Interim Management Statement

RNS Number : 4616G

Northamber PLC

12 May 2011

 



12 May 2011

Northamber plc ("Northamber" or the "Company")

Interim Management Statement for the Third Quarter to 31 March 2011

The economic reports for the UK economy over the first quarter have unfortunately justified the caution expressed in our last report to shareholders in February.  As that was our third fiscal quarter, the slightly confusing picture painted may benefit from some explanation.

Turnover for the year to 31 March 2011 is 0.7% higher than for the same period last year, whilst our third quarter proved somewhat resilient compared with other sectors and turnover was only some 2% lower than that of the second quarter.  Ignoring some very low margin product areas that were discontinued during the period, turnover in the third quarter delivered a quarterly increase of 13% against the second quarter. This is a creditable result in the light of the trading difficulties already highlighted by others in the sector.

However as advised above, it was overall a confusing picture.  Pressure on margins continued during the period to an extent that our overall gross margins for the year to date, were reduced by 0.7%.  Our long standing position on "empty revenue" remains unchanged and that pressure has been, and still is, a continuing presence in our sector.  Whilst newer vendors and products are contributing, disappointingly we are having to hold a watching brief on some of our smaller revenue contributors.

As would probably have been expected, we continued our pressure on year to date overheads and are pleased to report a 6.5% reduction against last year.

As stated in the interim results statement released in February, we are taking steps to strengthen management and promote growth in the business, but not at 'any price'.  There will be some resultant additional overheads in the near future, but these are anticipated to be reflected in a stronger trading position in due course.

At the end of March we continued to have a strong balance sheet, with the seasonally higher levels of stocks and debtors, the cash balance is just over £10 million, after the final dividend paid in January.  Despite our considerable cash reserves, investment income from interest remains very low in the ongoing low interest rate environment.

The year to date overall result currently show a small loss, when compared with an effective break even position this time last year.

The well publicised uncertainty in the economic climate makes any estimate of the future fraught, particularly with the impact of cuts and inflation which have yet to be felt.

Our results, whilst far from satisfactory, are considered to be reasonable in the circumstances and we have and are taking steps to strengthen the underlying operations of the Company based on the sound foundation of our strong and liquid balance sheet.

For further information please contact:

Northamber plc                                020 8296 7000

David Phillips

FoxDavies                                          020 3463 5010

Philip Davies

 

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