Final Results

Northamber PLC 05 October 2006 Northamber plc Preliminary Results for the year ended 30th June 2006 CHAIRMAN'S STATEMENT Results Sector trading conditions worsened over the period, constrained opportunities and with continuing price deflation in many key product areas, proved challenging. This resulted in pre-tax profits of Â£0.43 million (2005: Â£2.61million) on increased volumes but reduced revenues of Â£204.41 million (2005: Â£236.27 million). The impact on gross profit resulted from a 0.5% reduction in gross margins coupled with lowered revenues and greater unit volumes. Earnings per share reduced from 5.47p to 0.75p. During the second half, it became increasingly necessary to adopt trading and stock profiles that reflected the commercial need for the avoidance of excessive or unrewarding risk. The key performance indicators for the business again show some worthwhile gains and ongoing improvements. Whilst very many shipments and payment terms now originate in China, our stock turns further increased to almost 21 against last year's improvement to 16 times. This measure had weakened in recent years, as major vendors moved their point of supply and with that, longer and less frequent delivery times. There was a 17% reduction in creditor days to 29 days, as we sought improved supplier discounts. This resulted in net cash at year end of Â£8.30 million (2005: Â£9.73 million). With challenging levels of competition and unabated price erosion, particularly during our second half, the performance of our management team is appreciated. The Balance Sheet Post year-end we concluded our negotiations to sell a 'Lesser Interest' in our enterprise zone investment property in Arbroath for circa Â£2.43 million net. The pre-let investment was purchased in 1996 for Â£2.48 million and tax benefits were obtained. One result of falling prices and with that debtor finance needs, has been to firm the availability of surplus cash. When including the anticipated further influx from the investment property proceeds, your board is reviewing the possibility of returning a prudent portion of surplus cash to shareholders. Continuing our policy of improving shareholder value, we purchased a total of 555,000 ordinary shares at a cost of Â£421,000 for cancellation, leaving 30,458,100 shares in issue at year end. After dividends and re-purchases of shares for cancellation, there was a small decrease in the total net asset value at year end to Â£30.08 million or 98.7p per share (2005: 102.7p). The daily focus on the key business ratios continues to remain at the forefront of our management controls, as demonstrated in the examples above. Dividend Whilst constrained by the very adverse sector trading conditions, the balance sheet continues to be exceptionally sound, with a very strong cash position. With these results for the year as a whole and the intention to investigate efficient and cost effective means to return a prudent portion of our surplus cash to shareholders, your Board feels it appropriate to also recommend a final dividend of 1p making 2.1p for the year (2005: 6.0p). If approved at the AGM, the proposed final dividend will be payable on 11 January 2007 to members on the Register as at 8 December 2006. Outlook It is widely understood and reported, that July, August and September trading was generally poor across our sector. Subject to the state of the economy as a whole and our own performance within our sector, your Board is cautiously confident in the outcome for the new trading year. D.M. Phillips Chairman 5 October 2006 CONSOLIDATED INCOME STATEMENT for the year ended 30 June 2006 Notes 2006 2005 Total Total Â£'000 Â£'000 Continuing operations Revenue 204,408 236,271 Cost of sales (189,912) (218,170) ------------- ------------- Gross profit 14,496 18,101 Distribution costs (8,690) (9,813) Administrative expenses (5,679) (5,920) ------------- ------------- Profit from operations 127 2,368 Investment revenue 337 301 Finance costs (30) (56) ------------- ------------- Profit before tax 434 2,613 Tax (203) (905) ------------- ------------- Profit for the year from continuing operations 231 1,708 ======= ======= Earnings per ordinary share 2 0.75p 5.47p Diluted earnings per share 2 0.75p 5.46p Comparative results for 2005 have been restated following the adoption of International Financial Reporting Standards (IFRS's). CONSOLIDATED BALANCE SHEET at 30 June 2006 30 June 2006 30 June 2005 Â£'000 Â£'000 Non current assets Property, plant and equipment 3,911 4,219 Investment property - 2,483 ------------- ------------- 3,911 6,702 ------------- ------------- Current assets Trading investments 1 1 Inventories 9,052 13,890 Trade and other receivables 27,644 31,220 Cash and cash equivalents 9,821 9,734 ------------- ------------- 46,518 54,845 Assets held for sale 2,483 - ------------- ------------- Total assets 52,912 61,547 ------------- ------------- Current liabilities Trade and other payables (20,426) (28,535) Bank overdraft (1,522) - Tax liabilities (126) (408) ------------- ------------- (22,074) (28,943) ------------- ------------- Non current liabilities Deferred tax liabilities (760) (760) ------------- ------------- Total liabilities (22,834) (29,703) ------------- ------------- Net assets 30,078 31,844 ======= ======= Equity Share capital 1,523 1,551 Share premium account 5,734 5,734 Capital redemption reserve 264 236 Retained earnings 22,557 24,323 ------------- ------------- Equity shareholders' funds 30,078 31,844 ======= ======= Comparative results for 2005 have been restated following the adoption of International Financial Reporting Standards (IFRS's). CONSOLIDATED CASH FLOW STATEMENT Year ended 30 June 2006 2006 2005 Â£'000 Â£'000 Cash inflow from continuing operating activities Operating profit from continuing operations 127 2,368 Depreciation of property, plant and equipment 564 753 (Profit)/Loss on disposal of property, plant and (7) 21 equipment Profit on sale of investments - (6) ------------- ------------- 684 3,136 Decrease in inventories 4,838 3,473 Decrease/(increase) in trade and other receivables 3,576 (4,333) (Decrease)/increase in trade and other payables (8,109) 912 ------------- ------------- Cash generated from operations 989 3,188 Interest paid (30) (56) Income taxes paid (485) (915) ------------- ------------- Net cash from operating activities 474 2,217 ------------- ------------- Cash flows from investing activities Interest received 139 105 Proceeds from disposal of property, plant and equipment 17 26 Proceeds from disposal of investment property - 360 Purchase of property, plant and equipment (266) (480) Income from investments 198 196 ------------- ------------- Net cash from investing activities 88 207 ------------- ------------- Cash flows from financing activities Purchase of own shares for cancellation (421) (278) Dividends paid to equity shareholders (1,576) (1,562) ------------- ------------- Net cash used in financing activities (1,997) (1,840) ------------- ------------- Net (decrease)/increase in cash and cash equivalents (1,435) 584 Cash and cash equivalents at beginning of year 9,734 9,150 ------------- ------------- Cash and cash equivalents at end of year 8,299 9,734 ------------- ------------- Cash and cash equivalents for the purpose of this statement comprise: Cash and cash equivalents 9,821 9,734 Bank overdrafts (1,522) - ------------- ------------- 8,299 9,734 ------------- ------------- STATEMENT OF CHANGES IN EQUITY Consolidated statement of changes in equity At 30 June 2006 Share Capital Share premium Capital Retained Total account redemption earnings equity reserve Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Balance at 1 July 2004 1,566 5,734 221 24,455 31,976 Profit for the year - - - 1,708 1,708 -------------- -------------- -------------- -------------- -------------- Total recognised income for the year - - 1,708 1,708 Purchase of own shares (15) - 15 (278) (278) Dividends - - - (1,562) (1,562) -------------- -------------- -------------- -------------- -------------- Balance at 30 June 2005 1,551 5,734 236 24,323 31,844 Balance at 1 July 2005 1,551 5,734 236 24,323 31,844 Profit for the year - - - 231 231 -------------- -------------- -------------- -------------- -------------- Total recognised income for the year - - - 231 231 Purchase of own shares (28) - 28 (421) (421) Dividends - - - (1,576) (1,576) -------------- -------------- -------------- -------------- -------------- Balance at 30 June 2006 1,523 5,734 264 22,557 30,078 -------------- -------------- -------------- ------------- -------------- NOTES 1. Financial information The financial information set out above does not constitute the Group's statutory accounts for the years ended 30 June 2005 or 30 June 2006, but it is derived from those accounts. The Statutory Accounts for the year ended 30 June 2005 have been delivered to the Registrar of Companies and those for 2006 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 basic and diluted earnings per share is based on the following data. 2006 2005 Â£'000 Â£'000 Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent company 231 1,708 Effect of dilutive ordinary shares - - --------------- --------------- Earnings for the purpose of diluted earnings per share 231 1,708 --------------- --------------- 2006 2005 Number of shares Number Number Weighted average number of ordinary shares for the 30,849,032 31,246,365 purpose of basic earnings per share Effect of dilutive potential ordinary shares - 33,231 Share options --------------- -------------- 30,849,032 31,279,596 --------------- -------------- Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year. For diluted earnings per share the weighted average number of shares is adjusted on the assumption that all potential conversion of shares have been so converted. 3. Dividends An interim dividend has been paid during the year of 1.1p per share. A final dividend of 1.0p will be paid on 11 January 2007 to those members on the register at close of business on 8 December 2006. The ex-dividend date for the shares will be 6 December 2006. Total number of shares in issue 30,458,100 Date of AGM 23 November 2006 Ex Dividend Date 6 December 2006 Dividend Date 11 January 2007 The Company's registered office is 1-3 Union Street, Kingston-upon-Thames, Surrey KT1 1RP. This information is provided by RNS The company news service from the London Stock Exchange

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