REG - Northamber PLC - Interim Report
27/03/2025 07:15
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250327:nRSa3642Ca&default-theme=true
RNS Number : 3642C Northamber PLC 27 March 2025
Northamber PLC
("Northamber" or the "Company" or the "Group")
Interim Report for the Six months to 31 December 2024
Chairman's Statement
Results
The Group now has over 80% of sales coming from Audio Visual, Cyber Security
or Network Infrastructure; this is a significant evolution. Our acquisition of
Tempura Communications (Tempura) in April 2024 (a Unified Communications and
Pro Audio distributor) and Renaissance Contingency Services (RCS) in July 2024
(Cyber security distributor in Ireland) build on the existing businesses
Northamber and its subsidiary AVM already have in these categories and will
help continue our focus on specialisation. The acquisition of Epatra BV in the
Netherlands in February 2025 will serve to further increase this focus.
Northamber continued to make significant strategic strides in the first half
of the year as we work to ensure a strong mid and long term performance with a
focus on higher margin, technical distribution. This focus combined with the
benefits of recent acquisitions led to a modest increase in Group revenue to
£32.1m (of which £8.7m arose from the acquisitions), up from £29.2m the
prior year (+9.9%). More importantly, gross margin increased from £4.0m to
£5.1m (+27.5%), reaching its highest percentage margin in many years of
16.1%, up from 14.0% prior year. This reflects our continued exit from, and
deprioritizing of, low margin commodity business in legacy Northamber business
and the clear strategic decision to focus on value add, higher margin,
technical distribution supported by acquisitions and organic focus.
Our strategic acquisitions have bedded in well, with both Tempura and RCS
profitable for the period under review. It is particularly pleasing to report
that RCS has shown year-on-year growth and is now profitable, which further
strengthens our position in this important market. The cross-selling
opportunities that these acquisitions present are beginning to materialize
with new territories added across the Group for a number of vendors, and we
expect to see further benefits in the second half of the current financial
year and into the next.
Whilst challenging market conditions remain in the UK, our continued focus on
investing for the future means we are confident that when markets return to
expected growth levels we should be well positioned to drive significant
profitable and sustainable growth. Some examples of this include increasing
our investment in professional services and rolling out our AVail+ services
business across the UK subsidiaries and business units; a focus on growing
services is expected to support partners and allow Northamber to benefit from
higher margins and protection from commodity focused competitors.
Our European sales have seen significant growth, increasing from less than 2%
to nearly 15% of our total sales with the additional sales due to the
acquisition of Tempura and RCS, and we anticipate further growth following the
acquisition of Epatra BV in the Netherlands.
Whilst we continue to invest in strategic areas we have also taken steps to
address our cost base with annualised savings of £750K having been
implemented through the first half with associated termination costs of £90K;
we will see the benefit of these annual cost reliefs from the second half
onwards. Tempura's leased Irish address has already been consolidated into the
RCS Irish leased office. Tempura's owned Basingstoke office and demo centre in
the UK will be consolidated with Northamber's Basingstoke office into a single
larger leased Basingstoke office and demo centre that will allow us to better
demonstrate and sell our higher margin technical AV products.
We closely track our position with our key supplier franchises and remain
number 1 or number 2 for most of them so we are therefore confident that as
the market recovers from these temporary hardships we will be in a strong
position to capitalise.
Despite adding Tempura and Renaissance to the Group since this period last
year, overall stock levels reduced from £10.3m in December 2023 to £9.9m as
we continued to focus on cash utilisation.
The acquisition costs of Renaissance were £57K so together with the £90K of
termination costs in the first half as previously advised the Group achieved
an adjusted EBITDA profit of £66K versus a loss of £77K in the prior year.
A £168k foreign exchange loss tied largely to exiting forward contracts
inherited on the acquisition of Tempura Communications significantly reduced
the EBITDA profit; without this Forex position, adjusted EBITDA excluding
Forex would have been £234k profit.
In February, after the start of the second half, we announced the acquisition
of Epatra BV, a value-add distributor of Audio Visual solutions and services
in BeNeLux which as previously reported will:
- build on Northamber's Audio Visual business; a core strategic
focus area for the Group
- provide a core engine for European expansion, especially into
the BeNeLux market but providing scope to grow from there;
- provide strong cross selling opportunities across Epatra and the
existing Group businesses as we look to introduce strategic vendors across the
portfolio and build on our enhanced offering in audio-visual, unified
communications, and cyber solutions and services; and
We remain committed to investing for the future, and our recent acquisitions,
along with our focus on high-margin, technical distribution, position us well
to capitalize on market opportunities as conditions improve.
Financial position
We remain diligent in managing our balance sheet with a focus on cash and
stock. We have undertaken a number of acquisitions in a short time period as
we identified opportunities to quickly and efficiently drive the business
forward in strategic areas; these acquisitions were managed in a financially
disciplined way with a focus on managing risk by including an earn out element
where possible.
As stated above, we are pleased to have reduced stock levels year on year but
we continue to recognize the importance to maintain strong stock holding for
our partners as stock availability and supply chains remain fragile.
Cash reserves at £2.6 million were marginally up on the same period last year
(£2.5 million). With Net Assets at £21.7 million, including two
unencumbered freehold properties, the Group's overall financial position
remains very sound.
Net Assets at 79.8p per share are considerably in excess of the average price
of the ordinary shares throughout the period.
Dividend
As in previous years, your Board has had regard to the strength of our balance
sheet and is proposing the interim dividend be 0.3p, at a total cost of
£82,240. The dividend will be paid on 25 April 2025 to shareholders on the
register as at 11 April 2025.
Staff
Our staff remain a key asset for the business and an area we continue to
invest in. The team has continued to work hard to support our partners and
each other. Our plans remain to continue to invest in our evolving business
model by continuing to invest in building out the best team in the market to
achieve our business evolution.
Outlook
Following the period end, we have implemented a number of changes that were
planned during the first half, including the acquisition of Epatra, as
referenced above.
The focus on efficiency has continued with the consolidation in H2 of
premises.
We necessarily remain cautious short term as the UK market continues to be
challenging but industry analysts now expect a recovery through calendar year
2025, especially in the second half in demand levels as business confidence
hopefully returns. Despite a challenging environment we remain committed to
proactively finding opportunities.
In the mid-term we are cautiously optimistic that our focus and investments
will allow us to drive growth of strategic business units and therefore unlock
long term value for shareholders.
The strength of our balance sheet allows us to continue to do what is best for
the business strategically and we continue to review organic and non-organic
opportunities for growth which meet our strict criteria and add value for our
shareholders.
Alexander Phillips
Chairman
27 March 2025
Contacts:
Northamber PLC
investor_relations@northamber.com (mailto:investor_relations@northamber.com)
Alexander Phillips, Chairman
Singer Capital Markets (Nominated Adviser and Sole Broker) Tel: +44 (0) 207 496 3000
Philip Davies
Finn Gordon
Northamber PLC
("Northamber" or the "Company" or the "Group")
Interim Report for the Six months to 31 December 2024
Consolidated Statement of Comprehensive Income
6 months to 31 December 2024
6 months 6 months Year
Ended Ended Ended
31.12.24 31.12.23 30.06.24
£'000 £'000 £'000
Unaudited Unaudited Audited
Revenue 32,182 29,246 56,008
Cost of sales (27,073) (25,149) (47,969)
Gross Profit 5,109 4,097 8,039
(2,853) (2,766) (5,308)
Distribution costs
Administrative costs (2,742) (1,796) (4,147)
Operating Loss (486) (465) (1,416)
Finance income 2 52 87
Finance cost (114) - -
Loss before Tax (598) (413) (1,329)
Tax expense - - -
Loss for the period and total comprehensive income
Attributable to the owners (598) (413) (1,329)
Basic and diluted loss per ordinary share (2.18p) (1.52p) (4.85p)
(2.18p)
(1.52p)
(4.85p)
Consolidated Statement of Financial Position
As At 31 December 2024
6 months Ended 31.12.24 6 months Year Ended
Ended 31.12.23 30.06.24
£'000 £'000 £'000
Unaudited Unaudited Audited
Non -current assets
Property, plant and equipment 5,748 5,830 5,835
Intangible assets 4,128 1,203 3,933
9,876 7,033 9,768
Current assets
Inventories 9,893 10,301 11,838
Trade and other receivables 12,808 10,966 12,107
Cash and cash equivalents 2,640 2,534 4,687
25,341 23,801 28,632
Total assets 35,217 30,834 38,400
Current liabilities
Trade and other payables (12,875) (7,370) (15,459)
Corporation tax payable - - -
Non-current liabilities
Deferred tax liability (456) - (456)
Total liabilities (13,331) (7,370) (15,915)
Net assets 21,886 23,464 22,485
Equity
Share capital 274 272 274
Share premium account 5,832 5,734 5,832
Capital redemption reserve 1,514 1,514 1,514
Retained earnings 14,265 15,944 14,865
Equity shareholders' funds attributable to the owners of the parent 21,886 23,464 22,485
Consolidated Statement of Changes in Equity
As at 31 December 2024
Share capital Share premium account Capital redemption reserve Treasury Shares Retained earnings Total Equity
£'000 £'000 £'000 £'000 £'000 £'000
Period to 31 December 2023
Unaudited
Balance at 1 July 2023 272 5,734 1,514 - 16,357 23,877
Dividends - - - - - -
Loss and total comprehensive
income for the period - - - - (413) (413)
Balance at 31 December 2023 272 5,734 1,514 - 15,944 23,464
Period to 31 December 2024
Unaudited
Balance at 1 July 2024 274 5,832 1,514 - 14,865 22,485
Dividends - - - - - -
Loss and total comprehensive
Income for the period - - - - (598) (598)
Balance at 31 December 2024 274 5,832 1,514 - 14,267 21,887
Year to 30 June 2024
Audited
Balance at 1 July 2023 272 5,734 1,514 - 16,357 23,877
Issue of shares 2 98 - - - 100
Dividends - - - (163) (163)
Transactions with owners 2 98 - - (163) (63)
Loss and total comprehensive
Income for the period - - - - (1,329) (1,329)
Balance at 30 June 2024 274 5,832 1,514 - 14,865 22,485
Consolidated Statement of Cash Flows
6 months to 31 December 2024
6 months 6 months Year
Ended Ended Ended
31.12.24 31.12.23 30.06.24
£'000 £'000 £'000
Unaudited Unaudited Audited
Cash flows from operating activities
Operating loss from
continuing operations (600) (465) (1,416)
Depreciation of property, plant
and equipment 301 223 180
Amortisation of intangible assets 247 48 128
Profit on disposal of property, - - -
plant and equipment
Operating loss before changes in
working capital (52) (194) (1,108)
Decrease/(Increase) in inventories 1,946 1,146 2,588
Decrease/(increase) in trade and other receivables (702) 1,133 2,193
(Decrease)/increase in trade and
other payables (2,584) (4,581) (3,942)
Cash generated/(used) from operations (1,392) (2,496 (269)
Income taxes paid - - -
Net cash from operating activities -1,392 -2,496 -269
Cash flows from investing activities
Interest received 2 52 87
Interest paid (114) - -
Purchase of subsidiaries (net of cash acquired) (382) - (2,865)
Purchase of software - - (395)
Purchase of property, plant and
Equipment (161) (534) (40)
Net cash from investing activities (655) (482) (3,213)
Cash flows from financing activities
Dividends paid to equity shareholders - - (163)
New invoice discounting facility - 2,820
Net cash used in financing activities - - 2,657
Net increase/(decrease) in cash and
cash equivalents (2,046) (2,978) (825)
Cash and cash equivalents at
beginning of period 4,687 5,512 5,512
Cash and cash equivalents at end of period 2,640 2,534 4,687
Notes to the financial statements
1. Corporate Information
The financial information for the half year ended 31 December 2024 set out in
this interim report does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006. The auditor's report on the financial
statements for the year ended 30 June 2024 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 2024. 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
2024.
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 2024 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
The consolidated financial statements incorporate the financial statements of
Northamber plc and entities controlled by Northamber plc. Control is achieved
if all three of the following are achieved: power over the investee, exposure
to variable returns for the investee, and the ability of the investor to use
its power to affect those variable returns.
The results of subsidiaries are included in the consolidated statement of
comprehensive income and consolidated statement of financial position.
The results of entities acquired or disposed of during the year are included
in the consolidated statement of comprehensive income from the effective date
of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, the accounts of the subsidiaries are adjusted to conform to
the group's accounting policies. All intra-group transactions, balances,
income and expenses are eliminated on consolidation.
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 period. Revenue is attributable to individual countries based on the
location of the customer. All non-current assets are located in the country of
domicile.
UK Other Total
£'000 £'000 £'000
6 months to December 2024
Total Segment revenue 27,476 4,706 32,182
Year to 30 June 2024
Total Segment revenue 55,339 669 56,008
No customer accounted for more than 10% of the Group's revenue during the
period.
5. Taxation
No tax charge has been provided in the interim consolidated financial
statements due to the availability of carried forward losses.
6. Earnings per Share
The calculation of earnings per share is based on the Loss after tax for the
six months to 31 December 2024 of £598,000 (2023: Loss £413,000) and a
weighted average of 27,413,404 (2023: 27,231,586) ordinary shares in issue.
7. 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 10 to
11 of the Annual Report and Accounts for the year ended 30 June 2024 (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
· Inflationary 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 A M Phillips is the ultimate controlling party of the Company.
During the six months period, the company paid £150,000 (2023: £150,000)
rent to Anitass Limited, a wholly owned subsidiary. The company received
£22,644 recharged salary costs (2023: £nill). At 31 December 2024 Northamber
plc owed Anitass Ltd £9,372,796 (2023: £9,124,000).
During the six months period, the company received £12,000 (2023: £12,000)
rent, £33,000 (2023: £33,000) management charge and £100,572 recharged
salary costs (2023: £0) from Audio Visual Material Limited "AVM", a wholly
owned subsidiary.
During the six months period, AVM purchased £292,707 (2023: £185,116) worth
of goods from Northamber Plc and Northamber Plc purchased £219,766 (2023:
£184,440) worth of goods from AVM. AVM owed £623,027 (2023: £45,086) to
Northamber at 31 December 2024.
During the six months period, the company received £41,279 in recharged
salary costs from Tempura Communication Limited, a wholly owned subsidiary.
During the six months period Tempura Communication Limited, purchased £38,745
worth of goods from Northamber Plc and Northamber Plc purchased £204,060
worth of goods from Tempura Communication Limited. Tempura Communication
Limited owed £120,121 to Northamber at 31 December 2024.
During the six months period, the company received £19,904 in recharged
salary costs from Renaissance Contingency Services, a wholly owned subsidiary.
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.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR PPUMPWUPAGQQRecent news on Northamber
See all newsREG - Northamber PLC - Board Changes
AnnouncementREG - Northamber PLC - Purchase of Own Shares
AnnouncementREG - Northamber PLC - Board Appointment
AnnouncementREG - Northamber PLC - Interim Report
AnnouncementREG - Northamber PLC - Acquisition of Epatra
Announcement