Final Results

RNS Number : 6545V

Northamber PLC

30 October 2014

 

Northamber PLC ("the Company")

Preliminary Results for the year ended 30 June 2014

 

CHAIRMAN'S PRELIMINARY STATEMENT FOR THE YEAR ENDED 30 JUNE 2014

Results

Before the more usual opening to the annual report and to thank our shareholders for their patience, I want to share a very key indicator. One which most clearly demonstrates the improvement in performance is the increase in our Good Debtors. As an indication to "outlook", from the June 30th year-on-year there was a 38% increase, then rising to 57% as at end September 2014

The above improvement reflects the enhanced focus that has been placed on an area of our business. An area which maximises our opportunities, capabilities and the return on our strongest core skills. Those skills are within our highly competent logistics, infrastructure and facilities, which enabled and delivered the opportunity

Taken together with the ability to flex our very strong debt free cash, our trade credit capacity is supported by our long established, strong and tested credit management systems. Our documented minimal debtor loss over the years supports this evolution in direction

During my thirty five years experience in this sector and thirty as the senior executive of your quoted company, I have noted the repetitive frequency of viewing emerging business models almost unique to I.T. The aggressive pursuit of revenue growth, with an ill-defined promise of putting the profit back later. The very many business failures within our sector over that period, adequately reveal the reality.

Our own sector has and is struggling with strong and increasingly dominant performance competition from more stable technologies and vendors.

By contrast, following the double pronged downturn of demand and price within our sector, our business plan for the turn-around was to firstly concentrate on re-balancing our own business model with its unstable margins and still falling prices.

We must continue to minimise as far as is avoidable, exposure to empty revenue.

At this time last year and then my statement on the interim results, I reported that we were concentrating on the more profitable aspects of the business. That process is, in any dynamic business an on-going task. Any change in structure or direction takes time and involves costs, and the changes which we have made and those which are on-going are no different.

There has been a marked change between the first and second halves of this past year. In the first half the results continued the downward trend of previous periods but in the second half we achieved increases in both turnover and margins compared with the first half. Costs were contained in the second half even though we increased the quality and quantity of resources put into marketing, selling and liaison with suppliers. The result of these cumulative changes was that the operating loss for the second half year was significantly lower than for the first half at £495,000 compared with £730,000.

CHAIRMAN'S PRELIMINARY STATEMENT FOR THE YEAR ENDED 30 JUNE 2014 (continued)

The reason for my opening comments to these results, was to illustrate that progress has been made. Against the total operating loss for the year as a whole of £1.225 million compared with £1.155 million for the previous year. Following a decrease in turnover of £14.6 million (18.9% compared with last year) and reduced margins - down from 7.6% to 6.8% the reduction in overhead costs by £1.55 million 22% meant that the operating loss for the year only increased by some £70,000.

Balance Sheet

The changes which have been and are being implemented in the group are a form of investment, as the losses were incurred whilst the changes become effective.  These of course have some impact on the cash of the business, but with careful working cash management, which we consider to be one of our strengths, and operating control on all the other aspects of our business we remain in a very healthy and liquid state of capitalisation.

On the balance sheet figures the net book value of our freehold property assets with strong inherent re-development values, stand at £8.24 million or 29p per share. Our working capital ratios, although a little down on the previous year at 2.5 times and even without the cash still remains at nearly 2 times the current liabilities.

Our Debt Free Net Cash (no borrowings) was £5.08 million at 30 June 2014 compared with £6.14 million a year previously.

Net Tangible Assets per share at 76p continue to remain very comfortably above the share price.

Dividend

After consideration of our debt free balance sheet and cash position, your board is proposing a final dividend of 0.3p per share same as last year. Together with the 0.3p interim dividend, totals 0.6p for the year.

Staff

After the redundancies and associated costs, I am pleased to be able to report that we have been and are recruiting new, experienced and qualified staff to help deliver our change of focus and the drive forward. There are further tangible benefits to arise from this change of direction.

The evolution of the core team has progressed with the arrival last December of Alex Phillips as the Director of Strategy. After Alex achieved his Masters from the LSE, including a stint at Stern in New York, Alex spent over four years with the US strategic consulting firm Monitor. Whilst there, he worked directly with some of our own sector's "A" brand suppliers in developing their own strategies.

My grateful thanks once again to all our staff, both long standing and those who have joined us for our new journey, for all their past and continuing endeavours.

Outlook

Having shared in the opening paragraphs of this statement reasons for optimism, I am as always cautious when saying too much about the future. However I do feel that in the current situation and subject to major external forces over which we have no control, the upward momentum we have experienced in the latter part of this year may well continue.

CHAIRMAN'S PRELIMINARY STATEMENT FOR THE YEAR ENDED 30 JUNE 2014 (continued)

On that basis I am more optimistic than I have been for some time on the future for the company. With the dedicated team we have and the underlying strength of the company in not only its trading history and connections as well as the capital resources I hope to be able to report more progress in the coming years.

D.M. Phillips

Chairman

29 October 2014

For further information please contact:

Northamber plc                                                        020 8296 7000

David Phillips

Charles Stanley Securities                                    020 7149 6942

(Nominated Adviser)

Philip Davies

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2014
			2014		2013
			Total		Total
			£'000		£'000
Revenue			62,865		77,521
Cost of sales			(58,593)		(71,624)
Gross Profit			4,272		5,897
Distribution costs			(2,549)		(3,358)
Administrative costs			(2,948)		(3,694)
(Loss) from operations			(1,225)		(1,155)
Investment revenue			70		108
(Loss) before tax			(1,155)		(1,047)
Tax (charge)/credit			-		63
(Loss) for the year and total comprehensive (loss)			(1,155)		(984)
Basic and diluted (loss) per ordinary share			(4.10)p		(3.49)p

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2014
			2014		2013
			£'000		£'000
Non current assets
Property, plant and equipment			8,333		8,601
Current assets
Inventories			5,053		6,765
Trade and other receivables			11,689		8,475
Cash and cash equivalents			5,076		6,136
			21,818		21,376
Total assets			30,151		29,977
Current liabilities
Trade and other payables			(8,628)		(7,131)
			(8,628)		(7,131)
Total liabilities			(8,628)		(7,131)
Net assets			21,523		22,846
Equity
Share capital			281		281
Share premium account			5,734		5,734
Capital redemption reserve			1,505		1,505
Retained earnings			14,003		15,326
Equity shareholders' funds			21,523		22,846

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2014
			2014		2013
			£'000		£'000
Cash from operating activities
Operating (loss) from continuing operations			(1,225)		(1,155)
Depreciation of property, plant and equipment			265		531
(Profit) on disposal of property, plant and equipment			(1)		(1)
Operating (loss)/ profit before changes in working capital			(961)		(625)
Decrease/(increase) in inventories			1,712		(32)
(Increase)/decrease in trade and other receivables			(3,214)		6,184
Increase/(decrease) in trade and other payables			1,497		(3,447)
Cash (used)/generated from operations			(966)		2,080
Income taxes repaid			-		21
Net cash from operating activities			(966)		2,101
Cash flows from investing activities
Interest received			70		108
Proceeds from disposal of property, plant and equipment			30		1
Purchase of property, plant and equipment			(26)		(82)
			74		27
Cash flows from financing activities
Dividends paid to equity shareholders			(168)		(296)
Net cash used in financing activities			(168)		(296)
Net (decrease)/increase in cash and cash equivalents			(1,060)		1,832
Cash and cash equivalents at beginning of year			6,136		4,304
Cash and cash equivalents at end of year			5,076		6,136

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
	Share Capital		Share Premium Account	Capital Redemption Reserve			Retained Earnings		Total Equity
	£'000		£'000		£'000		£'000		£'000
Balance at 1 July 2012	281		5,734		1,505		16,606		24,126
Dividends	-		-		-		(296)		(296)
Transactions with owners	-		-		-		(296)		(296)
Loss and total comprehensive loss for the year	-		-		-		(984)		(984)
Balance at 30 June 2013	281		5,734		1,505		15,326		22,846
Dividends	-		-		-		(168)		(168)
Transactions with owners	-		-		-		(168)		(168)
Loss and total comprehensive loss for the year	-		-		-		(1,155)		(1,155)
Balance at 30 June 2014	281		5,734		1,505		14,003		21,523

Notes

1. Financial information

The financial information set out above does not constitute the group's statutory accounts for the years ended 30 June 2013 or 30 June 2014, but is derived from those accounts. The statutory accounts for the year ended 30 June 2013 have been delivered to the Registrar of Companies and those for 2014 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		Other		Total
	£'000		£'000		£'000
Year to 30 June 2013
Total Segment revenue	77,013		508		77,521
Year to 30 June 2014
Total Segment revenue	62,645		220		62,865

3. Loss per ordinary share

The calculation of the basic and diluted earnings per share is based on the following data:

			2014		2013
			£'000		£'000
(Loss) for the year attributable to equity holders of the parent company			(1,155)		(984)

			2014		2013
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		28,158,735

4. Dividends

A final dividend of 0.3p per share will be paid on 15 January 2015 to those members on the register at close of business on 5 December 2014.

5. Notice of meeting

The annual report accounts for the year ended 30 June 2014 will be posted to shareholders in due course and the Annual General Meeting will be held on 12 December 2014.

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

 

END

 

 

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