Half-year Report

RNS Number : 2709G
Northamber PLC
29 March 2022
 

Northamber PLC

("Northamber" or the "Company" or the "Group")

 

Interim Report for the Six months to 31 December 2021

 

 Chairman's Statement

 

Results

 

We are pleased to share that we have continued to grow revenue year on year by 8.8% from £29.7m to £32.3m whilst maintaining gross margins at 12.9% (12.8% prior year) despite challenging and very dynamic market conditions. This served to generate an increase in Gross Margins of £0.35m year on year and reflected our continued focus on evolving our product mix towards higher margin, more technical products through Northamber and AVM.

 

Previously discussed lockdown challenges eased but still impacted some performance in some of our strategic business units and our subsidiary AVM, as Covid easing still impacted some site access for higher end projects and the rental market, but we are hopeful of improved performance as these restrictions continue to ease.

 

Distribution costs increased significantly however as we continued to invest in developing the team for our significant growth ambitions; we were also affected by significant increases year on year on carriage costs (our biggest non-payroll cost).

 

Unfortunately the increase in distribution and administration costs outweighed the margin growth and resulted in a reduction of EBITDA year on year to £64K and an operating loss for the half of £0.1m versus a profit of £0.2m last year.  We feel strongly, however, that to drive significant long term profitable growth it is important that we continue to invest for the future. We regularly review these investments and all costs to ensure we are generating value.

 

 

Financial position

 

Stock levels are higher than last year at £11.2 million against £8.4 million at 31 December 2020 as we continued to seek to profitably support our partners by maintaining sufficient stock in country during the uncertainty of chip shortages together with continued impact of Brexit and COVID on supply chains.

 

The investment in inventory meant that cash reserves fell from £7.4 million at 30 June 2021 to £4.7 million.  With Fixed Assets at book value at £7.0 million, including three unencumbered freehold properties, the Group's overall financial position is very sound.

 

Net Assets at 91.7p per share are considerably in excess of the average price of the ordinary shares throughout the period.

 

Dividend

 

As in previous years, your Board has had regard to the strength of our debt free, tangible asset strong balance sheet and is proposing the interim dividend be 0.3p, at a total cost of £81,695. The dividend will be paid on 28 April 2022 to shareholders on the register as at 8 April 2022.

 

Staff

 

Our staff remain a key asset for the business and an area we continue to invest in. The team has continued to work hard to support our partners and each other. Our plans remain to continue to invest in our evolving business model by continuing to invest in building out the best team in the market to achieve our business evolution.

 

Outlook  

 

In keeping with prior outlooks that we shared, we remain cautiously optimistic that the investments we have made in supporting our partners will allow us to continue to drive growth of strategic business units as some of these investments returns have been hampered by the impact of COVID and supply chain issues. We necessarily remain cautious due to the economic uncertainty, Brexit, the potential further impact of COVID and supply chain pressures but feel strongly that our continued focus on strategic higher margin value categories provides a solid road map for the future with profitable growth opportunities and the ability to unlock long term value for shareholders.

 

The strength of our balance sheet allows us to continue to do what is best for the business strategically and we continue to review organic and non-organic opportunities for growth which meet our strict criteria and add value for our shareholders.

 

C.M. Thompson

Chairman

 

29 March 2021

 

 

Contacts:

 

Northamber PLC
Colin Thompson, Chairman
Tel: +44 (0) 208 744 8200
investor_relations@northamber.com
   

 

 

Singer Capital Markets (Nominated Adviser and Sole Broker)

Tel: +44 (0) 207 496 3000

Philip Davies (Corporate Finance)

Alex Bond (Corporate Finance)

 

 

 

 

 

Consolidated Statement of Comprehensive Income

 

6 months to 31 December 2021

 

 

 

 

 

 

 

 

 

 

 

6 months

6 months

Year

 

 

 

Ended

Ended

Ended

 

 

 

31.12.21

31.12.20

30.06.21

 

 

 

£'000

£'000

£'000

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

 

 

Revenue

 

32,276

29,679

60,009

 

Cost of sales

 

(28,123)

(25,878)

(52,200)

 

Gross Profit

 

4,153

3,801

7,809

 

 

Distribution cost

 

(2,670)

(2,284)

(4,595)

 

Administrative costs

 

(1,599)

(1,294)

(2,837)

 

 

 

 

 

 

 

(Loss)/Profit  from operations

 

(116)

223

377

 

Finance income

 

-

7

8

 

 

 

 

 

 

 

(Loss)/Profit  before Tax

 

(116)

230

385

 

Tax charge

 

-

-

(48)

 

(Loss)/Profit  and total comprehensive

 

 

 

 

 

Income for the period

 

(116)

230

337

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted profit  per ordinary share

 
 

 

 

(0.43p)

0.84p

1.24p

        

 

 

 

 

 

 

 

Consolidated Statement of Financial Position

As At 31 December 2021

 

 

 

6 months Ended 31.12.21

 

6 months

Ended 31.12.20

 

Year Ended

30.06.21

 

 

  £'000

Unaudited

 

  £'000

Unaudited

 

  £'000

Audited

 

 

 

 

 

 

 

 

Non -current assets

 

 

 

 

 

 

 

Property, plant and equipment

 

7,004

 

7,102

 

7,079

 

Goodwill and intangible assets

 

1,336

 

1,391

 

1,365

 

 

 

8,340

 

  8,493

 

8,444

 

Current assets

 

 

 

 

 

 

 

Inventories

 

11,190

 

8,401

 

8,468

 

Trade and other receivables

 

9,639

 

8,821

 

10,753

 

Cash and cash equivalents

 

4,737

 

10,802

 

7,449

 

 

 

25,566

 

28,024

 

26,670

 

 

 

 

 

 

 

 

 

 

Total assets

 

33,906

 

32.439

 

35,114

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

(8,885)

 

(11,372)

 

(9,866)

 

Corporation tax payable

 

(48)

 

-

 

(159)

 

Total liabilities

 

(8,933)

 

(11,372)

 

(10,025)

 

 

 

 

 

 

 

 

 

Net assets

 

24,973

 

25,145

 

25,089

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

 

272

 

273

 

272

 

Share premium account

 

5,734

 

5,734

 

5,734

 

Capital redemption reserve

 

1,514

 

1,514

 

1,514

 

Retained earnings

 

17,453

 

 

17,625

 

17,569

 

 

Equity shareholders' funds attributable to the owners of the parent

 

24,973

 

25,145

 

25,089

 

 

 

 

 

 

 

 

 

             

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statement of Changes in Equity

 

 

 

 

As at 31 December 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

Share premium account

Capital redemption reserve

Treasury Shares

Retained earnings

Total Equity

 

 

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

 

Period to 31 December 2020

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

Balance at 1 July 2020

273

5,734

1,514

-

17,395

24,915

 

Dividends

-

-

-

-

-

-

 

Profit and total comprehensive

 

 

 

 

 

 

 

income for the period

-

-

-

-

230

230

 

Balance at 31 December  2020

273

5,734

1,514

-

17,625

25,145

 

 

 

 

 

 

 

 

 

Period to 31 December 2021

 

 

 

 

 

 

 

Unaudited

 

 

 

 

 

 

 

Balance at 1 July 2021

272

5,734

1,514

-

17,569

25,089

 

Dividends

-

-

-

-

-

-

 

Profit and total comprehensive

 

 

 

 

 

 

 

Income for the period

-

-

-

-

(116)

(116)

 

Balance at 31 December  2021

 

272

5,734

1,514

-

17,453

24,973

 

 

 

 

 

 

 

 

 

Year to 30 June 2021

 

 

 

 

 

 

 

Audited

 

 

 

 

 

 

 

Balance at 1 July 2020

272

5,734

1,514

-

17,395

24,915

 

Dividends

-

-

-

-

(163)

(163)

 

 

 

 

 

 

 

 

 

Transactions with owners

-

-

-

-

(163)

(163)

 

Profit and total comprehensive

 

 

 

 

 

 

 

income for the period

-

-

-

-

  337

  337

 

Balance at 30 June 2021

272

5,734

1,514

-

17,569

25,089

 

 

 

 

 

Consolidated Statement of Cash Flows

 

 

 

 

6 months to 31 December 2021

 

 

 

 

 

 

 

6 months

6 months

Year

 

 

 

 

Ended

Ended

Ended

 

 

 

 

31.12.21

31.12.20

 

30.06.21

 

 

 

 

£'000

£'000

£'000

 

 

 

 

Unaudited

Unaudited

Audited

 

 

Cash from operating activities

 

 

 

 

 

 

Operating (loss)/profit from

 

 

 

 

 

 

continuing operations

 

(116)

223

337

 

 

Depreciation of property, plant

 

 

 

 

 

 

and equipment

 

151

167

350

 

 

Amortisation of intangible assets

 

28

30

56

 

 

Profit on disposal of property,

 

-

-

(13)

 

 

plant and equipment

 

 

 

 

 

 

Operating profit/(loss) before changes in

 

 

 

 

 

 

working capital

 

63

420

770

 

 

 

 

 

 

 

 

 

Increase in inventories

 

(2,722)

(2,453)

(2,520)

 

 

Decrease/(increase) in trade and

 

 

 

 

 

 

other receivables

 

1,114

(1,070)

(3.003)

 

 

(Decrease)/increase in trade and

 

 

 

 

 

 

other payables

 

(981)

3,015

2,923

 

 

Cash (used)/generated from operations

 

(2,526)

(88)

(1,830)

 

 

 

 

 

 

 

 

 

Income taxes paid

 

(111)

-

(1,302)

 

 

Net cash from operating activities

 

(2,637)

(88)

(3,132)

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Interest received

 

-

7

8

 

 

Proceeds from disposal of property,

 

 

 

 

 

 

plant and equipment

 

-

  -

17

 

 

Purchase of property, plant and

 

 

 

 

 

 

Equipment

 

(75)

(85)

(249)

 

 

Net cash from investing activities

 

(75)

(78)

(224)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Dividends paid to equity shareholders

 

-

-

(163)

 

 

 

 

 

 

 

 

 

Net cash used in financing activities

 

-

-

(163)

 

 

 

 

 

 

 

 

 

Net decrease in cash and

 

 

 

 

 

 

cash equivalents

 

(2,712)

(166)

(3,519)

 

 

Cash and cash equivalents at

 

 

 

 

 

 

beginning of period

 

7,449

10,968

10,968

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

4,737

10,802

7,449

 

           

 

Notes to the financial statements

 

1.  Corporate Information

 

The financial information for the half year ended 31 December 2021 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The auditor's report on the financial statements for the year ended 30 June 2021 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's AIM market.

 

2.  Basis of preparation

 

These interim consolidated financial statements are for the six months ended 31 December 2021. 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 2021.

 

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 2021 except for the adoption of IAS1 Presentation of Financial Statements (Revised 2007).

 

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

 

The consolidated financial statements incorporate the financial statements of Northamber plc and entities controlled by Northamber plc. Control is achieved if all three of the following are achieved: power over the investee, exposure to variable returns for the investee, and the ability of the investor to use its power to affect those variable returns.

 

The results of subsidiaries are included in the consolidated statement of comprehensive income and consolidated statement of financial position.

 

The results of entities acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.

 

Where necessary, the accounts of the subsidiaries are adjusted to conform to the group's accounting policies. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

 

 

 

 

 

4.  Segmental Reporting

 

Although the sales of the group are predominantly to the UK there are sales to other countries and the following schedule sets out the split of the sales for the period. Revenue is attributable to individual countries based on the location of the customer. There are no non current assets outside the UK.

 

 

UK

 

Other

 

Total

 

 

 

 

 

 

 

£'000

 

£'000

 

£'000

6 months to December 2021

 

 

 

 

 

Total Segment revenue

31,944

 

332

 

  32,276

 

 

 

 

 

 

Year to 30 June 2021

 

 

 

 

 

Total Segment revenue

59,137

 

872

 

60,009

 

No customer accounted for more than 10% of the Group's revenue during the period.

 

5.  Taxation

 

No tax charge has been provided in the interim consolidated financial statements due to the availability of carried forward losses.

 

6.  Earnings per Share

 

The calculation of earnings per share is based on the Loss after tax for the six months to 31 December 2021 of £116,000 (2020: Profit £230,000) and a weighted average of 27,231,586 (2020: 27,231,586) ordinary shares in issue.

 

7.  Risks and Uncertainties

 

The principal risks and uncertainties affecting the business activities of the group are detailed in the strategic report which can be found on pages 10 to 12 of the Annual Report and Accounts for the year ended 30 June 2021 (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:-

 

· Market 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

 

· Brexit risk

 

· Covid-19 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 A M Phillips is the ultimate controlling party of the Company.

 

During the six months period, the company paid £150,000 (2020: £150,000) rent to Anitass Limited, a wholly owned subsidiary. At 31 December 2021 Northamber plc owed Anitass Ltd £7,194,000 (2020: £6,325,000).

 

10.  Directors' 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.

 

 

 

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