SECTOR: SUPPORT SERVICES
NORTHLAND VIEW
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’.
COMPANY DESCRIPTION
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.