TIDMNAR
RNS Number : 3143B
Northamber PLC
20 September 2018
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
20 September 2018
Northamber PLC
("Northamber" or the "Company")
Preliminary Results for the year ended 30 June 2018
CHAIRMAN'S REPORT
Results
After an overly prolonged disappointing period of change, it is
some comfort to report that the loss before tax for the year has
been reduced by 51% to GBP489,000 by comparison with last year's
loss of GBP999,000.
The changes of focus and direction I have reported over recent
years have resulted in improved margins, albeit blunted by the high
costs of staff recruitment into those areas of skills needed to
develop the better quality opportunities, but we expect to see the
benefit of this investment in future years.
At the half year, I reported on the increase in turnover for
that period compared with the previous and comparable period,
however, our strategy only allowed some of the improvements in
achieved gross turnover to be continued into the second half. We
have continued our long standing policy of exiting empty revenue
offered by lower margin, long standing, commoditised product
groups. Margin erosion in this area is illustrated by a global and
leading U.S owned competitor, which has just reported that their
own global quarterly net margins have declined by 0.67% and with
Europe being their most competitive region.
Those areas where we did achieve increases in turnover in the
second half by comparison with the first half, were within the
newer higher yielding product groups, and these will continue to be
our principal focus.
As a consequence, turnover for the year at GBP58.1 million was
only 1.5% higher than the GBP57.3 million reported a year ago. More
importantly, the Gross Profit margin increased from 7.7% for the
year 2016/7 to 7.8% for the year 2017/8.
There were further savings in the overheads, both in
Distribution and in Administration in the second half compared with
the first half, so that for the year the total overheads were
reduced by GBP317,000 (5.8%). For the year the resulting loss from
operations was reduced from GBP1.05 million to GBP0.58 million.
Investment income increased from GBP52,000 to GBP90,000 so that
the pre tax loss for the year was GBP510,000 less at GBP489,000
compared with GBP999,000 last year.
Financial Position
Despite the margin pressures resulting from long standing
vendors transferring costs to their distribution business partners,
we have always been proud of the strength of our financial position
as reflected in the Balance Sheet.
Despite the all too frequent vagaries and vicissitudes of the
U.K.'s general economic conditions, and those particularly
affecting our section of the industry, we have through constant
vigilance and careful monitoring managed to retain our debt free
cash resources at around the GBP5 million level similar to the end
of the previous year.
In doing so we have reduced the working capital used within the
business by around GBP400,000 compared with last year. This was
achieved mainly by reducing each of the levels of inventory and
debtors and retaining a healthy Net Current Assets ratio of 2.4
compared with 2.2 for the previous year.
At end June 2018 the Net Assets per share were 62.2p (2017:
64.1p), based on the Balance Sheet values including our two
unencumbered freehold properties. We therefore maintained a
combined healthy tangible asset position and liquidity position
which gives us confidence for the future.
Dividend
Based on the continuing strength of the group's debt free
tangible asset base, the board is proposing to pay an unchanged
final dividend of 0.1p per share, at a total cost of GBP28,159
which will be paid on 18 January 2019.
Staff
Due to the changes in the profile of our offered product range,
we have regrettably lost a few of our staff during the year. This
is never a pleasant situation either for those affected or for
those who remain, I am therefore very grateful for the efforts and
dedication of all members of staff throughout the year.
Outlook
At the half way point in the year, and before the overly
protracted Brexit confusion, with a single EU negotiator able to
enjoy the mob confusion offered by our own side, I was able to be
more optimistic about the near term than currently possible.
In those areas where we have strength and which in the last
couple of years have shown growth and margin improvement, we should
continue to do well. However there are areas where it is extremely
difficult to make any assessment on the future direction, without
wishing to become political, the economic and social uncertainties
which abound all around us do not in my opinion augur well for
us.
On that basis I am unable to make any realistic assessment of
the next year or so. We shall, as we always have, work as hard as
possible to maximise our opportunities and deliver the best results
that we can for our shareholders.
D.M.Phillips
Chairman
20 September 2018
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 Boot
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2018
2018 2017
Total Total
GBP'000 GBP'000
Revenue 58,136 57,288
Cost of sales (53,589) (52,896)
Gross Profit 4,547 4,392
Distribution costs (2,850) (3,042)
Administrative costs (2,276) (2,401)
Loss from operations (579) (1,051)
Investment revenue 90 52
Loss before tax (489) (999)
Tax (charge) - -
Loss for the year and total comprehensive
loss (489) (999)
============ ============
Basic and diluted loss per ordinary
share (1.74)p (3.55)p
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2018
2018 2017
GBP'000 GBP'000
Non current assets
Property, plant and equipment 7,894 8,025
Current assets
Inventories 3,378 4,176
Trade and other receivables 8,145 9,052
Cash and cash equivalents 5,067 4,972
16,590 18,200
------------ -----------
Total assets 24,484 26,225
============ ===========
Current liabilities
Trade and other payables (6,964) (8,160)
(6,964) (8,160)
Total liabilities (6,964) (8,160)
------------ -----------
Net assets 17,520 18,065
============ ===========
Equity
Share capital 281 281
Share premium account 5,734 5,734
Capital redemption reserve 1,505 1,505
Retained earnings 10,000 10,545
------------ -----------
Equity shareholders' funds 17,520 18,065
============ ===========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June
2018
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 2016 281 5,734 1,505 11,600 19,120
Dividends - - - (56) (56)
Transactions with owners - - - (56) (56)
Loss and total comprehensive
loss for the year - - - (999) (999)
Balance at 30 June 2017 281 5,734 1,505 10,545 18,065
Dividends - - - (56) (56)
Transactions with owners - - - (56) (56)
Loss and total comprehensive
loss for the year - - - (489) (489)
Balance at 30 June 2018 281 5,734 1,505 10,000 17,520
========= ========= ============ ========== ========
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2018
2018 2017
GBP'000 GBP'000
Cash from operating activities
Operating (loss) from continuing operations (579) (1,051)
Depreciation of property, plant and equipment 188 166
(Profit) on disposal of property, plant
and equipment - (4)
-------------- --------------
Operating (loss) before changes in working
capital (391) (889)
Decrease)/(increase) in inventories 798 830
Decrease/(increase) in trade
and other receivables 907 (593)
(Decrease)/increase in trade
and other payables (1,196) 355
Cash generated from operations 118 (297)
Income taxes paid - -
Net cash from operating activities 118 (297)
-------------- --------------
Cash flows from investing activities
Interest received 90 52
Purchase of property, plant and
equipment (57) (197)
Proceeds from disposal of property,
plant and equipment - 4
Net cash from investing activities 33 (141)
Cash flows from financing activities
Dividends paid to equity shareholders (56) (56)
Net cash used in financing activities (56) (56)
-------------- --------------
Net increase in cash and cash
equivalents 95 (494)
Cash and cash equivalents at
beginning of year 4,972 5,466
Cash and cash equivalents at
end of year 5,067 4,972
-------------- --------------
Notes
1. Financial information
The results of the year ended 30 June 2018 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 2018. 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 2018 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 2017 or 30
June 2018, but is derived from those accounts. The statutory
accounts for the year ended 30 June 2017 have been delivered to the
Registrar of Companies and those for 2018 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 2017
Total Segment revenue 56,996 292 57,288
Year to 30 June 2018
Total Segment revenue 57,661 475 58,136
One customer accounted for more than 10% of the group's revenue
for the year, being GBP7.6m (2017:GBP7.4m).
3. Loss per ordinary share
The calculation of the basic and diluted earnings per share is
based on the following data:
2018 2017
GBP'000 GBP'000
(Loss) for the year attributable
to equity holders of the parent company (489) (999)
=========== ===========
2018 2017
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
2019 to those members on the register at close of business on 7
December 2018.
5. Notice of meeting
The annual report accounts for the year ended 30 June 2018 will
be posted to shareholders in due course and the Annual General
Meeting will be held on 14 December 2018.
The Company's registered office is Namber House, 23 Davis Road,
Chessington, Surrey, KT9 1HS.
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END
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