TIDMNAR
RNS Number : 4562T
Northamber PLC
15 November 2023
15 November 2023
Northamber PLC
(the "Company" or the "Group")
Preliminary Results for the year ended 30 June 2023
Chairman's Statement
Results
Against a challenging backdrop, we are pleased to share that we
have continued to grow revenue year on year by GBP890k from
GBP66.26m to GBP67.15m whilst also growing gross margins from 12.8%
to 13.3%. This served to generate a continued increase in gross
margins of GBP0.43m year on year to GBP8.91m (5% increase year on
year) and reflected our continued focus on evolving our product mix
towards higher margin, more technical products through Northamber
and AVM.
As mentioned in my last statement, we 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 allowed 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. The
addition of ViewSonic in H2 to our Audio Visual Business Unit also
helped provide growth opportunities.
Despite sales and gross margin growth for the year, performance
in some of our focus areas remained impacted by softer demand due
to deferred purchasing decisions by some end users as they chose to
defer non essential spend in the face of inflationary pressures and
continuing economic uncertainty. Our strategy remains to focus on
building the best Proactive, Technical distribution company in our
focus technology areas of Audio Visual, Network Security &
Infrastructure, Document Management & Peripherals as we remain
confident we can deliver significant long term value and growth in
these segments for our partners and shareholders.
Inflationary pressures combined with our continued investment in
developing the team for our growth ambitions led to distribution
costs increasing from GBP5.6m to GBP5.9m. Likewise, our
administration costs increased from GBP3.4m to GBP3.5m due to
inflationary pressures. Some of these cost increases we would hope
to be non-recurring or reduced moving forward such as an
exceptional GBP110k bad debt write off for the year (up from GBP62k
prior year), GBP110k for Electricity and Gas (up from GBP66k prior
year and despite the Company installing solar panels at our Swindon
Warehouse at the start of the fiscal year) and cost of living
pressure on wages (GBP6.15m up from GBP5.67m).
It is frustrating that inflationary factors increasing
distribution and administration costs have impacted the Group
despite Gross Margin growth. The Group remains committed to
proactively working to reduce these costs as best it can.
As part of our focus on profitable scalability and efficiency
drive, after the period end, the Group implemented a new company
wide ERP system at a committed capital investment of GBP278k.
Whilst this new system will cause some initial disruption in H1
FY24 whilst it is rolled out in a phased approach across the half,
this new system will allow us to drive a stronger customer
experience and better efficiency with automation so we would hope
to see a positive impact from this in H2 FY24 and onwards.
The net effect of these results were that Earnings Before Tax
Amortisation and Depreciation but After Interest was a modest GBP3k
profit, compared with a loss of GBP54k the prior year. At an
operating level this delivered a loss before tax for the year of
GBP411k versus a loss of GBP447k 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 remain diligent in managing our balance sheet and were
pleased to be able to remain debt free; we are a flexible stocking
than other commodity focused distributors. Cash reserves at year
end increased to GBP5.6 million from GBP4.7 million at 30 June
2022. This focus on cash levels together with stronger interest
rates available yielded a benefit of GBP81k of interest, up from
GBP5k the prior year. We look to balance the value of cash in the
bank with the need to provide flexible stock for our partners and
consciously review this on an ongoing basis. Tied to this approach,
we disposed of an office building in Lightwater in H1 that was no
longer core to our operation for a consideration of GBP1.48 million
and moved Audio Visual Material Ltd into a new leased office
together with our Audio Visual business unit in Basingstoke.
With Net Assets at GBP23.9 million, including two unencumbered
freehold properties, the Group's overall financial position remains
very sound.
Net Assets at 87.7p 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 final dividend be 0.3p, at a total cost of GBP81,695.
The dividend will be paid on 19 January 2024 to shareholders on the
register as at 15 December 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.
We were pleased to be able to roll out a Company Share Ownership
Plan as a long term incentive for all staff in July 2023 (post year
end), and see this as a way of rewarding the team who make an
impact and drive our results
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
15 November 2023
Contacts:
Northamber PLC Tel: +44 (0) 208 744 8200 investor_relations@northamber.com
Colin Thompson, Chairman
Singer Capital Markets (Nominated
Adviser and Sole Broker) +44 (0) 207 496 3000
Philip Davies
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2023
2023 2022
Notes GBP'000 GBP'000
Revenue 2 67,149 66,260
Cost of sales (58,243) (57,791)
Gross Profit 8,906 8,469
Distribution costs (5,907) (5,556)
Administrative costs (3,491) (3,365)
Operating Loss (492) (452)
Finance income 81 5
Finance cost - -
----------- --------
Loss before tax (411) (447)
Tax expense - -
Loss for the year and total
comprehensive income attributable
to the owners (411) (447)
=========== ========
Basic and diluted Loss per ordinary (1.51)
share 3 p (1.64)p
----------- --------
The above results arise from continuing operations
CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30 June 2023
2023 2022
GBP'000 GBP'000
Non current assets
Property, plant and equipment 5,519 6,919
Intangible assets 1,251 1,309
----------- ---------------
6,770 8,228
----------- ---------------
Current assets
Inventories 11,447 10,649
Trade and other receivables 12,099 11,245
Cash and cash equivalents 5,512 4,696
29,058 26,590
----------- ---------------
Total assets 35,828 34,818
=========== ===============
Current liabilities
Trade and other payables (11,951) (10,329)
Corporation tax payable - (38)
----------- ---------------
Total liabilities (11,951) (10,367)
----------- ---------------
Net assets 23,877 24,451
=========== ===============
Equity
Share capital 272 272
Share premium account 5,734 5,734
Capital redemption reserve 1,514 1,514
Retained earnings 16,357 16,931
----------- ---------------
Equity shareholders' funds attributable
to the owners of the parent 23,877 24,451
=========== ===============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 30 June 2023
Share Share Capital Redemption Retained Total Equity
Capital Premium Reserve Earnings
Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
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 year - - - (447) (447)
Balance at 30 June 2022 272 5,734 1,514 16,931 24,451
Dividends - - - (163) (163)
Transactions with owners - - - (163) (163)
Loss and total
comprehensive income
for the year - - - (411) (411)
Balance at 30 June 2023 272 5,734 1,514 16,357 23,877
============ ============ ============ ============ =============
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2023
2023 2022
GBP'000 GBP'000
Cash flows from operating activities
Operating Loss from continuing operations (492) (452)
Depreciation of property, plant and equipment 357 336
Amortisation of intangible assets 58 56
Profit on disposal of property, plant
and equipment (74) (15)
------------- --------------
Operating loss before changes in working
capital (151) (75)
Increase in inventories (798) (2,181)
Increase in trade and other receivables (854) (492)
Increase in trade and other payables 1,622 463
Cash used in operations (181) (2,285)
Income taxes paid (38) (120)
Net cash used in operating activities (219) (2,405)
------------- --------------
Cash flows from investing activities
Interest received 81 5
Proceeds from disposal of property,
plant and equipment 1,475 60
Purchase of property, plant and
equipment (358) (222)
Net cash generated from/(used
in) investing activities 1,198 (157)
Cash flows from financing activities
Dividends paid to equity shareholders (163) (191)
Interest paid - -
Net cash used in financing activities (163) (191)
------------- --------------
Net increase/(decrease) in cash
and cash equivalents 816 (2,753)
Cash and cash equivalents at
beginning of year 4,696 7,449
Cash and cash equivalents at
end of year 5,512 4,696
------------- --------------
Notes
1. Financial information
This financial information is consistent with the consolidated
financial statements of the group for the year ended 30 June 2023.
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 2022 or 30
June 2023 but is derived from those accounts. The statutory
accounts for the year ended 30 June 2022 have been delivered to the
Registrar of Companies and those for 2023 will be delivered
following the group's annual general meeting. The auditor's report
on the 2023 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: 2023 2022
GBP'000 GBP'000
Revenue from contracts
with
customers - UK 66,489 65,602
-other 660 658
--------- ---------
67,149 66,260
--------- ---------
No customer accounted for more than 10% of the group's revenue
for the year.
3. Loss per ordinary share
The calculation of the basic and diluted earnings per share is
based on the following data:
2023 2022
GBP'000 GBP'000
Loss for the year attributable to
equity holders of the parent company (411) (447)
=========== ===========
2023 2022
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 19 January
2024 to those members on the register at close of business on 15
December 2023.
5. Notice of meeting
The annual report and accounts for the year ended 30 June 2023
will be posted to shareholders in due course and the Annual General
Meeting will be held on 20 December 2023.
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 15, 2023 02:00 ET (07:00 GMT)
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