Trading Update

RNS Number : 7639Z

Northern Bear Plc

01 June 2016

 

1 June 2016

Northern Bear PLC

("Northern Bear", the "Company" or, together with its subsidiaries, the "Group")

Trading Update

The board of directors of Northern Bear plc (the "Board") is pleased to provide an update on its trading for the year ended 31 March 2016 ("FY2016"). 

Highlights

·      Earnings per share for FY2016 in line with both FY2015 (8.5p) and management expectations despite severe weather constraints.

·      Current order book is strong.

·      Cashflow continues to improve and net bank debt has continued to decrease (31 March 2015: £4.8m).

·      Progressive dividend policy to continue (FY2015: 1.5p per share). 

Trading

The Board is delighted to announce that the unaudited preliminary results before and after tax for the year ended 31 March 2016 are in line with the excellent results in FY2015.

This has been achieved despite the severe weather conditions encountered during the year. It was well publicised at the time that the North of England was hit by unprecedented floods and high winds for a prolonged period during the winter months. This seriously affected the ability to carry out site work, particularly in the Roofing Division.

As a result, turnover and operating profit have decreased in FY2016 (FY2015: £41.7m and £2.5m) but overall net profitability has been maintained. This has been achieved by careful contract selection and avoiding chasing turnover on lower margin work. In addition, the results have benefitted from reduced finance costs following the renegotiation of bank facilities in March 2015.

Reduction in bank debt

The strong performance has resulted in a further significant decrease in net bank debt. As a result, the Board intends to continue with its progressive dividend policy.

The Group is grateful for the continued support of Yorkshire Bank.

Operational Matters

Following the successful consolidation of various Group companies onto the Team Valley Trading Estate, the Group has improved the synergistic benefits to customers of using Northern Bear plc given the specialist disciplines which exist across the Group.

This year, the Group has continued to secure a number of high profile contracts ranging from Heritage sites to lighthouses. These include, but are not limited, to:

Acklam Hall, Middlesborough;

Alnwick Castle, Northumberland;

St. George's Quarter, Huddersfield;

Durham Castle, Durham;

Howarth Parish Church, Howarth;

The Literary and Philospohical Society, Newcastle; and

Souter Lighthouse, Sunderland.

Despite the adverse weather conditions during the winter months, our Roofing Division produced another excellent set of results and it is pleasing that customers continue to recognise the exceptional skill base within the Roofing Division. This has allowed it to maintain margins in what has become a margin pressured marketplace.

Outlook

Current order book levels remain strong across the Group and the new financial year has started well. It remains frustrating that the Group is often not in a position to influence when contracts commence so flexibility is key to maintaining profitability. 

Dividend

In view of the continued strong performance of the Group, the Board is pleased to announce that it is planning to increase the proposed final dividend in respect of the year ended 31 March 2016 (FY2015: 1.5p per share) subject to Shareholder approval.

Steve Roberts, Executive Chairman of Northern Bear, commented:

"We are very pleased with the performance in the year, particularly given the weather impact on the ability to trade on site in the second half of the year. After many years of tireless efforts to improve profitability and reduce the level of bank debt, it is rewarding to be able to continue with a progressive dividend policy for the benefit of shareholders. We continue to consider acquisition opportunities but will only execute a transaction where we are confident that the acquisition will be earnings enhancing and provide an attractive return on investment."

For further information please contact:

Northern Bear Plc
Steve Roberts - Executive Chairman	[phone]
Tom Hayes -  Finance Director	[phone]
Strand Hanson Ltd
James Harris / James Spinney	[phone]

 

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