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Interim Report

2 Dec 2014 07:00

RNS Number : 5430Y
Northern Bear Plc
02 December 2014
 



 

 

 

 

 

 

 

 

 

 

Northern Bear plc

Interim Report

30 September 2014

 

 

Contents

 

 

Advisors 1

Chairman's statement 2

Consolidated statement of comprehensive income 4

Consolidated statement of changes in equity 5

Consolidated balance sheet 6

Consolidated statement of cash flows 7

Notes 8

Advisors

 

 

Auditor

 

Mazars LLP

Mazars House

Gelderd Road

Gildersome

Leeds

LS27 7JN

Nominated advisor and Broker

 

Strand Hanson Limited

26 Mount Row

London

W1K 3SQ

 

Bankers

 

Yorkshire Bank

20 Merrion Way

Leeds

LS2 8NZ

 

Registered office

 

A1 Grainger

Prestwick Park

Prestwick

Newcastle upon Tyne

NE20 9SJ

 

Legal advisors

 

Mincoffs Solicitors LLP

5 Osborne Terrace

Jesmond

Newcastle upon Tyne

NE2 1SQ

 

 

 

Chairman's statement

 

Introduction

 

I am pleased to report unaudited interim results for the six months to 30 September 2014.

 

The Group has continued to perform well, delivering retained profit of £0.7 million (2013: £0.6 million) and earnings per share of 4.1p (2013: 3.2p) in the period.

 

Trading

 

The Group's revenue increased to £20.1 million (2013: £17.4 million) in the period and its gross profit increased to £4.6 million (2013: £4.2 million). There was growth in revenue at the majority of the Group's businesses with the most marked increases in those in the roofing sector.

 

Operating profit increased to £1.1 million (2013: £0.9 million) and profit before tax to £0.9m (2013: £0.7m).

 

We have continued to see positive movement in the new house build market and strength in the Social Housing sector. During the period, the Group commenced work on a number of significant and high profile projects, including the Tyne Tunnel, roofing works on the Aloft Hotel (as part of the Royal Exchange Building redevelopment in Liverpool), and the redevelopment of Tyneside Cinema in Newcastle City centre.

 

Cash flow

 

Net bank debt at 30 September 2014 was £4.7m (2013: £6.6m).

 

I am pleased to report that the strong trading performance in the period and in the second half of the year ended 31 March 2014 has resulted in a significant reduction in bank debt.

 

Whilst increased profitability should ordinarily result in reduced bank debt, the level of the reduction is testament to the strong management systems which are in place, ensuring that cash generation was maintained during a period in which the Group was experiencing substantial growth.

 

The Group's bank facilities were renewed on 7 April 2014. As part of this process, we successfully negotiated a change in the blend of debt from shorter to longer term borrowings. This will give greater operational flexibility in the future.

 

Dividend

 

As in prior years no interim dividend will be declared and the Group will continue to use trading cash flow to reduce bank debt. Provided that the strong performance continues as expected then the Board intends to continue with its current policy of paying a final dividend.

 

Strategy / Outlook

 

The Board has maintained, as a priority, the use of operating cash flow to reduce the level of bank debt. We will, however, continue to actively monitor opportunities for the use of funds generated, including capital investment, bolt-on acquisitions and capital repurchases.

 

During the period, we started the process of consolidating two of our trading businesses, MGM Limited and Northern Bear Building Services Limited, which operate in similar markets. As part of this process, we have leased new premises in the Team Valley Trading Estate from which both businesses will operate. This will provide operational synergies and overhead savings, whilst maintaining the brands and workforces of both companies.

 

This is part of a medium term objective to plan for the Group's future through both streamlining operations and succession planning which, moving forward, will involve bringing new blood into subsidiary management teams and promotions to the Group Board.

 

Order books across the Group remain strong and we are hopeful of a successful second half of the financial year.

 

New trading division

 

In May 2014, we announced the launch of a new trading division, Vantage Point Media, which provides an innovative new way of conducting detailed aerial surveys of buildings and roofs using state-of-the-art remote controlled hexacopters. This is an excellent example of how we are prepared to adapt new technologies and work together to provide innovative solutions for our clients. This was recognised by Durham University at its recent annual Supplier Recognition Event, where our technological application won the 'Most Innovative Solution or Proposal' category.

 

People

 

The implementation of a more streamlined management reporting structure, including the changes to the Board in February 2014, the direct reporting of subsidiary Managing Directors to the Group Managing Director, and the holding of bi-monthly Managing Director meetings, has resulted in better sharing of knowledge across the Group and closer working relationships between our businesses.

 

As reported in prior years, in an industry which has seen a decreasing number of skilled tradesmen over the past few years, our strategy of employing the majority of our workforce, along with investment in training new operatives, continues to reap dividends. We are able to sustain a loyal and dedicated workforce with the skills required to meet the demands of the modern day construction industry.

 

The quality and experience of our people and the key customer relationships that they maintain remain fundamental to the Group's success and I would again like to thank all of our employees for their contribution to the Group's strong results.

 

 

 

 

 

 

Steve Roberts

Executive Chairman

1 December 2014

 

 

 

Consolidated statement of comprehensive income

for the six month period ended 30 September 2014

 

 

6 months ended

6 months ended

Year ended

30 September 2014

30 September 2013

31 March 2014

Unaudited

Unaudited

Audited

£'000

£'000

£'000

Revenue

20,077

17,383

36,781

Cost of sales

(15,472)

(13,174)

(27,542)

Gross profit

4,605

4,209

9,239

Other operating income

8

9

20

Administrative expenses

Share based payment

(5)

-

(1)

Other administrative expenses

(3,479)

(3,299)

(7,025)

(3,484)

(3,299)

(7,026)

Operating profit

1,129

919

2,233

Finance income

2

-

21

Finance expense

(209)

(191)

(502)

Profit before income tax

922

728

1,752

Income tax expense

(194)

(168)

(417)

Profit for the period

728

560

1,335

Total comprehensive income attributable to equity holders of the parent

728

560

1,335

Earnings per share from continuing operations

Basic earnings per share

4.1p

3.2p

7.6p

Diluted earnings per share

4.1p

3.2p

7.5p

 

 

Consolidated statement of changes in equity

for the six month period ended 30 September 2014

 

 

 

Share capital

Capital redemption reserve

Share premium

Merger reserve

Retained earnings

Total equity

£'000

£'000

£'000

£'000

£'000

£'000

At 1 April 2013

184

6

5,169

10,371

2,604

18,334

Total comprehensive income for the period

Profit for the period

-

-

-

-

560

560

At 30 September 2013

184

6

5,169

10,371

3,164

18,894

At 1 April 2013

184

6

5,169

10,371

2,604

18,334

Total comprehensive income for the year

Profit for the year

-

-

-

-

1,335

1,335

Transactions with owners, recorded directly in equity

Equity settled share-based payment transactions

-

-

-

-

1

1

At 31 March 2014

184

6

5,169

10,371

3,940

19,670

At 1 April 2014

184

6

5,169

10,371

3,940

19,670

Total comprehensive income for the period

Profit for the period

-

-

-

-

728

728

Transactions with owners, recorded directly in equity

Equity settled share-based payment transactions

-

-

-

-

5

5

Equity dividends paid

-

-

-

-

(133)

(133)

At 30 September 2014

184

6

5,169

10,371

4,540

20,270

Consolidated balance sheet

at 30 September 2014

 

30 September 2014

30 September 2013

31 March

2014

Unaudited

Unaudited

Audited

£'000

£'000

£'000

Assets

Property, plant and equipment

2,675

2,464

2,530

Intangible assets

21,354

21,356

21,355

Total non-current assets

24,029

23,820

23,885

Inventories

868

867

831

Trade and other receivables

8,691

8,356

9,151

Prepayments

398

425

169

Deferred consideration receivable

153

180

166

Cash and cash equivalents

779

260

111

Total current assets

10,889

10,088

10,428

Total assets

34,918

33,908

34,313

Equity

Share capital

184

184

184

Capital redemption reserve

6

6

6

Share premium

5,169

5,169

5,169

Merger reserve

10,371

10,371

10,371

Retained earnings

4,540

3,164

3,940

Total equity attributable to equity holders of the Company

20,270

18,894

19,670

Liabilities

Loans and borrowings

4,815

1,402

1,039

Deferred tax liabilities

66

23

66

Total non-current liabilities

4,881

1,425

1,105

Bank overdraft

-

4,931

3,664

Loans and borrowings

979

967

1,169

Trade and other payables

8,218

7,384

8,261

Current tax payable

570

307

444

Total current liabilities

9,767

13,589

13,538

Total liabilities

14,648

15,014

14,643

Total equity and liabilities

34,918

33,908

34,313

Consolidated statement of cash flows

for the six month period ended 30 September 2014

6 months ended

6 months ended

Year ended

30 September 2014

30 September 2013

31 March 2014

Unaudited

Unaudited

Audited

£'000

£'000

£'000

Cash flows from operating activities

Profit for the period

728

560

1,335

Adjustments for:

Depreciation

241

235

496

Amortisation

1

1

2

Finance income

(2)

-

(21)

Finance expense

209

191

502

Loss on sale of property, plant and equipment

3

15

16

Equity settled share-based payment transactions

5

-

1

Income tax

194

168

417

1,379

1,170

2,748

Change in inventories and materials handling property, plant and equipment

(37)

(234)

(116)

Change in trade and other receivables

460

(900)

(1,695)

Change in prepayments

(229)

(283)

(26)

Change in trade and other payables

(43)

274

1,151

1,530

27

2,062

Interest received

2

-

21

Interest paid

(210)

(191)

(433)

Tax paid

(68)

(28)

(97)

Net cash from operating activities

1,254

(192)

1,553

Cash flows from investing activities

Proceeds from the sale of property, plant and equipment

33

72

147

Proceeds from subsidiary disposal

13

17

31

Acquisition of property, plant and equipment

(340)

(82)

(436)

Net cash from investing activities

(294)

7

(258)

Cash flows from financing activities

Increase in bank loans on re-financing of overdraft

4,213

-

-

Repayment of borrowings

(590)

(360)

(564)

Payment of finance lease liabilities

(118)

(86)

(244)

Equity dividends paid

(133)

-

-

Net cash from financing activities

3,372

(446)

(808)

Net increase in cash and cash equivalents

4,332

(631)

487

Cash and cash equivalents at start of period

(3,553)

(4,040)

(4,040)

Cash and cash equivalents at end of period

779

(4,671)

(3,553)

 

1. Basis of preparation

These condensed financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting as adopted by the EU'. They do not include all the information required for full annual financial statements and should be read in conjunction with the financial statements of the Group as at and for the year ended 31 March 2014.

These condensed financial statements are unaudited and were approved by the Board of Directors on 1 December 2014.

The information for the year ended 31 March 2014 does not constitute statutory financial statements as defined by section 435 of the Companies Act 2006. Those financial statements have been reported on by the Group's auditor and delivered to the Registrar of Companies. The report of the auditor was unqualified and did not contain statements under section 498 (2) or (3) of the Companies Act 2006.

The accounting policies applied by the Group in these condensed financial statements are the same as those applied by the Group in its consolidated financial statements for the year ended 31 March 2014, other than as disclosed in note 2.

2. Changes in accounting policies

From 1 April 2014 the following standards, amendments and interpretations became effective and were adopted by the Group:

 

§ IFRS 10 Consolidated Financial Statements;

§ IFRS 11 Joint Arrangements;

§ IFRS 12 Disclosure of Interests in Other Entities;

§ Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities; and

§ IFRIC 21 Levies.

 

The adoption of the above has not had a significant impact on the Group's profit for the period or equity.

3. Taxation

The taxation charge for the six months ended 30 September 2014 is calculated by applying the Directors' best estimate of the annual effective tax rate to the profit for the period.

 

4. Earnings per share

 

Basic earnings per share is the profit for the period divided by the weighted average number of ordinary shares outstanding, excluding those held in treasury, calculated as follows::

 

6 months ended

6 months ended

Year ended

30 September 2014

30 September 2013

31 March 2014

Unaudited

Unaudited

Audited

Profit for the period (£'000)

728

560

1,335

Weighted average number of ordinary shares excluding shares held in treasury for the proportion of the year held in treasury ('000)

17,670

17,670

17,670

 

Basic earnings per share

4.1p

3.2p

7.6p

 

The calculation of diluted earnings per share is the profit for the period divided by the weighted average number of ordinary shares outstanding, after adjustment for the effects of all potential dilutive ordinary shares, excluding those in treasury, calculated as follows:

 

6 months ended

6 months ended

Year ended

30 September 2014

30 September 2013

31 March 2014

Unaudited

Unaudited

Audited

Profit for the period (£'000)

728

560

1,335

Weighted average number of ordinary shares excluding shares held in treasury for the proportion of the year held in treasury ('000)

17,670

17,670

17,670

Effect of potential dilutive ordinary shares ('000)

260

-

90

Diluted weighted average number of ordinary shares excluding shares held in treasury for the proportion of the year held in treasury ('000)

17,930

17,670

17,760

Diluted earnings per share

4.1p

3.2p

7.5p

 

 

 

5. Principal risks and uncertainties

 

The directors consider that the principal risks and uncertainties which could have a material impact on the Group's performance in the remaining six months of the financial year remain the same as those stated on pages 8 and 9, and 52 to 54 of our Annual Report and Financial Statements for the year ended 31 March 2014, which are available on our website, www.northernbearplc.com.

 

 

6. Related party transactions

 

There have been no related party transactions in the first six months of the current financial year which have materially affected the financial position or performance of the Group.

 

 

7. Half year report

 

The condensed financial statements were approved by the Board of Directors on 1 December 2014 and are available on the Company's website, www.northernbearplc.com. Copies will be sent to shareholders and are available on application to the Company's registered office.

 

 

8. Statement of directors' responsibilities

 

The director named below confirms on behalf of the Board of Directors that to the best of their knowledge:

 

§ the condensed set of financial statements has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the EU; and

§ the interim management report includes a fair review of the information required by:

§ DTR4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

§ DTR4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the financial year and that have materially affected the financial position or performance of the Group during the period; and any changes in the related party transactions described in the last annual report that could do so.

 

The Directors of Northern Bear Plc are listed in the Annual Report and Financial Statements for the year ended 31 March 2014.

 

 

For and on behalf of the Board of Directors

 

 

 

 

 

 

Thomas Hayes

Finance Director

1 December 2014

 

 

 

 

 

This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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