Northern Bear Regulatory News (NTBR)

Northern Bear PLC

Preliminary results for the year ended 31 March 2012

Highlights

·; Revenue from continuing operations £36.4m (2011: £27.2m)

·; Operating profit (pre exceptional) from continuing operations £1.7m (2011: £1.6m)

·; Basic earnings per share from continuing operations 4.0p (2011: 3.4p)

·; Net bank debt decreased to £7.0m (2011: £8.4m).

Howard Gold, Chairman of Northern Bear Plc commented:

"I believe that these results continue to demonstrate the resilient nature of our businesses, the energy and commitment of the group's management teams and the further improvements to the Group's management structure.

We now have a more streamlined group of support services businesses, with strong reputations.

The new financial year has started well and we currently have a healthy order book. Nevertheless, we remain conscious of the current market conditions and everyone in the Group is continuing to focus on improving earnings and cash flow."

For further information contact:

Northern Bear PLC

Steve Roberts - Chief Financial Officer +44 (0) 845 680 2369

Strand Hanson Limited

James Harris / James Spinney +44 (0) 20 7409 3494

Seymour Pierce Limited

Katie Ratner / Paul Jewell / David Banks +44 (0) 20 7107 8000

Chairman's statement

Introduction

I am pleased to report results for the year ended 31 March 2012.

Profit before tax from continued operations increased by 25% to £1.0m (2011: £0.8m). Net cash generated from operating activities increased by 21% to £1.0m (2011: £0.9m).

Basic earnings per share from continued operations were 4.0p (2011: 3.4p) and earnings per share from total operations were 3.1p (2011: 1.2p loss per share).

Exceptional items (from continued operations) were £0.2m (2011: £0.3m), the majority of which were redundancy and legal costs.

Following the disposals of Hastie D Burton Limited and The Roof Truss Company (Northern) Limited in April and May 2011 respectively, it is not currently envisaged that there will be any further changes in the Group structure in the short term and, as such, no further losses from discontinued operations are expected. The loss from discontinued operations (net of income tax) was £0.2m (2011: £0.9m)

The Board was particularly pleased with the trading performance and cash collection in the second half of the financial year. This was subsequent to an operational review where changes were made to the Group's management structure, as detailed below. The Board has been delighted with the support received from subsidiary management teams (in implementing the necessary changes) and with the improvements which have resulted.

It has recently been announced that the Group has officially moved its Head Office to Prestwick Park which should provide efficiencies in the centralisation of certain Group functions, particularly finance.

Trading

Turnover (from continuing operations) increased by 34% to £36.4m (2011: £27.2m) which is testament to the management teams at the Group's subsidiaries who have continued to attract increased volumes of work. However, due to significant margin pressure in all markets and a change in the Group's sales mix, gross profitability did not increase at the same rate.

The uncertain macroeconomic conditions have continued to dominate the trading environment for our businesses. Whilst public sector expenditure programmes continue to provide the Group with a significant level of orders, there are constant delays between winning contracts and commencing work on site which makes predicting turnover levels more challenging.

Whilst all businesses within the Group continue to operate in extremely tough market conditions, the Board remain cautiously optimistic that the reputation of the Group's businesses will allow them to win more than their fair share of the work available.

Cash flow

The Group's bankers have remained supportive in very difficult trading conditions, especially given the markets in which we operate and the well publicised failures of other businesses in our sector (which have had an enormous impact on the banking sector as a whole).

The cash performance of the Group remains good, with a further reduction in net bank debt to £7.0m (2011: £8.4m). This reduction includes a repayment of term loan debt of £0.4m made from disposal proceeds on the sale of The Roof Truss Company (Northern) Limited.

Dividend

Despite improved trading performance, the Board believe that it would be prudent to continue not to declare dividends.

Board of Directors and Advisors

Graham Forrest announced his resignation as Chief Executive Officer and as a director of the Company, with immediate effect, on 11 October 2011.

The Board has used the occasion of Mr Forrest's resignation to ensure that the talent that exists within the Group was being utilised most appropriately. Following an operational review, which was overseen by myself as Chairman, the Board implemented changes to the Group's management structure, which we believe have already delivered benefits for the Group. This has included the appointment of Graham Jennings as Managing Director of the Group effective from the date of this announcement.

Mr Jennings was previously an Operations Director of the Group and was Managing Director of Jennings Roofing prior to its acquisition by the Group in November 2007. He has been involved in the construction industry in the North of England for 38 years and brings with him a wealth of experience to the role. Since being appointed to the Board in April 2008 he has had overall operational responsibility for several Group companies and has the knowledge and experience to manage the Group in trading conditions that are likely to remain challenging.

Keith Soulsby was re-appointed to the Board as an Operations Director on 11 May 2012. Mr Soulsby has previously been a Director of Northern Bear for over four years (between April 2007 and September 2011). He was the founder and remains current Managing Director of Wensley Roofing Limited.

Outlook

The new financial year has started well and the Group's order book remains healthy. As previously reported, the Group retains a presence in the private housebuilding sector and we are pleased to report a slight upturn in this market.

Given this, we are cautiously optimistic of maintaining current levels of trade, although we remain fully aware of the volatile market conditions in which we continue to operate. Also, the roll-out of certain committed orders, particularly those from the public sector (where project delays are common), remains outside of our control and makes the timing of revenues from those orders more difficult to predict.

In addition, our overall priority remains to improve earnings and cash flow to continue to reduce the Group's level of bank debt.

People

Once again, the Board and Shareholders would like to thank all of our employees for their continued commitment and energy. They have faced many varied challenges during the past year and, in all cases, a combination of experience and positive attitude have ensured the Group has exceeded expectations, even in this difficult climate.

HB GoldChairman

30 July 2012

Consolidated statement of comprehensive income

for the year ended 31 March 2012

Consolidated statement of changes in equity

for the year ended 31 March 2012

Consolidated balance sheet

at 31 March 2012

Consolidated statement of cash flows

for the year ended 31 March 2012

Notes

1 Basis of preparation

The preliminary announcement has been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the EU (Adopted IFRSs), IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. It does not include all the information required for full annual accounts.

2 Status of financial information

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2012 or 2011. The financial information for 2011 is derived from the statutory accounts for 2011, which have been delivered to the Registrar of Companies. The auditor has reported on the 2011 accounts; their report was i) unqualified, ii) did not include references to any matters to which the auditors drew attention by way of emphasis, without qualifying their report, and iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006. The statutory accounts for 2012 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies in due course.

The preliminary announcement is unaudited and has been prepared using the accounting policies published in the Group's accounts for the year ended 31 March 2011, which are available on the Company's website www.northern-bear.com with the exception of the following standards, amendments and interpretations which became effective during the year and were adopted by the Group:

·; Revised IAS 24 'Related party disclosure'

·; Improvements to IFRSs

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

3 Discontinued operation

The Group has disposed of operations as follows:

·; The Roof Truss Company (Northern) Limited - on 26 May 2011;

·; Hastie D Burton Limited - on 20 April 2011; and

·; DJ McGough Limited - on 15 September 2010

These operations were classified as discontinued in the prior year.

Results from discontinued operations - 2012

Results from discontinued operations - 2011

4 Exceptional items

Administrative expenses include the following exceptional expenses:

5 Earnings/(loss) per share

The calculation of basic earnings/(loss) per share was based on the profit/(loss) for the period and on the weighted average number of ordinary shares outstanding, calculated as follows:

6 Principal risks and uncertainties

The nature of the building services industry means that the Group is subject to a number of risk factors. Some of these factors apply to the building services industry generally, while others are specific to the Group's activities within that market.

Sector demand

The Group currently consists of businesses which all operate in three main segments of the building services sector of the economy. The Group is therefore exposed to varying activity levels within these diverse industries. Whilst the exposure of the Group to the new house build sector is less than 10% of Group turnover, our exposure to public sector markets is far greater. Consequently, any material reduction in Government expenditure programmes, particularly in social housing, will have an adverse effect on the financial position of the Group.

Competition

Some of the businesses within the Group have competitors who, as a result of their funding structure, may be able to accept lower financial returns than that required by the Group. Competition within these companies could adversely affect the Group's profitability and financial position.

Key clients

There can be no guarantee that the Group's key clients will not change suppliers. While each of the Group's businesses has many longstanding relationships with a number of key customers, the failure to satisfy the needs of these customers could harm the Group's business. Furthermore, these customers may be facing challenges within their own businesses.

Dependence on personnel

The Group continues to be dependent on the continued services of its senior management. Retaining qualified personnel, consultants and advisors is important to the continued successful operation of the Group's business. There can be no assurance that the Group will be able to recruit or retain its personnel in the future which could have an adverse effect upon the Group's business and financial position. The loss of any of the Group's senior personnel could impede the achievement of its objectives.