Preliminary Results

15 July 2025

Northern Bear PLC

("Northern Bear" or the "Company")

Preliminary results for the year ended 31 March 2025

The board of directors of Northern Bear (the "Board") is pleased to announce its unaudited preliminary results for the year ended 31 March 2025 ("FY25") for the Company and its subsidiaries (together, the "Group").

Financial summary

· Revenue of £78.1m (2024: £68.7m)

· Gross profit of £19.2m (2024: £15.9m), with a gross margin of 24.6% (2024: 23.1%)

· Adjusted EBITDA* of £5.4m (2024: £4.1m)

· Operating profit (EBIT) of £3.4m (2024: £2.4m)

· Adjusted operating profit (EBIT)* of £3.8m (2024: £2.6m)

· Basic earnings per share of 16.8p (2024: 9.5p)

· Adjusted earnings per share* 20.1p (2024: 10.7p)

· Equity dividends paid during the year of £0.3m (2024: £0.8m)

· Net cash position at 31 March 2025 of £2.5m (31 March 2024: net debt of £2.2m)

* stated prior to the impact of amortisation and provisions for closure costs relating to H Peel & Sons Limited (2024: amortisation and one-off contract losses in Arcas Building Solutions)

Operational summary

· The Group delivered strong growth in operating results during FY25, building on the strong performance of prior years; a testament to the continued hard work and commitment of the Group's employee base. 

· Site activity levels remained high, despite the ongoing macro-economic challenges and their related impact on the construction industry.

· Trading has been strong throughout FY25, with the group benefitting from the very dry winter period and the strategy of maintaining a good balance of private and public sector clients. 

· A final dividend of 2.5p per ordinary share is proposed. In addition, a special dividend of 1.0p per ordinary share is proposed to reward shareholders following the excellent trading performance in FY25.

Post Period: Board appointment

· Julian Davis joined as Chief Financial Officer on 9 May 2025. Julian is a Chartered Accountant and brings significant experience with listed and privately owned businesses in the construction, contracting, and housebuilding sectors. 

Outlook

· Trading in the first quarter of the current financial year ("FY 26") has started positively and results are in line with management expectations for Q1 FY 26. 

· As always, the timing of Group turnover and profitability is difficult to predict, despite the continued strong forward order book, and our results are subject to monthly variability.

· The latest expectations for FY26 are for operating profits to remain consistent with the excellent results in FY25 notwithstanding significant investments in both personnel and premises to generate further growth. 

Simon Carr CBE, Chairman of Northern Bear, commented:

"I am delighted with the Group's excellent results for the year, and I would like to wholeheartedly thank all of our employees for their talent, hard work and commitment, and our shareholders for their continued support.

I am also pleased to welcome Julian Davis to the executive team and look forward to continuing to work with the Board in my role as Chairman as we build on this success."

For further information contact:

Chief Executive Officer's Report

Introduction

I am delighted to report the results for the year to 31 March 2025 ("FY25") for Northern Bear Plc ("the Company") and its subsidiaries (together, "the Group"). This year has seen a strong performance from the operating businesses, with the exception of H Peel and Sons Limited ("H Peel"), which as previously announced was closed in May 2025. 

All of the Group's subsidiaries have benefited from the very dry winter period and also our strategy of maintaining a balanced mix of private and public sector clients.

Trading

Revenue in the year was £78.1m (2024: £68.7m) and gross profit increased to £19.2m (2024: £15.9m) at a gross margin of 24.6% (2024: 23.1%). Growth in revenue has been achieved through further investment in people, training and the relocation of businesses to support future growth plans.

The improved gross margin resulted from a move in the sales mix into the higher-margin areas of the Group's business and continued careful contract selection and execution. 

Administrative expenses have increased to £15.9m (2024: £13.5m). The increase largely relates to the investments referred to above, increased legal and professional costs and increased depreciation. General overheads also increased in line with the growth in revenue.

The Group incurred one-off provision costs in FY25 of £0.4m in relation to the costs of the closure of H Peel. These costs have been included in the calculation of alternative performance measures in note 3 below.

After taking account of these costs, the Group reported an operating profit of £3.4m (2024: £2.4m) and basic earnings per share of 16.8p (2024: 9.5p).

Northern Bear Roofing

Our roofing businesses have performed ahead of management expectations with growth in revenue from £32.4m in FY24 to £33.1m in FY25. The dry winter period has assisted in delivering the strong performance and our decision to invest in training and certification to enable our roofing teams to install photovoltaic roof systems has added to both revenue and profitability in the second half of the year. Operating profits in the roofing division increased to £2.5m (2024: £2.3m).

We will continue to invest in decarbonisation solutions within this division. This strategy will require short term investment in relocating businesses to support our growth plans, but will continue to strengthen our market position in this sector, particularly in public and private sector housing.

Northern Bear Specialist Building Services

Our building services division had a very strong year with revenue increasing from £32.5m in FY24 to £41.2m in FY25 and a corresponding increase in gross margin from 24.1% to 25.1%.

There has been significant growth in the delivery of passive fire stopping at Isoler Limited, our fire protection business. Whilst this has largely been market driven, our strategy of providing a one stop solution to end user / landlord clients is providing new work streams and opportunities both inside and outside the North East region. Against this backdrop, we will be making further investment in the management infrastructure, including a specialist compliance team in FY26 to further enhance our offering and provide a stable platform for future growth. 

Arcas Building Solutions Limited has performed well during year and stabilised its trading performance after challenges in the previous year. Improvements in the quality and delivery of contracts has resulted in improved margin performance during the year.

Our other contracting business, MGM Limited, has also traded strongly during the year with growth in both revenue and profitability.

We have previously announced our decision to close H Peel. Losses in FY24 of £0.2m lead to a full review of the business and a decision to close was made in early 2025. The company will continue to trade and fulfil all its contractual obligations in FY26. A provision for closure and associated costs of £0.4m has been made and the consolidated results for FY25 include trading losses of £0.5m. 

Northern Bear Materials Handling

Our materials handling business had another good trading year in FY25. During the period we made further investment into the hire fleet which will assist in growing our stable, long term hire revenues. 

Cash Flow and Bank Facilities

Cash generated from operations in FY25 was £7.7m (2024: £1.1m). The cash position at 31 March 2024 was significantly impacted by the timing of Easter and, as a result, the balance increased significantly in early April 2024. However, the cash generation in FY25 is primarily due to the Group's strong trading performance and demonstrates our ability to turn profits into cash.

In FY24, we funded the purchase of ordinary shares by way of a tender offer in October 2023, using a five year £3.5m amortising term loan with Virgin Money plc, our existing bankers. The loan balance at 31 March 2025 has reduced to £1.5m as a result of early repayments of £1m, made in addition to normal quarterly repayments, facilitated by our strong cash generation.

Our net bank cash position at 31 March 2025 was £2.5m (31 March 2024: £2.2m net debt). The net cash position consisted of £4.0m cash and cash equivalents (2024: £1.0m) and £1.5m bank debt (2024: £3.2m). 

As we have emphasised in previous years' results, our net cash (or net bank debt) position represents a snapshot at a particular point in time and can move by up to £1.5m in a matter of days, given the nature, size and variety of contracts that we work on and the resulting working capital balances. 

The lowest cash position during FY25 was £2.1m net bank debt, the highest was £2.5m net cash, and the average was £0.4m net bank debt.

While the Group's working capital requirements will continue to vary depending on the ongoing customer and contract mix, we believe that our financial position and bank facilities provide us with ample cash resources for the Group's ongoing operational requirements.

Strategy & Dividend

In September 2024, the Group paid a final dividend of £0.3m representing a 2p dividend per ordinary share. In FY24, significant returns of capital were made to shareholders, being £3.1m by way of tender offer (plus associated costs) and a further £0.8m in dividends.

Our priority is now to repay the remaining term debt and continue to invest in our businesses to generate further growth and create shareholder value.

However, whilst prioritising the repayment of the term debt, we recognise the importance of a regular dividend to the Company's shareholders and the Directors propose the payment of an increased final dividend of 2.5 p per share plus a special dividend of 1p per share, in recognition of this year's outstanding performance. This will be payable on 24 September 2025 to shareholders on the register on 29 August 2025. This is obviously subject to shareholder approval at the Annual General Meeting, which will be held on 9 September 2025.

Our intention is to continue with a progressive dividend policy, subject to the Group's relative performance and after considering the Group's available cash, working capital requirements, corporate opportunities, debt obligations, and the macro-economic environment at the relevant time.

Outlook

Our forward order book remains strong and is expected to support our trading performance in the coming months, subject to any business-specific considerations noted in the trading statement above. 

As we have regularly reported, the timing of Group turnover and profitability is difficult to predict, despite the continued strong order book, and our results are subject to monthly variability. We will continue to update shareholders with ongoing trading updates.

We have made a strong start to FY26 and results to date have been in line with management expectations.

People

I have now been in my role as Chief Executive Officer for over a year and, following a number of Board changes in FY24, there have been further changes in FY25.

Anil Khera

Anil resigned from his role as Non-Executive Director on 17 July 2024, as the Executive and Non-Executive Team was restructured, and the Board would like to thank Anil for his hard work and contribution to the Company and wishes him well for his future endeavours.

Tom Hayes

Tom resigned as a Director of the Company and its subsidiaries on 31 December 2024. Tom continued to work with the Group in a part time capacity until 31 March 2025. The Board would like to take this opportunity to thank Tom for his contribution to the Group over the last 10 years and wish him every success in his new role.

Simon Carr CBE

Simon Carr, who joined the Group on 17 July 2024 as Non-Executive Chairman, is a highly experienced individual with over 45 years' experience in the construction industry, having sat on the boards of both private and public companies. He was notably recognised in the 2020 Queen's Birthday Honours List, receiving a CBE for services to the construction industry and charity.

Simon sits on the board of trustees at Beverly Minister Old Fund and is the chair of the board of Road Link (A69) Limited and Road Link (A69) Holdings Limited (both companies that Henry Boot Plc hold a majority shareholding in). He is also the Independent Company Secretary and past national chair of the National Federation of Builders.

Simon was previously the Managing Director of Henry Boot Construction Limited and sat on the Executive Committee of Henry Boot Plc. He was also a private-sector board member for the Sheffield City Region Local Enterprise Partnership Board for eight years, sitting on a number of associated public and private sector boards. Simon sat on the CBI Construction Council for six years and is a past president of the Yorkshire Builders Federation.

Julian Davis

Julian joined as Group CFO on 9 May 2025 and brings extensive financial and sector-specific experience to Northern Bear. He began his career at KPMG, where he qualified as a chartered accountant. During this time, he worked closely with both listed and privately owned businesses across a range of sectors.

Subsequently, Julian served for ten years as CFO at a prominent regional residential developer. As a key member of the executive team, he was responsible for shaping and delivering strategic initiatives and driving financial and operational performance.

Following a 12-month career break, Julian joins Northern Bear, bringing with him significant experience in the construction, contracting, and housebuilding sectors.

Our workforce

As always, our loyal, dedicated, and skilled workforce is a key part of our success and we make every effort both to retain and protect them through continued training and health and safety compliance, supported by our health and safety advisory business, Northern Bear Safety Limited.

Conclusion

I am delighted with the Group's results for the year and look forward to continuing working with Simon and the Board in my role as Chief Executive Officer.

Once again, I would like to wholeheartedly thank all our employees for their hard work and commitment, and our shareholders for their continued support.

John Davies

Chief Executive Officer

Consolidated statement of comprehensive income

for the year ended 31 March 2025

Consolidated balance sheet

At 31 March 2025

Consolidated statement of changes in equity

For the year ended 31 March 2025

Consolidated statement of cash flows

For the year ended 31 March 2025

Notes

1 Basis of preparation

This announcement has been prepared in accordance with the Company's accounting policies which are based on International Financial Reporting Standards (IFRS Accounting Standards), though it is noted that this announcement does not contain sufficient information itself to comply with IFRS Accounting Standards.

The accounting policies are the same as those applied in preparation of the financial statements for the year ended 31 March 2024, apart from the following standards, amendments and interpretations, which became effective for the first time, and which were adopted by the Group for the financial year ended 31 March 2025:

· Lease Liability in a Sale and Leaseback (Amendments to IFRS 16) - effective date on or after 1 January 2024

· Classification of Liabilities as Current or Non-Current, Non-current Liabilities with Covenants: amendments to IAS 1 - effective date on or after 1 January 2024

· Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) - effective date on or after 1 January 2024

Their adoption has not had any material impact on the disclosures or amounts reported in the financial statements. For the purposes of their assessment of the appropriateness of the preparation of the Group's financial statements on a going concern basis, the directors have considered the current cash position and forecasts of future trading including working capital and investment requirements. 

During the financial year the Group met its day to day working capital requirements through bank facilities with Virgin Money plc. These facilities were refinanced in October 2023 and at that point comprised a £3.5m term loan, a £1.0m revolving credit facility, and a £1.0m bank overdraft. At 31 March 2025 the Group had cash and cash equivalents of £4.0m, with nothing drawn on the overdraft or revolving credit facility, and £1.5m outstanding on the term loan. 

The overdraft facility expires on 30 June 2026 and the revolving credit facility was most recently renewed on 20 October 2023 and is committed to 20 October 2026. The term loan was drawn down on 23 October 2023 and is repayable in full in equal quarterly instalments by 30 September 2028. 

The Group's forecasts and projections, taking account of reasonable possible changes in trading performance, show that the Group and the Company should have sufficient cash resources to meet its requirements for at least the next 12 months. Accordingly, the adoption of the going concern basis in preparing the financial statements remains appropriate.

2 Status of financial information

The financial information set out above does not constitute the Company's financial statements for the years ended 31 March 2025 or 31 March 2024. 

The financial statements for the year ended 31 March 2025 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The results are unaudited; however, we do not expect there to be any difference between the numbers presented and those within the annual report.

The financial information for the year ended 31 March 2024 is derived from the financial statements for that year, which have been delivered to the Registrar of Companies. The auditor has reported on the 2024 financial statements; their report was i) unqualified, ii) did not include references to any matters to which the auditors drew attention by way of emphasis, without qualifying their report, and iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006. 

3 Alternative performance measures

The Group uses Adjusted Operating Profit, Adjusted EBITDA, and Adjusted EPS as supplemental measures of the Group's profitability, in addition to measures defined under IFRS, and these items are discussed in the Chief Executive Officer's Report. The directors consider these useful due to the exclusion of specific items that could impact a comparison of the Group's underlying profitability, and is aware that shareholders use these measures to assist in evaluating performance. 

The adjusting items for the alternative measures of profit are either recurring but non-cash charges (amortisation of acquired intangible assets), one-off non-cash items, or significant one-off items (which are discussed further in the Chief Executive Officer's Report). 

Adjusted operating profit is calculated as below:

Adjusted EBITDA is calculated as below:

Adjusted basic and diluted earnings per share is presented in note 4 below. 

4 Earnings per share

Basic earnings per share is the profit or loss for the year divided by the weighted average number of ordinary shares outstanding, excluding those in treasury, calculated as follows:

The calculation of diluted earnings per share is the profit or loss for the year divided by the weighted average number of ordinary shares outstanding, after adjustment for the effects of all potential dilutive ordinary shares, excluding those in treasury, calculated as follows:

The following additional earnings per share figures are presented as the Directors believe they provide a better understanding of the trading performance of the Group.

Adjusted basic and diluted earnings per share is the profit or loss for the year, adjusted for the impact of costs associated with the closure of the H Peel & Sons Limited business (2024: costs of the tender offer to shareholders, Arcas contract losses, and amortisation), divided by the weighted average number of ordinary shares outstanding as presented above. More detail on these adjustments is included in the Chief Executive Officer's Report. 

Adjusted earnings per share is calculated as follows:

5 Finance income and costs

6 Loans and borrowings

The Group retains a £1.0m (2024: £1.0m) revolving credit facility and a £1.0m (2024: £1.0m) overdraft facility, both with Virgin Money plc, for working capital purposes. During the prior year, a £3.5m term loan was drawn down with Virgin Money plc and the revolving credit facility was reduced at the same time. 

As at 31 March 2025, a total of £nil (2024: £nil) was drawn down on the revolving credit and overdraft facilities, and £1.5m was outstanding on the term loan facility. 

This provides a net cash figure at 31 March 2025 of £2.5m (2024: £2.2m net debt) after offsetting cash and cash equivalents of £4.0m (2024: £1.0m). 

The overdraft facility expires on 30 June 2026, and the revolving credit facility was most recently renewed on 20 October 2023 and is committed to 20 October 2026. The term loan was drawn down on 23 October 2023 and is repayable in full in equal quarterly instalments by 30 September 2028. 

7 Availability of financial statements

The Group's Annual Report and Financial Statements for the year ended 31 March 2025 are expected to be approved by 21 July 2025 and will be posted to shareholders during the week commencing 21 July 2025. Further copies will be available to download on the Company's website at: http://www.northernbearplc.com. It is intended that the Annual General Meeting will take place at the Company's registered office, A1 Grainger, Prestwick Park, Prestwick, Newcastle upon Tyne, NE20 9SJ, at 1:00pm on 9 September 2025.