REG - Northamber PLC - Final Results
19/11/2021 07:00
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RNS Number : 8909S Northamber PLC 19 November 2021
19 November 2021
Northamber PLC
(the "Company" or the "Group")
Preliminary Results for the year ended 30 June 2021
Chairman's Statement
Results
Building on a profitable first half of the year, we are very pleased to be
able to report an operating profit and strong growth for the full financial
year to 30 June 2021. This was driven by significant growth in revenues and
gross margins despite challenging market conditions.
As mentioned in prior statements regarding our early decision to stay true to
our values and prioritise our team and partners by avoiding any furlough or
COVID related cuts, we also maintained our focus on mid-long term over short
term and invested further in growing our teams, all of which has proven
fruitful.
Revenues increased 13.57% for the year from £52.83 million to £60.01 million
for the comparative period last year. £3.32 million of this growth was due to
the inclusion of Audio Visual Material Limited "AVM" for a full year rather
than 5 months in the comparative period with the remaining £3.86 million from
organic growth. More significantly, this revenue growth was combined with a
significant increase in Gross Margin, the cumulative effect of which was to
increase Gross Profit by £2.33 million, from £5.48 million to £7.81
million, an increase of 42.52%. The improvement in Gross Margin resulted from
our evolving product mix towards higher margin, more technical products
through Northamber and AVM.
Previously discussed lockdown challenges continued to impact performance in
some of our strategic higher margin business units and our subsidiary AVM.
Site restrictions eased through the year however, and we saw improved trading
in these areas. As such we are hopeful performance will continue to improve
here in the current financial trading year.
Whilst we were very pleased with the double digit revenue and gross profit
growth, we maintained our focus on investing for the future. This investment
is focused on developing the business for the mid-long term whilst driving
efficiency and cost management.
Our strategy of focusing on adding value to our partners by building an
industry leading, knowledgeable team translated into an increased headcount
for the period from 88 to 102; this combined with the impact of AVM being
included for 12 months rather than for 5 months in the prior year, served to
increase our distribution costs by 27.6% from £3.6 million to £4.6 million.
Administrative costs increased by 8.8% as we continued to proactively manage
non-essential costs from £2.61 million to £2.84 million.
The above resulted in an operating profit of £0.38 million, an increase of
£1.12 million from the adjusted operating profit for the prior year.
Financial position
Our balance sheet remains strong with £6.2 million of unencumbered freehold
properties at depreciated cost together with cash balances of £7.45 million
(2020: £10.97 million).
Stock levels are higher than last year at £8.5 million against £5.9 million,
as we continued to seek to profitably support our partners by maintaining
sufficient stock during the uncertainty of logistics due to Covid-19 and
BREXIT as supply chains were under pressure. We see our flexibility on local
stock levels as a key driver of our strong future with our partners.
Net Assets at 92.1p per share (2020: 91.5p per share) are considerably in
excess of the average price of the Company's ordinary shares throughout the
period.
Board appointments
In April 2021, Antony Lee joined the Board as Finance director and Riccardo
Reggio also joined as a non-executive director.
Dividend
The Board is pleased to recommend (subject to shareholder approval at the
company annual general meeting on 21 December 2021) a proposed final dividend
of 0.4p (2020:0.3p).
This reflects the Board's confidence in the group's financial position and the
strength of the group's debt free tangible asset strong balance sheet.
The final dividend will be paid on 19 January 2022 to the shareholders on the
register on 17 December 2021.
Staff
We remain extremely grateful and proud of our team who have been a recognized
differentiator in our business for decades. We have been working hard to keep
our proactive, passionate and customer centric culture as we scale the team
and have been pleased to see how well new team members have integrated into
the business. We remain incredibly grateful to our team and will continue to
invest in our staff to support our evolving business model as we continue to
focus on value add. The quality of our team is evident in delivering these
growth figures despite significant changes in working environment, significant
recruitment to the team and unpredictable market forces.
Outlook
The addition of new Supplier partners during the year supports our mid-long
term optimism.
We will continue to utilise the strength of our balance sheet to do what is
best for the business strategically whether that is tactical actions such as
increasing our stock levels to pre-empt shortages or continuing to review
organic and non-organic opportunities for growth which meet our strict
criteria and add value for our shareholders.
Whilst there are a number of factors such as Brexit, the continued impact of
shipping and product constraints, together with the future uncertainty of
Covid and any further lockdowns, we remain cautiously optimistic that the
investments we have made in our team and in supporting our partners will allow
us to continue our growth over the coming years.
We necessarily remain cautious due to the factors outside our control but feel
strongly that our continued focus on strategic higher margin value categories
provides a solid road map for the future with profitable growth opportunities
and the ability to unlock long term value for shareholders.
C.M. Thompson
Chairman
18 November 2021
Contacts:
Northamber PLC Tel: +44 (0) 208 744 8200 investor_relations@northamber.com
Colin Thompson, Chairman
N+1 Singer (Nominated Adviser and Sole Broker) Tel: +44 (0) 207 496 3000
Philip Davies
Alex Bond
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2021
2021 2020
Notes £'000 £'000
Revenue 2 60,009 52,835
Cost of sales (52,200) (47,357)
Gross Profit 7,809 5,478
Distribution costs (4,595) (3,601)
Administrative costs (2,837) (2,613)
Administrative costs - Exceptional acquisition costs - (220)
Other income - Exceptional gain on disposal of property - 10,804
Operating profit 377 9,848
Adjusted Operating Profit 377 (736)
- 10,584
Exceptional items
Operating profit 377 9,848
Finance income 8 92
Finance cost - (15)
Profit before tax 385 9,925
Tax charge (48) (1,413)
Profit for the year and total comprehensive income attributable to the owners 337 8,512
Basic and diluted profit per ordinary share 3 1.24p 31.16p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2021
2021 2020
£'000 £'000
Non current assets
Property, plant and equipment 7,079 7,184
Goodwill and intangible assets 1,365 1,421
8,444 8,605
Current assets
Inventories 8,468 5,948
Trade and other receivables 10,753 7,750
Cash and cash equivalents 7,449 10,968
26,670 24,666
Total assets 35,114 33,271
Current liabilities
Trade and other payables (9,866) (6,943)
Corporation tax payable (159) (1,413)
Total liabilities (10,025) (8,356)
Net assets 25,089 24,915
Equity
Share capital 272 272
Share premium account 5,734 5,734
Capital redemption reserve 1,514 1,514
Retained earnings 17,569 17,395
Equity shareholders' funds attributable to the owners of the parent 25,089 24,915
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 30 June 2021
Share Capital Share Premium Account Capital Redemption Reserve Treasury shares Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2019 273 5,734 1,513 (7) 9,122 16,635
Dividends - - - - (164) (164)
Purchase and cancellation of shares (1) 1 - (68) (68)
Purchase of treasury shares
- 7 (7) -
Transactions with owners (1) - 1 7 (239) (232)
Profit and total comprehensive income for the year - - - - 8,512 8512
Balance at 30 June 2020 272 5,734 1,514 - 17,395 24,915
Dividends - - - - (163) (163)
Transactions with owners - - - - (163) (163)
Profit and total comprehensive income for the year - - - - 337 337
Balance at 30 June 2021 272 5,734 1,514 - 17,569 25,089
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2021
2021 2020
£'000 £'000
Cash flows from operating activities
Operating profit from continuing operations 377 9,848
Depreciation of property, plant and equipment 350 228
Amortisation of intangible assets 56 -
Profit on disposal of property, plant and equipment (13) (10,982)
Operating Profit/ (loss) before changes in working capital 770 (906)
(Increase) in inventories (2,520) (2,039)
(Increase)/decrease in trade and other receivables (3,003) 2,899
Increase/(decrease) in trade and other payables 2,923 (1,172)
Cash used in operations (1,830) (1,218)
Income taxes paid (1,302) -
Net cash used in operating activities (3,132) (1,218)
Cash flows from investing activities
Interest received 8 92
Proceeds from disposal of property 17 16,400
Purchase of property, plant and equipment (249) (5,370)
Purchase of AVM Limited
- (2,135)
Net cash (used in)/generated from investing activities (224) 8,987
Cash flows from financing activities
Dividends paid to equity shareholders (163) (164)
Interest paid - (15)
Purchase of cancellation of shares - (68)
Net cash used in financing activities (163) (247)
Net (decrease)/increase in cash and cash equivalents (3,519) 7,522
Cash and cash equivalents at beginning of year 10,968 3.446
Cash and cash equivalents at end of year 7,449 10,968
Notes
1. Financial information
This financial information is consistent with the consolidated financial
statements of the group for the year ended 30 June 2021. The group's
consolidated financial statements have been prepared in accordance with
international accounting standards in conformity with the requirements of the
Companies Act 2006.
The financial information set out above does not constitute the group's
statutory accounts for the years ended 30 June 2020 or 30 June 2021, but is
derived from those accounts. The statutory accounts for the year ended 30 June
2020 have been delivered to the Registrar of Companies and those for 2021 will
be delivered following the group's annual general meeting. The auditor's
report on the 2021 accounts will be unqualified, will not include references
to any matters to which the auditors drew attention by way of emphasis without
qualifying their reports, and will 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. Revenue
Although the sales of the group are predominantly to the UK there are sales to
other countries and the following table sets out the split of the sales for
the year. Revenue is attributed to individual countries based on the location
of the customer. There are no non-current assets outside the UK.
Revenues comprise: 2020 2020
£'000 £'000
Revenue from contracts with
customers - UK 59,137 52,391
-other 872 444
60,009 52,835
No customer accounted for more than 10% of the group's revenue for the year.
3. Profit per ordinary share
The calculation of the basic and diluted earnings per share is based on the
following data:
2021 2020
£'000 £'000
Profit for the year attributable to equity holders of the parent company 337 8,512
2021 2020
Number of shares Number Number
27,231,586 27,316,175
Weighted average number of ordinary shares for the purpose of basic and
diluted earnings per share
4. Dividends
A final dividend of 0.4p per share will be paid on 19 January 2022 to those
members on the register at close of business on 17 December 2021.
5. Notice of meeting
The annual report and accounts for the year ended 30 June 2021 will be posted
to shareholders in due course and the Annual General Meeting will be held on
21 December 2021 at the Company's warehouse & logistics complex, Unit 3,
Pagoda Park, Westmead Industrial Estate, Westmead Drive, Swindon, SN5 7UN.
The Company's registered office is Namber House, 23 Davis Road, Chessington,
Surrey, KT9 1HS.
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