Interim Results

Northamber PLC 24 February 2004 Northamber PLC Interim Report & Accounts (Unaudited) For Six Months Ended 31st December 2003 Chairman's Statement Results The Board is pleased to report pre tax profits of £659,000 for the six months to December 2003, a marked improvement from the £260,000 loss reported a year ago. This is especially pleasing given the difficult conditions caused by the weak dollar, which fuelled further price erosion of an estimated 15% in many of our product categories. By further increasing sales volumes, and we believe market share, we have managed to hold the overall decline in sales to less than 4%, which at £115 million for the period, we consider is a very satisfactory outcome. We also made further progress in reducing overheads and especially evolving our business model away from selling high volume but profitless products. We have continued with our policy of concentrating our sales efforts on our more profitable product areas. Given these results and the strength of our balance sheet, we have decided to increase the interim dividend by 10% to 1.1p per share from Earnings Per Share of 1.43p compared with a loss of 0.58p in the corresponding period of last year, which itself benefited from a small tax credit. As at 31 December 2003, we had net cash balances of £5.2m equivalent to over 16p per share and our net asset value per share increased to 100p from 98.3p at the end of June 2003. Trading As mentioned above, the US Dollar weakness over the period, coupled with industry trends, resulted in further downward price pressure on the product ranges which we distribute and which we estimate to have been circa 15%. The necessary tight management of overheads, that key relationship between actual costs, sales revenues and gross margin in monetary as well as percentage terms, is a core factor in any business model such as ours. The major difficulty in a deflationary price environment is the ability to reduce monetary overheads in line with the relevant available cash profit margin. Our business strategy, and the evolving and intended changes to our business model and vendor product focus, resulted in both a better mix in terms of margin and reduced overheads. This was despite an overall increase in unit volumes. We were therefore able to increase our gross profit contribution despite a near 4% decline in the value of overall sales. The Balance Sheet During the period we purchased and cancelled 1.1 million shares at a cost of £662,000. Despite this our balance sheet remains very strong with no debt and £5.2m of cash at 31 December 2003. Despite a small decrease in total net assets with fewer shares outstanding net asset value per share increased to 100p. The daily focus on the key business ratios remains at the forefront of our management controls. Dividend I have previously drawn attention to dividend policies necessarily reflecting trading and the maintenance of a healthy balance sheet. As a consequence of these results, your Board feels it appropriate to increase the 1p per share interim dividend paid last year by 10% to 1.1p per share. The proposed dividend will be payable on 7th May 2004 to members on the Register as at 13th April 2004. OUTLOOK Within a sector which has encountered more than its fair share of downturns and with the majority of IT products produced within a Dollar based context, the ongoing US Dollar weakness will require very tight focus. The cost base model of our sector is, however, already considerably over-stretched and the opportunities are clearly there for well based, financially proven and logistically strong companies such as ourselves. Those pressures on competitors and for that matter suppliers with less flexible resource and capital, should encourage positive movement towards a more commercially mature model and away from a revenue growth focus. That then enabling the sector to rebase itself more traditionally on the value of the working capital employed. Your Board is confident, if understandably slightly cautious, of a satisfactory outcome for the current trading year as a whole. D.M. Phillips Chairman 24 February 2004 Enquiries David Phillips, Chairman Tel: 020 8296 7000 Northamber plc Philip Davies Charles Stanley Tel: 020 7739 8200 CONSOLIDATED UNAUDITED PROFIT AND LOSS ACCOUNT For the six months ended 31st December 2003 6 months ended 31 6 months ended 31 12 months ended 30 December December June 2003 2002 2003 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Turnover 114,920 119,266 240,481 Cost of Sales (105,417) (109,843) (221,563) Gross Profit 9,503 9,423 18,918 Net operating expenses (8,943) (9,753) (18,513) OPERATING PROFIT/(LOSS) 560 (330) 405 Interest Receivable 100 79 103 Interest Payable (1) (9) (86) Profit/(Loss) on 659 (260) 422 ordinary activities before taxation Taxation (charge)/credit (198) 70 (116) Profit/(Loss) on 461 (190) 306 ordinary activities after taxation Equity Dividends (344) (331) (977) Retained Profit/(loss) 117 (521) (671) for period Earnings/(Loss) per 1.43p (0.58)p 0.94p ordinary share All operations are continuing. There is no difference between the loss on ordinary activities before taxation and the retained loss for the period stated above, and the historical cost equivalents. The comparative figures of cost of sales and net operating expenses for the half year ended 31 December 2002 have been reclassified in line with the audited figures for the year ended 30 June 2003. CONSOLIDATED UNAUDITED INTERIM BALANCE SHEET As at 31 December 2003 At 31 December At 31 December At 30 June 2003 2002 2003 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Fixed Assets Tangible Assets 5,238 5,988 5,575 Investments 2,837 2,836 2,837 8,075 8,824 8,412 Current Assets Stock 21,390 17,742 13,214 Debtors 27,128 29,776 27,249 Cash at bank and in hand 5,190 3,378 7,165 53,708 50,896 47,628 Current liabilities Creditors due within 1 year (29,623) (26,659) (23,324) Net current assets 24,085 24,237 24,304 Total assets less current liabilities 32,160 33,061 32,716 Deferred Taxation (859) (882) (859) Net Assets 31,301 32,179 31,857 Capital and reserves Share Capital 1,565 1,634 1,620 Share Premium 5,724 5,724 5,724 Capital Redemption Reserve 220 151 165 Profit and Loss 23,792 24,670 24,348 Equity shareholders' funds 31,301 32,179 31,857 Net assets per share 100.0p 98.5p 98.3p CONSOLIDATED CASH FLOW STATEMENT For the six months ended 31st December 2003 6 months ended 31 December 6 months ended 31 December 12 months ended 30 June 2003 2002 2003 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Cash outflow from continuing (1,171) (5,130) (365) operating activities Returns on investments and servicing of finance Interest received 100 79 103 Interest paid (1) (9) (86) Income from fixed asset 99 99 219 investments Net cash inflow from returns 198 169 236 on investments and servicing of finance Taxation UK corporation tax (paid) / (202) - 179 received Capital expenditure and financial investment Purchase of tangible fixed (169) (268) (408) assets Sale of tangible fixed assets 31 23 62 Net cash outflow from (138) (245) (346) capital expenditure and financial investment Equity dividends paid - - (978) Cash outflow before (1,313) (5,206) (1,274) financing Financing Purchase of shares (662) (29) (174) Issue of shares - 26 26 Net cash outflow from (662) (3) (148) financing Decrease in cash in the (1,975) (5,209) (1,422) period NORTHAMBER PLC Unaudited Interim Statement for the half year ended 31st December 2003. NOTES 1. The Directors have declared an interim net dividend of 1.1p per ordinary share (2002 - 1.0p) which will be paid on 7th May 2004 to shareholders on the register on 13th April 2004. The ex-dividend date for the shares will be 7th April 2004. 2. The tax charge for the six months ended 31st December 2003 has been based on the expected tax rate for the year of 30%. 3. The calculation of earnings per share is based on profits of £461,000 (2002 - loss £190,000) on the weighted average number of 32,243,565 (2002 - 32,506,524) ordinary shares in issue. 4. The calculation of net assets per ordinary share is based on 31,299,000 (2002 - 32,675,400) ordinary shares being the number of shares in issue at the end of the period. 5. The interim financial statements for the six months ended 31st December 2003 are unaudited. They have been prepared on the basis of accounting policies consistent with those adopted for the year ended 30th June 2003. The results for the year ended 30th June 2003 have been summarised for comparative purposes within the meaning of Section 240 of the Companies Act. 6. The full financial statements for the year ended 30th June 2003 were reported on by the auditors without qualifications or statements under Section 237(2) or (3) of the Companies Act 1985 and have been delivered to the Registrar of Companies. 7. A copy of the Interim Statement is being sent to all shareholders and is available to the public from the Company's trading office at Namber House, 23 Davis Road, Chessington, Surrey, KT9 1HS. 8. These interim results were approved by the Board of Directors on 24 February 2004. This information is provided by RNS The company news service from the London Stock Exchange

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Northamber (NAR)
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