Northamber PLC Final Results (3143B)

TIDMNAR

RNS Number : 3143B

Northamber PLC

20 September 2018

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

20 September 2018

Northamber PLC

("Northamber" or the "Company")

Preliminary Results for the year ended 30 June 2018

CHAIRMAN'S REPORT

Results

After an overly prolonged disappointing period of change, it is some comfort to report that the loss before tax for the year has been reduced by 51% to GBP489,000 by comparison with last year's loss of GBP999,000.

The changes of focus and direction I have reported over recent years have resulted in improved margins, albeit blunted by the high costs of staff recruitment into those areas of skills needed to develop the better quality opportunities, but we expect to see the benefit of this investment in future years.

At the half year, I reported on the increase in turnover for that period compared with the previous and comparable period, however, our strategy only allowed some of the improvements in achieved gross turnover to be continued into the second half. We have continued our long standing policy of exiting empty revenue offered by lower margin, long standing, commoditised product groups. Margin erosion in this area is illustrated by a global and leading U.S owned competitor, which has just reported that their own global quarterly net margins have declined by 0.67% and with Europe being their most competitive region.

Those areas where we did achieve increases in turnover in the second half by comparison with the first half, were within the newer higher yielding product groups, and these will continue to be our principal focus.

As a consequence, turnover for the year at GBP58.1 million was only 1.5% higher than the GBP57.3 million reported a year ago. More importantly, the Gross Profit margin increased from 7.7% for the year 2016/7 to 7.8% for the year 2017/8.

There were further savings in the overheads, both in Distribution and in Administration in the second half compared with the first half, so that for the year the total overheads were reduced by GBP317,000 (5.8%). For the year the resulting loss from operations was reduced from GBP1.05 million to GBP0.58 million.

Investment income increased from GBP52,000 to GBP90,000 so that the pre tax loss for the year was GBP510,000 less at GBP489,000 compared with GBP999,000 last year.

Financial Position

Despite the margin pressures resulting from long standing vendors transferring costs to their distribution business partners, we have always been proud of the strength of our financial position as reflected in the Balance Sheet.

Despite the all too frequent vagaries and vicissitudes of the U.K.'s general economic conditions, and those particularly affecting our section of the industry, we have through constant vigilance and careful monitoring managed to retain our debt free cash resources at around the GBP5 million level similar to the end of the previous year.

In doing so we have reduced the working capital used within the business by around GBP400,000 compared with last year. This was achieved mainly by reducing each of the levels of inventory and debtors and retaining a healthy Net Current Assets ratio of 2.4 compared with 2.2 for the previous year.

At end June 2018 the Net Assets per share were 62.2p (2017: 64.1p), based on the Balance Sheet values including our two unencumbered freehold properties. We therefore maintained a combined healthy tangible asset position and liquidity position which gives us confidence for the future.

Dividend

Based on the continuing strength of the group's debt free tangible asset base, the board is proposing to pay an unchanged final dividend of 0.1p per share, at a total cost of GBP28,159 which will be paid on 18 January 2019.

Staff

Due to the changes in the profile of our offered product range, we have regrettably lost a few of our staff during the year. This is never a pleasant situation either for those affected or for those who remain, I am therefore very grateful for the efforts and dedication of all members of staff throughout the year.

Outlook

At the half way point in the year, and before the overly protracted Brexit confusion, with a single EU negotiator able to enjoy the mob confusion offered by our own side, I was able to be more optimistic about the near term than currently possible.

In those areas where we have strength and which in the last couple of years have shown growth and margin improvement, we should continue to do well. However there are areas where it is extremely difficult to make any assessment on the future direction, without wishing to become political, the economic and social uncertainties which abound all around us do not in my opinion augur well for us.

On that basis I am unable to make any realistic assessment of the next year or so. We shall, as we always have, work as hard as possible to maximise our opportunities and deliver the best results that we can for our shareholders.

D.M.Phillips

Chairman

20 September 2018

For more information please contact:

 
Northamber plc                                020 8296 7000 
David Phillips, Chairman 
Cantor Fitzgerald Europe (Nominated Adviser 
 & Broker)                                    020 7894 7000 
Phil Davies / Michael Boot 
 
 
 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 
 
 For the year ended 30 June 2018 
                                                     2018            2017 
                                                    Total           Total 
                                                   GBP'000        GBP'000 
 
 
   Revenue                                          58,136         57,288 
 Cost of sales                                     (53,589)      (52,896) 
 
 Gross Profit                                         4,547         4,392 
 
 Distribution costs                                 (2,850)       (3,042) 
 Administrative costs                               (2,276)       (2,401) 
 
 
 Loss from operations                                 (579)       (1,051) 
 
 Investment revenue                                      90            52 
 
 
 Loss before tax                                      (489)         (999) 
 
 Tax (charge)                                             -             - 
 
 Loss for the year and total comprehensive 
  loss                                                (489)         (999) 
                                               ============  ============ 
 
 
 
 Basic and diluted loss per ordinary 
  share                                             (1.74)p       (3.55)p 
 
 
 
 
 CONSOLIDATED STATEMENT OF FINANCIAL POSITION 
 
 At 30 June 2018 
                                            2018           2017 
                                          GBP'000       GBP'000 
 
 Non current assets 
 Property, plant and equipment               7,894        8,025 
 
 
 Current assets 
 Inventories                                 3,378        4,176 
 Trade and other receivables                 8,145        9,052 
 Cash and cash equivalents                   5,067        4,972 
 
                                            16,590       18,200 
                                      ------------  ----------- 
 
 Total assets                               24,484       26,225 
                                      ============  =========== 
 
 
 Current liabilities 
 Trade and other payables                  (6,964)      (8,160) 
 
                                           (6,964)      (8,160) 
 
 
 
 Total liabilities                         (6,964)      (8,160) 
                                      ------------  ----------- 
 
 Net assets                                 17,520       18,065 
                                      ============  =========== 
 
 
 Equity 
 Share capital                                 281          281 
 Share premium account                       5,734        5,734 
 Capital redemption reserve                  1,505        1,505 
 Retained earnings                          10,000       10,545 
                                      ------------  ----------- 
 
 Equity shareholders' funds                 17,520       18,065 
                                      ============  =========== 
 
 
 
 
 
 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
 
 For the year ended 30 June 
  2018 
                                  Share      Share       Capital     Retained     Total 
                                  Capital    Premium    Redemption    Earnings    Equity 
                                             Account     Reserve 
                                 GBP'000    GBP'000      GBP'000      GBP'000    GBP'000 
 
 Balance at 1 July 2016               281      5,734         1,505      11,600    19,120 
 
 
 Dividends                              -          -             -        (56)      (56) 
 
 Transactions with owners               -          -             -        (56)      (56) 
 
 Loss and total comprehensive 
  loss for the year                     -          -             -       (999)     (999) 
 
 Balance at 30 June 2017              281      5,734         1,505      10,545    18,065 
 
 Dividends                              -          -             -        (56)      (56) 
 
 Transactions with owners               -          -             -        (56)      (56) 
 
 Loss and total comprehensive 
  loss for the year                     -          -             -       (489)     (489) 
 
 
 Balance at 30 June 2018              281      5,734         1,505      10,000    17,520 
                                =========  =========  ============  ==========  ======== 
 
 
 CONSOLIDATED STATEMENT OF CASH FLOWS 
 
 For the year ended 30 June 2018 
                                                          2018            2017 

                                                        GBP'000         GBP'000 
 
 Cash from operating activities 
 Operating (loss) from continuing operations                (579)         (1,051) 
 Depreciation of property, plant and equipment                188             166 
 (Profit) on disposal of property, plant 
  and equipment                                                 -             (4) 
                                                   --------------  -------------- 
 Operating (loss) before changes in working 
  capital                                                   (391)           (889) 
 
 Decrease)/(increase) in inventories                          798             830 
 Decrease/(increase) in trade 
  and other receivables                                       907           (593) 
 (Decrease)/increase in trade 
  and other payables                                      (1,196)             355 
 
 Cash generated from operations                               118           (297) 
 
 Income taxes paid                                              -               - 
 
 Net cash from operating activities                           118           (297) 
                                                   --------------  -------------- 
 
 Cash flows from investing activities 
 Interest received                                             90              52 
 Purchase of property, plant and 
  equipment                                                  (57)           (197) 
 Proceeds from disposal of property, 
  plant and equipment                                           -               4 
 Net cash from investing activities                            33           (141) 
 
 Cash flows from financing activities 
 Dividends paid to equity shareholders                       (56)            (56) 
 
 Net cash used in financing activities                       (56)            (56) 
                                                   --------------  -------------- 
 
 
 Net increase in cash and cash 
  equivalents                                                  95           (494) 
 Cash and cash equivalents at 
  beginning of year                                        4,972            5,466 
 
 
 Cash and cash equivalents at 
  end of year                                               5,067           4,972 
                                                   --------------  -------------- 
 
 
 

Notes

1. Financial information

The results of the year ended 30 June 2018 have been prepared using the accounting policies and methods of computation consistent with those used in the Group's annual report for the year ended 30 June 2018. The results have also been presented and prepared in a form consistent with that which will be adopted in the Group's annual report for the year ended 30 June 2018 and in accordance with the recognition and measurement requirements of the International Reporting Standards as adopted by the European Union.

The financial information set out above does not constitute the group's statutory accounts for the years ended 30 June 2017 or 30 June 2018, but is derived from those accounts. The statutory accounts for the year ended 30 June 2017 have been delivered to the Registrar of Companies and those for 2018 will be delivered following the group's annual general meeting. The auditors have reported on these accounts, their reports were unqualified and did 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. Segmental reporting

Management has determined that there is only one operating segment of the group as the total business of the company is the sourcing and distribution of computer related products and this is how information is reported to the Chief Operating Decision Maker. The board in carrying out its strategic planning and decision making has, necessarily, to take consideration of the inter relatedness of the product range and the customer base and thus treat the operations of the group as a whole. All decisions on the allocation of resources impacts on all aspects of the group. Information presented to the Chief Operating Decision Maker is the same as is reported in these financial statements.

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 year. 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 
 Year to 30 June 2017 
 Total Segment revenue            56,996              292           57,288 
 
 Year to 30 June 2018 
 Total Segment revenue            57,661              475           58,136 
 
 
 
 

One customer accounted for more than 10% of the group's revenue for the year, being GBP7.6m (2017:GBP7.4m).

3. Loss per ordinary share

The calculation of the basic and diluted earnings per share is based on the following data:

 
                                                   2018         2017 
                                                  GBP'000      GBP'000 
 
 (Loss) for the year attributable 
 to equity holders of the parent company            (489)        (999) 
                                              ===========  =========== 
 
 
                                                    2018         2017 
 Number of shares                                 Number       Number 
 
 Weighted average number of ordinary 
  shares for the purpose of basic earnings 
  per share and diluted earnings per 
  share                                         28,158,735   28,158,735 
                                               ===========  =========== 
 

4. Dividends

A final dividend of 0.1p per share will be paid on 18 January 2019 to those members on the register at close of business on 7 December 2018.

5. Notice of meeting

The annual report accounts for the year ended 30 June 2018 will be posted to shareholders in due course and the Annual General Meeting will be held on 14 December 2018.

The Company's registered office is Namber House, 23 Davis Road, Chessington, Surrey, KT9 1HS.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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September 20, 2018 02:00 ET (06:00 GMT)