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

NorthamberAnnouncement

12/03/2015 07:00

RNS Number : 2141H
Northamber PLC
12 March 2015
Northamber PLC (the "Company")
Interim Statement for the Six months to 31 December 2014
Chairman's Statement
Trading
It makes a very pleasant change to announce to shareholders an overall 18.1% sales increase to 35.7 million from 30.2 million for the equivalent period last year. 
I indicated in my last report on the year ending 30th June 2014 that there were signs of improvement and the upward trend we reported for the second half of last year continued into the first half of the current year, with revenues increasing 9.5% since 30th June 2014.
The gross margin has also increased from 2.0 million, on a margin of 6.7%, to 2.4 million at 6.83%. The reduced pre-tax loss of 292,000 is less than half the 690,000 reported loss for the same period last year. It is disappointing to still be "in the red" but movement is in the right direction. Returns from our strong cash balances remain at very low levels, such that our interest received was only some 25,000 compared with 40,000 in the same period last year.
In the past I have too frequently needed to refer to ongoing price erosion, thin margins and the need for tightly focused management, rather than just building empty revenue. The sector has for too long been driven by either over-supply or poorly regarded products, all then subject to un-commercial, competitive stock clearance pressures, which whilst partially avoidable, has not abated. 
After a very long term downward trend echoing the extreme levels of product driven price erosion, we are achieving a slight resumption of growth in margins. The 13 basis points improvement in the gross margin for the first half year compares favourably with the same period in the previous year. This improvement has been generated by the continued refocusing on those more profitable elements of our business and these established core resources are continuing to show results.
Through careful control overheads in the first half are essentially unchanged against the same period last year, despite the additional distribution costs associated with the increased level of turnover. Administrative overheads were further reduced and enabled additional investment in sales staff, reflecting the needs driven by the evolution of our trading model. 
Balance Sheet
The Company remains totally debt free and cash positive. The increased turnover drove a healthy increase in the level of working capital utilised in the business and as a consequence our free cash fell from 5.07 million at the beginning of the current year to 2.65 million as at the end of December 2014. Our working capital utilisation is obviously driven by seasonal demand stocking levels and the end of December is never the best time for debtor payments. We have since seen an improvement in our cash balances as these payments have been received.
As always, we are most careful in the control of our financial assets and even with the increase in the working capital, the ratios remained within the "very cautious" band of acceptable parameters. Debtor and Creditor days were little changed from last year and the current assets ratio although slightly lower was still at well over two and half times the creditor/payables level. Thus as always the financial situation is sound and added to which are the unencumbered freehold property values. The Board is more than satisfied with the underlying financial strength of the Company.
As we are now an AIM quoted company in a restricted market, our wholly tangible debt free Net Asset Value per share at more than 75 pence compares with a quoted share price averaging around 38 pence, giving no cause for concern.
Dividend
The subject of dividend is complicated by the message it also sends.
Perceived conflict decrees I exclude myself from this subject. Your board has taken particular consideration of the improving results for the period and the strength of our debt free, tangible asset base. 
At a total cost of only 84,476 your Board is again proposing the interim dividend be at the same level as for the interim in the previous year at 0.3p. The dividend will be paid on 12th May 2015 to shareholders on the register as at 17th April 2015.
Outlook
As you will know from my previous reports, I have learned not to speculate or be over optimistic and am hopeful that our improved trading performance will continue. 
As we know from history, however, within both the sector and the economy as a whole, there are many unknowns. Not the least of which will be any delaying effects on the user base I.T refresh intentions, resulting from Microsoft's awaited forthcoming release of Windows 10, following the belated abort of the Windows 9 launch, plus the upcoming General Election. 
The Board is confident that the Company is well placed to benefit from further improvements in revenue growth whilst also continuing to operate a tightly controlled cost structure, thus hopefully insulating us from any untoward surprises.
David Phillips
Chairman
12 March 2015
For further information please contact:
Northamber plc 020 8296 7000
David Phillips
Charles Stanley Securities 020 7149 6942
(Nominated Adviser)
Philip Davies


Consolidated Statement of Comprehensive Income

6 months to 31 December 2014







6 months 
6 months 
Year



ended
ended
ended



31.12.14
31.12.13
30.06.14



'000
'000
'000



Unaudited
Unaudited
Audited







Revenue

35,727
30,246
62,865

Cost of sales

(33,287)
(28,220)
(58,593)

Gross Profit

2,440
2,026
4,272

Distribution cost

(1,454)
(1,250)
(2,549)

Administrative expenses

(1,303)
(1,506)
(2,948)

(Loss) from operations

(317)
(730)
(1,225)

Investment revenue

25
40
70

(Loss) before tax

(292)
(690)
(1,155)

Tax credit/(charge)

-
-
-

Loss and total comprehensive income





for the period

(292)
(690)
(1,155)













Basic and diluted (loss) per ordinary share

(1.04)
(2.45)
(4.10)


Consolidated Statement of Financial Position


As at 31 December 2014







As at
As at
As at



31.12.14
31.12.13
30.06.14



'000
'000
'000



Unaudited
Unaudited
Audited

Non current assets





Property, plant and equipment

8,205
8,457
8,333

Current assets





Inventories

5,977
5,061
5,053

Trade and other receivables

13,456
10,561
11,689

Cash and cash equivalents

2,646
5,327
5,076



22,079
20,949
21,818







Total assets

30,284
29,406
30,151







Current liabilities





Trade and other payables

(9,053)
(7,250)
(8,628)



(9,053)
(7,250)
(8,628)







Total liabilities

(9,053)
(7,250)
(8,628)







Net assets

21,231
22,156
21,523







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

13,711
14,636
14,003






Equity shareholders' fund

21,231
22,156
21,523


Company Statement of Financial Position


As at 31 December 2014







As at
As at
As at



31.12.14
31.12.13
30.06.14



'000
'000
'000



Unaudited
Unaudited
Audited

Non current assets





Property, plant and equipment

1,882
2,013
1,943

Investments

6,588
6,588
6,588



8,470
8,601
8,531

Current assets





Inventories

5,977
5,061
5,053

Trade and other receivables

13,453
9,628
11,692

Cash and cash equivalents

2,599
5,301
5,071

Tax assets

-
-
14



22,029
19,990
21,830







Total assets

30,499
28,591
30,361







Current liabilities





Trade and other payables

(10,495)
(7,191)
(9,829)



(10,495)
(7,191)
(9,829)







Total liabilities

(10,495)
(7,191)
(9,829)







Net assets

20,004
21,400
20,532







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

12,484
13,880
13,012






Equity shareholders' fund

20,004
21,400
20,532








Consolidated Statement of Changes in Equity



As at 31 December 2014














Share capital
Share premium account
Capital redemption reserve 
Retained earnings
Total Equity


'000
'000
'000
'000
'000








Period to 31 December 2013






Unaudited






Balance at 1 July 2013
281
5,734
1,505
15,326
22,846

Dividends
-
-
-
-
-

Loss and total comprehensive 






loss for the period
-
-
-
(690)
(690)

Balance at 31 December 2013
281
5,734
1,505
14,636
22,156








Period to 31 December 2014






Unaudited






Balance at 1 July 2014
281
5,734
1,505
14,003
21,523

Dividends
-
-
-
-
-

Loss and total comprehensive 
-
-
-
(292)
(292)

loss for the period






Balance at 31 December 2014
281
5,734
1,505
13,711
21,231








Year to 30 June 2014






Audited






Balance at 1 July 2013
281
5,734
1,505
15,326
22,846

Dividends
-
-
-
(168)
(168)

Transactions with owners
-
-
-
(168)
(168)

Loss and total comprehensive 






loss for the period
-
-
-
(1,155)
(1,155)

Balance at 30 June 2014
281
5,734
1,505
14,003
21,523


Company Statement of Changes in Equity



As at 31 December 2014














Share capital
Share premium account
Capital redemption reserve 
Retained earnings
Total Equity


'000
'000
'000
'000
'000








Period to 31 December 2013






Unaudited






Balance at 1 July 2013
281
5,734
1,505
14,792
22,312

Dividends
-
-
-
-
-

Loss and total comprehensive 






loss for the period
-
-
-
(912)
(912)

Balance at 31 December 2013
281
5,734
1,505
13,880
21,400








Period to 31 December 2014






Unaudited






Balance at 1 July 2014
281
5,734
1,505
13,012
20,532

Dividends
-
-
-
-
-

Loss and total comprehensive 






loss for the period
- 
-
-
(528)
(528)

Balance at 31 December 2014
281
5,734
1,505
12,484
20,004








Year to 30 June 2014






Audited






Balance at 1 July 2013
281
5,734
1,505
14,792
22,312

Dividends
-
-
-
(168)
(168)

Transactions with owners
-
-
-
(168)
(168)

Loss and total comprehensive 






loss for the period
-
-
-
(1,612)
(1,612)

Balance at 30 June 2014
281
5,734
1,505
13,012
20,532


Consolidated Statement of Cash Flows




6 months to 31 December 2014







6 months 
6 months 
Year



ended
ended
ended



31.12.14
31.12.13
30.06.14



'000
'000
'000



Unaudited
Unaudited
Audited

Cash from operating activities





Operating (loss) from





continuing operations

(317)
(730)
(1,225)

Depreciation of property, plant





and equipment

128
144
265

(Profit)/loss on disposal of property,





plant and equipment

-
-
(1)

Operating (loss) before changes in





working capital

(189)
(586)
(961)







(Increase)/decrease in inventories

(924)
1,704
1,712

(Increase)/decrease in trade and





other receivables

(1,767)
(2,086)
(3,214)

Increase/(decrease) in trade and





other payables

425
119
1,497

Cash (used)/generated from operations

(2,455)
(849)
(966)







Income taxes received/(paid)

-
-
-

Net cash from operating activities

(2,455)
(849)
(966)







Cash flows from investing activities





Interest received

25
40
70

Proceeds from disposal of property,





plant and equipment

-
-
30

Purchase of property, plant and





Equipment

-
-
(26)

Net cash from investing activities

25
40
74







Cash flows from financing activities





Dividends paid to equity shareholders

-
-
(168)

Net cash used in financing activities

-
-
(168)







Net (decrease)/increase in cash and





cash equivalents

(2,430)
(809)
(1,060)

Cash and cash equivalents at





beginning of period

5,076
6,136
6,136







Cash and cash equivalents at end of period
2,646
5,327
5,076


Company Statement of Cash Flows




6 months to 31 December 2014







6 months 
6 months 
Year



ended
ended
ended



31.12.14
31.12.13
30.06.14



'000
'000
'000



Unaudited
Unaudited
Audited

Cash from operating activities





Operating (loss) from





continuing operations

(553)
(953)
(1,681)

Depreciation of property, plant





and equipment

61
66
132

(Profit)/loss on disposal of property,





plant and equipment

-
-
(2)

Operating (loss) before changes in





working capital

(492)
(887)
(1,551)







(Increase)/decrease in inventories

(924)
1,704
1,712

(Increase)/decrease in trade and





other receivables

(1,761)
(1,153)
(3,217)

Increase/(decrease) in trade and





other payables

666
(519)
2,119

Cash (used)/generated from operations

(2,511)
(855)
(937)







Income taxes received/(paid)

14
14
-

Net cash from operating activities

(2,497)
(841)
(937)







Cash flows from investing activities





Interest received

25
40
70

Proceeds from disposal of property,





plant and equipment

-
-
30

Purchase of property, plant and





Equipment

-
-
(26)

Net cash from investing activities

25
40
74







Cash flows from financing activities





Dividends paid to equity shareholders

-
-
(168)

Net cash used in financing activities

-
-
(168)







Net (decrease)/increase in cash and





cash equivalents

(2,472)
(801)
(1,031)

Cash and cash equivalents at





beginning of period

5,071
6,102
6,102







Cash and cash equivalents at end of period
2,599
5,301
5,071


Notes to the financial statements
1. Corporate Information
The financial information for the half year ended 31 December 2014 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 2014 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 2014. 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 2014.
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 2014 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 year. 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 2014





Total Segment revenue
35,585

142

35,727






Year to 30 June 2014





Total Segment revenue
62,645

220

62,865












One customer accounted for more than 10% of the group's revenue for the period, being 9.6m.
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 2014 of 292,000 (2013: loss 690,000) and a weighted average of 28,158,735 (2013: 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 2014. 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 2014 (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 ended 31 December 2014, the company paid 36,000 (2013: 12,000) as salary and 493 (2013: 140) as benefit to the company Director of Strategy, Mr A Phillips, who is the son of the Chairman, Mr D M Phillips.
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.

This information is provided by RNS
The company news service from the London Stock Exchange
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