REG - Northamber PLC - Half-year Report <Origin Href="QuoteRef">NAR.L</Origin>

NorthamberAnnouncement

14/02/2018 07:05

RNS Number : 8014E
Northamber PLC
14 February 2018
Northamber PLC
("Northamber" or the "Company")
Interim Report for the Six months to 31 December 2017
Chairman's Statement
Results
It is refreshing to be able to open a report to shareholders with an overdue sense of delivered achievement. Turnover at 31.6 million for the first six months of the current year was 9.1% greater than the corresponding period of last year with an increase in Gross Profit of 173,000, resulting in a reduced loss before tax of 201,000 down from 539,000 a year ago.
Not only is it pleasing to report an improvement, but gratifying when the constituent elements of that improvement vindicate our policy of constantly moving towards more specialised, technical and higher margin products. We have continued to reduce exposure to the evaporating net margins on many of the older established technology products, albeit with a reduction in revenues.
Many of those more mature technology products, originally carrying worthwhile revenue and gross profits, now form the basic IT foundations of a business user's installation. Against newer technologies bringing performance gains and efficiencies, they have evolved to become near commodity products as reflected by falling prices and margins. The number of higher margin opportunities has increased in our first half compared with the same period of the previous year.
The more commodity aspects of the business did however also see a small improvement in turnover for this half compared with the first half of last year. It recovered from the slow-down in the first half of 2017, returning towards its previous level, albeit at the now almost inevitable slightly reduced margin.
Further efficiency gains were made in both Distribution and Administration overhead and costs. There was also a minimal increase in the contribution in our investment income.
Financial Position
With Tangible Net Book value Fixed Assets at almost 8 million and Net Current Assets at 9.9 million with zero borrowings, the company remains financially strong.
Overall net cash balances were 2.2 million at the end of December 2017 and the trading improvement was reflected in increased debtors within terms, compared with 4.3 million at end December 2016 and 4.9 million at end June 2017.
The differing trading profile of the newer technology resellers, resulted in our debtor days increasing from 49 days to 57 days and our creditor days from 43 days to 52 days. The resultant impact on net liquidity has been marginal, with the Current Assets ratio (excluding cash) only falling from 1.77 times to 1.74 times.
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 28,159. The dividend will be paid on 11 May 2018 to shareholders on the register as at 20 April 2018.
Staff
Much of the improved position is due to the efforts of management and staff. To make headway in newer areas within the present very difficult trading conditions evidenced by the published and rumoured weaknesses in previously undoubted trading names, requires constant diligence and for this I am as always deeply grateful to each and every one of our staff.
Outlook
Whilst now moving faster in a better, and we hope a right, direction, the current position is far from satisfactory. Each step forward appears to be thwarted by adverse happenings undermining the confidence of our customers' ultimate users, which hampers achieving the goals and targets we set for ourselves.
Nevertheless we will continue to strive and take advantage of every opportunity to take the company forward, with a return to profitability when we can make use of the accumulated pre-tax losses, for the benefit of all shareholders.
Realistically, we cannot be over-optimistic on short term results but more hopeful than not that those improvements we have shown might continue as we move through 2018 and beyond.
D.M. Phillips
Chairman
14 February 2018
For more information please contact:
Northamber plc
020 8296 7000
David Phillips, Chairman
Cantor Fitzgerald Europe (Nominated Adviser & Broker)
020 7894 7000
Phil Davies
Consolidated Statement of Comprehensive Income
6 months to 31 December 2017
6 months
6 months
Year
Ended
ended
ended
31.12.17
31.12.16
30.06.17
'000
'000
'000
Unaudited
Unaudited
Audited
Revenue
31,659
29,003
57,288
Cost of sales
(29,239)
(26,756)
(52,896)
Gross Profit
2,420
2,247
4,392
Distribution cost
(1,471)
(1,575)
(3,042)
Administrative expenses
(1,176)
(1,234)
(2,401)
(Loss) from operations
(227)
(562)
(1,051)
Investment revenue
26
23
52
(Loss) before tax
(201)
(539)
(999)
Tax credit/(charge)
-
-
-
Loss and total comprehensive income
for the period
(201)
(539)
(999)
Basic and diluted (loss) per ordinary share
(0.71)p
(1.91)p
(3.55)p
Consolidated Statement of Financial Position
As at 31 December 2017
As at
As at
As at
31.12.17
31.12.16
30.06.17
'000
'000
'000
Unaudited
Unaudited
Audited
Non current assets
Property, plant and equipment
7,953
7,914
8,025
Current assets
Inventories
5,953
5,028
4,176
Trade and other receivables
12,005
9,488
9,052
Cash and cash equivalents
2,247
4,357
4,972
20,205
18,873
18,200
Total assets
28,158
26,787
26,225
Current liabilities
Trade and other payables
(10,294)
(8,206)
(8,160)
Total liabilities
(10,294)
(8,206)
(8,160)
Net assets
17,864
18,581
18,065
Equity
Share capital
281
281
281
Share premium account
5,734
5,734
5,734
Capital redemption reserve fund
1,505
1,505
1,505
Retained earnings
10,344
11,061
10,545
Equity shareholders' fund
17,864
18,581
18,065
Company Statement of Financial Position
As at 31 December 2017
As at
As at
As at
31.12.17
31.12.16
30.06.17
'000
'000
'000
Unaudited
Unaudited
Audited
Non current assets
Property, plant and equipment
1,864
1,769
1,900
Investments
6,588
6,588
6,588
8,452
8,357
8,488
Current assets
Inventories
5,953
5,028
4,176
Trade and other receivables
12,005
9,487
9,052
Cash and cash equivalents
2,210
4,316
4,934
20,168
18,831
18,162
Total assets
28,620
27,188
26,650
Current liabilities
Trade and other payables
(13,515)
(10,850)
(11,080)
Total liabilities
(13,515)
(10,850)
(11,080)
Net assets
15,105
16,338
15,570
Equity
Share capital
281
281
281
Share premium account
5,734
5,734
5,734
Capital redemption reserve fund
1,505
1,505
1,505
Retained earnings
7,585
8,818
8,050
Equity shareholders' fund
15,105
16,338
15,570
Consolidated Statement of Changes in Equity
As at 31 December 2017
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total Equity
'000
'000
'000
'000
'000
Period to 31 December 2016
Unaudited
Balance at 1 July 2016
281
5,734
1,505
11,600
19,120
Dividends
-
-
-
-
-
Loss and total comprehensive
loss for the period
-
-
-
(539)
(539)
Balance at 31 December 2016
281
5,734
1,505
11,061
18,581
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
-
-
-
 (201)
(201)
loss for the period
Balance at 31 December 2017
281
5,734
1,505
10,344
17,864
Year to 30 June 2017
Audited
Balance at 1 July 2016
281
5,734
1,505
11,600
19,120
Dividends
-
-
-
(56)
(56)
Transactions with owners
-
-
-
(56)
(56)
Loss and total comprehensive
loss for the period
-
-
-
 (999)
(999)
Balance at 30 June 2017
281
5,734
1,505
10,545
18,065
Company Statement of Changes in Equity
As at 31 December 2017
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Total Equity
'000
'000
'000
'000
'000
Period to 31 December 2016
Unaudited
Balance at 1 July 2016
281
5,734
1,505
9,620
17,140
Dividends
-
-
-
-
-
Loss and total comprehensive
loss for the period
-
-
-
(802)
(801)
Balance at 31 December 2016
281
5,734
1,505
8,818
16,338
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
Year to 30 June 2017
Audited
Balance at 1 July 2016
281
5,734
1,505
9,620
17,140
Dividends
-
-
-
(56)
(56)
Transactions with owners
-
-
-
(56)
(56)
Loss and total comprehensive
loss for the period
-
-
-
(1,514)
(1,514)
Balance at 30 June 2017
281
5,734
1,505
8,050
15,570
Consolidated Statement of Cash Flows
6 months to 31 December 2017
6 months
6 months
Year
Ended
ended
Ended
31.12.17
31.12.16
30.06.17
'000
'000
'000
Unaudited
Unaudited
Audited
Cash from operating activities
Operating (loss) from
continuing operations
(227)
(562)
(1,051)
Depreciation of property, plant
and equipment
91
83
166
(Profit)/loss on disposal of property,
-
(4)
(4)
plant and equipment
Operating (loss) before changes in
working capital
(136)
(483)
(889)
(Increase)/decrease in inventories
(1,777)
(22)
830
(Increase)/decrease in trade and
other receivables
(2,953)
(1,029)
(593)
Increase/(decrease) in trade and
other payables
2,134
400
355
Cash (used)/generated from operations
(2,732)
(1,134)
(297)
Income taxes received/(paid)
-
Net cash from operating activities
(2,732)
(1,134)
(297)
Cash flows from investing activities
Interest received
26
23
52
Proceeds from disposal of property,
plant and equipment
-
4
4
Purchase of property, plant and
Equipment
(19)
(2)
(197)
Net cash from investing activities
7
25
(141)
Cash flows from financing activities
Dividends paid to equity shareholders
-
-
(56)
Net cash used in financing activities
-
-
(56)
Net (decrease)/increase in cash and
cash equivalents
(2,725)
(1,109)
(494)
Cash and cash equivalents at
beginning of period
4,972
5,466
5,446
Cash and cash equivalents at end of period
2,247
4,357
4,972
Company Statement of Cash Flows
6 months to 31 December 2017
6 months
6 months
Year
Ended
Ended
Ended
31.12.17
31.12.16
30.06.17
'000
'000
'000
Unaudited
Unaudited
Audited
Cash from operating activities
Operating (loss) from
continuing operations
(491)
(824)
(1,567)
Depreciation of property, plant
and equipment
55
45
94
(Profit)/loss on disposal of property,
plant and equipment
-
(4)
 (4)
Operating (loss) before changes in
working capital
(436)
(783)
(1,477)
(Increase)/decrease in inventories
(1,777)
(22)
830
(Increase)/decrease in trade and
other receivables
(2,953)
(1,029)
(593)
Increase/(decrease) in trade and
other payables
2,435
699
 931
Cash (used)/generated from operations
(2,731)
(1,135)
(309)
Income taxes received/(paid)
-
-
-
Net cash from operating activities
(2,731)
(1,135)
 (309)
Cash flows from investing activities
Interest received
26
23
52
Proceeds from disposal of property,
plant and equipment
-
4
4
Purchase of property, plant and
Equipment
(19)
(2)
(183)
Net cash from investing activities
7
25
(127)
Cash flows from financing activities
Dividends paid to equity shareholders
-
-
(56)
Net cash used in financing activities
-
-
(56)
Net (decrease)/increase in cash and
cash equivalents
(2,724)
(1,110)
(492)
Cash and cash equivalents at
beginning of period
4,934
5,426
5,426
Cash and cash equivalents at end of period
2,210
4,316
4,934
Notes to the financial statements
1. Corporate Information
The financial information for the half year ended 31 December 2017 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 2017 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 2017. 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 2017.
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 2017 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
'000
'000
'000
6 months to December 2017
Total Segment revenue
31,554
105
31,659
Year to 30 June 2017
Total Segment revenue
56,996
292
57,288
One customer accounted for more than 10% of the group's revenue for the period, being 5.9m.
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 2017 of 201,000 (2016: loss 539,000) and a weighted average of 28,158,735 (2016: 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 2017. 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 2017 (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 300,500 (2016: 300,500) rent to Anitass Limited, a wholly owned subsidiary. At 31 December 2017 Northamber plc owed Anitass Ltd 3,259,000 (2016:2,676,000).
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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