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Yesterday’s AGM was very interesting. The Board were very welcoming to the five shareholders who made the effort.
There is a lot more value in the property portfolio than shown in the balance sheet.
And there is a reasonably good chance that both the warehouse and the offices will be sold with the company piling up cash. This will add to the £5.4m already there (no debt, no pension deficit).
Market capitalisation is 37p x 28.1m shares = £10.4m
The warehouse is situated on an estate near to Tesco and M&S. The directors of Northamber are actively considering the possibility of sale (nothing definite) at a sum much more than the £6.7m Northamber paid. I’m guessing here (no inside knowledge), but given its location £10m or so might be possible.
They are also considering the sale of the office in Chessington, which already has planning permission for conversion to 28 flats. My guess here is around £2.5m to £3m could be wrung out of a property developer.
So, if all that comes to pass the company could have £18m of cash with a market capitalisation of £10.4m. Interesting.
On top of that the operating business has inventory of £4.5m and receivables of £10.1m offset by payables (the only liability) of £7.8m. Perhaps £5m or so could be extracted from these assets?
Also, there were some indications that the company has in recent months managed to occasionally go into the black. But there is a problem.
The BoD made it very plain in a long discussion that they are minded to reinvest the money received in the operating business – yes, the same operating business that lost a total of £3m over the last 5 years.
However, they do offer a variation on the theme. They are trying to eliminate “empty revenues” and concentrate on the strategy of Value-added narrow lining (see my earlier Newsletters……..
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