Final Results
Northamber Plc ("the Company")
Preliminary Results for the year ended 30 June 2013
CHAIRMAN'S STATEMENT
Results
To those members who have read my statements over recent years and those who follow press reports, it will come as no surprise that the P.C. sector has seen repeated declines. In recent months independent sources have reported the further and worst downturn that the industry has known, as vendor after vendor who, despite falling prices, have reported substantially falling demand for their products.
Without dwelling or delving into the core causes, our foresight and focus over recent years was to move away from "Empty Revenue", a term I have repeatedly used in my reports to shareholders, as the cash value of margins continued to fall, whilst growing our non P.C. hardware based revenues. However, we were outpaced by the severity and speed of the latest downward twist in the spiral.
The direct effect of the unexpected acceleration in the downturn of demand, on stock turns, prices and margins for P.C.'s on the Group's sales, resulted in revenues for the year ended 30 June 2013 falling by 23% from £100.6 million to £77.5 million.
Whilst we managed our gross margins to be near stable at 7.6% from last year's 7.8%, responsive delays to the revenue shift were unavoidable.
The reduction in turnover necessitated reduction in both staffing and overheads. We had to make costly redundancies during the year, which will result in ongoing savings of some £800,000 and are the major element in achieving more immediate reductions in our total overhead of approximately £850,000. Otherwise, as commented above, some of the other overheads incurred in a business such as ours can only move in step changes and take time to effect and reveal a benefit.
The necessary restructure of our cost base, product focus and staffing, had a considerable effect on our resultant pre-tax result. Overall, there was a pre-tax loss of £1.05 million, compared with a profit of £37,000 a year ago.
Whilst the sector predictions do not offer any forecast of an early upturn in P.C. sector profitability, happily, management of our core financial strengths remain sound. Net cash of £6.13 million (2012:£4.3 million), with a depreciated and tangible net asset value of £22.8 million (2012:£24.1 million) and we remain debt free, with net assets of 81p (2012:85.7p) per share.
Balance Sheet
As the ultimate purpose of any business is in the finances, each year I stress the importance of retaining both liquidity and a strong, debt free balance sheet. In the extremely challenging times being experienced, this becomes ever more important. This past year we have reduced both our debtor days and our creditor days to 34 and 26 respectively, compared with 40 and 31 days in our previous year. We were also able to improve our liquidity ratio to 3.0 compared with 2.4 in the previous year.
The results of working capital management meant that we were able to produce a positive cash flow for the year of £1.8 million (2012:£6.4 million outflow) and that after the £6.8 million purchase of our warehouse's freehold in May 2012.
Our cash holdings at the end of the year increased from £4.3 million at 30 June 2012 to £6.1 million at 30 June 2013.
Of our net assets, some 37% is represented by the net book value of our freehold properties and 27% by cash. In total, our net assets per share were 81p at 30 June 2013 (2012: 85.7p).
It is noticeable that the highest price quoted for the shares during the year represented less than half the net asset value per share, one of the factors that influenced our decision to move to AIM from the Official list.
The move to AIM
The industry has changed since the company first became a plc 29 years ago and was then floated on the Official List or main market. The main market has become far more appropriate for those much larger companies which have a much wider range of shareholders and where potential need for funding is paramount. For those reasons, as well as for the cost savings associated with the lower level of bureaucracy involved in the junior market, the Directors considered it right that the Company change from the main market to AIM. This became effective on 2 September 2013.
Dividend
Your Board has considered this long and hard, although ultimately the conclusion was that it would be fair on shareholders to pass the dividend, even if that course of action was regarded as very prudent. The Company remains cash generative and positive in its medium term forward view. Accordingly, the Board is proposing a final dividend of 0.3p which together with the 0.3p interim would make 0.6p for the year.
Staff
As I have reported above, we had no option but to make redundancies during the year. This is always an unhappy and distasteful process both for those we have to lose and for those who remain and miss respected long term friends and associates. The need to do so was absolute and understood by the staff who continue to work hard and with dedication to maintain the Company. I was personally very sorry we had to take those actions and am very grateful to the remaining staff for their efforts.
Outlook
The sector is in the throes of monumental changes and the future direction and product/software format is extremely difficult to forecast. The true role of the distributor is one of a wholesaler enabling the fulfilment of demand and wholly dependent on decisions made by prime vendors over which it has no control. This is particularly true when it is the major vendors who are the primary innovators and drivers of manufactured technologies, products and demand.
The company's strategy is dependent on perceiving opportunities within the actions of major vendors and whose actions are at present unclear. Therefore I am unable to give a clear view on the immediate way forward for the company.
Our strength, as always lies in our liquidity and our balance sheet. We have a very tightly managed operating model, hold a healthy cash balance of £6.1 million further supported by un-encumbered, substantial and very well located freehold property assets.
Obviously, with the goodwill and dedication of our staff, the Directors are in a position to maximise whatever opportunities arise and will continue to monitor both costs and all available marketing opportunities.
D M Phillips
Chairman
For further information please contact:
Northamber plc 020 8296 7000
David Phillips
Charles Stanley Securities 020 7149 6942
(Nominated Adviser)
Philip Davies
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
|
For the year ended 30 June 2013
|
|
|
2013 |
2012 |
|
|
Total |
Total |
|
|
£'000 |
£'000 |
|
|
|
|
|
Revenue |
77,521 |
100,615 |
|
|
|
|
|
Cost of Sales |
(71,624) |
(92,807) |
|
|
------------ |
------------ |
|
|
|
|
|
Gross profit |
5,897 |
7,808 |
|
|
|
|
|
Distribution costs |
(3,358) |
(4,267) |
|
|
|
|
|
Administrative expenses |
(3,694) |
(3,638) |
|
|
------------ |
------------ |
|
|
|
|
|
(Loss) from operations |
(1,155) |
(97) |
|
|
|
|
|
Investment revenue |
108 |
134 |
|
|
------------ |
------------ |
|
(Loss)/Profit before tax |
(1,047) |
37 |
|
|
|
|
|
Tax (charge)/credit |
63 |
(39) |
|
|
------------ |
------------ |
|
|
|
|
|
(Loss) for the year and total comprehensive (loss) |
(984) |
(2) |
|
|
======= |
======= |
|
Basic and diluted (loss) per ordinary share |
(3.49)p |
(0.01)p |
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
||
|
|
||
|
At 30 June 2013 |
|
|
|
|
2013 |
2012 |
|
|
£'000 |
£'000 |
|
Non-current assets |
|
|
|
Property, plant and equipment |
8,601 |
9,050 |
|
|
|
|
|
Current assets |
|
|
|
Inventories |
6,765 |
6,733 |
|
Trade and other receivables |
8,475 |
14,659 |
|
Cash and cash equivalents |
6,136 |
4,304 |
|
|
-------------- |
-------------- |
|
|
21,376 |
25,696 |
|
|
|
|
|
Total assets |
29,977 |
34,746 |
|
|
-------------- |
-------------- |
|
Current liabilities |
|
|
|
Trade and other payables |
(7,131) |
(10,575) |
|
|
-------------- |
-------------- |
|
|
|
|
|
|
(7,131) |
(10,575) |
|
|
-------------- |
-------------- |
|
Non current liabilities |
|
|
|
Deferred tax liabilities |
- |
(45) |
|
|
-------------- |
-------------- |
|
Total liabilities |
(7,131) |
(10,620) |
|
|
-------------- |
-------------- |
|
|
|
|
|
Net assets |
22,846 |
24,126 |
|
|
======== |
======== |
|
Equity |
|
|
|
Share capital |
281 |
281 |
|
Share premium account |
5,734 |
5,734 |
|
Capital redemption reserve |
1,505 |
1,505 |
|
Retained earnings |
15,326 |
16,606 |
|
|
-------------- |
-------------- |
|
Equity shareholders' funds |
22,846 |
24,126 |
|
|
======== |
======== |
|
|
|
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CONSOLIDATED STATEMENT OF CASH FLOWS |
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For the year ended 30 June 2013
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
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Notes
1. Financial information
The financial information set out above does not constitute the group's statutory accounts for the years ended 30 June 2012 or 30 June 2013, but is derived from those accounts. The statutory accounts for the year ended 30 June 2012 have been delivered to the Registrar of Companies and those for 2013 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 |
Italy |
Other |
Total |
|
|
|
|
|
|
|
Year to 30 June 2012 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
Total Segment Revenue |
97,790 |
1,453 |
1,372 |
100,615 |
|
|
|
|
|
|
|
Year to 30 June 2013 |
|
|
|
|
|
|
|
|
|
|
|
Total Segment Revenue |
77,013 |
0 |
508 |
77,521 |
No one customer accounted for 10% or more of the group's revenue for the year
3. Loss per ordinary share
The calculation of the basic and diluted earnings per share is based on the following data:
|
|
2013 |
2012 |
|
|
£'000 |
£'000 |
|
|
|
|
|
(Loss) for the year attributable to equity holders of the parent company |
(1,008) |
(2) |
|
|
======= |
======= |
|
|
|
|
|
|
2013 |
2012 |
|
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 |
28,336,868 |
|
|
========= |
========= |
4. Dividends
A final dividend of 0.3p per share will be paid on 17 January 2014 to those members on the register at close of business on 6 December 2013.
5. Notice of meeting
The annual report and accounts for the year ended 30 June 2013 will be posted to shareholders in due course and the Annual General Meeting will be held on 6 December 2013.
The Company's registered office is Namber House, 23 Davis Road, Chessington, Surrey KT9 1HS.
This information is provided by RNS
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