Final Results - Replacement

Northamber PLC 22 September 2000 The issuer has made the following amendment to the 'Final Results' announcement released today at 7:30 under RNS No 3593R. Further to the announcement made earlier today, the following text should have been included in the Chairman's Statement: 'Trading The first half results were disappointing, restricted by the prolonged downturn and low levels of pre-millennium demand. As already widely reported, the post millennium marketplace then failed to produce the full extent of the awaited and anticipated upturn. Whilst sales levels were firm, if unexciting, the launch of Microsoft's Windows 2000 and faster offerings from Intel, also then failed to fuel any new replenishment cycle. These improved results are the product of the differentiation your Company brings to its marketplace. They demonstrate our very high level of technical expertise and added value. It is these core skills, over and above the perception of our 'A' brand product distribution activities, which enable a worthwhile return on the capital employed. There was an increased contribution from our high levels of expertise in complex I.T. network server system and corporate PC's assembly. These coupled with improved efficiencies in stock turns and our fast order processing and delivery, helped to better serve our established customer base, enabling them to better focus on their own local business opportunities and core competence. Financials Whilst necessarily focusing on cost efficiencies and the controls on high volume and marginal product sales, the value of our stocks at year end is below that of last year. We continue to maintain our policy for the managed avoidance of profitless revenue. Results were further enhanced by the use of our available cash resource to increase the controlled levels of credit extended to our customers. During the period, when the Company's share price was unrepresentative of its underlying value, there were several purchases of the Company's issued shares for cancellation. With the financial resource readily available, such share buy-backs will continue with the intention of further enhancing earnings per share.' The full text of the announcement as it should have read including such text is set out below. 'Northamber plc Preliminary Results Year Ended 30 June 2000 Highlights Year Ended 30th June 2000 30th June 1999 Profit before Plus 19.14percent tax 7.52 million pounds 6.32 million pounds Sales revenue Plus 2.36percent 284.27 million pounds 277.73 million pounds Earnings per Plus 28.0percent share 15.1p 11.8p Net asset value Plus 10.1percent per share 101.1p 91.8p Pre-tax margin Plus 19.14percent 2.64percent 2.27percent Return on Plus 3percent capital employed 22.1percent 19.1percent Stock turns Plus 15percent 23 20 Creditor days 19 23 Debtor days 44 38 Net cash 0.1 million pounds 4.983 million pounds Proposed final dividend 4.0p per share. A total of 6.0p for the year, a 20percent increase on the 5p last year. All 1999 comparatives figures are pre-exceptional FRS 11 item. David Phillips, Chairman commented: 'These strong, rewarding results cover a protracted period of adverse and then lacklustre market conditions, pre and post the millennium. Northamber has positively differentiated itself within its peer group throughout this period and has again established its ability to profitably manage difficult trading conditions. This ability is enhanced by the high value added expertise and service content of our offering to our customers. The marketplace is now on a more stable basis and the Board is confident of a successful outcome for the year' Total number of shares in 33,989,000 issue Weighted average number of 34,131,038 shares Date of the AGM 10 November 2000 Ex dividend date 6 November 2000 Dividend date 5 December 2000 These preliminary results were approved by the Board of Directors on September 22 2000. A copy of these Preliminary Results is being sent to all shareholders and is available to the public from the Company's trading office at 1 Lion Park Avenue,Chessington, Surrey KT9 1ST. Please call the Shareholder Support Line on 0208 296 7171 with any enquiries. CHAIRMAN'S STATEMENT Results These strong results together with twenty years experience of IT distribution, have again clearly and positively differentiated Northamber's trading performance and value added model from that of our peer group. The technical expertise within our services activities contributing satisfactorily to this outcome. The 19.14% increase in pre tax profits to 7.52 million pounds compares very favourably with the 6.04 million pounds reported a year ago . This increase was achieved despite the well reported, adverse and then slow I.T. market-place conditions pre and post the millennium. At 284.27 million pounds, revenue growth was moderated to 2.36 percent by the pursuit of improved margins and compares with 277.73 million pounds for the prior year.Contrary to the expectation of the sector, this illustrates our own focus and emphasis on profitable revenue growth. Also reported within these results, is the resultant further increase in our pre-tax margin at 2.64%, compared with last year's 2.27percent. The 28% increase in earnings per share, from 11.8p to 15.1p, clearly illustrates the strengths of Northamber's tight management and financial controls during this adverse period. At 101.1p Net Assets per share increased by 10.1% an improvement on last year's 91.8p. Dividend Our established policy is to continue to keep the level of dividend payments under review. It is therefore proposed to increase the final dividend to 4.0p(net per share) making a total of 6.0p net for the year. This is a 20% increase over last year. Trading The first half results were disappointing, restricted by the prolonged downturn and low levels of pre-millennium demand. As already widely reported, the post millennium marketplace then failed to produce the full extent of the awaited and anticipated upturn. Whilst sales levels were firm, if unexciting, the launch of Microsoft's Windows 2000 and faster offerings from Intel, also then failed to fuel any new replenishment cycle. These improved results are the product of the differentiation your Company brings to its marketplace. They demonstrate our very high level of technical expertise and added value. It is these core skills, over and above the perception of our 'A' brand product distribution activities, which enable a worthwhile return on the capital employed. There was an increased contribution from our high levels of expertise in complex I.T. network server system and corporate PC's assembly. These coupled with improved efficiencies in stock turns and our fast order processing and delivery, helped to better serve our established customer base, enabling them to better focus on their own local business opportunities and core competence. Financials Whilst necessarily focusing on cost efficiencies and the controls on high volume and marginal product sales, the value of our stocks at year end is below that of last year. We continue to maintain our policy for the managed avoidance of profitless revenue. Results were further enhanced by the use of our available cash resource to increase the controlled levels of credit extended to our customers. During the period, when the Company's share price was unrepresentative of its underlying value, there were several purchases of the Company's issued shares for cancellation. With the financial resource readily available, such share buy-backs will continue with the intention of further enhancing earnings per share.' Staff The demonstrated abilities to improve efficiencies have enabled a restriction in the growth of staff related overheads. The average number of staff increased by only 1 from 416 to 417 during this financial year. These results are, as always, totally dependent upon the efforts of our staff. We extend yours and our own thanks for their strong contribution over the past year. The Board After joining the Company last November, we were pleased to announce on August 10th 2000, that David Ives ACA had been appointed to the role of Finance Director. David brings to the role many years of both financial and operational experience, in both this industry as well as in retail and service orientated activities. Peter Fisher, whose home is in Blackburn Lancs., has been a Non-Executive director for some two years. Regrettably, Peter has advised that the distances involved have created difficulty in achieving the levels of involved interest that he would seek. As a result, Peter will shortly be leaving the Board and a suitable replacement is currently being sought. Outlook The new trading period has started on a more stable basis and in line with our own expectations. Return on capital and margin retention will continue to remain our primary focus and the Board is confident of a successful outcome for the current year. David Phillips September 22nd 2000 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the year ended 30th June 2000 Note 2000 1999 thousand thousand pounds pounds Turnover 284,270 277,727 Cost of sales (259,059) (253,675) Gross profit 25,211 24,052 Distribution costs (11,080) (10,887) Administration expenses Exceptional item (277) Other administrative (6,880) (6,971) costs Other operating income 501 417 Operating profit 7,752 6,334 Interest receivable 144 130 Interest payable (373) (426) Profit on ordinary activities before taxation 7,523 6,038 Tax on profit on ordinary activities (2,372) (1,971) Profit on ordinary activities after taxation 5,151 4,067 Equity dividends 3 (2,023) (1,724) Retained profit for period 3,128 3,343 Earnings per ordinary 2 15.1p 11.8p share Diluted earnings per share 2 15.0p 11.7p CONSOLIDATED BALANCE SHEET For the year ended 30th June 2000 Note 2000 1999 thousand thousand pounds pounds Fixed assets Tangible assets 2,850 3,121 Investments 2,833 2,833 _____ _____ 5,683 5,954 Current assets Stocks 11,262 12,896 Debtors - amounts falling due 41,294 34,216 within one year Cash at bank and in hand 1,032 4,984 ______ ______ 53,588 52,096 Current liabilities Creditors - amounts falling due within one year (23,969) (25,331) Net current assets 29,619 26,765 Total assets less current 35,302 32,719 liabilities Creditors - amounts falling due (944) (1,053) after more than one year Provisions for liabilities and (1) (9) charges Net assets 34,357 31,657 Capital and reserves Called up share capital 1,699 1,724 Share premium account 5,711 5,706 Capital redemption reserve 72 47 Profit and loss account 26,875 24,180 Equity shareholders' funds 34,357 31,657 CONSOLIDATED CASH FLOW STATEMENT Year ended 20 June 2000 Notes 2000 1999 thousand thousand pounds pounds Cash inflow from continuing 4 554 7,803 operating activities Returns on investments and servicing of finance Interest received 144 130 Interest paid (363) (495) Income from fixed asset 200 189 investments Net cash outflow from returns on investments and servicing of (19) (176) finance Taxation UK corporation tax paid (2,487) (2,812) ACT paid (51) (2,487) (2,863) Capital expenditure and financial investment Purchase of tangible fixed assets (557) (1,104) Sale of tangible fixed assets 31 165 Net cash outflow from capital expenditure and financial investment (526) (939) Equity dividends paid (1,870) (1,552) Cash (Outflow)/inflow before (4,348) 2,273 financing Financing Purchase of shares (435) (26) Issue of ordinary share capital 5 - Debt due beyond a year: Repayment of secured loan (109) (98) Net cash outflow from financing (539) (124) (Decrease)/Increase in cash in 4 (4,887) 2,149 the period NOTES 1. Accounting policies The Financial information set out above does not constitute the Group's statutory accounts for the years ended 30th June 1999 or 30th June 2000,but is derived from those accounts.The statutory accounts for 30th June 1999 have been delivered to the Registrar of companies and those for 2000 will be delivered following the Group's Annual General meeting.The Auditors have reported on these accounts,their reports were unqualified and did not contain statements under S237(2) or (3) of the Companies Act 1985.The information contained in this statement does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. 2. Earnings per ordinary share The calculation of earnings per ordinary share is based on the profit after taxation of 5,151,400 pounds (1999: 4,067,000 pounds) and on 34,131,038 ordinary shares (1999: 34,496,613). The number of ordinary shares in issue during the years ended 30th June 2000 and 30th June 1999 are the weighted average in issue during each year. Computation of Earnings per share for 2000 Per share Earnings Shares Net profit for year 5,151,400 Weighted average shares Outstanding during 34,131,038 year Basic earnings per 15.1p share Dilutive effect of 323,314 options Diluted earnings 15.0p 5,151,400 34,454,352 per share 3. Dividend An interim Dividend has been paid during the year of 2.0p per share.A final dividend of 4.0p will be paid on 5th December 2000 to those members on the register at the close of business on 10th of November 2000.The ex Dividend date for the shares will be 6th November 2000 4. Cashflow a) Reconcilitation of operating profit to operating cash flows Group 2000 1999 thousand thousand pounds pounds Continuing operations Operating profit 7,752 6,334 Income from fixed assets investments (200) (189) Depreciation of tangible fixed assets 817 867 (Profit)/loss on sale of tangible fixed (23) (25) assets Decrease in stocks 1,634 920 (Increase)/decrease in trade debtors (7,063) 1,792 (Increase)/decrease in other debtors (22) 36 (Increase)/decrease in prepayments and (253) 82 accrued income (Decrease)/increase in trade creditors (2,891) 302 Increase/(decrease) in other taxation 399 (2,163) and social security Increase/(decrease) in accruals and 404 (430) deferred income Exceptional Item - 277 Net cash inflow from continuing 554 7,803 operating activities b) Reconciliation of net cash flow to movement in net funds Decrease/(increase) in cash in the (4,887) 2,149 period Cash outflow from changes in debt 109 98 Change in net debt resulting from cash flows and the movement in net debt in the period (4,778) 2,247 Net funds brought forward 3,930 1,683 Net (debt)/funds carried forward (848) 3,930 c) Analysis of net debt At 1st Cash At 30th Flow July June 1999 2000 thousand thousand thousand pounds pounds pounds Cash at bank and in hand 4,984 (3,952) 1,032 Overdrafts (1) (935) (936) 4,983 (4,887) 96 Debt due after more than one (1,053) 109 (944) year Total 3,930 (4,778) (848) A copy of this report is being sent to all Shareholders. Copies are available to the public on request from the Company's offices 1, Lion Park Avenue Chessington Surrey KT91ST The Company's registered office is 1-3 Union Street, Kingston-upon-Thames, Surrey KT1 1RP'

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