment committee, Forests Forever
and a Trustee of the Commonwealth Forestry
Association. He is a past president of the Institute of
Wood Science and of the High Wycombe Furniture
Manufacturers’ Society.
David Dunmow BSc FCA Finance Director
and Company Secretary
David Dunmow, age 51, has worked in the company
for 21 years and was appointed to the board as
Finance Director in 2000. He is a Fellow of the
Institute of Chartered Accountants in England and
Wales. He is a director of Lathams Limited and
provides advice to the Audit and Remuneration
Committees. He is a former treasurer of the Timber
Trade Federation.
Chris Sutton Executive Director
Chris Sutton, age 56, has worked in the company for
37 years and was appointed to the board in 2005.
He is Chairman of Lathams Limited. He is a former
director of the Timber Trade Federation.
Nick Latham BSc Executive Director
Nick Latham, age 47, has worked in the company
for 24 years and was appointed to the board
in 2007. He is a director of Lathams Limited and
member of the Audit Committee. He sits on the
advisory committee of the Timber Research and
Development Association.
Peter Latham
David Dunmow
Chris Sutton
Nick Latham
Piers Latham
Andrew Wright
Pippa Latham
Meryl Bushell
JAMES LATHAM PLC ANNUAL REPORT 2015
19
Corporate Governance
Directors Remuneration Report
This report has been compiled by the company’s
Remuneration and Nominations Committee and sets out
the company’s remuneration policies for its key directors.
Remuneration and Nominations Committee
During the year ended 31 March 2015, the Remuneration
and Nominations Committee comprised two non-
executive directors, Meryl Bushell as chairman and
Pippa Latham. The meetings were attended by Peter
Latham and David Dunmow to provide information to
the Committee when required.
The main function of the Committee is to make
recommendations to the board regarding the group’s
policy on
the remuneration and conditions of
employment of the executive directors of the group,
and, where appropriate, senior management, and
includes considering nominations to the board. Over the
course of the year the committee has also taken an active
interest in talent development, succession planning and
group diversity.
This year the Committee recommended to the board
that Andrew Wright be appointed an executive director
on 1 April 2015. Andrew is currently responsible for
the group’s northern depots in Leeds, Gateshead and
Scotland. He also has responsibility for identifying,
assessing and introducing new product ranges into the
group’s portfolio of products. Andrews’ skills enhance
the board, and his appointment forms part of our long
term succession plans.
The Committee has access to professional remuneration
advice from outside of the company.
Remuneration Policy
The remuneration policy aims to ensure that executive
directors are
individual
contributions to the performance of the group, with due
regard for the interests of shareholders.
fairly rewarded
for their
The remuneration package consists of basic salary,
benefits (comprising car and private medical provision),
pensions, annual bonus schemes, share option schemes
and life assurance cover of 4 times gross salary.
Pay rises are considered once a year, to apply from
1 December. Pay rises are based on cost of living
increases plus awards for promotion where relevant.
The executive directors have their pay rises based on the
same criteria as all other employees.
20
JAMES LATHAM PLC ANNUAL REPORT 2015
Performance related bonuses
Annual bonuses can be earned by executive directors
for the achievement of specific financial performance
targets set by the group’s board of directors and agreed
by the remuneration committee. The criterion on which
the executive directors’ bonuses were based in 2015
was the achievement of £8,660,000 operating profit,
as measured in the depots management accounts,
an increase of 11.3% over the previous years targets.
Maximum bonuses of 19.5% of basic salary are paid
on achieving 120% of the target operating profit.
The minimum bonus level is 1.3% paid on achieving
90% of target operating profit. This year 131.6% of
the target operating profit was achieved earning
19.5% of basic salary. The criterion for the year ended
31 March 2016 will be based on a similar formula
applying to target profits. In addition a Group Bonus
scheme pays out a bonus to all eligible members of staff,
subject to achieving a minimum level of group profits.
This year the scheme is paying 3.62% of basic salary to
328 eligible employees.
Service Contracts
Following a review by the board of directors in 1996, the
service contracts of executive directors were amended
to incorporate a rolling 2 year notice period. This
was considered by the board of directors to be a
significant but reasonable reduction in their original
5 year contracts. In 2004, the board of directors agreed
that any new service contracts issued to new directors
would incorporate a fixed 2 year period, subject to a
minimum 6 month notice period.
Executive director’s contracts have no provisions for
pre-determined compensation on termination that
exceeds two years salary and benefits in kind.
Remuneration of the non-executive directors
The remuneration of the non-executive directors is
determined by the board. The non-executive directors do
not receive a pension or other benefits from the group.
Corporate Governance
Directors Remuneration Report
Review of past performance
The graph below shows the company’s total shareholder return performance against the total shareholder return
performance of the AIM All Share Index for the five years ended 31 March 2015.
James Latham plc total shareholder return
600
500
400
300
200
100
0
James Latham –
TOT Return Ind
FTSE AIM All-Share –
TOT Return Index
2009
2010
2011
2012
2013
2014
2015
The Remuneration Committee consider this to be the most appropriate graph against which to compare the
company’s performance.
Directors’ emoluments
Details of the individual directors’ emoluments for the year were as follows:
Salary
and fees
Benefits
Bonus
Total
emoluments
excluding
pensions
Share
based
payments
Pension
contributions
£000
£000
£000
£000
£000
£000
Executive
P.D.L. Latham
C.D. Sutton
D.A. Dunmow
2015
2014
2015
2014
2015
2014
2015
2014
P.F. Latham
2015
(appointed 1 January 2014) 2014
N.C. Latham
Non-executive
P.A.J. Latham
M.A. Bushell
Total
2014
2015
2014
2015
2014
207
185
145
137
140
130
109
99
88
21
30
29
35
29
754
630
6
9
10
11
9
8
-
-
10
-
-
-
-
-
35
28
47
45
35
33
34
33
27
24
22
5
-
-
-
-
165
140
260
239
190
181
183
171
136
123
120
26
30
29
35
29
954
798
1
2
10
15
9
15
2
2
2
1
-
-
-
-
24
35
TOTAL
£000
261
281
230
225
220
213
160
146
141
32
30
29
35
29
-
40
30
29
28
27
22
21
19
5
-
-
-
-
99
122
1,077
955
JAMES LATHAM PLC ANNUAL REPORT 2015
21
Corporate Governance
Directors Remuneration Report
Directors’ shareholdings
There were no contracts with the company or its subsidiaries during the year in which any of the directors had a material
interest, other than their service contracts. The directors’ holdings of the share capital at the end of the financial year
were as follows:
Directors
P.D.L. Latham
D.A. Dunmow
C.D. Sutton
N.C. Latham
P.F. Latham
P.A.J. Latham
M.A. Bushell
31 March 2015
31 March 2014
Ordinary shares
Preference shares
Ordinary shares
Preference shares
Beneficial owner
Beneficial owner
Beneficial owner
Beneficial owner
Beneficial owner
Beneficial owner
Beneficial owner
1,124,937
110,778
42,959
616,782
614,370
369,998
9,400
Nil
Nil
Nil
Nil
567
Nil
Nil
1,119,058
98,775
34,344
610,928
608,592
369,505
3,400
Nil
Nil
Nil
Nil
567
Nil
Nil
Directors’ share option schemes
Save as You Earn Scheme
Participation by the directors in the James Latham plc Save as You Earn Scheme is as follows:
P.D.L. Latham
D.A. Dunmow
N.C. Latham
P.F. Latham
31 March 2015
31 March 2014
3,658
3,658
3,658
3,658
3,658
3,658
3,658
3,658
These options are exercisable on 29 February 2016 at £2.46 a share. There are no performance conditions attached
to these options.
Company Share Option Scheme
Participation by the directors in the James Latham plc Approved Company Share Option Scheme 2008 is as follows:
P.D.L. Latham
D.A. Dunmow
Outstanding
1 April 2014
Granted during
the year
Exercised
Outstanding
31 March 2015
Exercise
price
4,242
2,532
1,742
1,834
3,447
4,242
2,532
1,742
1,834
1,262
-
-
-
-
-
-
-
-
-
-
-
707
(4,242)
-
-
-
(3,447)
(4,242)
-
-
-
-
-
-
2,532
1,742
1,834
-
-
2,532
1,742
1,834
1,262
707
£1.65
£1.98
£2.295
£2.725
£1.16
£1.65
£1.98
£2.295
£2.725
£3.96
£5.65
Exercise period
26.11.14 to 25.11.19
15.12.15 to 14.12.20
29.11.16 to 28.11.21
05.12.17 to 04.12.22
16.12.13 to 15.12.18
26.11.14 to 25.11.19
15.12.15 to 14.12.20
29.11.16 to 28.11.21
05.12.17 to 04.12.22
16.12.18 to 15.12.23
05.01.20 to 04.01.25
Continued on page 23
22
JAMES LATHAM PLC ANNUAL REPORT 2015
Corporate Governance
Directors Remuneration Report
Company Share Option Scheme (continued)
Participation by the directors in the James Latham plc Approved Company Share Option Scheme 2008 is as follows:
Outstanding
1 April 2014
Granted during
the year
Exercised
Outstanding
31 March 2015
Exercise
price
C.D. Sutton
N.C. Latham
P.F. Latham
3,447
4,242
2,532
1,742
1,834
1,262
-
4,242
2,532
1,742
1,834
1,262
-
4,242
2,532
1,742
1,834
1,262
-
-
-
-
-
-
-
707
-
-
-
-
-
707
-
-
-
-
-
707
(3,447)
-
-
-
-
-
-
(4,242)
-
-
-
-
-
(4,242)
-
-
-
-
-
-
4,242
2,532
1,742
1,834
1,262
707
-
2,532
1,742
1,834
1,262
707
-
2,532
1,742
1,834
1,262
707
£1.16
£1.65
£1.98
£2.295
£2.725
£3.96
£5.65
£1.65
£1.98
£2.295
£2.725
£3.96
£5.65
£1.65
£1.98
£2.295
£2.725
£3.96
£5.65
Exercise period
16.12.13 to 15.12.18
26.11.14 to 25.11.19
15.12.15 to 14.12.20
29.11.16 to 28.11.21
05.12.17 to 04.12.22
16.12.18 to 15.12.23
05.01.20 to 04.01.25
26.11.14 to 25.11.19
15.12.15 to 14.12.20
29.11.16 to 28.11.21
05.12.17 to 04.12.22
16.12.18 to 15.12.23
05.01.20 to 04.01.25
26.11.14 to 25.11.19
15.12.15 to 14.12.20
29.11.16 to 28.11.21
05.12.17 to 04.12.22
16.12.18 to 15.12.23
05.01.20 to 04.01.25
No performance conditions attach to these options. Mr P.D.L Latham, Mr N.C. Latham and Mr P.F. Latham made a gain
of £17,286, Mr D.A. Dunmow made a gain of £29,833 and Mr C.D. Sutton made a gain of £12,547 on options exercised
during the year.
Deferred Share Bonus Plan
Participation by the directors in the James Latham plc Deferred Share Bonus Plan is as follows:
Outstanding
1 April 2014
Awarded
during
the year
Excercised
during
the year
Outstanding
31 March
2015
Exercise
price
Award
price
Vesting
date
D.A. Dunmow
C.D. Sutton
5,391
5,195
5,391
5,195
85
113
85
113
(5,476)
-
(5,476)
-
-
5,308
-
5,308
nil
nil
nil
nil
£2.295
£2.74
£2.295
£2.74
29.11.14
06.12.15
29.11.14
06.12.15
No performance conditions or voting rights apply to these shares, but dividends will be reinvested into additional shares
in the plan. Mr D.A.Dunmow and Mr C.D Sutton each made a gain of £29,297 on options exercised during the year.
MA Bushell, Chairman of the Remuneration Committee
23 June 2015
JAMES LATHAM PLC ANNUAL REPORT 2015
23
Corporate Governance
Directors Report
The directors have pleasure in presenting their annual
report and the audited accounts for the year ended
31 March 2015. In accordance with section 414c(11)
of the Companies Act 2006, included in the Strategic
Review is the review of business, principal risks and
uncertainties and key performance indicators. This
information would have been required by section 7 of
the Large and Medium sized Companies and Groups
(Accounts and Reports) Regulations 2008 to be contained
in the Directors Report.
Results and dividends
Group results for the year ended 31 March 2015 are
set out on page 29. The directors recommend the
following dividends:-
Ordinary dividends
Interim dividend paid, 3.7 pence per
ordinary share
Final dividend proposed, 8.8 pence per
ordinary share
Total ordinary dividends, 12.5 pence per
ordinary share
£000
718
1,711
2,429
The directors recommend payment of the final dividend
on 28 August 2015 to shareholders on the register of
members at the close of business on 7 August 2015.
Balance sheet and post balance sheet events
The balance sheet on page 31 shows the group’s
financial position. No significant events have occurred
since the balance sheet date.
Directors
The directors of the company, whose biographical
details are shown on page 19, were directors throughout
the year, other than Andrew Wright who was appointed
on 1 April 2015.
In compliance with the Articles of Association, David
Dunmow, Pippa Latham and Meryl Bushell will retire
by rotation and, being eligible, offer themselves for
re-election. Andrew Wright, who was appointed during
the year, will be proposed for election at the Annual
General Meeting.
Other than their service contracts, no director has a
material interest in any contract with the company.
Pippa Latham and Meryl Bushell, as non-executive
directors, do not have a service contract with the
company, but each has received a letter of appointment
for a two year period. Details of directors’ emoluments,
pension rights, service contracts and the directors’
interests in the ordinary shares of the company are
included in the Directors’ Remuneration Report on
pages 20 to 23.
Article 168 of the company’s Articles of Association
gives the directors and officers of the company a right
to be indemnified out of the assets of the company in
respect of any liability incurred in relation to the affairs
of the group to the extent the law allows.
The company has undertaken to comply with best
practice on approval of directors’ conflicts of interest.
Under the Companies Act 2006 a director must avoid
a situation where there is, or can be, an interest that
may conflict with the company’s interests. None of the
directors had an interest in any contract to which the
group was a party during the year.
The company maintained directors’ and officers’ liability
insurance cover throughout the year.
Share capital
Resolutions concerning the ability of the board to
purchase the company’s own shares and to allot shares
and to dis-apply pre-emption rights are again being
proposed at the Annual General Meeting.
The company holds 719,200 shares as treasury shares,
with a view to being used for employee share schemes.
In addition the Trustees of the James Latham Employee
Benefits Trust holds 36,879 shares with a view to being
used for employee share schemes.
Share option schemes
On 29 August 2007, the shareholders approved by
ordinary resolution the extension of the Save as You
Earn scheme for a further 10 years. A 3 year scheme
commenced on 1 March 2013 with 188,284 options
being issued at an option price of £2.46. A resolution
is being put to the shareholders at the Annual General
Meeting to increase the maximum amount that can
be saved under this scheme from £250 a month to
the maximum allowed under the relevant legislation
(currently £500 a month).
On 21 August 2008, the shareholders approved by
special resolution the establishment of the Company
Share Option Scheme. During the year 16,262 options
24
JAMES LATHAM PLC ANNUAL REPORT 2015
Corporate Governance
Directors Report
were issued at an option price of £5.65. In addition
51,550 options were exercised after being held for five
years, 10,342 at an option price of £1.16 and 41,208 at
an option price of £1.65.
Substantial shareholdings
At 23 June 2015, the company had received notification
under the Disclosure Transparency Rules that the
holdings and voting rights exceeding the 3% notification
threshold were as follows:
Peter Latham
International Plywood (Importers) Ltd
Robert Latham
Nick Latham
Piers Latham
%
Number
1,124,937 5.79
963,746 4.96
680,787 3.50
616,782 3.17
614,370 3.16
Payments to suppliers
Operating businesses are responsible for agreeing the
terms and conditions under which business transactions
with their suppliers are conducted. The group’s policy
is to pay suppliers in accordance with these terms.
The group’s creditor days at 31 March 2015 were 35 days
(2014: 36 days).
Going concern
After making appropriate enquiries, the directors have a
reasonable expectation that the company and the group
have adequate resources to continue in operational
existence for the foreseeable future. The directors
confirm that the business is a going concern and that
their assessment of the going concern position has
been prepared in accordance with Going Concern and
Liquidity Risk: Guidance for Directors of UK Companies
2009, published by the Financial Reporting Council in
October 2009.
Political and charitable donations
During the year the group made no political contributions
but made direct donations to various charitable
organisations amounting to £7,040 (2014: £8,265). The
group also made small donations of our products to a
number of good causes and was involved in fund raising
activities for the Timber Trades Benevolent Society.
Close company status
The close company provisions of the Income and
Corporation Taxes Act 1988 do not apply to the company.
new image and caption to come
Dan May inspecting Tulipwood at our Fareham depot.
JAMES LATHAM PLC ANNUAL REPORT 2015
25
Corporate Governance
Directors Report
Financial instruments
A summary of the group financial instruments and
related disclosures are set out in note 28 to the group
accounts and in the Financial Review on pages 10-12.
Provision of information to the auditor
In the case of each of the directors who are directors of
the company at the date when this report was approved:
• So far as each of the directors is aware, there is no
relevant audit information of which the company’s
auditor is unaware; and
• Each of the directors has taken all the steps that
he ought to have taken as a director to make
himself aware of any relevant audit information and to
establish that the company’s auditor is aware of that
information.
Auditor
A resolution to reappoint Baker Tilly UK Audit LLP as
the company’s auditor and to authorise the directors to
fix their remuneration will be proposed at the Annual
General Meeting. Baker Tilly UK Audit LLP has indicated
its willingness to continue in office.
Annual General Meeting special business
The Annual General Meeting of the company will be
held at Unit 3, Swallow Park, Finway Road, Hemel
Hempstead, Hertfordshire, HP2 7QU on 26 August 2015
at 12.30pm. The following items are to be proposed as
special business, and the board recommends that the
shareholders vote in favour of all resolutions put before
the meeting.
Resolution 9. Directors authority to allot shares. This
gives the board the power to allot ordinary shares or
other securities, up to an aggregate nominal amount of
£1,680,000 (or one third of the current ordinary shares).
Resolution 10. Dis-application of pre-emption rights.
The Companies Act 2006 provides that when ordinary
shares are being issued for cash, these shares must first
be offered to existing shareholders on a pro rata basis.
This resolution empowers the board to allot shares not
exceeding 5% of the issued share capital, without offering
to existing shareholders. The board only anticipates
using this power in conjunction with the employee
share schemes.
Resolution 11. Authority for the company to purchase its
own shares. This gives the board the power to purchase up
to 10% of the company’s shares at a price not more than
105% of the average of the mid market price for the ten
business days preceding the date of the purchase.
On behalf of the Board of Directors
Peter Latham
Chairman
23 June 2015
26
JAMES LATHAM PLC ANNUAL REPORT 2015
Corporate Governance
Statement of Directors Responsibilities
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the group’s and company’s transactions and
disclose with reasonable accuracy at any time the
financial position of the group and the company and
to enable them to ensure that the financial statements
comply with the requirements of the Companies Act
2006. They are also responsible for safeguarding the
assets of the group and the company and hence
for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the James Latham plc investors website,
www.lathams.co.uk.
Legislation in the United Kingdom governing the
preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
On behalf of the Board of Directors
Peter Latham
Chairman
23 June 2015
The directors are responsible for preparing the Strategic
Report, Directors Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare group
and company financial statements for each financial
year. The directors are required by the AIM Rules of
the London Stock Exchange to prepare group financial
statements in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the European
Union “EU” and have elected under company law to
prepare the company financial statements in accordance
with United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards and
applicable law).
The group financial statements are required by law and
IFRS adopted by the EU to present fairly the financial
position and performance of the group; the Companies
Act 2006 provides in relation to such financial statements
that references in the relevant part of that Act to financial
statements giving a true and fair view are references to
their achieving a fair presentation.
Under company law the directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the group
and the company and of the profit or loss of the group
for that period.
In preparing each of the group and company financial
statements, the directors are required to:
a. select suitable accounting policies and then apply
them consistently;
b. make judgements and accounting estimates that are
reasonable and prudent;
c. for the group financial statements, state whether
they have been prepared in accordance with IFRS’s
adopted by the EU; and for the company financial
statements state whether applicable UK accounting
standards have been followed, subject to any
material departures disclosed and explained in the
company financial statements;
d. prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the group and the company will continue in
business.
JAMES LATHAM PLC ANNUAL REPORT 2015
27
Corporate Governance
Independent Auditor’s Report
To the members of James Latham plc
We have audited the group and parent company financial
statements (“the financial statements”) on pages 29 to 65.
The financial reporting framework that has been applied in
the preparation of the group financial statements is applicable
law and International Financial Reporting Standards (IFRSs)
as adopted by the European Union. The financial reporting
framework that has been applied in the preparation of the
parent company financial statements is applicable law and
United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice).
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for
the opinions we have formed.
Respective responsibilities of directors
and auditor
As more fully explained in the Directors’ Responsibilities
Statement set out on page 27, the directors are responsible
for the preparation of the financial statements and for
being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the
financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland).
Those standards require us to comply with the Auditing
Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the Financial Reporting Council’s website at
http://www.frc.org.uk/auditscopeukprivate
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the
state of the group’s and of the parent company’s affairs
as at 31 March 2015 and of the group’s profit for the year
then ended;
• the group financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union;
• the parent company financial statements have been
properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion the information given in the Strategic Report
and the Directors’ Report for the financial year for which
the financial statements are prepared is consistent with the
financial statements.
Matters on which we are required to report
by exception
We have nothing to report in respect of the following:
Under the the Companies Act 2006 we are required to
report to you if, in our opinion:
• adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company financial statements are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified
by law are not made; or
• we have not received all the information and explanations
we require for our audit.
Paul Watts
Senior Statutory Auditor
For and on behalf of
BAKER TILLY UK AUDIT LLP
Statutory Auditor, Chartered Accountants
25 Farringdon Street
London EC4A 4AB
23 June 2015
28
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Consolidated Income Statement
For the year ended 31 March 2015
£’000s
Notes
2015
2014
Continuing operations
Revenue
163,117
Cost of sales (including warehouse costs) 3, 4, 12 (143,978) (134,688)
174,855
Gross profit
Selling and distribution costs
Administrative expenses
Exceptional adjustment to defined benefit
pension cost
Other income
Operating profit
Finance income
Finance costs
Profit before tax
Tax expense
30,877
28,429
4, 12 (14,082) (12,941)
4, 12 (6,237) (6,016)
18.4
5
-
6
1,797
6
10,564
46
11,275
27
6
7 (503) (823)
3
10,479
8 (2,285) (1,888)
10,107
Profit after tax attributable to owners
of the parent company
Earnings per ordinary share (basic)
Earnings per ordinary share (diluted)
Earnings per ordinary share (basic, excluding
exceptional adjustment net of tax)
Earnings per ordinary share (diluted, excluding
exceptional adjustment net of tax)
10
10
10
10
7,822
40.3p
40.0p
40.3p
40.0p
8,591
44.3p
43.9p
36.9p
36.6p
JAMES LATHAM PLC ANNUAL REPORT 2015
29
Financial Statements
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2015
£’000s
Notes
2015
Profit after tax
Other comprehensive income:
Actuarial (loss)/gain on defined benefit pension scheme (1,849)
Deferred tax relating to components of other
comprehensive income
434
7,822
5,543
(1,508)
2014
8,591
Other comprehensive income for the year, net of tax
(1,415) 4,035
Total comprehensive income attributable to the owners
of the parent company
6,407
12,626
30
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Consolidated Balance Sheet
Notes
2015
2014
13
11
12
14
15
237
101
21,601
21,939
31,906
34,213
12,501
78,620
100,559
16
17
23,893
907
947
17
18
19
20
25,747
987
10,430
464
700
12,581
38,328
62,231
237
108
22,647
22,992
27,937
32,842
11,234
72,013
95,005
23,191
238
1,017
24,446
1,890
9,267
520
774
12,451
36,897
58,108
5,040
143
5,040
21
123
22
23 (177) (175)
3
53,117
3
57,222
At 31 March 2015
£’000s
Assets
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Current liabilities
Trade and other payables
Interest bearing loans and borrowings
Tax payable
Total current liabilities
Non-current liabilities
Interest bearing loans and borrowings
Retirement and other benefit obligation
Other payables
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Capital and reserves
Issued capital
Share-based payment reserve
Own shares
Capital reserve
Retained earnings
Total equity attributable to
shareholders of the parent company
62,231
58,108
These accounts were approved and authorised for issue by the Board of Directors on 23 June 2015 and signed on its behalf by:
P.D.L. Latham
D.A. Dunmow
} Directors
The consolidated notes on pages 34 to 58 form part of these accounts.
JAMES LATHAM PLC ANNUAL REPORT 2015
31
Financial Statements
Consolidated Statement of Changes in Equity
Attributable to owners of the parent company
Issued
capital
£’000
5,040
-
Share-based
payment
reserve
£’000
Own
shares
£’000
91 (218)
-
-
Capital
reserve
£’000
3
-
Retained
earnings
£’000
42,551
8,591
Total
equity
£’000
47,467
8,591
- - 5,543 5,543
Balance at 1 April 2013
Profit for the year
Other comprehensive income:
Actuarial gain on defined benefit
pension scheme
Deferred tax relating to components
of other comprehensive income
Total comprehensive income for the year
Transactions with owners:
Dividends
Write down on conversion of ESOP shares
Exercise of options
Change in investment in ESOP shares
Share-based payment expense
-
-
-
-
-
-
-
-
-
-
-
-
- (48)
-
-
-
77
-
- (34)
-
80
- (1,508) (1,508)
-
12,626
12,626
- (2,031) (2,031)
-
- (77)
-
48
-
- (34)
-
80
-
-
Total transactions with owners
- 32
43
- (2,060) (1,985)
Balance at 31 March 2014
5,040
123 (175)
Profit for the year
Other comprehensive income:
Actuarial loss on defined benefit
pension scheme
Deferred tax relating to components
of other comprehensive income
Total comprehensive income for the year
-
-
-
-
-
-
-
-
-
-
-
-
Transactions with owners:
Dividends
Exercise of options
Write down on conversion of ESOP shares
Change in investment in ESOP shares
Share-based payment expense
-
-
-
-
- (47)
82
-
-
- (84)
-
-
-
67
3
-
53,117
58,108
7,822
7,822
- (1,849) (1,849)
-
434
434
-
6,407
6,407
- (2,267) (2,267)
-
-
47
-
- (82)
- (84)
-
-
-
67
Total transactions with owners
- 20 (2)
- (2,302) (2,284)
Balance at 31 March 2015
5,040 143 (177)
3
57,222
62,231
32
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Consolidated Cash Flow Statement
For the year ended 31 March 2015
£’000s
Notes
2015
2014
Net cash flow from operating activities
Cash generated from operations
Interest paid
Income tax paid
24
6,218
8,036
(44) (45)
(1,996) (1,339)
Net cash inflow from operating activities
4,178 6,652
Cash flows from investing activities
Interest received and similar income
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
(383) (1,181)
46
27
6
-
Net cash outflow from investing activities
(331) (1,154)
Cash flows from financing activities
Borrowings repaid during the year
Equity dividends paid
Preference dividend paid
(234) (229)
(2,267) (2,031)
(79) (79)
Net cash outflow from financing activities
(2,580) (2,339)
Increase in cash and cash equivalents
for the year
1,267 3,159
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
11,234
12,501
8,075
11,234
JAMES LATHAM PLC ANNUAL REPORT 2015
33
Financial Statements
Notes forming part of the Group Accounts
General information
James Latham plc is a public limited company incorporated
and domiciled in the United Kingdom under the Companies
Act 2006 and is listed on the AIM market. The nature of
the group’s operations and its principal activities are set out
in the Strategic Review. The address of the registered office
is Unit 3 Swallow Park, Finway Road, Hemel Hempstead,
Herts HP2 7QU.
1. Summary of significant accounting policies
The principal accounting policies applied in the preparation
of these consolidated accounts are set out below. These
policies have been consistently applied to all the years
presented, unless otherwise stated.
(a) Basis of preparation
These consolidated accounts have been prepared in
accordance with
International Financial Reporting
Standards (IFRS) and IFRIC interpretations endorsed by
the European Union (EU) and with those parts of the
Companies Act 2006 applicable to companies reporting
under IFRS. The company has elected to prepare its
parent company accounts in accordance with UK Generally
Accepted Accounting Practice (GAAP). These are presented
on pages 59 to 65.
The accounts have been prepared under the historic cost
convention except for forward contract financial instruments
measured at fair value. The directors have prepared the
financial statements on the going concern basis for the reasons
set out on page 25. A summary of the more important group
accounting policies, which have been applied consistently
across the group, is set out below.
At the date of authorisation of these financial statements, the
following standards and interpretations which are issued but
not yet effective or endorsed (unless otherwise stated), have
not been applied:
- IFRS 11 – Joint Arrangements
- IFRS 14 – Regulatory Deferral Accounts
- Amendments to IAS 1 – Presentation of Financial
Statements
- Amendments to IAS 16 – Property, Plant and Equipment
- Amendments to IAS 19 – Employee Benefits
- Amendments to IAS 28 – Investments in Associates and
Joint Ventures
- Amendments to IAS 38 – Intangible Assets
- Amendments to IFRS 10 – Consolidated Financial
Statements
- Amendments to IFRS 12 – Disclosure of Interests in
Other Entities
The directors anticipate that the adoption of these standards
and interpretations as appropriate in future periods will have
no material impact on the financial statements of the group
when the relevant standards come into effect for periods
commencing after 1 April 2015.
(b) Basis of consolidation
The consolidated accounts include the company and all its
subsidiary undertakings (from the date of acquisition or to
the date of disposal where applicable). Intra group sales and
profits are eliminated on consolidation. The accounts of all
subsidiary undertakings are made up to 31 March.
A subsidiary is an entity controlled, either directly or
indirectly, by the company, where control is the power to
govern the financial and operating policies of the entity
so as to obtain benefit from its activities. The acquisition
method of accounting is used to account for the acquisition
of subsidiaries by the group. The cost of an acquisition
is measured as the fair value of the assets given, equity
instruments issued and liabilities incurred or assumed at
the date of exchange. Acquisition costs are expensed in the
period in which they are incurred.
1.1 Revenue recognition
Revenue comprises net sales to external customers exclusive
of Value Added Tax. Revenue is recognised upon delivery
to, or collection by, the customer. Revenue is shown net
of returns and rebates and after eliminating sales within
the group.
1.2 Segmental reporting
IFRS 8 “Operating Segments” requires operating segments
to be identified on the basis of internal reporting of
components of the group that are regularly reviewed by the
chief operating decision maker, which the group considers
to be the Chairman, to allocate resources to the segments
and to assess their performance. Further information is
available in note 2.
1.3 Operating profit
Operating profit consists of revenues and other operating
income less operating expenses. Operating profit excludes
net finance costs.
1.4 Exceptional items
Exceptional items are those items of income and expenditure
that by reference to the group are material in size and nature
or incidence, that in the judgement of the directors, should
be disclosed seperately on the face of the financial statements
to ensure both that the reader has a proper understanding
of the group’s financial performance and that there is
comparability of financial performance between periods.
34
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
1.5 Foreign currency translation
The functional and presentational currency of the parent
company and its subsidiaries is UK Pounds Sterling.
Transactions in currencies other than the functional
currency are translated at the rate ruling at the date of the
transaction. At each balance sheet date, monetary assets and
liabilities denominated in foreign currencies are translated
at the rate of exchange ruling at the balance sheet date.
Any gains or losses arising from the transactions are taken to
the income statement.
1.8 Goodwill
Goodwill on consolidation, being the excess of the purchase
price over the fair value of the net assets of subsidiary
undertakings at the date of acquisition is capitalised in
accordance with IFRS 3 (revised) “Business combinations”.
Goodwill is tested annually for impairment, or more
frequently when there is an indication that goodwill may
be impaired. Goodwill is carried at cost less accumulated
impairment losses. Impairment losses on goodwill are not
reversed in a subsequent period.
In order to help manage its exposure to certain foreign
exchange risks, the group enters into forward contracts.
Gains and losses on forward contracts are recognised at fair
value through the income statement.
1.6 Property, plant and equipment
Property, plant and equipment is stated at cost less
depreciation. Depreciation on property, plant and equipment
is provided at rates calculated to write off the cost less
estimated residual value of each asset over its expected life.
It is calculated at the following rates:
1.9 Intangible assets – trademark
Acquired trademarks are shown at historical cost. Trademarks
are considered to have a finite life and are carried at cost less
accumulated amortisation. Amortisation is calculated using
the straight-line method over the estimated useful life of
20 years.
1.10 Inventories
Inventories are stated at the lower of cost (including an
appropriate proportion of attributable supplier rebates and
discounts) and net realisable value.
Freehold buildings
Leasehold improvements
Fixtures and fittings
Plant, equipment and vehicles
- over 50 years
- over 5 to 15 years
- over 4 to 10 years
- over 5 to 20 years
Net realisable value is the estimated selling price in the
ordinary course of business, less applicable variable selling
expenses. Provision is made for obsolete or slow moving
inventories where appropriate.
Freehold land is not depreciated.
Estimated residual values and useful lives are reviewed
annually and adjusted where necessary.
1.7 Impairment of non-current assets
Goodwill is reviewed annually for impairment. The carrying
amounts of the group’s other
intangible assets and
property, plant and equipment are reviewed at each balance
sheet date to determine whether there is any indication
of impairment. If such an indication exists, the asset’s
recoverable amount is estimated and compared to its
carrying value. Where the asset does not generate cash
flows that are independent from other assets, the group
estimates the recoverable amount of the cash-generating
unit to which the asset belongs. Where the carrying value
exceeds the recoverable amount, a provision for the
impairment loss is established with a charge being made to
the income statement.
The cost of inventories is based on the weighted average
principle.
1.11 Financial instruments
Financial assets and financial liabilities are recognised on the
group’s balance sheet when the group has become party to
the contractual provisions of the instrument.
1.11.1 Trade receivables
Trade receivables are classified as loans and receivables and
are initially recognised at fair value. They are subsequently
measured at their amortised cost using the effective interest
method less any provision for impairment. A provision
for impairment is made where there is objective evidence
(including customers with financial difficulties or in default
on payments), that amounts will not be recovered in
accordance with original terms of the agreement. A provision
for impairment is established when the carrying value of the
receivable exceeds the present value of the future cash flow
discounted using the effective interest rate. The carrying
value of the receivable is reduced through the use of an
allowance account and any impairment loss is recognised in
the income statement.
JAMES LATHAM PLC ANNUAL REPORT 2015
35
Financial Statements
Notes forming part of the Group Accounts
1.11.2 Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and at
bank and other short-term, highly liquid investments that
are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
The carrying amount of these assets approximates their
fair value.
1.11.3 Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that
evidences a residual interest in the assets of the group after
deducting all of its liabilities.
1.11.4 Bank borrowings
Interest-bearing bank loans are recorded initially at their
fair value, net of direct transaction costs. Such instruments
are subsequently carried at their amortised cost and finance
charges, including premiums payable on settlement or
redemption, are recognised in the income statement over
the term of the instrument using an effective rate of interest.
1.11.5 Trade payables
Trade payables are initially recognised at fair value and
subsequently at amortised cost using the effective interest
method.
1.11.6 Equity instruments
Equity instruments issued by the group are recorded at the
proceeds received, net of direct issue costs.
1.11.7 Derivative financial instruments
The group’s activities expose the entity primarily to foreign
currency and interest rate risk. The group uses foreign
exchange forward contracts and fixed rate bank loans to
help manage these exposures. The group does not use
derivative financial instruments for speculative purposes.
Derivative financial instruments are initially recognised at
fair value on the date a derivative contract is entered into
and are subsequently remeasured at their fair value.
Foreign currency forward contracts and fixed rate bank
loans are not designated effective hedges and so are marked
to market at the balance sheet date, with any gains or losses
being taken through the income statement.
1.12 Current and deferred income tax
Current tax is the expected tax payable on taxable income
for the year, using tax rates enacted or substantively enacted
at the balance sheet date, and any adjustments to tax
payable in respect of previous years.
Deferred tax expected to be payable or recoverable on
differences at the balance sheet date between the tax
bases and liabilities and their carrying amounts for financial
reporting purposes is accounted for using the liability
method. Deferred tax liabilities are generally recognised for
all taxable temporary differences, and deferred tax assets
are recognised to the extent that it is probable that taxable
profits will be available against which deductible differences
can be utilised.
Deferred tax is calculated at the rates of taxation which are
expected to apply when the deferred tax asset or liability is
realised or settled, based on the rates of taxation enacted or
substantively enacted at the balance sheet date.
1.13 Operating leases
Leases in which a significant portion of the risks and rewards
of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases are
charged to the income statement on a straight-line basis over
the period of the lease.
1.14 Dividend distribution
Dividend distribution to the company’s shareholders is
recognised as a liability in the group’s financial statements
in the period in which the dividends are approved by the
company’s shareholders.
1.15 Retirement benefit costs
Retirement benefit costs are accounted for in accordance
with IAS 19 (revised) “Employee benefits”. Full details of the
basis of calculation of the net pension liability disclosed in
the balance sheet at 31 March 2015, and of the amounts
charged/credited to the income statement and equity, are set
out in note 18 to the accounts.
The cost of the defined benefit scheme is determined
using the projected unit credit method with actuarial
valuations being carried out at the end of each reporting
period. The current service cost represents the increase
in the present value of the plan liabilities expected to
arise from employee service in the current period. Past
service costs resulting
from enhanced benefits are
recognised in the income statement on a straight-line
basis over the vesting period, or immediately if the benefits
have vested. Interest cost represents a net interest cost
36
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
on the net defined benefit liability. Gains and losses on
curtailments or settlements are recognised in the income
statement in the period in which the curtailment or
settlement occurs.
Actuarial gains and losses, which represent differences
between the expected and actuarial returns on the plan
assets and the effect of changes in actuarial assumptions,
are recognised in the statement of recognised income and
expense in the period in which they occur.
The defined benefit liability recognised in the balance
sheet comprises the present value of the benefit obligation,
minus any past service costs not yet recognised minus the
fair value of the plan assets, if any, at the balance sheet date.
The deficit is classified as a non-current liability.
Pension payments to the group’s defined contributions
schemes are charged to the income statement as they arise.
1.16 Finance leases
Assets held under finance leases are recognised as assets
of the group at their fair value or, if lower, at the present
value of the minimum lease payments, each determined
at the inception of the lease. The corresponding liability
to the lessor is included in the balance sheet as a finance
lease obligation. Lease payments are apportioned between
finance charges and the reduction of lease obligation so
as to achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged directly
against income.
1.17 Share-based payment
The group has applied the requirements of IFRS 2
“Share-based payment” which requires the fair value of
share-based payments to be recognised as an expense.
Certain employees receive remuneration in the form of
share options. The fair value of the equity instruments
granted is measured on the date at which they are granted by
using the Black-Scholes model, and is based on the group’s
estimate of the number of options that will eventually vest.
The fair value is expensed in the income statement over the
vesting period.
1.18 Treasury shares
Treasury shares are shown at historical cost, and deducted
from retained earnings directly in equity.
1.19 Employee Share Ownership Plan (ESOP)
Own shares represent the company’s own shares that are
held by the group sponsored ESOP trust in relation to the
group’s employees share schemes. Own shares are deducted
at cost in arriving at shareholders’ equity and gains and losses
on their sale or transfer are recognised directly in equity.
ESOP is treated separately and consolidated in the group and
company accounts.
1.20 Accounting estimates and judgements
The directors consider the critical accounting estimates and
judgements used in the financial statements and concluded
that the main areas of judgements are:
i. Post-employment benefits
ii. Stock obsolescence provision
iii. Provisions for receivables impairment
These estimates are based on historical experience and
various other assumptions that management and the board
of directors believe are reasonable under the circumstances
and are discussed in more detail under their respective notes.
For post-employment benefits, the directors take advice from
a qualified actuary. Due to the inherent uncertainty involved
in making assumptions and estimates, actual outcomes could
differ from those assumptions and estimates.
2. Business and geographical segments
For management purposes, the group is organised into one
trading division, that of timber importing and distribution,
carried out in each of the eleven locations trading wholly
in the United Kingdom.
In each location, turnover and gross margin is reviewed
separately for Panel Products (including ATP) and Timber
(including Flooring and LDT). Most locations sell both
products groups, except in the London region where
for operational efficiency Panel Products and Timber are
sold from separate locations. Resources are allocated and
employees incentivised on the basis of the results of their
individual location and not on the basis of a product group.
Whilst there are regional differences in the relative
importance of product groups and classes of customer,
each location is considered to have similar economic
characteristics and so can be aggregated into one segment.
We therefore consider there is one business segment and
one geographic segment.
JAMES LATHAM PLC ANNUAL REPORT 2015
37
Financial Statements
Notes forming part of the Group Accounts
3. Profit before tax
2015 2014
Profit for the year has been arrived at after
taking into account the following:
Net foreign exchange gains
Cost of inventories recognised as an expense and included
in ‘cost of sales’ in the consolidated income statement
Depreciation of property, plant and equipment – owned
(Profit)/loss on disposal of property, plant and equipment
Amortisation
Operating lease rentals - vehicles and plant
- property
Fees payable to the company’s auditor for the audit
of the consolidated and parent company accounts
Fees payable to the company’s auditor and its
associates for other services
£’000
£’000
£’000
£’000
105
134
141,508
1,428
130,607
1,496
(5) 3
7
7
559
539
570
539
1,098
1,109
9 9
The audit of the company’s subsidiary pursuant to legislation
Tax services
Fees in relation to the audit of the James Latham plc Pension
and Assurance Scheme
59
58
15 11
7
7
4. Information regarding employees
The monthly average number of persons, including directors,
employed by the group during the year was as follows:
Management and administration
Warehousing
Selling
Distribution
2015
Number
54
102
124
61
341
The aggregate payroll costs of these employees were as follows:
£’000
2014
Number
54
93
117
62
326
£’000
Wages and salaries
Social security costs
Pension costs
Past service on pension cost
Share-based payment
11,265
1,138
1,224
10,607
1,076
1,370
- (1,797)
80
67
Of the above payroll costs, £2,897,000 (2014: £2,634,000) is included in cost of sales, £7,090,000 (2014: £6,697,000) is
included in selling and distribution costs, and £3,707,000 (2014: £2,005,000) is included in administrative expenses in
the income statement.
13,694
11,336
38
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
5. Other income
Rent receivable
6. Finance income
Interest receivable
The interest received is on bank deposits.
7. Finance costs
On bank loans and overdrafts
On pension liability
On 8% Cumulative Preference shares
2015
£’000
6
2015
£’000
46
2015
£’000
2014
£’000
6
2014
£’000
27
2014
£’000
44
45
380 699
79
79
The interest payable on bank loans and overdrafts is payable on balances with a maturity analysis of less than 6 months
at the balance sheet date and interest on all other interest payments are based on balances with a maturity analysis of
over five years at the balance sheet date.
503
823
JAMES LATHAM PLC ANNUAL REPORT 2015
39
Financial Statements
Notes forming part of the Group Accounts
8. Tax expense
The charge for taxation on profit comprises:
2015
£’000
2014
£’000
Current year:
UK corporation tax at 21% (2014: 23%)
1,832
Adjustment in respect of prior year (21) (13)
Deferred taxation - pension 137 397
- IBAs derecognised in current year (21) (29)
- change in tax rates - (323)
- on trading losses carried forward 92 203
- other 151 (179)
1,947
Profit before taxation
Tax at 21% (2014: 23%)
2,285
10,107
2,122
1,888
10,479
2,410
Tax effect of expenses/credits that are not
deductible/taxable in determining taxable profit (1) (60)
IBAs derecognised in current year (21) (29)
Change in tax rates - (323)
Other 206 (97)
Adjustment in respect of prior year (21) (13)
Total tax charge
2,285
1,888
There are tax trading losses of £nil (2014: £439,000) carried forward in the accounts of Lathams Limited for the trade
transferred from DLH UK Ltd.
9. Dividends
2015 2014
Ordinary dividends:
£’000
£’000 £’000 £’000
Final 8.0p per share paid 22 August 2014 (2013: 7.1p)
Interim 3.7p per share paid 30 January 2015 (2014: 3.4p)
1,549
718
1,372
659
2,267 2,031
The Directors propose a final dividend for 2015 of 8.8p per share, that, subject to approval by the shareholders, will
be paid on 28 August 2015 to shareholders on the register on 7 August 2015.
Based on the number of shares currently in issue, the final dividend for 2015 is expected to absorb £1,711,000.
40
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
10. Earnings per ordinary share
Earnings per ordinary share is calculated by dividing the net profit for the year attributable to ordinary shareholders by
the weighted average number of ordinary shares outstanding during the year.
Net profit attributable to ordinary shareholders
Net profit attributable to ordinary shareholders less exceptional
adjustment to defined benefit pension cost net of tax
2015
£’000
7,822
7,822
Number
’000
2014
£’000
8,591
7,153
Number
’000
Issued ordinary share capital
20,160
Less: weighted average number of own shares held in treasury investment (719) (719)
Less: weighted average number of own shares held in ESOP Trust (52) (56)
20,160
Weighted average share capital
Add: dilutive effects of share options issued
Weighted average share capital for diluted earnings per ordinary
share calculation
19,389
169
19,558
11. Intangible assets
Cost:
At 1 April 2013
Additions
At 1 April 2014
Additions
At 31 March 2015
Amortisation
At 1 April 2013
Charge for the year
At 1 April 2014
Charge for the year
At 31 March 2015
Net book value
At 31 March 2015
At 31 March 2014
At 31 March 2013
19,385
182
19,567
Trademark
£’000
155
-
155
-
155
40
7
47
7
54
101
108
115
The amortisation charge is included in the income statement under administrative expenses.
The registered trademarks of the group are Baüsen® Flooring and Buffalo® Board.
JAMES LATHAM PLC ANNUAL REPORT 2015
41
Financial Statements
Notes forming part of the Group Accounts
12. Property, plant and equipment
Cost:
At 1 April 2013
Additions
Disposals
At 1 April 2014
Additions
Disposals
At 31 March 2015
Depreciation:
At 1 April 2013
Disposals
Charge for the year
At 1 April 2014
Disposals
Charge for the year
At 31 March 2015
Net book value
At 31 March 2015
At 31 March 2014
At 31 March 2013
Short
leasehold
property
improvements
£’000
Plant,
equipment
and
vehicles
£’000
Total
£’000
28,720
1,181
- (30) (30)
9,379
1,167
613
-
Freehold
property
£’000
18,728
14
-
18,742
-
29,871
383
- - (20) (20)
10,516
383
613
-
18,742
613
10,879
30,234
1,919
-
247
177
5,755
- (27) (27)
1,212 1,496
3,659
37
2,166
7,224
- - (19) (19)
37 1,144 1,428
4,844
247
214
2,413
251
5,969
8,633
16,329
362
4,910
16,576
16,809
399
436
5,672
5,720
21,601
22,647
22,965
Included in freehold property is land with a book value of £6,311,000 (2014: £6,311,000) which is not depreciated.
The depreciation charge is included in the income statement as follows:
Cost of sales
Selling and distribution costs
Administrative expenses
2015
£’000
800
519
109
1,428
2014
£’000
806
591
99
1,496
42
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
13. Goodwill
Cost:
At 1 April 2013 and 31 March 2015
Impairment
At 1 April 2013 and 31 March 2015
Net book value
At 31 March 2015, 2014 and 2013
Goodwill
£’000
362
125
237
The goodwill arose upon the acquisition of part of the trade and net assets of F.H. Thompson Limited in the year ended
31 March 2005.
In accordance with the group’s accounting policy the carrying value of goodwill is reviewed annually for impairment.
The review entails an assessment of the present value of projected return from an asset over a period of 5 years.
The discount rate used in the group’s estimated weighted average cost of capital is currently 6%.
The review performed at the year end did not result in the impairment of goodwill as the estimated recoverable
amount exceeded the carrying value. The recoverable amount of the cash generating unit to which the goodwill has
been allocated is determined based on value-in-use calculations.
14. Inventories
2015
£’000
2014
£’000
Finished goods and goods for resale
28,603
Less: provisions for slow moving and obsolete stock (714) (666)
32,620
31,906
27,937
The inventories impairment charge for the year ended 31 March 2015 was 461,000 (2014: 341,000). Impairment charges
reversed during the year were £413,000 (2014: £389,000). The reversal of inventories arises from sales in the year of the
slow moving and obsolete stock previously provided.
Inventories are pledged as securities against bank overdrafts (see note 17).
JAMES LATHAM PLC ANNUAL REPORT 2015
43
Financial Statements
Notes forming part of the Group Accounts
15. Trade and other receivables
Trade receivables
Other receivables:
Other receivables
Prepayments
2015
£’000
31,428
1,123
1,662
2,785
34,213
2014
£’000
30,281
1,060
1,501
2,561
32,842
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
Trade receivables amounted to £31,428,000 (2014: £30,281,000), net of a provision of £126,000 (2014: £136,000) for
impairment. Movements on the group provisions for impairment were as follows:
246
At 1 April 2014
Provisions for receivables impairment
197
Receivables written off during the year as uncollectible (291) (307)
136
281
At 31 March 2015
126
136
2015
£’000
2014
£’000
The average credit period on sale of goods is 52 days (2014: 53 days).
The following table provides analysis of trade and other receivables that were past due at 31 March 2015 but not
impaired. The group believes that the balances are ultimately recoverable based on a review of past payment history
and the current financial status of the customers.
0-30 days
31-60 days
61-90 days
2015
£’000
611
35
29
675
2014
£’000
919
111
20
1,050
There are no significant credit risks arising from financial assets that are neither past due nor impaired.
At 31 March 2015, £33,846,000 (2014: £32,559,000) of trade and other receivables were denominated in sterling, £165,000
(2014: £157,000) were denominated in Euros and £202,000 (2014: £126,000) were denominated in US dollars.
44
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
16. Trade and other payables
Trade payables
Other taxation and social security
Other payables
Accruals and deferred income
2015
£’000
17,784
3,282
1,201
1,626
23,893
2014
£’000
16,744
3,697
1,228
1,522
23,191
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average
credit period taken for trade purchases is 35 days (2014: 36 days). The directors consider that the carrying amount of
trade payables approximates to their fair value.
At 31 March 2015, £21,923,000 (2014: £21,478,000) of trade and other payables were denominated in sterling, £1,513,000
(2014: £1,075,000) in US dollars and £457,000 (2014: £638,000) in Euros.
Based on the balance sheet value of trade and other payables, as shown above, a 10% change in the currency exchange
rate would lead to an increase or decrease in income and equity of £197,000 (2014: £171,000).
17. Interest bearing loans and borrowings
Current liabilities
Bank loans
Non-current liabilities
Bank loans
Cumulative preference shares of £1 each (note 21)
Total
2015
£’000
907
-
987
987
1,894
2014
£’000
238
903
987
1,890
2,128
The loans and borrowings were all denominated in sterling. Bank loans are secured by a legal charge over a freehold
property. The bank loan was repaid on 1 June 2015 and the charge released.
The group would normally expect that sufficient cash is generated in the operating cycle to meet the contractual cash
flows as discussed above through effective cash management. In addition, the group maintains uncommitted undrawn
bank facilities of £1,000,000 (2014: £2,000,000) which can be accessed as considered necessary. The facilities bear
interest at 2% above base rate and are secured by fixed and floating charges over the assets of the company and its
subsidiaries. This facility is renewed annually.
The cumulative preference shares are held on an ongoing basis and pay dividends at 8% per annum.
JAMES LATHAM PLC ANNUAL REPORT 2015
45
Financial Statements
Notes forming part of the Group Accounts
17. Interest bearing loans and borrowings (continued)
Bank loans
Bank loans
2015
2014
Current
£’000
907
Non-current
£’000
Current
£’000
Non-Current
£’000
-
238 903
The weighted average interest rates paid were:
Bank loans
2015
2014
3.59% 3.59%
The weighted average period until maturity was 0.2 years (2014: 4.4 years).
18. Retirement and other benefit obligations
Retirement benefit obligations (note 18.2)
2015
£’000
10,430
2014
£’000
9,267
18.1. Group pension schemes
James Latham plc operates a group contributory defined benefit pension scheme. The scheme is a funded scheme.
Benefits are provided based on earnings in the last twelve months before retirement, plus average bonuses received
over the last three years. The assets of the scheme are held separately from those of the company. 58% of the assets are
invested in equities, with 52% under passive management by Blackrock and 6% in a Fund of Hedge funds managed by
Mesirow. 32% are held in bonds and gilts, with 19% in a Buy and Maintain Fund managed by Mercers, 6% in an Absolute
Return Fund managed by Wellington and 7% in an Index Linked fund managed by Blackrock, with the remaining 9% in a
HLV Property Fund managed by Aviva and 1% in cash.
The group contributory defined benefit pension scheme is closed to new entrants, and a defined contribution group
scheme has been established for the pension provision of all other employees, including those contibuting through auto
enrolment.
The pension charge for the year for all schemes was £1,224,000 (2014: £1,370,000). Of the charge, £102,000 (2014:
£113,000) is included in cost of sales, £352,000 (2014: £356,000) is included in selling and distribution costs, and £770,000
(2014: £901,000) is included in administrative expenses in the income statement.
Contributions are determined by a qualified actuary on a basis of triennial valuations using the projected unit funding
method. The most recent available valuation was at 31 March 2014. The assumptions which have the most significant
effect on the results of the valuation are those relating to the rate of return on investments and the rates of increase in
salaries and pensions.
It was assumed that the investment return would be 6.0% per annum pre-retirement and 4.5% per annum post-
retirement, that the salary increases would average 3.6% per annum and that the present and future pensions would
increase at the rate of 3% per annum in respect of service to 1 January 1991. Pensions accruing between 1 January 1991
and 28 February 1999 are required to increase at the greater of: (a) 4%, and (b) 3% on the GMP and 5% on the excess over
the GMP. Pensions accruing after 1 March 1999 increase at Limited Price Indexation which has been assumed to average
2.6% in the future. Limited Price Indexation was replaced by the Consumer Price Index (CPI) for payrises occurring after
1 January 2014.
46
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
18.2. Group defined benefit pension scheme
The group operates a defined benefit scheme. The current practice of increasing pensions in line with inflation is
included in the measurement of the defined benefit obligation.
The retirement benefit liability recognised in the balance sheet is the present value of the defined benefit obligations, less
the fair value of the scheme assets, adjusted for past service costs. Actuarial gains and losses are immediately recognised
in the statement of other comprehensive income.
2015
£’000
2014
£’000
Change in benefit obligation
62,770
Benefit obligation at beginning of year
Service cost
823
Exceptional past service cost (see note 18.4) - (1,797)
2,725
Interest cost
5
Plan members’ contribution
Actuarial loss (gain) 4,842 (4,604)
Benefits paid (1,820) (1,670)
Premiums paid (17) (15)
58,237
594
2,580
5
Benefit obligation at end of year
Analysis of defined benefit obligation
Schemes that are wholly or partly funded
64,421
64,421
58,237
58,237
Change in scheme assets
45,977
Fair value of scheme assets at beginning of year
2,026
Interest income
939
Return on plan assets (excluding interest income)
1,834
Employers contributions (incl. employer direct benefit payments)
5
Member contributions
Benefits paid from plan (1,820) (1,670)
Expenses paid (133) (141)
48,970
2,200
2,993
1,776
5
Fair value of scheme assets at end of year
Amounts recognised in the balance sheet
Present value of funded obligations
Fair value of scheme assets
Net liability
53,991
64,421
53,991
10,430
48,970
58,237
48,970
9,267
JAMES LATHAM PLC ANNUAL REPORT 2015
47
Financial Statements
Notes forming part of the Group Accounts
18.2. Group defined benefit pension scheme (continued)
2015
£’000
2014
£’000
Components of pension expense
Current service cost
823
Past service cost - (1,797)
Interest cost
2,725
Income on plan assets (2,200) (2,026)
126
Expenses paid
116
2,580
594
Total pension expense recognised in the income statement
1,090 (149)
Actuarial loss (gain) immediately recognised 1,849 (5,543)
Total recognised in the statement of other comprehensive income 1,849 (5,543)
Cumulative amount of actuarial loss immediately recognised
11,414
9,565
Plan assets
The asset allocations at the year end were as follows:
Equities
Bonds
Property
Other
Amounts included in the fair value of assets for
Equity instruments
Bond instruments
Property occupied
Other assets used
2015
58.5%
31.9%
8.9%
0.7%
100.0%
2015
£’000
31,560
17,248
4,788
395
53,991
2014
59.8%
32.0%
7.4%
0.8%
100.0%
2014
£’000
29,271
15,694
3,608
397
48,970
48
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
18.2. Group defined benefit pension scheme (continued)
Weighted average assumptions used to determine benefit obligations:
Discount rate
Rate of compensation increase
Inflation (RPI)
Inflation (CPI)
Rate of pension increases
Weighted average life expectancy for mortality tables used to determine
benefit obligations:
Male member age 65 (current life expectancy)
Female member age 65 (current life expectancy)
Male member age 45 (life expectancy at age 65)
Female member age 45 (life expectancy at age 65)
Weighted average assumptions used to determine pension expense:
Discount rate
Rate of compensation increase
2015
3.20%
2.95%
2.95%
1.95%
2.05%
24.1
26.1
26.0
28.1
4.50%
3.35%
2014
4.50%
3.35%
3.35%
2.35%
2.35%
24.3
26.7
26.1
28.7
4.40%
4.40%
Sensitivity analysis of the key assumptions
The valuation of the scheme’s liabilities is dependant on the assumptions used. The sensitivity of the valuation of the
liability to changes in the assumptions is shown in the table below:
Impact on deficit
(Decrease)/increase
£’000
(3,209)
Discount rate increases by 0.25%
Inflation rate increases by 0.25%
1,625
Life expectancy increases by one year 2,055
History of plan assets and defined benefit obligation
Present value of defined benefit obligation
Fair value of plan assets
Net liability
2015
£’000
64,421
53,991
10,430
2014
£’000
58,237
48,970
9,267
2013
£’000
62,770
45,977
2012
£’000
53,010
40,694
16,793
12,316
2011
£’000
47,031
38,470
8,561
Contributions
The group expects to contribute £876,000 to the pension scheme for the year ending 31 March 2016.
18.3. Defined contribution pension payments
The group operates an executive defined contribution scheme managed by Aegon. The group has agreed to match
contributions by eligible employees up to a maximum of 7.5%. In addition Aegon also manage our auto-enrolment
scheme where employees are enrolled with a minimum of 3% matching contributions up to a maximum of 5%.
Pension contributions paid to the defined contribution scheme for the year totalled £590,000 (2014: £369,000).
JAMES LATHAM PLC ANNUAL REPORT 2015
49
Financial Statements
Notes forming part of the Group Accounts
18.4. Exceptional adjustment to defined benefit pension cost
During the previous year, the trustees of the defined benefit pension scheme amended the index used to measure
inflation from the Retail Price Index (RPI) to the Consumer Price Index (CPI). This followed research by the government
and the Office of National Statistics which concluded that RPI overstated the true level of price inflation. This affected
all pensioner pay rises with effect from 1 January 2014. The effect of this change is to produce an exceptional credit of
£1,797,000 to the service cost for the previous year.
19. Other payables (non-current liabilities)
Accruals and deferred income
2015
£’000
464
2014
£’000
520
20. Deferred tax
The net deferred tax asset/(liability) is made up of the following elements:
Post-
employment
benefits
£’000
Revalued
properties
£’000
Roll over
gains on
assets
£’000
Other (*)
£’000
Total
£’000
As at 1 April 2013
(Charge)/credit to the income statement (438)
(1,520)
Credit direct to equity
3,914 (102) (2,134) (875) 803
-
12
278 91 (69)
- (1,508)
-
At 31 March 2014 asset/(liability)
(Charge)/credit to the income statement
Credit direct to equity
1,956 (90) (1,856) (784) (774)
- (229) (222)
7
296
- - 296
-
-
At 31 March 2015 asset/(liability) 2,259 (90) (1,856) (1,013) (700)
* Includes accelerated capital allowances, share-based payments, industrial buildings allowances and trading losses.
Deferred tax has been calculated using rates that are expected to apply when the asset or liability is expected to be realised
or settled, based on rates that were substantively enacted at the balance sheet date.
50
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
21. Share capital
Ordinary shares
Authorised Issued
Ordinary shares of 25 pence each
Number
28,000,000
£’000
7,000
Number
20,160,000
£’000
5,040
2015 and 2014
Preference shares
Authorised Issued
8% Cumulative Preference Shares of £1 each
Number
1,500,000
£’000
1,500
Number
987,000
£’000
987
2015 and 2014
Preference shares are included in non-current liabilities (as interest bearing loans and borrowings). See note 17.
The Cumulative Preference shares carry the right to receive the 8% dividend in priority to all other shares and the right of
a return on assets in priority to all other shares. They do not carry the right to further participate in profits or assets, nor to
vote at a General Meeting unless the resolution directly or adversely varies any of their rights or privileges.
There were no movements in the share capital of the company in either the year ended 31 March 2015 or 2014.
22. Share-based payment
Equity-settled share option schemes
Details of the share options outstanding
during the year are as follows:
Number
of share
options
2015
Weighted
average
exercise
price (£)
Nil price
share
options
Number
of share
options
2014
Weighted
average
exercise
price (£)
Nil price
share
options
Outstanding at beginning of year 366,928 2.37 21,008 400,168 2.14 38,082
Granted during the year 16,262 5.65 560 25,394 3.96 746
-
Forfeited during the year (10,159) 2.20 - (19,373) 2.24
Exercised during the year (51,550) 1.55 (10,952) (39,261) 1.16 (17,820)
Outstanding at the end of the year 321,481 2.67 10,616 366,928 2.37 21,008
The weighted average share price for options exercised during the year was £5.55 (2014: £3.96).
JAMES LATHAM PLC ANNUAL REPORT 2015
51
Financial Statements
Notes forming part of the Group Accounts
22. Share-based payment (continued)
Details of the options outstanding at 31 March 2015 are shown below. 19,000 (2014: 12,894) of these options were
exercisable at the year end.
2015
2014
CSOP
SAYE
Nil price
share
options
CSOP
SAYE
Nil price
share
options
Range of exercise prices £1.65-£5.65 £2.46 Nil £1.16-£3.96 £2.46 Nil
Number of shares 153,094 168,387 10,616 192,323 174,605 21,008
Weighted average expected
remaining life (years) 3.0 0.9 0.2 3.0 1.9 1.1
The Black-Scholes option model is used to calculate the fair value of the options and the amount to be expensed.
No performance conditions apply to any of the share option schemes.
The inputs into the Black-Scholes model, expressed as weighted averages for options granted during the year are as follows:
2015
2014
CSOP
SAYE
Nil price
share
options
CSOP
SAYE
Share price at grant date
£5.65
Option exercise price £5.65
24%
Expected volatility
5 years
Option life
1.7%
Risk free interest rate
£1.39
Fair value
-
-
-
-
-
-
- £3.96
- £3.96
24%
-
5 years
-
2.9%
-
£1.07
-
-
-
-
-
-
-
Nil price
share
options
-
-
-
-
-
-
Expected volatility was determined by calculating the historical volatility of the group’s share price over the previous
5 years. The option life is based on options being exercised in accordance with usual patterns. Options are forfeited if
the employee leaves the group before options vest. For the CSOP scheme, the options can be exercised up to 5 years
after the vesting date, and with the SAYE scheme, this period is 6 months. The risk free interest rate is based on 10 year
UK Government Bonds. For the nil price share options, dividends will be reinvested into additional shares in the plan.
The group recognised total expenses of £67,000 (2014: £80,000) related to equity settled share-based payment transactions
in the year.
Share Incentive Plan
The Company also runs an approved Share Incentive Plan in which eligible employees can buy Partnership Shares
at mid-market price on the date of the grant. The shares are held in the employee benefits trust for a 5-year period.
The number of shares held in trust of this plan at 31 March 2015 was 191,115 (2014: 180,217).
52
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
23. Own shares
At 1 April 2013
Cost
Movement in the year
At 31 March 2014
Movement in the year
At 31 March 2015
£’000
218
(43)
175
2
177
The investment in own shares represents 36,879 25p Ordinary shares (2014: 67,080 25p Ordinary shares) held on behalf
of the James Latham plc Employee Benefits Trust, a discretionary trust. This represents 0.18% (2014: 0.33%) of the issued
share capital. The maximum number of shares held during the year was 82,900 (0.41%). Dividends have been waived and
all income and expenditure of the trust has been dealt with through the group’s income statement. None of these shares
have been allocated to employees.
At 31 March 2015 719,200 (2014: 719,200) 25p Ordinary shares were held by the company as Treasury Shares. These shares
are held with a view to being used for employee share schemes.
24. Cash generated from operations
2015
£’000
2014
£’000
10,479
Profit before tax
457 796
Adjustment for finance income and expense
Depreciation and amortisation
1,503
(Profit)/loss on disposal of property, plant and equipment (5) 3
Increase in inventories (3,969) (1,715)
Increase in receivables (1,371) (3,965)
Increase in payables 647 3,571
Retirement benefits non cash amounts (1,066) (2,682)
Share-based payments non cash amounts 67 80
Own shares non cash amounts (84) (34)
10,107
1,435
Cash generated from operations
6,218
8,036
25. Leasing commitments
Future aggregate minimum payments under various operating lease contracts for vehicles, plant and property payable by
the group are as follows:
2015
£’000
2014
£’000
Vehicles and Plant
No later than one year
Later than one year but no later than five years
Property:
No later than one year
Later than one year but no later than five years
Later than five years
The average period of leasing for vehicles and plant is four years.
427
486
913
595
2,383
2,044
5,022
478
505
983
595
2,383
2,640
5,618
JAMES LATHAM PLC ANNUAL REPORT 2015
53
Financial Statements
Notes forming part of the Group Accounts
26. Related party transactions
The group has a related party relationship with its subsidiaries and with its directors. Transactions between group
companies, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
The remuneration of the key management of the group, who are the
Company’s directors, is set out below.
Salaries and other short-term employee benefits
Social security costs
Pension costs
Share-based payments
2015
£’000
954
123
99
24
1,200
2014
£’000
798
97
122
35
1,052
There are 4 directors to whom retirement benefits are accruing under defined benefit schemes, and 5 directors that
exercised share options during the year.
Emoluments for the highest paid director totalled £260,000 (2014: £239,000). The highest paid director also exercised
4,242 Company Share Option Plan share options during the year at a gain of £17,286. The highest paid director had an
accrued defined benefit pension of £109,000 (2014: £108,000) at the balance sheet date.
27. Capital commitments
At 31 March 2015, there were capital commitments contracted for but not provided in the accounts of £413,000 (2014: £76,000).
54
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
28. Financial instruments
The group’s activities expose the group to a number of risks including market risk (foreign currency risk and interest rate
risk), credit risk and liquidity risk. The group manages these risks through an effective risk management programme.
Further details are set out in the Financial Review on pages 10-12.
Maturity analysis
The table below analyses the group’s financial liabilities on a contractual gross undiscounted cash flow basis into maturity
groupings based on period outstanding at the balance sheet date up to the contractual maturity date.
Less than
6 months
£’000
Between
6 months
and 1 year
£’000
Between
1 and
5 years
£’000
More than
5 years
£’000
2015
Bank loans
Trade payables
Accruals
Other payables
Cumulative preference shares of £1 each
Total
2014
Bank loans
Trade payables
Accruals
Other payables
Cumulative preference shares of £1 each
Total
907
17,784
1,594
1,201
-
21,486
118
16,744
1,490
1,228
-
19,580
-
-
-
-
-
-
120
-
-
-
-
120
-
-
-
-
-
-
903
-
-
-
-
903
Total
£’000
907
17,784
1,594
1,201
987
-
-
-
-
987
987
21,590
-
-
-
-
987
1,141
16,744
1,490
1,228
987
987
21,590
Foreign currency risk
Approximately 42% of the group’s purchases are denominated in foreign currencies, principally the US dollar and the
Euro. Forward contracts are used where we have agreed exchange rates with our customers and we also use other
currency derivatives to help manage our short term exposure on a weakening sterling from time to time. However, no
more than 25 percent of the currency requirements will be covered by forward contracts or other currency derivatives.
Whilst purchases in foreign currencies are a significant figure, fluctuations in currency exchange rates do not have a major
impact on the results. As the group trades mainly in the UK, the market price of our products tends to fluctuate in line
with spot prices.
Included in group cash and cash equivalents at 31 March 2015 was £37,000 in US Dollars (2014: £390,000) and £46,000 in
Euros (2014: £184,000), at variable interest rates.
Based on the balance sheet value of cash and cash equivalents, as shown above, a 10% change in the currency exchange
rate would lead to an increase or decrease in income and equity of £8,000 (2014: £57,000).
Interest rate risk
The group’s interest rate exposure arises mainly from its interest bearing deposits. Deposits held at floating rates
expose the entity to cash flow risk whilst deposits held at fixed rate expose the entity to fair value risk.
JAMES LATHAM PLC ANNUAL REPORT 2015
55
Financial Statements
Notes forming part of the Group Accounts
28. Financial instruments (continued)
The table below shows the group’s financial assets and liabilities split by those bearing fixed and floating rates and those
that are non-interest bearing.
Financial assets
2015
Cash and cash equivalents
Trade and other receivables
2014
Cash and cash equivalents
Trade and other receivables
Financial liabilities
2015
Trade payables
Accruals
Other payables
Bank loan
Cumulative preference shares of £1 each
2014
Trade payables
Accruals
Other payables
Bank loan
Cumulative preference shares of £1 each
Fixed
rate
£’000
-
-
-
Fixed
rate
£’000
-
-
-
Fixed
rate
£’000
-
-
-
907
987
1,894
Fixed
rate
£’000
-
-
-
1,141
987
2,128
Floating
rate
£’000
12,501
-
Non-
interest
bearing
£’000
-
32,551
Total
£’000
12,501
32,551
12,501
32,551
45,052
Floating
rate
£’000
11,234
-
Non-
interest
bearing
£’000
-
31,341
Total
£’000
11,234
31,341
11,234
31,341
42,575
Floating
rate
£’000
-
-
-
-
-
-
Floating
rate
£’000
-
-
-
-
-
-
Non-
interest
bearing
£’000
17,784
1,594
1,201
-
-
Total
£’000
17,784
1,594
1,201
907
987
20,579
22,473
Non-
interest
bearing
£’000
16,744
1,490
1,228
-
-
Total
£’000
16,744
1,490
1,228
1,141
987
19,462
21,590
Interest rate risk is limited to the cash and cash equivalents and bank loans.
Based on the balance sheet value of cash and cash equivalents and bank loans, as shown above, a 1% change in interest
base rates would lead to an increase or decrease in income and equity of £125,000 (2014: £112,000).
56
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes forming part of the Group Accounts
28. Financial instruments (continued)
Credit risk exposure
Credit risk arises on our financial asset investments, trade receivables and cash and cash equivalents. Credit exposure
is managed on a group basis and appropriate credit limits are set for each customer taking into account credit reports
received from outside agencies, and previous credit history. Credit insurance is taken out to cover approved individual
debtors with balances over £40,000. Where limits are required above £40,000 that cannot be backed by insurance, a
sub-committee of the board will review reports on the customer, and agree additional limits if appropriate. Bad debts
are 0.15% of sales this year, compared with our target of 0.4%. The carrying amount of financial assets recorded in the
accounts, which is net of impairment losses, represents the groups maximum exposure to credit risk.
Liquidity risk
The group closely monitors its cash position to ensure that it has sufficient funds to meet the obligations of the group
as they fall due. Short term bank deposits are executed only with organisations with a long term rating of at least A- from
the major rating agencies.
Capital management
The group manages its capital risk by ensuring that its capital, which represents share capital, retained earnings, investments in
own shares and cash, is sufficient to support the ongoing needs of the business, and is organised to try and minimise the cost
of capital over the medium term. The group’s current strategy is to maintain sufficient cash balances to satisfy ongoing needs.
Finance income
An analysis of finance income is set out in note 6 to the consolidated accounts.
Finance costs
An analysis of finance costs is set out in note 7 to the consolidated accounts.
Financial instruments recognised in the balance sheet
2015
Current assets
Trade receivables
Other receivables
Cash and cash equivalents
Total current assets
Current liabilities
Trade payables
Other payables
Accruals
Bank loans
Loans and
receivables
£’000
31,428
1,123
12,501
42,052
Financial liabilities
measured at
amortised cost
17,784
1,201
1,594
907
Total
17,784
1,201
1,594
907
Total current liabilities
21,486 21,486
Non-current liabilities
Bank loans
Total non-current liabilities
-
-
-
-
JAMES LATHAM PLC ANNUAL REPORT 2015
57
Loans
and
receivables
£’000
30,281
1,060
11,234
42,575
Financial liabilities measured
at amortised cost
Total
16,744
1,228
1,490
238
16,744
1,228
1,490
238
19,700
19,700
903
903
903
903
Financial Statements
Notes forming part of the Group Accounts
28. Financial instruments (continued)
Financial instruments recognised in the balance sheet
(continued)
2014
Current assets
Trade receivables
Other receivables
Cash and cash equivalents
Total current assets
Current liabilities
Trade payables
Other payables
Accruals
Bank loans
Total current liabilities
Non-current liabilities
Bank loans
Total non-current liabilities
58
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Company Balance Sheet
Company number: 65619
Notes
2015
2014
2
3
22
14,613
14,635
23
14,613
14,636
At 31 March 2015
£’000s
Fixed assets
Tangible fixed assets
Investments
Current assets
Debtors: amounts falling due within one year
4
Cash at bank and in hand
3,333
11,041
14,374
3,819
9,137
12,956
Creditors: amounts falling due within one year
5 (8,402)
(4,214)
Net current assets
5,972
Total assets less current liabilities
Creditors: amounts falling due after
more than one year
6
Net assets
Represented by:
Capital and reserves
Called up share capital
Investment in own shares
Share-based payment reserve
Profit and loss account
Equity Shareholders Funds
8
9
10
10
20,607
(1,273)
19,334
5,040
(177)
143
14,328
19,334
8,742
23,378
(1,305)
22,073
5,040
(175)
123
17,085
22,073
These accounts were approved and authorised for issue by the Board of Directors on 23 June 2015 and signed on its
behalf by:
P.D.L. Latham
} Directors
D.A. Dunmow
The notes on pages 60 to 65 form part of these company accounts.
JAMES LATHAM PLC ANNUAL REPORT 2015
59
Financial Statements
Notes to the Company Accounts
1. Principal accounting policies
The parent company accounts have been prepared in
accordance with applicable Accounting Standards in the
United Kingdom (UK GAAP). A summary of the company
accounting policies, which have been applied consistently,
is set out below.
(a) Basis of accounting
The accounts have been prepared under the historical
cost convention. The directors have prepared the financial
statements on the going concern basis for the reasons set
out on page 25.
The company does not present its own profit and loss
account as permitted by Section 408 of the Companies
Act 2006. The company profit is disclosed in note 11 to the
company accounts.
(b) Fixed assets
Fixed assets are stated at cost less depreciation. Depreciation
is provided to write off the cost or valuation over the
estimated useful lives of the assets on a straight line basis,
as follows:
Plant and machinery 4 to 20 years
(c) Deferred taxation
Deferred taxation is recognised in respect of all timing
differences that have originated but not reversed at the
balance sheet date where transactions or events that result
in an obligation to pay more tax in future or a right to pay
less tax in future have occurred at the balance sheet date.
Deferred taxation assets are recognised to the extent that
it is regarded as more likely than not that they will be
recoverable against suitable taxable profits in the future.
Discounting has been applied using appropriate post-tax
discount rates.
(d) Operating leases
Leases in which a significant portion of the risks and rewards
of ownership are retained by the lessor are classified as
operating leases. Operating lease rentals are charged to the
profit and loss account in the year in which they fall due,
except where provision has been made for future rents on
unoccupied properties.
(e) Pension scheme costs
The James Latham Plc defined benefit pension scheme is
a multi-employer scheme due to the historic complexities
of the group structure and thus no separate actuarial
information is available in respect of the employees of the
parent company. Full details of the basis of calculation of the
net pension liability is disclosed in the group balance sheet
at 31 March 2015, and of the amounts charged/credited to
the group income statement and group equity are set out
in note 18 to the group accounts. In the company accounts,
contributions to the defined benefit scheme have been
charged to the profit and loss account as incurred.
Pension payments made into the group’s defined contribution
schemes are charged to the profit and loss account as they arise.
(f) Share-based payments
The accounting for share-based payments mirrors that of
the group’s accounting policy under IFRS2 as detailed in
note 1.17 of the group accounts. Details of the share-based
payments are set out in note 22 to the group accounts.
(g) Investments
Fixed asset investments in subsidiaries are shown at cost
less provision for impairment. The carrying values of fixed
asset investments are reviewed at each balance sheet date
to determine whether there is any indication of impairment.
If such indication exists, the carrying value is written down
to its estimated recoverable amount.
(i) Treasury shares
Treasury shares are valued on a cost basis. Any treasury share
balance at the balance sheet date has been transferred as a
deduction to accumulated profits.
(j) Employee Share Ownership Plan (ESOP)
Own shares represent the company’s shares that are held by
the company sponsored ESOP trust in relation to the group’s
employees share scheme. Own shares are deducted at cost
in arriving at shareholders’ equity and gains and losses on
their sale or transfer are recognised directly in equity. ESOP is
treated seperately and consolidated in the company accounts.
(k) Financial liabilities and equity
Financial liabilities and equity instruments are classified
according to the substance of the contractual arrangements
entered into. An equity instrument is any contract that
evidences a residual interest in the assets of the company after
deducting all of its liabilities.
(l) Bank borrowings
Interest-bearing bank loans are recorded initially at their
fair value, net of direct transaction costs. Such instruments
are subsequently carried at their amortised cost and finance
charges, including premiums payable on settlement or
redemption, are recognised in the income statement over
the term of the instrument using an effective rate of interest.
60
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes to the Company Accounts
Plant, equipment
and vehicles
£’000
353
2
355
330
3
333
22
23
2. Tangible fixed assets
Cost:
At 1 April 2014
Additions
At 31 March 2015
Depreciation:
At 1 April 2014
Provision for the year
At 31 March 2014
Net book value
At 31 March 2015
At 31 March 2014
3. Fixed asset investments
Subsidiary undertakings
Shares:
At 1 April 2014 and 31 March 2015
Loans:
At 1 April 2014 and 31 March 2015
Total at 31 March 2015 and 31 March 2014
£’000
9,613
5,000
14,613
The loan to Lathams Limited has no fixed repayment terms and interest is charged at a rate of 1.25% above base rate per
annum. Details of subsidiary companies are given in note 12 to the company accounts.
4. Debtors: amounts falling due within one year
Trade debtors
Amounts owed by subsidiary undertakings
Other debtors
Corporation tax
Deferred taxation (note 7)
Prepayments
2015
£’000
7
2,328
2
970
5
21
3,333
2014
£’000
23
2,985
1
785
6
19
3,819
JAMES LATHAM PLC ANNUAL REPORT 2015
61
Financial Statements
Notes to the Company Accounts
5. Creditors: amounts falling due within one year
Bank overdraft
Trade creditors
Other taxation and social security
Other creditors
Accruals and deferred income
6. Creditors: amounts falling due after more than one year
Accruals and deferred income
8% Cumulative Preference Shares of £1 each (note 8)
2015
£’000
7,563
21
497
237
84
8,402
2015
£’000
286
987
1,273
2014
£’000
3,390
35
466
236
87
4,214
2014
£’000
318
987
1,305
Bank loans and overdrafts are secured by fixed and floating charges over the assets of the company and its subsidiaries.
7. Deferred taxation
Included in debtors (note 4) is a deferred taxation asset of
£5,000 (2014: £6,000)
2015
£’000
2014
£’000
The deferred taxation provision comprises:
Accelerated capital allowances (5) (6)
Timing differences on pension adjustments - -
Undiscounted provision for deferred tax (5) (6)
-
Discount
-
Discounted provision for deferred tax (5) (6)
Deferred taxation is provided at a rate of 20% (2014: 20%).
Some or all of the deferred taxation debtor may be recoverable after more than one year.
8. Share capital
Details of the share capital of the company are set out in note 22 to the consolidated accounts.
62
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes to the Company Accounts
9. Investment in own shares
Shares:
At 1 April 2014
Movements during the year
Total at 31 March 2015
Total at 31 March 2014
£’000
175
2
177
175
The investment in own shares represents 36,879 25p ordinary shares (2014: 67,080 25p ordinary shares) held on behalf
of the James Latham plc Employee Benefits Trust, a discretionary trust. Dividends have been waived and all income and
expenditure of the trust has been dealt with through the group’s income statement. None of these shares have been
allocated to employees.
10. Reserves
Profit and
loss account
£’000
Share-based
payment reserve
£’000
Total
£’000
17,208
17,085
At April 2014
- (455)
Profit for the year (455)
Dividends (2,267)
- (2,267)
Exercise of options 47 (47) -
Conversions of ESOP shares (82)
- (82)
-
Share-based payment expense
67 67
123
At 31 March 2015
14,328
143 14,471
At 31 March 2014 719,200 (2013: 719,200) 25p Ordinary shares were held by the company as Treasury Shares. These shares
will be either used to meet existing employee share option plan requirements or will be cancelled.
11. Reconciliation of movements in shareholders’ funds
Loss for the financial year
Dividends
2015
£’000
(455)
(2,267)
(2,722)
Change in investment in ESOP shares (84)
Movement in share based payment reserve
67
Reduction in shareholders’ funds
(2,739)
Opening shareholders’ funds
Closing shareholders’ funds
22,073
19,334
JAMES LATHAM PLC ANNUAL REPORT 2015
63
Financial Statements
Notes to the Company Accounts
12. Principal subsidiary undertakings
Name
Country of
incorporation
Class of shares
Percentage
of ownership
Principal activity
Lathams Limited
England and Wales
£1 Ordinary
100%
James Latham Trustee Limited
England and Wales
£1 Ordinary
100%
Importing and
distribution of timber
and panel products
Corporate Trustee
Company
LDT Westerham Limited
England and Wales
£1 Ordinary
Baüsen Limited
England and Wales
£1 Ordinary
James Latham (Midland and Western) Limited* England and Wales
£1 Ordinary
Advanced Technical Panels Limited*
England and Wales
£1 Ordinary
Latham Timber Centres (Bridgwater) Limited
England and Wales
£1 Ordinary
James Latham (Warehousing) Limited
England and Wales
£1 Ordinary
100%
100%
100%
100%
100%
100%
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
* Indirectly held
All companies operate within the United Kingdom.
13. Leasing commitments
Leasing commitments under various operating lease contracts for vehicles, plant and property payable by the company.
Vehicles and plant:
Leases expiring within one year
Leases expiring within two to five years
Property:
Leases expiring after more than five years
14. Related party transactions
2015
£’000
3
20
23
87
2014
£’000
2
23
25
87
The company has taken advantage of the exemption in FRS8 Related Parties not to disclose transactions with the active
subsidiary company.
64
JAMES LATHAM PLC ANNUAL REPORT 2015
Financial Statements
Notes to the Company Accounts
15. Financial instruments
Risk management disclosures as applicable to the group as a whole are set out in note 28 to the consolidated financial
statements.
The company’s financial instruments comprise cash, bank loans and bank overdrafts, other creditors and various items
arising directly from its operations, such as trade debtors and trade creditors. Trade debtors, trade creditors, group
balances and other items arising directly from operations have been excluded from the following disclosures. The main
purpose of these financial instruments is to provide working capital and to assist with the purchase of capital assets for
the company.
The company’s policy is to obtain the highest rate of return on its cash balances, subject to having sufficient resources
to manage the business on a day to day basis and not exposing the company to unnecessary risk of default.
The company’s cash at bank is all in sterling accounts.
The total borrowing facilities available to the company which were undrawn as at 31 March 2015 were:
Repayable on demand
The carrying value of all financial instruments is not materially different from their fair value.
£
1,000,000
16. Dividends
2015 2014
Ordinary dividends:
Final 8.0p per share paid 22 August 2014 (2013: 7.1p)
Interim 3.7p per share paid 30 January 2015 (2014: 3.4p)
1,549
718
1,372
659
£’000
£’000
£’000
£’000
2,267
2,031
The Directors propose a final dividend for 2015 of 8.8p per share, that, subject to approval by the shareholders, will be
paid on 28 August 2015 to shareholders on the register on 7 August 2015.
Based on the number of shares currently in issue, the final dividend for 2015 is expected to absorb £1,711,000.
JAMES LATHAM PLC ANNUAL REPORT 2015
65
Notice of Annual General Meeting
Notice is hereby given that the one hundred and
sixteenth Annual General Meeting of the Company will
be held at Unit 3, Swallow Park, Finway Road, Hemel
Hempstead, Hertfordshire, HP2 7QU on Wednesday
26th August 2015 at 12.30pm. Resolutions 1 to 9 inclusive
will be proposed as ordinary resolutions, and resolutions
10 and 11 will be proposed as special resolutions.
Ordinary business
1. To receive and adopt the Directors’ Report and
Accounts for the year ended 31 March 2015 together
with the Independent Auditors report thereon.
2. To declare the final dividend recommended by the
directors on the ordinary shares of the Company.
3. To re-elect Pippa Latham as a director, who retires
by rotation.
4. To re-elect Meryl Bushell as a director, who retires
by rotation.
5. To re-elect David Dunmow as a director, who retires
by rotation.
6. To elect Andrew Wright as a director, who was
appointed during the year.
7. To re-appoint Baker Tilly UK Audit LLP, Chartered
Accountants, as auditors to hold office from the
conclusion of the meeting to the conclusion of the
next meeting at which accounts are laid before the
Company, at a remuneration to be determined by
the directors.
8. To amend the rules of the James Latham PLC
Savings Related Share Option Scheme to state
that the maximum monthly contribution from
each eligible employee is to be increased to the
maximum allowed under the Income Tax (Earnings
and Pensions) Act 2003 or superceding legislation.
Special business
9. Directors authority to allot shares: To consider, and
if thought fit, pass the following resolution: “THAT in
substitution for all existing authorities, to the extent
unused, the directors be and they are generally and
unconditionally authorised for the purposes of section
551 of the Companies Act 2006 to exercise all the
powers of the Company to allot equity securities up to
an aggregate nominal amount of £1,680,000 provided
that this authority shall expire at the earlier of the
conclusion of the Company’s next Annual General
Meeting or 15 months from the date of the passing
of this resolution and that the Company may before
such expiry make offers or agreements which would
or might require relevant securities to be allotted
after such expiry and the Directors may allot relevant
securities in pursuance of such offers or agreements
notwithstanding that the authority conferred has
expired. The expression
‘equity securities’ and
‘allotment’ shall bear the same meanings respectively
given to the same in section 560 Companies Act 2006.”
10. Disapplication of pre-emption rights: To consider,
and if thought fit, pass the following resolution:
“THAT subject to the passing of the previous
Resolution 9, pursuant to section 571 of the
Companies Act 2006, section 561 of the Companies
Act 2006 shall not apply to any allotment or
agreement to allot equity securities pursuant to the
authority conferred by Resolution 9:
(a) this power shall be limited to:
(i) the allotment of equity securities in connection
with or subject to an offer or invitation, open for
acceptance for a period fixed by the Directors,
to the holders of Ordinary Shares on the register
on a fixed record date in proportion (as nearly
as maybe) to their respective holdings or in
accordance with the rights attached thereto
(including equity securities which, in connection
with such offer or invitation, are the subject of
such exclusions or other arrangements as the
Directors may deem necessary or expedient
to deal with the fractional entitlements which
would otherwise arise or with legal or practical
problems under the laws of, or the requirements
of any recognised regulatory body or any stock
exchange in any territory or otherwise how so
ever); and
(ii) other than pursuant to paragraph (a)(i) of this
Resolution, the allotments of equity securities
for cash up to an aggregate nominal amount of
£252,000; and
(b) this power shall expire at the earlier of the
conclusion of the next Annual General Meeting
of the Company or 15 months from the date after
passing of this Resolution except that the Directors
may allot equity securities under this power after
that date to satisfy an offer or agreement made
before this power expired.”
66
JAMES LATHAM PLC ANNUAL REPORT 2015
Notice of Annual General Meeting
11. Authority of the Company to purchase its own
shares: To consider and, if thought fit, pass the
following resolution: “THAT the Company be and
is generally and unconditionally authorised to make
one or more market purchases (within the meaning
of section 693 (4) of the Companies Act 2006) of its
Ordinary Shares of 25p each provided that:
(a) the maximum aggregate number of Ordinary
Shares which may be purchased is 2,016,000
(representing 10% of the issued share capital of
the Company);
(b) the price at which Ordinary Shares may be
purchased shall not be more than 105% of the
average of the closing middle market price for
the Ordinary Shares as derived from the AIM
section of the London Stock Exchange Daily
Official List for the five business days preceding
the date of purchase and shall not be less than
25p per Ordinary Share (in both cases exclusive
of expenses); and
(c) this power shall expire at the earlier of the
conclusion of the next Annual General Meeting of
the Company or 15 months from the date of the
passing of this resolution.”
By Order of the Board
D.A. Dunmow
Company Secretary
Registered Office: Unit 3, Swallow Park, Finway Road
Hemel Hempstead, Hertfordshire HP2 7QU
23 June 2015
Notes:
The Report and Accounts are sent to all members of
the Company.
Holders of preference shares are not entitled to be
present, either personally or by proxy, or to vote at
any general meeting so long as the dividends on such
preference shares are regularly paid or unless a resolution
is to be proposed for winding up the Company, reducing
its capital or selling its undertaking or adversely affecting
the rights of the holders of preference shares.
A member entitled to attend and vote at the above
Meeting is entitled to appoint one or more proxies to
attend, speak and vote on his/her behalf. A proxy need
not be a member of the Company.
Any corporation which is a member can appoint one or
more corporate representatives who may exercise on its
behalf all of its powers as a member provided that they
do not do so in relation to the same shares.
A proxy form is enclosed. To be valid, it must be
lodged with the Company’s Registrars at Computershare
Investor Services PLC, The Pavilions, Bridgwater Road,
Bristol BS99 6ZY, not later than 48 hours before the
fixed time for the Meeting.
Copies of directors’ contracts of service, the register of
interests of directors, the Company’s memorandum of
association and the articles of association will be available
for inspection at the Registered Office during normal
business hours from the date of the above notice until
the close of the meeting.
In accordance with Regulation 41 of the Uncertified
Securities Regulations 2001, only those members eligible
to vote and entered on the Company’s register of
members as at 12.30pm on Monday 24 August 2015
are entitled to attend and vote at the meeting; or, if
the meeting is adjourned, shareholders entered on the
Company’s register of members not later than 48 hours
before the time fixed for the adjourned meeting shall be
entitled to attend and vote at the adjourned meeting.
At 23rd June 2015, the Company’s issued share capital
consisted of 20,160,000 shares of which 719,200 shares
are held in Treasury. Each share not held in Treasury
carries one vote. The total number of voting rights are
therefore 19,440,800.
JAMES LATHAM PLC ANNUAL REPORT 2015
67
Notice of Annual General Meeting
Share dealing service for shareholders
We continue to operate a telephone share dealing service
with our registrar, Computershare Investor Services
PLC, which provides shareholders with a simple way
of buying or selling James Latham plc ordinary shares
on the London Stock Exchange. The commission is
1%, subject to a minimum charge of £35. There are no
forms to complete and the share price at which you
deal will generally be confirmed to you whilst you are
still on the telephone. The service is available from
8am to 4.30pm Monday to Friday excluding bank
holidays on telephone number 0870 703 0084. Please
ensure you have your Shareholder Reference Number
(SRN) ready when making the call. The SRN appears
on your share certificate. In addition an internet share
dealing service is available by logging into your account
on www-uk.computershare.com/investor. The fee for
this service will be 1% of the value of each sale or
purchase of shares, subject to a minimum of £30. There
are no additional charges for limit orders (available for
sales only). No stamp duty is currently payable on share
transfers. Detailed terms and conditions are available
on request, please phone 0870 707 1093.
This is not a recommendation to buy, sell or hold shares
in James Latham plc. If you are unsure of what action
to take contact a financial adviser authorised under the
Financial Services and Markets Act 2000. Please note that
share values may go down as well as up, which may result
in you receiving less than you originally invested.
In so far as this statement constitutes a financial
promotion for the share dealing service provided by
Computershare Investor Services it has been approved
by Computershare Investor Services PLC for the purpose
of Section 21(2)(b) of the Financial Services and Markets
Act 2000 only. Computershare Investor Services PLC is
regulated by the Financial Services Authority.
Where this has been received in a country where the
provision of such a service would be contrary to local laws
or regulations, this should be treated as information only.
68
JAMES LATHAM PLC ANNUAL REPORT 2015
James Latham Importing and
Distribution companies
PEFC/16-37-046
Purfleet serves timber customers across
the Thurrock, Hemel Hempstead and part
of the Fareham panels sales areas.
Leeds
Speciality Products
Advanced Technical Panels – Northern Depot
Topcliffe Close, Off Topcliffe Lane
Capitol Park East, Tingley, Leeds
West Yorkshire WF3 1DR
Tel 0113 387 0850
Fax 0113 387 0855
Email: atp@lathams.co.uk
Southern Depot
Unit 2 Swallow Park Finway Road
Hemel Hempstead Herts HP2 7QU
Tel 01442 849009
Fax 01442 239287
Email: atp@lathams.co.uk
www.advancedtechnicalpanels.co.uk
Flooring Products
Thurrock, Essex
Unit 4 Dolphin Way Purfleet
Essex RM19 1NZ
Tel 01708 681700
Fax 01708 252381
Email: flooring@lathams.co.uk
Timber Products
Purfleet, Essex
Units 22/24 Purfleet Industrial Park
Juliette Way Aveley South Ockendon
Essex RM15 4YD
Tel 01708 864477
Fax 01708 862727
Email: timber.purfleet@lathams.co.uk
Panel and Timber Products
Dudley, West Midlands
Unit 3, Yorks Park
Blowers Green Road, Dudley
West Midlands DY2 8UL
Tel 01384 234444
Fax 01384 233121
Email: panels.dudley@lathams.co.uk
Email: timber.dudley@lathams.co.uk
Fareham, Hants
Unit 6, Matrix Park
Talbot Road, Fareham
Hants PO15 5AP
Tel 01329 854800
Fax 01329 849585
Email: panels.fareham@lathams.co.uk
Email: timber.fareham@lathams.co.uk
Gateshead, Tyne & Wear
Nest Road
Felling Industrial Estate
Gateshead
Tyne & Wear NE10 OLU
Tel 0191 469 4211
Fax 0191 469 2615
Email: panels.gateshead@lathams.co.uk
Leeds, West Yorkshire
Topcliffe Close, Off Topcliffe Lane
Capitol Park East
Tingley, Leeds
West Yorkshire WF3 1DR
Tel 0113 387 0830
Fax 0113 387 0855
Email: panels.leeds@lathams.co.uk
Email: timber.leeds@lathams.co.uk
Wigston, Leicester
Chartwell Drive, Off West Avenue
Wigston, Leicester LE18 2FN
Tel 0116 288 9161
Fax 0116 281 3806
Email: panels.wigston@lathams.co.uk
Email: timber.wigston@lathams.co.uk
Yate, Bristol
Badminton Road Trading Estate
Yate, Bristol BS37 5JX
Tel 01454 315421
Fax 01454 323488
Email: panels.yate@lathams.co.uk
Email: timber.yate@lathams.co.uk
Eurocentral, Scotland
Pharos, Brittain Way
Eurocentral, Motherwell
Lanarkshire ML1 4XJ
Tel 01698 838777
Fax 01698 831452
Email: scotland@lathams.co.uk
Panel Products
Hemel Hempstead, Herts
Unit 2, Swallow Park
Finway Road
Hemel Hempstead
Herts HP2 7QU
Tel 01442 849000
Fax 01442 239287
Email: panels.hemel@lathams.co.uk
Thurrock, Essex
Unit 4, Dolphin Way
Purfleet, Essex RM19 1NZ
Tel 01708 869800
Fax 01708 860900
Email: panels.thurrock@lathams.co.uk
Accounts/Credit Control/Administration
James Latham Unit 3 Swallow Park Finway Road Hemel Hempstead Herts HP2 7QU
Tel 01442 849100 Fax 01442 267241
Marketing Tel 0116 257 3415
Email marketing@lathams.co.uk
Website www.lathamtimber.co.uk (Trading)
www.lathams.co.uk (Plc)
Designed by
GDA Design
and printed on:
Regency Satin Howard Smith paper Group
Cover: 300gsm
Text: 150gsm
JAMES LATHAM PLC
Unit 3 Swallow Park Finway Road Hemel Hempstead Herts HP2 7QU
Telephone 01442 849100 Fax 01442 267241 Email: plc@lathams.co.uk
www.lathams.co.uk