Leading timber product importer and distributor James Latham saw profits and sales reduce in the financial year ended March 31, 2024 as more normal market conditions returned following the end of a period of exceptional business performance and markets.

Chairman of James Latham plc Nick Latham, commenting on July 8 in the company’s annual results for the financial year to March 31, reported profit before tax of £30.3m, compared with last year’s £44.5m.

Revenue for the financial year to March 31, 2024, was £366.5m, down 10.2% on last year’s £408.4m.

“The financial year to 31 March 2024 was a year where normal market conditions returned following three years of unprecedented challenges and opportunities, which had provided the group with exceptional profits,” said Mr Latham.

“Product values reduced at a faster rate and earlier in the financial year than we had predicted. The lack of demand for our type of products in Continental Europe led to UK manufacturers having to react to price weakness from European manufacturers, who were looking to sell more product in the UK.”

The cost price of the company’s products was on average 3.4% lower (2023: 6.5% higher) than at the start of the financial year. 

“This year has seen a change in our product mix, with customers moving to cheaper cost-effective products. Whilst we have gained market share in these products, the lower price per tonne has resulted in reduced revenues.”

Gross profit percentage for the financial year to March 31, 2024, was 16.9% compared with 19.6% in the previous financial year, with product mix and a more competitive environment resulting in margins reducing slightly below the company’s long-term average.

Mr Latham said the strength of the results were testament to the depth and breadth of the customer base and the diverse market sectors within which the business operated.

Current trading is consistent with the second half of the financial year to March 31, 2024, with very similar volumes and margins. 

“The majority of our customers have improved order books and are feeling more positive than this time last year,” added Nick Latham. “However certain sectors, such as the merchant sector, are still finding the marketplace challenging.”

The business is also seeing significant container freight rate increases at the moment,

affecting about 25% of products. It expects the market price of these products will increase to compensate for this.

Demand for panel products is reported as slowly increasing, but demand for timber has been more challenging, but with volumes expected to increase as the year progresses.

Other James Latham news from the annual report include the building of a new storage shed at the Thurrock facility to enable stocking of more commodity products and adding new racking to both the Scotland and Hemel Hempstead warehouses to allow them to further develop their product range.

The company is committed to relocating the Belfast site (formerly branded as IJK Timber) to a modern style facility enabling it to stock the full range of products, but it is taking longer than expected to find a suitable site for development.

The purchasing of the Dublin site (formerly branded Abbey Woods) is being followed by investment there to give approximately 15% more space to allow an increased range and depth of our stock to support customer requirements.

“The board continue to look for acquisitions that either help develop sales in specific market sectors, enable the business to sell a wider product range, or any geographical opportunities that arise,” concluded Nick Latham.