Interim Results

RNS Number : 3790S

Northern Bear Plc

30 November 2012

 



Northern Bear plc

Unaudited Interim Report

30 September 2012

Contents

Advisers                                                                                                                                     1

Chairman's statement                                                                                                                 2

Consolidated statement of comprehensive income                                                                         4

Consolidated statement of changes in equity                                                                                 5

Consolidated balance sheet                                                                                                         6

Consolidated statement of cash flows                                                                                           7

Notes                                                                                                                                        8

Advisers

Auditor KPMG Audit Plc Quayside House 110 Quayside Newcastle upon Tyne NE1 3DX	Nominated advisor Strand Hanson Limited 26 Mount Row London W1K 3SQ
Bankers Yorkshire Bank 4 Victoria Place Manor Road Leeds LS11 5AE	Broker Seymour Pierce Limited 20 Old Bailey London EC4M 7EN
Legal advisors Mincoffs Solicitors LLP 5 Osborne Terrace Jesmond Newcastle upon Tyne NE2 1SQ	Registered office A1 Grainger Prestwick Park Prestwick Newcastle upon Tyne NE20 9SJ

Chairman's statement

Introduction

I am pleased to report the unaudited interim results for the six months to 30 September 2012. 

The Group continued to perform well despite difficult trading conditions, which were exacerbated by the wettest summer in England and Wales for 100 years. 

Profit from continuing operations was £0.5m (2011: £0.5m). The Group's results were not affected in the current period by losses from discontinued operations and hence profit increased by 24 per cent. to £0.5m (2011: £0.4m). 

The disposals of The Roof Truss Company (Northern) Limited and Hastie D Burton Limited resulted in £0.1m of exceptional costs being incurred in the six months ended 30 September 2011. The Group is now focused on its established base of core businesses and has been able to deliver savings in central costs.  This has, in part, resulted from the Group's Head Office being moved to Prestwick Park, which has allowed the centralisation of certain administrative functions and a more streamlined operation.

Earnings per share for the period increased to 2.5p (2011: 2.0p)

The Group made changes to its management structure during the period, including the appointment of Graham Jennings as Managing Director of the Group in July 2012.  I would like to thank Graham for his contribution to date and am confident his vast experience in the sector will allow him to guide the Group through the continued difficult trading conditions. 

Trading

Revenue (from continuing operations) increased by 3 per cent. to £17.7m (2011: £17.2m) but the Group continued to experience margin pressure in all markets.

The Group undertook a full review of overheads and this has resulted in a reduction in administrative expenses to £3.1m (2011: £3.3m). 

The market conditions in which the Group operates continue to be challenging and remain impacted by the current uncertain macroeconomic conditions. Despite the continued uncertainty, the Group's order books remain healthy although the roll out of these orders remains difficult to predict.

Cash flow

Net bank debt at 30 September 2012 was £6.7m (2011: £8.0m).

The Group's strategy continues to be to reduce its level of bank debt and the Group's bank continues to be supportive. 

Dividend

The Board believes the Group's priority should be to reduce bank debt levels and, hence, that it would not be prudent to declare an interim dividend. 

Strategy / Outlook

Order books continue to be healthy and we remain cautiously optimistic with regard to maintaining current levels of trading, although market conditions remain volatile. 

Our overall priority remains to improve earnings and cash flow to continue to reduce the Group's level of bank debt.  In this respect the Group's cost base remains under constant review. 

People

Following Graham Forrest's resignation as Chief Executive Officer of the Company in October 2011, I oversaw an operational review resulting in changes to the Group's management structure.  This resulted in the appointment of Graham Jennings as Managing Director of the Group effective from 30 July 2012.  Keith Soulsby was also re-appointed to the Board as an Operations Director on 11 May 2012. 

I am confident that the Group now has a more effective management structure which will allow it to continue to meet the challenges it faces and which is already delivering benefits to the Group. 

The quality and experience of our people and the key customer relationships they maintain remain fundamental to the Group's success. 

Howard Gold

Non-Executive Chairman

30 November 2012

Consolidated statement of comprehensive income

for the six month period ended 30 September 2012

	6 months ended		6 months ended		Year ended
	30 September 2012		30 September 2011		31 March 2012
	£'000		£'000		£'000
Continuing operations
Revenue	17,670		17,168		36,412
Cost of sales	(13,713)		(12,941)		(28,099)
Gross profit	3,957		4,227		8,313
Other operating income	16		8		16
Administrative expenses
Exceptional expenses	(58)		(30)		(191)
Other administrative expenses	(3,073)		(3,287)		(6,666)
	(3,131)		(3,317)		(6,857)
Operating profit	842		918		1,472
Finance income	-		-		1
Finance expenses	(202)		(233)		(452)
Profit before income tax	640		685		1,021
Income tax expense	(172)		(202)		(299)
Profit from continuing operations	468		483		722
Discontinued operations
Loss from discontinued operations, net of tax	-		(106)		(159)
Profit for the period	468		377		563
Total comprehensive income attributable to equity holders of the parent	468		377		563
Basic earnings/(loss) per share
-       continuing operations	2.5p		2.6p		4.0p
-       discontinued operations	0.0p		(0.6)p		(0.9)p
-       total operations	2.5p		2.0p		3.1p

Consolidated statement of changes in equity

for the six month period ended 30 September 2012

		Share capital	Capital redemption reserve	Share premium	Merger reserve	Retained earnings	Total equity
		£'000	£'000	£'000	£'000	£'000	£'000
At 1 April 2011		184	6	5,169	10,371	1,569	17,299
Total comprehensive income for the period
Profit for the period		-	-	-	-	377	377
At 30 September 2011		184	6	5,169	10,371	1,946	17,676
At 1 April 2011		184	6	5,169	10,371	1,569	17,299
Total comprehensive income for the year
Profit for the year		-	-	-	-	563	563
At 31 March 2012		184	6	5,169	10,371	2,132	17,862
At 1 April 2012		184	6	5,169	10,371	2,132	17,862
Total comprehensive income for the period
Profit for the period		-	-	-	-	468	468
At 30 September 2012		184	6	5,169	10,371	2,600	18,330

Consolidated balance sheet

at 30 September 2012

	30 September 2012		30 September 2011		31 March 2012
	£'000		£'000		£'000
Assets
Property, plant and equipment	2,373		2,271		2,220
Intangible assets	21,348		21,345		21,348
Deferred tax assets	33		-		33
Total non-current assets	23,754		23,616		23,601
Inventories	814		748		807
Trade and other receivables	7,729		7,692		7,607
Prepayments for current assets	337		376		194
Deferred consideration receivable	200		227		222
Cash and cash equivalents	327		339		243
Total current assets	9,407		9,382		9,073
Total assets	33,161		32,998		32,674
Equity
Share capital	184		184		184
Capital redemption reserve	6		6		6
Share premium	5,169		5,169		5,169
Merger reserve	10,371		10,371		10,371
Retained earnings	2,600		1,946		2,132
Total equity attributable to equity holders of the Company	18,330		17,676		17,862
Liabilities
Loans and borrowings	2,036		2,915		2,470
Deferred tax liabilities	-		103		-
Total non-current liabilities	2,036		3,018		2,470
Bank overdraft	4,389		5,032		4,333
Loans and borrowings	938		715		858
Trade and other payables	6,858		6,214		6,713
Current tax payable	610		343		438
Total current liabilities	12,795		12,304		12,342
Total liabilities	14,831		15,322		14,812
Total equity and liabilities	33,161		32,998		32,674

Consolidated statement of cash flows

for the six month period ended 30 September 2012

	6 months ended		6 months ended		Year ended
	30 September 2012		30 September 2011		31 March 2012
	£'000		£'000		£'000
Cash flows from operating activities
Profit for the period	468		377		563
Adjustments for:
Depreciation	231		241		495
Impairment	-		3		-
Finance income	-		-		(1)
Finance expense	202		233		452
Loss on sale of property, plant and equipment	3		4		24
Income tax expense	172		202		299
	1,076		1,060		1,832
Change in inventories	(192)		2		(145)
Change in trade and other receivables	(122)		(1,515)		(1,579)
Change in prepayments	(143)		(232)		(49)
Change in trade and other payables	145		1,062		1,708
	764		377		1,767
Interest received	-		-		1
Interest paid	(202)		(233)		(452)
Tax paid	-		(133)		(271)
Net cash from operating activities	562		11		1,045
Cash flows from investing activities
Proceeds from the sale of property, plant and equipment	44		19		70
Disposal of subsidiary, net of cash disposed of	22		639		644
Acquisition of property, plant and equipment	(150)		(86)		(181)
Net cash from investing activities	(84)		572		533
Cash flows from financing activities
Repayment of borrowings	(344)		(688)		(983)
Payment of finance lease liabilities	(106)		(87)		(184)
Net cash from financing activities	(450)		(775)		(1,167)
Net increase/(decrease) in cash and cash equivalents	28		(192)		411
Cash and cash equivalents at start of period	(4,090)		(4,501)		(4,501)
Cash and cash equivalents at end of period	(4,062)		(4,693)		(4,090)

Notes

1.   Basis of preparation

These condensed financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting as adopted by the EU'.  They do not include all the information required for full annual financial statements, and should be read in conjunction with the financial statements of the Group as at and for the year ended 31 March 2012.

These condensed financial statements are unaudited and were approved by the Board of Directors on 29 November 2012.

The information for the year ended 31 March 2012 does not constitute statutory financial statements as defined by section 435 of the Companies Act 2006.  Those financial statements 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 498 (2) or (3) of the Companies Act 2006.

The accounting policies applied by the Group in these condensed financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 31 March 2012, other than as disclosed in note 2.

2.    Changes in accounting policies

From 1 April 2012 the following standards, amendments and interpretations became effective and were adopted by the Group:

§  Amendments to IFRS7 - Disclosures: Transfers of financial assets; and

§  Amendments to IAS12 - Deferred tax: Recovery of underlying assets.

The adoption of the above has not had a significant impact on the Group's profit for the period or equity.

3.         Discontinued operation

The Group disposed of operations, as follows:

§  The Roof Truss Company (Northern) Limited - on 26 May 2011; and

§  Hastie D Burton Limited - on 20 April 2011.

Results from discontinued operations - 6 months ended 30 September 2011

		Hastie £000	Roof Truss £000	Total £000
Exceptional expenses		-	(106)	(106)
		_______	_______	_______
Loss before income tax		-	(106)	(106)
Income tax		-	-	-
		_______	_______	_______
Loss for the period		-	(106)	(106)
		--_______	_______	_______
Basic loss per share				(0.6)p
				_______

Results from discontinued operations - year ended 31 March 2012

		Hastie £000	Roof Truss £000	Total £000
Exceptional expenses		(54)	(105)	(159)
		_______	_______	_______
Loss before income tax		(54)	(105)	(159)
Income tax		-	-	-
		_______	_______	_______
Loss for the year		(54)	(105)	(159)
		--_______	_______	_______
Basic loss per share				(0.9)p
				_______

 

4.    Taxation

The taxation charge for the six months ended 30 September 2012 is calculated by applying the Directors' best estimate of the annual effective tax rate to the profit for the period.

5.         Earnings per share

The calculation of basic earnings/(loss) per share was based on the profit/(loss) for the period and on the weighted average number of ordinary shares outstanding, calculated as follows:

					6 months ended	6 months ended	Year ended
					30 September 2012	30 September 2011	31 March 2012
Profit/(loss) for the period (£000) -       continuing operations					468	483	722
-       discontinued operations					-	(106)	(159)
-       total					468	377	563
Weighted average number of ordinary shares (000)					18,420	18,420	18,420
Earnings/(loss) per share
-       continuing operations					2.5p	2.6p	4.0p
-       discontinued operations					-	(0.6)p	(0.9)p
-       total					2.5p	2.0p	3.1p

Share options in issue do not have a dilutive impact on the earnings per share calculation.

6.    Principal risks and uncertainties

The directors consider that the principal risks and uncertainties which could have a material impact on the Group's performance in the remaining six months of the financial year remain the same as those stated on pages 5 and 6, and 43 to 47 of our Annual Report and Accounts for the year ended 31 March 2012, which are available on our website, www.northernbearplc.com.

7.    Related party transactions

There have been no related party transactions in the first six months of the current financial year which have materially affected the financial position or performance of the Group.

8.    Half year report

The condensed financial statements were approved by the Board of Directors on 29 November 2012 and are available on the Company's website, www.northernbearplc.com.  Copies will be sent to shareholders and are available on application to the Company's registered office.

9.    Statement of directors' responsibilities

The director named below confirms on behalf of the Board of Directors that to the best of their knowledge:

§  the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU; and

§  the interim management report includes a fair review of the information required by:

§  DTR4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

§  DTR4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the Group during the period; and any changes in the related party transactions described in the last annual report that could do so.

The Directors of Northern Bear Plc are listed in the Annual Report and Financial Statements for the year ended 31 March 2012.

For and on behalf of the Board of Directors

Steven Roberts

Finance Director

30 November 2012

 

END

 

 

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