TIDMNTBR
RNS Number : 9783U
Northern Bear Plc
29 November 2023
29 November 2023
Northern Bear plc
("Northern Bear" or the "Company")
Interim results for the six month period ended 30 September
2023
Northern Bear (LSE:NTBR), the AIM quoted holding company of the
group of companies providing specialist building and support
services headquartered in Northern England and serving customers
across the UK, is pleased to announce the unaudited interim results
for the Company and its subsidiaries (together the "Group") for the
six months to 30 September 2023 (the "Period" or "H1 FY24").
Financial Summary
-- Revenue of GBP36.9m, representing an increase of 8.7% (H1 FY 23: GBP34.0m)
-- Operating profit of GBP1.8 m* , representing an increase of 20.9% (H1 FY 23: GBP1.5m)
-- Profit for the period up 11.6% to GBP1.3m (H1 FY23: GBP1.1m)
-- Basic earnings per share up 11.7% to 6.7p (H1 FY23: 6.0p)
-- Net cash of GBP0.4m as at 30 September 2023 (30 September
2022: GBP1.9m net bank debt; 31 March 2023: GBP3.2m net cash)
-- Equity dividends paid of GBP0.6m in the Period (H1 FY23: GBPnil)
-- Post period end: return of capital of approximately GBP3.1m
by way of tender offer for 5 million Ordinary Shares at a fixed
price of 62p per Ordinary Share, expected to complete in December
2023, and updated upon separately today via RNS.
Operational and commercial summary
-- The Board of Directors of Northern Bear (the "Board") is
pleased with the Group's performance during the Period, with
revenue and profits in line with management's expectations and
ahead of strong prior year results.
-- Site activity levels remained high despite the ongoing
macro-economic challenges and their related impact on the
construction industry.
-- The results in the Period are testament to the hard work and
commitment of the Group's employee base.
Outlook
-- The Group has traded well during the first half of FY24 and
has the potential to trade ahead of strong prior year results
should this level of performance continue.
-- At this stage, the Board confirms that the Group is trading
in line with market expectations.
-- Our forward order book remains strong and should support our
trading performance in the coming months.
* No material adjustments to reported operating profit in the
Period or H1 FY23
Harry Samuel, Non-Executive Chairman of Northern Bear,
commented:
"Notwithstanding the challenging macro-economic environment, the
Group's performance has been strong during the Period and beyond,
with a robust pipeline of new business opportunities supported by
the continued efforts of our dedicated workforce."
For further information please contact:
Northern Bear plc
Harry Samuel - Non-Executive Chairman +44 (0) 166 182 0369
Tom Hayes - Finance Director +44 (0) 166 182 0369
Strand Hanson Limited (Nominated Adviser)
James Harris
James Bellman +44 (0) 20 7409 3494
Hybridan LLP (Nominated Broker)
Claire Louise Noyce +44 (0) 20 3764 2341
Introduction
I am delighted to report the unaudited interim results for the
Company and its subsidiaries (together the "Group") for the six
months ended 30 September 2023 (the "Period" or "H1 FY24").
These results represent a significant improvement on what were
considered very strong results in the prior period ended 30
September 2022 (the "Prior Period" or "H1 FY23), and are testament
to the hard work and commitment of the Group's employee base.
Trading
Despite ongoing macro-economic challenges and their related
impact on the construction industry, our site activity levels
remained high during the Period across our Group of companies. This
led to revenue in the Period increasing by 8.7% to GBP36.9m (H1
FY23: GBP34.0m).
Gross margin increased to 22.2% (H1 FY23: 20.7%) through both
greater economies of scale from higher revenues and continued
careful contract selection and execution. This was offset to an
extent by administrative expenses increasing to GBP6.4m from
GBP5.6m to support the higher revenue levels.
All of our Roofing, Specialist Building Services, and Materials
Handling divisions made positive trading contributions during the
Period.
As reported in our results for the financial year ended 31 March
2023 ("FY23"), Arcas Building Solutions undertook a small number of
contracts under prior management where significant trading losses
were incurred totalling GBP733,000 (including a provision for
losses through to completion). John Davies was appointed as
Managing Director at Arcas in April 2023 and has since made
significant commercial, management, and systems' improvements to
the business. I am pleased to report that Arcas traded profitably
in the Period.
As in prior years, we have included a calculation of adjusted
Operating Profit, adjusted EBITDA, and adjusted earnings per share
in note 4 to these interim results as supplemental measures of the
Group's profitability, in addition to the statutory measures
defined under IFRS. The only adjusting item to Operating Profit in
the Period and Prior Period is for amortisation of GBP6,000.
Cash flows
The Group had a net cash position, defined as cash balances less
the amount drawn down on our revolving credit facility, of GBP0.4m
at 30 September 2023 (30 September 2022: net bank debt of GBP1.9m;
31 March 2023: net cash of GBP3.2m). As in prior years, the
financial year-end balance is usually a high point reflecting
favourable working capital movements, and excess cash balances
would be expected to normalise post year-end.
During the Period. the Company paid an ordinary dividend of 2.0p
per ordinary share (H1 FY23: nil) and a further special dividend of
1.0p per ordinary share (H1 FY23: nil), providing a return of
capital to shareholders of GBP0.6m (H1 FY23: GBPnil).
As we have emphasised in prior results, our net cash (or net
bank debt) position represents a snapshot at a particular point in
time and can move by up to GBP1.5m in a matter of days, given the
nature, size and variety of contracts that we work on and the
related working capital balances. The lowest position in the Period
was GBP0.7m net bank debt, and the highest position in the Period
was GBP3.3m net cash, and the average was GBP0.7m net cash.
Tender offer and new bank facilities
On 23 October 2023, we announced a return of capital of up to
GBP3.1m by way of Tender Offer to shareholders for up to 5 million
Ordinary Shares at a fixed price of 62 pence per Ordinary Share.
This was approved by shareholders at a General Meeting on 15
November 2023; further to this we announced this morning that the
Tender Offer was fully subscribed, and it is expected to complete
on or around 8 December 2023.
The return of capital of GBP3.1m, plus associated costs, will be
funded using both existing cash resources and an increase of
GBP1.0m to the Group's existing debt facilities of GBP4.5m from
Clydesdale Bank plc (trading as Virgin Money). We had previously
stated that costs and expenses related to the Tender Offer were not
expected to exceed an aggregate of GBP0.4 million inclusive of VAT.
While the final amount will only be confirmed following conclusion
of the Tender Offer, our current expectation is that the final
costs and expenses will be closer to GBP0.2m.
Outlook
As at the date of this report, the Board confirms that the Group
is trading in line with management's expectations and that our
forward order book remains strong.
The timing of Group turnover and profitability is, however,
difficult to predict, and our results are subject to monthly
variability. In addition, whilst on site activity levels have been
encouraging, overall Group performance is dependent on a number of
factors outside of management's control, including macro-economic
factors and their impact on the construction industry, any
prolonged spells of severe weather, supply-chain and construction
materials availability, and ongoing challenges with attracting and
retaining employees within the construction industry.
Notwithstanding the inherent uncertainties associated with our
industry, the Group has made an excellent start to FY24 and has the
potential to trade ahead of strong prior year results should the
current level of performance continue.
People and Board changes
As announced following the conclusion of the General Meeting on
15 November 2023, Jeff Baryshnik resigned from his role as
Non-Executive Chairman and as a director of the Company with
immediate effect. The board would like to thank Jeff for his
service as a director of the Company.
I have assumed the position of Interim Non-Executive Chairman,
having previously been a Non-Executive Director, until such time as
the Board has identified and appointed a permanent successor.
Martin Boden joined the Board as a Non-Executive Director on 13
September 2023. I am pleased to welcome Martin, who brings strong
public markets experience to the Board.
As always, our loyal, dedicated, and skilled workforce is a key
part of our success and we make every effort to support them,
including through continued training and health and safety
compliance.
Conclusion
Once again, I would like to thank all our employees for their
hard work and commitment, and our shareholders for their continued
support.
Harry Samuel
Non-Executive Chairman
29 November 2023
Consolidated statement of comprehensive income
for the six month period ended 30 September 2023
6 months ended 6 months ended Year ended
30 September 30 September
2023 2022 31 March 2023
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 36,890 33,951 69,724
Cost of sales (28,704) (26,935) (55,785)
--------------- --------------- --------------
Gross profit 8,186 7,016 13,939
Other operating income 16 13 35
Administrative expenses (6,449) (5,579) (11,828)
--------------- --------------- --------------
Operating profit 1,753 1,450 2,146
Finance costs (74) (89) (210)
--------------- --------------
Profit before income tax 1,679 1,361 1,936
Income tax expense (421) (234) (344)
--------------- --------------- --------------
Profit for the period 1,258 1,127 1,592
--------------- --------------- --------------
Total comprehensive income
attributable to equity
holders of the parent 1,258 1,127 1,592
=============== =============== ==============
Earnings per share from
continuing operations
Basic earnings per share 6.7p 6.0p 8.5p
Diluted earnings per share 6.7p 6.0p 8.5p
Consolidated balance sheet
at 30 September 2023
30 September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 5,171 4,550 4,990
Right of use asset 1,565 1,596 1,553
Intangible assets 15,400 15,413 15,406
Trade and other receivables 983 783 799
Total non-current assets 23,119 22,342 22,748
Inventories 1,418 1,383 1,444
Trade and other receivables 13,964 14,535 12,771
Cash and cash equivalents 439 150 3,150
Total current assets 15,821 16,068 17,365
------------- ------------- ---------
Total assets 38,940 38,410 40,113
============= ============= =========
Equity
Share capital 190 190 190
Capital redemption reserve 6 6 6
Share premium 5,169 5,169 5,169
Merger reserve 9,703 9,703 9,703
Retained earnings 8,195 7,034 7,499
Total equity attributable
to equity holders of the Company 23,263 22,102 22,567
============= ============= =========
Liabilities
Trade and other payables 55 168 114
Lease liabilities 1,484 1,433 1,504
Deferred tax liabilities 1,059 879 1,059
Total non-current liabilities 2,598 2,480 2,677
------------- ------------- ---------
Loans and borrowings 50 2,028 35
Trade and other payables 11,690 10,796 13,947
Lease liabilities 709 615 700
Current tax payable 630 389 187
Total current liabilities 13,079 13,828 14,869
------------- ------------- ---------
Total liabilities 15,677 16,308 17,546
============= ============= =========
Total equity and liabilities 38,940 38,410 40,113
============= ============= =========
Consolidated statement of changes in equity
for the six month period ended 30 September 2023
Capital
Share redemption Share Merger Retained Total
capital reserve premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2022 190 6 5,169 9,703 5,907 20,975
Total comprehensive income
for the period
Profit for the period - - - - 1,127 1,127
At 30 September 2022 190 6 5,169 9,703 7,034 22,102
========= ============ ========= ========= ========== ========
At 1 April 2022 190 6 5,169 9,703 5,907 20,975
Total comprehensive income
for the year
Profit for the year - - - - 1,592 1,592
At 31 March 2023 190 6 5,169 9,703 7,499 22,567
========= ============ ========= ========= ========== ========
At 1 April 2023 190 6 5,169 9,703 7,499 22,567
Total comprehensive income
for the period
Profit for the period - - - - 1,258 1,258
Transactions with owners,
recorded directly in equity
Equity dividends paid - - - - (562) (562)
At 30 September 2023 190 6 5,169 9,703 8,195 23,263
========= ============ ========= ========= ========== ========
Consolidated statement of cash flows
for the six month period ended 30 September 2023
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Operating profit for the period 1,753 1,450 2,146
Adjustments for:
Depreciation of property,
plant and equipment 420 361 787
Depreciation of lease asset 251 204 417
Amortisation 6 6 13
Loss on sale of property,
plant and equipment (22) (16) (31)
2,408 2,005 3,332
Change in inventories 26 21 (40)
Change in trade and other
receivables (1,377) (2,458) (710)
Change in trade and other
payables (2,316) (2,903) 193
--------------- --------------- -----------
Cash (used in)/generated
from operations (1,259) (3,335) 2,775
Interest paid (34) (56) (155)
Tax received/(paid) 22 99 (33)
--------------- --------------- -----------
Net cash flow from operating
activities (1,271) (3,292) 2,587
--------------- --------------- -----------
Cash flows from investing
activities
Proceeds from sale of property,
plant and equipment 246 193 520
Acquisition of property, plant
and equipment (701) (614) (1,466)
Net cash from investing activities (455) (421) (946)
--------------- --------------- -----------
Cash flows from financing
activities
Issue of borrowings 15 990 -
Repayment of borrowings - - (1,003)
Repayment of lease liabilities (438) (360) (721)
Equity dividends paid (562) - -
Net cash from financing activities (985) 630 (1,724)
--------------- --------------- -----------
Net decrease in cash and
cash equivalents (2,711) (3,083) (83)
Cash and cash equivalents
at start of period 3,150 3,233 3,233
Cash and cash equivalents
at end of period 439 150 3,150
=============== =============== ===========
Notes
1. Basis of preparation
These interim consolidated financial statements have been
prepared using accounting policies based on International Financial
Reporting Standards (IFRS and IFRIC Interpretations) issued by the
International Accounting Standards Board ("IASB") as adopted for
use in the UK. They do not include all disclosures that would
otherwise be required in a complete set of financial statements and
should be read in conjunction with the 31 March 2023 Annual Report
and Financial Statements. The financial information for the half
years ended 30 September 2023 and 30 September 2022 does not
constitute statutory accounts within the meaning of Section 434 (3)
of the Companies Act 2006 and both periods are unaudited. The
financial information has not been prepared (and is not required to
be prepared) in accordance with IAS 34 Interim Financial
Reporting.
The annual consolidated financial statements of Northern Bear
plc (the "Company", or, together with its subsidiaries, the
"Group") are prepared in accordance with the requirements of the
Companies Act 2006 and UK adopted International Accounting
Standards. The comparative financial information for the year ended
31 March 2023 included within this report does not constitute the
full statutory Annual Report for that period. The statutory Annual
Report and Financial Statements for the year ended 31 March 2023
have been filed with the Registrar of Companies. The Independent
Auditors' Report on the Annual Report and Financial Statements for
the year ended 31 March 2023 was i) unqualified, ii) did not draw
attention to any matters by way of emphasis, and iii) did not
contain a statement under 498(2) - (3) of the Companies Act
2006.
2. Accounting policies
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2023 annual financial statements, as set out in Notes 2 and
3 of that document, except for those that relate to new standards
and interpretations effective for the first time for periods
beginning on (or after) 1 April 2023, and will be adopted in the
2024 financial statements. The accounting policies applied are
based on the recognition and measurement principles of IFRS in
issue as adopted by the UK and are effective at 31 March 2024 or
are expected to be adopted and effective at 31 March 2024.
New and amended standards and interpretations issued by the IASB
that will apply for the first time in the next annual financial
statements include:
-- IFRS 17 - Insurance Contracts - effective date on or after 1 January 2023
-- Amendments to IFRS 17 - Insurance Contracts; and Extension of
the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4
Insurance Contracts) - effective date on or after 1 January
2023
-- Disclosure of Accounting Policies (Amendments to IAS 1
Presentation of Financial Statements and IFRS Practice Statement 2
Making Materiality Judgements) - effective date on or after 1
January 2023
-- Definition of Accounting Estimates (Amendments to IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors) -
effective date on or after 1 January 2023
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12 Income Taxes) - effective
date on or after 1 January 2023
Adoption of the above standards and interpretations is not
expected to have a material impact on the Group's financial
statements.
3. Taxation
The taxation charge for the six months ended 30 September 2023
is calculated by applying the Directors' best estimate of the
annual effective tax rate to the profit for the period.
4. Alternative performance measures
The Group uses Adjusted Operating Profit, Adjusted EBITDA, and
Adjusted earnings per share as supplemental measures of the Group's
profitability, in addition to measures defined under IFRS. The
directors consider these useful due to the exclusion of specific
items that could impact a comparison of the Group's underlying
profitability, and is aware that shareholders use these measures to
assist in evaluating performance.
The adjusting items for the alternative measures of profit are
either recurring but non-cash charges (amortisation of acquired
intangible assets), one-off non-cash items (impairment charges), or
one-off exceptional items (e.g., exceptional loss-making contracts
in Arcas Building Solutions Limited).
Adjusted operating profit is calculated as below:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Operating profit (as reported) 1,753 1,450 2,146
Loss-making contracts in Arcas
Building Solutions - - 733
Amortisation of intangible assets
arising on acquisitions 6 6 13
Adjusted profit for the period 1,759 1,456 2,892
------------- ------------- -----------
Adjusted EBITDA is calculated as below:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Adjusted operating profit (as above) 1,759 1,456 2,892
Depreciation of property, plant
and equipment 420 361 787
Depreciation of lease asset 251 204 417
Adjusted EBITDA 2,430 2,021 4,096
------------- ------------- -----------
Adjusted basic and diluted earnings per share is presented in
note 5 below.
5. Earnings per share
Basic earnings per share is the profit or loss for the period
divided by the weighted average number of ordinary shares
outstanding, excluding those held in treasury, calculated as
follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
Profit for the period (GBP'000) 1,258 1,127 1,592
------------- ------------- -----------
Weighted average number of ordinary
shares excluding shares held
in treasury for the proportion
of the year held in treasury
('000) 18,725 18,725 18,725
Basic earnings per share 6.7p 6.0p 8.5p
------------- ------------- -----------
The calculation of diluted earnings per share is the profit or
loss for the period divided by the weighted average number of
ordinary shares outstanding, after adjustment for the effects of
all potential dilutive ordinary shares, excluding those in
treasury, calculated as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
Profit for the period (GBP'000) 1,258 1,127 1,592
------------- ------------- -----------
Weighted average number of
ordinary shares excluding shares
held in treasury for the proportion
of the year held in treasury
('000) 18,725 18,725 18,725
Effect of potential dilutive
ordinary shares ('000) 15 15 13
------------- ------------- -----------
Diluted weighted average number
of ordinary shares excluding
shares held in treasury for
the proportion of the year
held in treasury ('000) 18,740 18,740 18,738
------------- ------------- -----------
Diluted earnings per share 6.7p 6.0p 8.5p
------------- ------------- -----------
The following additional earnings per share figures are
presented as the Directors believe they provide a better
understanding of the trading performance of the Group.
Adjusted basic and diluted earnings per share is the profit or
loss for the period, adjusted for recurring but non-cash charges
(amortisation of acquired intangible assets), one-off non-cash
items (impairment charges), or one-off exceptional items (e.g.
exceptional loss-making contracts in Arcas Building Solutions
Limited), divided by the weighted average number of ordinary shares
outstanding as presented above.
Adjusted earnings per share is calculated as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
Profit for the period (GBP'000) 1,258 1,127 1,592
Loss-making contracts in Arcas
Building Solutions - - 733
Amortisation of intangible assets
arising on acquisitions 6 6 13
Corporation tax effect of above
items - - (139)
------------- ------------- -----------
Adjusted profit for the period
(GBP'000) 1,264 1,133 2,199
------------- ------------- -----------
Weighted average number of ordinary
shares excluding shares held in
treasury for the proportion of
the year held in treasury ('000) 18,725 18,725 18,725
Adjusted basic earnings per
share 6.8p 6.1p 11.7p
------------- ------------- -----------
Adjusted diluted earnings per
share 6.7p 6.0p 11.7p
------------- ------------- -----------
6. Finance costs
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2023 2022 2023
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
On bank loans and overdrafts 34 56 128
Finance charges on lease liabilities 40 33 82
Total finance costs 74 89 210
------------- ------------- -----------
7. Principal risks and uncertainties
The Directors consider that the principal risks and
uncertainties which could have a material impact on the Group's
performance in the remaining six months of the financial year
remain the same as those stated on page 11 to 12, and 68 to 69 of
our Annual Report and Financial Statements for the year ended 31
March 2023, which are available on the Company's website,
www.northernbearplc.com .
8. Half year report
The condensed financial statements were approved by the Board of
Directors on 29 November 2023 and are available on the Company's
website, www.northernbearplc.com . Copies will be sent to
shareholders and are available on application to the Company's
registered office.
For and on behalf of the Board of Directors
Thomas Hayes
Finance Director
29 November 2023
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END
IR NKFBQDBDBFDB
(END) Dow Jones Newswires
November 29, 2023 02:01 ET (07:01 GMT)
Northern Bear (LSE:NTBR)
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Northern Bear (LSE:NTBR)
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