Half Yearly Report

Northamber PLC (the "Company")

Interim Statement for the Six months to 31 December 2014

Chairman's Statement

Trading

It makes a very pleasant change to announce to shareholders an overall 18.1% sales increase to £35.7 million from £30.2 million for the equivalent period last year.

I indicated in my last report on the year ending 30th June 2014 that there were signs of improvement and the upward trend we reported for the second half of last year continued into the first half of the current year, with revenues increasing 9.5% since 30th June 2014.

The gross margin has also increased from £2.0 million, on a margin of 6.7%, to £2.4 million at 6.83%. The reduced pre-tax loss of £292,000 is less than half the £690,000 reported loss for the same period last year. It is disappointing to still be "in the red" but movement is in the right direction. Returns from our strong cash balances remain at very low levels, such that our interest received was only some £25,000 compared with £40,000 in the same period last year.

In the past I have too frequently needed to refer to ongoing price erosion, thin margins and the need for tightly focused management, rather than just building empty revenue. The sector has for too long been driven by either over-supply or poorly regarded products, all then subject to un-commercial, competitive stock clearance pressures, which whilst partially avoidable, has not abated.

After a very long term downward trend echoing the extreme levels of product driven price erosion, we are achieving a slight resumption of growth in margins. The 13 basis points improvement in the gross margin for the first half year compares favourably with the same period in the previous year. This improvement has been generated by the continued refocusing on those more profitable elements of our business and these established core resources are continuing to show results.

Through careful control overheads in the first half are essentially unchanged against the same period last year, despite the additional distribution costs associated with the increased level of turnover. Administrative overheads were further reduced and enabled additional investment in sales staff, reflecting the needs driven by the evolution of our trading model.

Balance Sheet

The Company remains totally debt free and cash positive. The increased turnover drove a healthy increase in the level of working capital utilised in the business and as a consequence our free cash fell from £5.07 million at the beginning of the current year to £2.65 million as at the end of December 2014. Our working capital utilisation is obviously driven by seasonal demand stocking levels and the end of December is never the best time for debtor payments. We have since seen an improvement in our cash balances as these payments have been received.

As always, we are most careful in the control of our financial assets and even with the increase in the working capital, the ratios remained within the "very cautious" band of acceptable parameters. Debtor and Creditor days were little changed from last year and the current assets ratio although slightly lower was still at well over two and half times the creditor/payables level. Thus as always the financial situation is sound and added to which are the unencumbered freehold property values. The Board is more than satisfied with the underlying financial strength of the Company.

As we are now an AIM quoted company in a restricted market, our wholly tangible debt free Net Asset Value per share at more than 75 pence compares with a quoted share price averaging around 38 pence, giving no cause for concern.

Dividend

The subject of dividend is complicated by the message it also sends.

Perceived conflict decrees I exclude myself from this subject. Your board has taken particular consideration of the improving results for the period and the strength of our debt free, tangible asset base.

At a total cost of only £84,476 your Board is again proposing the interim dividend be at the same level as for the interim in the previous year at 0.3p. The dividend will be paid on 12th May 2015 to shareholders on the register as at 17th April 2015.

Outlook

As you will know from my previous reports, I have learned not to speculate or be over optimistic and am hopeful that our improved trading performance will continue.

As we know from history, however, within both the sector and the economy as a whole, there are many unknowns. Not the least of which will be any delaying effects on the user base I.T refresh intentions, resulting from Microsoft's awaited forthcoming release of Windows 10, following the belated abort of the Windows 9 launch, plus the upcoming General Election.

The Board is confident that the Company is well placed to benefit from further improvements in revenue growth whilst also continuing to operate a tightly controlled cost structure, thus hopefully insulating us from any untoward surprises.

David Phillips

Chairman

12 March 2015

For further information please contact:

Northamber plc 020 8296 7000

David Phillips

Charles Stanley Securities 020 7149 6942

(Nominated Adviser)

Philip Davies

Notes to the financial statements

1. Corporate Information

The financial information for the half year ended 31 December 2014 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The group's statutory financial statements for the year ended 30 June 2014 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Sections 498(2) and 498(3) of the Companies Act 2006. The interim results are unaudited. Northamber Plc is a public limited company incorporated and domiciled in England and Wales. The company's shares are publicly traded on the London Stock Exchange's AIM market.

2. Basis of preparation

These interim consolidated financial statements are for the six months ended 31 December 2014. They have been prepared in accordance with IAS34 Interim Financial Reporting. They do not include all the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the group for the year ended 30 June 2014.

These interim consolidated financial statements have been prepared under the historical cost convention.

These interim consolidated financial statements (the interim financial statements) have been prepared in accordance with accounting policies adopted in the last annual financial statements for the year to 30 June 2014 except for the adoption of IAS1 Presentation of Financial Statements (Revised 2007).

The adoption of IAS1 (Revised 2007) does not affect the financial position or profits of the group, but gives rise to additional disclosures. The measurement and recognition of the group's assets, liabilities, income and expenses is unchanged. A separate 'Statement of changes in equity' is now presented.

The accounting policies have been applied consistently throughout the group for the purposes of preparation of these interim consolidated financial statements.

3. Basis of Consolidation

For the periods covered in these interim consolidated financial statements all trading has been carried out by the parent company alone. The group includes some non-trading dormant subsidiaries. All the assets and liabilities of all subsidiaries have been included in the statements of financial position.

4. Segmental Reporting

Although the sales of the group are predominantly to the UK there are sales to other countries and the following schedule sets out the split of the sales for the year. Revenue is attributable to individual countries based on the location of the customer. There are no non current assets outside the UK.

One customer accounted for more than 10% of the group's revenue for the period, being £9.6m.

5. Taxation

No tax charge has been provided in the interim consolidated financial statements due to the losses accumulated both in prior years and in the current period.

6. Earnings per Share

The calculation of earnings per share is based on the loss after tax for the six months to 31 December 2014 of £292,000 (2013: loss £690,000) and a weighted average of 28,158,735 (2013: 28,158,735) ordinary shares in issue.

7. Property, Plant and Equipment

There were no significant additions to or disposals of property, plant or equipment in the period to 31 December 2014. The reduction in the total value of property, plant and equipment was primarily due to the depreciation charge for the year.

8. Risks and Uncertainties

The principal risks and uncertainties affecting the business activities of the group are detailed in the strategic report which can be found on pages 7 to 11 of the Annual Report and Accounts for the year ended 30 June 2014 (the Annual Report). A copy of the Annual Report is available on the company's web site at www.northamber.com

The risks affecting the business remain the same as in the Annual Report. In summary these include:-

Market risk particularly those relating to the suppliers of products to the group

Financial risks including exchange rate risk, liquidity risk, interest rate risk and credit risk

In the opinion of the directors, these will remain the principal risks for the remainder of the year, however, the directors have reviewed the company's risk analysis and are of the opinion that steps have been taken to minimise the potential impact of such risks.

9. Related Party Transactions

Mr D M Phillips is the ultimate controlling party of the Company.

During the six months ended 31 December 2014, the company paid £36,000 (2013: £12,000) as salary and £493 (2013: £140) as benefit to the company Director of Strategy, Mr A Phillips, who is the son of the Chairman, Mr D M Phillips.

10. Directors' Confirmation

The Directors confirm that to the best of their knowledge these condensed consolidated half year financial statements have been prepared in accordance with IAS 34 and that the interim management report herein includes a fair review of the information required by DTR 4.2.7R, an indication of important events during the first 6 months and descriptions of principal risks and uncertainties for the remaining six months of the year, and DTR 4.2.8R the disclosure of related party transactions and changes therein.