The pre-tax profits were down from £57.9min the previous year, while revenue was up 6% to break the £400m barrier.

Lathams chairman Nick Latham said the year had seen a gradual return to more normal market conditions, with supply chains becoming easier and cost prices of products stabilising. Despite economic challenges, including inflation and increased energy costs impacting consumer confidence, he said markets had remained resilient.

The cost price of the company’s products was on average 6.5% higher (2022: 36.2% higher) than at the start of the financial year.

As at March 31, 2023, the company’s net assets increased to £195.9m (2022: £164m), while inventory levels have reduced to £67.5m from £74.2m last year as the easing of supply chain conditions meant the business could reduce the investment it made last year in additional inventories. 

Bad debts have remained small at 0.1% of revenues. 

Mr Latham said margins had returned to the longer term average and reported price weakness in several product areas, as supply issues have eased. 

Manufacturer suppliers are still experiencing significant cost pressures, which should temper any price weakness. 

He reported a shift in product mix to some lower value products, in part due to product replacement and value engineering by customers.

Mr Latham said fundamentals within the majority of the company’s market sectors were “stable at this stage”, despite challenges in the economy. 

“The board is therefore very aware that the results for the last two years have been exceptional, and far beyond the profits earned before the start of the COVID-19 pandemic,” he said. 

“The board’s challenge is to navigate the business towards what is a more normal and realistic profit achievement which takes into account the market conditions we are operating in and the inflationary overhead pressures that all companies are facing.”

The company’s development strategy has seen it invest in some melamine racking at IJK Timber, its recent acquisition in Belfast, with a longer term objective is to relocate this business to a more modern facility. 

The Yate site has seen a 25% increase in capacity and the Purfleet site is now operating a 24/5 warehouse which will enable increased volumes through the business. 

During the year the company will upgrade its ERP computer system and it is planning to purchase its site at Abbey Woods in Dublin in the autumn of 2023. “The board remains focused on identifying acquisitions that either help develop sales in specific market sectors, enable the business to sell a wider product range to our existing customers, or any geographical opportunities that arise,” added Mr Latham.