TIDMNTBR
RNS Number : 5490O
Northern Bear Plc
08 November 2016
8 November 2016
Northern Bear plc
("Northern Bear" or the "Company")
Interim results for the six-month period ended 30 September
2016
The board of directors of Northern Bear (the "Board") is pleased
to announce its unaudited interim results for the six months to 30
September 2016.
Highlights:
-- Profit before income tax of GBP1.1 million (2015: GBP0.9 million)
-- Basic earnings per share 5.2p (2015: 4.2p)
-- Cash generated from operations GBP1.4 million (2015: GBP1.4 million)
-- Further decrease in net bank debt to GBP2.0 million
(September 2015: GBP4.0 million; March 2016 GBP2.5 million)
Steve Roberts, Executive Chairman of Northern Bear,
commented:
"The results for the six months ended 30 September 2016
represent a further improvement in performance, following excellent
results in the previous two years. I am very pleased with our
continued progress, and I would once again like to thank our
employees for all their hard work and contribution to our continued
success."
For further information, please contact:
Northern Bear plc +44 (0) 166
Steve Roberts - Executive 182 0369
Chairman +44 (0) 166
Tom Hayes - Finance Director 182 0369
Strand Hanson Limited (Nominated
Adviser and Broker)
James Harris
James Spinney +44 (0) 20
James Bellman 7409 3494
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report the unaudited interim results for the six
months ended 30 September 2016 for Northern Bear plc and its
subsidiaries (together "the Group").
The Group has delivered another excellent set of results, with
retained profit of GBP0.9 million (2015: GBP0.7 million) and basic
earnings per share of 5.2p (2015: 4.2p) for the period. This
performance should be measured against what we already considered
to be strong first half results in each of the last two years.
Northern Bear was admitted to trading on AIM on 19 December 2006
and we are fast approaching our tenth anniversary as a public
company. Despite the severe recession, resulting from the financial
crisis that started shortly after our flotation, the current
operational management team led by Graham Jennings have worked
tirelessly to drive improved trading performance. We have also
restructured operations and substantially deleveraged the Group's
balance sheet over this period. I would like to thank them for all
their efforts and am confident that the Group is well positioned to
face the future.
Trading
Turnover for the period was GBP20.9 million (2015: GBP19.6
million) with a particularly strong performance coming from our
Roofing division as detailed below. Gross profit increased to
GBP4.7 million (2015: GBP4.4 million), with gross margin slightly
higher at 22.7% (2015: 22.3%) through continued careful contract
selection and management.
The Group's overhead cost base has increased slightly, with
administrative expenses up to GBP3.5 million (2015: GBP3.3
million), largely to support higher trading volumes. As a result
operating profit was GBP1.2 million for the period (2015: GBP1.1
million).
We continue to benefit from reduced finance costs as debt levels
fall and, partly due to this, profit before tax increased to GBP1.1
million (2015: GBP0.9 million).
Cash flow
Net bank debt at 30 September 2016 was GBP2.0 million (September
2015: GBP4.0 million, March 2016: GBP2.5 million). Cash generated
from operations was GBP1.4 million in the period (2015: GBP1.4
million) which represents an appropriate cash conversion rate. The
improved net bank debt position from March 2016 is despite having
paid last year's final dividend of GBP0.4 million (2015: GBP0.3
million) in the period.
The Group is grateful for the continued support of Yorkshire
Bank. Discussions are ongoing with regard to the routine review and
renewal of term loan and overdraft facilities currently committed
to 31 March 2017, and we expect these facilities to be renewed in
the ordinary course of business in the near future.
Dividend
Over the past three years, the Board has followed a progressive
dividend policy, significantly increasing the final dividend in
each year (2014: 0.75p, 2015: 1.5p, 2016: 2.0p per share) as the
Group's bank debt and associated outgoings reduced to what we
deemed a more appropriate and sustainable level.
We stated some time ago that our policy was to pay only a final
dividend, primarily due to the potential impact of severe weather
on the Group's trading over the winter months, and we will continue
with this policy.
Provided that the strong trading performance continues for the
remainder of the financial year, it is the intention of the Board
to continue with a progressive dividend policy for the benefit of
our shareholders.
Operational and commercial matters
Once again, our Roofing division continues to excel in its
sector with Jennings Roofing, Springs Roofing and Wensley Roofing
seeing a surge of work in social housing, heritage and private
housing projects. We have also benefited from a successful schools
programme which has been supported by dry summer weather
conditions. It is apparent that the exceptional expertise and
knowledge of our employees is having a positive impact with
customers seeking good-quality suppliers who employ fully trained
and qualified staff.
Our Specialist Building Services division continues to grow in
both turnover and in reputation, which is helping to enhance and
strengthen the Northern Bear brand in this particular field. I am
delighted that Northern Bear Building Services, which was a new
division launched in 2010, continues to progress and is delivering
a high standard of work while bringing in contracts on time and on
budget. We also benefit from sharing technical skills and knowledge
across all of our companies in this division.
The Group's Materials Handling business, A1 Industrial Trucks,
has again performed strongly through the sale, hire and provision
of maintenance of Mitsubishi Fork Lift trucks to its customer
base.
The support provided by our in-house health and safety business,
Northern Bear Safety, is invaluable in maintaining our high safety
standards and ensuring that working environments are compliant with
all relevant regulations. They carry out unannounced on-site
inspections on a regular basis and provide safety training to all
Group companies, including CITB accredited courses. Northern Bear
Safety also provides the same services to an increasing number of
external clients.
Survey Drones, a sub business operated by the safety team, has
seen its best year to date, both in terms of work won and revenue
generated. With the use of drones increasing in the construction
industry, they are in an ideal position to increase their client
base and grow further in the second half of the current financial
year.
Strategy
Having used operating cash flow to reduce bank debt levels in
recent years, the Group is now well placed to take advantage of
both strategic and commercial opportunities as and when they
arise.
We continue to believe that acquisitions of specialist building
services businesses, either in the same or complementary sectors to
our current operations, could further enhance the Group's offering
to customers. As previously stated, however, we will only proceed
with such an opportunity where we are confident that it will
predictably enhance earnings and provide an acceptable return on
investment for our shareholders.
We have considered a number of acquisition opportunities in
recent months but none were able to meet all of our criteria. We
will continue to be cautious with our use of shareholders' funds in
this area.
Outlook
Order books remain healthy across the Group and I am cautiously
optimistic for a successful second half to the financial year. We
have not yet experienced any adverse impact to date from the recent
referendum on the UK's continued membership of the European Union,
although the longer term impact on our business will become clearer
as the process of the UK leaving unfolds over the medium term.
People
I remain proud that the Group directly employs a large majority
of its workforce and, overseen by Keith Soulsby, has continued to
invest in training new operatives throughout difficult economic
times. This is particularly important given the shortage of skilled
operatives and cost pressures in our sector. Our loyal, dedicated
and skilled workforce, along with investment in apprenticeship
schemes, is a key part of the Group's continued success.
Conclusion
I am delighted to be able to report such positive news and I
would once again like to thank all of our employees for their hard
work and contribution to another period of strong performance for
the Group.
Steve Roberts
Executive Chairman
8 November 2016
Consolidated statement of comprehensive income
for the six-month period ended 30 September 2016
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2016 2015 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 20,878 19,569 36,466
Cost of sales (16,148) (15,212) (27,542)
------------- ------------- -----------
Gross profit 4,730 4,357 8,924
Other operating income 13 9 25
Administrative expenses
------------- ------------- -----------
Share based payment (8) (7) (15)
Other administrative
expenses (3,496) (3,281) (6,830)
------------- ------------- -----------
(3,504) (3,288) (6,845)
------------- ------------- -----------
Operating profit 1,239 1,078 2,104
Finance income - 3 2
Finance costs (96) (145) (229)
------------- -----------
Profit before income
tax 1,143 936 1,877
Income tax expense (228) (187) (423)
------------- ------------- -----------
Profit for the period 915 749 1,454
============= ============= ===========
Total comprehensive
income attributable
to equity holders
of the parent 915 749 1,454
============= ============= ===========
Earnings per share
from continuing operations
Basic earnings per
share 5.2p 4.2p 8.2p
Diluted earnings
per share 5.1p 4.2p 8.1p
Consolidated statement of changes in equity
for the six-month period ended 30 September 2016
Capital
Share redemption Share Merger Retained Total
capital reserve premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2015 184 6 5,169 10,371 5,328 21,058
Total comprehensive
income for the period
Profit for the period - - - - 749 749
Transactions with owners,
recorded directly in
equity
Equity settled share-based
payment transactions - - - - 7 7
Equity dividends paid - - - - (265) (265)
--------- ------------ --------- --------- ---------- --------
At 30 September 2015 184 6 5,169 10,371 5,819 21,549
========= ============ ========= ========= ========== ========
At 1 April 2015 184 6 5,169 10,371 5,328 21,058
Total comprehensive
income for the year
Profit for the year - - - - 1,454 1,454
Transactions with owners,
recorded directly in
equity
Equity settled share-based
payment transactions - - - - 15 15
Equity dividends paid - - - - (265) (265)
--------- ------------ --------- --------- ---------- --------
At 31 March 2016 184 6 5,169 10,371 6,532 22,262
========= ============ ========= ========= ========== ========
At 1 April 2016 184 6 5,169 10,371 6,532 22,262
Total comprehensive
income for the period
Profit for the period - - - - 915 915
Transactions with owners,
recorded directly in
equity
Equity settled share-based
payment transactions - - - - 8 8
Equity dividends paid - - - - (353) (353)
--------- ------------ --------- --------- ---------- --------
At 30 September 2016 184 6 5,169 10,371 7,102 22,832
========= ============ ========= ========= ========== ========
Consolidated balance sheet
at 30 September 2016
30 September 30 September 31 March
2016 2015 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Property, plant and
equipment 3,004 2,688 2,881
Intangible assets 21,350 21,352 21,351
Total non-current assets 24,354 24,040 24,232
Inventories 1,094 793 976
Trade and other receivables 9,384 8,929 7,239
Prepayments 421 408 289
Deferred consideration
receivable - 18 -
Cash and cash equivalents 2,022 903 1,898
Total current assets 12,921 11,051 10,402
------------- ------------- ---------
Total assets 37,275 35,091 34,634
============= ============= =========
Equity
Share capital 184 184 184
Capital redemption reserve 6 6 6
Share premium 5,169 5,169 5,169
Merger reserve 10,371 10,371 10,371
Retained earnings 7,102 5,819 6,532
Total equity attributable
to equity holders of
the Company 22,832 21,549 22,262
============= ============= =========
Liabilities
Loans and borrowings 142 4,135 119
Deferred tax liabilities 213 139 213
Total non-current liabilities 355 4,274 332
------------- ------------- ---------
Loans and borrowings 4,168 1,042 4,607
Trade and other payables 9,353 7,774 7,090
Current tax payable 567 452 343
Total current liabilities 14,088 9,268 12,040
------------- ------------- ---------
Total liabilities 14,443 13,542 12,372
============= ============= =========
Total equity and liabilities 37,275 35,091 34,634
============= ============= =========
Consolidated statement of cash flows
for the six-month period ended 30 September 2016
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2016 2015 2016
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Operating profit for
the period 1,239 1,078 2,104
Adjustments for:
Depreciation 259 249 529
Amortisation 1 1 2
Loss on sale of property,
plant and equipment 9 9 16
Equity settled share-based
payment transactions 8 7 15
------------- ------------- -----------
1,516 1,344 2,666
Change in inventories (118) 56 (127)
Change in trade and
other receivables (2,145) 817 2,427
Change in prepayments (132) (185) 14
Change in trade and
other payables 2,263 (594) (1,278)
------------- ------------- -----------
Cash generated from
operations 1,384 1,438 3,702
Interest received - 3 2
Interest paid (96) (145) (229)
Tax paid (4) (40) (311)
------------- ------------- -----------
Net cash flow from operating
activities 1,284 1,256 3,164
------------- ------------- -----------
Cash flows from investing
activities
Proceeds from the sale
of property, plant and
equipment 167 104 212
Proceeds from subsidiary
disposal - 125 143
Acquisition of property,
plant and equipment (405) (297) (813)
------------- ------------- -----------
Net cash from investing
activities (238) (68) (458)
------------- ------------- -----------
Cash flows from financing
activities
Repayment of borrowings (451) (423) (848)
Payment of finance lease
liabilities (118) (99) (197)
Equity dividends paid (353) (265) (265)
Net cash from financing
activities (922) (787) (1,310)
------------- ------------- -----------
Net increase in cash
and cash equivalents 124 401 1,396
Cash and cash equivalents
at start of period 1,898 502 502
Cash and cash equivalents
at end of period 2,022 903 1,898
============= ============= ===========
Notes to the Financial Statements
1. Basis of preparation
The consolidated interim financial information has been prepared
in accordance with the accounting policies that are expected to be
adopted in the Group's full financial statements for the year
ending 31 March 2017 which are not expected to be significantly
different to those set out in Notes 2 and 3 of the Group's audited
financial statements for the year ended 31 March 2016, other than
as disclosed in Note 2. These are based on the recognition and
measurement principles of IFRS in issue as adopted by the European
Union (EU) and are effective at 31 March 2017 or are expected to be
adopted and effective at 31 March 2017. The financial information
has not been prepared (and is not required to be prepared) in
accordance with IAS 34. The accounting policies have been applied
consistently throughout the Group for the purposes of preparation
of this financial information.
The financial information in this statement relating to the six
months ended 30 September 2016 and the six months ended 30
September 2015 has neither been audited nor reviewed pursuant to
guidance issued by the Auditing Practices Board. The financial
information for the year ended 31 March 2016 does not constitute
the full statutory accounts for that period. The Annual Report and
Financial Statements for the year ended 31 March 2016 have been
filed with the Registrar of Companies. The Independent Auditor's
Report on the Annual Report and Financial Statements for the year
ended 31 March 2016 was unqualified, did not draw attention to any
matters by way of emphasis, and did not contain a statement under
498(2) or 498(3) of the Companies Act 2006.
2. Changes in accounting policies
From 1 April 2016 the following standards, amendments and
interpretations became effective and were adopted by the Group:
-- IAS 1 (Amendment) 'Presentation of Financial Statements' -
Disclosure initiative;
-- IAS 16 (Amendment) 'Property, Plant and Equipment' and IAS 38
(Amendment) 'Intangible Assets' - Clarification of acceptable
methods of depreciation and amortisation;
-- IAS 27 (Amendment) 'Separate Financial Statements' - Equity
method in separate financial statements;
-- IFRS 10 (Amendment) 'Consolidated Financial Statements', IFRS
12 (Amendment) 'Disclosure of Interest in Other Entities' and IAS
28 (Amendment) 'Investments in Associates and Joint Ventures' -
Investment entities: Applying the consolidation exception;
-- IFRS 11 (Amendment) 'Joint Arrangements' - Accounting for
acquisitions of interests in joint operations; and
-- Annual Improvements to IFRS (2012 -2014).
The adoption of the above has not had a significant impact on
the Group's profit for the period or equity.
3. Taxation
The taxation charge for the six months ended 30 September 2016
is calculated by applying the Directors' best estimate of the
annual effective tax rate to the profit for the period.
4. Earnings per share
Basic earnings per share is the profit for the period divided by
the weighted average number of ordinary shares outstanding,
excluding those held in treasury, calculated as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2016 2015 2016
Unaudited Unaudited Audited
Profit for the period
(GBP'000) 915 749 1,454
Weighted average number
of ordinary shares excluding
shares held in treasury
for the proportion of
the year held in treasury
('000) 17,670 17,670 17,670
Basic earnings per share 5.2p 4.2p 8.2p
The calculation of diluted earnings per share is the profit for
the period divided by the weighted average number of ordinary
shares outstanding, after adjustment for the effects of all
potential dilutive ordinary shares, excluding those in treasury,
calculated as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2016 2015 2016
Unaudited Unaudited Audited
Profit for the period
(GBP'000) 915 749 1,454
Weighted average number
of ordinary shares excluding
shares held in treasury
for the proportion of
the year held in treasury
('000) 17,670 17,670 17,670
Effect of potential
dilutive ordinary shares
('000) 191 225 211
Diluted weighted average
number of ordinary shares
excluding shares held
in treasury for the
proportion of the year
held in treasury ('000) 17,861 17,895 17,881
============= ============= ===========
Diluted earnings per
share 5.1p 4.2p 8.1p
5. Principal risks and uncertainties
The directors consider that the principal risks and
uncertainties which could have a material impact on the Group's
performance in the remaining six months of the financial year
remain the same as those stated on pages 7 to 9, and 52 to 56 of
our Annual Report and Financial Statements for the year ended 31
March 2016, which are available on our website,
www.northernbearplc.com.
6. Half year report
The condensed financial statements were approved by the Board of
Directors on 8 November 2016 and are available on the Company's
website, www.northernbearplc.com. Copies will be sent to
shareholders and are available on application to the Company's
registered office.
For and on behalf of the Board of Directors
Thomas Hayes
Finance Director
8 November 2016
-ENDS-
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 ("MAR").
This information is provided by RNS
The company news service from the London Stock Exchange
END
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