James Latham: Red Sea attacks dent timber supplier’s profit

Timber distributor James Latham has taken a hit to its profit as shipping attacks in the Red Sea sent the cost of containers flying.

The London-listed company saw its pre-tax profit fall by more than 30 per cent to £30.3m in the 12 months ended March 31, 2024, down from £44.5m the year before.

James Latham’s revenue also fell to £366.5m – down 10 per cent from £408.4m in the year before.

The firm said this was due to product values reducing a faster rate and earlier in the year than predicted, plus soaring container rates triggered by attacks on on ships entering the Red Sea en route to the Suez Canal by Yemen’s Houthi rebels.

In an update posted today the company said: “The cost prices from the majority of our manufacturers, excluding freight, are relatively stable, and we do not expect any changes in the short term.

“Demand for panel products is slowly increasing. Demand for timber however has been more challenging, but we are expecting volumes to increase as the year progresses.

“Construction has had a challenging year, and although this does not directly affect us, many of our larger manufacturing customers supply product into this sector.

“The strength of our results are testament to the depth and breadth of our customer base and the diverse market sectors within which we operate.

“We continue to see increased volumes in lower value products, but as overall demand and confidence picks up, combined with the work that we are doing in the specification sector then we expect our product mix will improve.

“We are very mindful of the uncertainties created by the current geopolitical instability and the upcoming UK general election, but the macro-economic climate seems to be gradually improving, and the market place within which we operate is feeling more confident.

“The group continues to demonstrate its ability to deliver strong results despite all the challenges that we face, and we believe that this will continue.”