REG - Northamber PLC - Half-year Report
29/03/2022 07:00
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RNS Number : 2709G Northamber PLC 29 March 2022
Northamber PLC
("Northamber" or the "Company" or the "Group")
Interim Report for the Six months to 31 December 2021
Chairman's Statement
Results
We are pleased to share that we have continued to grow revenue year on year by
8.8% from £29.7m to £32.3m whilst maintaining gross margins at 12.9% (12.8%
prior year) despite challenging and very dynamic market conditions. This
served to generate an increase in Gross Margins of £0.35m year on year and
reflected our continued focus on evolving our product mix towards higher
margin, more technical products through Northamber and AVM.
Previously discussed lockdown challenges eased but still impacted some
performance in some of our strategic business units and our subsidiary AVM, as
Covid easing still impacted some site access for higher end projects and the
rental market, but we are hopeful of improved performance as these
restrictions continue to ease.
Distribution costs increased significantly however as we continued to invest
in developing the team for our significant growth ambitions; we were also
affected by significant increases year on year on carriage costs (our biggest
non-payroll cost).
Unfortunately the increase in distribution and administration costs outweighed
the margin growth and resulted in a reduction of EBITDA year on year to £64K
and an operating loss for the half of £0.1m versus a profit of £0.2m 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.
We regularly review these investments and all costs to ensure we are
generating value.
Financial position
Stock levels are higher than last year at £11.2 million against £8.4 million
at 31 December 2020 as we continued to seek to profitably support our partners
by maintaining sufficient stock in country during the uncertainty of chip
shortages together with continued impact of Brexit and COVID on supply chains.
The investment in inventory meant that cash reserves fell from £7.4 million
at 30 June 2021 to £4.7 million. With Fixed Assets at book value at £7.0
million, including three unencumbered freehold properties, the Group's overall
financial position is very sound.
Net Assets at 91.7p 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 interim
dividend be 0.3p, at a total cost of £81,695. The dividend will be paid on 28
April 2022 to shareholders on the register as at 8 April 2022.
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.
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 as some of these
investments returns have been hampered by the impact of COVID and supply chain
issues. We necessarily remain cautious due to the economic uncertainty,
Brexit, the potential further impact of COVID and supply chain pressures 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
29 March 2021
Contacts:
Northamber PLC Tel: +44 (0) 208 744 8200
Colin Thompson, Chairman
investor_relations@northamber.com (mailto:investor_relations@northamber.com)
Singer Capital Markets (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 2021
6 months 6 months Year
Ended Ended Ended
31.12.21 31.12.20 30.06.21
£'000 £'000 £'000
Unaudited Unaudited Audited
Revenue 32,276 29,679 60,009
Cost of sales (28,123) (25,878) (52,200)
Gross Profit 4,153 3,801 7,809
(2,670) (2,284) (4,595)
Distribution cost
Administrative costs (1,599) (1,294) (2,837)
(Loss)/Profit from operations (116) 223 377
Finance income - 7 8
(Loss)/Profit before Tax (116) 230 385
Tax charge - - (48)
(Loss)/Profit and total comprehensive
Income for the period (116) 230 337
Basic and diluted profit per ordinary share (0.43p) 0.84p 1.24p
(0.43p)
0.84p
1.24p
Consolidated Statement of Financial Position
As At 31 December 2021
6 months Ended 31.12.21 6 months Year Ended
Ended 31.12.20 30.06.21
£'000 £'000 £'000
Unaudited Unaudited Audited
Non -current assets
Property, plant and equipment 7,004 7,102 7,079
Goodwill and intangible assets 1,336 1,391 1,365
8,340 8,493 8,444
Current assets
Inventories 11,190 8,401 8,468
Trade and other receivables 9,639 8,821 10,753
Cash and cash equivalents 4,737 10,802 7,449
25,566 28,024 26,670
Total assets 33,906 32.439 35,114
Current liabilities
Trade and other payables (8,885) (11,372) (9,866)
Corporation tax payable (48) - (159)
Total liabilities (8,933) (11,372) (10,025)
Net assets 24,973 25,145 25,089
Equity
Share capital 272 273 272
Share premium account 5,734 5,734 5,734
Capital redemption reserve 1,514 1,514 1,514
Retained earnings 17,453 17,625 17,569
Equity shareholders' funds attributable to the owners of the parent 24,973 25,145 25,089
Consolidated Statement of Changes in Equity
As at 31 December 2021
Share capital Share premium account Capital redemption reserve Treasury Shares Retained earnings Total Equity
£'000 £'000 £'000 £'000 £'000 £'000
Period to 31 December 2020
Unaudited
Balance at 1 July 2020 273 5,734 1,514 - 17,395 24,915
Dividends - - - - - -
Profit and total comprehensive
income for the period - - - - 230 230
Balance at 31 December 2020 273 5,734 1,514 - 17,625 25,145
Period to 31 December 2021
Unaudited
Balance at 1 July 2021 272 5,734 1,514 - 17,569 25,089
Dividends - - - - - -
Profit and total comprehensive
Income for the period - - - - (116) (116)
Balance at 31 December 2021 272 5,734 1,514 - 17,453 24,973
Year to 30 June 2021
Audited
Balance at 1 July 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 period - - - - 337 337
Balance at 30 June 2021 272 5,734 1,514 - 17,569 25,089
Consolidated Statement of Cash Flows
6 months to 31 December 2021
6 months 6 months Year
Ended Ended Ended
31.12.21 31.12.20
30.06.21
£'000 £'000 £'000
Unaudited Unaudited Audited
Cash from operating activities
Operating (loss)/profit from
continuing operations (116) 223 337
Depreciation of property, plant
and equipment 151 167 350
Amortisation of intangible assets 28 30 56
Profit on disposal of property, - - (13)
plant and equipment
Operating profit/(loss) before changes in
working capital 63 420 770
Increase in inventories (2,722) (2,453) (2,520)
Decrease/(increase) in trade and
other receivables 1,114 (1,070) (3.003)
(Decrease)/increase in trade and
other payables (981) 3,015 2,923
Cash (used)/generated from operations (2,526) (88) (1,830)
Income taxes paid (111) - (1,302)
Net cash from operating activities (2,637) (88) (3,132)
Cash flows from investing activities
Interest received - 7 8
Proceeds from disposal of property,
plant and equipment - - 17
Purchase of property, plant and
Equipment (75) (85) (249)
Net cash from investing activities (75) (78) (224)
Cash flows from financing activities
Dividends paid to equity shareholders - - (163)
Net cash used in financing activities - - (163)
Net decrease in cash and
cash equivalents (2,712) (166) (3,519)
Cash and cash equivalents at
beginning of period 7,449 10,968 10,968
Cash and cash equivalents at end of period 4,737 10,802 7,449
Notes to the financial statements
1. Corporate Information
The financial information for the half year ended 31 December 2021 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 2021 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 2021. 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
2021.
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 2021 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 2021
Total Segment revenue 31,944 332 32,276
Year to 30 June 2021
Total Segment revenue 59,137 872 60,009
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 Loss after tax for the
six months to 31 December 2021 of £116,000 (2020: Profit £230,000) and a
weighted average of 27,231,586 (2020: 27,231,586) 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 2021 (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 (2020: £150,000)
rent to Anitass Limited, a wholly owned subsidiary. At 31 December 2021
Northamber plc owed Anitass Ltd £7,194,000 (2020: £6,325,000).
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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