Shares in James Latham (AIM:LTHM) fell 16% after the timber specialist reported a fall in first-half profits and warned of "slightly lower" full-year results as an expected improvement in the market in the second half has not yet materialised.

Revenue for the six months to September 30 of £186.6 million was 2.3% lower than a year earlier, with sales volumes up 4.1% as cost prices of timber and panels remained stable but there were "signs of price weakness" in some commodity products.

"We are still seeing a move in the product mix of our sales towards cheaper alternative products," the company said.

Operating profit fell 22% to £11.3 million.

While the first two months of the second half have seen stable volumes there has been no sign of the expected market improvement, with pressures from a major competitor's insolvency and margin challenges from rivals cutting prices.

Opportunities include new product lines such as melamine and laminate panels, while the decision has been taken to invest in a new national distribution centre to try and enhance efficiency. Bad debts are rising, but credit insurance remains strong.

Results for the year to March 2025 are now anticipated to "fall slightly below last year's results", with the expected improvement in market conditions not expected until the middle of 2025.

Shares in the AIM 100-listed group fell 16% in early trading to 1,199p, down 23% from the all-time high of 1,550p seen in July.

Source:  proactiveinvestors.com