5th Oct 2006 07:01
Northamber PLC05 October 2006 Northamber plc Preliminary Results for the year ended 30th June 2006 CHAIRMAN'S STATEMENT Results Sector trading conditions worsened over the period, constrained opportunitiesand with continuing price deflation in many key product areas, provedchallenging. This resulted in pre-tax profits of £0.43 million (2005: £2.61million) onincreased volumes but reduced revenues of £204.41 million (2005: £236.27million). The impact on gross profit resulted from a 0.5% reduction in grossmargins coupled with lowered revenues and greater unit volumes. Earnings pershare reduced from 5.47p to 0.75p. During the second half, it became increasingly necessary to adopt trading andstock profiles that reflected the commercial need for the avoidance of excessiveor unrewarding risk. The key performance indicators for the business again show some worthwhile gainsand ongoing improvements. Whilst very many shipments and payment terms noworiginate in China, our stock turns further increased to almost 21 against lastyear's improvement to 16 times. This measure had weakened in recent years, asmajor vendors moved their point of supply and with that, longer and lessfrequent delivery times. There was a 17% reduction in creditor days to 29 days, as we sought improvedsupplier discounts. This resulted in net cash at year end of £8.30 million(2005: £9.73 million). With challenging levels of competition and unabated price erosion, particularlyduring our second half, the performance of our management team is appreciated. The Balance Sheet Post year-end we concluded our negotiations to sell a 'Lesser Interest' in ourenterprise zone investment property in Arbroath for circa £2.43 million net.The pre-let investment was purchased in 1996 for £2.48 million and tax benefitswere obtained. One result of falling prices and with that debtor finance needs, has been tofirm the availability of surplus cash. When including the anticipated furtherinflux from the investment property proceeds, your board is reviewing thepossibility of returning a prudent portion of surplus cash to shareholders. Continuing our policy of improving shareholder value, we purchased a total of555,000 ordinary shares at a cost of £421,000 for cancellation, leaving30,458,100 shares in issue at year end. After dividends and re-purchases of shares for cancellation, there was a smalldecrease in the total net asset value at year end to £30.08 million or 98.7p pershare (2005: 102.7p). The daily focus on the key business ratios continues toremain at the forefront of our management controls, as demonstrated in theexamples above. Dividend Whilst constrained by the very adverse sector trading conditions, the balancesheet continues to be exceptionally sound, with a very strong cash position. With these results for the year as a whole and the intention to investigateefficient and cost effective means to return a prudent portion of our surpluscash to shareholders, your Board feels it appropriate to also recommend a finaldividend of 1p making 2.1p for the year (2005: 6.0p). If approved at the AGM, the proposed final dividend will be payable on 11January 2007 to members on the Register as at 8 December 2006. Outlook It is widely understood and reported, that July, August and September tradingwas generally poor across our sector. Subject to the state of the economy as a whole and our own performance withinour sector, your Board is cautiously confident in the outcome for the newtrading year. D.M. PhillipsChairman5 October 2006 CONSOLIDATED INCOME STATEMENTfor the year ended 30 June 2006 Notes 2006 2005 Total Total £'000 £'000Continuing operationsRevenue 204,408 236,271Cost of sales (189,912) (218,170) ------------- -------------Gross profit 14,496 18,101 Distribution costs (8,690) (9,813)Administrative expenses (5,679) (5,920) ------------- -------------Profit from operations 127 2,368 Investment revenue 337 301Finance costs (30) (56) ------------- -------------Profit before tax 434 2,613 Tax (203) (905) ------------- ------------- Profit for the year from continuing operations 231 1,708 ======= ======= Earnings per ordinary share 2 0.75p 5.47p Diluted earnings per share 2 0.75p 5.46p Comparative results for 2005 have been restated following the adoption ofInternational Financial Reporting Standards (IFRS's). CONSOLIDATED BALANCE SHEETat 30 June 2006 30 June 2006 30 June 2005 £'000 £'000 Non current assetsProperty, plant and equipment 3,911 4,219Investment property - 2,483 ------------- ------------- 3,911 6,702 ------------- ------------- Current assetsTrading investments 1 1Inventories 9,052 13,890Trade and other receivables 27,644 31,220Cash and cash equivalents 9,821 9,734 ------------- ------------- 46,518 54,845Assets held for sale 2,483 - ------------- -------------Total assets 52,912 61,547 ------------- ------------- Current liabilitiesTrade and other payables (20,426) (28,535)Bank overdraft (1,522) -Tax liabilities (126) (408) ------------- ------------- (22,074) (28,943) ------------- ------------- Non current liabilitiesDeferred tax liabilities (760) (760) ------------- -------------Total liabilities (22,834) (29,703) ------------- -------------Net assets 30,078 31,844 ======= ======= EquityShare capital 1,523 1,551Share premium account 5,734 5,734Capital redemption reserve 264 236Retained earnings 22,557 24,323 ------------- -------------Equity shareholders' funds 30,078 31,844 ======= ======= Comparative results for 2005 have been restated following the adoption ofInternational Financial Reporting Standards (IFRS's). CONSOLIDATED CASH FLOW STATEMENTYear ended 30 June 2006 2006 2005 £'000 £'000 Cash inflow from continuing operating activitiesOperating profit from continuing operations 127 2,368Depreciation of property, plant and equipment 564 753(Profit)/Loss on disposal of property, plant and (7) 21equipmentProfit on sale of investments - (6) ------------- ------------- 684 3,136Decrease in inventories 4,838 3,473Decrease/(increase) in trade and other receivables 3,576 (4,333)(Decrease)/increase in trade and other payables (8,109) 912 ------------- -------------Cash generated from operations 989 3,188 Interest paid (30) (56)Income taxes paid (485) (915) ------------- -------------Net cash from operating activities 474 2,217 ------------- -------------Cash flows from investing activitiesInterest received 139 105Proceeds from disposal of property, plant and equipment 17 26Proceeds from disposal of investment property - 360Purchase of property, plant and equipment (266) (480)Income from investments 198 196 ------------- -------------Net cash from investing activities 88 207 ------------- -------------Cash flows from financing activitiesPurchase of own shares for cancellation (421) (278)Dividends paid to equity shareholders (1,576) (1,562) ------------- -------------Net cash used in financing activities (1,997) (1,840) ------------- -------------Net (decrease)/increase in cash and cash equivalents (1,435) 584Cash and cash equivalents at beginning of year 9,734 9,150 ------------- -------------Cash and cash equivalents at end of year 8,299 9,734 ------------- -------------Cash and cash equivalents for the purpose of thisstatement comprise:Cash and cash equivalents 9,821 9,734Bank overdrafts (1,522) - ------------- ------------- 8,299 9,734 ------------- ------------- STATEMENT OF CHANGES IN EQUITYConsolidated statement of changes in equityAt 30 June 2006 Share Capital Share premium Capital Retained Total account redemption earnings equity reserve £'000 £'000 £'000 £'000 £'000 Balance at 1 July 2004 1,566 5,734 221 24,455 31,976Profit for the year - - - 1,708 1,708 -------------- -------------- -------------- -------------- --------------Total recognised incomefor the year - - 1,708 1,708Purchase of own shares (15) - 15 (278) (278)Dividends - - - (1,562) (1,562) -------------- -------------- -------------- -------------- --------------Balance at 30 June 2005 1,551 5,734 236 24,323 31,844 Balance at 1 July 2005 1,551 5,734 236 24,323 31,844Profit for the year - - - 231 231 -------------- -------------- -------------- -------------- --------------Total recognised incomefor the year - - - 231 231Purchase of own shares (28) - 28 (421) (421)Dividends - - - (1,576) (1,576) -------------- -------------- -------------- -------------- --------------Balance at 30 June 2006 1,523 5,734 264 22,557 30,078 -------------- -------------- -------------- ------------- -------------- NOTES 1. Financial information The financial information set out above does not constitute the Group'sstatutory accounts for the years ended 30 June 2005 or 30 June 2006, but it isderived from those accounts. The Statutory Accounts for the year ended 30 June2005 have been delivered to the Registrar of Companies and those for 2006 willbe delivered 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 basic and diluted earnings per share is based on thefollowing data. 2006 2005 £'000 £'000Earnings for the purpose of basic earnings per sharebeing net profit attributable to equity holders of theparent company 231 1,708Effect of dilutive ordinary shares - - --------------- ---------------Earnings for the purpose of diluted earnings per share 231 1,708 --------------- --------------- 2006 2005Number of shares Number NumberWeighted average number of ordinary shares for the 30,849,032 31,246,365purpose of basic earnings per shareEffect of dilutive potential ordinary shares - 33,231Share options --------------- -------------- 30,849,032 31,279,596 --------------- -------------- Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary shares in issueduring the year. For diluted earnings per share the weighted average number ofshares is adjusted on the assumption that all potential conversion of shareshave been so converted. 3. Dividends An interim dividend has been paid during the year of 1.1p per share. A finaldividend of 1.0p will be paid on 11 January 2007 to those members on theregister at close of business on 8 December 2006. The ex-dividend date for theshares will be 6 December 2006. Total number of shares in issue 30,458,100 Date of AGM 23 November 2006 Ex Dividend Date 6 December 2006 Dividend Date 11 January 2007 The Company's registered office is 1-3 Union Street, Kingston-upon-Thames,Surrey KT1 1RP. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Northamber