REG - Northamber PLC - Half-year Report

NorthamberAnnouncement

12/02/2021 07:01

RNS Number : 8734O
  
Northamber PLC
  
12 February 2021
  
 

Northamber PLC
("Northamber" or the "Company" or the "Group")
 
Interim Report for the Six months to 31 December 2020
 
Chairman's Statement
 
Results
 
We are very pleased to be able to report an operating profit driven by year-on-year gross margin growth and year-on-year revenue growth for the last 6 months despite challenging market conditions.
 
Our early decision to stay true to our values and prioritise our team and partners by avoiding any furlough or COVID related cuts, evolved during the period and we invested further in growing our teams, all of which has proven fruitful. Revenues increased 13% in the first half from £26.3 million to £29.6 million for the comparative period last year. More significantly, this revenue growth was combined with a significant increase in Gross Margin from 8.8% to 12.8%; the cumulative effect of both was to increase Gross Profit by £1.5m from £2.3 million to £3.8 million, an increase of 65%. 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 have impacted performance in some of our strategic business units and our subsidiary AVM, as site restrictions limited access for higher end projects but we are hopeful of improved performance as these restrictions ease later in 2021 and beyond. 
 
It is clearly pleasing to see a 65% increase in Gross Profit year on year however our focus on efficiency and cost management remains strong; we remain focused on optimising the business for long term results and investing as needed to drive this. Our warehouse changes in the last financial year was a significant undertaking and we are seeing the benefits through an improved cost base, whilst still providing significant capacity to scale the business further.
 
To support this increase in Gross Profit, and in anticipation of continued growth, our Distribution costs increased year on year from £1.53 million to £2.28 million; part of this costs increase also came from the addition of AVM to the group. Administrative costs also increased marginally from £1.15 million to £1.29 million as we continue to invest to support our future plans. 
 
Financial position 
 
Stock levels are higher than last year at £8.4 million against £4.5 million, in part due to the AVM acquisition, and also as we continued to seek to profitably support our partners by maintaining sufficient stock in country during the uncertainty of logistics derived from Brexit and COVID impacts on supply chains. We see our flexibility on local stock levels as a key driver of our future with our partners, who have recognised the benefits of Northamber's financial strength in underpinning this.
 
Cash was £10.8 million at 31 December 2020 compared with £14.7 million at 31 December 2019, reflecting the sale of the Brooklands distribution centre and the purchase of the new Swindon warehouse, the acquisition of AVM and a new office, where AVM is now located. With Fixed Assets at book value at £7.1 million, including three unencumbered freehold properties, the Group's overall financial position is very sound.
 
Net Assets at 92.3p 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 interim dividend be 0.3p, at a total cost of £81,695. The dividend will be paid on 27 May 2021 to shareholders on the register as at 30 April 2021. 
 
Staff
 
The Board remain grateful and pleased for how our team continues to pull together to flexibly support our partners and each other through these unprecedented times. We strongly believe that our staff are a key differentiator for our business and we are delighted to be able to continue to grow with them and offer them continued job security. We intend 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.
 
Outlook 
 
In keeping with the outlook we shared in our recently published full year results, we remain cautiously optimistic that the investments we have made in supporting our partners coupled with removing the one off costs tied to moving warehouse should be reflected in the trading results for the current financial year and allow us to build on our profitable first half. We necessarily remain cautious due to the economic uncertainty, Brexit and the potential further impact of COVID on demand and the supply chain, 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.  
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
 
12 February 2021
 
 
Contacts:
 




Northamber PLC                              Tel: +44 (0) 208 744 8200
Colin Thompson, Chairman


investor_relations@northamber.com




 


 




N+1 Singer (Nominated Adviser and Sole Broker)


Tel: +44 (0) 207 496 3000




Philip Davies (Corporate Finance)
Alex Bond (Corporate Finance)


 




 
 
 
 
 




Consolidated Statement of Comprehensive Income


 




6 months to 31 December 2020


 




 
 


 


 


 


 


 




 


 


 


6 months 


6 months 


Year




 


 


 


Ended


Ended


Ended




 


 


 


31.12.20


31.12.19


30.06.20




 


 


 


£'000


£'000


£'000




 


 


 


Unaudited


Unaudited


Audited




 


 


 


 


 


 




 


Revenue


 


29,679


26,273


52,835




 


Cost of sales


 


(25,878)


(23,972)


(47,998)




 


Gross Profit


 


3,801


2,301


5,478




 


 
Distribution cost


 


(2,284)


(1,533)


(3,601)




 


Administrative costs


 


(1,294)


(1,152)


(2,613)




 


Administrative costs-Exceptional acquisition costs


 


-


-


(220)




 


Other income-Exceptional gain on disposal of property


 


-


10,203


10,804




 


 


 


 


 


 




 


Profit  from operations


 


223


9,819


9,848




 


Investment revenue


 


7


167


92




 


Finance cost


 


-


-


(15)




 


Profit  before Tax


 


230


9,986


9,925




 


Tax charge


 


-


(1,643)


(1,413)




 


Profit  and total comprehensive 


 


 


 


 




 


Income for the period


 


230


8,343


8,512




 


 


 


 


 


 




 


 


 


 


 


 




 






Basic and diluted profit  per ordinary share

 


 



 


 


0.84p


30.50p


31.16p



 
 
 
 
 
 
 
 



 
 
 
 
Consolidated Statement of Financial Position
As At 31 December 2020
 




 


 


6 months Ended 31.12.20


 


6 months
Ended 31.12.19


 


Year Ended
30.06.20




 


 


    £'000
Unaudited


 


  £'000
Unaudited


 


    £'000
Audited




 


 


 


 


 


 


 


 




Non -current assets


 


 


 


 


 


 


 




Property, plant and equipment


 


7,102


 


5,169


 


7,184


 




Goodwill and intangible assets


 


1,391


 


-


 


1,421


 




 


 


8,493


 


5,169


 


8,605


 




Current assets


 


 


 


 


 


 


 




Inventories


 


8,401


 


4,458


 


5,948


 




Trade and other receivables


 


8,821


 


8,137


 


7,750


 




Cash and cash equivalents


 


10,802


 


14,675


 


10,968


 




 


 


28,024


 


27,270


 


24,666


 




 
 


 


 


 


 


 


 


 




Total assets


 


36,517


 


32.439


 


33,271


 




 


 


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 


 




Trade and other payables


 


(11,372)


 


(7,461)


 


(8,356)


 




 


 


 


 


 


 


 


 




Total liabilities


 


(11,372)


 


(7,461)


 


(8,356)


 




 


 


 


 


 


 


 


 




Net assets


 


25,145


 


24,978


 


24,915


 




 


 


 


 


 


 


 


 




 


 


 


 


 


 


 


 




Equity


 


 


 


 


 


 


 




Share capital


 


272


 


273


 


272


 




Share premium account


 


5,734


 


5,734


 


5,734


 




Capital redemption reserve


 


1,514


 


1,513


 


1,514


 




Treasury shares


 


-


 


(7)


 


-


 




Retained earnings


 


17,625
 


 


17,465


 


17,395
 


 




Equity shareholders' funds attributable to the owners of the parent 


 


25,145


 


24,978


 


24,915


 




 


 


 


 


 


 


 


 



 
 
 
 
 
 
 
 
 
 
 
 
 



 
 
 
Company Statement of Financial Position
As At 31 December 2020
 




 


 


6 Months Ended
31.12.20


 


6 months Ended
31.12.19


 


Year Ended
30.06.20




 


 


    £'000
Unaudited


 


  £'000
Unaudited


 


    £'000
Audited




 


 


 


 


 


 


 




Non -current assets


 


 


 


 


 


 




Property, plant and equipment


 


1,687


 


1,730


 


1,748




Investments


 


2,135


 


6,588


 


2,135




 


 


3,822


 


8,318


 


3,883




Current assets


 


 


 


 


 


 




Inventories


 


7,748


 


4,458


 


5,304




Trade and other receivables


 


8,248


 


7,974


 


7,509




Cash and cash equivalents


 


7,809


 


3,012


 


4,700




 


 


23,805


 


15,444


 


17,513




 
 


 


 


 


 


 


 




Total assets


 


27,627


 


23,762


 


21,396




 


 


 


 


 


 


 




Current liabilities


 


 


 


 


 


 




Trade and other payables


 


(14,684)


 


(10,945)


 


(8,709)




 


 


 


 


 


 


 




Total liabilities


 


(14,684)


 


(10,945)


 


(8,709)




 


 


 


 


 


 


 




Net assets


 


12,943


 


12,817


 


12,687




 


 


 


 


 


 


 




 


 


 


 


 


 


 




Equity


 


 


 


 


 


 




Share capital


 


272


 


273


 


272




Share premium account


 


5,734


 


5,734


 


5,734




Capital redemption reserve


 


1,514


 


1,513


 


1,514




Treasury shares


 


-


 


(7)


 


-




Retained earnings


 


5,423
 


 


5,304


 


5,167
 




Equity shareholders' funds attributable to the owners of the parent 


 


12,943


 


12,817


 


12,687




 


 


 


 


 


 


 



 
 
 
 
 
 
 
 
 



 
 

 
 




Consolidated Statement of Changes in Equity


 


 


 


 




As at 31 December 2020


 


 


 


 


 


 




 


 


 


 


 


 


 


 




 


 


Share capital


Share premium account


Capital redemption reserve 


Treasury Shares


Retained earnings


Total Equity




 


 


£'000


£'000


£'000


£'000


£'000


£'000




 


 


 


 


 


 


 


 




 


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 


 


 


 


 


 


 




 


income for the period


-


-


-


-


8,343


8,343




 


Balance at 31 December  2019


273


5,734


1,513


-


17,465


24,978




 


 


 


 


 


 


 


 




 


Period to 31 December 2020


 


 


 


 


 


 




 


Unaudited


 


 


 


 


 


 




 


Balance at 1 July 2020


272


5,734


1,514


-


17,395


24,915




 


Dividends


-


-


-


-


-


-




 


Profit and total comprehensive 


 


 


 


 


 


 




 


Income for the period


-


-


-


-


230


230




 


Balance at 31 December  2020
 


272


5,734


1,514


-


17,625


25,145




 


 


 


 


 


 


 


 




 


Year to 30 June 2020


 


 


 


 


 


 




 


Audited


 


 


 


 


 


 




 


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 period


-


-


-


-


      8,512


  8,512




 


Balance at 30 June 2020


272


5,734


1,514


-


17,395


24,915




 
 
 




Company Statement of Changes in Equity


 


 


 


 




As at 31 December 2020


 


 


 


 


 


 




 


 


 


 


 


 


 


 




 


 


Share capital


Share premium account


Capital redemption reserve 


Treasury Shares


Retained earnings


Total Equity




 


 


£'000


£'000


£'000


£'000


£'000


£'000




 


 


 


 


 


 


 


 




 


Period to 31 December 2019


 


 


 


 


 


 




 


Unaudited


 


 


 


 


 


 




 


Balance at 1 July 2019


273


5,734


1,513


(7)


5,587


13,100




 


Dividends


-


-


-


 


-


-




 


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




 


 


 


 


 


 


 


 




 


Period to 31 December 2020


 


 


 


 


 


 




 


Unaudited


 


 


 


 


 


 




 


Balance at 1 July 2020


272


5,734


1,514


-


5,167


12,687




 


Dividends


-


-


-


 


-


-




 


Profit and total comprehensive 


 


 


 


 


 


 




 


income for the period


       -


     -   


                -       


-


256


256




 


Balance at 31 December  2020


272


5,734


1,514


-


5,423


12,943




 


 


 


 


 


 


 


 




 


Year to 30 June 2020


 


 


 


 


 


 




 


Audited


 


 


 


 


 


 




 


Balance at 1 July 2019


273


5,734


1,513


(7)


5,587


13,100




 


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)




 


Loss and total comprehensive 


 


 


 


 


 


 




 


loss for the year


-


-


-


-


(181)


(181)




 


Balance at 30 June 2020


272


5,734


1,514


-


5,167


12,687




 
 
 




 
Consolidated Statement of Cash Flows


 


 


 


 




6 months to 31 December 2020


 


 


 


 




 


 


 


6 months 


6 months 


Year


 




 


 


 


Ended


Ended


Ended


 




 


 


 


31.12.20


31.12.19


 
30.06.20


 




 


 


 


£'000


£'000


£'000


 




 


 


 


Unaudited


Unaudited


Audited


 




 


Cash from operating activities


 


 


 


 


 




 


Operating profit from


 


 


 


 


 




 


continuing operations


 


223


9,819


9,848


 




 


Depreciation of property, plant


 


 


 


 


 




 


and equipment


 


167


62


228


 




 


Amortisation of intangible assets


 


30


-


-


 




 


(Profit)/loss on disposal of property,


 


-


(10,203)


(10,982)


 




 


plant and equipment


 


 


 


 


 




 


Operating profit/(loss) before changes in


 


 


 


 


 




 


working capital


 


420


(322)


(906)


 




 


 


 


 


 


 


 




 


(Increase)/decrease in inventories


 


(2,453)


(1,138)


(2,039)


 




 


(Increase)/decrease  in trade and


 


 


 


 


 




 


other receivables


 


(1,070)


1,355


2,899


 




 


Increase/(decrease)  in trade and


 


 


 


 


 




 


other payables


 


3,015


(1,616)


(1,172)


 




 


Cash (used)/generated from operations


 


(88)


(1,721)


(1,218)


 




 


 


 


 


 


 


 




 


Income taxes received/(paid)


 


-


-


-


 




 


Net cash from operating activities


 


(88)


(1,721)


(1,218)


 




 


 


 


 


 


 


 




 


Cash flows from investing activities


 


 


 


 


 




 


Interest received


 


7


167


92


 




 


Interest paid


 


-


-


(15)


 




 


Proceeds from disposal of property,


 


 


 


 


 




 


plant and equipment


 


-


            16,222


16,400


 




 


Purchase of property, plant and


 


 


 


 


 




 


Equipment


 


(85)


(3,439)


(5,370)


 




 


Purchase of AVM Ltd


 


-


-


(2,135)


 




 


Net cash from investing activities


 


(78)


12,950


8,972


 




 


 


 


 


 


 


 




 


Cash flows from financing activities


  


 


 


 


 




 


Dividends paid to equity shareholders


 


-


-


(164)


 




 


Purchase of own shares for cancellation 


 


-


-


(68)


 




 


Net cash used in financing activities


 


-


-


(232)


 




 


 


 


 


 


 


 




 


Net (decrease)/increase in cash and


 


 


 


 


 




 


cash equivalents


 


(166)


11,229


7,522


 




 


Cash and cash equivalents at


 


 


 


 


 




 


beginning of period


 


10,968


3,446


5,446


 




 


 


 


 


 


 


 




 


Cash and cash equivalents at end of period


10,802


14,675


10,968


 




Company Statement of Cash Flows


 


 


 


 


 




6 months to 31 December 2020


 


 


 


 


 




 


 


 


6 months 


6 months 


Year


 




 


 


 


Ended


Ended


Ended


 




 


 


 


31.12.20


31.12.19


30.06.20


 




 


 


 


£'000


£'000


£'000


 




 


 


 


Unaudited


Unaudited


Audited


 




 


Cash from operating activities


 


 


 


 


 




 


Operating profit/(loss) from


 


 


 


 


 




 


continuing operations


 


249


(393)


(198)


 




 


Depreciation of property, plant


 


 


 


 


 




 


and equipment


 


68


62


131


 




 


Operating profit/(loss) before changes in


 


 


 


 


 




 


working capital


 


317


(331)


(67)


 




 


 


 


 


 


 


 




 


(Increase)/decrease in inventories


 


(2,444)


(1,138)


(1,984)


 




 


(Increase)/decrease in trade and


 


 


 


 


 




 


other receivables


 


(739)


1,518


1,983


 




 


Increase/(decrease)  in trade and


 


 


 


 


 




 


other payables


 


5,975


(476)


(2,703)


 




 


Cash generated/(used) from operations


 


3,109


(418)


(2,771)


 




 


 


 


 


 


 


 




 


Income taxes received/(paid)


 


-


-


-


 




 


Net cash from operating activities


 


3,109


(418)


(2,771)


 




 


 


 


 


 


 


 




 


Cash flows from investing activities


 


 


 


 


 




 


Interest received


 


7


110


          17


 




 


Purchase of property, plant and


 


 


 


 


 




 


Equipment


 


(7)


-


(87)


 




 


Purchase of AVM Ltd


 


-


-


(2,135)


 




 


Repayment of long term loan held as investment


 


-


-


6,588


 




 


Net cash from investing activities


 


 
-


 
110


4,383


 




 


 


 


 


 


 


 




 


Cash flows from financing activities


 


 


 


 


 




 


Dividends paid to equity shareholders


 


-


-


(164)


 




 


Purchase of own shares for cancellation 


 


-


-


(68)


 




 


Net cash used in financing activities


 


-


-


(232)


 




 


 


 


 


 


 


 




 


Net increase/(decrease) in cash and


 


 


 


 


 




 


cash equivalents


 


3,109


(308)


1,380


 




 


Cash and cash equivalents at


 


 


 


 


 




 


beginning of period


 


4,700


3,320


3,320


 




 


 


 


 


 


 


 




 


Cash and cash equivalents at end of period


7,809


3,012


4,700


 



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



 
 
 
 
Notes to the financial statements
 
1.            Corporate Information
 
The financial information for the half year ended 31 December 2020 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The auditor's report on the financial statements for the year ended 30 June 2020 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 2020. 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 2020.
 
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 2020 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
 
The consolidated financial statements incorporate the financial statements of Northamber plc and entities controlled by Northamber plc. Control is achieved if all three of the following are achieved: power over the investee, exposure to variable returns for the investee, and the ability of the investor to use its power to affect those variable returns.
 
The results of subsidiaries are included in the consolidated statement of comprehensive income and consolidated statement of financial position.
 
The results of entities acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
 
Where necessary, the accounts of the subsidiaries are adjusted to conform to the group's accounting policies. All intra-group transactions, balances, income and expenses are eliminated on consolidation.
 
 
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 2020


 


 


 


 


 




Total Segment revenue


29,292


 


387


 


     29,679




 


 


 


 


 


 




Year to 30 June 2020


 


 


 


 


 




Total Segment revenue


52,391


 


444


 


52,835




 
No customer accounted for more than 10% of the Group's revenue during the period.
 
5.            Taxation
 
No tax charge has been provided in the interim consolidated financial statements due to the availability of carried forward losses.
 
6.            Earnings per Share
 
The calculation of earnings per share is based on the Profit after tax for the six months to 31 December 2020 of £230,000 (2019:8,343,000) and a weighted average of 27,231,586 (2019: 27,356,586) ordinary shares in issue.
 
7.            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 10 to 12 of the Annual Report and Accounts for the year ended 30 June 2020 (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
 
·    Brexit risk 
 
·    Covid-19 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 A M Phillips is the ultimate controlling party of the Company.
 
During the six months period, the company paid £150,000 (2019: £12,925) rent to Anitass Limited, a wholly owned subsidiary. At 31 December 2020 Northamber plc owed Anitass Ltd £6,325,000 (2019:£4,510,000).
 
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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