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Northland Capital Partners View on the City - Latham (James) (LON:LTHM)

Northland Capital Partners View on the City -  Latham (James) (LON:LTHM)



 In a trading statement ahead of results for the year ended 31st March 2018 James Latham reported that revenue and profit before tax for the year are expected to be in line with market expectations. 
 Furthermore, Wigston depot operations have been relocated to the new site in Leicester with minimal disruption, and the old site has been sold.
 The company anticipates releasing preliminary results on June 28th.
In November, reporting interim revenue of £107.3m (+7.0% YoY) and PBT of £6.7m (-12.3% YoY) James Latham observed that the second half had “started well” with “growing revenues at slightly higher margins”, albeit against the background of “mixed” trading conditions.  We made minor adjustments to our March 2018 estimates: our revenue outlook, at £210.7m, remained unchanged +(6.0% YoY) and PBT estimate (adjusted) was lowered from £13.4m to £13.2m.  At the interim James Latham was clear on the combination of operating conditions – demand-led pricing and sterling weakness – that placed pressure on margins, and as a result was responding with measures to improve distribution efficiency.  At current levels, the stock trades at a 23% discount to a market cap-weighted EV/EBITDA average of its peers (9.9x), and on a PE basis, at an 11% discount (avg. 14.4x).  Our rating remains ‘Buy’.

Founded in the late eighteenth century, the Group specialises in import and distribution of wood-based sheet materials and joinery quality hardwoods and softwoods, hardwood flooring and other products, with national coverage from ten locations.

1. Northland Capital Partners Limited (“Northland”) acts as Nominated Advisor and/or Broker to the company.

2. Northland) and/or its affiliates companies do beneficially own 1% or more of any class of the issuer’s equity securities, as of the end of the month immediately preceding the date of issuance of the research report or the end of the second most recent month if the issue date is less than 10 calendar days after the end of the most recent month. 

3. The authoring analyst or any associate of the authoring analyst does maintain a long or short position in any of the issuer’s securities directly or through derivatives, including options or futures positions.

4. Northland, its affiliated companies, partners, officers, directors or any authoring analyst of Northland has provided services to the issuer for remuneration during the preceding 12 months other than investment advisory or trading services.

5. Northland or any of its affiliated companies has performed investment banking services for the issuer during the 12 months preceding the date of issuance of the report.  

6. A partner, director, officer, employee or agent of Northland or any of its affiliated companies is an officer, director, employee or advisor of the issuer.  Disclosures are applicable for all companies

7. The authoring analyst, or any associate of the authoring analyst, has viewed the material operations of the issuer. 

8. The authoring analyst, or any associate of the authoring analyst, received reimbursement for travel expenses.

9. Northland makes a market in the securities of this company.




This document is provided solely to enable clients to make their own investment decisions. It may therefore not be suitable for all recipients and does not constitute a personal recommendation to invest. It does not constitute an offer or solicitation to buy or sell securities or instruments of any kind. If you have any doubts about the suitability of this service, you should seek advice from your investment adviser. This document is produced in accordance with UK laws and regulations. It is not intended for any person whose nationality or residential circumstances may render its receipt unlawful.

The past is not necessarily a guide to future performance. The value of shares and the income arising from them can fall as well as rise and investors may get back less than they originally invested. The information contained in this document has been obtained from sources which Northland Capital Partners Limited believes to be re¬li¬able. The Com¬pany does not warrant that such information is accurate or complete. All estimates and prospective figures quoted in this report are forecasts and not guaranteed. Opinions included in this report reflect the Company’s judgement at the date of publication and are subject to change without notice. If the investment(s) mentioned in this report are denominated in a currency different from the currency of the country in which the recipient is a resident, the recipient should be aware that fluctuations in exchange rates may have an adverse effect on the value of the investment(s). The listing requirements for securities listed on AIM or PLUS markets are less demanding, also trading in them may be less liquid than main markets.

Northland Capital Partners Limited and/or its officers, as¬sociated entities or clients may have a position, or other material interest, in any securities men¬tioned in this report. Northland Capital Partners Limited does not provide recommendations on securities of firms with which it has a corporate relationship. More information about our management of Conflicts of Interest, Investment Research Methodology & Definition of Recommendations can be found at 

Northland Capital Partners Limited is authorised and regulated by the Financial Conduct Authority and a Member of the London Stock Exchange.

Published by/copyright: Northland Capital Partners Limited, 2013. All rights reserved

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