26th Nov 2007 07:01
Northern Bear Plc26 November 2007 Northern Bear plc Interim Report 30 September 2007 Chairman's statement Northern Bear plc ("Northern Bear" or the "Group") announces interim results forthe six months ended 30 September 2007. The unaudited interim financialinformation represents the first published financial information prepared on thebasis of the recognition and measurement requirements of International FinancialReporting Standards ('IFRS') adopted by the European Union ('Adopted IFRS'). Results I am pleased to announce the unaudited results for the Group for the six monthsended 30 September 2007. These encouraging results reflect the very considerabledevelopment of our business and are in line with our expectations. Turnover for the period was £13.7 million, with profit before tax of £1.0million. The results include contributions from Chirmarn Limited and Hastie D BurtonLimited which were the two acquisitions during the period. Basic earnings pershare for the period was 5.1p and diluted earnings per share was 4.9p. Further, the Board has decided to declare a maiden interim dividend of 1p pershare. Notably, this is twelve months ahead of our initial expectation, butreflects our performance, both organically and by acquisition, and the improvedcash status of the Group. The dividend will be paid on 16 December 2007 toeligible shareholders on the share register at close of business on 28 November2007. I am also delighted that we have been able to raise further funds during theperiod to assist with our stated acquisition policy. New equity has been raised at an attractive share price compared with ourlisting price in December 2006 of 88 pence per share. On 31 May, we announcedthe issue of 275,000 shares at a price of £1.40, to raise £0.4 million for theGroup. On 30 August, following an EGM, 2,415,250 shares were issued at a priceof £1.45, raising a further £3.2 million net of costs to help fund the Group'sgrowth. It was further announced on 6 November 2007 that the Group had agreed a new andimproved banking facility with Yorkshire Bank. This facility, together with thefunds raised in the share issues above, provide the Group with substantial fundsto continue its proven acquisition policy. Accordingly, on 12 November 2007, it was announced that we had completed theacquisition of Jennings Roofing Ltd, a Yorkshire based roofing contractor,specialising in Local Authority work. This acquisition reinforces our aim ofbalancing our customer base, while at the same time satisfying our otheracquisition criteria. IFRS Northern Bear shares are traded on the AIM market, operated by the London StockExchange plc ('AIM') and the AIM Rules for Companies require that the nextannual consolidated financial statements of the Group, for the year ending 31March 2008, be prepared in accordance with Adopted IFRS. This interim financial information has been prepared on the basis of therecognition and measurement requirements of Adopted IFRS as at 30 September 2007that are effective (or available for early adoption) at 31 March 2008, theGroup's first annual reporting date at which it is required to use Adopted IFRS.Based on Adopted IFRS, the directors have applied the accounting policies, asset out in the restatement document referred to in note 1 of this interimfinancial information, which they expect to apply when the first annual IFRSfinancial statements are prepared for the year ending 31 March 2008. However, the Adopted IFRS that will be effective (or available for earlyadoption) in the financial statements for the year ending 31 March 2008 arestill subject to change and to additional interpretations and therefore cannotbe determined with certainty. Accordingly, the accounting policies for thatannual period will be determined finally only when the annual financialstatements are prepared for the year ending 31 March 2008. Trading Review Advisers Since the Group's year end in March 2007, we have been able to appointexperienced teams from Strand Partners as our Nominated Advisers and St. HelensCapital as our corporate Brokers. The Board As reported in the final accounts to 31 March 2007, we continue to strengthenthe Board and I am therefore delighted to announce that Howard Gold, aNon-executive Director, has agreed to accept the role of Deputy Chairman. Basedin the North East, Howard is able to provide daily support and guidance toGraham Forrest, Chief Executive Officer, and the rest of the executive team. The Board and our management team fully appreciate your continued support of theGroup as we work diligently to build upon our existing foundation. We would alsolike to thank the Group's staff for their hard work and efforts over the year todate and look forward to a successful second half. Future We continue to increase the scale and momentum of Northern Bear and feel that wenow have an excellent team of professionals and funders with us who can helpdeliver progressive earnings per share. We expect to continue with our acquisition policy during the second half of thefinancial year and have prospective targets in mind. Jon Pither 23 November 2007 Chairman Consolidated income statementfor the six month period ended 30 September 2007 Unaudited Unaudited 6 months period from ended incorporation Note 30 September to 31 March 2007 2007 £000 £000 Continuing operationsRevenue 13,705 4,751Cost of sales (9,804) (3,459) Gross profit 3,901 1,292Other operating income 19 9Administrative expenses (2,656) (1,048) Results from operating 1,264 253activities Finance income 24 14Finance expenses (280) (184) Profit before income tax 1,008 83Income tax expense (313) (65) Profit for the period 695 18 Basic earnings per share 5 5.1p 0.5p Diluted earnings per share 5 4.9p 0.5p Consolidated statement of changes in equityfor the six month period ended 30 September 2007 Unaudited period from Unaudited incorporation to 6 month 31 March 30 September 2007 2007 £000 £000 Profit for the period 695 18Shares issued 5,261 9,570Share based payments 112 28 Net increase in total equity 6,068 9,616Total equity at start of period 9,616 - Total equity at end of period 15,684 9,616 Consolidated balance sheetat 30 September 2007 Unaudited Unaudited 30 September 31 March 2007 2007 £000 £000AssetsProperty, plant and equipment 1,965 1,718Intangible assets 16,749 12,414Other investments 11 11 Total non-current assets 18,725 14,143 Inventories 2,018 197Trade and other receivables 4,483 3,990Prepayments for current assets 443 185Cash and cash equivalents 3,049 494 Total current assets 9,993 4,866 Total assets 28,718 19,009 EquityShare capital 159 120Share premium 5,075 1,479Reserves 9,597 7,971Retained earnings 853 46 Total equity attributable to equity 15,684 9,616holders of the company LiabilitiesLoans and borrowings 4,097 3,090Deferred income - 50Deferred tax liabilities 67 52 Total non-current liabilities 4,164 3,192 Bank overdraft 2,383 1,096Loans and borrowings 929 677Trade and other payables 4,373 2,885Current tax payable 1,185 952Deferred income - 591 Total current liabilities 8,870 6,201 Total liabilities 13,034 9,393 Total equity and liabilities 28,718 19,009 Consolidated statement of cash flowsfor the six month period ended 30 September 2007 Unaudited Unaudited 6 months period from ended incorporation 30 to 31 march September 2007 2007 £000 £000 Cash flows from operating activitiesProfit for the period 695 18Adjustments for:Depreciation 146 49Finance income (24) (14)Finance expense 280 184Loss on sale of property, plant and equipment 1 5Equity settled share-based payment 112 28transactionsIncome tax expense 313 65 1,523 335Change in inventories (1,607) (44)Change in trade and other receivables 958 (281)Change in prepayments (213) (6)Change in trade and other payables (495) 181 166 185Interest received 24 14Interest paid (280) (131)Tax paid (65) - Net cash from operating activities (155) 68 Cash flows from investing activitiesProceeds from sale of property, plant and equipment - 2Acquisition of subsidiary, net of cash acquired (2,502) (95)Acquisition of property, plant and equipment (119) (31) Net cash from investing activities (2,621) (124) Cash flows from financing activitiesProceeds from issue of share capital 3,924 2,425Payment of transaction costs (289) (919)Proceeds from new borrowings 1,850 2,350Repayment of borrowings (1,354) (4,344)Payment of finance lease liabilities (87) (58) Net cash from financing activities 4,044 (546) Net increase / (decrease) in cash and cash equivalents 1,268 (602) Cash and cash equivalents at start of period (602) - Cash and cash equivalents at end of period 666 (602) Notes (forming part of the financial statements) 1 Basis of preparation The AIM Rules require that the next annual consolidated financial statements ofthe Group, for the year ending 31 March 2008, be prepared in accordance withInternational Financial Reporting Standards ('IFRS') adopted for use in the EU('Adopted IFRS;). The interim financial information has been prepared on the basis of therecognition and measurement requirements of Adopted IFRS that are effective (oravailable for early adoption) at 31 March 2008, the Group's first annualreporting date at which it is required to use Adopted IFRS. Based on theseAdopted IFRS, the directors have applied the accounting policies, as set out inthe IFRS restatement document referred to below, which they expect to apply whenthe first annual IFRS financial statements are prepared for the year ending 31March 2008. However, the Adopted IFRS that will be effective (or available for earlyadoption) in the financial statements for the year ending 31 March 2008 arestill subject to change and to additional interpretations and therefore cannotbe determined with certainty. Accordingly, the accounting policies for thatannual period will be determined finally only when the financial statement areprepared for the year ending 31 March 2008. The preparation of this financial information resulted in changes to theaccounting policies as compared with the most recent annual financial statementsprepared under previous Generally Accepted Accounting Practice ('GAAP'). Therevised accounting policies have, except where otherwise stated, been applied toall periods presented in this financial information. A detailed review of the changes in our accounting policies and reconciliationsof our financial statements from UK GAAP to IFRS at key dates are available onthe Group's website at www.northern-bear.co.uk. 2 Accounting policies The accounting policies that the group intend to apply to the year ending 31March 2008 are set out in the IFRS restatement document referred to in note 1. 3 Status of financial information The comparative figures for the period ended 31 March 2007 are not the Group'sstatutory financial statements for that year. Those financial statements, whichwere prepared under UK GAAP, have been reported on by the Group's auditors anddelivered to the Registrar of Companies. The report of the auditors wasunqualified and did not contain statements under section 237(2) or (3) of theCompanies Act 1985. The interim information for the half year ended 30 September 2007 is unaudited.This information does not constitute statutory accounts within the meaning ofthe Companies Act 1985. 4 Acquisitions a) On 14 May 2007 the company acquired 100% of the issued share capital ofChirmarn Holdings Limited and its subsidiaries, Chirmarn Limited and Chirmarn(Surveying) Limited. The resulting goodwill was calculated and capitalised asfollows: Chirmarn Holdings Limited £000 Fixed assetsTangible 207Current assetsStock 174Debtors 525Cash 590Current liabilities (1,448) Net assets 48Goodwill 3,923 Purchase consideration 3,971 Satisfied by: Cash 2,823Shares 1,148 3,971 b) On 1 June 2007 the company acquired 100% of the issued share capital ofHastie Limited and its subsidiary, Hastie D Burton Limited. The resultinggoodwill was calculated and capitalised as follows: Hastie Limited £000 Fixed assetsTangible 64Current assetsStock 40Debtors 533Cash 730Current liabilities (497) Net assets 870Goodwill 381 Purchase consideration 1,251 Satisfied by:Cash 999Shares 252 1,251 5 Earnings per share The calculation of basic loss per share was based on the profit for the periodand on the weighted average number of ordinary shares outstanding, calculated asfollows: Unaudited Unaudited 6 months period from ended incorporation 2007 to 31 March 2007 Profit for the period (£000) 695 18Weighted average number of ordinary shares 13,548 3,375('000)Earnings per share 5.1p 0.5p The calculation of diluted earnings per share was based on the profit for theperiod and on the weighted average number of ordinary shares outstanding afteradjustment for the effects of all dilutive potential ordinary shares, calculatedas follows: Unaudited Unaudited 6 months period from ended incorporation 30 to 31 March September 2007 2007 Profit for the period (£000) 695 18Weighted average number of ordinary shares ('000) 14,321 3,630 Earnings per share 4.9p 0.5p 6 Interim results These results were approved by the Board of Directors on 23 November 2007. Copies of the interim statement will be sent to shareholders. Further copieswill be available from the Company's registered office and are also available onour website at www.northern-bear.co.uk. Enquiries please contact: Northern Bear PlcGraham Forrest, Chief Executive0191 371 2934 Strand Partners LimitedJames Harris / Braden Saunders020 7409 3494 St Helens CapitalRuari McGirr020 7628 5582 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Northern Bear