Northamber Share Discussion Threads

[sleepy] 02/2/2021 07:23

Thanks Konradpuss

[konradpuss] 02/2/2021 04:48

They appeared in a portfolio in the I.C. on Friday.

[sleepy] 01/2/2021 22:00

Why are the shares up today?

[spob] 31/1/2021 09:15

It's a bit like the Sainsbury family selling all of their share holdings down to a fraction of what they had originally held

and then throwing a hissy fit when the Quataris come along and want to buy the whole company for 600p

I think they said something like... "No price is high enough"

LMAO

[spob] 31/1/2021 09:09

families get emotionally attached to family busineses

bit hard for them to see the wood for the trees initially i guess

[konradpuss] 30/1/2021 18:50

Now the Chairman has sadly passed away, is this the catalyst for change?

Look at that cash sitting on the balance sheet and the year after year of losses along with a creditable effort.

Now if I were the son going in I would hold a strategic review. Sell the business to the management and liquidate.

What am I missing?

[spob] 29/1/2021 10:31

good news is never delayed, someone once said

[sleepy] 28/1/2021 17:05

Tomorrow - big day or damp squib?

[sleepy] 19/10/2020 10:09

Interest perking up

Worsley went over 3% last week

[sleepy] 13/10/2020 15:56

Anyone know when the results will be out?

[sleepy] 27/7/2020 22:33

New improved Northamber -

[sleepy] 26/7/2020 16:46

And in each half of the current financial year?

[sleepy] 25/7/2020 10:50

Northamber lost £217,000 before exceptional item in the first six months (to December) of its recently ended financial year

Any guesses as to how much the new improved Northamber - following AVM purchase - will lose in the second six months and full year?

[balcony] 11/5/2020 22:33

Seems like something going on here

[devilsprofessor] 25/3/2020 19:13

Still happy holding this company. It's keeping its head down, no sharp shocks. A good long term company IMO DYOR

[sleepy] 03/3/2020 14:03

From today’s interims:

“Mr D M Phillips (Deceased) is the ultimate controlling party of the Company”

[cjohn] 18/2/2020 17:48

"Sell while the ducks are quacking" is surely a widespread approach to taking profits on illiquid small and micro-caps.


I still have a medium-sized position here after selling a few % of my holding into the marked recent spike. I only found out the rise was due to an ST share tip after the event.

I did listen to the podcast, and to my mind, it was a competent compendium of info that was already widely available in company reports and notifications and discussion boards like this. It didn't add anything new - not its purpose, I suppose.

[tokyojoe007] 18/2/2020 15:39

A few investors discussed this being a value play around 30p on Advfn, noted the Chadwick notifiable RNS (both in originally and reduced last week), and used the liquidity created by the ST tip to get partially out at a healthy return, in what is a v illiquid share. Me for one, that was before knowing about the tip or listening to the Graeme podcast, which I thought was well presented. Anyhow the bigger question is why the sustained rise, whilst Nar intent on doubling down, on their long held distribution focus - long may the share price continue upwards

[spob] 18/2/2020 15:07

from memory you talked about liquidity allowing someone to sell

and taking advantage of ST to do that

and I still think selling Northamber on the back of the ST tip last week is unprofessional


you mention someone with a notifiable interest selling NAR

what percentage of your listeners have a notifiable interest in any stock Lol


I have a position in Northamber

built up a long time ago and before the ST tip last week

[rndm355] 18/2/2020 14:07

Graham here. I'm going to have to respectfully disagree with your assessment:

- I said in the podcast that anyone who wanted to hold the share for the long term should treat the tip as short term noise, no need to sell into it if that's the case.

- the podcast explained in some detail why I think the intrinsic value at Northamber is less than it first appears.

- two very experienced and professional investors who know Northamber extremely well and who I know personally did use the share tip to sell Northamber shares (one of these had a publicly notifiable position, the other did not). On the other hand, I don't know of any professional investors who bought into the company on the back of the tip.

[spob] 18/2/2020 13:08

his comments about selling into a ST tip were unprofessional imo


selling should be related to either ...


'price v intrinsic value on offer' if you are an investor

or

'trend reversal/stop loss' if you are a trend following trader


anything else shows inexperience

[jpeel60] 18/2/2020 12:10

In this latest podcast, Graham talks about the “Simon Thompson effect” on share prices, Northamber (#NAR), and the astonishing RNS from Tandem Group (#TND), where Graham is a shareholder.

[spob] 17/2/2020 22:55

Simon Thompson

Investors Chronicle

Bargain shares for 2020


7 February 2020




Northamber

Aim: Share price: 53p (6 Feb 2020)

Bid-offer spread: 51-55p

Market value: £14.5m

Website: northamber.com

Founded four decades ago by late chairman David Phillips, Northamber(NAR) is widely recognised as the largest UK-owned trade-only distributor within the IT equipment industry. The business has more than 100 strategic alliances with the industry's leading manufacturers and distributes a comprehensive range of electronic products to provide solutions for the IT and communications needs of small and medium-sized enterprises (SMEs).

Northamber is not directly involved with the ultimate users of the products it sells, rather it acts as a hub through which manufacturers provide products to resellers for sale to the ultimate end user. As a result it has to develop strategies with both suppliers and resellers to satisfy the needs of the ultimate users of the products. The strategy is to assess their requirements, source quality products and services from reliable brand-named manufacturers, and make them available to resellers at the best prices in the most efficient time frame. Moreover, with an ever-changing product range coming onto the market, the company needs to seek out fresh new products that will prove attractive to end users.

The company operates from its head office in Chessington, Surrey which is home to more than 50 sales and customer support staff and teams working in purchasing, credit service, commercial web and marketing. The IT products are held in an 80,000 sq ft warehouse in Weybridge, which has more than 7,500 pallet bays and 13 loading bays, enabling Northamber to deliver 98.9 per cent of orders the next working day.

However, it’s a cut-throat industry, one reason why Northamber has failed to report a profit in any one of the past seven financial years, racking up cumulative pre-tax losses of £6.4m on aggregate revenue of £433m since 30 June 2012.

Given this dire performance, and the fact that 85 per cent of the 27.333m shares are held by the top five shareholders, it’s hardly surprising that the shares have underperformed, falling from a dot.com peak of 255p two decades ago. In fact, until last summer the share price was trading around its 2009 bear market low of 28p.

Despite the chronic underperformance, and a poor operational track record, there are reasons to believe that the share price move since last summer’s lows is the real deal rather than another false dawn.



Reasons for optimism

Firstly, in the annual results released at the end of last year, acting chairman Geoff Walters made the important point that the planned exit from low-margin and commoditised products is starting to pay off. Gross margin increased from 8.4 per cent in the first half of the financial year to 8.8 per cent on 7 per cent higher six-monthly revenue of £26.1m in the second half. This has been helped by the expansion of audio-visual solutions products. Indeed, increasing profitable product ranges helped drive a reduction in the six-monthly pre-tax loss from £353,000 to £245,000. Also, one reason for the loss is that a supplier of a new product breached its contract with Northamber, which led to lost sales and contribution. Northamber swiftly took action against the supplier and a related party, which has resulted in an interim award judgement of £431,000 plus costs in its favour.

Secondly, the company has a cash-rich balance sheet and one that has been boosted significantly following the £16.4m cash sale (post the 30 June 2019 financial year-end) of the aforementioned Weybridge facility. The property was purchased by Northamber for £6.35m in April 2012 and is valued in the company’s accounts at £6m. This means that Northamber’s cash pile will have soared more than fivefold to £19.8m when the sale completed, a significant sum in relation to the company’s market capitalisation of £14.5m and its last reported NAV of £16.6m.

Admittedly, Northamber has agreed to pay rent of £175,000 to the vendor of the Weybridge property for the next two years as part of the sale agreement, but it has also recently acquired a 51,000 sq ft freehold warehouse on a two-acre site in Swindon for £3.2m and one that meets the company’s current requirements. It is much closer to its courier partner, too. I would flag up that Northamber holds one other unencumbered freehold property which has a book value of £1.8m and is conservatively valued in the accounts.

The point being that even if you ignore the £5m value of these two unencumbered freehold properties, I reckon Northamber’s pro-forma current assets of £29.5m are four times higher than its last reported current liabilities of £7.4m, so the company’s working capital position is incredibly strong and offers investors the “margin of safety” that Ben Graham was looking for. Furthermore, net current assets of £22.1m are 1.5 times the company’s market capitalisation of £14.5m. Factor in the value of the freehold properties and I estimate a live NAV of £26.6m, or 97p a share. That’s almost double the current share price.

Thirdly, with the benefits of a cash rich balance sheet, Northamber completed earlier this week the £2.1m acquisition of audio-visual distributor Audio Visual Materials (AVM), a company that reported a pre-tax profit of £300,000 in its 2018 financial year. Northamber’s directors feel the business will help expand its own audio visual segment and drive higher growth for IT and audio visual resellers in certain key areas including professional displays, video conferencing, and room booking systems. After taking into account the improvement in Northamber’s trading results, the contribution from AVM certainly supports a move back towards operating profitability for the enlarged entity.



The bottom line

Northamber is a debt free company which will have £14.5m of cash once the Swindon warehouse purchase completes, will own two unencumbered freehold properties that are conservatively worth £5m and perhaps significantly more on the open market, and is trading in line with cash even though the business is showing signs of improvement and earlier this week completed the AVM earnings’ accretive acquisition. Also, there is a possibility that Northamber could itself become a target after founder and 63 per cent shareholder Mr Phillips passed away in December at the age of 74. He is survived by his wife, son Alexander (who has a director role at the company) and daughter.

Please note that although the shares are tightly held – excluding the top five shareholders there are only 4.1m shares in issue – it’s possible to trade in bargain sizes well in excess of the London Stock Exchange normal market size of 1,000 shares. Indeed, in the past month trades of up to 25,000 shares have passed through the market between the official bid-offer spread.

Bargain buy.

[rndm355] 13/2/2020 12:25

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