Final Results
18 September 2003 - 5:01PM
UK Regulatory
RNS Number:8908P
Northamber PLC
18 September 2003
Northamber plc
Audited Results for the year ended 30th June 2003
CHAIRMAN'S STATEMENT
Results
The Board is pleased to report a very strong second half performance by the
Group which has resulted in a creditable full year outcome of pre-tax profits of
#422,000 (#456,000, including an exceptional profit of #321,000: 30 June 2002).
Shareholders will recall that at the interim stage the Group reported a
disappointing pre-tax loss of #260,000.
Ongoing price erosion reduced sales revenues to #240 million (#250 million: 30
June 2002) negating the growth in our own average unit sales and we believe that
we have again increased market share. Overly competitive price and resultant
margin pressures continue to prevail and reflect the basic problems within the
I.T. hardware sector.
Obscured within the result is our continued avoidance of loss making sales of
mere revenue products. This contributed to a modest 0.16% point increase in
gross margin and whilst sales fell by some 4%, the Board's close attention to
costs has reduced total overheads by 5.2%.
On a positive note, earnings per share increased to 0.94p from the 0.91p of a
year ago. At the year end we had a significant #7.165 million cash balance and
remain debt free. Subject to confirmation by shareholders at the AGM, this will
enable the Board to recommend a final cash dividend of 2.0p (net), making a
total of 3.0p for the full year, (compared with 4.2p last year).
After dividend payments and #174,000 spent on the re-purchase of the Company's
ordinary shares for cancellation, net assets per share were 98.3p against the
100.7p reported a year ago.
Trading
Sales of distributed PC's were reported as having fallen over the first half of
2003. Also, the volume market place and inherent lack of commercial
profitability over the past year required a review of the Group's operations at
the end of 2002 and with it, a strategic change in general direction.
With sales of volume PC's and most accessories continuing to lack adequate
commercial returns, it is essential that we evolve our business model to become
more commercially viable. That entails re-enforcing our focus on key
relationships, whilst shifting emphasis and investment further up both the
technology and value chains. This change was commenced late last year and,
albeit slowly, is progressing to plan.
Our existing higher value activities have continued to perform in-line with
market conditions. Disappointingly, the malaise of the volume markets has also
been somewhat reflected in this area.
The Balance Sheet
Continued strong cash management during the period enabled the Group to end the
year with a very strong #7.17 million (#8.59 million: 30 June 2002) net cash
position at year end, which was again coupled with zero debt.
Net assets of #31.86 million are after the annual depreciation charge of #1.05
million, dividend payments of #977,000 and #174,000 spent on the re-purchase of
326,400 ordinary shares for cancellation.
Stock levels reduced to #13.21 million from #14.59 million and stock turns also
benefited with an increase from 16 to 17 times.
The Board
After very many years association with the Group, Graham Cole advised that his
other commitments strained his ability to properly carry out his role as a
non-executive director. We shall miss his input and wish his new venture every
success.
Dividend
Reviewing dividend policy against the current background is difficult. With our
strong cash generation and net cash position, pending a return to realistic
levels of trading, it is proposed that the final dividend be maintained at 2.0p
(net). This would be at a cost to our reserves of #648,000. If approved, the
proposed dividend will be payable on 9th January 2004 to members on the Register
as at 19th December 2003.
Outlook
Within any new constraints that might arise within the sector or economy, we
have reasonable expectations and your Board is confident of the outcome for the
year.
D.M. Phillips
Chairman
18th September 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Notes 2003 2002
#'000 #'000
Turnover 240,481 250,410
Cost of sales (221,563) (231,093)
-------------- --------------
Gross profit 18,918 19,317
Distribution costs (11,073) (11,150)
Administrative expenses (7,660) (8,610)
Other operating income 220 472
-------------- --------------
Operating profit 405 29
Exceptional profit on sale of fixed assets in continuing operations - 321
-------------- --------------
Profit on ordinary activities before interest 405 350
Interest receivable 103 142
Interest payable (86) (36)
-------------- --------------
Profit on ordinary activities before taxation 422 456
Tax on profit on ordinary activities (116) (160)
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Profit on ordinary activities after taxation 306 296
Equity dividends 3 (977) (1,353)
-------------- --------------
Retained loss for year (671) (1,057)
-------------- --------------
Earnings per ordinary share 2 0.94p 0.91p
Diluted earnings per share 2 0.94p 0.90p
CONSOLIDATED BALANCE SHEET
2003 2002
#'000 #'000
Fixed assets
Tangible assets 5,575 6,289
Investments 2,837 2,837
-------------- --------------
8,412 9,126
-------------- --------------
Current assets
Stocks 13,214 14,590
Debtors - amounts falling due within one year 27,249 27,023
Cash at bank and in hand 7,165 8,587
-------------- --------------
47,628 50,200
Current liabilities
Creditors - amounts falling due within one year (23,324) (25,743)
-------------- --------------
Net current assets 24,304 24,457
-------------- --------------
Total assets less current liabilities 32,716 33,583
Provisions for liabilities and charges (859) (882)
-------------- --------------
Net assets 31,857 32,701
======= =======
Capital and reserves
Called up share capital 1,620 1,623
Share premium account 5,724 5,711
Capital redemption reserve 165 148
Profit and loss account 24,348 25,219
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Equity shareholders' funds 31,857 32,701
======= =======
CONSOLIDATED CASH FLOW STATEMENT
Notes 2003 2002
#'000 #'000
Cash (outflow)/inflow from continuing operating activities 4 (365) 10,525
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Returns on investments and servicing of finance
Interest received 103 142
Interest paid (86) (36)
Income from fixed asset investments 219 255
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Net cash inflow from returns on investments and servicing of finance 236 361
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Taxation
UK corporation tax received/(paid) 179 (913)
------------- -------------
Capital expenditure and financial investment
Purchase of tangible fixed assets (408) (1,090)
Sale of tangible fixed assets 62 1,361
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Net cash (outflow)/inflow from capital expenditure and financial (346) 271
investment
------------- -------------
Equity dividends paid (978) (2,015)
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Cash (outflow)/inflow before financing (1,274) 8,229
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Financing
Purchase of shares (174) (214)
Issue of ordinary share capital 26 -
Debt due beyond a year: Repayment of secured loan - (831)
------------- -------------
Net cash outflow from financing (148) (1,045)
------------- -------------
(Decrease)/increase in cash in period 4 (1,422) 7,184
======= =======
NOTES
1. Accounting policies
The Financial information set out above does not constitute the Group's
statutory accounts for the years ended 30th June 2002 or 30th June 2003, but it
is derived from those accounts. The Statutory Accounts for 30th June 2002 have
been delivered to the Registrar of Companies and those for 2003 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 #306,000 (2002: #296,000) and on 32,511,604 ordinary shares (2002:
32,524,260). The number of ordinary shares in issue during the years ended 30th
June 2003 and 30th June 2002 were the weighted average in issue during each
year.
Computation of Earnings per share for 2003
Per share Earnings Shares
Net profit for year #306,000
Weighted average shares outstanding during year 32,511,604
Basic earnings per share 0.94p
Diluted effect of options 14,282
Diluted earnings per share 0.94p #306,000 32,525,886
3. Dividend
An interim dividend has been paid during the year of 1.0p per share. A final
dividend of 2.0p will be paid on 9th January 2004 to those members on the
register at close of business on 19th December 2003. The ex-dividend date for
the shares will be 17th December 2003.
4. Cash flow
a) Reconciliation of operating profit to operating cash flows
2003 2002
#'000 #'000
Continuing operations
Operating profit 405 29
Income from fixed assets investments (219) (255)
Depreciation of tangible fixed assets 1,054 1,054
Loss on sale of tangible fixed assets 7 27
Decrease in stocks 1,376 354
(Increase)/decrease in trade debtors (338) 6,119
Decrease/(increase) in other debtors 8 (1)
Decrease/(increase) in prepayments and accrued income 78 (116)
(Decrease)/increase in trade creditors (2,467) 3,467
Decrease in other taxation and social security (7) (205)
(Decrease)/increase in accruals and deferred income (403) 54
Increase/(decrease) in other creditors 141 (2)
------------ ------------
Net cash (outflow)/inflow from continuing operating activities (365) 10,525
------------ ------------
b) Reconciliation of net cash flow to movement in net funds
(Decrease)/increase in cash in the period (1,422) 7,184
Cash outflow from changes in debt - 831
------------ ------------
Change in net funds resulting from cash flows and the movement (1,422) 8,015
in net debt in the period
Net funds brought forward 8,587 572
------------ ------------
Net funds carried forward 7,165 8,587
====== ======
c) Analysis of net debt
At 1st July 2002 Cash Flow At 30th June 2003
#'000 #'000 #'000
Cash at bank and in hand 8,587 (1,422) 7,165
----------- ----------- -----------
Total number of shares in issue 32,399,000
Weighted average number of shares 32,511,604
Date of AGM 14 November 2003
Ex Dividend Date 17 December 2003
Dividend Date 9 January 2004
The Company's registered office 1-3 Union Street, Kingston-upon-Thames,
Surrey KT1 1RP.
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