Northamber Share Discussion Threads

[battlebus2] 17/8/2015 08:11

Northamber is the longest established trade-only distributor of IT equipment in the UK. Since 1980, Today they are widely recognised as the largest UK owned trade-only distributor within their industry.

Northamber has over 100 strategic alliances with the industry's leading manufacturers and our comprehensive range now encompasses Servers, Storage, Security, Laptop and Desktop PCs, Printers, Software, Networking and Components, enabling us to provide complete solutions for the entire information technology and communications SME/SMB market.

With such a wide product portfolio backed by acknowledged logistical excellence, Northamber has become the UK's IT distribution partner of choice, as over 5,000 actively trading resellers will attest.


Northamber plc has it's head office in Chessington, Surrey

Northamber conducts business from two locations based in surrey, United Kingdom

Firstly, they have a custom-built 20,000 sq ft Head Office in Chessington which is home to 50+ sales and customer support staff, backed by Customer Focus, Purchasing, Credit Service, Commercial Web and Marketing teams.

Secondly, over 80,000 sq ft of warehousing located in Weybridge, with more than 7,500 pallet bays and 13 loading bays, equiped to deliver 98.9% of orders the next working day.

Their sophisticated bar-coding technologies minimize shipping errors and ensure the highest levels of integrity of supply.

[sleepy] 12/3/2015 12:34

Hope Paul Scott won't mind me posting his opinion here:

"My opinion - the way I look at things, this company needs to either diversify into more profitable areas, or shut down. There's no logic at all to continuing trading at a loss. Otherwise shareholders might be forgiven for complaining that it's probably just a lifestyle business for the Directors. There is a small divi, but that can't continue forever, unless the company makes some profits."

[sleepy] 12/3/2015 10:31

Are you still a shareholder in Axxxx?

[hybrasil] 12/3/2015 08:06

I have been a north amber shareholder for over 10 years.

Its a long time but it is does look like my initial reasons for investing strong family shareholding serious asset backing were justified. Whether they are ever reflected in the share price????

[arthur_lame_stocks] 17/12/2014 18:50

I'm not a subscriber but I have found Glen's posts generally well informed and interesting and we like similar types of stocks and hold some of the same investments in NAR and AIEA so a subscription is definitely something I would consider. The thing that puts me off is that I think there are just too few stocks of this type out there to justify a newsletter and it will be hard for Glen to come up with new ideas.

[rarther] 17/12/2014 08:11

This is all very y2k subscribing to get research/tips. From what i have seen i dont doubt the doc's integrity or the quality of his research but it goes against the 'dyor' principle that puts the 'adv' into advfn.(Anyway, back to Northamber...)

[gingerplant] 16/12/2014 14:40

ruslan1 - I've already done that but it's not there.

[gingerplant] 15/12/2014 12:20

Thanks profdoc - I would've expected to receive emailed updates etc.?

Good stuff on DWHA (I'm already in there).

[profdoc] 15/12/2014 11:16

GingerPlant. Thank you for subscribing. I'll ask the powers that be.
Glen

[gingerplant] 13/12/2014 18:01

profdoc - I have taken out a sub but don't seem to get anything in my in box about any updates etc. Can you explain why this is?

[profdoc] 13/12/2014 07:13

I had a very interesting day yesterday, with a long discussion with the BoD at the AGM. David was surprisingly open and frank. I have written a report if anyone is interested (Unfortunately ADVFN will not let me copy it to here). It is at
Glen

[profdoc] 19/11/2014 15:25

I was not going to put this in my Newsletter until next week, but seeing as it is you, Sleepy:
I think the secret lies in Note 13 showing trade receivables of £11,669,000, and that, of these, only £282,000 are ‘past due but not impaired’ by more than 30 days.
I may be misunderstanding here, but I think that means that a lot of additional sales went through in the final two months of the year – boosting receivables by £3.2m compared with the previous year (up from £8.5m to £11.7m), but not greatly increasing the amounts owed beyond the normal due date.
In other words, quantity of goods dispatched in May and June have risen significantly and will have been paid for in July and August.

Does that seem logical to you - or have I missed something?
Glen

[sleepy] 19/11/2014 13:39

Glen - Thank you for your post which has prompted me to look at the annual report. Can you expand on your point re the sales increase - they say debtor days have increased from 34 to 56

[profdoc] 19/11/2014 12:16

I was all set to reject the idea of adding more Northamber shares to my Net Current Asset Value, NCAV, portfolio, despite its reappearance on my simple first-stage quantitative filter.
My main reason for doubt, following its enthusiastic purchase for the 2013 NCAV portfolio, is that I thought the corporate strategy had changed too much. In 2013 my hope was that the managers continued to turn inventory and debtors into cash by gradually running down the operating business.
But, I thought that changed this summer with the arrival of the 61% shareholder’s son as ‘Strategy Director’.
Here we go, a freshly-minted management consultant given the brief to regenerate the operating business. Cue millions spent on ‘exciting ideas’. Bang goes the safer approach of liquidation by stealth.
But, it is not like that. At least, I’m now willing to give the benefit of doubt that money will not splashed around liberally. My change of heart came from reading the detail in the notes to the accounts and combining that with a few other things I know about the company.
Here are a few things to look at:
- lowered administration and distribution costs
- less staff, despite hiring a dozen
- low directors' pay
- rise in sales in the last two months of the year - check out £3m rise in receivables combined with little rise in overdue payments
- planning application for 28 flats in office building
- value of warehouse
Over the next few days I'll discuss the details in my 'Newsletter' - ADVFN are not keen on me writing everything up on the bulletin boards. Anyway, the analysis runs to 2800 words.
I look forward to meeting some of you at the AGM next month.
Glen

[sleepy] 31/10/2014 22:08

CWA1 - thank you for your post 256. The only ray of sunshine in the gloom :-)

[profdoc] 31/10/2014 14:20

Sleepy,

Thank you. At least they are totting up the asset values with alternative uses in mind. But the expansion plans carry considerable risk.
Glen

[sleepy] 31/10/2014 11:08

Profdoc

Thank you

Yes they only have one warehouse but it is much larger than they need and I suspect also has development potential

Have just googled to learn more about Namber House planning and found this article -

hxxp://www.channelregister.co.uk/2014/04/08/northamber_not_building_flats/

[profdoc] 31/10/2014 09:29

Hi Sleepy
From last years AGM I gleaned that the warehouse activities could be squeezed into half of the current warehouse, with the remainder rented out. Note also that it is in the prosperous South, so is probably worth more than book value. Also note that they have a very nice set of offices in London on the edge of an industrial estate (book value £1.9m), but the field next door to Northamber's offices has planning permission for housing. Northamber's offices could be converted to flats and thus be worth £4.5m (according to Chairman, who has investigated this).
Thus the market capitalisation could be covered by the property assets, leaving the net current assets.
But, the poor profit record, lack of urgency, confusing communication and encouragement of young inexperienced family member to experiment with turning around this business worries me. "You can't teach a new dog old tricks" (Warren). But then again perhaps he is a genius - if anyone sees any sign of genius please let me know.
Glen Arnold

[sleepy] 30/10/2014 15:14

"A plaything for its Chairman" !!!

Thanks CWA1 - very interesting. Sympathise with Paul in trying to decipher the Chairmans report/waffle.

Am I wrong in thinking that NAR still have two warehouses in different locations and as much warehouse space as they had some years ago when their sales were over twice what they are now?

[cwa1] 30/10/2014 14:31

In case you are interested/haven't seen it here's some comment from Paul Scott:-

This is an IT distributor. I'm beginning to wish that I hadn't started the day with this company, as trying to decipher the Chairman's report has already given me a headache. It's not quite gibberish, but every sentence has to be read two or three times to work out what it's trying to say.

Mind you, the Chairman owns 61.5% of the company, so is free to write whatever he likes!

Preliminary results - for the year ended 30 Jun 2014 have not impressed me. Turnover is down 19% to £62.9m, and the company only eked out a tiny 6.8% gross profit margin of £4.3m. Overheads were considerably more, at £5.5m, thus generating a loss before tax of £1.2m, slightly worse than the similar loss for last year.

Balance Sheet - this looks fairly strong, with £21.5m net assets. No breakdown is given of the £8.3m in fixed assets, so I've checked back to the 2012 Annual Report on the company's website (the 2013 AR doesn't seem to be on there yet), and note that fixed assets is almost entirely land & buildings, most of which appears to be the company's freehold warehouse, bought for £6.4m in 2012.

My opinion - this is an interesting asset-backed situation where the company's market value is less than half its own tangible net assets. As the company is loss-making, the first key question to ask is, "why does this company exist?" The logical thing to do would be to shut it down, and liquidate the assets, thus generating a better return for shareholders than continuing to trade at a loss.

There is no point in anyone trying to force the company to do this, as the Chairman holds a controlling stake, so could block any attempts by activists to force a change of direction. I therefore feel that the company is essentially a play-thing for its Chairman, and cannot be taken seriously as a potential investment, if nothing is likely to change.

Dividends are being paid, but are not covered by earnings, so if the trends below continue, no reliance can be placed on the continuation of dividends, although today it is announced that a 0.3p final divi (same as last year) is to be paid, in addition to the 0.3p interim divi.

The outlook statement indicates that performance has improved towards the end of the year being reported, and subsequently.

In my view the company should give serious thought to whether or not they continue with their existing activities. Box shifting at a loss is a mug's game, and they should either work out how to make a profit, or use the warehouse and staff to do something else altogether more productive - maybe becoming an outsourced warehouse for small online retailers which cannot afford their own warehouse?
- See more at:

[rarther] 30/10/2014 11:27

All revenue is "empty revenue" when you are making a loss.

[sleepy] 30/10/2014 11:08

I note the appointment of Alex Phillips, who has worked in a strategic consulting firm, as Director of Strategy. Any other reason why Northamber, a plc chaired by David Phillips, has appointed Alex Phillips?

[sleepy] 30/10/2014 10:39

IF there are genuine grounds for optimism (and given losses of over £1 million in each of the last two years one would very much hope that there are) why didn't he give information on trading performance?

He did say that "Good Debtors" (sic) are up 57%. Are sales up 57% or are customers taking longer to pay them? "Good Debtors" at year end were up 38% on the previous year despite second half sales being lower than the previous year.