Interim Results
Northern Bear Plc
26 November 2007
Northern Bear plc
Interim Report
30 September 2007
Chairman's statement
Northern Bear plc ('Northern Bear' or the 'Group') announces interim results for
the six months ended 30 September 2007. The unaudited interim financial
information represents the first published financial information prepared on the
basis of the recognition and measurement requirements of International Financial
Reporting Standards ('IFRS') adopted by the European Union ('Adopted IFRS').
Results
I am pleased to announce the unaudited results for the Group for the six months
ended 30 September 2007. These encouraging results reflect the very considerable
development of our business and are in line with our expectations.
Turnover for the period was £13.7 million, with profit before tax of £1.0
million.
The results include contributions from Chirmarn Limited and Hastie D Burton
Limited which were the two acquisitions during the period. Basic earnings per
share for the period was 5.1p and diluted earnings per share was 4.9p.
Further, the Board has decided to declare a maiden interim dividend of 1p per
share. Notably, this is twelve months ahead of our initial expectation, but
reflects our performance, both organically and by acquisition, and the improved
cash status of the Group. The dividend will be paid on 16 December 2007 to
eligible shareholders on the share register at close of business on 28 November
2007.
I am also delighted that we have been able to raise further funds during the
period to assist with our stated acquisition policy.
New equity has been raised at an attractive share price compared with our
listing price in December 2006 of 88 pence per share. On 31 May, we announced
the issue of 275,000 shares at a price of £1.40, to raise £0.4 million for the
Group. On 30 August, following an EGM, 2,415,250 shares were issued at a price
of £1.45, raising a further £3.2 million net of costs to help fund the Group's
growth.
It was further announced on 6 November 2007 that the Group had agreed a new and
improved banking facility with Yorkshire Bank. This facility, together with the
funds raised in the share issues above, provide the Group with substantial funds
to continue its proven acquisition policy.
Accordingly, on 12 November 2007, it was announced that we had completed the
acquisition of Jennings Roofing Ltd, a Yorkshire based roofing contractor,
specialising in Local Authority work. This acquisition reinforces our aim of
balancing our customer base, while at the same time satisfying our other
acquisition criteria.
IFRS
Northern Bear shares are traded on the AIM market, operated by the London Stock
Exchange plc ('AIM') and the AIM Rules for Companies require that the next
annual consolidated financial statements of the Group, for the year ending 31
March 2008, be prepared in accordance with Adopted IFRS.
This interim financial information has been prepared on the basis of the
recognition and measurement requirements of Adopted IFRS as at 30 September 2007
that are effective (or available for early adoption) at 31 March 2008, the
Group's first annual reporting date at which it is required to use Adopted IFRS.
Based on Adopted IFRS, the directors have applied the accounting policies, as
set out in the restatement document referred to in note 1 of this interim
financial information, which they expect to apply when the first annual IFRS
financial statements are prepared for the year ending 31 March 2008.
However, the Adopted IFRS that will be effective (or available for early
adoption) in the financial statements for the year ending 31 March 2008 are
still subject to change and to additional interpretations and therefore cannot
be determined with certainty. Accordingly, the accounting policies for that
annual period will be determined finally only when the annual financial
statements are prepared for the year ending 31 March 2008.
Trading Review
Advisers
Since the Group's year end in March 2007, we have been able to appoint
experienced teams from Strand Partners as our Nominated Advisers and St. Helens
Capital as our corporate Brokers.
The Board
As reported in the final accounts to 31 March 2007, we continue to strengthen
the Board and I am therefore delighted to announce that Howard Gold, a
Non-executive Director, has agreed to accept the role of Deputy Chairman. Based
in the North East, Howard is able to provide daily support and guidance to
Graham Forrest, Chief Executive Officer, and the rest of the executive team.
The Board and our management team fully appreciate your continued support of the
Group as we work diligently to build upon our existing foundation. We would also
like to thank the Group's staff for their hard work and efforts over the year to
date and look forward to a successful second half.
Future
We continue to increase the scale and momentum of Northern Bear and feel that we
now have an excellent team of professionals and funders with us who can help
deliver progressive earnings per share.
We expect to continue with our acquisition policy during the second half of the
financial year and have prospective targets in mind.
Jon Pither 23 November 2007
Chairman
Consolidated income statement
for the six month period ended 30 September 2007
Unaudited Unaudited
6 months period from
ended incorporation
Note 30 September to 31 March
2007 2007
£000 £000
Continuing operations
Revenue 13,705 4,751
Cost of sales (9,804) (3,459)
Gross profit 3,901 1,292
Other operating income 19 9
Administrative expenses (2,656) (1,048)
Results from operating 1,264 253
activities
Finance income 24 14
Finance expenses (280) (184)
Profit before income tax 1,008 83
Income tax expense (313) (65)
Profit for the period 695 18
Basic earnings per share 5 5.1p 0.5p
Diluted earnings per share 5 4.9p 0.5p
Consolidated statement of changes in equity
for the six month period ended 30 September 2007
Unaudited
period from
Unaudited incorporation to
6 month 31 March
30 September 2007 2007
£000 £000
Profit for the period 695 18
Shares issued 5,261 9,570
Share based payments 112 28
Net increase in total equity 6,068 9,616
Total equity at start of period 9,616 -
Total equity at end of period 15,684 9,616
Consolidated balance sheet
at 30 September 2007
Unaudited Unaudited
30 September 31 March
2007 2007
£000 £000
Assets
Property, plant and equipment 1,965 1,718
Intangible assets 16,749 12,414
Other investments 11 11
Total non-current assets 18,725 14,143
Inventories 2,018 197
Trade and other receivables 4,483 3,990
Prepayments for current assets 443 185
Cash and cash equivalents 3,049 494
Total current assets 9,993 4,866
Total assets 28,718 19,009
Equity
Share capital 159 120
Share premium 5,075 1,479
Reserves 9,597 7,971
Retained earnings 853 46
Total equity attributable to equity 15,684 9,616
holders of the company
Liabilities
Loans and borrowings 4,097 3,090
Deferred income - 50
Deferred tax liabilities 67 52
Total non-current liabilities 4,164 3,192
Bank overdraft 2,383 1,096
Loans and borrowings 929 677
Trade and other payables 4,373 2,885
Current tax payable 1,185 952
Deferred income - 591
Total current liabilities 8,870 6,201
Total liabilities 13,034 9,393
Total equity and liabilities 28,718 19,009
Consolidated statement of cash flows
for the six month period ended 30 September 2007
Unaudited Unaudited
6 months period from
ended incorporation
30 to 31 march
September 2007
2007 £000
£000
Cash flows from operating activities
Profit for the period 695 18
Adjustments for:
Depreciation 146 49
Finance income (24) (14)
Finance expense 280 184
Loss on sale of property, plant and equipment 1 5
Equity settled share-based payment 112 28
transactions
Income tax expense 313 65
1,523 335
Change in inventories (1,607) (44)
Change in trade and other receivables 958 (281)
Change in prepayments (213) (6)
Change in trade and other payables (495) 181
166 185
Interest received 24 14
Interest paid (280) (131)
Tax paid (65) -
Net cash from operating activities (155) 68
Cash flows from investing activities
Proceeds from sale of property, plant and equipment - 2
Acquisition of subsidiary, net of cash acquired (2,502) (95)
Acquisition of property, plant and equipment (119) (31)
Net cash from investing activities (2,621) (124)
Cash flows from financing activities
Proceeds from issue of share capital 3,924 2,425
Payment of transaction costs (289) (919)
Proceeds from new borrowings 1,850 2,350
Repayment of borrowings (1,354) (4,344)
Payment of finance lease liabilities (87) (58)
Net cash from financing activities 4,044 (546)
Net increase / (decrease) in cash and cash equivalents 1,268 (602)
Cash and cash equivalents at start of period (602) -
Cash and cash equivalents at end of period 666 (602)
Notes
(forming part of the financial statements)
1 Basis of preparation
The AIM Rules require that the next annual consolidated financial statements of
the Group, for the year ending 31 March 2008, be prepared in accordance with
International Financial Reporting Standards ('IFRS') adopted for use in the EU
('Adopted IFRS;).
The interim financial information has been prepared on the basis of the
recognition and measurement requirements of Adopted IFRS that are effective (or
available for early adoption) at 31 March 2008, the Group's first annual
reporting date at which it is required to use Adopted IFRS. Based on these
Adopted IFRS, the directors have applied the accounting policies, as set out in
the IFRS restatement document referred to below, which they expect to apply when
the first annual IFRS financial statements are prepared for the year ending 31
March 2008.
However, the Adopted IFRS that will be effective (or available for early
adoption) in the financial statements for the year ending 31 March 2008 are
still subject to change and to additional interpretations and therefore cannot
be determined with certainty. Accordingly, the accounting policies for that
annual period will be determined finally only when the financial statement are
prepared for the year ending 31 March 2008.
The preparation of this financial information resulted in changes to the
accounting policies as compared with the most recent annual financial statements
prepared under previous Generally Accepted Accounting Practice ('GAAP'). The
revised accounting policies have, except where otherwise stated, been applied to
all periods presented in this financial information.
A detailed review of the changes in our accounting policies and reconciliations
of our financial statements from UK GAAP to IFRS at key dates are available on
the Group's website at www.northern-bear.co.uk.
2 Accounting policies
The accounting policies that the group intend to apply to the year ending 31
March 2008 are set out in the IFRS restatement document referred to in note 1.
3 Status of financial information
The comparative figures for the period ended 31 March 2007 are not the Group's
statutory financial statements for that year. Those financial statements, which
were prepared under UK GAAP, have been reported on by the Group's auditors and
delivered to the Registrar of Companies. The report of the auditors was
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.
The interim information for the half year ended 30 September 2007 is unaudited.
This information does not constitute statutory accounts within the meaning of
the Companies Act 1985.
4 Acquisitions
a) On 14 May 2007 the company acquired 100% of the issued share capital of
Chirmarn Holdings Limited and its subsidiaries, Chirmarn Limited and Chirmarn
(Surveying) Limited. The resulting goodwill was calculated and capitalised as
follows:
Chirmarn
Holdings
Limited
£000
Fixed assets
Tangible 207
Current assets
Stock 174
Debtors 525
Cash 590
Current liabilities (1,448)
Net assets 48
Goodwill 3,923
Purchase consideration 3,971
Satisfied by:
Cash 2,823
Shares 1,148
3,971
b) On 1 June 2007 the company acquired 100% of the issued share capital of
Hastie Limited and its subsidiary, Hastie D Burton Limited. The resulting
goodwill was calculated and capitalised as follows:
Hastie
Limited
£000
Fixed assets
Tangible 64
Current assets
Stock 40
Debtors 533
Cash 730
Current liabilities (497)
Net assets 870
Goodwill 381
Purchase consideration 1,251
Satisfied by:
Cash 999
Shares 252
1,251
5 Earnings per share
The calculation of basic loss per share was based on the profit for the period
and on the weighted average number of ordinary shares outstanding, calculated as
follows:
Unaudited Unaudited
6 months period from
ended incorporation
2007 to 31 March
2007
Profit for the period (£000) 695 18
Weighted average number of ordinary shares 13,548 3,375
('000)
Earnings per share 5.1p 0.5p
The calculation of diluted earnings per share was based on the profit for the
period and on the weighted average number of ordinary shares outstanding after
adjustment for the effects of all dilutive potential ordinary shares, calculated
as follows:
Unaudited Unaudited
6 months period from
ended incorporation
30 to 31 March
September 2007
2007
Profit for the period (£000) 695 18
Weighted average number of ordinary shares ('000) 14,321 3,630
Earnings per share 4.9p 0.5p
6 Interim results
These results were approved by the Board of Directors on 23 November 2007.
Copies of the interim statement will be sent to shareholders. Further copies
will be available from the Company's registered office and are also available on
our website at www.northern-bear.co.uk.
Enquiries please contact:
Northern Bear Plc
Graham Forrest, Chief Executive
0191 371 2934
Strand Partners Limited
James Harris / Braden Saunders
020 7409 3494
St Helens Capital
Ruari McGirr
020 7628 5582
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