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Northamber PLC  -  NAR   

Final Results

Released 07:00 20-Sep-2018

RNS Number : 3143B
Northamber PLC
20 September 2018
 

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

 

20 September 2018

 

Northamber PLC

("Northamber" or the "Company")

 

Preliminary Results for the year ended 30 June 2018

 

CHAIRMAN'S REPORT

 

Results

 

After an overly prolonged disappointing period of change, it is some comfort to report that the loss before tax for the year has been reduced by 51% to £489,000 by comparison with last year's loss of £999,000.

 

The changes of focus and direction I have reported over recent years have resulted in improved margins, albeit blunted by the high costs of staff recruitment into those areas of skills needed to develop the better quality opportunities, but we expect to see the benefit of this investment in future years.

 

At the half year, I reported on the increase in turnover for that period compared with the previous and comparable period, however, our strategy only allowed some of the improvements in achieved gross turnover to be continued into the second half.  We have continued our long standing policy of exiting empty revenue offered by lower margin, long standing, commoditised product groups.  Margin erosion in this area is illustrated by a global and leading U.S owned competitor, which has just reported that their own global quarterly net margins have declined by 0.67% and with Europe being their most competitive region.

 

Those areas where we did achieve increases in turnover in the second half by comparison with the first half, were within the newer higher yielding product groups, and these will continue to be our principal focus.

 

As a consequence, turnover for the year at £58.1 million was only 1.5% higher than the £57.3 million reported a year ago.  More importantly, the Gross Profit margin increased from 7.7% for the year 2016/7 to 7.8% for the year 2017/8.

 

There were further savings in the overheads, both in Distribution and in Administration in the second half compared with the first half, so that for the year the total overheads were reduced by £317,000 (5.8%). For the year the resulting loss from operations was reduced from £1.05 million to £0.58 million.

 

Investment income increased from £52,000 to £90,000 so that the pre tax loss for the year was £510,000 less at £489,000 compared with £999,000 last year.

 

 

 

Financial Position

 

Despite the margin pressures resulting from long standing vendors transferring costs to their distribution business partners, we have always been proud of the strength of our financial position as reflected in the Balance Sheet.

 

Despite the all too frequent vagaries and vicissitudes of the U.K.'s general economic conditions, and those particularly affecting our section of the industry, we have through constant vigilance and careful monitoring managed to retain our debt free cash resources at around the £5 million level similar to the end of the previous year.

 

In doing so we have reduced the working capital used within the business by around £400,000 compared with last year. This was achieved mainly by reducing each of the levels of inventory and debtors and retaining a healthy Net Current Assets ratio of 2.4 compared with 2.2 for the previous year.

 

At end June 2018 the Net Assets per share were 62.2p (2017: 64.1p), based on the Balance Sheet values including our two unencumbered freehold properties.  We therefore maintained a combined healthy tangible asset position and liquidity position which gives us confidence for the future.

 

Dividend

 

Based on the continuing strength of the group's debt free tangible asset base, the board is proposing to pay an unchanged final dividend of 0.1p per share, at a total cost of £28,159 which will be paid on 18 January 2019.

 

Staff

 

Due to the changes in the profile of our offered product range, we have regrettably lost a few of our staff during the year. This is never a pleasant situation either for those affected or for those who remain, I am therefore very grateful for the efforts and dedication of all members of staff throughout the year.

 

Outlook

 

At the half way point in the year, and before the overly protracted Brexit confusion, with a single EU negotiator able to enjoy the mob confusion offered by our own side, I was able to be more optimistic about the near term than currently possible.

 

In those areas where we have strength and which in the last couple of years have shown growth and margin improvement, we should continue to do well. However there are areas where it is extremely difficult to make any assessment on the future direction, without wishing to become political, the economic and social uncertainties which abound all around us do not in my opinion augur well for us.

 

On that basis I am unable to make any realistic assessment of the next year or so.  We shall, as we always have, work as hard as possible to maximise our opportunities and deliver the best results that we can for our shareholders.

 

D.M.Phillips

Chairman

 

20 September 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 / Michael Boot

 

 

 

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

 

 

 

 

 

 

For the year ended 30 June 2018

 

 

 

 

 

 

 

 

    2018

 

    2017

 

 

 

    Total

 

    Total

 

 

 

    £'000

 

    £'000

 

 

 

 

 

 

 

Revenue

 

 

     58,136

 

     57,288

Cost of sales

 

 

(53,589)

 

(52,896)

 

 

 

 

 

 

Gross Profit

 

 

       4,547

 

       4,392

 

 

 

 

 

 

Distribution costs

 

 

(2,850)

 

(3,042)

Administrative costs

 

 

(2,276)

 

(2,401)

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(579)

 

(1,051)

 

 

 

 

 

 

Investment revenue

 

 

90

 

52

 

 

 

 

 

 

 

 

 

 

 

 

Loss before tax

 

 

(489)

 

(999)

 

 

 

 

 

 

Tax (charge)

 

 

-

 

-

 

 

 

 

 

 

Loss for the year and total comprehensive loss

 

 

(489)

 

(999)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per ordinary share

 

 

(1.74)p

 

(3.55)p

 

 

 

 

 

 

             

 

 

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

 

 

 

 

 

At 30 June 2018

 

 

 

 

 

 

 

 

    2018

 

    2017

 

 

 

    £'000

 

    £'000

 

 

 

 

 

 

Non current assets

 

 

 

 

 

Property, plant and equipment

 

 

7,894

 

8,025

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

Inventories

 

 

3,378

 

4,176

Trade and other receivables

 

 

8,145

 

9,052

Cash and cash equivalents

 

 

5,067

 

4,972

 

 

 

 

 

 

 

 

 

16,590

 

18,200

 

 

 

 

 

 

Total assets

 

 

24,484

 

26,225

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Trade and other payables

 

 

(6,964)

 

(8,160)

 

 

 

 

 

 

 

 

 

(6,964)

 

(8,160)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

(6,964)

 

(8,160)

 

 

 

 

 

 

Net assets

 

 

17,520

 

18,065

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

Share capital

 

 

281

 

281

Share premium account

 

 

5,734

 

5,734

Capital redemption reserve

 

 

1,505

 

1,505

Retained earnings

 

 

10,000

 

10,545

 

 

 

 

 

 

Equity shareholders' funds

 

 

17,520

 

18,065

 

 

 

 

 

 

 

 

 

 

 

 

             

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

 

 

 

 

 

 

For the year ended 30 June 2018

 

 

 

 

 

 

 

 

 

Share Capital

 

Share Premium Account

Capital Redemption Reserve

Retained Earnings

 

Total Equity

 

 

£'000

 

£'000

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

 

 

 

 

 

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 year

-

 

-

 

-

 

(999)

 

(999)

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 June 2017

281

 

5,734

 

1,505

 

10,545

 

18,065

 

 

 

 

 

 

 

 

 

 

 

 

Dividends

-

 

-

 

-

 

(56)

 

(56)

 

 

 

 

 

 

 

 

 

 

 

 

Transactions with owners

-

 

-

 

-

 

(56)

 

(56)

 

 

 

 

 

 

 

 

 

 

 

 

Loss and total comprehensive loss for the year

-

 

-

 

-

 

(489)

 

(489)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30 June 2018

281

 

5,734

 

1,505

 

10,000

 

17,520

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

 

 

 

 

 

For the year ended 30 June 2018

 

 

 

 

 

 

 

 

 

    2018

 

    2017

 

 

 

 

    £'000

 

    £'000

 

 

 

 

 

 

 

 

Cash from operating activities

 

 

 

 

 

Operating (loss) from continuing operations

 

(579)

 

(1,051)

 

Depreciation of property, plant and equipment

 

188

 

166

 

(Profit) on disposal of property, plant and equipment

 

-

 

(4)

 

Operating (loss)  before changes in working capital

 

(391)

 

(889)

 

 

 

 

 

 

 

 

Decrease)/(increase) in inventories

 

 

798

 

830

 

Decrease/(increase) in trade and other receivables

 

 

907

 

(593)

 

(Decrease)/increase in trade and other payables

 

 

(1,196)

 

355

 

 

 

 

 

 

 

 

Cash generated from operations

 

 

118

 

(297)

 

 

 

 

 

 

 

 

Income taxes paid

 

 

-

 

-

 

 

 

 

 

 

 

 

Net cash from operating activities

 

 

118

 

(297)

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Interest received

 

 

90

 

52

 

Purchase of property, plant and equipment            

 

 

(57)

 

(197)

 

Proceeds from disposal of property, plant and equipment

 

 

-

 

4

 

Net cash from investing activities

 

 

33

 

(141)

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Dividends paid to equity shareholders

 

 

(56)

 

(56)

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

 

(56)

 

(56)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

            95

 

         (494)

 

Cash and cash equivalents at beginning of year

 

 

        4,972

 

5,466

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of year

 

 

5,067

 

4,972

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes

 

1. Financial information

 

The results of the year ended 30 June 2018 have been prepared using the accounting policies and methods of computation consistent with those used in the Group's annual report for the year ended 30 June 2018. The results have also been presented and prepared in a form consistent with that which will be adopted in the Group's annual report for the year ended 30 June 2018 and in accordance with the recognition and measurement requirements of the International Reporting Standards as adopted by the European Union.

 

The financial information set out above does not constitute the group's statutory accounts for the years ended 30 June 2017 or 30 June 2018, but is derived from those accounts. The statutory accounts for the year ended 30 June 2017 have been delivered to the Registrar of Companies and those for 2018 will be delivered following the group's annual general meeting. The auditors have reported on these accounts, their reports were unqualified and did 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. Segmental reporting

 

Management has determined that there is only one operating segment of the group as the total business of the company is the sourcing and distribution of computer related products and this is how information is reported to the Chief Operating Decision Maker. The board in carrying out its strategic planning and decision making has, necessarily, to take consideration of the inter relatedness of the product range and the customer base and thus treat the operations of the group as a whole. All decisions on the allocation of resources impacts on all aspects of the group. Information presented to the Chief Operating Decision Maker is the same as is reported in these financial statements.

 

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

Year to 30 June 2017

 

 

 

 

 

Total Segment revenue

56,996

 

292

 

57,288

 

 

 

 

 

 

Year to 30 June 2018

 

 

 

 

 

Total Segment revenue

57,661

 

475

 

58,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One customer accounted for more than 10% of the group's revenue for the year, being £7.6m (2017:£7.4m).

 

 

 

3. Loss per ordinary share

 

The calculation of the basic and diluted earnings per share is based on the following data:

 

 

 

 

    2018

 

    2017

 

 

 

    £'000

 

    £'000

 

 

 

 

 

(Loss) for the year attributable to equity holders of the parent company

 

(489)

 

(999)

 

 

 

 

    2018

 

    2017

Number of shares

 

 

Number

 

Number

 

 

 

 

 

Weighted average number of ordinary shares for the purpose of basic earnings per share and diluted earnings per share

 

28,158,735              

 

28,158,735              

 

4. Dividends

 

A final dividend of 0.1p per share will be paid on 18 January 2019 to those members on the register at close of business on 7 December 2018.

 

5. Notice of meeting

 

The annual report accounts for the year ended 30 June 2018 will be posted to shareholders in due course and the Annual General Meeting will be held on 14 December 2018.

 

The Company's registered office is Namber House, 23 Davis Road, Chessington, Surrey, KT9 1HS.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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Final Results - RNS