TIDMNAR
RNS Number : 2357S
Northamber PLC
08 March 2019
Northamber PLC
("Northamber" or the "Company")
Interim Report for the Six months to 31 December 2018
Chairman's Statement
Results
Having reported a strong and encouraging performance for the
full year to June 2018, it is disappointing to report that the
commercial sector upon which our B2B offering is focussed has been
negatively impacted by the widespread Brexit malaise hanging over
us all. Back in September 2018, I did highlight the difficulties of
forecasting future performance but as ever we have worked hard to
maximise our opportunities and exert influence over those factors
we do have in our control.
In the first half we have seen revenues fall from GBP31.7
million to GBP24.2 million for the comparative period last year,
although this has reflected our planned refocusing of our core
business case and it is worth noting that revenues in the second
half of the year ended 30 June 2018 were GBP26.5 million. What I am
pleased to report is that the trend of improvement in the Gross
Profit margin has continued, increasing from 7.6% to 8.4% in the
first half, alongside lower overheads including distribution
costs.
Frustratingly, a supplier for a significant new product area
breached our contract during the first half which results in lost
sales and contribution. We took swift legal action against this
supplier, and a related party, which could result in a settlement
in our favour. The matter has yet to be concluded, but has so far
resulted in an interim award judgement in our favour of GBP431,000
plus costs. More importantly, we have secured replacement vendors
and those results will start coming on stream during the second
half of our financial year.
Partly as a result of the event reported immediately above, at
the pre-tax level we made a loss of GBP353,000 compared with a
GBP201,000 loss in the comparative period a year ago. As stated, we
nonetheless gained improvement in our gross margins, whilst
continued proactive cost monitoring resulted in overhead economies
in both Distribution and Administration compared with the
comparative period last year, with a comparative saving of
GBP113,000 for the period.
Financial position
Maintaining our prudence in financial matters, our working
capital management is reflected in the Net Current Assets ratio
which at 2.6 times (2018: 2.0 times) is a healthy improvement.
Free Cash was GBP2.9 million at 31 December 2018 compared with
GBP2.2 million at 31 December 2017. With Fixed Assets at book value
at GBP7.8 million, including two unencumbered freehold properties
whose value is, in the Board's strong view, in excess of book, the
Company's overall financial position is sound.
Net Assets at 61.9p per share are considerably in excess of the
average price of the ordinary shares throughout the period.
Board
I am very pleased to highlight that Colin Thompson has recently
joined the board as a non-executive director and who will support
my own role. Colin originally joined the Company in 1982 and was a
board director from September 1991 until January 1999. He was
instrumental in the design, construction and effective efficiencies
of all our IT and logistics systems.
Dividend
As in previous years, your board has had regard to the strength
of our debt free, tangible asset strong balance sheet and is
proposing the interim dividend be 0.1p, at a total cost of only
GBP27,357. The dividend will be paid on 13th May 2019 to
shareholders on the register as at 12th April 2019.
Staff
We continue to invest in our evolving business model with added
skills based services and which are heavily reliant on our staff to
achieve our business case evolution and I am very grateful to all
of our staff for their continued support and flexibility.
Outlook
My comments in previous statements, especially those made in
recent years, have tended to be cautionary, which by and large has
been borne out in actual outcomes.
As regards the current underlying trading position, the state of
the economy at large, the extremely and damaging fluid Brexit
scenario, and the associated effects on our own sector offers,
offer no greater incentive for optimism now than they have in the
past. Our continued focus on the new higher margin value categories
continues to be an area we are confident and excited about, and
where we see our future opportunities.
D.M. Phillips
Chairman
8th March 2019
For more information please contact:
Northamber plc 020 8296 7000
David Phillips, Chairman
Cantor Fitzgerald Europe (Nominated Adviser
& Broker) 020 7894 7000
Phil Davies / Michael Boot
Consolidated Statement of Comprehensive Income
6 months to 31 December 2018
6 months 6 months Year
Ended Ended Ended
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Revenue 24,234 31,659 58,136
Cost of sales (22,197) (29,239) (53,589)
---------- ------------ ---------
Gross Profit 2,037 2,420 4,547
Distribution cost (1,392) (1,471) (2,850)
Administrative expenses (1,142) (1,176) (2,276)
---------- ------------ ---------
(Loss) from operations (497) (227) (579)
Investment revenue 144 26 90
---------- ------------ ---------
(Loss) before tax (353) (201) (489)
Tax credit/(charge) - - -
---------- ------------ ---------
Loss and total comprehensive
income
for the period (353) (201) (489)
---------- ------------ ---------
Basic and diluted (loss)
per ordinary share (1.28)p (0.71)p (1.74)p
Consolidated Statement of Financial
Position
As at 31 December 2018
As at As at As at
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Non current assets
Property, plant and equipment 7,799 7,953 7,894
---------- ---------- ---------
Current assets
Inventories 4,193 5,953 3,378
Trade and other receivables 7,662 12,005 8,145
Cash and cash equivalents 2,931 2,247 5,067
14,786 20,205 16,590
---------- ---------- ---------
Total assets 22,585 28,158 24,484
---------- ---------- ---------
Current liabilities
Trade and other payables (5,643) (10,294) (6,964)
---------- ---------- ---------
Total liabilities (5,643) (10,294) (6,964)
---------- ---------- ---------
Net assets 16,942 17,864 17,520
---------- ---------- ---------
Equity
Share capital 273 281 281
Share premium account 5,734 5,734 5,734
Capital redemption reserve
fund 1,513 1,505 1,505
Retained earnings 9,422 10,344 10,000
Equity shareholders' funds 16,942 17,864 17,520
---------- ---------- ---------
Company Statement of Financial Position
As at 31 December 2018
As at As at As at
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Non current assets
Property, plant and equipment 1,783 1,864 1,841
Investments 6,588 6,588 6,588
---------- ---------- ---------
8,371 8,452 8,429
Current assets
Inventories 4,193 5,953 3,378
Trade and other receivables 7,665 12,005 8,145
Cash and cash equivalents 2,871 2,210 5,034
14,729 20,168 16,557
---------- ---------- ---------
Total assets 23,100 28,620 24,986
---------- ---------- ---------
Current liabilities
Trade and other payables (9,442) (13,515) (10,486)
---------- ---------- ---------
Total liabilities (9,442) (13,515) (10,486)
---------- ---------- ---------
Net assets 13,658 15,105 14,500
---------- ---------- ---------
Equity
Share capital 273 281 281
Share premium account 5,734 5,734 5,734
Capital redemption reserve
fund 1,513 1,505 1,505
Retained earnings 6,138 7,585 6,980
Equity shareholders' funds 13,658 15,105 14,500
---------- ---------- ---------
Consolidated Statement of Changes
in Equity
As at 31 December 2018
Share Capital
Share premium redemption Retained Total
capital account reserve earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Period to 31 December
2017
Unaudited
Balance at 1 July 2017 281 5,734 1,505 10,545 18,065
Dividends - - - - -
Loss and total comprehensive
loss for the period - - - (201) (201)
---------- --------- --------------------- -----------
Balance at 31 December
2017 281 5,734 1,505 10,344 17,864
---------- --------- --------------------- ----------- --------
Period to 31 December
2018
Unaudited
Balance at 1 July 2018 281 5,734 1,505 10,000 17,520
Dividends - - - - -
Purchase of own Shares
for cancellation (8) - 8 (225) (225)
Loss and total comprehensive - - - (353) (353)
loss for the period
---------- --------- --------------------- -----------
Balance at 31 December
2018 273 5,734 1,513 9,422 16,942
---------- --------- --------------------- ----------- --------
Year to 30 June 2018
Audited
Balance at 1 July 2017 281 5,734 1,505 10,545 18,065
Dividends - - - (56) (56)
Transactions with owners - - - (56) (56)
Loss and total comprehensive
loss for the period - - - (489) (489)
---------- --------- --------------------- -----------
Balance at 30 June
2018 281 5,734 1,505 10,000 17,520
---------- --------- --------------------- ----------- --------
Company Statement of Changes in Equity
As at 31 December 2018
Share Capital
Share premium redemption Retained Total
capital account reserve earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Period to 31 December
2017
Unaudited
Balance at 1 July 2017 281 5,734 1,505 8,050 15,570
Dividends - - - - -
Loss and total comprehensive
loss for the period - - - (465) (465)
---------- --------- ------------------- ----------
Balance at 31 December
2017 281 5,734 1,505 7,585 15,105
---------- --------- ------------------- ---------- ---------
Period to 31 December
2018
Unaudited
Balance at 1 July 2018 281 5,734 1,505 6,980 14,500
Dividends - - - - -
Purchase of own shares
for cancellation (8) - 8 (225) (225)
Loss and total comprehensive
loss for the period - - - (617) (617)
---------- --------- ------------------- ----------
Balance at 31 December
2018 273 5,734 1,513 6,138 13,658
---------- --------- ------------------- ---------- ---------
Year to 30 June 2018
Audited
Balance at 1 July 2017 281 5,734 1,505 8,050 15,570
Dividends - - - (56) (56)
Transactions with owners - - - (56) (56)
Loss and total comprehensive
loss for the period - - - (1,014) (1,014)
---------- --------- ------------------- ----------
Balance at 30 June
2018 281 5,734 1,505 6,980 14,500
---------- --------- ------------------- ---------- ---------
Consolidated Statement of Cash
Flows
6 months to 31 December 2018
6 months 6 months Year
Ended ended Ended
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Cash from operating activities
Operating (loss) from
continuing operations (497) (227) (579)
Depreciation of property,
plant
and equipment 95 91 188
(Profit)/loss on disposal
of property, - - -
plant and equipment
-------------- ---------- -----------
Operating (loss) before changes
in
working capital (402) (136) (391)
(Increase)/decrease in inventories (815) (1,777) 798
(Increase)/decrease in trade
and
other receivables 483 (2,953) 907
Increase/(decrease) in trade
and
other payables (1,321) 2,134 (1,196)
-------------- ---------- -----------
Cash (used)/generated from
operations (2,055) (2,732) 118
Income taxes received/(paid) - - -
Net cash from operating activities (2,055) (2,732) 118
-------------- ---------- -----------
Cash flows from investing
activities
Interest received 144 26 90
Proceeds from disposal of
property,
plant and equipment - - -
Purchase of property, plant
and
Equipment - (19) (57)
Net cash from investing activities 144 7 33
-------------- ---------- -----------
Cash flows from financing
activities
Purchase of own shares for
cancellation (225) - -
Dividends paid to equity shareholders - - (56)
Net cash used in financing
activities (225) - (56)
-------------- ---------- -----------
Net (decrease)/increase in
cash and
cash equivalents (2,136) (2,725) 95
Cash and cash equivalents
at
beginning of period 5,067 4,972 4,972
-------------- ---------- -----------
Cash and cash equivalents at end
of period 2,931 2,247 5,067
-------------- ---------- -----------
Company Statement of Cash Flows
6 months to 31 December 2018
6 months 6 months Year
Ended Ended Ended
31.12.18 31.12.17 30.06.18
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Cash from operating activities
Operating (loss) from
continuing operations (696) (491) (1,103)
Depreciation of property, plant
and equipment 58 55 115
(Profit)/loss on disposal of
property,
plant and equipment - - -
---------- ---------- --------------
Operating (loss) before changes
in
working capital (638) (436) (988)
(Increase)/decrease in inventories (815) (1,777) 798
(Increase)/decrease in trade
and
other receivables 480 (2,953) 907
Increase/(decrease) in trade
and
other payables (1,044) 2,435 (594)
---------- ---------- --------------
Cash (used)/generated from operations (2,017) (2,731) 123
Income taxes received/(paid) - - -
Net cash from operating activities (2,017) (2,731) 123
---------- ---------- --------------
Cash flows from investing activities
Interest received 79 26 90
Proceeds from disposal of property,
plant and equipment - - -
Purchase of property, plant
and
Equipment - (19) (57)
Net cash from investing activities 79 7 33
---------- ---------- --------------
Cash flows from financing activities
Purchase of own shares for cancellation (225) - -
Dividends paid to equity shareholders - - (56)
---------- ---------- --------------
Net cash used in financing activities (225) - (56)
---------- ---------- --------------
Net (decrease)/increase in cash
and
cash equivalents (2,163) (2,724) 100
Cash and cash equivalents at
beginning of period 5,034 4,934 4,934
---------- ---------- --------------
Cash and cash equivalents at end
of period 2,871 2,210 5,034
---------- ---------- --------------
Notes to the financial statements
1. Corporate Information
The financial information for the half year ended 31 December
2018 set out in this interim report does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The
group's statutory financial statements for the year ended 30 June
2018 have been filed with the Registrar of Companies. The auditor's
report on those financial statements was unqualified and did not
contain statements under Sections 498(2) and 498(3) of the
Companies Act 2006. The interim results are unaudited. Northamber
Plc is a public limited company incorporated and domiciled in
England and Wales. The company's shares are publicly traded on the
London Stock Exchange's AIM market.
2. Basis of preparation
These interim consolidated financial statements are for the six
months ended 31 December 2018. They have been prepared in
accordance with IAS34 Interim Financial Reporting. They do not
include all the information required for full annual financial
statements, and should be read in conjunction with the consolidated
financial statements of the group for the year ended 30 June
2018.
These interim consolidated financial statements have been
prepared under the historical cost convention.
These interim consolidated financial statements (the interim
financial statements) have been prepared in accordance with
accounting policies adopted in the last annual financial statements
for the year to 30 June 2018 except for the adoption of IAS1
Presentation of Financial Statements (Revised 2007).
The adoption of IAS1 (Revised 2007) does not affect the
financial position or profits of the group, but gives rise to
additional disclosures. The measurement and recognition of the
group's assets, liabilities, income and expenses is unchanged. A
separate 'Statement of changes in equity' is now presented.
The accounting policies have been applied consistently
throughout the group for the purposes of preparation of these
interim consolidated financial statements.
3. Basis of Consolidation
For the periods covered in these interim consolidated financial
statements all trading has been carried out by the parent company
alone. The group includes some non-trading dormant subsidiaries.
All the assets and liabilities of all subsidiaries have been
included in the statements of financial position.
4. Segmental Reporting
Although the sales of the group are predominantly to the UK
there are sales to other countries and the following schedule sets
out the split of the sales for the period. Revenue is attributable
to individual countries based on the location of the customer.
There are no non current assets outside the UK.
UK Other Total
GBP'000 GBP'000 GBP'000
6 months to December 2018
Total Segment revenue 23,967 267 24,234
Year to 30 June 2018
Total Segment revenue 57,661 475 58,136
One customer accounted for more than 10% of the group's revenue
for the period, being GBP3.6m.
5. Taxation
No tax charge has been provided in the interim consolidated
financial statements due to the losses accumulated both in prior
years and in the current period.
6. Earnings per Share
The calculation of earnings per share is based on the loss after
tax for the six months to 31 December 2018 of GBP353,000 (2017:
loss GBP201,000) and a weighted average of 27,639,779 (2017:
28,158,735) ordinary shares in issue.
7. Property, Plant and Equipment
There were no significant additions to or disposals of property,
plant or equipment in the period to 31 December 2018. The reduction
in the total value of property, plant and equipment was primarily
due to the depreciation charge for the year.
8. Risks and Uncertainties
The principal risks and uncertainties affecting the business
activities of the group are detailed in the strategic report which
can be found on pages 7 to 11 of the Annual Report and Accounts for
the year ended 30 June 2018 (the Annual Report). A copy of the
Annual Report is available on the company's web site at
www.northamber.com.
The risks affecting the business remain the same as in the
Annual Report. In summary these include:-
Market risk particularly those relating to the suppliers of
products to the group
Financial risks including exchange rate risk, liquidity risk,
interest rate risk and credit risk
In the opinion of the directors, these will remain the principal
risks for the remainder of the year, however, the directors have
reviewed the company's risk analysis and are of the opinion that
steps have been taken to minimise the potential impact of such
risks.
9. Related Party Transactions
Mr D M Phillips is the ultimate controlling party of the
Company.
During the six months period, the company paid GBP235,500 (2017:
GBP300,500) rent to Anitass Limited, a wholly owned subsidiary. At
31 December 2018 Northamber plc owed Anitass Ltd GBP3,793,000
(2017:GBP3,259,000).
10. Directors' Confirmation
The Directors confirm that to the best of their knowledge these
condensed consolidated half year financial statements have been
prepared in accordance with IAS 34 and that the interim management
report herein includes a fair review of the information required by
DTR 4.2.7R, an indication of important events during the first 6
months and descriptions of principal risks and uncertainties for
the remaining six months of the year, and DTR 4.2.8R the disclosure
of related party transactions and changes therein.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR JRMRTMBJMBJL
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March 08, 2019 02:00 ET (07:00 GMT)
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