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RNS Number:7349H
Northamber PLC
20 February 2003
Northamber PLC
Interim Report & Accounts (Unaudited)
For Six Months Ended 31st December 2002
Chairman's Statement
Results
An increase in sales to #119.3 million for the six month period (#118.4 million:
31st December 2001) records a modest uplift in sales revenues and importantly,
market share within our volume P.C. related activities. The pre-tax loss of
#260k reveals unit volume growth as having been again coupled with still further
falls in both price and profit margins. These results represent a loss of 0.58p
per share, against the 0.18p of earnings per share of a year ago. Depreciation
of #545k reduced the NAV per share to 98.5p, from the 101.9p of 31st December
2001.
Although sales at #119.3 million recorded a modest increase over last years
#118.4 million, this masked a reasonable improvement in our more specialised
activities and a decline in our historic P.C. oriented business. That said, our
unit volumes were higher and we believe we have increased our market share.
Continued price erosion in the P.C. market has, however, reduced the value of
sales and the value of our gross margin per unit fell correspondingly.
The results also obscured the improved profit contribution from our specialist
areas and the total loss per share of 0.58p against a positive 0.18p in the
corresponding period of last year was due to losses in the P.C. business.
The improvement in our specialist areas was necessarily accompanied by a
commensurate evolutionary growth in their overheads and which distorts the view
of the ongoing achievements in overhead reductions in our volume areas.
The group remains debt free and had cash as at 31st December 2002 of #3.38
million.
Trading
Despite ongoing channel consolidation and a high level of unit sales, the period
once again demonstrated the manufacturer 's ability to grow unit sales at the
expense of both revenue and more especially margin.
Following confirmation of the HP merger with Compaq, as previously forecast, we
achieved availability and equal trading terms with the pre-merger distributors
within the final weeks of the period, which led to increased stock levels and
debtor levels as at 31 December. Unfortunately, this also coincided with a
further downturn in demand levels for volume PC products in the weeks before
Christmas.
Over recent reports to members, I advised we had taken steps to significantly
reduce costs, and those were successful in our volumes activities. At the full
year I reported staff numbers at year-end were 350 against the 415 of a year
before. Ongoing changes to the trading model, have enabled further reductions to
now 317. We are also continuing to achieve improved efficiencies from fewer
operational facilities. However, despite having taken actions to avoid loss, the
extent of the downturn and trading difficulties, negated anticipated gains.
The higher margin and skills based operations within the digital communications
convergence and networking arena have brought us the anticipated incremental
trading activities. Whilst not immune from the general economic downturn, with
measured and managed evolution within its product offerings, its contribution is
less uncertain.
There has, however, been a slight increase in group overheads over the
comparable period. These relate to structural cost increases to properly support
the trading levels and growth expectations from our newer and profitable areas.
The Balance Sheet
Our #3.38 million of cash at 31st December was accompanied by our ongoing zero
debt status, with Net Assets of #32.18 million (2001: #33.12 million), or 98.5p
per share. In addition, #28,500 was spent on the re-purchase of 50,000 shares
for cancellation.
The preserved financial strength, benefited from appropriate, pre-emptive
management actions of a year ago. Although the further sales downturn largely
dissipated the benefits. The close focus on key ratios avoided a worse outcome
within the limited viable trading opportunities available to ourselves.
Dividend
At the full year, it was necessary to draw attention to the need for dividend
policies to reflect trading and ensure our healthy balance sheet is not
compromised, pending a return to the cash demands of normal trading levels. We
are recommending an interim dividend of 1p net, down from last year's 2.2p.
The proposed dividend will be payable on 9th May, 2003 to members on the
Register as at 22nd April, 2003
Outlook
Within an uncertain and higher taxed commercial economy, any short-term market
recovery is unlikely. The extensive consolidations of the past year should
provide the I.T. hardware sector with the opportunity to commercially mature
from a revenue growth focus, and rebase itself on one based more traditionally
on the value of the working capital employed.
Your Board is confident, if understandably very cautious, of a satisfactory
outcome for the current trading year as a whole.
D.M.Phillips
Chairman
20th February, 2003
CONSOLIDATED UNAUDITED PROFIT AND LOSS ACCOUNT
For the six months ended 31st December 2002
6 months 6 months 12 months
ended ended ended
31st December 31st December 30th June
2002 2001 2002
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Turnover 119,266 118,410 250,410
Cost of sales (111,359) (110,719) (231,093)
Gross profit 7,907 7,691 19,317
Net operating expenses (8,237) (7,770) (19,288)
Operating (loss)/profit (330) (79) 29
Exceptional profit on sale of fixed assets in 93 321
continuing operations
Interest receivable 79 86 142
Interest payable (9) (20) (36)
(Loss)/profit on ordinary activities before taxation (260) 80 456
Taxation credit/(charge) 70 (21) (160)
(Loss)/profit on ordinary activities after taxation (190) 59 296
Equity dividends (331) (715) (1,353)
Retained loss for period (521) (656) (1,057)
Earnings per ordinary share (0.58)p 0.18p 0.91p
All operations are continuing.
There is no difference between the loss on ordinary activities before taxation
and the retained loss for the period stated above, and the historical cost
equivalents.
CONSOLIDATED UNAUDITED INTERIM BALANCE SHEET
At 31st December 2002
31st December 31st December 30th June
2002 2001 2002
Restated*
(Unauited) (Unaudited) (Audited)
#'000 #'000 #'000
Fixed assets
Tangible assets 5,988 7,446 6,289
Investments 2,836 2,837 2,837
8,824 10,283 9,126
Current assets
Stocks 17,742 16,261 14,590
Debtors 29,776 29,545 27,023
Cash at bank and in hand 3,378 4,555 8,587
50,896 50,361 50,200
Current liabilities
Creditors - amounts falling due within one year (26,659) (26,722) (25,743)
Net current assets 24,237 23,639 24,457
Total assets less current liabilities 33,061 33,922 33,583
Deferred Taxation (882) (804) (882)
Net Assets 32,179 33,118 32,701
Capital and reserves
Called up share capital 1,634 1,625 1,623
Share premium account 5,724 5,711 5,711
Capital redemption reserve 151 147 148
Profit and loss account 24,670 25,635 25,219
Equity Shareholders' Funds 32,179 33,118 32,701
Net assets per share 98.5p 101.9p 100.7p
*As a result of the adoption of FRS19 the provision for deferred taxation has
been restated, resulting in an increase in the provision of #703,000 at 31
December 2001.
CONSOLIDATED CASH FLOW STATEMENT
For the 6 months ended 31st December 2002
6 months 6 months 12 months
ended ended ended
31st December 31st December 30th June
2002 2001 2002
(Unauited) (Unaudited) (Audited)
#'000 #'000 #'000
Cash flow from continuing operating activities (5,130) 4,804 10,525
Returns on investments and servicing of finance
Interest received 79 86 142
Interest paid (9) (20) (36)
Income from fixed asset investments 99 87 255
Net cash inflow from returns on investments and 169 153 361
servicing of finance
Taxation
UK corporation tax paid - (241) (913)
Capital expenditure and financial investment
Purchase of tangible fixed assets (268) (730) (1,090)
Sale of tangible fixed assets 23 190 1,361
Net cash outflow from capital expenditure and (245) (540) 271
financial investment.
Equity dividends paid - - (2,015)
Cash (outflow)/inflow before financing (5,206) 4,176 8,229
Financing
Purchase of shares (29) (193) (214)
Issue of shares 26 - -
Debt due beyond a year :
Repayment of secured loan - (831) (831)
Net cash outflow from financing (3) (1,024) (1,045)
(Decrease)/Increase in cash in the period (5,209) 3,152 7,184
NOTES
1. The Directors have declared an interim net dividend of 1p per ordinary
share ( 2001 - 2.2p ) which will be paid on 9th May 2003 to shareholders on the
register on 22nd April 2003. The ex-dividend date for the shares will be 16th
April 2003.
2. The tax charge for the six months ended 31st December 2002 has been based
on the expected tax rate for the year of 30%.
3. The calculation of earnings per share is based on profits of (#190,000)
(2001 - #59,000) on the weighted average number of 32,506,524 (2001 -
32,549,625) ordinary shares in issue.
4. The calculation of net assets per ordinary share is based on 32,675,400 (
2001 - 32,499,000 ) ordinary shares being the number of shares in issue at the
end of the period.
5. The interim financial statements for the six months ended 31st December
2002 are unaudited. They have been prepared on the basis of accounting policies
consistent with those adopted for the year ended 30th June 2002. The results
for the year ended 30th June 2002 have been summarised for comparative purposes
within the meaning of Section 240 of the Companies Act 1985.
The full financial statements for the year ended 30th June 2002 were reported on
by the auditors without qualifications or statements under Section 237(2) or (3)
of the Companies Act 1985 and have been delivered to the Registrar of Companies.
6. A copy of the Interim Statement is being sent to all shareholders and is
available to the public from the Company's trading office at Namber House, Davis
Road, Chessington, Surrey, KT9 1TT.
7. These interim results were approved by the Board of Directors on 20th
February 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAPAEALXDEEE
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