TIDMNAR
RNS Number : 2099U
Northamber PLC
27 March 2023
Northamber PLC
("Northamber" or the "Company" or the "Group")
Interim Report for the Six months to 31 December 2022
Chairman's Statement
Results
We are pleased to have continued to grow revenue year on year by
4.1% from GBP32.3m to GBP33.6m whilst maintaining strong gross
margins up 10 bps at 13.0% (12.9% prior year) despite challenging
market conditions. This served to generate an increase in Gross
Profit of GBP0.2m to GBP4.4m year on year and reflected our
continued focus on evolving our product mix towards higher margin,
more technical products through Northamber and AVM.
We are confident that we are investing in the right places and
continuing to build a strong long term business around some core
technology pillars that require and reward value add from
distribution. We are pleased to have evolved over recent years to
now be recognized as a destination for Audio Visual technology as
well as further developing our already strong Infrastructure
Solutions, Document Management and Peripherals business.
We have expanded our Audio Visual (AV) unit into Unified
Communications and Collaborations (UC&C) during the first half
of the year with a new partnership with Yealink who are a
significant brand in the Microsoft Teams Room and Zooms room space.
This new partnership allows us to access a significant new UC&C
market for our existing reseller customers as well as bring
existing products from our Audio Visual and Infrastructure
Solutions business units to a wider market. Whilst costs were
accrued last half in developing this category we have already seen
a promising pipeline and sales from the category and expect to see
the results translate to significant returns for the business.
The continued investment in developing our long term strategic
areas was unfortunately coupled with significant inflationary
pressures and foreign exchange fluctuations, resulting in an
increase of 8.6% in distribution and administrative costs year on
year from GBP4.27 million to GBP4.64 million.
These increased costs outweighed the gross margin growth and
resulted in a reduction of EBITDA year on year from GBP64K last
year to negative GBP28k EBITDA this year. The Group made an
operating loss for the six months of GBP250k versus an operating
loss of GBP116k the year before. 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
We remain diligent in managing our balance sheet and were
pleased to be able to remain debt free. An increased focus on stock
levels yielded a reduction in stock levels across the group from
GBP10.6 million to GBP9.6 million, freeing up additional working
capital. We recognize the importance to maintain strong stock
holding for our partners as stock availability and supply chains
remain fragile at times so we accept fluctuations on stock levels
when this makes commercial sense but we actively manage this. We
also disposed of an office building in Lightwater in H1 that was no
longer core to our operation for a consideration of GBP1.48
million.
Cash reserves increased to GBP6.0 million from GBP4.7 million at
30 June 2022. With Net Assets at GBP24.2 million, including two
unencumbered freehold properties, the Group's overall financial
position remains very sound.
Net Assets at 88.8p 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 25 April 2023 to
shareholders on the register as at 11 April 2023.
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 although some of these investments
returns have been hampered by the impact of inflationary issues. We
necessarily remain cautious due to the economic uncertainty 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.
We are also investing in new systems for warehousing and
Enterprise Resource Planning which we believe will deliver
substantial efficiency gains for the future.
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
27 March 2023
Contacts:
Northamber PLC Tel: +44 (0) 208 744 8200 investor_relations@northamber.com
Colin Thompson, Chairman
Singer Capital Markets (Nominated Tel: +44 (0) 207 496
Adviser and Sole Broker) 3000
Philip Davies
Alex Bond
Northamber PLC
("Northamber" or the "Company" or the "Group")
Interim Report for the Six months to 31 December 2022
Consolidated Statement of Comprehensive Income
6 months to 31 December 2022
6 months 6 months Year
Ended Ended Ended
31.12.22 31.12.21 30.06.22
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Revenue 33,626 32,276 66,260
Cost of sales (29,251) (28,123) (57,791)
---------- ---------- ------------
Gross Profit 4,375 4,153 8,469
Distribution cost (2,878) (2,670) (5,556)
Administrative costs (1,760) (1,599) (3,365)
Loss from operations (263) (116) (452)
Finance income 13 - 5
Loss before Tax (250) (116) (447)
Tax charge - - -
---------- ---------- ------------
Loss and total comprehensive
Income for the period (250) (116) (447)
---------- ---------- ------------
Basic and diluted loss
per ordinary share (0.92p) (0.43p) (1.64p)
Consolidated Statement of Financial Position
As At 31 December 2022
6 months 6 months Year
Ended 31.12.22 Ended Ended
31.12.21 30.06.22
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Non -current assets
Property, plant and equipment 5,516 7,004 6,919
Goodwill and intangible assets 1,279 1,336 1,309
------------ ---------- ----------------
6,795 8,340 8,228
------------ ---------- ----------------
Current assets
Inventories 9,588 11,190 10,649
Trade and other receivables 9,701 9,639 11,245
Cash and cash equivalents 6,055 4,737 4,696
25,344 25,566 26,590
------------ ---------- ----------------
Total assets 32,139 33,906 34,818
============ ========== ================
Current liabilities
Trade and other payables (7,938) (8,885) (10,329)
Corporation tax payable - (48) (38)
------------ ---------- ----------------
Total liabilities (7,938) (8,933) (10,367)
------------ ---------- ----------------
Net assets 24,201 24,973 24,451
============ ========== ================
Equity
Share capital 272 272 272
Share premium account 5,734 5,734 5,734
Capital redemption reserve 1,514 1,514 1,514
Retained earnings 16,681 17,453 16,931
------------ ---------- ----------------
Equity shareholders' funds attributable
to the owners of the parent 24,201 24,973 24,451
============ ========== ================
Consolidated Statement of Changes
in Equity
As at 31 December 2022
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
2021
Unaudited
Balance at 1 July 2021 272 5,734 1,514 - 17,569 25,089
Dividends - - - - - -
Loss and total comprehensive
income for the period - - - - (116) (116)
--------- --------- ------------ --------- -----------
Balance at 31 December
2021 272 5,734 1,514 - 17,453 24,973
--------- --------- ------------ --------- ----------- --------
Period to 31 December
2022
Unaudited
Balance at 1 July 2022 272 5,734 1,514 - 16,931 24,451
Dividends - - - - - -
Loss and total comprehensive
Income for the period - - - - (250) (250)
--------- --------- ------------ --------- -----------
Balance at 31 December
2022 272 5,734 1,514 - 16,681 24,201
--------- --------- ------------ --------- ----------- --------
Year to 30 June 2021
Audited
Balance at 1 July 2021 272 5,734 1,514 - 17,569 25,089
Dividends - - - - (191) (191)
Transactions with owners - - - - (191) (191)
Loss and total comprehensive
income for the period - - - - (447) (447)
--------- --------- ------------ --------- -----------
Balance at 30 June
2022 272 5,734 1,514 - 16,931 24,451
--------- --------- ------------ --------- ----------- --------
Consolidated Statement of Cash
Flows
6 months to 31 December 2022
6 months 6 months Year
Ended Ended Ended
31.12.22 31.12.21 30.06.22
GBP'000 GBP'000 GBP'000
Unaudited Unaudited Audited
Cash from operating activities
Operating loss from
continuing operations (264) (116) (452)
Depreciation of property,
plant
and equipment 194 151 336
Amortisation of intangible
assets 30 28 56
Profit on disposal of property, (84) - (15)
plant and equipment
------------ --------------- -------------
Operating (loss)/profit before
changes in
working capital (124) 63 (75)
Decrease/(Increase) in inventories 1,061 (2,722) (2,181)
Decrease/(increase) in trade
and
other receivables 1,544 1,114 (492)
(Decrease)/increase in trade
and
other payables (2,391) (981) 463
------------ --------------- -------------
Cash generated/(used) from
operations 90 (2,526) (2,285)
Income taxes paid (38) (111) (120)
Net cash from operating activities 52 (2,637) (2,405)
------------ --------------- -------------
Cash flows from investing
activities
Interest received 13 - 5
Proceeds from disposal of
property,
plant and equipment 1,475 - 60
Purchase of property, plant
and
Equipment (181) (75) (222)
Net cash from investing activities 1,307 (75) (157)
------------ --------------- -------------
Cash flows from financing
activities
Dividends paid to equity shareholders - - (191)
Net cash used in financing
activities - - (191)
------------ --------------- -------------
Net increase/(decrease) in
cash and
cash equivalents 1,359 (2,712) (2,753)
Cash and cash equivalents
at
beginning of period 4,696 7,449 7,449
------------ --------------- -------------
Cash and cash equivalents at end
of period 6,055 4,737 4,696
------------ --------------- -------------
Notes to the financial statements
1. Corporate Information
The financial information for the half year ended 31 December
2022 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 2022 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 2022. 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
2022.
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 2022 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 2022
Total Segment revenue 33,385 241 33,626
Year to 30 June 2022
Total Segment revenue 65,602 658 66,260
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 2022 of GBP250,000 (2021:
Loss GBP116,000) and a weighted average of 27,231,586 (2021:
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 6 to 9 of the Annual Report and Accounts for
the year ended 30 June 2022 (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
-- Inflationary 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 (2021:
GBP150,000) rent to Anitass Limited, a wholly owned subsidiary. At
31 December 2022 Northamber plc owed Anitass Ltd GBP9,023,000
(2021: GBP7,194,000).
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
IR JIMFTMTTTBJJ
(END) Dow Jones Newswires
March 27, 2023 02:00 ET (06:00 GMT)
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