REG - Northamber PLC - Final Results <Origin Href="QuoteRef">NAR.L</Origin>

NorthamberAnnouncement

28/10/2016 07:06

RNS Number : 6769N
Northamber PLC
28 October 2016
28 October 2016
Northamber PLC
("Northamber" or the "Company")
Preliminary Results for the year ended 30 June 2016
Chairman's Statement
Results
As we continue our transition into more consultative, solution driven sales, I am pleased to be able to announce an increase in gross profit to 4.8 million, driven by a gross margin ("GM") improvement to 7.8%. This is a significant increase from just over 7% for the previous year, especially against a challenging industry background and shows the traction we are making in evolving the business.
Unfortunately whilst margins increased, so did losses. This stemmed from increased administration costs, of which recruitment was a significant contributor, as we invested in building our future presence in these strategically important categories and sectors organically.
As we increased our focus on these higher margin solutions categories, we also moved away from some of our lower margin more transactional business, leading to an overall reduction in turnover of some 3.6 million to a total of 61.8 million compared with 65.4 million for last year.
We now look at the business as 3 mutually reinforcing units, namely: "Wholesale" which provides a wholesale function for IT products: "Solutions" which focuses on a consultative approach to newer IT technologies with a heavy value-add: and "Retail" which focuses on providing consumer goods to national retailers.
The far more promising, newer technologies and higher margin added value areas, we labelled "Solutions", increased its GM year on year contribution significantly despite investment and staff recruitment costs. This division is an area with a strong potential that we are focusing on heavily.
The Retail sector of our business which is driven by the strength of our experienced logistics and I.T. systems is always subject to the vagaries of the retail industry demand generation focus. Whilst a profitable contributor, it was nonetheless disappointing to experience a significant decline in revenue, albeit with retained margins.
In order to fully benefit from the strategy of providing higher margin Solutions, we have made significant investment in recruiting and training more experienced staff who can add value to very specialised products and gain the additional levels of margin. Whilst we are confident that this strategy will prove successful, and will be more fully reflected in the outcome for the current financial year, we cannot avoid the impact of the additional staff recruitment fees.
The reported operating loss of 1.29 million, disguises an annual gross profit improvement of 218,000. The increase in reported loss of 360,000 over the prior year is partly due to the previously advised needs for key recruitment and associated costs. Those increased costs are included within the overall figure of 578,000 over the prior year.
Balance Sheet
During these challenging times of significant movements in structure and profile, of both the industry, our sector and consequently within our company, the need for conservation and control of finances becomes ever more important and critical.
We have always been extremely careful in the management of our finances and assets, and have always placed great emphasis on liquidity and cash.
I am pleased to be able to state each year that our balance sheet continues to be strong, our liquidity ratios more than adequate, our assets unencumbered and our cash balances positive. This year is no different and with cash at the year- end standing at 5.4 million, it is almost exactly the same as at the last year end.
Net Assets per share have inevitably declined to 67.9p per share (2015: 72.7p) although still well above the average share price in the year.
Dividend
As always, the subject of dividend is complicated by the message it also sends. Your board has taken particular consideration of the underlying improvement in the newer business areas, plus the strength of our ongoing debt free, tangible asset base.
At a total cost of 28,159 your Board is proposing a final dividend of 0.1p per share .The dividend will be paid on 18 January 2017 to shareholders on the register as at 9 December 2016.
Staff
Whilst we have maintained a lean management structure, it remains key that we continue our search for the right individuals to drive our forward management strategy. With an incredibly high percentage of long serving members of staff plus those more recently joined, I am very grateful to all our staff for their support and focus.
Board
Geoff Walters, with his non-executive financial skills, has made a very welcome contribution to the board in the role previously held by Gordon Hamilton.
Outlook
Although the forecast post referendum gloom has not yet happened, and hopefully will not be too great if and when it does become reality, the short and medium term future is fraught with uncertainty. 
In view of the history of the last few years I am, to say the least, cautious. We are hopeful that the moves we have made in the profile and structure of the business will continue to develop the more profitable sides of the business and that we shall be in a position to move towards profitability sometime in the not too distant future, although I do not expect to reach that position within the next twelve months.
The company remains well placed to deal with both challenges and opportunities alike and the board is confident that the change in direction will prove fruitful in the years ahead.
D.M. Phillips
Chairman
28 October 2016
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 Reynolds



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME






For the year ended 30 June 2016








 2016

 2015



 Total

 Total



 '000

 '000






Revenue


61,844

65,452
Cost of sales


(57,025)

(60,851)






Gross Profit


4,819

4,601






Distribution costs


(3,310)

(2,950)
Administrative costs


(2,801)

(2,583)












Loss from operations


(1,292)

(932)






Investment revenue


59

46












Loss before tax


(1,233)

(886)






Tax (charge)


-

(2)






Loss for the year and total comprehensive loss


(1,233)

(888)


















Basic and diluted loss per ordinary share


(4.38)p

(3.15)p








CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2016








 2016

 2015



 '000

 '000






Non current assets





Property, plant and equipment


7,995

8,129












Current assets





Inventories


5,006

4,519
Trade and other receivables


8,459

10,176
Cash and cash equivalents


5,466

5,441









18,931

20,136






Total assets


26,926

28,265












Current liabilities





Trade and other payables


(7,805)

(7,798)












Total liabilities


(7,805)

(7,798)






Net assets


19,121

20,467












Equity





Share capital


281

281
Share premium account


5,734

5,734
Capital redemption reserve


1,505

1,505
Retained earnings


11,601

12,947






Equity shareholders' funds 


19,121

20,467








CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2016








Share Capital

Share Premium Account
Capital Redemption Reserve
Retained Earnings

Total Equity

'000

'000

'000

'000

'000










Balance at 1 July 2014
281

5,734

1,505

14,003

21,523




















Dividends
-

-

-

(168)

(168)










Transactions with owners
-

-

-

(168)

(168)










Loss and total comprehensive loss for the year
-

-

-

(888)

(888)










Balance at 30 June 2015
281

5,734

1,505

12,947

20,467










Dividends
-

-

-

(113)

(113)










Transactions with owners
-

-

-

(113)

(113)










Loss and total comprehensive loss for the year
-

-

-

(1,233)

(1,233)




















Balance at 30 June 2016
281

5,734

1,505

11,601

19,121


CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2016








 2016

 2015



 '000

 '000






Cash from operating activities




Operating (loss) from continuing operations

(1,292)

(932)
Depreciation of property, plant and equipment

167

247





Operating (loss) before changes in working capital

(1,125)

(685)






(Increase)/decrease in inventories


(487)

534
Decrease in trade and other receivables


1,716

1,513
Increase/(decrease) in trade and other payables


7

(829)






Cash generated from operations


111

533






Income taxes paid


-

(2)






Net cash from operating activities


111

531






Cash flows from investing activities





Interest received


59

46
Purchase of property, plant and equipment 


(32)

(44)






Net cash from investing activities


27

2






Cash flows from financing activities





Dividends paid to equity shareholders


(113)

(168)






Net cash used in financing activities


(113)

(168)












Net increase in cash and cash equivalents


25

365
Cash and cash equivalents at beginning of year


5,441

5,076












Cash and cash equivalents at end of year


5,466

5,441


Notes
1. Financial information
The results of the year ended 30 June 2016 have been prepared using the accounting policies and methods of computation consistent with those used in the Group's annual report for the year ended 30 June 2016. The results have also been presented and prepared in a form consistent with that which will be adopted in the Group's annual report for the year ended 30 June 2016 and in accordance with the recognition and measurement requirements of the International Reporting Standards as adopted by the European Union.
The financial information set out above does not constitute the group's statutory accounts for the years ended 30 June 2015 or 30 June 2016, but is derived from those accounts. The statutory accounts for the year ended 30 June 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the group's annual general meeting. The auditors have reported on these accounts, their reports were unqualified and did not contain statements under s.498(2) or (3) of the Companies Act 2006. The information contained in this statement does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.
2. Segmental reporting
Management has determined that there is only one operating segment of the group as the total business of the company is the sourcing and distribution of computer related products and this is how information is reported to the Chief Operating Decision Maker. The board in carrying out its strategic planning and decision making has, necessarily, to take consideration of the inter relatedness of the product range and the customer base and thus treat the operations of the group as a whole. All decisions on the allocation of resources impacts on all aspects of the group. Information presented to the Chief Operating Decision Maker is the same as is reported in these financial statements.
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 year. 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







 '000

 '000

 '000
Year to 30 June 2015





Total Segment revenue
65,226

226

65,452






Year to 30 June 2016





Total Segment revenue
61,615

229

61,844


















One customer accounted for more than 10% of the group's revenue for the year, being 8.6m.


3. Loss per ordinary share
The calculation of the basic and diluted earnings per share is based on the following data:



 2016

 2015



 '000

 '000





(Loss) for the year attributable to equity holders of the parent company

(1,233)

(888)



 2016

 2015
Number of shares


Number

Number





Weighted average number of ordinary shares for the purpose of basic earnings per share and diluted earnings per share

28,158,735

28,158,735
4. Dividends
A final dividend of 0.1p per share will be paid on 18 January 2017 to those members on the register at close of business on 9 December 2016.
5. Notice of meeting
The annual report and accounts for the year ended 30 June 2016 will be posted to shareholders in due course and the Annual General Meeting will be held on 14 December 2016.
The Company's registered office is Namber House, 23 Davis Road, Chessington, Surrey KT9 1HS.

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