UK timber supplier James Latham sees profits spike as prices rise sharply while building materials shortages and delivery delays continue to grow
- The shares of the UK-based company listed on AIM are up nearly 8% today
- Wood prices have risen significantly this year, but have fallen slightly since then
- Home builders and hardware store chains are struggling to keep up with demand
Commercial timber supplier and trader James Latham has seen its profits soar as the scarcity of building materials drove prices up over the past year.
Listed on the AIM and based in the UK, its share price is up sharply today, currently up nearly 8 percent to 1,176.00 pence.
The group, founded in 1757, offers everything from wood-based panels such as plywood to molded MDF parts such as skirting boards.
Baurausch: The trade-oriented timber supplier and trader James Latham recorded an increase in profits last year
James Lathams’ pre-tax profit for the year ended March 31 was £ 18.6 million, up from £ 2.9 million last year, and sales increased 1.3 percent to £ 250.2 million.
The group’s comments on the prices are quite noticeable.
It says: ‘The cost prices of our products rose significantly in the second half of the year and are on average 7.3 percent higher than at the beginning of the financial year.’
To give shareholders a boost, the group’s top executives decided to pay a final dividend of 15.5p per share, up from 10p per share. On August 27, the shareholders will receive their dividend distribution.
The company said the strong demand for the products it supplies has continued into the new fiscal year with increasing margins.
It added: ‘The global demand for wood products is very strong and is mainly driven by North America but also by the construction sector worldwide.
‘Many manufacturers have implemented an allocation system that limits our ability to increase our volume.
“These manufacturers are unable to significantly increase their capacities because they are struggling with Covid-19 (especially in South America), labor shortages, rising costs and scarcity of raw materials.
Fluctuations: A graph that shows what has happened to James Latham’s stock price over time