Final Results

RNS Number : 2433S

Northamber PLC

07 September 2010

 

Northamber plc

Preliminary Results for the year ended 30 June 2010

Chairman's Statement

Results

I am pleased to announce improved profitability for the year as a whole and importantly the return to profit at the operating level.  

In both my interim and third quarter performance reports, I was unable to be optimistic on the outlook for our sector.   Whilst underlying conditions are largely unchanged, I can report that the efficiency improvements to assist profitability came through in our final quarter.

Profit before tax at £258,000 was significantly ahead of last year's £47,000. Earnings per share were 0.58p compared with the 0.18p per share last year.

Sales revenues at £128.48 million were some £11 million (7.8%) lower and were again constrained by both demand levels and sector price deflation.

With our trading model dependent on high revenues and low margins, total bad debt of only £38,000 (0.03%)  demonstrates our cautious, trade credit strategy within the varying levels of ongoing uncertainty.  Credit risk is a significant factor and one that has dominated our sales strategies over the recent years.  

One strong benefit of such an experienced board, has been the management of what was seen as a predictable and enhanced re-run of previous credit cycles.   Our first objective has been to protect our accumulated core financial strengths. The resultant trading uncertainties then drove focus on improving our efficiencies. 

For the year, operating costs were reduced by £1.26m (13%) compared with the previous year.

Investment income, being interest earned on cash deposits, at £142,000 was less than half of that earned in the previous year (2009 - £367,000).  As reported last year, once again the result of still lower rates of interest, rather than any reduction in the level of cash balances retained by the company. (£14.0 million compared with £14.1 million 30^th June 2009)

Balance sheet

At our 30^th June 2010 year end, the net assets per share were 88.5p compared with 89.4p at the end of the previous year.  Surprisingly, net assets per share, and even net cash, continue to exceed by quite some margin, the quoted price of the company's shares and resultant market capitalisation

During the year we had an increase in free cash of £395,000.  After paying dividends of £464,000 and the £42,000 spent repurchasing 95,000 shares for cancellation leaving 28.9 million shares in issue, the cash balance remaining at the year end was £14.0m compared with £14.1m at the end of the previous year. 

From our banking and credit facility experiences during the troubled years of the early 1990's, our priority has been the defence and maintenance of a strong, independent, debt free and liquid financial position. This has been reflected in both the working capital ratios and cash balances held by the company.

Our working capital ratio has consistently been in excess of the benchmark of 2.0 and strong cash balances have also been a consistent feature of our assets.

We were able to reduce our debtor levels and debtor days whilst retaining our levels of creditor payments and creditor days within terms.  Although some increase in the levels of stock this year was necessary to meet demand and a wider range of products

Staff

The unavoidable needs for further improvements in efficiency, have fallen heavily on our staff and we are indebted to them all for their continued contribution.

Dividend

After consideration of the results for the year, the strength of our debt free balance sheet and cash position, your board is proposing a final dividend of 1.4p per share. Together with the 0.6p interim dividend, totals 2.0p per share compared with 1.6p per share last year.

Outlook

Whilst difficult trading conditions still prevail, we are probably now better aware of the factual obstacles we need to overcome or avoid

Early indications are that the improved trends seen in the last quarter of 2009/10 may be continuing into the current year.  However, it is too early yet to say with any degree of certainty whether this is a mere blip or an underlying trend. 

We do, as always, seek to optimise whatever opportunities we can create.   As we move forward whilst ensuring that we continue with our strong financial position, we look forward with a degree of optimistic caution to the year ahead.

D. M. Phillips

Chairman

7 September 2010

For further information, contact:

Northamber Plc                        David Phillips                              020 8296 7000

Charles Stanley Securities         Russell Cook/Carl Holmes           020 7149 6000

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2010
	2010		2009
	£'000		£'000
Revenue	128,481		139,275
Cost of Sales	(119,885)		(129,853)
Gross Profit	8,596		9,422
Distribution cost	(4,477)		(4,919)
Administrative expenses	(4,003)		(4,823)
Profit from operations	116		(320)
Investment revenue	142		367
Finance Costs	-		-
Profit before tax	258		47
Tax	(88)		5
Profit for the year from operations	170		52
Total basic earnings per ordinary share	0.58p		0.18p
Total diluted earnings per ordinary share	0.58p		0.18p

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2010
	2010		2009
	£'000		£'000
Non current assets
Property, plant and equipment	2,695		2,968
Current assets
Inventories	10,322		7,173
Trade and other receivables	15,679		20,112
Cash and cash equivalents	14,013		14,124
	40,014		41,409
Total assets	42,709		44,377
Current liabilities
Trade and other payables	(17,040)		(18,385)
Tax liabilities	(18)		(40)
	(17,058)		(18,425)
Non current liabilities
Deferred tax liabilities	(37)		(2)
Total liabilities	(17,095)		(18,427)
Net assets	25,614		25,950
Equity
Share capital	289		290
Share premium account	5,734		5,734
Capital redemption reserve	1,497		1,496
Retained earnings	18,094		18,430
Equity shareholders' funds	25,614		25,950

CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2010
	2010		2009
	£'000		£'000
Cash inflow from operating activities
Operating profit from continuing operations	116		(320)
Depreciation of property, plant and equipment	283		369
(Profit)/loss on disposal of property, plant and equipment	(2)		(6)
	397		43
(Increase)/decrease in inventories	(3,149)		2,961
Decrease in trade and other receivables	4,433		2,866
(Decrease) in trade and other payables	(1,345)		(4,567)
Cash generated from operations	336		1,303
Interest paid	-		-
Income taxes paid	(74)		(211)
Net cash from operating activities	262		1,092
Cash flow from investing activities
Interest received	142		355
Proceeds from disposal of property, plant and equipment	12		18
Purchase of property, plant and equipment	(21)		(82)
Rental income	-		12
Net cash from investing activities	133		303
Cash flows from financing activities
Purchase of own shares for cancellation	(42)		(114)
Dividends paid to equity shareholders	(464)		(465)
Net cash used in financing activities	(506)		(579)
Net (decrease)/increase  in cash and cash equivalents	(111)		816
Cash and cash equivalents at beginning of year	14,124		13,308
Cash and cash equivalents at end of year	14,013		14,124
Cash and cash equivalents for the purpose of this statements comprise:
Cash and cash equivalents	14,013		14,124
Bank overdraft	-		-
	14,013		14,124

STATEMENTS OF CHANGES IN EQUITY

Consolidated statement of changes in equity

At 30 June 2010

	Share capital	Share premium account	Capital redemption reserve	Retained earnings	Total equity
	£'000	£'000	£'000	£'000	£'000
Balance at 1 July 2008	294	5,734	1,492	18,957	26,477
Profit for the year	-	-	-	52	52
Total recognised income for the year	-	-	-	52	52
Dividends	-	-	-	(465)	(465)
Purchase of own shares	(4)		4	(113)	(113)
Transaction costs of purchase	-	-	-	(1)	(1)
Balance at 30 June 2009	290	5,734	1,496	18,430	25,950
Balance at 1 July 2009	290	5,734	1,496	18,430	25,950
Profit for the year	-	-	-	170	170
Total recognised income for the year	-	-	-	170	170
Dividends	-	-	-	(464)	(464)
Purchase of own shares	(1)	-	1	(42)	(42)
Transaction costs of purchase	-	-	-	-	-
Balance at 30 June 2010	289	5,734	1,497	18,094	25,614

Notes:

1.   Financial information

The financial information set out above does not constitute the group's statutory accounts for the years ended 30 June 2009 or 30 June 2010, but is derived from those accounts. The statutory accounts for the year ended 30 June 2009 have been delivered to the Registrar of Companies and those for 2010 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.   Adoption of new and revised standards

These financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 June 2009 except for the adoption of IAS 1 Presentation of Financial Statements (Revised 2007) and IFRS 8. The adoption of IAS 1 (Revised 2007) and IFRS 8 does not affect the financial position or profits of the company, but gives rise to additional disclosures. The measurement and recognition of the company's assets, liabilities, income and expenses is unchanged. A separate 'Statement of changes in equity' is now presented.

3.   Segmental Reporting

Management has determined that there is only one operating segment of the company 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 company as a whole. All decisions on the allocation of resources impacts on all aspects of the company.

Although the sales of the company 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. The sales outside the UK are conducted on matching purchases of products to the sales of those products and on a cash basis. There are therefore no non current assets outside the UK. Information presented to the Chief Operating Decision Maker is the same as is reported in these financial statements.

                                                                                 Other

                                                             UK          European               Other             Total    

Year to 30 June 2010                       £'000               £'000               £'000               £'000

REVENUE

Total Segment revenue                     105,633              20,943                1,905           128,481

Contribution from segments                  5,368                  377                    44               5,789

Pre tax profits                                                                                                             258  

NET ASSETS

Wholly related to UK operations         25,614                      -                       -            25,614

Year to 30 June 2009

REVENUE                                      124,584              14,691                       -          139,275

Total Segment revenue

Contribution from segments                  4,138                  242                       -              4,380

Pre tax profits                                                                                                              47

NET ASSETS

Wholly related to UK operation           25,950                      -                       -            25,950

No one customer accounted for 10% or more of the company's revenue for the year.

4.   Earnings per ordinary share

The calculation of total basic and diluted earnings per share is based on the following data:
			2010		2009
			£'000		£'000
Earnings for the purpose of total basic earnings per share being net profit attributable to equity holders of the parent company			170		52
Effect of dilutive shares			-		-
Earnings for the purpose of diluted earnings per share			170		52
			2010		2009
			Number		Number
Number of shares
Weighted average number of shares for the purpose of
total basic earnings per share			29,002,552		29,171,182
effect of dilutive potential of shares - share options			-		-
			29,002,552		29,171,182

5.   Dividends

A final dividend of 1.4p will be paid on 10 January 2011 to those members on the register at close of business on 3 December 2010.

6.   The annual report accounts for the year ended 30 June 2010 will be posted to shareholders in due course and the Annual General Meeting will be held on 19 November 2010. The annual report and accounts will also be available to download from the company's website at www.northamber.com.

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

 

END

 

 

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