The Hemel Hempstead-headquartered company saw revenues climb almost 7% to £198.8mln in the 12 months to 31 March, with pre-tax profits following suit to rise by £0.9mln to £12.9mln.
Latham said the weak pound forced the company to up its prices which partly explained the rise in revenues.
That didn’t deter customers though, with the timber merchant reporting higher volumes of ex-warehouse sales, which is when the buyer arranges collection and delivery of goods themselves.
“Year on year increases in both revenue and volume for the fourth quarter was particularly encouraging,” added chairman Peter Latham.
Gross margins dipped by 0.3 percentage points across this year, primarily because of “competitive pressures” and higher stock replacement costs.
Latham added that costs had been well controlled despite the higher volumes through the warehouses, while “bad debts were low overall for the year”.
Current trading strong but margins remain under pressure
In the first few months of its new financial year, Latham told investors that like-for-like revenues are 3% ahead compared to the same period last year.
That’s even more impressive when you consider that the corresponding period of 2016 had two extra trading days because of the earlier Easter.
Latham did add that the gross margin remains under pressure however.
The construction of the new upgraded site for the Yate operation is nearing completion and the company hopes to move in next month.
Negotiations are also an advanced stage for the construction of a new site for Latham’s Wigston unit and relocation is expected by the end of the current financial year (March 2018).
Broker praises “solid” performance, questions divi
“Another solid performance, where revenue was £199m, 1.4% ahead of forecasts and 7% [ahead] year-on-year,” said analyst Michael Campbell in a note to clients.
“The balance sheet is in strong shape with over £16mln of net cash, well ahead of our forecast £8.6m.
“Recommended final divi of 10.85p taking the total divi to 15.35p, well covered by earnings at 3.6x, though marginally below what we expected.”
Shares were down 2% to 835.85p in mid-morning trade on Thursday.