REG - Northamber PLC - Final Results
15/11/2023 07:00
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RNS Number : 4562T Northamber PLC 15 November 2023
15 November 2023
Northamber PLC
(the "Company" or the "Group")
Preliminary Results for the year ended 30 June 2023
Chairman's Statement
Results
Against a challenging backdrop, we are pleased to share that we have continued
to grow revenue year on year by £890k from £66.26m to £67.15m whilst also
growing gross margins from 12.8% to 13.3%. This served to generate a continued
increase in gross margins of £0.43m year on year to £8.91m (5% increase year
on year) and reflected our continued focus on evolving our product mix towards
higher margin, more technical products through Northamber and AVM.
As mentioned in my last statement, we expanded our Audio Visual (AV) unit into
Unified Communications and Collaborations (UC&C) during the first half of
the year with a new partnership with Yealink who are a significant brand in
the Microsoft Teams Room and Zooms room space. This new partnership allowed us
to access a significant new UC&C market for our existing reseller
customers as well as bring existing products from our Audio Visual and
Infrastructure Solutions business units to a wider market. The addition of
ViewSonic in H2 to our Audio Visual Business Unit also helped provide growth
opportunities.
Despite sales and gross margin growth for the year, performance in some of our
focus areas remained impacted by softer demand due to deferred purchasing
decisions by some end users as they chose to defer non essential spend in the
face of inflationary pressures and continuing economic uncertainty. Our
strategy remains to focus on building the best Proactive, Technical
distribution company in our focus technology areas of Audio Visual, Network
Security & Infrastructure, Document Management & Peripherals as we
remain confident we can deliver significant long term value and growth in
these segments for our partners and shareholders.
Inflationary pressures combined with our continued investment in developing
the team for our growth ambitions led to distribution costs increasing from
£5.6m to £5.9m. Likewise, our administration costs increased from £3.4m to
£3.5m due to inflationary pressures. Some of these cost increases we would
hope to be non-recurring or reduced moving forward such as an exceptional
£110k bad debt write off for the year (up from £62k prior year), £110k for
Electricity and Gas (up from £66k prior year and despite the Company
installing solar panels at our Swindon Warehouse at the start of the fiscal
year) and cost of living pressure on wages (£6.15m up from £5.67m).
It is frustrating that inflationary factors increasing distribution and
administration costs have impacted the Group despite Gross Margin growth. The
Group remains committed to proactively working to reduce these costs as best
it can.
As part of our focus on profitable scalability and efficiency drive, after the
period end, the Group implemented a new company wide ERP system at a committed
capital investment of £278k. Whilst this new system will cause some initial
disruption in H1 FY24 whilst it is rolled out in a phased approach across the
half, this new system will allow us to drive a stronger customer experience
and better efficiency with automation so we would hope to see a positive
impact from this in H2 FY24 and onwards.
The net effect of these results were that Earnings Before Tax Amortisation and
Depreciation but After Interest was a modest £3k profit, compared with a loss
of £54k the prior year. At an operating level this delivered a loss before
tax for the year of £411k versus a loss of £447k last year.
We feel strongly, however, that to drive significant long term profitable
growth it is important that we continue to invest for the future, albeit these
investments are measured against the ability to generate value.
Financial Position
We remain diligent in managing our balance sheet and were pleased to be able
to remain debt free; we are a flexible stocking than other commodity focused
distributors. Cash reserves at year end increased to £5.6 million from £4.7
million at 30 June 2022. This focus on cash levels together with stronger
interest rates available yielded a benefit of £81k of interest, up from £5k
the prior year. We look to balance the value of cash in the bank with the need
to provide flexible stock for our partners and consciously review this on an
ongoing basis. Tied to this approach, we disposed of an office building in
Lightwater in H1 that was no longer core to our operation for a consideration
of £1.48 million and moved Audio Visual Material Ltd into a new leased office
together with our Audio Visual business unit in Basingstoke.
With Net Assets at £23.9 million, including two unencumbered freehold
properties, the Group's overall financial position remains very sound.
Net Assets at 87.7p per share are considerably in excess of the average price
of the ordinary shares throughout the period.
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 final dividend
be 0.3p, at a total cost of £81,695. The dividend will be paid on 19 January
2024 to shareholders on the register as at 15 December 2023.
Staff
Our staff remain a key asset for the business and an area we continue to
invest in. The team has continued to work hard to support our partners and
each other. Our plans remain to continue to invest in our evolving business
model by continuing to invest in building out the best team in the market to
achieve our business evolution.
We were pleased to be able to roll out a Company Share Ownership Plan as a
long term incentive for all staff in July 2023 (post year end), and see this
as a way of rewarding the team who make an impact and drive our results
Outlook
In keeping with prior outlooks that we shared, we remain cautiously optimistic
that the investments we have made in supporting our partners will allow us to
continue to drive growth of strategic business units. We have yet to fully
benefit from these investments, given the ongoing impact of COVID, forex
movements and supply chain issues which together with wider economic
uncertainty due to rising interest rates, inflation and subsequent cost of
living impacts, necessarily mean we must remain cautious about the near term.
We do feel strongly, however, 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. The strength of our balance sheet allows us to continue to do
what is best for the business strategically and we continue to review organic
and non-organic opportunities for growth which meet our strict criteria and
add value for our shareholders.
C.M.Thompson
Chairman
15 November 2023
Contacts:
Northamber PLC Tel: +44 (0) 208 744 8200 investor_relations@northamber.com
Colin Thompson, Chairman
Singer Capital Markets (Nominated Adviser and Sole Broker) +44 (0) 207 496 3000
Philip Davies
investor_relations@northamber.com
Singer Capital Markets (Nominated Adviser and Sole Broker)
+44 (0) 207 496 3000
Philip Davies
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2023
2023 2022
Notes £'000 £'000
Revenue 2 67,149 66,260
Cost of sales (58,243) (57,791)
Gross Profit 8,906 8,469
Distribution costs (5,907) (5,556)
Administrative costs (3,491) (3,365)
Operating Loss (492) (452)
81 5
Finance income
Finance cost - -
Loss before tax (411) (447)
Tax expense - -
Loss for the year and total comprehensive income attributable to the owners (411) (447)
Basic and diluted Loss per ordinary share 3 (1.51) p (1.64)p
The above results arise from continuing operations
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2023
2023 2022
£'000 £'000
Non current assets
Property, plant and equipment 5,519 6,919
Intangible assets 1,251 1,309
6,770 8,228
Current assets
Inventories 11,447 10,649
Trade and other receivables 12,099 11,245
Cash and cash equivalents 5,512 4,696
29,058 26,590
Total assets 35,828 34,818
Current liabilities
Trade and other payables (11,951) (10,329)
Corporation tax payable - (38)
Total liabilities (11,951) (10,367)
Net assets 23,877 24,451
Equity
Share capital 272 272
Share premium account 5,734 5,734
Capital redemption reserve 1,514 1,514
Retained earnings 16,357 16,931
Equity shareholders' funds attributable to the owners of the parent 23,877 24,451
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 30 June 2023
Share Capital Share Premium Account Capital Redemption Reserve Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 July 2021 272 5,734 1,514 17,569 25,089
Dividends - - - (191) (191)
Transactions with owners - - - (191) (191)
Loss and total comprehensive income for the year - - - (447) (447)
Balance at 30 June 2022 272 5,734 1,514 16,931 24,451
Dividends - - - (163) (163)
Transactions with owners - - - (163) (163)
Loss and total comprehensive income for the year - - - (411) (411)
Balance at 30 June 2023 272 5,734 1,514 16,357 23,877
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2023
2023 2022
£'000 £'000
Cash flows from operating activities
Operating Loss from continuing operations (492) (452)
Depreciation of property, plant and equipment 357 336
Amortisation of intangible assets 58 56
Profit on disposal of property, plant and equipment (74) (15)
Operating loss before changes in working capital (151) (75)
Increase in inventories (798) (2,181)
Increase in trade and other receivables (854) (492)
Increase in trade and other payables 1,622 463
Cash used in operations (181) (2,285)
Income taxes paid (38) (120)
Net cash used in operating activities (219) (2,405)
Cash flows from investing activities
Interest received 81 5
Proceeds from disposal of property, plant and equipment 1,475 60
Purchase of property, plant and equipment (358) (222)
Net cash generated from/(used in) investing activities 1,198 (157)
Cash flows from financing activities
Dividends paid to equity shareholders (163) (191)
Interest paid - -
Net cash used in financing activities (163) (191)
Net increase/(decrease) in cash and cash equivalents 816 (2,753)
Cash and cash equivalents at beginning of year 7,449
4,696
Cash and cash equivalents at end of year 5,512 4,696
Notes
1. Financial information
This financial information is consistent with the consolidated financial
statements of the group for the year ended 30 June 2023. 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 2022 or 30 June 2023 but is
derived from those accounts. The statutory accounts for the year ended 30 June
2022 have been delivered to the Registrar of Companies and those for 2023 will
be delivered following the group's annual general meeting. The auditor's
report on the 2023 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: 2023 2022
£'000 £'000
Revenue from contracts with
customers - UK 66,489 65,602
-other 660 658
67,149 66,260
No customer accounted for more than 10% of the group's revenue for the year.
3. Loss per ordinary share
The calculation of the basic and diluted earnings per share is based on the
following data:
2023 2022
£'000 £'000
Loss for the year attributable to equity holders of the parent company (411) (447)
2023 2022
Number of shares Number Number
27,231,586 27,231,586
Weighted average number of ordinary shares for the purpose of basic and
diluted earnings per share
4. Dividends
A final dividend of 0.3p per share will be paid on 19 January 2024 to those
members on the register at close of business on 15 December 2023.
5. Notice of meeting
The annual report and accounts for the year ended 30 June 2023 will be posted
to shareholders in due course and the Annual General Meeting will be held on
20 December 2023.
The Company's registered office is Namber House, 23 Davis Road, Chessington,
Surrey, KT9 1HS.
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