TIDMNAR
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 GBP26.3 million to GBP29.6 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 GBP1.5m from GBP2.3 million to GBP3.8 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 GBP1.53 million to GBP2.28 million; part of this costs
increase also came from the addition of AVM to the group.
Administrative costs also increased marginally from GBP1.15 million
to GBP1.29 million as we continue to invest to support our future
plans.
Financial position
Stock levels are higher than last year at GBP8.4 million against
GBP4.5 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 GBP10.8 million at 31 December 2020 compared with
GBP14.7 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 GBP7.1 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
GBP81,695. 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 investor_relations@northamber.com
8200
Colin Thompson, Chairman
N+1 Singer (Nominated Adviser and Tel: +44 (0) 207 496
Sole Broker) 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
GBP'000 GBP'000 GBP'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 6 months Year Ended
Ended 31.12.20 Ended 30.06.20
31.12.19
GBP'000 GBP'000 GBP'000
Unaudited Unaudited 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 6 months Year Ended
Ended Ended 30.06.20
31.12.20 31.12.19
GBP'000 GBP'000 GBP'000
Unaudited Unaudited 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 redemption Treasury Retained Total
capital account reserve Shares earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 redemption Treasury Retained Total
capital account reserve Shares earnings Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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 GBP230,000
(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 GBP150,000 (2019:
GBP12,925) rent to Anitass Limited, a wholly owned subsidiary. At
31 December 2020 Northamber plc owed Anitass Ltd GBP6,325,000
(2019:GBP4,510,000).
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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END
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