Interim Results

RNS Number : 5495N

Northamber PLC

19 February 2009

 

Northamber plc (“the Company”)

Unaudited Interim Statement

for the six months ended 31 December 2008

 

CHAIRMAN’S STATEMENT

 

Results

 

Our trading caution, driven by the UK economy and associated trade credit risks and expressed within my statement on our first quarter’s trading, materialized, in reduced sales of £68 million (31 December 2007, £97 million).

 

The resultant pre-tax loss of £304,000 (31 December 2007 a pre-tax profit of £453,000) is an unavoidable consequence and our first reported loss in over 15 years or since the last UK recession. The amount of the loss was mitigated by £900,000 of further cost saving measures versus a year ago.

 

The trend over our first half-year with turnover almost 30% lower, also reflected UK sector statistics for sales of commercial hardware I.T. equipment.

 

Our product range largely encompasses discretionary corporate expenditure. The general and continuing uncertainty within the economy, and the market as a whole, remains the dominant feature of our marketplace.

 

The importance of cash ensures Northamber is in a particularly strong position with the strength of our balance sheet and cash reserves.

 

It has always been a primary feature of our management of the business that we focus on the conservation of our working capital. The current state of affairs within the industry and the country at large has once again shown this policy to be appropriate.

 

Because of our financial strength and being able to offer both our suppliers and our customer's opportunities, the rate of gross margin is slightly better at 6.9% than when compared with 6.5% a year ago.

 

Balance Sheet

 

Our well established policy is to conserve working capital and that we have continued to do. After £4.437 million in share buy-backs, dividends and returns to shareholders during 2007/2008, as at 31 December 2008 we retained cash reserves of £10.5 million. This compares with £11.8 million at 31 December 2007. Total net assets comparatively declined from 102p per share to 90p, and a current NAV £26.1 million down from £30.1 million the result of the above.

 

Dividend

 

With our very high levels of cash, this aspect challenged your board. It was decided to mitigate the dividend choice to one of a reduced 0.6p per share (2007 1.2p per share) interim payable to shareholders on 8 May 2009 to members on the register at 17 April 2009.

 

Outlook

 

With our strengths in distribution, together with what is becoming an essential re-engineering of the current model, we are well placed to evolve better trading practices with our partners in the trading cycle, i.e. our vendors and customers to the benefit of us all.

 

There seems little doubt that it may take some time before there is any noticeable upturn in the sector, therefore it would be wrong of me to be optimistic.

 

 

D.M. Phillips

Chairman

19 February 2009

 

 

ENQUIRIES

 

Northamber Plc

David Phillips                                                                 Tel: [phone]

 

Charles Stanley Securities

Philip Davies                                                                  Tel: [phone]

 

Consolidated Income Statement 6 months to 31-12-08

 

 

		6 months ended 31.12.08 £’000	6 months ended 31.12.07 £’000	Year ended 30.06.08 £’000
Revenue Cost of sales		68,063 63,386	97,020      90,742	179,677 167,801
Gross Profit Net operating expenses		4,677 5,264	6,278        6,157	11,876 11,851
Profit from operations Investment revenue Finance costs		(587) 283 -	121           332              -	25 602 -
Profit before tax Tax (charge)/credit	3	(304) 61	453         (162)	627 (222)
Profit for the period from continuing operations		(243)	291	405
Earnings per ordinary share		-0.83p	0.96p	1.36p
Diluted earnings per share		-0.83p	0.96p	1.36p

 

Consolidated statement of recognised income and expense

 

Total income recognised directly in equity		(243)	291	405
Attributable to equity shareholders		(243)	291	405

 

Reconciliation of Movements in Shareholders’ Funds

 

	6 months ended 31.12.08 £’000	6 months ended 31.12.07 £’000	Year ended 30.06.08 £’000
Capital items     Dividends     Purchase of own shares	- (114)	-           (702)	(646) (3,791)
Total recognised income and expense for the period	(114)   (243)	(702)              291	(4,437)   405
Movement in shareholders’ funds for the period Opening equity shareholders’ funds	(357) 26,477	(411)        30,509	(4,032) 30,509
Closing equity shareholders’ funds	26,120	30,098	26,477

 

 

Consolidated balance sheet at 31-12-08

 

	Notes	As at 31.12.08 £’000	As at 31.12.07 £’000	As at 30.06.08 £’000
Non current assets Property, plant and equipment	4	3,101	3,416	3,267
Current assets Inventories Trade and other receivables Cash and cash equivalents		11,488 18,680 10,556	13,979       30,180       11,811	10,134 22,978 13,308
		40,724	55,970	46,420
Total assets		43,825	59,386	49,687
Current liabilities Trade and other payables Bank overdraft Current taxation Provisions		17,719 - (62) -	29,062            -                   162 -	22,952 - 210 -
		17,657	29,224	23,162
Non current liabilities Deferred tax liabilities		48	64	48
Total liabilities		17,705	29,288	23,210
Net assets		26,120	30,098	26,477
Equity Share capital Share premium account Capital redemption reserve fund Retained earnings		290 5,734 1,496 18,600	1,469         5,734            317       22,578	294 5,734 1,493 18,956
		26,120	30,098	26,477

 

 

 

Consolidated cash flow statement 6 months to 31-12-08

 

	6 months to  31.12.08 £’000	6 months to  31.12.07 £’000	Year to 30.06.08 £’000
Operating activities Operating profit from continuing operations	(587)	121	25
Depreciation of property, plant and equipment (Profit)/loss on disposal of property, plant and equipment	195   (8)	219             (1)	425   (10)
Operating profit before changes in working capital   (Increase)/decrease in inventories Decrease)/(increase) in trade and other receivables   (Decrease)/(increase) in trade and other payables	(400)   (1,354)   4,298     (5,233)	339        (2,251)        (3,856)        3,328	440   1,594   3,346     (2,782)
Cash generated from operations   Interest paid Income taxes paid	(2,689)   - (210)	(2,440)                -         (167)	2,598   - (195)
Net cash from operating activities	(2,899)	(2,607)	2,403
Cash flows from investing activities Interest received Proceeds from disposal of property, plant and equipment Purchase of property, plant and equipment Income from investments	271   18 (40) 12	316                11               (83)             16	567   14 (134) 35
Net cash from investing activities	261	260	482
Cash flows from financing activities Purchase of own shares for cancellation Dividends paid to equity shareholders	(114) -	(702)            -	(3,791) (646)
Net cash used in financing activities	(114)	(702)	(4,437)
Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of period	(2,752)   13,308	(3,049)         14,860	(1,552)   14,860
Cash and cash equivalents at end of period	10,556	11,811	13,308
Cash and cash equivalents for the purpose of this statement comprise Cash and cash equivalents Bank overdrafts	10,556 -	11,811           -	13,308 -
	10,556	11,811	13,308

 

 

Notes to the accounts

 

1.       Basis of preparation

 

These financial statements do not constitute statutory accounts and have not been audited. They have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting.

 

2.       Accounting policies

 

The policies set out below have been consistently applied to all the periods presented in these financial statements and will apply for the full year to 30 June 2009.

 

3.       Tax charge

 

The interim period tax charge is accrued on the estimated average annual effective tax rate of   20% (6 months ended 31 December 2007: 35.7%).

 

4.       Property, plant and equipment

 

	6 months to 31.12.08 £’000	6 months to 31.12.07 £’000	Year to 30.06.08 £’000
At beginning of period Additions Disposals Depreciation	3,267 40 (11) (195)	3,562             83            (10)          (219)	3,562 134 (4) (425)
At end of period	3,101	3,416	3,267

 

5.       Related party transactions

 

Mr D M Phillips is the ultimate controlling party of the company.

 

During the period the director of HR, Mrs S Matthews was paid £23,652 as salary and £4,139 as benefit. Mrs S Matthews is the wife of the managing director, Mr H W Matthews. In the opinion of the directors the payments were made on an arms length basis.

 

END

 

 

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