Interim Statement

RNS Number : 5994B
Northamber PLC
22 February 2011
 



Northamber Plc ("the Company")

 

Interim Statement for the six months to 31 December 2010

 

Chairman's Statement

 

Trading

 

A trading slowdown plus December's weather, supported the cautious optimism expressed in November's Interim Management Statement. 

 

Pre-tax profit for the half year to 31 December was a much improved £151,000 compared with last year's loss of £41,000.   Whilst the value of our net cash was protected, interest income was once again minimal. Earnings per share of 0.39p reversed last year's loss of 0.19p, although depreciation charges reduced the NAV to 88.9p per share from 89.2p per share in December 2009.

 

Sales for the half year increased from last year's £63.8 million to £67.7million, an increase of just over 6%.   However, competitive pressures resulted in a 0.6% reduction in the comparative gross margins and there are a few specific product areas, we will of necessity now be keeping under very close scrutiny. 

 

Through our ongoing strict cost controls we further reduced overheads compared with the corresponding period last year.  

 

Balance Sheet

 

The company continues to remain debt free.  We are constantly focussed on the management of our working capital in the most effective manner possible.   During the half year we achieved an improvement in stock turns, debtors days and even to our advantage, shortened our creditor days but with the associated slight reduction in net cash to £12.1 million against the £13.5 million at 31 December 2010.

 

The £12.1 million in net cash represents just over  47% of our Net Assets as at 31 December.

 

During the period the Company repurchased 50,000 ordinary shares of 1p at a cost of £28,200 for cancellation.

 

Dividend

 

In view of all the circumstances, your board has decided to pay an unchanged dividend of 0.6p per share (2009: 0.6p per share). The interim dividend will be paid on 10 May 2011 to those shareholders on the register at 15 April  2011.

 

Board

 

Northamber is pleased to be able to announce the appointment of Gordon Hamilton as senior non executive director of the company with effect from 17 December 2010. He will also chair the audit and remuneration committees of the board.

 

Gordon Hamilton brings to the post a vast experience in a wide range of industries and an extensive knowledge of financial matters and experience of the City.  He will, we are sure, be a most valuable addition to the board.

 

After 30 years with Deloitte & Touche and retiring as a senior audit partner in 2006, Gordon was also the partner responsible for the audit of Northamber in the late 1990's, so already has an understanding of the business of the company.

 

We are indeed delighted that he has agreed to join our board and we feel most fortunate to have secured his services.

 

Whilst we are happy to announce Gordon's appointment, we have at the same time to announce that Tony Caplin has regrettably felt that the growing pressure of his other commitments required him to advise his resignation from the board .

 

Tony has not only been a long term member of the board but has also been a pillar of strength, particularly during the recent very turbulent years.  His advice has always been most welcome and useful and we are sorry to lose his wisdom and guidance.   We thank him for his help and assistance to the company and wish him well in the future.

 

Outlook

 

We have made reasonable progress in meeting the Board's intention to re-grow the company after avoiding the problems of recent years.  That involved the tight controls evidenced by the very minimal bad debt on last year's  sales of £128 million and inherent asset protection.  We must not now ignore the probable effects from this latest "squeeze" on the UK economy and the consequential adverse effects on those arguably discretionary expenditure elements within our offerings. 

 

The foretaste afforded by January's trading, confirms our view of the future remaining one of caution with the need for close and tight management.  Our overall goal remains one of seeking the re-growth of profits and turnover whilst maintaining effective controls.

 

Lastly, I can report that moves to strengthen the management team continue apace and with satisfaction.

 

For further information please contact:

 

Northamber Plc   020 8296 7000    David Phillips

 

Fox-Davies            020 3463 5010    Philip Davies

 

Consolidated statement of comprehensive income


6 months to 31 December 2010







Notes

6 months

6 months

Year




ended

ended

Ended




31.12.10

31.12.09

30.06.10




£'000

£'000

£'000




Unaudited

Unaudited

Audited








Revenue


67,707

63,801

128,481


Cost of sales


63,460

59,354

119,885


Gross Profit


4,247

4,447

8,596


Distribution cost


2,236

2,366

4,477


Administrative expenses


1,936

2,164

4,003


Profit/(loss) from Operations


75

(83)

116


Investment revenue


76

42

142


Profit/(loss) before tax


151

(41)

258


Tax charge


(40)

(15)

(88)


Total comprehensive income






for the period attributable to






equity holders of the parent


111

(56)

170








Basic and diluted earnings/(loss)






pence per ordinary share


0.39p

(0.19)p

0.58p

 

Consolidated statement of financial position



As at 31 December 2010








As at

As at

As at




31.12.10

31.12.09

30.06.10




£'000

£'000

£'000




Unaudited

Unaudited

Audited


Non current assets






Property, plant and equipment


2,608

2,823

2,695


Current assets






Inventories


10,764

10,942

10,322


Trade and other receivables


14,857

15,569

15,679


Cash and cash equivalents


12,085

13,482

14,013




37,706

39,993

40,014








Total assets


40,314

42,816

42,709








Current liabilities






Trade and other payables


14,574

16,938

17,040


Current taxation


6

(10)

18




14,580

16,928

17,058








Non current liabilities






Deferred tax liabilities


37

2

37


Total liabilities


14,617

16,930

17,095








Net assets


25,697

25,886

25,614








Equity






Share capital


289

290

289


Share premium account


5,734

5,734

5,734


Capital redemption reserve fund


1,497

1,497

1,497


Retained earnings


18,177

18,365

18,094


Total Equity attributable to equity holders





of the parent


25,697

25,886

25,614







 

Consolidated statement of changes in equity




As at 31 December 2010















Share capital

Share premium account

Capital redemption reserve

Retained earnings

Total Equity



£'000

£'000

£'000

£'000

£'000









Period to 31 December 2010







Unaudited







Balance at 30 June 2010

289

5,734

1,497

18,094

25,614


Dividends




0

0


Purchase of own shares

0


0

(28)

(28)


Transaction costs of purchase




0

0



0

0

0

(28)

(28)


Comprehensive income







for the period




111

111


Balance at 31 December  2010

289

5,734

1,497

18,177

25,697









Period to 31 December 2009







Unaudited







Balance at 30 June 2009

290

5,734

1,497

18,429

25,950


Dividends





0


Purchase of own shares

0


0

(8)

(8)


Transaction costs of purchase




0

0



0

0

0

(8)

(8)


Comprehensive income







for the period




(56)

(56)


Balance at 31 December  2009

290

5,734

1,497

18,365

25,886









Year to 30 June 2010







Audited







Balance at 30 June 2009

290

5,734

1,496

18,430

25,950


Dividends




(464)

(464)


Purchase of own shares

(1)


1

(42)

(42)


Transaction costs of purchase




0

0



(1)

0

1

(506)

(506)


Comprehensive income







for the period




170

170


Balance at 30 June 2010

289

5,734

1,497

18,094

25,614








 

Consolidated statement of cash flows




6 months to 31 December 2010








6 months

6 months

Year




ended

ended

Ended




31.12.10

31.12.09

30.06.10




£'000

£'000

£'000




Unaudited

Unaudited

Audited


Operating activities






Operating profit/(loss) from






continuing operations


75

(83)

116


Depreciation of property, plant






and equipment


127

149

283


(Profit)/loss on disposal of property,





plant and equipment


0

(2)

(2)


Operating profit before changes in






working capital


202

64

397








(Increase)/decrease in inventories


(442)

(3,769)

(3,149)


Decrease/(increase)  in trade and






other receivables


822

4,543

4,433


(Decrease)/increase  in trade and






other payables


(2,466)

(1,447)

(1,345)


Cash (utilised)/generated from operations

(1,884)

(609)

336








Interest paid


0

0

0


Income taxes paid


(53)

(67)

(74)


Net cash from operating activities


(1,937)

(676)

262


Cash flows from investing activities





Interest received


76

42

142


Proceeds from disposal of property,






plant and equipment


0

12

12


Purchase of property, plant and






Equipment


(39)

(12)

(21)


Net cash from investing activities


37

42

133


Cash flows from financing activities





Purchase of own shares for cancellation

(28)

(8)

(42)


Dividends paid to equity shareholders

0

0

(464)


Net cash used in financing activities

(28)

(8)

(506)








Net (decrease)/increase in cash and






cash equivalents


(1,928)

(642)

(111)


Cash and cash equivalents at






beginning of period


14,013

14,124

14,124


Cash and cash equivalents at






end of period


12,085

13,482

14,013








Cash and cash equivalents  for the






purpose of this statement comprise





Cash and cash equivalents


12,085

13,482

14,013







 

Notes to the financial statements

 

1.             Corporate Information

 

The financial information for the year ended 30 June 2010 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The group's statutory financial statements for the year ended 30 June 2010 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Sections 498(2) and 498(3) of the Companies Act 2006. The interim results are unaudited. Northamber Plc is a public limited company incorporated and domiciled in England and Wales. The company's shares are publicly traded on the London Stock Exchange.

 

2.             Basis of preparation

 

These interim consolidated financial statements are for the six months ended 31 December 2010. They have been prepared in accordance with IAS34 Interim Financial Reporting. They do not include all the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the group for the year ended 30 June 2010.

 

These interim consolidated financial statements have been prepared under the historical cost convention.

 

These interim consolidated financial statements (the interim financial statements) have been prepared in accordance with accounting policies adopted in the last annual financial statements for the year to 30 June 2010 except for the adoption of IAS1 Presentation of Financial Statements (Revised 2007), The group has only one reportable segment therefore no statement of segmental reporting is shown in these interim financial statements.

 

The adoption of IAS1 (Revised 2007) does not affect the financial position or profits of the group, but gives rise to additional disclosures. The measurement and recognition of the group's assets, liabilities, income and expenses is unchanged. A separate 'Statement of changes in equity' is now presented.

 

The accounting policies have been applied consistently throughout the group for the purposes of preparation of these interim consolidated financial statements.

 

3.             Basis of Consolidation

 

For the periods covered in these interim consolidated financial statements all trading has been carried out by the parent company alone. The group includes some non trading dormant subsidiaries.

All the assets and liabilities of all subsidiaries have been included in the statements of financial position.

 

4.             Taxation

 

The tax charge shown in the interim consolidated financial statements is accrued on an estimated average annual effective rate of tax of  27% ( 6 months to December 2009: 28.0%)

 

5.             Earnings per Share

 

The calculation of earnings per share is based on the profit after tax for the six months to 31 December 2010 of £111,000 (2009: loss £56,000) and a weighted average of 28,925,029 (2009:29,030,247) ordinary shares in issue.

 

6.             Property, Plant and Equipment

 

There were no significant additions to or disposals of property, plant or equipment in the period to 31 December 2010.  The reduction in the total value of property, plant and equipment was primarily due to the depreciation charge for the year.

 

7.             Important Events

 

There were changes to the Board in December as indicated in the Chairman's Statement, also during the first 6 months of this year up to 31 December 2010, we have appointed several new senior managers with a view to future expansion of the business and to develop further our relationships with our vendors. With similar objectives we have also expanded our range of vendors taking on some new ones and seeking some specialist vendors to expand the range of products we offer.

 

This trend continues as the objective for the second half of this year.

 

8.             Risks and Uncertainties

 

The principal risks and uncertainties affecting the business activities of the group are detailed in the director's report which can be found on pages 7, 8  and 19 of the Annual Report and Accounts for the year ended 30 June 2010 (the Annual Report). A copy of the Annual Report is available on the company's web site at www.northamber.com

 

The risks affecting the business remain the same as in the Annual Report. In summary these include:-

 

Marketing risk particularly those relating to the suppliers of products to the group

 

Financial risks including exchange rate risk, liquidity risk, interest rate risk and credit risk.

 

In the opinion of the directors, these will remain the principal risks for the remainder of the year, however, the directors have reviewed the company's risk analysis and are of the opinion that steps have been taken to minimise the potential impact of such risks.

 

9.             Related Party Transactions

 

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

 

During the period to 31 December 2010 the company paid £15,000 as salary and no benefits to the

company's personnel manager, Samantha Matthews, who is the wife of Mr H Matthews. In the director's opinion the payments were on an arms length basis.

 

10.          Director's Confirmation

 

The Directors confirm that to the best of their knowledge these condensed consolidated half year financial statements have been prepared in accordance with IAS 34 and that the interim management report herein includes a fair review of the information required by DTR 4.2.7R, an indication of important events during the first 6 months and descriptions of principal risks and uncertainties for the remaining six months of the year, and DTR 4.2.8R the disclosure of related party transactions and changes therein.

 

D.M. Phillips

Chairman

 

 


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