Northamber Regulatory News (NAR)

5 Oct 2007 07:00

Northamber PLC05 October 2007 Northamber plc Preliminary Results for the year ended 30th June 2007 CHAIRMAN'S STATEMENT Results Despite increased unit volumes, sales decreased to £182.2 million (2006: £204.4million) and were accompanied by a 0.5 per cent. reduction in gross margins.These were in part the result of the slow acceptance of Windows Vista and aweaker US Dollar driving further price deflation in key volume product areas.The increase in Pre-tax profits to £0.59 million (2006: £0.43million), waslargely attributable to a £0.27 million increase in investment revenue.Profitable trading conditions continued to be challenging. Due to the release of a deferred tax provision of £0.70 million, as detailedbelow, profit after tax for the year increased to £1.102 million (2006: £0.231million). Earnings per share showed an increase to 3.62p (2006: 0.75p). Working capital controls improved net cash over the year by some £6.56m to£14.8m at the year end (2006: £8.3m). Similarly the net asset value alsoincreased from last year's £30.08 million to £30.5 million. These improvementsare also partly the effect of the sale in September 2006 of an investmentproperty and release of the deferred tax position. Trading conditions required a necessary further strengthening of our monitoringof customer and stock profiles to avoid either excessive or unrewarding creditor stock risks. Increasing levels of sector bad debt show our own controls tohave served us well with a bad debts charge of less than 0.07 per cent. of salesfor the year (2006: 0.10 per cent.). Longer lead times with so many vendors both sourcing and shipping from Chinareduced stock turns to 14.5 from last year's 21 times and affected optimisedreturns. This translating into a contributory cause for the 0.5% reduction ingross margins The Balance Sheet The grant of a 175 year lease in the enterprise zone investment property inArbroath during the year enabled the release of the related deferred taxprovision of £0.70m. This release has been made through the tax charge of theIncome Statement and has enhanced the earnings per share by some 2.31p. Withoutthat release the earnings per share would have been 1.31p per share which showsan increase over the previous year's earnings per share of 0.75p The Group retains the freehold interest which has a negligible value and acontingent liability of £0.70m exists in respect of tax clawback and this isdisclosed in the accounts. The Directors believe that any realisation of thisliability has an extremely low level of probability. The maintenance of a healthy balance sheet is one of our continuing objectives.This we achieved with a working capital ratio in excess of 2. The cash balanceincreased over the year by some £6.5m to £14.8m at the year end. With this levelof financial support we are well able to deal with any foreseeable disturbancesin our market place. The release of the deferred tax provision in respect of the Arbroath propertycontributed towards the increase in the net assets of the group to in excess of£30.5m , equivalent to 100.2p per share (2006: 98.7p). Dividend Whilst profits have been constrained by adverse trading conditions over the past2 years, the balance sheet continues to be exceptionally sound, with a verystrong cash position. These results for the year as a whole enable your Board to feel it appropriateto recommend a final dividend of 1.0p per share, making a total of 2.2p for theyear (2006: 2.1p). If approved at the AGM, the proposed final dividend will be payable on 10January 2008 to members on the Register as at 7 December 2007. Outlook On a very slightly more positive note, trading in the early months of thecurrent period showed revenue improvements when compared with the previous year.With a likely tightening in the availability of credit, it remains to be seen ifthis improvement can be sustained. Subject to the state of the economy as a whole and our own performance withinour sector, your Board is cautiously confident in the outcome for the newtrading year. D.M. PhillipsChairman5 October 2007 CONSOLIDATED INCOME STATEMENTfor the year ended 30 June 2007 Notes 2007 2006 Total Total £'000 £'000Continuing operationsRevenue 182,191 204,408Cost of sales (170,174) (189,912) ------------- -------------Gross profit 12,017 14,496 Distribution costs (6,835) (8,690)Administrative expenses (5,140) (5,679) ------------- -------------Profit from operations 42 127 Investment revenue 608 337Finance costs (58) (30) ------------- -------------Profit before tax 592 434 Tax 510 (203) ------------- ------------- Profit for the year from continuing operations 1,102 231 ============= ============= Earnings per ordinary share 2 3.62p 0.75p Diluted earnings per share 2 3.62p 0.75p CONSOLIDATED BALANCE SHEETat 30 June 2007 30 June 2007 30 June 2006 £'000 £'000 Non current assetsProperty, plant and equipment 3,562 3,911 ----------- ---------- Current assets Trading investments - 1Inventories 11,728 9,052Trade and other receivables 26,324 27,644Cash and cash equivalents 14,860 9,821 ----------- ---------- 52,912 46,518Assets held for sale - 2,483 ----------- ----------Total assets 56,474 52,912 ----------- ---------- Current liabilities Trade and other payables (25,734) (20,426)Bank overdraft - (1,522)Tax liabilities (167) (126) ----------- ---------- (25,901) (22,074) ----------- ---------- Non current liabilities Deferred tax liabilities (64) (760) ----------- ---------- Total liabilities (25,965) (22,834) ----------- ----------Net assets 30,509 30,078 =========== ========== Equity Share capital 1,523 1,523Share premium account 5,734 5,734Capital redemption reserve 264 264Retained earnings 22,988 22,557 ----------- ----------Equity shareholders' funds 30,509 30,078 =========== ========== CONSOLIDATED CASH FLOW STATEMENTYear ended 30 June 2007 2007 2006 £'000 £'000 Cash inflow from continuing operating activitiesOperating profit from continuing operations 42 127Depreciation of property, plant and equipment 456 564Loss/(profit) on disposal of property, plant and equipment 18 (7)Loss/(profit) on sale of investment property 48 - ----------- ----------- 564 684(Increase)/decrease in inventories (2,676) 4,838Decrease/(increase) in trade and other receivables 1,320 3,576Increase/(decrease) in trade and other payables 5,308 (8,109) ----------- -----------Cash generated from operations 4,516 989 Interest paid (58) (30)Income taxes paid (145) (485) ----------- -----------Net cash from operating activities 4,313 474 ----------- -----------Cash flows from investing activitiesInterest received 533 139Proceeds from disposal of property, plant and equipment 30 17Proceeds from disposal of investment property 2,435 -Purchase of property, plant and equipment (154) (266)Income from investments 75 198 ----------- -----------Net cash from investing activities 2,919 88 ----------- -----------Cash flows from financing activitiesPurchase of own shares for cancellation - (421)Dividends paid to equity shareholders (671) (1,576) ----------- -----------Net cash used in financing activities (671) (1,997) ----------- -----------Net increase/(decrease) in cash and cash equivalents 6,561 (1,435)Cash and cash equivalents at beginning of year 8,299 9,734 ----------- -----------Cash and cash equivalents at end of year 14,860 8,299 ----------- -----------Cash and cash equivalents for the purpose of thisstatement comprise:Cash and cash equivalents 14,860 9,821Bank overdrafts - (1,522) ----------- ----------- 14,860 8,299 ----------- ----------- STATEMENT OF CHANGES IN EQUITYConsolidated statement of changes in equityAt 30 June 2007 Share Capital Share premium Capital Retained Total account redemption earnings equity reserve £'000 £'000 £'000 £'000 £'000 Balance at 1 July 2005 1,551 5,734 236 24,323 31,844 Profit for the year - - - 231 231 -------------- -------------- -------------- -------------- --------------Total recognised incomefor the year - - 231 231 Purchase of own shares (28) - 28 (421) (421) Dividends - - - (1,576) (1,576) -------------- -------------- -------------- -------------- --------------Balance at 30 June 2006 1,523 5,734 264 22,557 30,078 Balance at 1 July 2006 1,523 5,734 264 22,557 30,078 Profit for the year - - - 1,102 1,102 -------------- -------------- -------------- -------------- --------------Total recognised incomefor the year - - - 1,102 1,102 Dividends - - - (671) (671) -------------- -------------- -------------- -------------- --------------Balance at 30 June 2007 1,523 5,734 264 22,988 30,509 -------------- -------------- -------------- ------------- -------------- NOTES 1. Financial information The financial information set out above does not constitute the Group'sstatutory accounts for the years ended 30 June 2006 or 30 June 2007, but it isderived from those accounts. The Statutory Accounts for the year ended 30 June2006 have been delivered to the Registrar of Companies and those for 2007 willbe delivered following the Group's Annual General Meeting. The Auditors havereported on these accounts, their reports were unqualified and did not containstatements under S237(2) or (3) of the Companies Act 1985. The informationcontained in this statement does not constitute statutory accounts within themeaning of section 240 of the Companies Act 1985. 2. Earnings per ordinary share The calculation of basic and diluted earnings per share is based on thefollowing data. 2007 2006 £'000 £'000Earnings for the purpose of basic earnings per sharebeing net profit attributable to equity holders of theparent company 1,102 231Effect of dilutive ordinary shares - - --------------- ---------------Earnings for the purpose of diluted earnings per share 1,102 231 --------------- --------------- 2007 2006Number of shares Number Number Weighted average number of ordinary shares for the 30,458,100 30,849,032purpose of basic earnings per shareEffect of dilutive potential ordinary shares Share options - - --------------- -------------- 30,458,100 30,849,032 --------------- -------------- Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary shares in issueduring the year. For diluted earnings per share the weighted average number ofshares is adjusted on the assumption that all potential conversion of shares hadbeen so converted. 3. Dividends An interim dividend has been paid during the year of 1.2p per share. A finaldividend of 1.0p will be paid on 10 January 2008 to those members on theregister at close of business on 7 December 2007. The ex-dividend date for theshares will be 5 December 2007. Total number of shares in issue 30,458,100 Date of AGM 16 November 2007 Ex Dividend Date 5 December 2007 Dividend Date 10 January 2008 The Company's registered office is 1-3 Union Street, Kingston-upon-Thames,Surrey KT1 1RP. This information is provided by RNS The company news service from the London Stock Exchange