Northern Bear Regulatory News (NTBR)

21 May 2021

Northern Bear plc

("Northern Bear" or the "Company")

Trading Update and Notice of Results

The board of directors of Northern Bear (NTBR) (the "Board") hereby provides an update on trading for the Company and its subsidiaries (together the "Group") for the year ended 31 March 2021 ("FY21"), the year end cash position, and the outlook for the coming year ending 31 March 2022 ("FY22"). 

This update is provided subject to finalisation of our audited results for FY21. The Group's unaudited preliminary results for FY21 are expected to be released in the week commencing 19 July 2021. 

Trading update

We have provided several updates on trading for FY21, most recently as part of our interim results for the six month period ended 30 September 2020 ("H1 FY21") released on 25 November 2020. As part of that update, we noted substantial disruption to H1 FY21 activity levels from COVID-19, and that, subject to a continued ability to fulfil contracts on site, we had a strong forward order book that should support stronger operating performance in the six month period ended 31 March 2021 ("H2 FY21"), subject to the uncertainty at that time over the extent of the second wave of COVID-19 infections and associated restrictions. 

Whilst we have experienced some ongoing disruption from the severity of the COVID-19 second wave, we expect to report profitability from underlying trading in H2 FY21 to be in line with H2 FY20 for the Group as a whole. This performance is testament to the hard work and commitment of all our employees, and the first-class safety procedures which our safety team have implemented, which have minimised on-site disruption during the pandemic. 

Northern Bear Roofing

Despite on-site restrictions, our Roofing division has performed well in H2 FY21. Whilst there was some weather-related disruption in a very wet February, in general there was no repeat of FY20's severe winter weather.

We are delighted to announce that Keith Muldoon has been appointed to oversee the Group's Roofing division as part of longer-term succession planning. Keith was Managing Director at Springs Roofing Limited since its acquisition by the Company in 2006 and has demonstrated outstanding leadership of that business in recent years. Matty Rowley has replaced Keith as Managing Director at Springs Roofing Limited, having previously served as Operations Director. 

Northern Bear Construction

Our Construction division has seen a more mixed performance in H2 FY21.

We are pleased to report that MGM, our specialist construction and refurbishment business, has performed exceptionally well following the appointment of Phil Burridge as Managing Director in August 2020 and had an excellent finish to the year. Phil was brought into MGM to allow Neil Jukes to focus on continuing to develop Northern Bear Building Services, where Neil and the team have expanded the business over time and are seeing further opportunities for growth. 

H Peel, our fit out and interiors business, has seen a major impact on its core hospitality and leisure markets due to COVID-19 restrictions and has continued to experience very challenging trading conditions in H2 FY21. We recorded an impairment of the goodwill and intangible assets related to H Peel in our interim results to 30 September 2020. We are cautiously hopeful of an improvement in these core markets as the current year progresses.

J Lister, our electrical contractor, traded well over the autumn but has experienced COVID-19 related disruption in recent months due to the indoor nature of works, which has impacted profitability for H2 FY21. In light of current order book levels, we are hopeful that trading at J Lister will improve significantly in the coming year.

Northern Bear Materials Handling

Our Materials Handling business, A1 Industrial Trucks ("A1"), has also seen disruption to new truck sales and its ability to deliver maintenance and service works on site during H2 FY21, although the long-term hire revenue streams have helped support this business. We are again hopeful of an improvement in trading at A1 as COVID-19 restrictions are eased moving forward. 

Year end cash position

The Group reported net cash of £0.6m at 30 September 2020 (31 March 2020: net cash £0.2m). Since then, our cash position has remained strong and, whilst it reflects only a snapshot in time and our working capital requirements change on a daily basis, the Group had a substantial net cash position as at 31 March 2021 of £2.1m. 

We have made limited use of our committed £1m overdraft and £3.5m revolving credit facility in H2 FY21. This financial position and bank facility headroom provides us with ample cash resources for the Group's strategic and operational requirements as we look ahead to the coming financial year and beyond with renewed optimism. 

Outlook

Whilst we are relatively early into the new financial year, the forward order book remains strong and should support our trading performance in the coming months, subject to a continued ability to fulfil contracts on site while a level of uncertainty over the long term outlook for COVID-19 and short term supply chain pressures remain challenges for our business. 

Assuming no further significant disruption or margin impact from COVID-19 or supply chain pressures, our current expectation is for a resumption of more 'normal' trading and profitability levels, closer to those seen in financial years prior to FY21. 

Steve Roberts, Executive Chairman of Northern Bear, commented:

"FY21 has been a turbulent year for all companies in our sectors. Whilst we have obviously experienced severe difficulties within certain businesses within the Group, others have performed exceptionally well, particularly in H2 FY21, given the backdrop against which they have had to, and continue to, operate.

I would like to congratulate Keith Muldoon and Matty Rowley on their new roles and wish them every success. The work of the Executive Team and all subsidiary management teams has been outstanding during this period. All businesses managed to control costs, preserve cash and maximise the opportunities which were available during these unprecedented times and the resulting difficulties in working conditions."

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