Profit before tax was boosted to £11.64m by the disposal of Nevill Long, the group’s ceiling, drylining and partitioning distributor. Excluding the Nevill Long sale and last year’s profit on the disposal of fixed assets, pre-tax profits were up 43.2% to £5.4m.

Lathams Ltd, the company’s panel and timber products distribution business, recorded a 3% turnover increase.

“However, due to the excess global availability of timber products which put pressure on prices and margins, the third quarter was poor, but trading did pick up again in the final quarter,” said group chairman Roger Latham.

In March, the group decided to sell Nevill Long, realising a £6.2m profit, because of the division’s profit volatility, narrow customer base and lack of synergy with the rest of the group. Nevill Long sales were 20% higher for the year, while profits were a record £1.99m.

The company said the sale of its Clapton site in 2005 and Nevill Long, together with better funding of its pension scheme, had put the group in a strong financial position.

“The directors intend to develop Lathams Ltd’s core business of timber products over the coming 12 months as and when opportunities arise,” it said.