Northern Bear Plc Trading Update (8533D)
November 02 2020 - 2:00AM
UK Regulatory
TIDMNTBR
RNS Number : 8533D
Northern Bear Plc
02 November 2020
2 November 2020
Northern Bear plc
("Northern Bear" or the "Company")
Trading Update
The board of directors of Northern Bear plc (the "Board") is
pleased to provide an update on trading for the six month period
ended 30 September 2020 ("H1 FY21") for the Company and its
subsidiaries (together the "Group").
We provided updates on trading for H1 FY21 in the preliminary
results announcement dated 13 July 2020 and on the date of the
Annual General Meeting on 18 August 2020. In the latter
announcement the Board noted an intention to provide a further
trading update in October 2020. At that time the COVID-19 case load
was relatively low and, should this have continued, we hoped to be
able to provide a further positive update effectively post COVID-19
restrictions. The situation has since worsened, with a new four
week lockdown for England commencing on 5 November, and it now
appears clear that the Group will be working with widespread
restrictions over the coming months.
As stated previously, the COVID-19 pandemic had a major impact
on the construction industry with the majority of the Group's
businesses seeing construction sites close in late March and, as a
result, the Group had limited on-site work opportunities at that
time.
We are pleased to say that, while activity levels were low
during April, there was a gradual and sustained improvement during
the latter part of May and June, with a number of private sector
and local authority contracts resuming. This allowed us to restrict
the extensive losses that would have occurred across the majority
of our businesses in a worst-case scenario with no site activities
over a period of months.
On release of our preliminary results in July we were operating
at circa 75% of normal activity levels, and trading profitably
again, and by our AGM date in August we had seen a further increase
to circa 90% of normal levels. We have since had a solid trading
month in September. We are pleased to report that, as a result of
the strong trading as the second quarter progressed, we expect to
report a small overall trading profit for H1 FY21. Given the
circumstances faced in March, this performance is testament to the
loyal workforce of the Group, many of whom took voluntary wage
reductions to help restrict fixed overheads during the lockdown
period and beyond.
The impact on our subsidiary businesses has varied over H1 FY21,
with Isoler Limited (our fire protection business) busy throughout
the period due to many of its ongoing projects being deemed
essential works. Conversely, H Peel & Sons Limited, our fit out
and interiors business has seen a major impact on its core
hospitality and leisure markets from COVID-19 restrictions and has
experienced a very challenging period which, given the new sector
restrictions imposed in recent weeks by the Government, is likely
to continue throughout the second half of the financial year.
Our forward order book remains strong and should support our
operating performance in the remainder of this financial year,
subject to a continued ability to fulfil contracts on site. The
renewed restrictions put in place following the outbreak of the
second wave of COVID-19 infections have increased inherent
uncertainty in our industry, impacting both our customer base and
supply chain, and are expected to remain headwinds to short term
trading. We will do everything possible to maintain our site
activities, by ensuring the first class safety procedures that our
safety team have devised over this challenging period continue to
remain fluid and in place in order to protect all of our workforce,
customers, and members of the public.
In the meantime our financial position remains strong and,
whilst it reflects only a snapshot in time and our working capital
requirements swing on a daily basis, the Group was in a position of
having a net cash rather than debt position as at 30 September
2020. We have made use of our GBP1m overdraft facility in H1 FY21
and subsequent to the period end, but have not drawn any of the
GBP3.5m revolving credit facility since April 2020. Together with
the strong order book, this strong cash and headroom position means
that we are well placed to trade through a further difficult and
uncertain period during this second wave of the pandemic and
beyond.
The Group's unaudited interim results will be released in the
week commencing 23 November 2020.
For further information, please contact:
Northern Bear PLC
Steve Roberts - Executive Chairman
Tom Hayes - Finance Director +44 (0) 166 182 0369
Strand Hanson Limited (Nominated Adviser and Broker)
James Harris
James Bellman +44 (0) 20 7409 3494
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014.
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