Livent Annual Report 2016

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FY2016 Annual Report · Livent

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J A M E S L A T H A M P L C

ANNUAL REPORT & ACCOUNTS 2016

Contents

Summary and Highlights

1 Financial Highlights and Calendar
2 Chairman’s Statement

Strategic Report

James Latham plc and Our Objectives

4 Outline of the 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
29 Consolidated Statement of Comprehensive Income
30 Consolidated and Company Balance Sheet
31 Consolidated Statement of Changes in Equity
32 Company Statement of Changes in Equity
33 Consolidated and Company Cash Flow Statement
34 Notes forming part of the Group Accounts

59 Notice of the Annual General Meeting
65 The Latham Group

Front cover:

1 Accoya Cladding
2 Henshaw Collection – Midhurst flooring
3 Black Buffalo-Heksa Plus birch plywood
4 XyloCleaf Melamine

Financial Highlights and Calendar

for the year ended 31 March 2016

Financial Highlights

Year to 31 March

Revenue

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

2016
£000

2015
£000

185,929

174,855

13,241

7.1%

12,876

53.7p

14.3p

71,183

16,832

10,564

6.0%

10,107

40.3p

12.5p

62,231

12,501

Increase

6.3%

25.3%

18.3%

27.4%

33.3%

14.4%

34.6%

2014
£000

163,117

9,478

5.8%

8,682

36.9p

11.4p

58,108

11,234

Revenue (£000’s)

Adjusted EPS

Dividend

9
2
9
,
5
8
1

5
5
8
,
4
7
1

7
1
1
,
3
6
1

5
4
6
,
3
4
1

9
6
0
,
3
4
1

p
3
.
0
4

p
9
.
6
3

p
9
.
1
3

p
7
.
8
2

p
7
.
3
5

p
3
.
4
1

p
5
.
2
1

p
4
.
1
1

p
5
7
.
9

p
2
.
0
1

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

Financial Calendar

Record date for ﬁnal dividend 2016

AGM

Payment of ﬁnal dividend

Interim 2016/17 results announcement

Interim dividend expected payment date

Preliminary announcement of 2016/17 results

AGM 2017

5 August 2016

24 August 2016

26 August 2016

24 November 2016

27 January 2017

22 June 2017

23 August 2017

JAMES LATHAM PLC ANNUAL REPORT 2016

Chairman’s Statement

I am pleased to report very good trading results for the
financial year to 31 March 2016.

Group revenue for the financial year to 31 March 2016 was
£185.9m, 6.3% up on last year’s £174.9m. The operating
profit was £13.2m, up £2.6m from £10.6m.

Finance income was £56,000 against £46,000 last year.
Finance costs, which are principally interest on the pension
scheme deficit as calculated under IAS19 (revised), were
£421,000 against £503,000 last year.

Pre-tax profit was £12.9m, up £2.8m from £10.1m last year.
Post-tax profit for the year is £10.5m, up from last year’s
figure of £7.8m.

Earnings per share were 53.7p compared to last year’s 40.3p.

Net assets (total equity) were £71.2m compared to £62.2m
last year.

At the year end the group’s cash reserves stood at £16.8m
compared to £12.5m last year.

Final dividend
The directors recommend a final dividend of 10.3p per
ordinary share (2015 8.8p). The final dividend will be paid
on 26 August 2016 to shareholders on the register at the
close of business on 5 August 2016. The shares will become
ex-dividend on 4 August 2016.

The total dividend per ordinary share of 14.3p for the year
is covered 3.8 times by earnings (2015: 3.2 times).

Financial year 2015/16
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 slowed in the second half
year. Both panels and timber grew revenues throughout
the year. The gross margin, before warehouse costs,
increased by 1.4 percentage points, due to the higher
share taken by our specialist products; margins remained
tight on commodity products.

Timber and panel prices fell slightly during the year, in spite
of the weakness in sterling in the second half. Focus on
panel products including melamine panels and door blanks,
continued to show good growth. Our high quality, certified
sustainable hardwood and WoodEx, our brand of engineered
timber for the joinery sector, showed good growth.

Overheads have been controlled, but higher than last year’s
due to the extra volumes and longer warehouse hours
introduced to meet customers’ demands. Staff numbers
have increased during the year, with more warehouse staff
to meet shift patterns and sales staff recruited in areas of
the business where we see opportunities. Bad debts were
low overall for the year.

JAMES LATHAM PLC ANNUAL REPORT 2016

More warehouse staff have been employed to meet customers’ demands.

Chairman’s Statement

Pension Scheme
At 31 March 2016 the deficit of the defined benefit scheme
under IAS19 (revised) was £9.7m down £0.7m compared
with £10.4m last year. This reduction is the result of the
increase in the corporate bond yield used to calculate the
present value of the scheme’s liabilities, offset by the
reduction in the value of scheme assets and reflects the
volatility of the accounting for this scheme.

Current financial year 2016/17
This year like for like revenues are 4% higher for April
and May than the corresponding period last year, both in
panels and timber. The gross margin is also higher. While
this is a steady start to the year, there are some signs that
this growth is slowing and the fluctuating value of sterling
and the uncertain outlook for business activity caused by
the EU referendum, make the immediate future difficult
to predict.

We continue to see 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; we have
increased our resource focused on obtaining specifications
for these. The plans to upgrade our two older sites at Yate
and Wigston have progressed with site purchase and build
contracts approved, subject to planning, for a new site in
Yate which should be completed by the end of the financial
year, and negotiations proceeding for a site in Wigston.

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 January 2016 I stood down as Executive Chairman
but will continue on the Board for a period as Non-
Executive Chairman. Nick Latham has been appointed
Deputy Chairman and has taken on most of my executive
functions. Nick was responsible for the start up of two of
our very successful newer branches, Hemel Hempstead
and Fareham and is responsible for the development of
our timber products.

There is a clear division of responsibilities between the
main board, which determines strategy and exercises
corporate governance and the trading board of Lathams
Limited, chaired by Chris Sutton, which sets and monitors
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.

The Company has been going through a period of change
in terms of management structure, development of new
products and warehouse operations, and I would like to
thank fellow directors for their help and support during
the year. Progress has been made in many areas and we
continue to provide a high quality of customer service as
measured by our record sixth consecutive TTJ award of
Timber Trader of the year. I would like to thank everyone
in the group for their individual contribution.

Peter Latham
Chairman, James Latham plc

22 June 2016

JAMES LATHAM PLC ANNUAL REPORT 2016

Strategic Report

Introduction

Outline of the Strategic Report
The directors present their Strategic Report for the year ended 31 March 2016.
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 22nd June 2016
and signed on its behalf by:-

Peter Latham

David Dunmow

1 Super Prime Walnut Staircase. 2 Losan RealWood veneers – Barber’s Shop finished in Cracked Oak.
3 XyloCleaf used in a restaurant. 4 UPM-ProFi-Lifecycle decking.

JAMES LATHAM PLC ANNUAL REPORT 2016

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 panel products,
natural acrylic stone, hardwoods, high grade softwoods,
flooring, cladding, decking and plastics. 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.

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 next day delivery service to Ireland.

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 five 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 65. Having stock of
product in the right place at the right time is important

Our core values are Integrity, Shareholder Value,
Empowerment, Sustainability and Customer Focus.

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,
2014 and 2015 in a vote of readers
of the Timber Trades Journal.

The company’s objectives are:

• To maximise shareholder value over the 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 increase sales of third party certified legal and

sustainable timber products.

• 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 2016

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.

Revenue (£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
2
9
,
5
8
1

6
9
8

8
3
9

2
7
9

7
.
3
5

9
.
6
3

3
.
0
4

2014 2015 2016

Revenue up 6.3%

Tonnes per working
day up 3.6%

Adjusted earnings
per share up 33.3%

Debtors days
average

Stock turn
(times)

Cash (£000’s)

6
.
2
5

4
.
2
5

3
.
1
5

6
.
6

2
.
6

0
.
6

2
3
8
,
6
1

1
0
5
,
2
1

4
3
2
,
1
1

2014 2015 2016

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 6.0 times and excludes stock being
processed in kilns. The stock turn target
was revised this year following detailed
analysis of anticipated lead times of
each product group

Cash balances
up £4,331,000

JAMES LATHAM PLC ANNUAL REPORT 2016

Results for the year to 31 March 2016
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 2015/16 was £185.9m, £11m higher than the
previous year, reflecting improving volumes in both panels
and timber despite product prices being on average 1%
below last years level.

The gross margin, the difference between the sales values
and the cost prices excluding warehouse costs, was 1.4
percentage points up on the previous year. Volume growth
was achieved mainly in our specialised products which
attract higher margins, although continuing competitive
pressure in the commodity markets resulted in some lower
margins being achieved in those products.

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 continued
to extend the working day by introducing longer shifts,
bringing along with it more warehouse staff. This enables
us to efficiently pick our specialised products reducing
damage and pick orders placed later in the day and allow
our vehicles to be loaded overnight for prompt starts the
next day. Increasingly next day delivery is expected by
our customers and our operations have to adapt to deal
with this. Overhead cost control though has remained
important and we continually look to improve efficiency
and productivity.

For management purposes, the group is organised into one
trading division, importing and distribution of wood-based
and related materials, 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 Product sales at £132.1m were 5.8% higher than last
year, with volumes up 2.3%. The group’s strategy continues
to be to target specific markets where decorative surfaces
are required. Our extensive range of real wood veneered and
melamine panels, laminates, Hi-Macs® natural acrylic stone
and flexible panels have all shown sales growth. During
the year we added Xylocleaf, a very high quality embossed
melamine panel, and Kydex®, a thermoformable plastic to
our range. These products have enabled us to develop sales
into new customers and markets. We will continue to invest
in a wider range of melamines and laminates.

Strategic Report

Operating Review

XyloCleaf offers a range of wood grains, linens and other
unique materials.

Sales of hardwood and softwood plywood have come
under pressure during the year, but our strategy continues
to be to supply legal, certified and fit-for-purpose products.
A campaign to raise the awareness of our plywood range
began in January 2016. Birch Plywood sales have remained
strong despite the weak currency in Russia.

In spite of aggressive pricing by competitors, we have seen
marginal growth in sales of MDF with more positive
increases in Tricoya Extreme Durable Fibreboard. The next
generation of added value and higher performance
Smartply® OSB entered the market during the year and
early indications show a real interest from our customer
base. An exclusive agreement to distribute a range of Fire
Retardant materials from our Iberian supplier has helped
to increase sales and margins in this area.

During the year extensive testing has been carried out on our
high quality Moralt fire, thermal and acoustic door blanks,
leading to specifications being won and higher sales values.

Architects, Designers and Specifiers have been inspired by
our extensive range of added value and niche products,
leading to many specifications and orders. The Surface
Design Show generated over 500 leads resulting in orders
being placed and specifications being gained.

JAMES LATHAM PLC ANNUAL REPORT 2016

Strategic Report

Operating Review

James Latham at the Surface Design Show.

In March 2016 we signed a 3 year agreement with the
Business Design Centre, Islington, for a suite where we will
have a dedicated team and showroom aimed at our larger
audience of Architects, Designers and Specifiers.

A structured and focussed PR and marketing plan is in
place, which includes a presence on Twitter, Facebook and
Pinterest where we highlight our products and projects.

Our Hi-Macs® team continues to work on specifications
and to offer to our fabricator customer network a prompt
ex-stock service from our central distribution facility in
Leeds, to the UK and Ireland.

The Advanced Technical Panels team, with their wealth
of experience and knowledge, together with their
extensive product range produced an excellent increase in
turnover and margin this year. Buffalo Board® continues
to be specified. The addition of Kydex® on an exclusive
distributor basis, proved to be very beneficial with strong
sales into new and existing customers.

We were joined by 17 of our key suppliers from all over
the world at our Suppliers Day, where a rolling 3 year
development plan was presented to them. This day
was very beneficial and further strengthened mutual
commitments.

Key suppliers from South East Asia, Scandinavia, Eastern
and Western Europe plus UK and Ireland were visited
during the year. This was to further develop personal
and business relationships and to carry out product and
environmental audits.

JAMES LATHAM PLC ANNUAL REPORT 2016

Timber sales, at £53.9m were 7.7% higher than last year
with volumes 6.7% higher.

Our timber strategy remains to target the joinery, kitchen and
shopfitting sectors, all of which have provided us with sales
and volume growth. We re-focussed our sales efforts on our
traditional business, namely North American (especially
Walnut and Oak), African and European hardwoods. We have
been developing our relationships with key suppliers in these
areas, and concentrating our sales efforts on premium
grades. Volume growth in North American and European
timbers have been encouraging, but achieving sales and
margin growth in African timbers remain challenging.

We have managed to secure some high end specification
contracts for both Lifecycle and Profi, our premium range
of wood plastic composite decking. We believe the market
for composite decking is one that could bring us future
growth. Our success has been more with contractors than

Super Prime Walnut Staircase.

Strategic Report

Operating Review

builders merchants at this stage, but we expect sales from
both sectors to grow in the future.

Accoya Modified Wood sales have been steady this year,
however we have seen some high profile specifications for
our Latham Accoya-Clad. The success in the performance
of this cladding solution is leading to a growing number
of specifications and enquiries. We are also introducing
other species into our Cladding range, in a market that we
haven’t previously been strong in.

Our largest growth area has been in WoodEx, our Forest
Stewardship Council (FSC) certified brand of engineered
hardwood and softwood, where we have continued to
expand the range and sizes that are available to meet our
customer needs. Our decision to focus on working with a
small number of suppliers, and promote premium products
is proving successful. Our Engineered Grandis 690 + has
been tested and approved for use in FD60 door frames
which will provide opportunities in the door market for us.

LDT have made a very useful contribution to
group profits, despite extreme competition.
We have made good progress in developing
overseas markets in Europe and Asia and
expect to see continued sales growth here. As part of their
ongoing development, LDT will look to increase their
product offering to the importer and merchant sectors,
whilst maintaining their strict environmental policy.

We continue to develop our range of certified 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 (RPP). Any supplier who
does not meet this criteria will not be considered. Product
of Verified Legal Origin (VLO) is also purchased.

Strategy for developing the business
The directors recognise that the strength of the group is
as a distributor of fit-for-purpose, 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 as we are viewed as a good route to
market by current and prospective suppliers.

Value added products continue to account for a significant
proportion of our sales. Manufacturing and processing
customers, along with our merchant and importer base,
expect us to bring new products to them on a regular
basis. Our extensive product range is a key differentiator
for us in our chosen markets.

Our core commodity range of panels and timber are
constantly reviewed with new lines being stocked if we
believe they will meet our customer’s requirements.

Our Leeds depot acts as the central distribution point for
ATP, Hi-Macs®, Profi decking, engineered flooring, our
large range of Egger and Kronospan laminates and other
niche products. These are available on a national basis for
next day delivery to our customer base.

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 relocation of our Yate and Wigston
depots expected to be substantially complete during the
course of the next year. Further investment in racking systems
will be undertaken at Hemel Hempstead and Purfleet depots.
We will also consider acquisitions where opportunities arise,
to enhance our product range or geographical coverage.

Our staff are a major asset for the company, and we
continue to invest in training to ensure that we have
the best operations, sales, administrative and technical
teams in the industry. Marketing of our products through
brochures, direct advertising, public relations, social
media and exhibitions is key to our success. The addition
of our Architect and Design facility in Islington will make
our products visible to a larger number of professional
specifiers. 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 %
2016 2015

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

TOTAL

100

End products are used in both the public and private
sectors. Our top ten customers account for 10% of sales
and our top 25 customers represent 16% of sales.

JAMES LATHAM PLC ANNUAL REPORT 2016

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 out-performed 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,

whilst remaining competitive

• 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 6.3% to £185.9m. 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 to 19.1% from 17.7%, through a mixture of
management of margins, product mix and some currency
assistance earlier in the year. In addition warehouse costs,
which are included in the calculation of gross profit, have
remained under control, with warehouse cost per tonne
of product delivered, little changed on last year. This is
despite further investment in manpower to extend the
working day to meet customer demands. Most depots have
increased the number of hours in their working day, with
two operating a 24 hour system.

JAMES LATHAM PLC ANNUAL REPORT 2016

David Dunmow
Finance Director and Company Secretary

Selling and distribution costs increased by 7.4%. 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 fell by
1.6% over last year. This efficiency is due to a combination
of increasing our lorry fleet and reducing hauliers,
extended warehouse working day meaning more lorries
can leave fully freighted early in the morning, and cost
savings by reduced fuel prices. Sales staff were taken on
with responsibility for the new product launches this year
and to develop existing niche product areas.

Administration costs decreased by 1.0%, mainly due to a
reduction in bad debt and pension costs. Costs in each
location are monitored closely by the board through the
quarterly meetings at each depot.

Operating profit increased 25.3% to £13.2m. Group net
profit before taxation increased to £12.9m from £10.1m
last year.

The taxation charge of £2.4m represents an effective rate of
18.7%, compared with 22.6% last year, benefitting from the
reduction in corporate tax rates. 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 2016 the deficit of the defined benefit scheme
under International Financial Reporting Standards was
£9.7m compared with £10.4m last year. Discount rates,
represented by yields on corporate bonds, showed a small
increase to 3.5% from 3.2% last year. The reduction in
liabilities that this produces has been offset to a degree by a
fall in asset values caused by a reduction in equity valuations
and some disinvestments needed to pay pension benefits.

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 52.4 days to
51.3 days. Bad debts this year ended up at 0.11% of
turnover against a budget of 0.4%, and last year of 0.15%.
I am very grateful for the work my 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. They also work very closely with
our credit insurers to ensure that as many of our major
accounts as possible are covered. At the year end we had
97% of accounts owing over £40,000 covered by credit
insurance. In addition, the amount of outstanding debt
being dealt with by our solicitors has remained low all year.

Stock turnover targets are set and monitored on a
monthly basis, and senior management has access to
real time stock levels. We have undertaken a review of
stock turn targets this year to more accurately measure
anticipated lead times. At 31 March 2016 stock turn is
6.0 times compared with our target of 6.0 times, and
there were no areas of our stock profile that were
significantly overstocked. We also increased our focus on
slow moving stock lines, better identifying slow moving
ranges that were important in the stock portfolio and
needed to be retained, and those that needed to be
disposed of. This produced a 20% reduction in these lines.

2016

2013

2012

2014

2015

7
6
2
,
9

0
3
4
,
0
1

7
5
6
,
9

6
1
3
,
2
1

Good stock and debtor control has allowed 91% of profit
before tax to be available as free cash for investment and
distribution.

3
9
7
,
6
1

Cash and Cash Equivalents

2
3
8
,
6
1

1
0
5
.
2
1

4
3
2
,
1
1

4
0
0
,
7

5
7
0
,
8

In note 17.2 to the accounts, we have provided some
sensitivity analysis around the various assumptions used
to illustrate this volatility. Under the recovery plan agreed
following the triennial valuation at 31 March 2014 there
will be no deficit recovery payments made in the year to
31 March 2017.

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.

Gross IAS19 deﬁcit £000’s

2012

2013

2014

2015

2016

7
6
2
,
9

0
3
4
,
0
1

7
5
6
,
9

6
1
3
,
2
1

3
9
7
,
6
1

1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
12000
13000
14000
15000
16000

2
3
8
,
6
1

1000
Cash ﬂow and working capital
2000
3000
4000
At the end of the year cash balances of £16.8m were
5000
6000
held, up from £12.5m last year. The cash is being held
7000
8000
as short term deposits providing funds for short term
9000
10000
working capital fluctuations and allowing us to make
11000
12000
capital investments when opportunities arise. The lowest
13000
14000
amount of cash held during the year was £9.3m. This
15000
16000
cash is being held to finance the relocations of Yate and
Wigston. There have been more planning delays for Yate
than originally anticipated but this relocation is expected
to be substantially completed by March 2017. We do not
foresee any planning issues with the Wigston relocation
and this may be substantially completed by June 2017.
It is anticipated that each site will cost over £7m with
sale proceeds for the existing two sites being received
the year after. 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 £940,000 of
discounts received compared with £864,000 last year. I am
particularly grateful to my bought ledger team for their
hard and efficient work in processing suppliers invoices so
that these discounts are not missed.

1
0
5
.
2
1

4
3
2
,
1
1

5
7
0
,
8

4
0
0
,
7

2016

2012

2013

2015

2014

The timber importing and distribution business requires
considerable working capital investment in stock and
debtors.

2012

2013

2014

2015

2016

JAMES LATHAM PLC ANNUAL REPORT 2016

Strategic Report

Financial Review

Capital investment
As expected, the levels of capital expenditure returned
to normal levels during the year. The £2.0m invested in
fixed assets included £825,000 in new and replacement
lorries where we have increased our lorry fleet by 7 to
69 vehicles. £695,000 was invested in warehousing lifting
equipment and £200,000 in warehouse racking.

We also undertook a major project to replace our complete
IT infrastructure to move to state of the art servers, hosted
away from our depots, and improving back up and disaster
recovery systems. I am extremely grateful for the hard work
of my IT team in planning and preparing for the change
over of systems with no disruption to business activities.

Net assets at the year end were £71.1m (2015 £62.2m).
The group’s adjusted pre-tax return on capital for the year
was 19.7% (2015 16.6%), 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 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. The European Union
Referendum on 23rd June could cause some short term
volatility in exchange rates and so some short term forward
exchange contracts were entered into to smooth out any
volatility that could arise.

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.

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

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 below 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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Market
Conditions

Competition
from new
and existing
businesses

Inventory
levels move
out of line
with sales
requirements
and market
prices

Strategic Report

Principal Risks and Uncertainties

Inherent risk

Risk Description

Risk Mitigation

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.

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.

Competitive pressures from existing businesses
and new entrants to the market could reduce
prices, margins and profitability.

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.

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.

To mitigate this risk, the group has a strict policy of stock level targets by
product group and 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 17.2 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 in a separate data centre to provide extra resilience.
Should there be any failure in the systems in the main datacentre, then the back
ups held in the secondary data centre can be made operational.

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 2016

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, with their audit scores and trends
being monitored at management meetings. 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 have introduced the FORS (Fleet
Operator Recognition Scheme), achieving Bronze status
and aim to improve this in the future. Our lorries all have
tracking devices fitted which provide alerts and information
on speed as well as the route taken. We have started
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 or social 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

Staff at our Leeds depot.

JAMES LATHAM PLC ANNUAL REPORT 2016

Strategic Report

Corporate Responsibility

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 biodiversity,
leads to soil erosion and damages watercourses. 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.

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 assurances of this. 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. WWF award up to
three “trees” to show companies progress towards this
goal, and during the year we achieved the top score.

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 that suppliers 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.

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.

The figures for the relevant calendar years are given below.

FSC

PEFC

3rd party
veriﬁed legal

TOTAL

Panels

2014

2015

2016
Target

Timber 2014

2015

2016
Target

69%

71%

72%

40%

39%

20%

16%

17%

33%

40%

18%

34%

93%

97%

98%

89%

92%

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 buying timber that can
be demonstrated to be legal and from well-managed forests.
This is 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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Strategic Report

Corporate Responsibility

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, Congo Brazzaville,
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 (FLEGT)
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.

Supply chain transparency – Modern Slavery
Act 2015
We are dedicated to promoting ethical values and integrity
in our business behavior by implementing controls through
ISO management and due diligence systems. We aim to
ensure that trading and operational purchases are free
from human trafficking and slavery. We are committed
to transparency within our supply chains and are alert to
the potential risks. Where risks are identified, adequate
mitigation measures will be implemented and monitored.

Local environmental issues
We also recognize that alongside our timber environmental
policy, we have a responsibility to minimise our local
environmental 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.

agreement to give financial support to the National Forest
project. This started with the planting of 250 trees to
celebrate the company’s 250 year anniversary in 2007, and
we will be organising further tree planting and woodland
management activities for customers, suppliers and staff.

Customers and Suppliers at the National Forest.

We have this year provided office space and support at our
Thurrock depot to Sports Quest, who provide high quality
coaching in a range of sports for all children in schools,
and providing personal coaching to children with special
educational needs and disabilities.

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 at or above the Living Wage.

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 extended our

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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Corporate Governance

Corporate Responsibility / Corporate Governance Report

We have a successful program of introducing trainees
from school or college. All depots have trainees and we
have plans to recruit more 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 Dominic Manfredini won
the coveted Timber Trades Journal Career Development
Award, open to trainees under 25 throughout the timber
trade. Thomas Jones from our Leeds branch, was also
shortlisted for the award. This is the fifth year in a row that
our trainees have been nominated for this award.

Dominic Manfredini and Thomas Jones, with their mentors
Tim Andrews of ATP and Billy McKay from Leeds.

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™ 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.investorcentre.co.uk/
etreeuk/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

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. 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, five other
executive directors and two non-executive directors.
Peter Latham became non-executive Chairman on
1 January 2016. Each director has a vote and no
individual or small group of individuals dominates
the board’s decision making.

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 2016, the board met six times, with all directors
attending each meeting other than Piers Latham, who
missed one meeting due to other business commitments.
In addition conference calls are held where matters which
cannot wait for the next board meeting can be discussed.

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 2016

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 was chaired by Pippa Latham
until 30 September 2015 and then by Fabian French,
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, and receive reports
from the auditors. 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.

JAMES LATHAM PLC ANNUAL REPORT 2016

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 shareholders with any
published financial statements and Stock Exchange
announcements also posted on to our Investors
website, www.lathams.co.uk.

Corporate Governance

Directors and Advisors

Directors’ biographies

Peter Latham OBE BA FIMMM
Non-executive Chairman
Peter Latham, age 65, has worked in the company for
43 years and was appointed to the board in 1983, and
became a non-executive on 1 January 2016. He is a
former director of Lathams Limited, and provides
advice to the Remuneration and Nominations
Committees. He is a director of the Programme for
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 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 52, has worked in the company
for 22 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. He is a Trustee of the James
Latham plc Pension and Assurance Scheme and of
the Timber Trade Federation Pension Scheme.

Chris Sutton Executive Director
Chris Sutton, age 57, has worked in the company
for 38 years and was appointed to the board in
2005. He is Chairman of Lathams Limited. He is a
director of the Timber Trade Federation.

Nick Latham BSc Executive Director
Nick Latham, age 48 has worked in the company for
25 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 main board of
the Timber Research and Development Association.

Piers Latham BSc Executive Director
Piers Latham, age 45 has worked in the company for
23 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.

Andrew Wright Executive Director
Andrew Wright, age 51, has worked in the company
for 15 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.

Meryl Bushell PhD FCIPS
Non-Executive Director
Meryl Bushell, age 61, 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
Nomination Committees and is a member of the
Audit Committee. 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.

Fabian French MA Non-Executive Director
Fabian French, age 57, was appointed a non-
executive director in 2015. He is a qualified
solicitor and worked in corporate finance for
major investment banks. He is currently Chief
Executive of UK Community Foundations and is a
director of CRGH Investment LLP, Goodenough
College Charity, The Royal Yacht Squadron Isle of
Wight Foundation, Trebartha Hydro Ltd, and is a
previous director of Inspiration in Sport and
Mithras Investment Trust plc, and was previously
Head of International Corporate Finance at
Dresdner Kleinwort.

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
60 Gresham Street,
London EC2V 7BB

Pension Advisor
Mercer
Tower Place West
London EC3R 5BU

Independent Auditor
RSM 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

Peter Latham

David Dunmow

Chris Sutton

Nick Latham

Piers Latham

Andrew Wright

Fabian French

Meryl Bushell

JAMES LATHAM PLC ANNUAL REPORT 2016

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 2016
was the achievement of £10,523,000 operating profit,
as measured in the depots management accounts,
an increase of 21.5% over the previous year’s 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 138.7% of the target
operating profit was achieved earning 19.5% of basic
salary. The criterion for the year ended 31 March 2017
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 4.92% of basic salary to 334 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

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 2016, the Remuneration
and Nominations Committee comprised two non-
executive directors, Meryl Bushell as Chairman, who served
throughout the year, and Pippa Latham until 30 September
2015 and Fabian French after 1 October 2015. 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.

During the year Pippa Latham retired from the board after
10 years as a non executive director. Following interviews
Fabian French was recommended as her replacement
which was accepted by the board. Fabian has skills and
listed company experience which enhance the overall
skills of the board. I would like to thank Pippa for all her
hard work over this period.

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 fairly rewarded for their individual
contributions to the performance of the group, with due
regard for the interests of shareholders.

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.

JAMES LATHAM PLC ANNUAL REPORT 2016

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 2016.

James Latham plc total shareholder return

200

150

100

2011

2012

2013

2014

2015

2016

Directors’ emoluments
Details of the individual directors’ emoluments for the year were as follows:

James Latham Plc

FTSE AIM All
Share Index

The Remuneration
Committee consider this
to be the most appropriate
graph against which to
compare the company’s
performance.

Salary
and fees

Beneﬁts

Bonus

Total
emoluments
excluding
pensions

Share
based
payments

Pension
contributions

£000

Executive
P.D.L. Latham
2016
(non executive from 2015
1 January 2016)
D.A. Dunmow

C.D. Sutton

N.C. Latham

P.F. Latham

A.G. Wright
(appointed 1 April 2015)

2016
2015
2016
2015
2016
2015
2016
2015
2016
2015

Non-executive
P.D.L. Latham
(appointed 1 January 2016)
M.A. Bushell

2016
2015
2016
2015
P.A.J. Latham
2016
(resigned 30 September 2015) 2015
2016
P.L.F. French
2015
(appointed 1 October 2015)

Total

2015

162
207

152
145
148
140
131
109
95
88
100
-

17
-
31
35
15
30
15
-

866

754

4
6

13
10
10
9
1
-
10
10
9
-

-
-
-
-
-
-
-
-

-
47

38
35
38
34
39
27
24
22
26
-

-
-
-
-
-
-
-
-

166
260

203
190
196
183
171
136
129
120
135
-

17
-
31
35
15
30
15
-

165

1,078

954

1
1

5
10
4
9
2
2
2
2
1
-

-
-
-
-
-
-
-
-

TOTAL

£000

167
261

239
230
229
220
195
160
150
141
157
-

17
-
31
35
15
30
15
-

-
-

31
30
29
28
22
22
19
19
21
-

-
-
-
-
-
-
-
-

122

1,215

1,077

JAMES LATHAM PLC ANNUAL REPORT 2016

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
A.G. Wright
M.A. Bushell
P.L.F. French

Beneﬁcial owner
Beneﬁcial owner
Beneﬁcial owner
Beneﬁcial owner
Beneﬁcial owner
Beneﬁcial owner
Beneﬁcial owner
Beneﬁcial owner

31 March 2016

31 March 2015

Ordinary shares

Preference shares

Ordinary shares

Preference shares

1,132,372
120,236
48,540
624,231
621,757
20,114
9,400
370,052

Nil
Nil
Nil
Nil
567
Nil
Nil
Nil

1,124,937
110,778
42,959
616,782
614,370
-
9,400
-

Nil
Nil
Nil
Nil
567
-
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
A.G. Wright

31 March 2016

31 March 2015

-
-
-
-
-

3,658
3,658
3,658
3,658
1,463

On 29th February 2016, each of the directors listed above exercised their options at £2.46 a share. Mr A.G. Wright made
a gain of £6,349 and the other directors a gain of £15,876 on the exercise of 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 2015

Granted during
the year

2,532
1,742
1,834

2,532
1,742
1,834
1,262
707
-

-
-
-

-
-
-
-
-
586

Exercised

(2,532)
-
-

-
-
-
-
-
-

Outstanding
31 March 2016

Exercise
price

-
1,742
1,834

2,532
1,742
1,834
1,262
707
586

£1.975
£2.295
£2.725

£1.975
£2.295
£2.725
£3.96
£5.65
£6.825

Exercise period

15.12.15 to 14.12.20
29.11.16 to 28.11.21
05.12.17 to 04.12.22

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
18.12.20 to 17.12.25

Continued on page 23

JAMES LATHAM PLC ANNUAL REPORT 2016

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 2015

Granted during
the year

Exercised

Outstanding
31 March 2016

Exercise
price

C.D. Sutton

N.C. Latham

P.F. Latham

A.G. Wright

4,242
2,532
1,742
1,834
1,262
707
-

2,532
1,742
1,834
1,262
707
-

2,025
1,742
1,834
1,262
707
-

-
-
-
-
-
-
586

-
-
-
-
-
586

(2,424)
-
-
-
-
-
-

(2,532)
-
-
-
-
-

-
-
-
-
-
-

1,818
2,532
1,742
1,834
1,262
707
586

-
1,742
1,834
1,262
707
586

2,025
1,742
1,834
1,262
707
586

£1.65
£1.975
£2.295
£2.725
£3.96
£5.65
£6.825

£1.975
£2.295
£2.725
£3.96
£5.65
£6.825

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
16.12.18 to 15.12.23
05.01.20 to 04.01.25
18.12.20 to 17.12.25

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
18.12.20 to 17.12.25

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
£12,217 and Mr C.D. Sutton made a gain of £12,423 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 2015

Awarded
during
the year

Excercised
during
the year

Outstanding
31 March
2016

Exercise
price

Award
price

Vesting
date

D.A. Dunmow

C.D. Sutton

5,308

(5,376)

nil

£2.74

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 £36,557 on options exercised during the year.

MA Bushell, Chairman of the Remuneration Committee

22 June 2016

JAMES LATHAM PLC ANNUAL REPORT 2016

Corporate Governance

Directors’ Report

The directors have pleasure in presenting their annual
report and the audited accounts for the year ended
31 March 2016. 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 2016 are set
out on page 29. The directors recommend the following
dividends:-

Ordinary dividends

Interim dividend paid, 4.0 pence per
ordinary share

Final dividend proposed, 10.3 pence per
ordinary share

Total ordinary dividends, 14.3 pence per
ordinary share

£000

777

2,019

2,796

The directors recommend payment of the final dividend
on 26 August 2016 to shareholders on the register of
members at the close of business on 5 August 2016.

Balance sheet and post balance sheet events
The balance sheet on page 30 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 Fabian French who was appointed
on 1 October.

In compliance with the Articles of Association, Peter Latham,
Meryl Bushell and Nick Latham will retire by rotation
and, being eligible, offer themselves for re-election.
Fabian French, 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. Meryl
Bushell and Fabian French, 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

JAMES LATHAM PLC ANNUAL REPORT 2016

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 519,200 ordinary shares as treasury
shares, with a view to being used for employee share
schemes. The company also holds 150 preference shares
in treasury. In addition the Trustees of the James Latham
Employee Benefits Trust holds 59,247 shares with a view
to being used for employee share schemes.

The new range of Losan RealWood veneers from James Latham.
This living room is finished in Grissard.

Corporate Governance

Directors’ Report

Accoya bench.

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. This scheme matured
on 29 February 2016 and 160,799 options were exercised.

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 2016 were 34 days
(2015: 35 days).

On 21 August 2008, the shareholders approved by special
resolution the establishment of the Company Share
Option Scheme. During the year 14,349 options were
issued at an option price of £6.825. In addition 27,531
options were exercised after being held for five years,
4,242 at an option price of £1.65 and 23,289 at an option
price of £1.975.

Substantial shareholdings
At 22 June 2016, 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
Robert Latham
Nick Latham
Piers Latham

Number
1,132,372
680,787
624,231
621,757

%
5.77
3.47
3.18
3.17

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 Guidance on Risk Management and Internal Control
and Related Financial and Business Reporting, published by
the Financial Reporting Council in 2014.

Political and charitable donations
During the year the group made no political contributions
but made direct donations to various charitable
organisations amounting to £4,940 (2015: £7,040). 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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Auditor
A resolution to reappoint RSM UK Audit LLP (formerly
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. RSM 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 Gallery Level, Business Design Centre, 52 Upper Street,
London, N1 0QH on 24 August 2016 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 8. 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 9. 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 10. 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

22 June 2016

Corporate Governance

Directors’ Report

Moralt doors at Spitalfields.

Close company status
The close company provisions of the Income and
Corporation Taxes Act 1988 do not apply to the company.

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 to 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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Corporate Governance

Statement of Directors’ Responsibilities

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 IFRS as adopted by the EU.

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;

American White Oak.

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.

b. make judgements and accounting estimates that are

reasonable and prudent;

Legislation in the United Kingdom governing the
preparation and dissemination of financial statements may
differ from legislation in other jurisdictions.

c. state whether they have been prepared in accordance
with IFRS’s adopted by the EU, 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.

On behalf of the Board of Directors
Peter Latham
Chairman

22 June 2016

JAMES LATHAM PLC ANNUAL REPORT 2016

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 58.
The financial reporting framework that has been applied
in the preparation of the parent company and group
financial statements is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the
European Union, and as regards to the parent company
financial statements as applied in accordance with the
provisions of the Companies Act 2006.

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 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 2016 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 IFRSs as adopted
by the European Union and as applied in accordance
with the Companies Act 2006: 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
matters where the Companies Act 2006 requires us 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
RSM UK Audit LLP
(formerly Baker Tilly UK Audit LLP)
Statutory Auditor, Chartered Accountants
25 Farringdon Street
London EC4A 4AB

22 June 2016

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Consolidated Income Statement

For the year ended 31 March 2016

£’000s

Notes

2016

2015

Continuing operations

Revenue
174,855
Cost of sales (including warehouse costs) 3, 4, 11 (151,389) (143,978)

185,929

Gross proﬁt
Selling and distribution costs
Administrative expenses

35,540

30,877
4, 11 (15,129) (14,082)
4, 11 (6,170) (6,231)

Operating proﬁt
Finance income
Finance costs

Proﬁt before tax
Tax expense

13,241
56

10,564
46
5
6 (421) (503)

3
10,107
7 (2,410) (2,285)

12,876

Proﬁt after tax attributable to owners
of the parent company

Earnings per ordinary share (basic)

Earnings per ordinary share (diluted)

10,466

53.7p

53.5p

7,822

40.3p

40.0p

Consolidated Statement of Comprehensive Income

For the year ended 31 March 2016

£’000s

Proﬁt after tax
Other comprehensive income:
Actuarial gain/(loss) on defined benefit pension scheme
Deferred tax relating to components of other
comprehensive income

2016

10,466

2015

7,822

825

(1,849)

(219)

434

Other comprehensive income for the year, net of tax

606 (1,415)

Total comprehensive income attributable to the owners
of the parent company

11,072

6,407

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Consolidated and Company Balance Sheet

At 31 March 2016

Group

Company

£’000s

Notes

2016

2015

2016

2015

2014

Assets
Non-current assets
Investments
Goodwill
Other intangible assets
Property, plant and equipment
Deferred tax asset

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

22
12
10
11
19

13
14

15
16

16
17
18
19

-
237
93
22,111
1,802

-
237
101
21,601
2,259

9,613
-
-
24
65

14,613
-
-
22
170

14,613
-
-
23
99

24,243

24,198

9,702

14,805

14,735

33,403
35,288
16,832

31,906
34,213
12,501

-
3,322
14,924

-
3,328
11,041

-
3,813
9,137

85,523

78,620

18,246

14,369

12,950

109,766

102,818

27,948

29,174

27,685

23,471
-
1,376

23,893
907
947

24,847

25,747

987
9,657
406
2,686

987
10,430
464
2,959

852
9,132
-

9,984

987
-
254
-

864
7,563
-

8,427

987
-
286
-

1,273

9,700

845
3,390
-

4,235

987
-
318
-

1,305

5,540

Total non-current liabilities

13,736

14,840

1,241

Total liabilities

Net assets

Capital and reserves
Issued capital
Share-based payment reserve
Own shares
Capital reserve
Retained earnings

38,583

40,587

11,225

71,183

62,231

16,723

19,474

22,145

5,040
143

5,040
56

5,040
20
21
123
23 (441) (177) (441) (177) (175)
-
17,157

3
66,525

-
12,068

3
57,222

-
14,468

5,040
56

5,040
143

Total equity attributable to
shareholders of the parent company

71,183

62,231

16,723

19,474

22,145

These accounts were approved and authorised for issue by the Board of Directors on 22 June 2016 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 2016

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

123 (175)
-

Capital
reserve
£’000

3
-

Retained
earnings
£’000

53,117
7,822

Total
equity
£’000

58,108
7,822

- - (1,849) (1,849)

- 434 434

6,407

-
-
-
-
- (47)
-
-

-
82
-
- (84)
-

- (2,267) (2,267)
-
- (82)
-
-
47
- (84)
-
67
-
-

Balance at 1 April 2014
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
Write down on conversion of ESOP shares
Exercise of options
Change in investment in ESOP shares
Share-based payment expense

Total transactions with owners

- 20 (2)

- (2,302) (2,284)

Balance at 31 March 2015

5,040

143 (177)

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
Exercise of options
Transfer of treasury shares
Write down on conversion of ESOP shares
Conversions of ESOP shares
Change in investment in ESOP shares
Share-based payment expense

-
-
- (149)
-
-
-
-
-

-
-
- (1,385)
819
-
-
507
- (205)
-

57,222

62,231

10,466

- 825 825

- (219) (219)

11,072

- (2,484) (2,484)
-
-
149
-
- 1,385
-
- (819)
-
507
-
- (205)
-
62
-
-

Total transactions with owners

- (87) (264)

- (1,769) (2,120)

Balance at 31 March 2016

5,040 56 (441)

66,525

71,183

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Company Statement of Changes in Equity

Attributable to owners of the parent company

Balance at 1 April 2014
Proﬁt for the year

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

Issued
capital
£’000

5,040
-

Share-based
payment
reserve
£’000

Own
shares
£’000

Retained
earnings
£’000

Total
equity
£’000

123 (175)

17,157

22,145
- (451) (451)

- - 64 64

- (387) (387)

-
-
- (47)
-
-

- - (2,267) (2,267)
-
- 82 (82)
-
47
- (84)
67
-

-
- (84)
-

Total transactions with owners

20 (2) (2,302) (2,284)

Balance at 31 March 2015

5,040

143 (177)

14,468

19,474

Proﬁt for the year
Deferred tax relating to components
of other comprehensive income

Total comprehensive income for the year

- (551) (551)

- - (80) (80)

- (631) (631)

-
- (149)
-
-
-
-
-

149
- (1,385) 1,385
- 819 (819)
-
-
507
- (205)
-

- - (2,484) (2,484)
-
-
-
507
- (205)
62
-

Total transactions with owners

- (87) (264) (1,769) (2,120)

Balance at 31 March 2016

5,040 56 (441)

12,068

16,723

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Consolidated and Company Cash Flow Statement

For the year ended 31 March 2016

Group

Company

£’000s

Notes

2016

2015

2016

2015

Net cash flow from operating activities
Cash generated from operations
Interest paid
Income tax paid

11,704

133
(23) (44) (196) (132)
75 (62)
(2,016) (1,996)

6,218 (109)

Net cash inflow/(outflow) from operating activities

9,665

4,178 (230) (61)

Cash flows from investing activities
Interest received and similar income
Purchase of property, plant and equipment
Proceeds from sale of property, plant
and equipment

140
(2,056) (383) (6) (2)

113

Net cash (outflow)/inflow from investing activities

(1,864) (331)

136

107

138

Cash flows from financing activities
Borrowings repaid during the year
-
Group investments repaid in the year
-
Equity dividends paid (2,484) (2,267) (2,484) (2,267)
Preference dividend paid
(79) (79) (79) (79)

(907) (234)
-
-

-
5,000

Net cash (outflow)/inflow from financing activities

(3,470) (2,580)

2,437 (2,346)

4,331

1,267 2,314 (2,269)

Increase/(decrease) in cash and cash
equivalents for the year

Cash and cash equivalents at
beginning of year

Cash and cash equivalents at end of year

16,832

12,501

11,234

3,478

5,792

5,747

3,478

Balance sheet cash and cash equivalents
Bank overdraft in current liabilities (note 16)

16,832
-

12,501

14,924
11,041
- (9,132) (7,563)

Cash and cash equivalents at end of year

16,832

12,501

5,792

3,478

JAMES LATHAM PLC ANNUAL REPORT 2016

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.

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 9 Financial instruments – Classification and

Measurement

- IFRS 15 Revenue from Contracts with Customers
- IFRS 16 Leases
- IAS 1 Presentation of Financial Statements (amendment)
- IAS 7 Statement of Cash Flows (amendment)
- IAS 12 Income Taxes (amendment)

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 2016.

(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. 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 and company 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 had previously prepared its parent company
accounts in accordance with UK Generally Accepted
Accounting Practice (GAAP). Comparative figures have been
restated to reflect the adjustments made.

The only difference arising on transition to IFRS for the
company is as follows:

IAS 12 Income taxes
IAS 12 requires entities to calculate deferred taxation based
on temporary differences, which are defined as the difference
between the carrying amount of assets/liabilities and their tax
base. The increase in deferred tax liabilities as a result of the
transition to IFRS is from the removal of the discount applied
to the deferred tax liability under UK GAAP.

IAS 19 Employee benefits
As the group has an obligation to its employees to pay
accrued holiday entitlement, IAS 19 requires it to accrue
for holidays earned by its employees, but not taken, by the
balance sheet date.

The following changes arose as a result of the transition to IFRS:

31 March 2014
£’000
22,073
Total equity under UK GAAP
Deferred tax adjustment
93
Holiday pay accrual adjustment (25) (21)

31 March 2015
£’000
19,334
165

Total equity under IFRS

19,474

22,145

2015
£’000
Profit and total comprehensive income under GAAP (2,757)
Deferred tax adjustment
72
Holiday pay accrual adjustment (4)

Profit and total comprehensive income under IFRS (2,689)

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

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 separately 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.

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.

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:

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

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.

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.

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.

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.

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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

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.

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 2016, and of the amounts charged/
credited to the income statement and equity, are set out in
note 17 to the accounts.

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

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
predominantly 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.

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 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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

3. Proﬁt before tax

2016 2015

Proﬁt for the year has been arrived at after
taking into account the following:

Net foreign exchange (loss)/gain
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

(13)

105

145,914
1,507

141,508
1,428
(97) (5)
7

576
539

559
539

1,115

1,098

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
61
11 15

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

The aggregate payroll costs of these employees were as follows:

Wages and salaries
Social security costs
Pension costs
Share-based payment

2016
Number

55
111
128
62

356

£’000

11,964
1,196
1,279
62

14,501

2015
Number

54
102
124
61

341

£’000

11,265
1,138
1,224
67

13,694

Of the above payroll costs, £3,218,000 (2015: £2,897,000) is included in cost of sales, £7,789,000 (2015: £7,090,000) is
included in selling and distribution costs, and £3,494,000 (2015: £3,707,000) is included in administrative expenses in
the income statement.

5. Finance income

Interest receivable

The interest received is on bank deposits.

JAMES LATHAM PLC ANNUAL REPORT 2016

2016
£’000

2015
£’000

Financial Statements

Notes forming part of the Group Accounts

2016
£’000

2015
£’000

44
319 380
79

6. Finance costs

On bank loans and overdrafts
On pension liability
On 8% Cumulative Preference shares

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.

421

503

7. Tax expense

The charge for taxation on proﬁt comprises:

2016
£’000

2015
£’000

Current year:
UK corporation tax at 20% (2015: 21%)
1,947
Adjustment in respect of prior year (11) (21)
Deferred taxation - pension (9) 137
- IBAs derecognised in current year (22) (21)
- change in tax rates (28) -
- on trading losses carried forward - 92
24 151
- other

2,456

Proﬁt before taxation

Tax at 20% (2015: 21%)

2,410

12,876

2,575

2,285

10,107

2,122

Tax effect of expenses that are not taxable in
determining taxable proﬁt (124) (1)
IBAs derecognised in current year (22) (21)
Change in tax rates (28) -
Other 20 206
Adjustment in respect of prior year (11) (21)

Total tax charge

2,410

2,285

8. Dividends

2016 2015

Ordinary dividends:

£’000

£’000 £’000 £’000

Final 8.8p per share paid 28 August 2015 (2014: 8.0p)
Interim 4.0p per share paid 29 January 2016 (2015: 3.7p)

1,707
777

1,549
718

2,484 2,267

The Directors propose a final dividend for 2016 of 10.3p per share, that, subject to approval by the shareholders,
will be paid on 26 August 2016 to shareholders on the register on 5 August 2016.

Based on the number of shares currently in issue, the final dividend for 2016 is expected to absorb £2,019,000.

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

9. 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

2016
£’000

10,466

Number
’000

2015
£’000

7,822

Number
’000

Issued ordinary share capital
20,160
Less: weighted average number of own shares held in treasury investment (619) (719)
Less: weighted average number of own shares held in ESOP Trust (48) (52)

20,160

19,389
169

19,558

Trademark
£’000

155
-

155

47
7

54
8

101

108

Weighted average share capital
Add: dilutive effects of share options issued

Weighted average share capital for diluted earnings per ordinary
share calculation

19,493
65

19,558

10. Intangible assets – Group

Cost:
At 1 April 2014
Additions

At 1 April 2015
Additions

At 31 March 2016

Amortisation
At 1 April 2014
Charge for the year

At 1 April 2015
Charge for the year

At 31 March 2016

Net book value
At 31 March 2016

At 31 March 2015

At 31 March 2014

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 2016

Financial Statements

Notes forming part of the Group Accounts

Group

Short
leasehold
property
improvements
£’000

Plant,
equipment
and
vehicles
£’000

Total
£’000

29,871
383
- (20) (20)

10,516
383

613
-

Freehold
property
£’000

18,742
-
-

18,742
64

30,234
2,056
(1) - (603) (604)

10,879
1,992

613
-

18,805

613

12,268

31,686

2,166
-
247

214

7,224
- (19) (19)
1,144 1,428

4,844

2,413

8,633
- - (565) (565)
37 1,221 1,507

5,969

249

251

2,662

288

6,625

9,575

16,143

325

5,643

16,329

16,576

362

399

4,910

5,672

22,111

21,601

22,647

11. Property, plant and equipment

11.1 Group

Cost:
At 1 April 2014
Additions
Disposals

At 1 April 2015
Additions
Disposals

At 31 March 2016

Depreciation:
At 1 April 2014
Disposals
Charge for the year

At 1 April 2015
Disposals
Charge for the year

At 31 March 2016

Net book value

At 31 March 2016

At 31 March 2015

At 31 March 2014

Included in freehold property is land with a book value of £6,311,000 (2015: £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

2016
£’000

888
513
106

1,507

2015
£’000

800
519
109

1,428

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

11.2 Company

Cost:
At 1 April 2014
Additions

At 1 April 2015
Additions
Disposals

At 31 March 2016

Depreciation:
At 1 April 2014
Charge for the year

At 1 April 2015
Disposals
Charge for the year

At 31 March 2016

Net book value

At 31 March 2016

At 31 March 2015

At 31 March 2014

12. Goodwill

Cost:
At 1 April 2014 and 31 March 2016

Impairment
At 1 April 2014 and 31 March 2016

Net book value
At 31 March 2016, 2015 and 2014

Plant, equipment and vehicles
£’000

353
2

355
6
-

361

330
3

333
4
-

337

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.

13. Inventories

2016
£’000

2015
£’000

32,620
Finished goods and goods for resale
Less: provisions for slow moving and obsolete stock (579) (714)

33,982

33,403

31,906

The inventories impairment charge for the year ended 31 March 2016 was £406,000 (2015: £461,000). Impairment
charges reversed during the year were £539,000 (2015: £413,000). 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 16).

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

14. Trade and other receivables

Group

Company

Trade receivables

Other receivables:
Other receivables
Amounts owed by subsidiaries
Tax receivable
Prepayments

2016
£’000

2015
£’000

32,472

31,428

1,073
-
-
1,743

2,816

1,123
-
-
1,662

2,785

35,288

34,213

2016
£’000

-
2,220
1,058
29

3,307

3,322

2015
£’000

2
2,328
970
21

3,321

3,328

2014
£’000

1
2,985
785
19

3,790

3,813

The directors consider that the carrying amount of trade and other receivables approximates their fair value.

Trade receivables amounted to £32,472,000 (2015: £31,428,000), net of a provision of £106,000 (2015: £126,000) for
impairment. Movements on the group provisions for impairment were as follows:

At 1 April 2015
Provisions for receivables impairment
Receivables written off during the year as uncollectible

At 31 March 2016

Group

2016
£’000

2015
£’000

136
126
281
206
(226) (291)

106

126

The average credit period on sale of goods is 51 days (2015: 52 days).

The following table provides analysis of trade and other receivables that were past due at 31 March 2016 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

Group

2016
£’000

517
96
51

664

2015
£’000

611
35
29

675

There are no significant credit risks arising from financial assets that are neither past due nor impaired.

At 31 March 2016, £34,788,000 (2015: £33,846,000) of trade and other receivables were denominated in sterling,
£247,000 (2015: £165,000) were denominated in Euros and £253,000 (2015: £202,000) were denominated in US dollars.

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

15. Trade and other payables

Trade payables
Other taxation and social security
Other payables
Accruals and deferred income

Group

Company

2016
£’000

17,222
3,301
1,253
1,695

2015
£’000

17,784
3,282
1,201
1,626

23,471

23,893

2016
£’000

50
477
203
122

852

2015
£’000

21
497
237
109

864

2014
£’000

35
466
236
108

845

Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs.
The average credit period taken for trade purchases is 34 days (2015: 35 days). The directors consider that the
carrying amount of trade payables approximates to their fair value.

At 31 March 2016, £21,413,000 (2015: £21,923,000) of trade and other payables were denominated in sterling,
£1,374,000 (2015: £1,513,000) in US dollars, £647,000 (2015: £457,000) in Euros and £37,000 (2015: £nil) in
Canadian dollars.

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 £206,000 (2015: £197,000).

16. Interest bearing loans and borrowings

Current liabilities
Bank overdraft
Bank loans

Non-current liabilities
Cumulative preference shares
of £1 each (note 20)

Group

Company

2016
£’000

2015
£’000

-
-

987

-
907

907

987

2016
£’000

9,132
-

9,132

2015
£’000

7,563
-

7,563

2014
£’000

3,390
-

3,390

987

Total

987

1,894

10,119

8,550

4,377

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 (2015: £1,000,000) 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 2016

Financial Statements

Notes forming part of the Group Accounts

16. Interest bearing loans and borrowings (continued)

Bank loans

Group

2016

2015

Current
£’000

Non-current
£’000

Current
£’000

Non-Current
£’000

907 -

The weighted average interest rates paid were:
Bank loans

2016

2015

3.59% 3.59%

The weighted average period until maturity was nil years (2015: 0.2 years).

17. Retirement and other beneﬁt obligation

Group

Retirement beneﬁt obligations (note 17.2)

17.1. Group pension schemes

2016
£’000

9,657

2015
£’000

10,430

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. 55% of the
assets are invested in equities, with 49% under passive management by Blackrock and 6% in a Fund of Hedge funds
managed by Mesirow. 35% are held in bonds and gilts, with 21% in a Buy and Maintain Fund managed by Mercers, 6%
in an Absolute Return Fund managed by Wellington and 8% in an Index Linked fund managed by Blackrock, with the
remaining 10% in a HLV Property Fund managed by Aviva.

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 £1,279,000 (2015: £1,224,000). Of the charge, £169,000
(2015: £102,000) is included in cost of sales, £597,000 (2015: £352,000) is included in selling and distribution costs,
and £513,000 (2015: £770,000) 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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

17.2. 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.

2016
£’000

2015
£’000

Change in beneﬁt obligation
58,237
Beneﬁt obligation at beginning of year
Service cost
594
2,580
Interest cost
Plan members’ contribution
5
Actuarial loss (3,686) 4,842
Beneﬁts paid (3,192) (1,820)
Premiums paid (14) (17)

64,421
616
2,014
5

Beneﬁt obligation at end of year

Analysis of deﬁned beneﬁt obligation
Schemes that are wholly or partly funded

60,164

64,421

Change in scheme assets
53,991
Fair value of scheme assets at beginning of year
48,970
Interest income
1,695
2,200
Return on plan assets (excluding interest income) (2,861)
2,993
876
Employers contributions (incl. employer direct beneﬁt payments)
1,776
5
5
Member contributions
Beneﬁts paid from plan (3,192) (1,820)
Expenses paid (7) (133)

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

50,507

60,164
50,507

9,657

53,991

64,421
53,991

10,430

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

17.2. Group deﬁned beneﬁt pension scheme (continued)

2016
£’000

2015
£’000

Components of pension expense
Current service cost
594
2,580
Interest cost
Income on plan assets (1,695) (2,200)
116
Expenses paid (7)

616
2,014

Total pension expense recognised in the income statement

928 1,090

Actuarial (gain)/loss immediately recognised (825) 1,849

Total recognised in the statement of other comprehensive income (825) 1,849

Cumulative amount of actuarial loss immediately recognised

10,589

11,414

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

2016

55.2%
34.4%
9.8%
0.6%

100.0%

2016
£’000

27,901
17,355
4,928
323

50,507

2015

58.5%
31.9%
8.9%
0.7%

100.0%

2015
£’000

31,560
17,248
4,788
395

53,991

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

17.2. 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 (CPI capped at 5%)

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

2016

3.50%
2.90%
2.90%
1.90%
2.00%

24.2
26.1
26.2
28.2

3.20%
2.95%

2015

3.20%
2.95%
2.95%
1.95%
2.05%

24.1
26.1
26.0
28.1

4.50%
3.35%

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

Discount rate increases by 0.25%
(2,571)
2,027
Inﬂation rate increases by 0.25%
Life expectancy increases by one year 1,842

History of plan assets and deﬁned beneﬁt obligation

Present value of deﬁned beneﬁt obligation
Fair value of plan assets

Net liability

2016
£’000

60,164
50,507

9,657

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

Contributions
The group expects to contribute £422,000 to the pension scheme for the year ending 31 March 2016.

17.3. Defined contribution pension payments

The group operates a defined contribution scheme managed by Aviva. The group has agreed to match contributions
by eligible employees up to maximum of 7.5%.

Pension contributions paid to the defined contribution scheme for the year totalled £701,000 (2015: £590,000).

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

Group

Company

2016
£’000

406

2015
£’000

464

2016
£’000

254

2015
£’000

286

2014
£’000

318

18. Other payables (non-current liabilities)

Accruals and deferred income

19. Deferred tax

19.1 Group

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 2014
1,956 (90) (1,856) (784) (774)
Credit/(charge) to the income statement 7 - - (229) (222)
- 296
Credit direct to equity

296

At 31 March 2015 asset
At 31 March 2015 liability

2,259

- 2,259
- (90) (1,856) (1,013) (2,959)

(Charge)/credit to the income statement
(Charge)/credit direct to equity

(229)
(228)

- 186 78 35
- - (219)
9

At 31 March 2016 asset

1,802

- - 1,802

At 31 March 2016 liability

- (81) (1,670) (935) (2,686)

* Includes accelerated capital allowances, share-based payments, industrial buildings allowances and trading losses.

19.2 Company

As at 1 April 2014
Charge for the year

At 31 March 2015
Charge for the year

At 31 March 2016

Post-
employment
beneﬁts
£’000

Accelerated
capital
allowances
£’000

Total
£’000

6
72 (1)

99
71

170
(102) (3) (105)

165

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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

20. Share capital

Ordinary shares

Authorised Issued and fully paid

Ordinary shares of 25 pence each

Number
28,000,000

£’000
7,000

Number
20,160,000

£’000
5,040

2016, 2015 and 2014

Preference
shares

8% Cumulative Preference Shares of £1 each

2016, 2015 and 2014

Authorised Issued and fully paid

Number
1,500,000

£’000
1,500

Number
987,000

£’000
987

Preference shares are included in non-current liabilities (as interest bearing loans and borrowings). See note 16.

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 2016 or 2015.

21. Share-based payment

Equity-settled share option schemes
Details of the share options outstanding during the year are as follows:

2016

Weighted
average
exercise
price (£)

Number
of share
options

Nil price
share
options

Number
of share
options

2015

Weighted
average
exercise
price (£)

Nil price
share
options

Outstanding at beginning of year 321,481 2.67 10,616 366,928 2.37 21,008
Granted during the year 14,349 6.75 136 16,262 5.65 560
-
Forfeited during the year (14,637) 2.74 - (10,159) 2.20
Exercised during the year (188,330) 2.38 (10,752) (51,550) 1.55 (10,952)

Outstanding at the end of the year 132,863 3.52

- 321,481 2.67 10,616

The weighted average share price for options exercised during the year was £6.66 (2015: £5.55).

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

21. Share-based payment (continued)

Details of the options outstanding at 31 March 2016 are shown below. 17,000 (2015: 19,000) of these options were
exercisable at the year end.

2016

2015

CSOP

SAYE

Nil price
share
options

CSOP

SAYE

Nil price
share
options

Range of exercise prices £1.65-£6.75
£2.46 Nil £1.65-£5.65 £2.46 Nil
Number of shares 132,234 629 - 153,094 168,387 10,616
Weighted average expected
remaining life (years) 3.0

- - 3.0 0.9 0.2

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:

2016

2015

CSOP

SAYE

Nil price
share
options

CSOP

SAYE

Share price at grant date
£6.75
Option exercise price £6.75
Expected volatility
14.5%
5 years
Option life
1.8%
Risk free interest rate
£1.17
Fair value

-
-
-
-
-
-

- £5.65
- £5.65
24%
-
5 years
-
1.7%
-
£1.39
-

-
-
-
-
-
-

Nil price
share
options

-
-
-
-
-
-

Expected volatility was determined by calculating the historical volatility of the group’s share price over the previous
3 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 £62,000 (2015: £67,000) 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 2016 was 175,354 (2015: 191,115).

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

22. Fixed asset investments – Company

Shares:
At 1 April 2014 and 31 March 2016

Loans:
At 1 April 2014 and 1 April 2015
Repayments

At 31 March 2016

Total at 31 March 2014 and 31 March 2015

Total 31 March 2016

Subsidiary undertakings

£’000

9,613

5,000
(5,000)

14,613

9,613

The loan to Lathams Limited has been repaid in the year, interest was charged at a rate of 1.25% above base rate per annum.

Details of subsidiary companies are given below:

Name

Country of
incorporation

Class of shares Percentage

Principal activity

of ownership

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

Baüsen Limited

England and Wales

£1 Ordinary

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%

Dormant

* Indirectly held.
All companies operate within the United Kingdom.

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

23. Own shares

At 1 April 2014
Cost
Movement in the year

At 31 March 2015

Movement in the year

At 31 March 2016

£’000

175
2

177

264

441

The investment in own shares represents 59,247 25p Ordinary shares (2015: 36,879 25p Ordinary shares) held on
behalf of the James Latham plc Employee Benefits Trust, a discretionary trust. This represents 0.29% (2015: 0.18%) of
the issued share capital. The maximum number of shares held during the year was 219,788 (1.07%). 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 2016 519,200 (2015: 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. During the year 200,000 shares were issued to
the James Latham Employee Benefits Trust.

24. Cash generated from operations

Group

Company

2016
£’000

2015
£’000

2016
£’000

2015
£’000

Proﬁt before tax

12,876

10,107 (690) (581)

Adjustment for ﬁnance income and expense
Depreciation and amortisation

365
1,515

457
1,435

162
4

71
3

Proﬁt on disposal of property, plant and equipment (97) (5)
Increase in inventories (1,497) (3,969)
Increase in receivables (1,075) (1,371)
(Decrease)/increase in payables (480)
Retirement beneﬁts non cash amounts (267) (1,066)

-
-
-
-
670
94
647 (43) (13)
-
-

Share-based payments non cash amounts
Own shares non cash amounts

67
302 (84)

Cash generated from operations

11,704

6,218 (109)

133

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

25. Leasing commitments

Future aggregate minimum payments under various operating lease contracts for vehicles, plant and property payable
by the group are as follows:

Group Company

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.

2016
£’000

442
672

1,114

595
2,383
1,448

4,426

2015
£’000

2016
£’000

427
486

913

595
2,383
2,044

5,022

13
7

221
884
848

1,953

2015
£’000

23
21

221
884
1,069

2,174

JAMES LATHAM PLC ANNUAL REPORT 2016

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 Companies directors, is set out below.

Salaries and other short-term employee beneﬁts
Social security costs
Pension costs
Share-based payments

2016
£’000

1,078
143
122
15

1,358

2015
£’000

954
123
99
24

1,200

There are 5 directors to whom retirement benefits are accruing under defined benefit schemes, and 6 directors that
exercised share options during the year.

Emoluments for the highest paid director totalled £203,000 (2015: £260,000). The highest paid director also exercised
5,376 Deferred Share Bonus Plan share options during the year at a gain of £36,557. The highest paid director had an
accrued defined benefit pension of £56,000 (2015: £109,000) at the balance sheet date.

The company undertakes the following transactions with the active subsidiary company.
• Paying interest totalling £257,000 (2015: £233,000).
• Receiving an annual management charge to cover services provided of £1,849,000 (2015: £1,652,000).

Details of balances outstanding with subsidiary companies are shown in Note 14.

Other than the payment of remuneration, there have been no related party transactions with directors.

27. Capital commitments

At 31 March 2016, there were capital commitments contracted for but not provided in the accounts of £583,000
(2015: £413,000).

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

28. Financial instruments

The group and company’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. These risks are managed through an effective risk management
programme. Further details are set out in the Financial Review on pages 10 to 12.

Maturity analysis
The table below analyses the 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

GROUP

2016
Finance leases
Trade payables
Accruals
Other payables
Cumulative preference shares of £1 each

Total

2015
Finance leases
Bank loans
Trade payables
Accruals
Other payables
Cumulative preference shares of £1 each

Total

-
17,222
1,663
1,253
-

20,138

-
907
17,784
1,594
1,201
-

21,486

-
-
-
-
-

-
-
-
-
-
-

-
-
-
-
-

-
-
-
-
-
-

Total
£’000

-
17,222
1,663
1,253
987

-
-
-
-
987

987

21,125

-
-
-
-
-
987

-
907
17,784
1,594
1,201
987

987

22,473

COMPANY

2016
Trade payables
Accruals
Other payables
Cumulative preference shares of £1 each

Total

2015
Trade payables
Accruals
Other payables
Cumulative preference shares of £1 each

Total

Less than
6 months
£’000

Between
6 months
and 1 year
£’000

Between
1 and
5 years
£’000

More than
5 years
£’000

50
90
203
-

343

21
77
237
-

335

-
-
-
-

-
-
-
987

987

-
-
-
987

987

Total
£’000

50
90
203
987

1,330

21
77
237
987

1,322

JAMES LATHAM PLC ANNUAL REPORT 2016

Financial Statements

Notes forming part of the Group Accounts

28. Financial instruments (continued)

Foreign currency risk
Approximately 41% 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 2016 was £113,000 in US Dollars (2015 £37,000) and £154,000
in Euros (2015: £46,000), 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 £27,000 (2015: £8,000).

There is no foreign currency held in the company accounts.

Interest rate risk
The 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.

At the reporting date, the interest rate profile of the group’s interest-bearing financial instruments was:

Group Company

2016
£’000

2015
£’000

2016
£’000

2015
£’000

Fixed rate instruments
Bank loan
-
Cumulative preference shares of £1 each (987) (987) (987) (987)

- (907)

Variable rate instruments
Cash and cash equivalents
Bank overdraft

16,832
-

12,501

11,041
- (9,132) (7,563)

14,924

Interest rate risk is limited to the cash and cash equivalents, bank overdraft and bank loans.

Based on the balance sheet value of cash and cash equivalents, bank overdraft 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 £168,000 (2015: £125,000)
in the group and £57,000 (2015: £35,000) in the company.

JAMES LATHAM PLC ANNUAL REPORT 2016

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 0.11% 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 maximum exposure to credit risk. The maximum exposure
to credit risk at the reporting date was:

Trade receivables
Other receivables
Cash and cash equivalents

Total

Group Company

2016
£’000

32,472
1,073
16,832

50,377

2015
£’000

31,428
1,123
12,501

45,052

2016
£’000

15
-
14,924

14,939

2015
£’000

7
2
11,041

11,050

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.

The following table shows the financial liabilities measured at amortised cost:

Trade payables
Other payables
Accruals
Bank loan
Bank overdraft

Total

Group Company

2016
£’000

17,222
1,253
1,663
-
-

20,138

2015
£’000

17,784
1,201
1,594
907
-

21,486

2016
£’000

50
203
90
-
9,132

9,475

2015
£’000

21
237
77
-
7,563

7,898

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 5 to the consolidated accounts.

Finance costs
An analysis of finance costs is set out in note 6 to the consolidated accounts.

JAMES LATHAM PLC ANNUAL REPORT 2016

Notice of Annual General Meeting

Notice is hereby given that the one hundred and
seventeenth Annual General Meeting of the Company
will be held at Gallery Level, Business Design Centre,
52 Upper Street, London, N1 0QH on Wednesday 24th
August 2016 at 12.30pm. Resolutions 1 to 8 inclusive will
be proposed as ordinary resolutions, and resolutions 9
and 10 will be proposed as special resolutions.

9. Disapplication of pre-emption rights: To consider, and if
thought fit, pass the following resolution: “THAT subject
to the passing of the previous Resolution 8, 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 8:

(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.”

Ordinary business
1. To receive and adopt the Directors’ Report and Accounts
for the year ended 31 March 2016 together with the
Independent Auditor’s report thereon.

2. To declare the final dividend recommended by the
directors on the ordinary shares of the Company.

3. To elect Fabian French as a director, who was appointed

during the year.

4. To re-elect Meryl Bushell as a director, who retires by

rotation.

5. To re-elect Peter Latham as a director, who retires by

rotation.

6. To re-elect Nick Latham as a director, who retires by

rotation.

7. To re-appoint RSM UK Audit LLP (formerly 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.

Special business
8. 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.”

JAMES LATHAM PLC ANNUAL REPORT 2016

Notice of Annual General Meeting

10. 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

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

22 June 2016

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 22 August 2016 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 22nd June 2016, the Company’s issued share capital
consisted of 20,160,000 shares of which 519,200 shares are
held in Treasury. Each share not held in Treasury carries
one vote. The total number of voting rights are therefore
19,640,800.

JAMES LATHAM PLC ANNUAL REPORT 2016

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
0370 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 0370 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 Conduct 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 Conduct and Markets Act 2000 only.
Computershare Investor Services PLC is regulated by the
Financial Conduct 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.

JAMES LATHAM PLC ANNUAL REPORT 2016

Notes

JAMES LATHAM PLC ANNUAL REPORT 2016

Notes

JAMES LATHAM PLC ANNUAL REPORT 2016

Notes

JAMES LATHAM PLC ANNUAL REPORT 2016

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

Timber and Flooring
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)

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