James Latham plc
Unaudited Interim Results
Six Months Ended 30 September 2006 

Chairman’s Statement  
These are the first results since the disposal of Nevill Long Ltd on 31 March 2006.  I am pleased to report an improvement in pre-tax profit of 5.3% for the first half year compared with the same period last year.  The balance sheet remains strong and there has been a further reduction in the underfunding of the pension scheme since this time last year.  The interim dividend has been increased by 25%. 
 
Results  
Sales from continuing activities for the 6 months to 30 September 2006 were £49,072,000 against £47,430,000 last year, a 3.5% increase.
 
The operating profit from continuing activities rose by 40.2% to £2,606,000 compared with £1,859,000 last year.
 
Pre-tax profit at £2,905,000 was up 5.3% on last year’s £2,759,000 which included the profit contribution from Nevill Long Ltd.
 
Earnings per Ordinary Share are 9.6p (2005 9.6p). 

Interim Dividend  
The Board has declared an interim dividend of 2.0p per Ordinary Share (2005 1.6p) which is covered 4.8 times (2005 6.0 times).  It is payable on 24 January 2007 to Ordinary shareholders on the Company’s Register at the close of business on 05 January 2007.  The ex-dividend date is 03 January 2007. 

Six Months Trading to 30 September 2006  
After a disappointing first six months last year, Lathams Ltd has performed very satisfactorily in the six months to 30 September 2006.  The Company, which distributes hardwoods, softwoods and panel products is, by design, becoming less dependent on commodity products where prices and margins are more prone to wide fluctuations.
 
Price increases in the first half of the financial year have had a beneficial effect on sales and particularly on margins and the increased profit at Lathams Ltd has replaced the shortfall in profit due to the sale of Nevill Long Ltd on 31 March 2006. 

Current & Future Trading  
Last year the Company experienced a difficult third quarter from October to December 2005.  This year our management accounts show better trading in October and so far November is looking reasonably favorable.
 
Whilst we expect prices to remain generally firm and a continuation of some restrictions in supply, there are signs of weakness in some countries that are currently not major suppliers to the UK market.  We are conscious that trading conditions in terms of supply, demand and prices can change rapidly so we are keeping a watchful eye on the situation to try to minimise any downside affects.
 
The Directors continue to attach great importance to the sourcing of legal and sustainable supplies of timber products for resale which we believe will stand the Company in good stead in the future.
 
Lathams Ltd is now the only trading company of James Latham plc after the disposal of subsidiaries.  It is not the intention of the Board to downsize the Company but rather to develop our remaining core timber products distribution business as opportunities arise.  We are in a strong position.  Further cash of some £10 million is due to be received in the next 12 months from the deferred payments for the Clapton site and the sale of Nevill Long.  This sum is currently shown under debtors in the balance sheet. 

Pension Scheme  
The funding position of the Company’s final salary pension scheme is continually changing in line with the rise and fall of the liabilities and assets.  After very substantial contributions in the recent past, the scheme actuary’s estimate as at 30 June 2006 indicated that the funding position has improved significantly to about 90% on an ongoing basis.  Since then an additional substantial contribution has been made which will have further improved the position. 

Chairman  
Next month I retire and Peter Latham takes over as Chairman.  I would like to wish him every success in the role and also express my thanks to him, the other directors, the staff and shareholders for their support over the past few years.
 
Early in 2007 your Company celebrates 250 years of trading and we are proud of the fact that a family member has been at the helm every year since 1757.
 
Roger Latham
Executive Chairman
24 November 2006

JAMES LATHAM PLC
CONSOLIDATED BALANCE SHEET
As at 30 September 2006 

JAMES LATHAM PLC
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED
GAINS AND LOSSES
For the six months to 30 September 2006

RECONCILIATION OF MOVEMENT SHAREHOLDERS' FUNDS
For the six months to 30 September 2006

JAMES LATHAM PLC

Notes to the preliminary announcement

1.  The results for the six months ended 30 September 2006 are unaudited and prepared on the basis of the accounting policies set out in the Group statutory accounts for the year ended 31 March 2006, except  as modified for the introduction of newly adopted accounting standard FRS 20 : Share-based payment as set out in note 5.  The results for the year ended 31 March 2006 (prior to adjustment for adoption of FR S20) are extracted from the statutory accounts, and which have been filed with the Registrar of Companies.

2.  The directors propose an interim dividend of 2.0p per ordinary share which will absorb £403,000 (2005: 1.6p absorbing £322,000), payable on 24 January 2007 to shareholders on the Register at the close of business on 5 January 2007.  The ex-dividend date is 3 January 2007.

3.  This statement does not comprise full accounts within the meaning of Section 240 of the Companies Act 1985.

4.  For the year ended 31 March 2006 the earnings per ordinary share excluding the sale of Nevill Long was 17.1p (restated).

5.  The accounts have been prepared on the basis of the accounting policies set out in the audited accounts for the year ended 31 March 2006 except instruments after 7 November 2002 that were invested at 1 April 2006.  Equity settled share based payments (share options) are measured at fair value at the date of grant.  The fair value determined at the grant date is expensed on a straight-line basis over the vesting period based on the directors' estimate of shares that will eventually vest.  Fair value is measured by used of the Black-Schole model.

All comparative figures have been reinstated to reflect this standard.

The effect of adopting this accounting standard has been as follows:

Balance sheet

The is no impact on shareholders' funds at 30 September 2006, 30 September 2005 and 31 March 2006.

6.  Copies of this statement will be sent to all shareholders and will also be available on written applications to the company secretary, James Latham plc, Unit 3, Swallow Park, Finway Road, Hemel Hempstead, Herts.  HP2 7QU.