Northamber Regulatory News (NAR)

24 Sep 2008 07:00

Northamber plc

Preliminary Results for the year ended 30 June 2008

Chairman's Statement

Results

Revenues for the year were £179.7 million against £182.2 million for the prior year. After having shown improvement over the first three quarters, the downturn in the general economic climate during our fourth quarter, resulted in a comparative 1.4% fall in revenue against the prior year.

Pre-tax profits of £627,000 (2007: £592,000) increased by 5.9% through maintenance of consistent gross profit margins and a decrease in overheads including an 8% reduction in logistics costs, despite the 1.4% decrease in revenues.

Administrative costs rose marginally due to increased insurance costs to provide for customer defaults in the deteriorating economic climate.

In the current year there was a total tax charge of £222,000 compared with a total tax credit in the previous year of £510,000. The prior year tax credit arose from a cancellation of the deferred tax liability in respect of  the possible claw-back of Enterprise Zone Allowances following the sale in 2006 of a lesser, long leasehold interest in the Arbroath investment property. Whilst there remains a contingent exposure to claw-backs for a further nine years, the likelihood of this is considered to be remote and so no amounts are provided in this respect in the financial statements.

Earnings per share for 2008 were 1.36p compared with 3.62p for the previous year. The 3.62p a year ago would have only been 1.31p if adjusted for the deferred tax credit referred to above.

My reports usually mention the control of working capital. Working capital ratios can and do vary within fairly narrow margins from year to year. For the year just ended those key ratios all showed small but favourable movements. Movements in working capital have fluctuated in accordance with normal trading operations.

 Stock turns  increased from an average of 14.5 to 16.5 times. Debtor days were decreased from 44 to 39 days and additional cash discounts drove creditor days from 41 to 37 days.

The Balance Sheet

During the year, the company repurchased and cancelled 1,075,000 of its ordinary shares of 5p each at a cost of £702,000.

Shareholders will be aware that following the EGM on 3rd April, we undertook a capital restructure and effectively returned 10p per share. This was enabled by the sale of a minority interest in the long leasehold interest in the Arbroath investment property. This also reflected the board's previously advised intention to consider how best to return surplus cash to shareholders. 

Following these transactions, which totalled £3.6 million, at year end the group had £13.3 million in cash, compared with the £14.9 million in June 2007 demonstrating the cash generation capability of the business.

The reduction in Net Asset Value from £30.5 million to £26.48 million was after the re-purchase of shares and the dividends during the year of £646,000. The total cost of these balance sheet movements in the year was £4.28million. 

The resultant 90.1p net assets per share are therefore just over 10p per share lower than the previous year's 100.2p.

Staff

As will be understood, current circumstances have been and continue to be difficult. The results we have achieved are the result of the focus of all the management and staff of the group, and we can all be very appreciative of their efforts.

Dividend

In view of the results for the year, combined with the strength of the balance sheet, your board considers it appropriate to recommend an unchanged final dividend of 1.0p per ordinary share which together with the interim dividend of 1.2p,  makes a total for the year of 2.2p (2007: 2.2p).

If approved at the AGM, the proposed final dividend will be payable on 9 January 2009 to members on the register at 5 December 2008.

Outlook

The expressions of quiet confidence in my statements of prior years, within the present economic uncertainty, are not easily given. Within an area of largely discretionary expenditure and a lack lustre start to the year, it is simply not possible to provide any guidance, beyond our determination to continue to manage the balance sheet tightly. 

D.M.Phillips

Chairman 

24 September 2008

NOTES

Financial information

The financial information set out above does not constitute the group's statutory accounts for the years ended 30 June 2007 or 30 June 2008, but is derived from those accounts. The statutory accounts for the year ended 30 June 2007 have been delivered to the Registrar of Companies and those for 2008 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 S237(2) or (3) of the Companies Act 1985. The information contained in this statement does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985.

2. Earnings per share

3. Dividends

An interim dividend has been paid in the year of 1.2p per share. A final dividend of 1.0p will be paid on 9 January 2009 to those members on the register at close of business on 5 December 2008.