REG - Northamber PLC - Final Results
18/11/2022 07:00
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RNS Number : 8343G Northamber PLC 18 November 2022
18 November 2022
Northamber PLC
(the "Company" or the "Group")
Preliminary Results for the year ended 30 June 2022
Chairman's Statement
Results
We are pleased to share that we have continued to grow revenue year on year by
10.4% from £60.01m to £66.26m whilst maintaining gross margins at 12.8%
(13.0% prior year) despite challenging and very dynamic market conditions.
This served to generate a continued increase in gross margins of £0.66m year
on year to £8.47m and reflected our continued focus on evolving our product
mix towards higher margin, more technical products through Northamber and AVM.
The trend of this growth can be better seen when comparing results to even the
year prior to that (June 2020) which had revenue of £52.8m and Gross Margins
were £5.48m, albeit AVM was acquired early in the second half of that year.
Despite pleasing sales and gross margin growth for the year, performance in
some of our focus areas remained impacted by the gradual recovery from Covid
with continuing uncertainty for resuming events and large venue installations,
as well as market disruptions from rapid changes in Sterling, particularly
against the US Dollar. We remain optimistic and confident in these focus areas
and believe that we can deliver significant long term value and growth in
these segments for our partners and shareholders.
Distribution costs increased significantly from £4.59m to £5.56m as we
continued to invest in developing the team for our significant growth
ambitions. We were also affected by significant increases year on year on
carriage costs (our biggest non-payroll cost).
The fall in the value of Sterling translated into a swing from a foreign
exchange profit of £223k in 2021 to a loss of £164k in 2022, which was the
main driver in increased administration costs from £2.84m to £3.36m.
It is frustrating that factors over which we have no control have led to
increases in distribution and administration costs, which have outweighed the
margin growth. The impact of carriage costs and a weaker Sterling, totalling
approximately £0.30m, resulted in a reduction of EBITDA year on year to a
loss of £75k and an operating loss for the year of £0.45m versus a profit of
£0.38m last year.
We feel strongly, however, that to drive significant long term profitable
growth it is important that we continue to invest for the future, albeit these
investments are measured against the ability to generate value.
Financial position
We made a deliberate decision to profitably support our partners by
maintaining sufficient stock in country during the uncertainty of chip
shortages together with continued impact on supply chains of Brexit, the war
in Ukraine and COVID. As a consequence, stock levels increased from £8.5
million in 2021 to £10.6 million at 30 June 2022. This investment in
inventory meant that cash reserves fell from £7.45m at 30 June 2021 to
£4.70m. With Fixed Assets at book value at £6.92m, including three
unencumbered freehold properties, the Group's overall financial position is
very sound. Net Assets at 89.8p per share are considerably in excess of the
average price of the ordinary shares throughout the period.
Since the end of the financial year, the Board took the decision to relocate
AVM into existing premises and to sell the freehold office where they are
based. The Company has exchanged contracts for the sale of the office and
completion is scheduled to occur on 28 November 2022. The consideration will
be £1.48m, before costs, payable in cash, against a net book value of
£1.43m. The net proceeds will be added to our cash reserves.
Board changes
In July 2022, Peter Dosanjh joined the Board as a director. Peter has over 25
years' experience within B2B AV and IT hardware resellers alongside AV
distribution.
Geoff Walters is to stand down as a non-executive director with effect from 31
December 2022 and will not stand for re-election at this year's AGM. Geoff
joined the Board in February 2016 and the Board is grateful for his
contribution during this period and we wish him well for the future.
Dividend
As in previous years, your Board has had regard to the strength of our debt
free, tangible asset strong balance sheet and is proposing the interim
dividend be 0.3p, at a total cost of £81,695. The dividend will be paid on 18
January 2023 to shareholders on the register as at 16 December 2022.
Staff
Our staff remain a key asset for the business and an area we continue to
invest in. The team has continued to work hard to support our partners and
each other. Our plans remain to continue to invest in our evolving business
model by continuing to invest in building out the best team in the market to
achieve our business evolution.
Outlook
In keeping with prior outlooks that we shared, we remain cautiously optimistic
that the investments we have made in supporting our partners will allow us to
continue to drive growth of strategic business units. We have yet to fully
benefit from these investments, given the ongoing impact of COVID, forex
movements and supply chain issues which together with wider economic
uncertainty due to rising interest rates, inflation and subsequent cost of
living impacts, necessarily mean we must remain cautious about the near term.
We do feel strongly, however, that our continued focus on strategic higher
margin value categories provides a solid road map for the future with
profitable growth opportunities and the ability to unlock long term value for
shareholders. The strength of our balance sheet allows us to continue to do
what is best for the business strategically and we continue to review organic
and non-organic opportunities for growth which meet our strict criteria and
add value for our shareholders.
C.M. Thompson
Chairman
18 November 2022
Contacts:
Northamber PLC Tel: +44 (0) 208 744 8200 investor_relations@northamber.com (mailto:investor_relations@northamber.com)
Colin Thompson, Chairman
Singer Capital Markets (Nominated Adviser and Sole Broker) Tel: +44 (0) 207 496 3000
Philip Davies
Alex Bond
investor_relations@northamber.com (mailto:investor_relations@northamber.com)
Singer Capital Markets (Nominated Adviser and Sole Broker)
Tel: +44 (0) 207 496 3000
Philip Davies
Alex Bond
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2022
2022 2021
£'000 £'000
Non current assets
Property, plant and equipment 6,919 7,079
Goodwill and intangible assets 1,309 1,365
8,228 8,444
Current assets
Inventories 10,649 8,468
Trade and other receivables 11,245 10,753
Cash and cash equivalents 4,696 7,449
26,590 26,670
Total assets 34,818 35,114
Current liabilities
Trade and other payables (10,329) (9,866)
Corporation tax payable (38) (159)
Total liabilities (10,367) (10,025)
Net assets 24,451 25,089
Equity
Share capital 272 272
Share premium account 5,734 5,734
Capital redemption reserve 1,514 1,514
Retained earnings 16,931 17,569
Equity shareholders' funds attributable to the owners of the parent 24,451 25,089
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 30 June 2022
Share Capital Share Premium Account Capital Redemption Reserve Retained Earnings Total Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 July 2020 272 5,734 1,514 17,395 24,915
Dividends - - - (163) (163)
Transactions with owners - - - (163) (163)
Loss and total comprehensive income for the year - - - 337 337
Balance at 30 June 2021 272 5,734 1,514 17,569 25,089
Dividends - - - (191) (191)
Transactions with owners - - - (191) (191)
Profit and total comprehensive income for the year - - - (447) (447)
Balance at 30 June 2022 272 5,734 1,514 16,931 24,451
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2022
2022 2021
£'000 £'000
Cash flows from operating activities
Operating profit from continuing operations (452) 377
Depreciation of property, plant and equipment 336 350
Amortisation of intangible assets 56 56
Profit on disposal of property, plant and equipment (15) (13)
Operating Profit/ (loss) before changes in working capital (75) 770
(Increase) in inventories (2,181) (2,520)
(Increase)/decrease in trade and other receivables (492) (3,003)
Increase/(decrease) in trade and other payables 463 2,923
Cash used in operations (2,285) (1,830)
Income taxes paid (120) (1,302)
Net cash used in operating activities (2,405) (3,132)
Cash flows from investing activities
Interest received 5 8
Proceeds from disposal of property 60 17
Purchase of property, plant and equipment (222) (249)
Purchase of AVM Limited - -
Net cash (used in)/generated from investing activities (157) (224)
Cash flows from financing activities
Dividends paid to equity shareholders (191) (163)
Interest paid - -
Purchase of cancellation of shares - -
Net cash used in financing activities (191) (163)
Net (decrease)/increase in cash and cash equivalents (2,753) (3,519)
Cash and cash equivalents at beginning of year 10,968
7,449
Cash and cash equivalents at end of year 4,696 7,449
Notes
1. Financial information
This financial information is consistent with the consolidated financial
statements of the group for the year ended 30 June 2022. The group's
consolidated financial statements have been prepared in accordance with
international accounting standards in conformity with the requirements of the
Companies Act 2006.
The financial information set out above does not constitute the group's
statutory accounts for the years ended 30 June 2021 or 30 June 2022 but is
derived from those accounts. The statutory accounts for the year ended 30 June
2021 have been delivered to the Registrar of Companies and those for 2022 will
be delivered following the group's annual general meeting. The auditor's
report on the 2022 accounts will be unqualified, will not include references
to any matters to which the auditors drew attention by way of emphasis without
qualifying their reports, and will 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. Revenue
Although the sales of the group are predominantly to the UK there are sales to
other countries and the following table sets out the split of the sales for
the year. Revenue is attributed to individual countries based on the location
of the customer. There are no non-current assets outside the UK.
Revenues comprise: 2022 2021
£'000 £'000
Revenue from contracts with
customers - UK 65,602 59,137
-other 658 872
66,260 60,009
No customer accounted for more than 10% of the group's revenue for the year.
3. Profit per ordinary share
The calculation of the basic and diluted earnings per share is based on the
following data:
2022 2021
£'000 £'000
(Loss)/Profit for the year attributable to equity holders of the parent (447) 337
company
2022 2021
Number of shares Number Number
27,231,586 27,231,586
Weighted average number of ordinary shares for the purpose of basic and
diluted earnings per share
4. Dividends
A final dividend of 0.3p per share will be paid on 18 January 2023 to those
members on the register at close of business on 16 December 2022.
5. Notice of meeting
The annual report and accounts for the year ended 30 June 2022 will be posted
to shareholders in due course and the Annual General Meeting will be held on
21 December 2022.
The Company's registered office is Namber House, 23 Davis Road, Chessington,
Surrey, KT9 1HS.
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