Final Results

Northamber PLC 05 October 2007 Northamber plc Preliminary Results for the year ended 30th June 2007 CHAIRMAN'S STATEMENT Results Despite increased unit volumes, sales decreased to £182.2 million (2006: £204.4 million) and were accompanied by a 0.5 per cent. reduction in gross margins. These were in part the result of the slow acceptance of Windows Vista and a weaker US Dollar driving further price deflation in key volume product areas. The increase in Pre-tax profits to £0.59 million (2006: £0.43million), was largely attributable to a £0.27 million increase in investment revenue. Profitable trading conditions continued to be challenging. Due to the release of a deferred tax provision of £0.70 million, as detailed below, profit after tax for the year increased to £1.102 million (2006: £0.231 million). Earnings per share showed an increase to 3.62p (2006: 0.75p). Working capital controls improved net cash over the year by some £6.56m to £14.8m at the year end (2006: £8.3m). Similarly the net asset value also increased from last year's £30.08 million to £30.5 million. These improvements are also partly the effect of the sale in September 2006 of an investment property and release of the deferred tax position. Trading conditions required a necessary further strengthening of our monitoring of customer and stock profiles to avoid either excessive or unrewarding credit or stock risks. Increasing levels of sector bad debt show our own controls to have served us well with a bad debts charge of less than 0.07 per cent. of sales for the year (2006: 0.10 per cent.). Longer lead times with so many vendors both sourcing and shipping from China reduced stock turns to 14.5 from last year's 21 times and affected optimised returns. This translating into a contributory cause for the 0.5% reduction in gross margins The Balance Sheet The grant of a 175 year lease in the enterprise zone investment property in Arbroath during the year enabled the release of the related deferred tax provision of £0.70m. This release has been made through the tax charge of the Income Statement and has enhanced the earnings per share by some 2.31p. Without that release the earnings per share would have been 1.31p per share which shows an increase over the previous year's earnings per share of 0.75p The Group retains the freehold interest which has a negligible value and a contingent liability of £0.70m exists in respect of tax clawback and this is disclosed in the accounts. The Directors believe that any realisation of this liability has an extremely low level of probability. The maintenance of a healthy balance sheet is one of our continuing objectives. This we achieved with a working capital ratio in excess of 2. The cash balance increased over the year by some £6.5m to £14.8m at the year end. With this level of financial support we are well able to deal with any foreseeable disturbances in our market place. The release of the deferred tax provision in respect of the Arbroath property contributed towards the increase in the net assets of the group to in excess of £30.5m , equivalent to 100.2p per share (2006: 98.7p). Dividend Whilst profits have been constrained by adverse trading conditions over the past 2 years, the balance sheet continues to be exceptionally sound, with a very strong cash position. These results for the year as a whole enable your Board to feel it appropriate to recommend a final dividend of 1.0p per share, making a total of 2.2p for the year (2006: 2.1p). If approved at the AGM, the proposed final dividend will be payable on 10 January 2008 to members on the Register as at 7 December 2007. Outlook On a very slightly more positive note, trading in the early months of the current period showed revenue improvements when compared with the previous year. With a likely tightening in the availability of credit, it remains to be seen if this improvement can be sustained. Subject to the state of the economy as a whole and our own performance within our sector, your Board is cautiously confident in the outcome for the new trading year. D.M. Phillips Chairman 5 October 2007 CONSOLIDATED INCOME STATEMENT for the year ended 30 June 2007 Notes 2007 2006 Total Total £'000 £'000 Continuing operations Revenue 182,191 204,408 Cost of sales (170,174) (189,912) ------------- ------------- Gross profit 12,017 14,496 Distribution costs (6,835) (8,690) Administrative expenses (5,140) (5,679) ------------- ------------- Profit from operations 42 127 Investment revenue 608 337 Finance costs (58) (30) ------------- ------------- Profit before tax 592 434 Tax 510 (203) ------------- ------------- Profit for the year from continuing operations 1,102 231 ============= ============= Earnings per ordinary share 2 3.62p 0.75p Diluted earnings per share 2 3.62p 0.75p CONSOLIDATED BALANCE SHEET at 30 June 2007 30 June 2007 30 June 2006 £'000 £'000 Non current assets Property, plant and equipment 3,562 3,911 ----------- ---------- Current assets Trading investments - 1 Inventories 11,728 9,052 Trade and other receivables 26,324 27,644 Cash and cash equivalents 14,860 9,821 ----------- ---------- 52,912 46,518 Assets held for sale - 2,483 ----------- ---------- Total assets 56,474 52,912 ----------- ---------- Current liabilities Trade and other payables (25,734) (20,426) Bank overdraft - (1,522) Tax liabilities (167) (126) ----------- ---------- (25,901) (22,074) ----------- ---------- Non current liabilities Deferred tax liabilities (64) (760) ----------- ---------- Total liabilities (25,965) (22,834) ----------- ---------- Net assets 30,509 30,078 =========== ========== Equity Share capital 1,523 1,523 Share premium account 5,734 5,734 Capital redemption reserve 264 264 Retained earnings 22,988 22,557 ----------- ---------- Equity shareholders' funds 30,509 30,078 =========== ========== CONSOLIDATED CASH FLOW STATEMENT Year ended 30 June 2007 2007 2006 £'000 £'000 Cash inflow from continuing operating activities Operating profit from continuing operations 42 127 Depreciation of property, plant and equipment 456 564 Loss/(profit) on disposal of property, plant and equipment 18 (7) Loss/(profit) on sale of investment property 48 - ----------- ----------- 564 684 (Increase)/decrease in inventories (2,676) 4,838 Decrease/(increase) in trade and other receivables 1,320 3,576 Increase/(decrease) in trade and other payables 5,308 (8,109) ----------- ----------- Cash generated from operations 4,516 989 Interest paid (58) (30) Income taxes paid (145) (485) ----------- ----------- Net cash from operating activities 4,313 474 ----------- ----------- Cash flows from investing activities Interest received 533 139 Proceeds from disposal of property, plant and equipment 30 17 Proceeds from disposal of investment property 2,435 - Purchase of property, plant and equipment (154) (266) Income from investments 75 198 ----------- ----------- Net cash from investing activities 2,919 88 ----------- ----------- Cash flows from financing activities Purchase of own shares for cancellation - (421) Dividends paid to equity shareholders (671) (1,576) ----------- ----------- Net cash used in financing activities (671) (1,997) ----------- ----------- Net increase/(decrease) in cash and cash equivalents 6,561 (1,435) Cash and cash equivalents at beginning of year 8,299 9,734 ----------- ----------- Cash and cash equivalents at end of year 14,860 8,299 ----------- ----------- Cash and cash equivalents for the purpose of this statement comprise: Cash and cash equivalents 14,860 9,821 Bank overdrafts - (1,522) ----------- ----------- 14,860 8,299 ----------- ----------- STATEMENT OF CHANGES IN EQUITY Consolidated statement of changes in equity At 30 June 2007 Share Capital Share premium Capital Retained Total account redemption earnings equity reserve £'000 £'000 £'000 £'000 £'000 Balance at 1 July 2005 1,551 5,734 236 24,323 31,844 Profit for the year - - - 231 231 -------------- -------------- -------------- -------------- -------------- Total recognised income for the year - - 231 231 Purchase of own shares (28) - 28 (421) (421) Dividends - - - (1,576) (1,576) -------------- -------------- -------------- -------------- -------------- Balance at 30 June 2006 1,523 5,734 264 22,557 30,078 Balance at 1 July 2006 1,523 5,734 264 22,557 30,078 Profit for the year - - - 1,102 1,102 -------------- -------------- -------------- -------------- -------------- Total recognised income for the year - - - 1,102 1,102 Dividends - - - (671) (671) -------------- -------------- -------------- -------------- -------------- Balance at 30 June 2007 1,523 5,734 264 22,988 30,509 -------------- -------------- -------------- ------------- -------------- NOTES 1. Financial information The financial information set out above does not constitute the Group's statutory accounts for the years ended 30 June 2006 or 30 June 2007, but it is derived from those accounts. The Statutory Accounts for the year ended 30 June 2006 have been delivered to the Registrar of Companies and those for 2007 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 S237(2) or (3) of the Companies Act 1985. The information contained in this statement does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. 2. Earnings per ordinary share The calculation of basic and diluted earnings per share is based on the following data. 2007 2006 £'000 £'000 Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent company 1,102 231 Effect of dilutive ordinary shares - - --------------- --------------- Earnings for the purpose of diluted earnings per share 1,102 231 --------------- --------------- 2007 2006 Number of shares Number Number Weighted average number of ordinary shares for the 30,458,100 30,849,032 purpose of basic earnings per share Effect of dilutive potential ordinary shares Share options - - --------------- -------------- 30,458,100 30,849,032 --------------- -------------- Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year. For diluted earnings per share the weighted average number of shares is adjusted on the assumption that all potential conversion of shares had been so converted. 3. Dividends An interim dividend has been paid during the year of 1.2p per share. A final dividend of 1.0p will be paid on 10 January 2008 to those members on the register at close of business on 7 December 2007. The ex-dividend date for the shares will be 5 December 2007. Total number of shares in issue 30,458,100 Date of AGM 16 November 2007 Ex Dividend Date 5 December 2007 Dividend Date 10 January 2008 The Company's registered office is 1-3 Union Street, Kingston-upon-Thames, Surrey KT1 1RP. This information is provided by RNS The company news service from the London Stock Exchange

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