TIDMNAR
RNS Number : 6769N
Northamber PLC
28 October 2016
28 October 2016
Northamber PLC
("Northamber" or the "Company")
Preliminary Results for the year ended 30 June 2016
Chairman's Statement
Results
As we continue our transition into more consultative, solution
driven sales, I am pleased to be able to announce an increase in
gross profit to GBP4.8 million, driven by a gross margin ("GM")
improvement to 7.8%. This is a significant increase from just over
7% for the previous year, especially against a challenging industry
background and shows the traction we are making in evolving the
business.
Unfortunately whilst margins increased, so did losses. This
stemmed from increased administration costs, of which recruitment
was a significant contributor, as we invested in building our
future presence in these strategically important categories and
sectors organically.
As we increased our focus on these higher margin solutions
categories, we also moved away from some of our lower margin more
transactional business, leading to an overall reduction in turnover
of some GBP3.6 million to a total of GBP61.8 million compared with
GBP65.4 million for last year.
We now look at the business as 3 mutually reinforcing units,
namely: "Wholesale" which provides a wholesale function for IT
products: "Solutions" which focuses on a consultative approach to
newer IT technologies with a heavy value-add: and "Retail" which
focuses on providing consumer goods to national retailers.
The far more promising, newer technologies and higher margin
added value areas, we labelled "Solutions", increased its GM year
on year contribution significantly despite investment and staff
recruitment costs. This division is an area with a strong potential
that we are focusing on heavily.
The Retail sector of our business which is driven by the
strength of our experienced logistics and I.T. systems is always
subject to the vagaries of the retail industry demand generation
focus. Whilst a profitable contributor, it was nonetheless
disappointing to experience a significant decline in revenue,
albeit with retained margins.
In order to fully benefit from the strategy of providing higher
margin Solutions, we have made significant investment in recruiting
and training more experienced staff who can add value to very
specialised products and gain the additional levels of margin.
Whilst we are confident that this strategy will prove successful,
and will be more fully reflected in the outcome for the current
financial year, we cannot avoid the impact of the additional staff
recruitment fees.
The reported operating loss of GBP1.29 million, disguises an
annual gross profit improvement of GBP218,000. The increase in
reported loss of GBP360,000 over the prior year is partly due to
the previously advised needs for key recruitment and associated
costs. Those increased costs are included within the overall figure
of GBP578,000 over the prior year.
Balance Sheet
During these challenging times of significant movements in
structure and profile, of both the industry, our sector and
consequently within our company, the need for conservation and
control of finances becomes ever more important and critical.
We have always been extremely careful in the management of our
finances and assets, and have always placed great emphasis on
liquidity and cash.
I am pleased to be able to state each year that our balance
sheet continues to be strong, our liquidity ratios more than
adequate, our assets unencumbered and our cash balances positive.
This year is no different and with cash at the year- end standing
at GBP5.4 million, it is almost exactly the same as at the last
year end.
Net Assets per share have inevitably declined to 67.9p per share
(2015: 72.7p) although still well above the average share price in
the 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 the newer business areas, plus the
strength of our ongoing debt free, tangible asset base.
At a total cost of GBP28,159 your Board is proposing a final
dividend of 0.1p per share .The dividend will be paid on 18 January
2017 to shareholders on the register as at 9 December 2016.
Staff
Whilst we have maintained a lean management structure, it
remains key that we continue our search for the right individuals
to drive our forward management strategy. With an incredibly high
percentage of long serving members of staff plus those more
recently joined, I am very grateful to all our staff for their
support and focus.
Board
Geoff Walters, with his non-executive financial skills, has made
a very welcome contribution to the board in the role previously
held by Gordon Hamilton.
Outlook
Although the forecast post referendum gloom has not yet
happened, and hopefully will not be too great if and when it does
become reality, the short and medium term future is fraught with
uncertainty.
In view of the history of the last few years I am, to say the
least, cautious. We are hopeful that the moves we have made in the
profile and structure of the business will continue to develop the
more profitable sides of the business and that we shall be in a
position to move towards profitability sometime in the not too
distant future, although I do not expect to reach that position
within the next twelve months.
The company remains well placed to deal with both challenges and
opportunities alike and the board is confident that the change in
direction will prove fruitful in the years ahead.
D.M. Phillips
Chairman
28 October 2016
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
For the year ended 30
June 2016
2016 2015
Total Total
GBP'000 GBP'000
Revenue 61,844 65,452
Cost of sales (57,025) (60,851)
Gross Profit 4,819 4,601
Distribution costs (3,310) (2,950)
Administrative costs (2,801) (2,583)
Loss from operations (1,292) (932)
Investment revenue 59 46
Loss before tax (1,233) (886)
Tax (charge) - (2)
Loss for the year and
total comprehensive loss (1,233) (888)
=========== ===========
Basic and diluted loss
per ordinary share (4.38)p (3.15)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2016
2016 2015
GBP'000 GBP'000
Non current assets
Property, plant and equipment 7,995 8,129
Current assets
Inventories 5,006 4,519
Trade and other receivables 8,459 10,176
Cash and cash equivalents 5,466 5,441
18,931 20,136
----------- -----------
Total assets 26,926 28,265
=========== ===========
Current liabilities
Trade and other payables (7,805) (7,798)
Total liabilities (7,805) (7,798)
----------- -----------
Net assets 19,121 20,467
=========== ===========
Equity
Share capital 281 281
Share premium account 5,734 5,734
Capital redemption reserve 1,505 1,505
Retained earnings 11,601 12,947
----------- -----------
Equity shareholders' funds 19,121 20,467
=========== ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended
30 June 2016
Share Share Capital Retained Total
Capital Premium Redemption Earnings Equity
Account Reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
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 year - - - (888) (888)
Balance at 30 June
2015 281 5,734 1,505 12,947 20,467
Dividends - - - (113) (113)
Transactions with
owners - - - (113) (113)
Loss and total comprehensive
loss for the year - - - (1,233) (1,233)
Balance at 30 June
2016 281 5,734 1,505 11,601 19,121
========= ========= ============ ========== ========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30
June 2016
2016 2015
GBP'000 GBP'000
Cash from operating activities
Operating (loss) from continuing
operations (1,292) (932)
Depreciation of property, plant
and equipment 167 247
Operating (loss) before changes
in working capital (1,125) (685)
(Increase)/decrease in
inventories (487) 534
Decrease in trade and
other receivables 1,716 1,513
Increase/(decrease) in
trade and other payables 7 (829)
Cash generated from operations 111 533
Income taxes paid - (2)
Net cash from operating
activities 111 531
----------- -----------
Cash flows from investing
activities
Interest received 59 46
Purchase of property,
plant and equipment (32) (44)
Net cash from investing
activities 27 2
Cash flows from financing
activities
Dividends paid to equity
shareholders (113) (168)
Net cash used in financing
activities (113) (168)
----------- -----------
Net increase in cash and
cash equivalents 25 365
Cash and cash equivalents
at beginning of year 5,441 5,076
Cash and cash equivalents
at end of year 5,466 5,441
----------- -----------
Notes
1. Financial information
The results of the year ended 30 June 2016 have been prepared
using the accounting policies and methods of computation consistent
with those used in the Group's annual report for the year ended 30
June 2016. The results have also been presented and prepared in a
form consistent with that which will be adopted in the Group's
annual report for the year ended 30 June 2016 and in accordance
with the recognition and measurement requirements of the
International Reporting Standards as adopted by the European
Union.
The financial information set out above does not constitute the
group's statutory accounts for the years ended 30 June 2015 or 30
June 2016, but is derived from those accounts. The statutory
accounts for the year ended 30 June 2015 have been delivered to the
Registrar of Companies and those for 2016 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 s.498(2) or (3) of the Companies Act
2006. The information contained in this statement does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006.
2. Segmental reporting
Management has determined that there is only one operating
segment of the group as the total business of the company is the
sourcing and distribution of computer related products and this is
how information is reported to the Chief Operating Decision Maker.
The board in carrying out its strategic planning and decision
making has, necessarily, to take consideration of the inter
relatedness of the product range and the customer base and thus
treat the operations of the group as a whole. All decisions on the
allocation of resources impacts on all aspects of the group.
Information presented to the Chief Operating Decision Maker is the
same as is reported in these financial statements.
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
GBP'000 GBP'000 GBP'000
Year to 30 June 2015
Total Segment revenue 65,226 226 65,452
Year to 30 June 2016
Total Segment revenue 61,615 229 61,844
One customer accounted for more than 10% of the group's revenue
for the year, being GBP8.6m.
3. Loss per ordinary share
The calculation of the basic and diluted earnings per share is
based on the following data:
2016 2015
GBP'000 GBP'000
(Loss) for the year attributable
to equity holders of the parent
company (1,233) (888)
=========== ===========
2016 2015
Number of shares Number Number
Weighted average number of
ordinary shares for the purpose
of basic earnings per share
and diluted earnings per share 28,158,735 28,158,735
=========== ===========
4. Dividends
A final dividend of 0.1p per share will be paid on 18 January
2017 to those members on the register at close of business on 9
December 2016.
5. Notice of meeting
The annual report and accounts for the year ended 30 June 2016
will be posted to shareholders in due course and the Annual General
Meeting will be held on 14 December 2016.
The Company's registered office is Namber House, 23 Davis Road,
Chessington, Surrey KT9 1HS.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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