Northamber Regulatory News (NAR)

Northamber plc

Preliminary Results for the year ended 30 June 2010

Chairman's Statement

Results

I am pleased to announce improved profitability for the year as a whole and importantly the return to profit at the operating level.

In both my interim and third quarter performance reports, I was unable to be optimistic on the outlook for our sector. Whilst underlying conditions are largely unchanged, I can report that the efficiency improvements to assist profitability came through in our final quarter.

Profit before tax at £258,000 was significantly ahead of last year's £47,000. Earnings per share were 0.58p compared with the 0.18p per share last year.

Sales revenues at £128.48 million were some £11 million (7.8%) lower and were again constrained by both demand levels and sector price deflation.

With our trading model dependent on high revenues and low margins, total bad debt of only £38,000 (0.03%) demonstrates our cautious, trade credit strategy within the varying levels of ongoing uncertainty. Credit risk is a significant factor and one that has dominated our sales strategies over the recent years.

One strong benefit of such an experienced board, has been the management of what was seen as a predictable and enhanced re-run of previous credit cycles. Our first objective has been to protect our accumulated core financial strengths. The resultant trading uncertainties then drove focus on improving our efficiencies.

For the year, operating costs were reduced by £1.26m (13%) compared with the previous year.

Investment income, being interest earned on cash deposits, at £142,000 was less than half of that earned in the previous year (2009 - £367,000). As reported last year, once again the result of still lower rates of interest, rather than any reduction in the level of cash balances retained by the company. (£14.0 million compared with £14.1 million 30th June 2009)

Balance sheet

At our 30th June 2010 year end, the net assets per share were 88.5p compared with 89.4p at the end of the previous year. Surprisingly, net assets per share, and even net cash, continue to exceed by quite some margin, the quoted price of the company's shares and resultant market capitalisation

During the year we had an increase in free cash of £395,000. After paying dividends of £464,000 and the £42,000 spent repurchasing 95,000 shares for cancellation leaving 28.9 million shares in issue, the cash balance remaining at the year end was £14.0m compared with £14.1m at the end of the previous year.

From our banking and credit facility experiences during the troubled years of the early 1990's, our priority has been the defence and maintenance of a strong, independent, debt free and liquid financial position. This has been reflected in both the working capital ratios and cash balances held by the company.

Our working capital ratio has consistently been in excess of the benchmark of 2.0 and strong cash balances have also been a consistent feature of our assets.

We were able to reduce our debtor levels and debtor days whilst retaining our levels of creditor payments and creditor days within terms.  Although some increase in the levels of stock this year was necessary to meet demand and a wider range of products

Staff

The unavoidable needs for further improvements in efficiency, have fallen heavily on our staff and we are indebted to them all for their continued contribution.

Dividend

After consideration of the results for the year, the strength of our debt free balance sheet and cash position, your board is proposing a final dividend of 1.4p per share. Together with the 0.6p interim dividend, totals 2.0p per share compared with 1.6p per share last year.

Outlook

Whilst difficult trading conditions still prevail, we are probably now better aware of the factual obstacles we need to overcome or avoid

Early indications are that the improved trends seen in the last quarter of 2009/10 may be continuing into the current year. However, it is too early yet to say with any degree of certainty whether this is a mere blip or an underlying trend.

We do, as always, seek to optimise whatever opportunities we can create. As we move forward whilst ensuring that we continue with our strong financial position, we look forward with a degree of optimistic caution to the year ahead.

D. M. Phillips

Chairman

7 September 2010

For further information, contact:

Northamber Plc David Phillips 020 8296 7000

Charles Stanley Securities Russell Cook/Carl Holmes 020 7149 6000

STATEMENTS OF CHANGES IN EQUITY

Consolidated statement of changes in equity

At 30 June 2010

Notes:

1. Financial information

The financial information set out above does not constitute the group's statutory accounts for the years ended 30 June 2009 or 30 June 2010, but is derived from those accounts. The statutory accounts for the year ended 30 June 2009 have been delivered to the Registrar of Companies and those for 2010 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. Adoption of new and revised standards

These financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 30 June 2009 except for the adoption of IAS 1 Presentation of Financial Statements (Revised 2007) and IFRS 8. The adoption of IAS 1 (Revised 2007) and IFRS 8 does not affect the financial position or profits of the company, but gives rise to additional disclosures. The measurement and recognition of the company's assets, liabilities, income and expenses is unchanged. A separate 'Statement of changes in equity' is now presented.

3. Segmental Reporting

Management has determined that there is only one operating segment of the company 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 company as a whole. All decisions on the allocation of resources impacts on all aspects of the company.

Although the sales of the company 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. The sales outside the UK are conducted on matching purchases of products to the sales of those products and on a cash basis. There are therefore no non current assets outside the UK. Information presented to the Chief Operating Decision Maker is the same as is reported in these financial statements.

Other

UK European Other Total

Year to 30 June 2010 £'000 £'000 £'000 £'000

REVENUE

Total Segment revenue 105,633 20,943 1,905 128,481

Contribution from segments 5,368 377 44 5,789

Pre tax profits 258

NET ASSETS

Wholly related to UK operations 25,614 - - 25,614

Year to 30 June 2009

REVENUE 124,584 14,691 - 139,275

Total Segment revenue

Contribution from segments 4,138 242 - 4,380

Pre tax profits 47

NET ASSETS

Wholly related to UK operation 25,950 - - 25,950

No one customer accounted for 10% or more of the company's revenue for the year.

4. Earnings per ordinary share

5. Dividends

A final dividend of 1.4p will be paid on 10 January 2011 to those members on the register at close of business on 3 December 2010.

6. The annual report accounts for the year ended 30 June 2010 will be posted to shareholders in due course and the Annual General Meeting will be held on 19 November 2010. The annual report and accounts will also be available to download from the company's website at www.northamber.com.

The Company's registered office is Namber House, 23 Davis Road, Chessington, Surrey KT9 1HS.