F18 results, strong demand and efficiency measures offset margin pressure
NORTHLAND VIEW
James Latham (LON:LTHM) reported F2018 results with revenue of £214.9m, +8.1%YoY (NCP Estimates (‘NCP-E’): £210.7m), with growth in own-warehouse volume of 4.5%YoY, and profit before tax of £15.2m, inclusive of a one-time £1.28m profit from sale of the Wigston site, indicating an adjusted PBT of £14.0m (NCP E: £13.2m). Adjusted EBITDA was £16.4m (7.6% margin) compared to NCP-E of £15.7m (7.5% margin).
Gross profitability (£37.8m) declined from 18.2% to 17.6%, although H2 saw an improvement to 17.9% (H117: 17.3%) with 11%YoY growth indicated. Product prices increased due to a combination of Sterling weakness against the Euro and increased manufacturers’ prices. Distribution costs increased by 5.3% (or +2.3% on a per tonne basis) to £16.277m (NCP-E: £16.38m), offset by efficiency measures including relocating two sites (Yate and Leicester to Wigston) which James Latham reports are performing well.
The company declared a final dividend of 12.1p/share (payable on 24th August) taking the full-year total to 16.6p (NCPE 16.5p), indicating a 2.0% yield.
Firm top-line growth defines these results, with revenue 2.0% ahead of our outlook. Pressure on gross margins, previously noted in H1, was offset by the planned improvements in operational efficiency which James Latham instituted a year earlier. The company noted that F19 “started well” with sales per working-day in April and May up +9.8% YoY, underscored by growth in sales of added-value timber and panel products, although volume growth in core products is “proving more challenging”. The company plans continued investment in warehouse facilities (Purfleet, Thurrock, and Gateshead), geographical growth, and a new design centre in Manchester.
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.
Alexander Mining - Licence Agreement with Deep-South Resources
NORTHLAND VIEW
Alexander Mining (LON:AXM) has signed a license agreement with Deep South Resources for the potential use of the Company’s leaching technology at the Kapili Tepe Project located in Turkey. This agreement is conditional on Deep South Resources completing the acquisition of a 75% interest in the Project.
Deep South Resources plans to complete a NI 43-101 Compliant Mineral Resource Estimate at the Project that will be followed up by a Preliminary Economic Assessment (PEA) and Pre-Feasibility Study (PFS) both of which would investigate the potential to use Alexander Mining’s leaching technology.
Should Deep South Resources opt to proceed with using the technology, Alexander Mining would receive a 2.5% royalty of gross saleable metal products. Upon completion of the acquisition of the 75% interest in the Kapili Tepe Project, Deep South Resources will issue 500,000 shares to Alexander Mining.
Alexander Mining will receive a monthly technical consultancy services retainer fee of US$7,500, paid in advance for 24 months from the start of Deep South Resources committing to a PEA. This can be renewed on a mutually acceptable rolling three months' basis thereafter.
This agreement could potentially lead to the commercialisation of Alexander Mining’s leaching technology, though there will be a number of milestones that need to be completed before testing of the mineralisation commences. The Kapili Tepe Project is a copper-nickel-cobalt-gold project comprised of two exploration licences and one mining licence. Alexander Mining has had some interest in the Project for a number of years.
COMPANY DESCRIPTION
Alexander Mining is a mineral processing technology business, seeking to commercialise its leaching technologies.