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Latchways FY10 Profit Declines – Update

(RTTNews) – Safety systems maker Latchways Plc (LTC.L) Monday reported a decline in profit for the full year ended 31 March 2010, hurt by an 8% drop in revenues, attributed mainly to the recession in UK commercial construction sector that hit volumes. However, the company said it has seen a noticeable bottoming out of volumes in this sector, but does not expect growth for some time, as many projects involve at least some element of public financing.

Full-year pre-tax profit decreased 8% to GBP 7.62 million from GBP 8.31 million in the prior year period.

Profit for the year attributable to equity shareholders declined to GBP 5.48 million from GBP 5.74 million in the year-ago period. On a per share basis, earnings were 49.12 pence, down 5% from 51.47 pence in the prior year.

Revenue for the year dropped 8% to GBP 33.85 million from GBP 36.96 million in the comparable period. The company attributed the decline in revenue to lower demand across a number of its markets, in particular the UK construction sector, driven by global recession and the lack of credit available for capital projects.

By segments, revenue from Latchways product business, Safety Products, fell 6% from last year, mainly due to the weakness of the UK construction market, while export revenues rose by 6%.

Latchways’ UK installation arm, Safety Services division, contributed revenues of GBP 8.4 million, down 14% from GBP 9.8 million last year. The company noted that recession in the commercial construction sector has resulted in a 19% fall in installation revenues, although annual inspection revenues rose slightly.

Specialist Fixings revenues were down 7% to GBP 2.6 million from GBP 2.8 million in the year ago period, as many of the housing refurbishment projects on which the business operates have been deferred or cut back.

The company said that its board has recommended a 15% increase in the final dividend to 17.97 pence per share, payable on 17 September 2010 to shareholders on the register as at 20 August 2010. Taken together with the interim dividend of 7.81 pence, the total dividend for the year of 25.78 pence per share represents a 10% increase on last year.

The fall protection solutions provider noted that it will increase its emphasis on overseas growth, as over half of the company’s product revenues now come from overseas markets.

The company said that current orders are ahead of the same period last year, and added that its pipeline of prospects across Europe gives it confidence of renewed revenue growth in this market while its newer product ranges continue to gain market share.

Paul Hearson, chairman of the company said, “We believe that the targeted additions of new sales resources, together with a robust pipeline of business prospects, will allow Latchways to resume its historically successful pattern of growth in the current year and beyond.”

LTC.L is currently trading at 670.00 pence per share, up 6.50 pence or 0.98% on the London Stock Exchange.

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