Half Yearly Report

RNS Number : 0804T

Northamber PLC

24 March 2016

 

Northamber PLC

("Northamber" or the "Company")

Interim Results for the Six months to 31 December 2015

Chairman's Statement

Results

In my report on the financial year ended 30 June 2015, I stated that the second half of that year saw a reversal of the encouraging first half of the year and I commented on the various reasons at the time. Although hopeful that we could overcome those negative factors, I did again sound a note of caution, one that proved well founded as the core difficulties within the sector's dynamics continued to prevail over our ongoing corrective actions.

The group has two areas of focus, the long standing high-tech distribution model and the retail sector that utilises our leading edge storage and logistics strengths.  Across calendar 2015 the progress in revenue growth was positive with a 9.4% increase in the second calendar half, despite the Windows 10 hiatus shared in my last report and slow commercial sector acceptance.  Management actions taken for the longer term resulted in the less satisfying second half 2015 statistic, with year-on-year comparatives some 9.0% lower at £32.5 million compared with £35.7 million.

Steps taken to increase the skill levels of our staff did serve to spur the achievements of our planned strategy and our actions to concentrate in more profitable areas resulted in consolidating margins with a slight improvement, compared with the first half of last year, rising from 6.8% to 6.9%; whilst minor not insignificant given the prevailing market conditions of uncertainty and lost revenue.

Those improved margins were not sufficient, however, to compensate for the higher staff costs and comparative loss of turnover, such that the gross profit line was some £198,000 less than the £2.4 million achieved in the first half of the comparative period.

As a result primarily of one off staff recruitment costs overheads were some £190,000 higher than for the same period in the previous year, with the net result that the pre-tax loss for the period was £547,000 compared with £292,000 in the first half of the previous year.  A most disappointing short term result; albeit there should be further benefits accruing from this strategy over the medium term.

Balance Sheet

The balance sheet remains strong with 31 December 2015 cash balances of £3.8 million as against £2.6 million a year earlier, despite the loss for the period. Any comparison with the end June 2015 cash balance of £5.4 million is confused by the usual seasonal delay in debtor receipts

Our continuous tight cash and working capital control is the reason we remain so financially strong and liquid, irrespective of the turmoil within the sector.

Net Assets per share of 71 pence (31 December 2014: 75 pence) reflected that and though impacted by the loss for the period, it is still more than twice the average share price in the 2015 calendar year.

Dividend

As always, the subject of dividend is complicated by the message it also sends.   Your board has taken particular consideration of the underlying improvement in continuing business, plus that newly introduced, and the strength of our debt free, tangible asset base.

At a total cost of only £28,159 your Board is proposing the interim dividend be 0.1p.  The dividend will be paid on 12 May 2016 to shareholders on the register as at 15 April 2016.

Board

As announced on 19 February 2016, I am pleased to welcome Geoff Walters to the board as a non-executive director of Northamber.

Geoff is a Chartered Accountant and has a wealth of experience having held Finance Director and Company Secretary roles.  His financial skills and experience have already, and will, provide a valuable contribution to the Board.

Staff

We appreciate the strain put on our staff during these very difficult trading conditions and together we are working to overcome them as well as possible.

Outlook

These last six months amply demonstrate the complexities of the market place we serve, one in which we have 35 years' experience, where we aim to make credible judgements about the future whilst subject to volatile market forces .

With the current marketplace uncertainties it is difficult to indicate a near term return to profit.  We are confident in the medium and long term of delivering profitability due to already evidenced underlying growth, supported by our strong financial position and infrastructure

D.M. Phillips

Chairman

For more information please contact:

Northamber plc	020 8296 7000
David Phillips, Chairman
Cantor Fitzgerald Europe (Nominated Adviser & Broker)	020 7894 7000
Phil Davies / Michael Reynolds

Consolidated Statement of Comprehensive Income
6 months to 31 December 2015
			6 months	6 months	Year
			Ended	ended	ended
			31.12.15	31.12.14	30.06.15
			£'000	£'000	£'000
			Unaudited	Unaudited	Audited
	Revenue		32,522	35,727	65,452
	Cost of sales		(30,280)	(33,287)	(60,851)
	Gross Profit		2,242	2,440	4,601
	Distribution cost		(1,446)	(1,454)	(2,950)
	Administrative expenses		(1,370)	(1,303)	(2,583)
	(Loss) from operations		(574)	(317)	(932)
	Investment revenue		27	25	46
	(Loss) before tax		(547)	(292)	(886)
	Tax credit/(charge)		-	-	(2)
	Loss and total comprehensive income
	for the period		(547)	(292)	(888)
	Basic and diluted (loss) per ordinary share		(1.94)p	(1.04)p	(3.15)p

Consolidated Statement of Financial Position
As at 31 December 2015
			As at	As at	As at
			31.12.15	31.12.14	30.06.15
			£'000	£'000	£'000
			Unaudited	Unaudited	Audited
	Non current assets
	Property, plant and equipment		8,012	8,205	8,129
	Current assets
	Inventories		4,588	5,977	4,519
	Trade and other receivables		14,393	13,456	10,179
	Cash and cash equivalents		3,805	2,646	5,441
			22,786	22,079	20,136
	Total assets		30,798	30,284	28,265
	Current liabilities
	Trade and other payables		(10,878)	(9,053)	(7,798)
			(10,878)	(9,053)	(7,798)
	Total liabilities		(10,878)	(9,053)	(7,798)
	Net assets		19,920	21,231	20,467
	Equity
	Share capital		281	281	281
	Share premium account		5,734	5,734	5,734
	Capital redemption reserve fund		1,505	1,505	1,505
	Retained earnings		12,400	13,711	12,947
	Equity shareholders' fund		19,920	21,231	20,467

Company Statement of Financial Position
As at 31 December 2015
			As at	As at	As at
			31.12.15	31.12.14	30.06.15
			£'000	£'000	£'000
			Unaudited	Unaudited	Audited
	Non current assets
	Property, plant and equipment		1,823	1,882	1,873
	Investments		6,588	6,588	6,588
			8,411	8,470	8,461
	Current assets
	Inventories		4,588	5,977	4,519
	Trade and other receivables		14,392	13,453	10,175
	Cash and cash equivalents		3,796	2,599	5,424
	Tax assets			-	-
			22,776	22,029	20,118
	Total assets		31,187	30,499	28,759
	Current liabilities
	Trade and other payables		(12,957)	(10,495)	(9,569)
			(12,957)	(10,495)	(9,569)
	Total liabilities		(12,957)	(10,495)	(9,569)
	Net assets		18,230	20,004	19,010
	Equity
	Share capital		281	281	281
	Share premium account		5,734	5,734	5,734
	Capital redemption reserve fund		1,505	1,505	1,505
	Retained earnings		10,710	12,484	11,490
	Equity shareholders' fund		18,230	20,004	19,010

Consolidated Statement of Changes in Equity
As at 31 December 2015
		Share capital	Share premium account	Capital redemption reserve	Retained earnings	Total Equity
		£'000	£'000	£'000	£'000	£'000
	Period to 31 December 2014
	Unaudited
	Balance at 1 July 2014	281	5,734	1,505	14,003	21,523
	Dividends	-	-	-	-	-
	Loss and total comprehensive
	loss for the period	-	-	-	(292)	(292)
	Balance at 31 December  2014	281	5,734	1,505	13,711	21,231
	Period to 31 December 2015
	Unaudited
	Balance at 1 July 2015	281	5,734	1,505	12,947	20,467
	Dividends	-	-	-	-	-
	Loss and total comprehensive	-	-	-	(547)	(547)
	loss for the period
	Balance at 31 December  2015	281	5,734	1,505	12,400	19,920
	Year to 30 June 2015
	Audited
	Balance at 1 July 2014	281	5,734	1,505	14,003	21,523
	Dividends	-	-	-	(168)	(168)
	Transactions with owners	-	-	-	(168)	(168)
	Loss and total comprehensive
	loss for the period	-	-	-	(888)	(888)
	Balance at 30 June 2015	281	5,734	1,505	12,947	20,467

Company Statement of Changes in Equity
As at 31 December 2015
		Share capital	Share premium account	Capital redemption reserve	Retained earnings	Total Equity
		£'000	£'000	£'000	£'000	£'000
	Period to 31 December 2014
	Unaudited
	Balance at 1 July 2014	281	5,734	1,505	13,012	20,532
	Dividends	-	-	-	-	-
	Loss and total comprehensive
	loss for the period	-	-	-	(528)	(528)
	Balance at 31 December  2014	281	5,734	1,505	12,484	20,004
	Period to 31 December 2015
	Unaudited
	Balance at 1 July 2015	281	5,734	1,505	11,490	19,010
	Dividends	-	-	-	-	-
	Loss and total comprehensive
	loss for the period	-	-	-	(780)	(780)
	Balance at 31 December  2015	281	5,734	1,505	10,710	18,230
	Year to 30 June 2015
	Audited
	Balance at 1 July 2014	281	5,734	1,505	13,012	20,532
	Dividends	-	-	-	(168)	(168)
	Transactions with owners	-	-	-	(168)	(168)
	Loss and total comprehensive
	loss for the period	-	-	-	(1,354)	(1,354)
	Balance at 30 June 2015	281	5,734	1,505	11,490	19,010

Consolidated Statement of Cash Flows
6 months to 31 December 2015
			6 months	6 months	Year
			ended	ended	ended
			31.12.15	31.12.14	30.06.15
			£'000	£'000	£'000
			Unaudited	Unaudited	Audited
	Cash from operating activities
	Operating (loss) from
	continuing operations		(574)	(317)	(932)
	Depreciation of property, plant
	and equipment		114	128	247
	(Profit)/loss on disposal of property,
	plant and equipment			-	-
	Operating (loss) before changes in
	working capital		(460)	(189)	(685)
	(Increase)/decrease in inventories		(69)	(924)	534
	(Increase)/decrease  in trade and
	other receivables		(4,214)	(1,767)	1513
	Increase/(decrease)  in trade and
	other payables		3,080	425	(829)
	Cash (used)/generated from operations		(1,663)	(2,455)	533
	Income taxes received/(paid)			-	(2)
	Net cash from operating activities		(1,663)	(2,455)	531
	Cash flows from investing activities
	Interest received		27	25	46
	Proceeds from disposal of property,
	plant and equipment			-	-
	Purchase of property, plant and
	Equipment			-	(44)
	Net cash from investing activities		27	25	2
	Cash flows from financing activities
	Dividends paid to equity shareholders		-	-	(168)
	Net cash used in financing activities		-	-	(168)
	Net (decrease)/increase in cash and
	cash equivalents		(1,636)	(2,430)	365
	Cash and cash equivalents at
	beginning of period		5,441	5,076	5,076
	Cash and cash equivalents at end of period		3,805	2,646	5,441

Company Statement of Cash Flows
6 months to 31 December 2015
			6 months	6 months	Year
			ended	ended	ended
			31.12.15	31.12.14	30.06.15
			£'000	£'000	£'000
			Unaudited	Unaudited	Audited
	Cash from operating activities
	Operating (loss) from
	continuing operations		(808)	(553)	(1,395)
	Depreciation of property, plant
	and equipment		51	61	114
	(Profit)/loss on disposal of property,
	plant and equipment			-	-
	Operating (loss) before changes in
	working capital		(757)	(492)	(1,281)
	(Increase)/decrease in inventories		(69)	(924)	534
	(Increase)/decrease in trade and
	other receivables		(4,217)	(1,761)	1,514
	Increase/(decrease)  in trade and
	other payables		3,388	666	(248)
	Cash (used)/generated from operations		(1,655)	(2,511)	519
	Income taxes received/(paid)			14	-
	Net cash from operating activities		(1,655)	(2,497)	519
	Cash flows from investing activities
	Interest received		27	25	46
	Proceeds from disposal of property,
	plant and equipment			-	-
	Purchase of property, plant and
	Equipment			-	(44)
	Net cash from investing activities		27	25	2
	Cash flows from financing activities
	Dividends paid to equity shareholders			-	(168)
	Net cash used in financing activities			-	(168)
	Net (decrease)/increase in cash and
	cash equivalents		(1,628)	(2,472)	353
	Cash and cash equivalents at
	beginning of period		5,424	5,071	5,071
	Cash and cash equivalents at end of period		3,796	2,599	5,424

Notes to the financial statements

1.            Corporate Information

The financial information for the half year ended 31 December 2015 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 2015 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's AIM market.

2.            Basis of preparation

These interim consolidated financial statements are for the six months ended 31 December 2015. 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 2015.

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 2015 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

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.            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 year. 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 2015
Total Segment revenue	32,483		39		32,522
Year to 30 June 2015
Total Segment revenue	65,226		226		65,452

One customer accounted for more than 10% of the group's revenue for the period, being £5.8m.

5.            Taxation

No tax charge has been provided in the interim consolidated financial statements due to the losses accumulated both in prior years and in the current period.

6.            Earnings per Share

The calculation of earnings per share is based on the loss after tax for the six months to 31 December 2015 of £547,000 (2014: loss £292,000) and a weighted average of 28,158,735 (2014: 28,158,735) ordinary shares in issue.

7.            Property, Plant and Equipment

There were no significant additions to or disposals of property, plant or equipment in the period to 31 December 2015.  The reduction in the total value of property, plant and equipment was primarily due to the depreciation charge for the year.

8.            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 7 to 11 of the Annual Report and Accounts for the year ended 30 June 2015 (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

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 six months ended 31 December 2015, the company paid £36,000 (2014: £36,000) as salary and £2,572 (2014: £493) as benefit to the company Director of Strategy, Mr A Phillips, who is the son of the Chairman, Mr D M Phillips.

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.

 

END

 

 

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