TIDMNAR
RNS Number : 8343G
Northamber PLC
18 November 2022
18 November 2022
Northamber PLC
(the "Company" or the "Group")
Preliminary Results for the year ended 30 June 2022
Chairman's Statement
Results
We are pleased to share that we have continued to grow revenue
year on year by 10.4% from GBP60.01m to GBP66.26m whilst
maintaining gross margins at 12.8% (13.0% prior year) despite
challenging and very dynamic market conditions. This served to
generate a continued increase in gross margins of GBP0.66m year on
year to GBP8.47m and reflected our continued focus on evolving our
product mix towards higher margin, more technical products through
Northamber and AVM. The trend of this growth can be better seen
when comparing results to even the year prior to that (June 2020)
which had revenue of GBP52.8m and Gross Margins were GBP5.48m,
albeit AVM was acquired early in the second half of that year.
Despite pleasing sales and gross margin growth for the year,
performance in some of our focus areas remained impacted by the
gradual recovery from Covid with continuing uncertainty for
resuming events and large venue installations, as well as market
disruptions from rapid changes in Sterling, particularly against
the US Dollar. We remain optimistic and confident in these focus
areas and believe that we can deliver significant long term value
and growth in these segments for our partners and shareholders.
Distribution costs increased significantly from GBP4.59m to
GBP5.56m 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).
The fall in the value of Sterling translated into a swing from a
foreign exchange profit of GBP223k in 2021 to a loss of GBP164k in
2022, which was the main driver in increased administration costs
from GBP2.84m to GBP3.36m.
It is frustrating that factors over which we have no control
have led to increases in distribution and administration costs,
which have outweighed the margin growth. The impact of carriage
costs and a weaker Sterling, totalling approximately GBP0.30m,
resulted in a reduction of EBITDA year on year to a loss of GBP75k
and an operating loss for the year of GBP0.45m versus a profit of
GBP0.38m 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 , albeit these investments are measured against the
ability to generate value.
Financial position
We made a deliberate decision to profitably support our partners
by maintaining sufficient stock in country during the uncertainty
of chip shortages together with continued impact on supply chains
of Brexit, the war in Ukraine and COVID. As a consequence, stock
levels increased from GBP8.5 million in 2021 to GBP10.6 million at
30 June 2022. This investment in inventory meant that cash reserves
fell from GBP7.45m at 30 June 2021 to GBP4.70m. With Fixed Assets
at book value at GBP6.92m, including three unencumbered freehold
properties, the Group's overall financial position is very sound.
Net Assets at 89.8p per share are considerably in excess of the
average price of the ordinary shares throughout the period.
Since the end of the financial year, the Board took the decision
to relocate AVM into existing premises and to sell the freehold
office where they are based. The Company has exchanged contracts
for the sale of the office and completion is scheduled to occur on
28 November 2022. The consideration will be GBP1.48m, before costs,
payable in cash, against a net book value of GBP1.43m. The net
proceeds will be added to our cash reserves.
Board changes
In July 2022, Peter Dosanjh joined the Board as a director.
Peter has over 25 years' experience within B2B AV and IT hardware
resellers alongside AV distribution.
Geoff Walters is to stand down as a non-executive director with
effect from 31 December 2022 and will not stand for re-election at
this year's AGM. Geoff joined the Board in February 2016 and the
Board is grateful for his contribution during this period and we
wish him well for the future.
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 18 January 2023 to
shareholders on the register as at 16 December 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. We have yet to fully benefit from
these investments, given the ongoing impact of COVID, forex
movements and supply chain issues which together with wider
economic uncertainty due to rising interest rates, inflation and
subsequent cost of living impacts, necessarily mean we must remain
cautious about the near term . We do feel strongly, however, 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
18 November 2022
Contacts:
Northamber PLC Tel: +44 (0) 208 744 8200 investor_relations@northamber.com
Colin Thompson, Chairman
Singer Capital Markets (Nominated Adviser and Sole Broker) Tel: +44 (0) 207 496 3000
Philip Davies
Alex Bond
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2022
2022 2021
GBP'000 GBP'000
Non current assets
Property, plant and equipment 6,919 7,079
Goodwill and intangible assets 1,309 1,365
----------- -----------
8,228 8,444
----------- -----------
Current assets
Inventories 10,649 8,468
Trade and other receivables 11,245 10,753
Cash and cash equivalents 4,696 7,449
26,590 26,670
----------- -----------
Total assets 34,818 35,114
=========== ===========
Current liabilities
Trade and other payables (10,329) (9,866)
Corporation tax payable (38) (159)
----------- -----------
Total liabilities (10,367) (10,025)
----------- -----------
Net assets 24,451 25,089
=========== ===========
Equity
Share capital 272 272
Share premium account 5,734 5,734
Capital redemption reserve 1,514 1,514
Retained earnings 16,931 17,569
----------- -----------
Equity shareholders' funds attributable
to the owners of the parent 24,451 25,089
=========== ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 30 June 2022
Share Capital Share Premium Capital Retained Earnings Total Equity
Account Redemption
Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
July 2020 272 5,734 1,514 17,395 24,915
Dividends - - - (163) (163)
Transactions
with owners - - - (163) (163)
Loss and total
comprehensive
income for the
year - - - 337 337
Balance at 30
June 2021 272 5,734 1,514 17,569 25,089
Dividends - - - (191) (191)
Transactions
with owners - - - (191) (191)
Profit and
total
comprehensive
income for the
year - - - (447) (447)
Balance at 30
June 2022 272 5,734 1,514 16,931 24,451
============== ============== ============== ================== =============
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2022
2022 2021
GBP'000 GBP'000
Cash flows from operating activities
Operating profit from continuing operations (452) 377
Depreciation of property, plant and equipment 336 350
Amortisation of intangible assets 56 56
Profit on disposal of property, plant
and equipment (15) (13)
------------------ --------------
Operating Profit/ (loss) before changes
in working capital (75) 770
(Increase) in inventories (2,181) (2,520)
(Increase)/decrease in trade
and other receivables (492) (3,003)
Increase/(decrease) in trade
and other payables 463 2,923
Cash used in operations (2,285) (1,830)
Income taxes paid (120) (1,302)
Net cash used in operating activities (2,405) (3,132)
------------------ --------------
Cash flows from investing activities
Interest received 5 8
Proceeds from disposal of property 60 17
Purchase of property, plant and
equipment (222) (249)
Purchase of AVM Limited - -
Net cash (used in)/generated
from investing activities (157) (224)
Cash flows from financing activities
Dividends paid to equity shareholders (191) (163)
Interest paid - -
Purchase of cancellation of shares - -
Net cash used in financing activities (191) (163)
------------------ --------------
Net (decrease)/increase in cash
and cash equivalents (2,753) (3,519)
Cash and cash equivalents at
beginning of year 7,449 10,968
Cash and cash equivalents at
end of year 4,696 7,449
------------------ --------------
Notes
1. Financial information
This financial information is consistent with the consolidated
financial statements of the group for the year ended 30 June 2022.
The group's consolidated financial statements have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006.
The financial information set out above does not constitute the
group's statutory accounts for the years ended 30 June 2021 or 30
June 2022 but is derived from those accounts. The statutory
accounts for the year ended 30 June 2021 have been delivered to the
Registrar of Companies and those for 2022 will be delivered
following the group's annual general meeting. The auditor's report
on the 2022 accounts will be unqualified, will not include
references to any matters to which the auditors drew attention by
way of emphasis without qualifying their reports, and will 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. Revenue
Although the sales of the group are predominantly to the UK
there are sales to other countries and the following table sets out
the split of the sales for the year. Revenue is attributed to
individual countries based on the location of the customer. There
are no non-current assets outside the UK.
Revenues comprise: 2022 2021
GBP'000 GBP'000
Revenue from contracts
with
customers - UK 65,602 59,137
-other 658 872
--------- ---------
66,260 60,009
--------- ---------
No customer accounted for more than 10% of the group's revenue
for the year.
3. Profit per ordinary share
The calculation of the basic and diluted earnings per share is
based on the following data:
2022 2021
GBP'000 GBP'000
(Loss)/Profit for the year attributable
to equity holders of the parent company (447) 337
=========== ===========
2022 2021
Number of shares Number Number
Weighted average number of ordinary
shares for the purpose of basic and
diluted earnings per share 27,231,586 27,231,586
=========== ===========
4. Dividends
A final dividend of 0.3p per share will be paid on 18 January
2023 to those members on the register at close of business on 16
December 2022.
5. Notice of meeting
The annual report and accounts for the year ended 30 June 2022
will be posted to shareholders in due course and the Annual General
Meeting will be held on 21 December 2022.
The Company's registered office is Namber House, 23 Davis Road,
Chessington, Surrey, KT9 1HS.
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END
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November 18, 2022 02:00 ET (07:00 GMT)
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