TIDMNAR
RNS Number : 7453E
Northamber PLC
03 March 2020
Northamber PLC
("Northamber" or the "Company" or the "Group")
Interim Report for the Six months to 31 December 2019
Chairman's Statement
Results
It is pleasing to be able to report that we have seen revenues
increase in the first half from GBP24.2 million to GBP26.3 million
for the comparative period last year especially as this has been
combined with an increase of percentage Gross Margin from 8.41% to
8.76%; the cumulative effect of both was to increase Gross Profit
from GBP2.04 million to GBP2.3 million. Revenue and margin growth
has been supported by growth from some of our strategic focus areas
including Audio Visual and Solutions.
To support this increase in Gross Profit and the planned
continued growth in Gross Profits our Distribution costs increased
year on year from GBP1.39 million to GBP1.53 million.
Administrative costs remained largely consistent year on year as we
continued our focus on cost management meaning that our loss from
operations for the first half was reduced from GBP0.5 million to
GBP0.4million.
The Group sold its Weybridge distribution centre for GBP16.4
million against a net book value of GBP6.02 million. The Group also
paid GBP0.18 million for legal and professional costs for the sale
of the property. The gain on the sale is reported as an Exceptional
Item. The Board were cautious to ensure this sale would not disrupt
our core operations and were pleased to have agreed a sale and
leaseback on the Weybridge distribution centre (at a rental cost of
GBP85k for the first half) to allow us time to find a new suitable
site and effect a move with the minimum possible disruption to our
trading activity. A new warehouse has been purchased in Swindon for
GBP3.2 million and we expect to complete the move from Weybridge
during the second half of this financial year.
Financial position
Maintaining our prudence in financial matters, our working
capital management is reflected in the Net Current Assets ratio
which at 3.7 times (2018: 2.6 times) is a significant
improvement.
Cash was GBP14.7 million at 31 December 2019 compared with
GBP2.9 million at 31 December 2018, reflecting the sale of the
distribution centre and the purchase of the new warehouse property.
With Fixed Assets at book value at GBP5.2 million, including two
unencumbered freehold properties, the Company's overall financial
position is sound.
Net Assets at 91.3p per share are considerably in excess of the
average price of the ordinary shares throughout the period.
Board
With great sadness, we lost our founder and Chairman David
Phillips in December 2019. David made a very significant
contribution to the development and leadership of the Company since
he founded Northamber in 1980 and he will be greatly missed.
We are pleased to welcome David's son Alex Phillips who has
recently joined our very experienced Board as Commercial Director.
Alex joined the Company in 2013 as Director of Strategy and gained
valuable experience of the business and the wider sector.
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 0.3p, at a total cost of
GBP82,070. The dividend will be paid on 15 May 2020 to shareholders
on the register as at 16 April 2020.
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.
Event after the reporting date.
In January 2020 the Company acquired Audio Visual Material
Limited (AVM), an Audio Visual Distributor, to enhance and expand
Northamber's specialist AV division to focus on driving higher
margin profitable growth. I am pleased to report the integration of
AVM is going well and the Board is confident that the business will
make an important contribution to Northamber in the years
ahead.
Outlook
Whilst we are optimistic in the long-term strategy, we remain
cautious due to the economic uncertainty, Brexit and the potential
impact of coronavirus on the supply chain. 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 future
opportunities for organic growth. We will continue to review
non-organic opportunities for growth should an appropriate
acquisition be identified which meets our strict criteria and adds
value for our shareholders.
G.P.Walters
Acting Chairman
3 March 2020
Consolidated Statement of Comprehensive Income
6 months to 31 December 2019
6 months 6 months Year
Ended Ended Ended
31.12.19 31.12.18 30.06.19
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Revenue 26,273 24,234 50,329
Cost of sales (23,972) (22,197) (45,998)
---------- ------------ ---------
Gross Profit 2,301 2,037 4,331
Distribution cost (1,533) (1,392) (2,849)
Administrative costs (1,152) (1,142) (2,352)
---------- ------------ ---------
Loss from operations (384) (497) (870)
Investment revenue 167 144 272
---------- ------------ ---------
Loss before Exceptional
Items and tax (217) (353) (598)
Exceptional Item 10,203 - -
---------- ------------ ---------
Profit/ (Loss) before Tax 9,986 (353) (598)
Tax(charge) (1,643) - -
---------- ------------ ---------
Profit/(Loss) and total
comprehensive income
for the period 8,343 (353) (598)
---------- ------------ ---------
Basic and diluted profit/
(loss) per ordinary share 30.50p (1.28)p (2.17)p
Consolidated Statement of Financial
Position
As at 31 December 2019
As at As at As at
31.12.19 31.12.18 30.06.19
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Non current assets
Property, plant and equipment 5,169 7,799 1,792
---------- ---------- ---------
Current assets
Inventories 4,458 4,193 3,320
Trade and other receivables 8,137 7,662 9,492
Cash and cash equivalents 14,675 2,931 3,446
Assets classified as held
for sale - - 6,019
27,270 14,786 22,277
---------- ---------- ---------
Total assets 32,439 22,585 24,069
---------- ---------- ---------
Current liabilities
Trade and other payables (7,461) (5,643) (7,434)
---------- ---------- ---------
Total liabilities (7,461) (5,643) (7,434)
---------- ---------- ---------
Net assets 24,978 16,942 16,635
---------- ---------- ---------
Equity
Share capital 273 273 273
Share premium account 5,734 5,734 5,734
Capital redemption reserve
fund 1,513 1,513 1,513
Treasury shares (7) - (7)
Retained earnings 17,465 9,422 9,122
Equity shareholders' funds 24,978 16,942 16,635
---------- ---------- ---------
Company Statement of Financial Position
As at 31 December 2019
As at As at As at
31.12.19 31.12.18 30.06.19
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Non current assets
Property, plant and equipment 1,730 1,783 1,792
Investments 6,588 6,588 6,588
---------- ---------- ---------
8,318 8,371 8,380
Current assets
Inventories 4,458 4,193 3,320
Trade and other receivables 7,974 7,665 9,492
Cash and cash equivalents 3,012 2,871 3,320
15,444 14,729 16,132
---------- ---------- ---------
Total assets 23,762 23,100 24,512
---------- ---------- ---------
Current liabilities
Trade and other payables (10,945) (9,442) (11,412)
---------- ---------- ---------
Total liabilities (10,945) (9,442) (11,412)
---------- ---------- ---------
Net assets 12,817 13,658 13,100
---------- ---------- ---------
Equity
Share capital 273 273 273
Share premium account 5,734 5,734 5,734
Capital redemption reserve
fund 1,513 1,513 1,513
Treasury shares (7) - (7)
Retained earnings 5,304 6,138 5,587
Equity shareholders' funds 12,817 13,658 13,100
---------- ---------- ---------
Consolidated Statement of Changes
in Equity
As at 31 December 2019
Share Capital
Share premium redemption Treasury Retained Total
capital account reserve Shares earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Period to 31 December
2018
Unaudited
Balance at 1 July 2018 281 5,734 1,505 - 10,000 17,520
Dividends - - - - - -
Loss and total comprehensive
Purchase of own Shares
for cancellation (8) - 8 (225) (225)
loss for the period - - - - (353) (353)
---------- --------- --------------------- --------- -----------
Balance at 31 December
2018 273 5,734 1,513 - 9,422 16,942
---------- --------- --------------------- --------- ----------- --------
Period to 31 December
2019
Unaudited
Balance at 1 July 2019 273 5,734 1,513 (7) 9,122 16,635
Dividends - - - - - -
Profit and total comprehensive - - - - 8,343 8,343
Profit for the period
---------- --------- --------------------- --------- -----------
Balance at 31 December
2019 273 5,734 1,513 (7) 17,465 24,978
---------- --------- --------------------- --------- ----------- --------
Year to 30 June 2019
Audited
Balance at 1 July 2018 281 5,734 1,505 - 10,000 17,520
Dividends - - - - (55) (55)
Purchase and cancellation
of shares (8) 8 (225) (225)
Purchase of Treasury
shares (7) (7)
Transactions with owners (8) - 8 (7) (280) (287)
Loss and total comprehensive
loss for the period - - - (598) (598)
---------- --------- --------------------- --------- -----------
Balance at 30 June
2019 273 5,734 1,513 (7) 9,122 16,635
---------- --------- --------------------- --------- ----------- --------
Company Statement of Changes in Equity
As at 31 December 2019
Share Capital
Share premium redemption Treasury Retained Total
capital account reserve Shares earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Period to 31 December
2018
Unaudited
Balance at 1 July 2018 281 5,734 1,505 - 6,980 14,500
Dividends - - - - -
Purchase and cancellation
of shares (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
--------- --------- ------------ --------- ---------- --------
Period to 31 December
2019
Unaudited
Balance at 1 July 2019 273 5,734 1,513 (7) 5,587 13,100
Dividends - - - - -
Purchase of own shares
for cancellation - -
Loss and total comprehensive
loss for the period - - - - (283) (283)
--------- --------- ------------ --------- ----------
Balance at 31 December
2019 273 5,734 1,513 (7) 5,304 12,817
--------- --------- ------------ --------- ---------- --------
Year to 30 June 2019
Audited
Balance at 1 July 2018 281 5,734 1,505 6,980 14,500
Dividends - - - (55) (55)
Purchase and cancellation
of shares (8) 8 (225) (225)
Purchase of Treasury
shares (7) (7)
Transactions with owners (8) - 8 (7) (280) (287)
Loss and total comprehensive
loss for the period - - - - (1,113) (1,113)
--------- --------- ------------ --------- ----------
Balance at 30 June
2019 273 5,734 1,513 (7) 5,587 13,100
--------- --------- ------------ --------- ---------- --------
Consolidated Statement of Cash
Flows
6 months to 31 December 2019
6 months 6 months Year
Ended Ended Ended
31.12.19 31.12.18 30.06.19
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Cash from operating activities
Operating (loss) from
continuing operations (384) (497) (870)
Depreciation of property,
plant
and equipment 62 95 153
(Profit)/loss on disposal
of property, - - -
plant and equipment
-------------- ---------- -----------
Operating (loss) before changes
in
working capital (322) (402) (717)
(Increase)/decrease in inventories (1,138) (815) 58
Decrease/(increase) in trade
and
other receivables 1,355 483 (1,346)
(Decrease)/increase in trade
and
other payables (1,616) (1,321) 470
-------------- ---------- -----------
Cash (used)/generated from
operations (1,721) (2,055) (1,535)
Income taxes received/(paid) - - -
Net cash from operating activities (1,721) (2,055) (1,535)
-------------- ---------- -----------
Cash flows from investing
activities
Interest received 167 144 272
Proceeds from disposal of
property,
plant and equipment 16,222 - -
Purchase of property, plant
and
Equipment (3,439) - (71)
Net cash from investing activities 12,950 144 201
-------------- ---------- -----------
Cash flows from financing
activities
Dividends paid to equity shareholders - - (55)
Purchase of own shares for
cancellation - (225) (225)
Purchase of Treasury shares - - (7)
Net cash used in financing
activities - (225) (287)
-------------- ---------- -----------
Net (decrease)/increase in
cash and
cash equivalents 11,229 (2,136) (1,621)
Cash and cash equivalents
at
beginning of period 3,446 5,067 5,067
-------------- ---------- -----------
Cash and cash equivalents at end
of period 14,675 2,931 3,446
-------------- ---------- -----------
Company Statement of Cash Flows
6 months to 31 December 2019
6 months 6 months Year
Ended Ended Ended
31.12.19 31.12.18 30.06.19
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Cash from operating activities
Operating (loss) from
continuing operations (393) (696) (1,385)
Depreciation of property, plant
and equipment 62 58 120
(Profit)/loss on disposal of
property,
plant and equipment - - -
---------- ---------- -----------
Operating (loss) before changes
in
working capital (331) (638) (1,265)
(Increase)/decrease in inventories (1,138) (815) 58
Decrease/(increase) in trade
and
other receivables 1,518 480 (1,347)
(Decrease)/increase in trade
and
other payables (467) (1,044) 926
---------- ---------- -----------
Cash (used)/generated from operations (418) (2,017) (1,628)
Income taxes received/(paid) - - -
Net cash from operating activities (418) (2,017) (1,628)
---------- ---------- -----------
Cash flows from investing activities
Interest received 110 79 272
Proceeds from disposal of property,
plant and equipment - - -
Purchase of property, plant
and
Equipment - - (71)
Net cash from investing activities 110 79 201
---------- ---------- -----------
Cash flows from financing activities
Dividends paid to equity shareholders - - (55)
Purchase of own shares for cancellation - (225) (225)
Purchase of Treasury shares - - (7)
---------- ---------- -----------
Net cash used in financing activities - (225) (287)
---------- ---------- -----------
Net (decrease)/increase in cash
and
cash equivalents (308) (2,163) (1,714)
Cash and cash equivalents at
beginning of period 3,320 5,034 5,034
---------- ---------- -----------
Cash and cash equivalents at end
of period 3,012 2,871 3,320
---------- ---------- -----------
Notes to the financial statements
1. Corporate Information
The financial information for the half year ended 31 December
2019 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
2019 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 2019. 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
2019.
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 2019 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 2019
Total Segment revenue 26,172 101 26,273
Year to 30 June 2019
Total Segment revenue 49,655 674 50,329
One customer accounted for more than 10% of the Group's revenue
for the period, being GBP3.27million.
5. Taxation
The interim period tax charge is accrued on the estimated
average annual effective tax rate of 19%.
6. Earnings per Share
The calculation of earnings per share is based on the Profit
after tax for the six months to 31 December 2019 of GBP8,343,000
(2018: loss GBP353,000) and a weighted average of 27,356,586 (2018:
27,639,779) ordinary shares in issue.
7. Property, Plant and Equipment
The Group sold its freehold distribution centre on 8 July 2019
and purchased a new warehouse property on 12 December 2019.
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 2019 (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 (Deceased) is the ultimate controlling party of
the Company.
During the six months period, the Company paid GBP12,925 (2018:
GBP235,500) rent to Anitass Limited, a wholly owned subsidiary. At
31 December 2019 Northamber plc owed Anitass Ltd GBP4,510,000
(2018: GBP3,793,000).
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.
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END
IR JTMFTMTBMBAM
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