Interim Management Statement

RNS Number : 0454R

Northamber PLC

14 November 2012

 

Northamber plc

("Northamber" or the "Company")

Interim Management Statement

In the annual accounts for the year ended 30 June 2012, published in late September, the Board reported that market conditions were less than certain and that the outlook for the first quarter of the current financial year was not looking encouraging.

That has proved to be the case and disappointingly, turnover in the first quarter was marginally lower than for the final quarter of the previous financial year, a reflection of the contraction in our sector, the summer months and the Olympics.  With contraction in volumes, our ability to earn retrospective volume rebates was significantly affected and reduced overall margins. This resulted in first quarter margins almost one percentage point lower when compared with the prior year as a whole.

Whilst the previous actions to reduce overheads have proved correct, the full benefit has not been seen in the first quarter as a result of the decline of revenues, although losses for the quarter are approximately half that of the comparable period last year.

Despite the pressure from all sides on the operations, including some tightening of trade vendor credit terms and the inevitable drift of debtor days, the company still maintains a very healthy balance sheet with a current assets ratio of nearly 3. The debt free cash balance at the end of September was £1.3 million.

The Net Asset Value per share at 85.0p per share was only slightly lower than that at the end of June 2012 (85.7p per share).

In summary, the market contractions in the electronics sector still show no sign of abating and require a very high degree of reactive focus, with the Comet failure and Argos contractions recent examples.

There are also further indications of the need for driven consolidation as all parts of the channel seek economies.  When a market contracts, one of the costs that suppliers tend to consider first is their cost of distribution, and to reduce that. 

As a company with proven expertise in the logistics of distribution and the resources able to handle a significant increase in the type of products distributed, we should be in a good position to benefit from any future consolidation in the industry.

As can be gleaned from the above, our economy and our sector are in a state of flux and it is difficult to report any accurate assessment of the short term future.  We can but maintain efforts to concentrate on delivering profitable revenue, alongside our well repeated mantra of controlling costs whilst taking whatever opportunities that emerge.

14 November 2012

For further information please contact:

Northamber plc                                   020 8296 7000

David Phillips / John Henry

Charles Stanley Securities                 020 7149 6942

Philip Davies

 

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