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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Northamber Plc | LSE:NAR | London | Ordinary Share | GB00B2Q99X01 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 35.00 | 34.00 | 36.00 | 35.00 | 33.70 | 35.00 | 0.00 | 08:00:24 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Computers & Software-whsl | 67.15M | -411k | -0.0151 | -23.18 | 9.53M |
From Apr 2019 to Apr 2024
TIDMNAR
RNS Number : 4356N
Northamber PLC
29 January 2021
29 January 2021
Northamber PLC
(the "Company" or the "Group")
Preliminary Results for the year ended 30 June 2020
Chairman's Statement
Results
It has been a challenging year for many of us driven by significant changes and challenges on Demand and Supply due to Covid-19 and the uncertainty it created. We took the early decision to keep true to our core values and prioritise looking after our team and partners for as long as we could by avoiding any furlough or Covid-19 related redundancy across the Group. By staying fully staffed and operational we believed we could better support all our stakeholders throughout lockdown - the hope was that this would also allow us to gain long term market share. We are pleased to advise that this decision to keep fully resourced, combined with our nimble structure, rewarded us with modest organic sales growth but significant margin growth year on year as we picked up opportunities from our major competitors.
The year has also been one of deliberate change, which began with the sale of the Weybridge distribution centre in July 2019 for cash consideration of GBP16.4 million. We leased the site whilst looking for a new permanent home for our distribution centre which we found in Swindon, purchasing the site in December 2019 for GBP3.4 million. By surrendering the lease of the Weybridge warehouse within 12 months we realised additional consideration of GBP0.6 million. We are very pleased to have moved into the Swindon warehouse from the Weybridge site during the second half of the financial year. Despite the pandemic, we managed to ensure that there was no customer disruption by simultaneously operating from the two sites, although this resulted in dual running costs of the sites.
Another significant event was the acquisition in February of Audio Visual Materials Limited ("AVM") for GBP2.14 million which reaffirms our commitment to investing in technical, value add distribution which offers more attractive margins. AVM now benefits from the Group's back end infrastructure but is operated as a largely standalone business as we sought to protect its core focus. We are pleased to advise that despite AVM's sector experiencing a very heavy Covid-19 contraction, that negatively impacted AVM's sales and profitability, the Group has not made any redundancies at AVM whether due to Covid-19, integration or any other reason and indeed has continued to invest to ensure AVM prospers in the longer term including building its presence in future key technologies. The Group is excited for the future with AVM and expects to see a strong recovery from AVM in a post Covid-19 world.
Following the AVM acquisition, the Group purchased an office for GBP1.5 million to house the AVM team near to its previous location. This provided an immediate rent saving for AVM, additional office space for the Group to expand our sales team in a strong catchment area and came with an incumbent sub-tenant which served to further reduce the operating cost of the office.
Turning to our financial results, across the Group, like-for-like revenue increased by 2.1% year on year with total Group revenue increasing by 5% from GBP50.3 million to GBP52.8 million, including the contribution from AVM, despite very challenging conditions for many of our focus suppliers within Pro AV, Infrastructure and large Document Management where many sales were delayed due to restricted site access for installation due to lockdown. An increased demand for IT equipment to facilitate home working meant that there was a limited overall impact on sales during the lockdown period.
Our continued investment and focus on these more technical, higher margin categories, coupled with an early move to support partners with remote working deployments, was rewarded as gross margins in our core business increased significantly from 8.60% to 10.03%. Market declines in some of our core categories however meant that we missed out on volume achievement rebates with some suppliers with rebates down significantly year on year; we would expect these to return in the future however as the market recovers in these impacted segments. AVM enjoys significantly higher gross margins of around 20% and we anticipate that the Group's gross margins will further improve from a change in sales mix post Covid-19.
Overall, Gross Profit increased from GBP4.33 million to GBP5.48 million which is a 26.5% increase year on year. Revenue and margin growth has been supported by growth from some of our strategic focus areas, together with the addition of higher margin revenues from AVM, as well as some tactical gains in supporting remote working deployments; we would have expected more significant revenue growth if not for lockdowns restricting access to site.
The corporate activity undertaken during the year inevitably led to the Group incurring some, non-recurring costs such as warehouse duplication and restructuring costs following the move from Weybridge to Swindon which have impacted the results for the year but which won't be repeated in the following financial year. Due to the extra costs associated with operating the AVM business, the investment in our sales capabilities and supporting the planned continued growth in Gross Profit our distribution costs increased year on year from GBP2.85 million to GBP3.60 million and administrative costs increased from GBP2.35 million to GBP2.61 million. Costs remain closely monitored however and as ever this is a key focus area for the business and our Board.
Similarly, the GBP9.93 million pre-tax profit for the Group (GBP0.60 million loss prior year) after exceptional income from the Warehouse sale would have been stronger but for the non-recurring costs mentioned above.
The Board are very proud of how the team pulled together in this tough year to help our community, some specific examples include working with customers & suppliers to quickly prioritise supporting the NHS including Nightingale efforts, offering warehousing free of charge to the local NHS Trust, supporting Clap for our Carers by providing resources from AVM for illuminating local churches, sourcing products globally that were constrained in the UK to support remote working all whilst rolling out remote working for our entire office based team.
Financial position
Maintaining our prudence in financial matters, our working capital management is reflected in the Net Current Assets ratio which at 4.7 times (2019: 2.5 times) is a significant improvement.
Stock levels are higher than last year at GBP5.9 million vs GBP3.3 million, in part due to the AVM acquisition and also as we continued to seek to profitably support our partners by maintaining sufficient stock in country during the uncertainty of logistics due to Covid-19 as supply chains were creaking. We see our flexibility on local stock levels as a key driver of our future with our partners.
Cash was GBP10.96 million at 30 June 2020 compared with GBP3.4 million at 30 June 2019, reflecting the sale of the distribution centre and the purchase of the new warehouse property, AVM and a new office. With Fixed Assets at book value at GBP7.2 million, including three unencumbered freehold properties, the Group's' overall financial position is very sound.
Net Assets at 91.5p per share are considerably in excess of the average price of the ordinary shares throughout the period.
Board
With great sadness, we lost our founder and Chairman David Phillips in December 2019. David made a very significant contribution to the development and leadership of the Company since he founded Northamber in 1980 and he will be greatly missed.
Alex Phillips, who is the son of David Phillips, joined the board in February and was appointed Managing Director of the Group in August having formerly been the Commercial Director, whilst Colin Thompson was appointed Chairman in October.
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 18 March 2021 to shareholders on the register as at 12 February 2021.
Staff
Our staff have been the differentiator in our business for decades and we are pleased that we were able to work side by side with them throughout this unprecedented period and offer them continued job security. We remain incredibly grateful to them and continue to invest in our evolving business model with added skills based services and which are heavily reliant on our staff to achieve our business evolution. The quality of our team is evident in delivering these growth figures whilst working remotely, moving logistics centre and supporting our partners in a tough period with unpredictable demand.
Outlook
We are pleased to advise that we have been trading well so far since the start of the new financial year and we are quietly optimistic that the investments we have made in supporting our partners coupled with removing the one off costs tied to moving warehouse should be reflected in the trading results for the current financial year. Clearly we remain highly cautious however due to the economic uncertainty, Brexit and the potential further impact of Covid-19 on the demand and supply chain. We remain committed to our continued focus on our strategic, higher margin value categories and we see future opportunities to grow our market share. The strength of our balance sheet provides an excellent platform from which to do so, and inspires confidence in our customers and suppliers that Northamber is here for the long haul.
C.M.Thompson
Chairman
29 January 2021
Contacts:
Hot Features
Premium
Northamber PLC investor_relations@northamber.com Tel: +44 (0) 208 744 8200
Colin Thompson, Chairman
N+1 Singer (Nominated Adviser and Tel: +44 (0) 207 496
Sole Broker) 3000
Philip Davies (Corporate Finance)
Alex Bond (Corporate Finance)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2020
2020 2019
Notes GBP'000 GBP'000
Revenue 2 52,835 50,329
Cost of sales (47,357) (45,998)
Gross Profit 5,478 4,331
Distribution costs (3,601) (2,849)
Administrative costs (2,613) (2,352)
Administrative costs - Exceptional
acquisition costs (220) -
Other income - Exceptional gain 10,804 -
on disposal of property
----------- -----------
Profit/(loss) from operations 9,848 (870)
Adjusted operating loss (736) (870)
Exceptional items 10,584 -
----------- -----------
Operating profit/(loss) 9,848 (870)
---------------------------------------- ------ ----------- -----------
Investment revenue 92 272
Finance cost (15) -
----------- -----------
Profit/(loss) before tax 9,925 (598)
Tax charge (1,413) -
Profit/(loss) for the year and
total comprehensive loss attributable
to the owners 8,512 (598)
=========== ===========
Basic and diluted profit/ (loss)
per ordinary share 3 31.16p (2.17)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2020
2020 2019
GBP'000 GBP'000
Non current assets
Property, plant and equipment 7,184 1,792
Goodwill and intangible assets 1,421 -
----------- -----------
8,605 1,792
----------- -----------
Current assets
Inventories 5,948 3,320
Trade and other receivables 7,750 9,492
Cash and cash equivalents 10,968 3,446
Assets classified as held for
sale - 6,019
----------- -----------
24,666 22,277
----------- -----------
Total assets 33,271 24,069
=========== ===========
Current liabilities
Trade and other payables (8,356) (7,434)
Total liabilities (8,356) (7,434)
----------- -----------
Net assets 24,915 16,635
=========== ===========
Equity
Share capital 272 273
Share premium account 5,734 5,734
Capital redemption reserve 1,514 1,513
Treasury Shares - (7)
Retained earnings 17,395 9,122
----------- -----------
Equity shareholders' funds 24,915 16,635
=========== ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 30 June 2020
Share Share Capital Redemption Treasury Retained Total
Capital Premium Reserve shares Earnings Equity
Account
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 July 2019 281 5,734 1,505 - 10,000 17,520
Dividends - - - - (55) (55)
Purchase and cancellation of shares (8) 8 - (225) (225)
Purchase of treasury shares - (7) - (7)
-------- -------- -------- --------- --------- ---------
Transactions with owners (8) - 8 (7) (280) (287)
Loss and total comprehensive loss for
the year - - - - (598) (598)
Balance at 30 June 2019 273 5,734 1,513 (7) 9,122 16,635
Dividends - - - - (164) (164)
Purchase and cancellation of shares (1) 1 - (68) (68)
Purchase of treasury shares - - - 7 (7) -
Transactions with owners (1) - 1 7 (239) (232)
Profit and total comprehensive Profit
for the year - - - - 8,512 8,512
Balance at 30 June 2020 272 5,734 1,514 - 17,395 24,915
======== ======== ======== ========= ========= =========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
2020 2019
GBP'000 GBP'000
Cash flows from operating activities
Operating (loss) from continuing operations 9,848 (870)
Depreciation of property, plant and equipment 228 153
Profit on disposal of property (10,982) -
------------- -------------
Operating (loss) before changes in working
capital (906) (717)
(Increase)/decrease in inventories (2,039) 58
Decrease/(increase) in trade
and other receivables 2,899 (1,346)
(Decrease)/increase in trade
and other payables (1,172) 470
Cash generated from operations (1,218) (1,535)
Income taxes paid - -
Net cash from operating activities (1,218) (1535)
------------- -------------
Cash flows from investing activities
Interest received 92 272
Interest paid (15) -
Proceeds from disposal of property 16,400 -
Purchase of property, plant and
equipment (5,370) (71)
Purchase of AVM Limited (2,135) -
Net cash from investing activities 8,972 201
Cash flows from financing activities
Dividends paid to equity shareholders (164) (55)
Purchase of cancellation of shares (68) (225)
Purchase of treasury shares - (7)
Net cash used in financing activities (232) (287)
------------- -------------
Net increase in cash and cash
equivalents 7,522 (1,621)
Cash and cash equivalents at
beginning of year 3.446 5,067
Cash and cash equivalents at
end of year 10,968 3,446
------------- -------------
Notes
1. Financial information
This financial information is consistent with the consolidated financial statements of the group for the year ended 30 June 2020. The group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU.
The financial information set out above does not constitute the group's statutory accounts for the years ended 30 June 2019 or 30 June 2020, but is derived from those accounts. The statutory accounts for the year ended 30 June 2019 have been delivered to the Registrar of Companies and those for 2020 will be delivered following the group's annual general meeting. The auditors have reported on these accounts, their reports were unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports, 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. 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 attributable to individual countries based on the location of the customer. There are no non current assets outside the UK.
Revenues comprise: 2020 2019
GBP'000 GBP'000
Revenue from contracts
with
customers - UK 52,391 49,655
-other 444 674
-------- ---------
52,835 50,329
-------- ---------
One customer accounted for more than 10% of the group's revenue for the year, being GBP5,900,000 (2019: GBP6,400,000).
3. Profit /Loss) per ordinary share
The calculation of the basic and diluted earnings per share is based on the following data:
2020 2019
GBP'000 GBP'000
Profit/(Loss) for the year attributable
to equity holders of the parent company 8,512 (598)
=========== ===========
2020 2019
Number of shares Number Number
Weighted average number of ordinary
shares for the purpose of basic and
diluted earnings per share 27,316,175 27,499,434
=========== ===========
4. Dividends
A final dividend of 0.3p per share will be paid on 18 March 2021 to those members on the register at close of business on 12 February 2021.
5. Notice of meeting
The annual report and accounts for the year ended 30 June 2020 will be posted to shareholders in due course and the Annual General Meeting will be held on 10 March 2021.
The Company's registered office is Namber House, 23 Davis Road, Chessington, Surrey, KT9 1HS.
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END
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January 29, 2021 12:05 ET (17:05 GMT)
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