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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Northern Bear Plc | LSE:NTBR | London | Ordinary Share | GB00B19FLM15 | 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% | 59.00 | 56.00 | 62.00 | 59.00 | 59.00 | 59.00 | 5,695 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Roof,siding,sheet Metal Work | 69.72M | 1.59M | 0.0850 | 6.94 | 11.05M |
From Apr 2019 to Apr 2024
TIDMNTBR
RNS Number : 3950G
Northern Bear Plc
25 November 2020
25 November 2020
Northern Bear plc
("Northern Bear" or the "Company")
Interim results for the six month period ended 30 September 2020
The board of directors of Northern Bear (the "Board") is pleased to announce the unaudited interim results for the Company and its subsidiaries (together the "Group") for the six months to 30 September 2020.
Financial Summary
-- Revenue of GBP20.1m (2019: GBP27.8m) -- Adjusted operating profit* of GBP0.5m (2019: GBP1.4m) -- Net cash flow from operating activities of GBP1.1m (2019: GBP1.4m outflow)
-- Net cash of GBP0.6m at 30 September 2020 (31 March 2020: net cash GBP0.2m; 30 September 2019: net bank debt GBP0.7m)
-- Goodwill impairment in relation to H Peel -- Results significantly impacted by COVID-19 disruption during Q1 -- More normal levels of operating activity in Q2, which have continued to date
* stated prior to the impact of amortisation, impairment, and other acquisition related adjustments
Steve Roberts, Executive Chairman of Northern Bear, commented:
"I am delighted that we were able to minimise trading losses during Q1 and, as a result, we can report a pleasing level of trading profitability for H1 as a whole. This is testament to the efforts of our loyal workforce, many of whom took voluntary pay reductions during Q1 when the majority of our businesses generated very little revenue as a result of large scale site closures due to the COVID-19 pandemic."
For further information please contact:
Northern Bear plc Steve Roberts - Executive Chairman +44 (0) 166 182 0369 Tom Hayes - Finance Director +44 (0) 166 182 0369 Strand Hanson Limited (Nominated Adviser and Broker) James Harris James Bellman +44 (0) 20 7409 3494
Chairman's Statement
Introduction
I am pleased to report the unaudited interim results for the six months ended 30 September 2020 (the "Period") for Northern Bear plc (the "Company" and, together with its subsidiaries, the "Group").
In our preliminary results for the year to 31 March 2020 ("FY20"), announced in July 2020, we provided a detailed statement on the impact of the COVID-19 pandemic on our results from March 2020 onwards and the related actions we took to ensure the safety of our employees, customers, and suppliers, and to manage the Group's cash resources during the period.
While activity levels were low during April, there was a gradual and sustained improvement during the latter part of May and June, with a number of private sector and local authority contracts resuming. This allowed us to restrict the extensive losses that would otherwise have occurred across the majority of our businesses had there been a worst-case scenario of no on-site activity over a sustained period of months.
On release of our preliminary results in July 2020, we were operating at circa 75% of normal activity levels and trading profitably again. By the time of our AGM in August, we had seen a further increase in activity to circa 90% of normal levels. We provided a further trading update on 2 November 2020 stating that we had since had a solid trading month in September.
Further to the last trading update, I can now confirm the Group's results for the Period, with an adjusted operating profit (stated prior to the impact of amortisation, impairment and other acquisition related adjustments) of GBP0.5m (2019: GBP1.4m). Given the levels of disruption from March onwards, this performance is testament to the loyal workforce of the Group, many of whom took voluntary wage reductions to help restrict fixed overheads during the initial lockdown period and beyond.
We are required to consider the carrying value of goodwill on the Group's balance sheet at least annually and, by way of prudence, have decided to record an impairment to goodwill and related intangible assets for H Peel & Sons (Holdings) Limited ("H Peel"). Further detail on this is provided below.
Trading
Revenue for the Period was GBP20.1m (2019: GBP27.8m) and, through continued careful contract selection and execution, gross margins were slightly higher than the corresponding prior period at 20.1% (2019: 19.5%).
Administrative expenses reduced to GBP3.6m (2019: GBP4.1m), despite having acquired Lister Holdings (York) Limited, and its trading subsidiary J Lister Electrical Limited (together "J Lister") in January 2020. This was due to a combination of the obvious lower levels of activity, use of the Government's furlough scheme and the voluntary wage reductions as referred to above.
Goodwill impairment
We recorded an impairment of goodwill and related intangible assets of GBP2.8m in the Period. This relates to H Peel, our fit out and interiors business. H Peel has seen a major impact on its core hospitality and leisure markets due to COVID-19 restrictions and, as a result, has experienced a very challenging trading period. Given the new sector restrictions imposed in recent weeks by the Government, this is likely to continue throughout the second half of the financial year.
We had noted in our annual report and financial statements for the year ended 31 March 2020 that, should trading performance not improve at H Peel, it was likely that a goodwill impairment would need to be booked in future years. At that point in time, the COVID-19 impact was still relatively low and we were hopeful of a recovery in trading. However, given the situation has since worsened and we have seen the impact of new restrictions on the hospitality and leisure sector, it seems there is no certainty over how quickly the sector and, therefore, H Peel's trading will recover so we consider it prudent to record this impairment now.
The management team at H Peel continue to make every effort to explore new markets and we expect them to be well positioned to benefit from any recovery in their core sectors in due course.
Goodwill is a non-cash accounting estimate which arises on acquisition of subsidiaries. It should be noted that the carrying value of goodwill included estimated consideration payable during a three year earn-out period. The majority of the proposed earn-out was neither achieved nor paid.
Following the impairment adjustment, the overall loss before tax for the period was GBP2.4m (2019: GBP1.2m profit) and basic loss per share was 13.3p (2019: 5.4p earnings per share).
Cash flow
The Group had a net cash position (defined as cash balances less any draw down on our revolving credit facility) of GBP0.6m (31 March 2020: net cash GBP0.2m; 30 September 2019: net bank debt GBP0.7m). Cash generated from operations in the Period was GBP1.1m (2019: GBP1.2m outflow).
Our existing GBP3.5m revolving credit facility with Yorkshire Bank was renewed in March 2020 and provides us with committed working capital facilities to May 2023, along with a GBP1m overdraft facility which is renewable annually.
As we have emphasised previously, the net cash/bank debt position represents a snapshot at a particular point in time and our net cash/bank debt position can move by up to GBP1.5m in a matter of days given the nature, size and variety of contracts that we work on and the related working capital balances. The highest net cash position in the Period was GBP1.7m, the lowest position during the period was GBP0.7m net bank debt, and the average was GBP0.2m net cash.
Dividend
We stated previously that we did not consider it appropriate in the circumstances to return capital to shareholders via a final dividend for the year ended 31 March 2020. Subject to the ongoing impact of the COVID-19 pandemic and cash requirements of the Group, should trading continue to improve, then our intention is to resume dividend payments at the earliest opportunity.
We will continue to assess dividend levels generally and our intention for the longer term is to maintain future dividend levels in line with the Group's relative performance, after taking into account the Group's available cash, working capital requirements, corporate opportunities, debt obligations, and the macro economic environment at the relevant time.
Strategy
I was delighted to announce the acquisition of J Lister in January 2020. J Lister met our criteria of being well-established in its sector, having a consistent track record of profitability and cash generation and a strong management team who are committed to remaining with the business. I am pleased to say that, following COVID-19 disruption in the Period, J Lister is currently trading well and is also exploring a number of opportunities for expansion and cross-selling with our existing Group companies.
We continue to seek acquisitions of established specialist building services businesses, either in the same or complementary sectors to our current operations, although we will proceed with caution in this area in the current trading environment.
Outlook
Our forward order book remains strong and should support our operating performance in the remainder of this financial year, subject to a continued ability to fulfil contracts on site. The renewed restrictions put in place following the outbreak of the second wave of COVID-19 infections have increased inherent uncertainty in our industry, impacting both our customer base and supply chain, and are expected to continue to impact on trading in the short term. We will do everything possible to maintain our site activities, by ensuring that the first-class safety procedures our safety team have devised over this challenging period remain in place, and are adaptable as circumstances change, in order to protect all of our workforce, customers, and members of the public.
The Group has traded well since the end of the Period and this, together with the strong order book and our cash and facility headroom position, means that we are well placed to trade through a further difficult and uncertain period during this second wave of the pandemic and beyond.
Conclusion
I am pleased with the Group's results for the Period, in light of the unprecedented impact of the COVID-19 pandemic. I would like to once again thank all of our employees for their hard work and their fortitude in the face of the challenges we have faced in recent months.
Steve Roberts
Executive Chairman
25 November 2020
Consolidated statement of comprehensive income
for the six month period ended 30 September 2020
Hot Features
Premium
6 months ended 6 months ended Year ended
30 September 30 September
2020 2019 31 March 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 20,105 27,849 54,421
Cost of sales (16,071) (22,431) (43,545)
--------------- --------------- --------------
Gross profit 4,034 5,418 10,876
Other operating income 12 12 25
Administrative expenses (3,571) (4,059) (8,682)
--------------- --------------- --------------
Operating profit (before
amortisation and other
adjustments) 475 1,371 2,219
Transaction and other one-off
costs - (264)
Deferred consideration
adjustments - 36 277
Impairment charge (2,807) - -
Amortisation of intangible
assets arising on acquisitions (16) (77) (155)
Operating (loss)/profit (2,348) 1,330 2,077
Finance costs (68) (97) (229)
--------------- --------------
(Loss)/profit before income
tax (2,416) 1,233 1,848
Income tax expense (60) (235) (360)
--------------- --------------- --------------
(Loss)/profit for the period (2,476) 998 1,488
--------------- --------------- --------------
Total comprehensive (loss)/income
attributable to equity
holders of the parent (2,476) 998 1,488
=============== =============== ==============
(Loss)/earnings per share
from continuing operations
Basic (loss)/earnings per
share (13.3p) 5.4p 8.0p
Diluted (loss)/earnings
per share (13.2p) 5.4p 8.0p
Consolidated balance sheet
at 30 September 2020
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 3,375 3,145 3,213
Right of use asset 1,198 1,084 1,132
Intangible assets 18,040 20,399 20,923
Trade and other receivables 1,080 1,025 1,063
Total non-current assets 23,693 25,653 26,331
Inventories 881 805 1,007
Trade and other receivables 10,673 10,512 8,218
Cash and cash equivalents 569 1,300 3,658
Total current assets 12,123 12,617 12,883
------------- ------------- ---------
Total assets 35,816 38,270 39,214
============= ============= =========
Equity
Share capital 190 189 190
Capital redemption reserve 6 6 6
Share premium 5,169 5,169 5,169
Merger reserve 9,703 9,605 9,703
Retained earnings 6,535 8,516 9,011
Total equity attributable to
equity holders of the Company 21,603 23,485 24,079
============= ============= =========
Liabilities
Loans and borrowings - 230 3,500
Deferred consideration 50 - 50
Trade and other payables - - 88
Lease liabilities 1,114 814 1,072
Deferred tax liabilities 294 295 354
Total non-current liabilities 1,458 1,339 5,064
------------- ------------- ---------
Loans and borrowings 31 2,236 31
Deferred consideration 50 229 50
Trade and other payables 11,705 10,075 9,103
Lease liabilities 571 292 549
Current tax payable 398 614 338
Total current liabilities 12,755 13,446 10,071
------------- ------------- ---------
Total liabilities 14,213 14,785 15,135
============= ============= =========
Total equity and liabilities 35,816 38,270 39,214
============= ============= =========
Consolidated statement of changes in equity
for the six month period ended 30 September 2020
Capital
Share redemption Share Merger Retained Total
capital reserve premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 189 6 5,169 9,605 8,277 23,246
Effect of adoption of IFRS
16 - - - - (18) (18)
--------- ------------ --------- --------- ---------- --------
At 1 April 2019 (adjusted) 189 6 5,169 9,605 8,259 23,228
Total comprehensive income
for the period
Profit for the period - - - - 998 998
Transactions with owners, recorded
directly in equity
Equity dividends paid - - - - (741) (741)
At 30 September 2019 189 6 5,169 9,605 8,516 23,485
========= ============ ========= ========= ========== ========
At 1 April 2019 189 6 5,169 9,605 8,277 23,246
Effect of adoption of IFRS
16 - - - - (18) (18)
--------- ------------ --------- --------- ---------- --------
At 1 April 2019 (adjusted) 189 6 5,169 9,605 8,259 23,228
Total comprehensive income
for the year
Profit for the year - - - - 1,488 1,488
Transactions with owners, recorded
directly in equity
Issue of shares 1 - - - - 1
Exercise of share options - - - - 5 5
Equity dividends paid - - - - (741) (741)
Merger reserve arising on acquisition - - - 98 - 98
At 31 March 2020 190 6 5,169 9,703 9,011 24,079
========= ============ ========= ========= ========== ========
At 1 April 2020 190 6 5,169 9,703 9,011 24,079
Total comprehensive income
for the period
Loss for the period - - - - (2,476) (2,476)
At 30 September 2020 190 6 5,169 9,703 6,535 21,603
========= ============ ========= ========= ========== ========
Consolidated statement of cash flows
for the six month period ended 30 September 2020
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Operating (loss)/profit for
the period (2,348) 1,330 2,077
Adjustments for:
Depreciation of property,
plant and equipment 283 265 570
Depreciation of lease asset 185 152 367
Amortisation 16 77 155
Loss on sale of property,
plant and equipment 2 5 1
Impairment of goodwill and
intangible assets 2,807 - -
Deferred consideration adjustments - (36) (277)
945 1,793 2,893
Change in inventories 126 (153) (275)
Change in trade and other
receivables (2,472) (1,771) 1,039
Change in trade and other
payables 2,514 (1,077) (2,215)
--------------- --------------- -----------
Cash generated from operations 1,113 (1,208) 1,442
Interest paid (33) (82) (202)
Tax paid - (111) (485)
--------------- --------------- -----------
Net cash flow from operating
activities 1,080 (1,401) 755
--------------- --------------- -----------
Cash flows from investing
activities
Proceeds from sale of property,
plant and equipment 218 141 671
Acquisition of property, plant
and equipment (591) (405) (1,156)
Acquisition of subsidiary
(net of cash acquired) - (64) (876)
--------------- --------------- -----------
Net cash from investing activities (373) (328) (1,361)
--------------- --------------- -----------
Cash flows from financing
activities
(Repayment)/ issue of borrowings (3,500) 1,007 2,513
Repayment of lease liabilities (296) (275) (551)
Proceeds from the exercise
of share options - - 5
Equity dividends paid - (741) (741)
Net cash from financing activities (3,796) (9) 1,226
--------------- --------------- -----------
Net (decrease)/ increase in
cash and cash equivalents (3,089) (1,738) 620
Cash and cash equivalents
at start of period 3,658 3,038 3,038
Cash and cash equivalents
at end of period 569 1,300 3,658
=============== =============== ===========
1. Basis of preparation
These interim consolidated financial statements have been prepared using accounting policies based on International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 31 March 2020 Annual Report and Financial Statements. The financial information for the half years ended 30 September 2020 and 30 September 2019 does not constitute statutory accounts within the meaning of Section 434 (3) of the Companies Act 2006 and both periods are unaudited. The financial information has not been prepared (and is not required to be prepared) in accordance with IAS 34 Interim Financial Reporting.
The annual consolidated financial statements of Northern Bear plc (the "Company", or, together with its subsidiaries, the "Group") are prepared in accordance with IFRS as adopted by the European Union. The comparative financial information for the year ended 31 March 2020 included within this report does not constitute the full statutory Annual Report for that period. The statutory Annual Report and Financial Statements for the year ended 31 March 2020 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 31 March 2020 was i) unqualified, ii) did not draw attention to any matters by way of emphasis, and iii) did not contain a statement under 498(2) - (3) of the Companies Act 2006.
2. Accounting policies
The Group has applied the same accounting policies and methods of computation in its interim consolidated financial statements as in its 2020 annual financial statements, as set out in Notes 2 and 3 of that document, except for those that relate to new standards and interpretations effective for the first time for periods beginning on (or after) 1 April 2020, and will be adopted in the 2021 financial statements. The accounting policies applied are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and are effective at 31 March 2021 or are expected to be adopted and effective at 31 March 2021.
New and amended standards and interpretations issued by the IASB that will apply for the first time in the next annual financial statements include:
-- Conceptual Framework (Revised) and amendments to related references in IFRS Standards - effective date on or after 1 January 2020;
-- IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures (Amendments): Interest Rate Benchmark Reform (effective date for periods starting on or after 1 January 2020); and
-- IFRS 3 Business Combinations (Amendment): Definition of a Business (effective date for periods starting on or after 1 January 2020).
Adoption of the above standards and interpretations is not expected to have a material impact on the Group's financial statements.
3. Taxation
The taxation charge for the six months ended 30 September 2020 is calculated by applying the Directors' best estimate of the annual effective tax rate to the profit for the period.
4. Earnings per share
Basic earnings per share is the profit or loss for the period divided by the weighted average number of ordinary shares outstanding, excluding those held in treasury, calculated as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
(Loss)/ Profit for the period
(GBP'000) (2,476) 998 1,488
------------- ------------- -----------
Weighted average number of ordinary
shares excluding shares held
in treasury for the proportion
of the year held in treasury
('000) 18,665 18,519 18,548
Basic (loss)/ earnings per
share (13.3p) 5.4p 8.0p
------------- ------------- -----------
The calculation of diluted earnings per share is the profit or loss for the period divided by the weighted average number of ordinary shares outstanding, after adjustment for the effects of all potential dilutive ordinary shares, excluding those in treasury, calculated as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
(Loss)/ Profit for the period
(GBP'000) (2,476) 998 1,488
------------- ------------- -----------
Weighted average number of
ordinary shares excluding shares
held in treasury for the proportion
of the year held in treasury
('000) 18,665 18,519 18,548
Effect of potential dilutive
ordinary shares ('000) 46 55 57
------------- ------------- -----------
Diluted weighted average number
of ordinary shares excluding
shares held in treasury for
the proportion of the year
held in treasury ('000) 18,711 18,574 18,605
------------- ------------- -----------
Diluted (loss)/ earnings per
share (13.2p) 5.4p 8.0p
------------- ------------- -----------
The following additional earnings per share figures are presented as the directors believe they provide a better understanding of the trading performance of the Group.
Adjusted basic and diluted (loss)/ earnings per share is the loss or profit for the period, adjusted for acquisition related costs and impairment of goodwill and intangible assets, divided by the weighted average number of ordinary shares outstanding as presented above.
Adjusted earnings per share is calculated as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
(Loss)/ Profit for the period (GBP'000) (2,476) 998 1,488
Transaction and other one-off costs - - 264
Deferred consideration adjustments - (36) (277)
Impairment of goodwill and intangible
assets 2,807 - -
Amortisation of intangible assets
arising on acquisitions 16 77 155
Unwinding of discount on deferred
consideration liabilities - 21 28
Corporation tax effect of above
items - (18) (50)
------------- ------------- -----------
Adjusted profit for the period
(GBP'000) 347 1,042 1,608
------------- ------------- -----------
Weighted average number of ordinary
shares excluding shares held in
treasury for the proportion of
the year held in treasury ('000) 18,665 18,519 18,548
Adjusted basic earnings per
share 1.9p 5.6p 8.7p
------------- ------------- -----------
Adjusted diluted earnings per
share 1.9p 5.6p 8.6p
------------- ------------- -----------
5. Finance costs
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2020 2019 2020
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
On bank loans and overdrafts 33 44 114
Finance charges on lease liabilities 35 32 87
Unwinding of discount on deferred
consideration liabilities - 21 28
------------- ------------- -----------
Total finance costs 68 97 229
------------- ------------- -----------
6. Principal risks and uncertainties
The directors consider that the principal risks and uncertainties which could have a material impact on the Group's performance in the remaining six months of the financial year remain the same as those stated on page 11 to 12, and 68 to 71 of our Annual Report and Financial Statements for the year ended 31 March 2020, which are available on the Company's website, www.northernbearplc.com .
7. Half year report
The condensed financial statements were approved by the Board of Directors on 25 November 2020 and are available on the Company's website, www.northernbearplc.com . Copies will be sent to shareholders and are available on application to the Company's registered office.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 .
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END
IR KKQBDDBDBFDB
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November 25, 2020 02:00 ET (07:00 GMT)
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