21st Sep 2005 07:00
Northamber PLC21 September 2005 NORTHAMBER PLC21 SEPTEMBER 2005 Northamber plc Preliminary Results for the year ended 30th June 2005 CHAIRMAN'S STATEMENT Results Despite a challenging trading period, the Board is pleased to announce an 18.5%increase in pre-tax profits to £2.6 million (2004: £2.2 million beforeexceptional loss of £393,000). We consider that we have grown market share andmaintained primary positions within the UK distribution models of our keysuppliers, despite the overly competitive nature of the sector. This isreflected in total sales which increased to £236.3 million (2004: £232.8million) despite continuing levels of significant price deflation on theproducts that we distribute. The key performance indicators for the business show either gains or at leastimprovements. The return on capital employed pre tax and exceptional itemimproved by 20.8% to 8.46% whilst earnings per share grew by 49.05% to 5.47p(2004: 3.67p). Although gross profit margins fell by 5.86%, cost efficienciesdelivered a 28.14% improvement at the operating profit level before exceptionalitem. Attention to operating efficiencies improved the levels of stock turns to 16times from last year's 12. This measure of trading efficiency having weakenedin recent years, as all major vendors moved their point of supply to the fareast or China and with that, longer and less frequent delivery times This performance by our management team is very encouraging with the extent ofthe unabated price erosion on many of our higher value but volume product rangesover the period. The Balance Sheet During the year our cash management delivered a further increase to £9.73million at year end (2004: £9.15 million), whilst also reducing our creditorsdays to 35 days (36 a year ago). Continuing our policy of improvingshareholder value, we purchased and cancelled a total of 303,000 ordinary sharesat a cost of £278,000. After dividends and share re-purchases there was a small decrease of £434,000 inthe total net asset value to £30.7 million or 98.9p per share (2004: 99.3p).The daily focus on the key business ratios remains at the forefront of ourmanagement controls. Dividend The balance sheet continues to be very sound together with a strong cashposition. With these results for the year as a whole, your Board feels itappropriate to recommend an increase in the final dividend to 4p. That is an increase of 33.3% from the 3p paid a year ago, making a total of 6pfor the full year (4.1p last year) If approved, the proposed final dividend will be payable on 12th January 2006to members on the Register as at 9th December 2005. Board Change We are pleased to advise members that we have welcomed Reg Heath to the board asa non-executive director. Reg's considerable board level experience in otherquoted companies and that gained in the motor and distributive trades is provinginvaluable OUTLOOK It is widely understood and has also been reported, that July and August tradingwas extremely weak across our entire sector. September has started in-line withour expectations, albeit with pressure on margins arising from ongoing pricedeflation. Subject to the state of the economy as a whole and our own performance withinour chosen sector, your Board is confident in the outcome for the new tradingyear. D.M. PhillipsChairman21st September 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT Notes 2005 2004 Total Total £'000 £'000 Turnover 236,271 232,809Cost of sales (218,170) (213,862) ------------- --------------Gross profit 18,101 18,947 Distribution costs (9,813) (10,548)Administrative expenses (5,946) (7,017)Other operating income 222 226 -------------- --------------Operating profit 2,564 1,608 Interest receivable 105 209Interest payable (56) (5) -------------- --------------Profit on ordinary activities before taxation 2,613 1,812 Tax on profit on ordinary activities (905) (647) -------------- -------------- Profit on ordinary activities after taxation 1,708 1,165 Equity dividends 3 (1,864) (1,261) ------------ --------------Amount transferred from reserves (156) (96) ============ ============== Earnings per ordinary share 2 5.47p 3.67p Diluted earnings per share 2 5.46p 3.67p CONSOLIDATED BALANCE SHEET 30 June 30 June 2005 2004 £'000 £'000 Fixed assetsTangible assets 4,219 4,541Investments 2,484 2,837 -------------- -------------- 6,703 7,378 -------------- -------------- Current assets Stocks 13,890 17,363Debtors - amounts falling due within one year 31,220 26,887Cash at bank and in hand 9,734 9,150 -------------- -------------- 54,844 53,400 Current liabilities Creditors - amounts falling due within one year (30,114) (28,888) -------------- --------------Net current assets 24,730 24,512 -------------- --------------Total assets less current liabilities 31,433 31,890 Provisions for liabilities and charges (760) (783) -------------- -------------- Net assets 30,673 31,107 ============== ============== Capital and reserves Called up share capital 1,551 1,566Share premium account 5,734 5,734Capital redemption reserve 236 221Profit and loss account 23,152 23,586 -------------- --------------Equity shareholders' funds 30,673 31,107 ============== ============== CONSOLIDATED CASH FLOW STATEMENT Notes 2005 2004 £'000 £'000 Cash inflow from continuing operating activities 4(a) 3,188 3,669 ------------- ------------- Returns on investments and servicing of financeInterest received 105 209Interest paid (56) (5)Income from fixed asset investments 196 220 ------------- -------------Net cash inflow from returns on investments andservicing of finance 245 424 ------------- ------------- TaxationUK corporation tax paid (915) (529) ------------- ------------- Capital expenditure and financial investmentPurchase of tangible fixed assets (480) (314)Sale of investments 360 - Sale of tangible fixed assets 26 365 ------------- -------------Net cash (outflow)/inflow from capital expenditure andfinancial investment (94) 51 ------------- ------------- Equity dividends paid (1,562) (970) ------------- ------------- Cash inflow before financing 862 2,645 ------------- ------------- FinancingPurchase of shares (278) (672)Issue of ordinary share capital - 12 ------------- ------------- Net cash outflow from financing (278) (660) ------------- ------------- Increase in cash in period 4(b) 584 1,985 ============= ============= NOTES 1. Financial information The financial information set out above does not constitute the Group'sstatutory accounts for the years ended 30th June 2004 or 30th June 2005, but itis derived from those accounts. The Statutory Accounts for 30th June 2004 havebeen delivered to the Registrar of Companies and those for 2005 will bedelivered 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 earnings per ordinary share is based on the profit aftertaxation of £1,708,000 (2004: £1,165,000) and on 31,246,365 ordinary shares(2004: 31,770,085). The number of ordinary shares in issue during the yearsended 30th June 2005 and 30th June 2004 were the weighted average in issueduring each year. Computation of Earnings per share for 2005 Per share Earnings Shares Net profit for year £1,708,000Weighted average shares outstanding during year 31,246,365Basic earnings per share 5.47pDiluted effect of options 33,231Diluted earnings per share 5.46p £1,708,000 31,279,596 3. Dividends An interim dividend has been paid during the year of 2.0p per share. A finaldividend of 4.0p will be paid on 12th January 2006 to those members on theregister at close of business on 9th December 2005. The ex-dividend date forthe shares will be 7th December 2005. 4. Cash flow a) Reconciliation of operating profit to operating cash flows 2005 2004 £'000 £'000 Continuing operationsOperating profit 2,564 1,608Income from fixed assets investments (196) (220)Depreciation of tangible fixed assets 753 907Loss on sale of tangible fixed assets 18 83Profit on sale of fixed asset investment (6) -Provision against investment 3 -Decrease/(increase) in stocks 3,473 (4,149)(Increase)/decrease in trade debtors (4,391) 387Decrease/(increase) in other debtors 2 (68)Decrease in prepayments and accrued income 56 43Increase in trade creditors 235 5,171Increase/(decrease) in other taxation and social security 853 (431)(Decrease)/increase in accruals and deferred income (203) 318Increase in other creditors 27 20 ------------ ------------Net cash inflow from continuing operating activities 3,188 3,669 ------------ ------------ b) Reconciliation of net cash flow to movement in net funds Increase in cash in the period 584 1,985 ------------ ------------ Change in net funds resulting from cash flows in the year 584 1,985 Net funds brought forward 9,150 7,165 ------------ ------------ Net funds carried forward 9,734 9,150 ============ ============ c) Analysis of net debt At 1st July Cash Flow At 30th June 2004 2005 £'000 £'000 £'000 Cash at bank and in hand 9,150 584 9,734 ----------- ----------- ----------- Total number of shares in issue 31,013,100 Weighted average number of shares 31,246,365 Date of AGM 25th November 2005 Ex Dividend Date 7th December 2005 Dividend Date 12th January 2006 The Company's registered office is 1-3 Union Street, Kingston-upon-Thames,Surrey KT1 1RP. 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Northamber