TIDMNTBR
RNS Number : 6636T
Northern Bear Plc
26 November 2021
26 November 2021
Northern Bear plc
("Northern Bear" or the "Company")
Interim results for the six month period ended 30 September
2021
The board of directors of Northern Bear (the "Board") is pleased
to announce the unaudited interim results for the Company and its
subsidiaries (together the "Group") for the six months to 30
September 2021.
Financial Summary
-- Revenue of GBP30.0m (H1 2020: GBP20.1m)
-- Adjusted operating profit* of GBP1.5 m (H1 2020: GBP0.5m)
-- Net cash of GBP0.6m at 30 September 2021
-- Robust trading performance despite industry-wide supply chain
disruptions and staffing challenges
-- Positive outlook for the second half of the financial year
-- Appointment of two new independent non-executive Directors
with significant corporate, financial, and real estate
experience
* stated prior to the impact of amortisation and impairment
charges
Jeff Baryshnik, Non-Executive Chairman of Northern Bear,
commented:
"We are pleased to announce strong operating results for the
period, despite ongoing industry-wide challenges."
"It is a testament to the executive team and subsidiary
operating teams that these results exceed those from the comparable
pre-pandemic period for the six months ended 30 September 2019.
With a strong order book, we are well positioned to continue to
generate a more normalised level of profitability."
For further information please contact:
+44 (0) 166
Northern Bear plc 182 0369
Jeff Baryshnik - Non-Executive Chairman +44 (0) 166
Tom Hayes - Finance Director 182 0369
Strand Hanson Limited (Nominated Adviser
and Broker)
James Harris +44 (0) 20 7409
James Bellman 3494
Chairman's Statement
Introduction
I am pleased to report the unaudited interim results for the six
months ended 30 September 2021 (the "Period") for Northern Bear plc
(the "Company" and, together with its subsidiaries, the
"Group").
Further to the recent trading update, I am pleased to confirm
the Group's results for the Period, with adjusted operating profit
(stated prior to the impact of amortisation and impairment charges)
of GBP1.5m (H1 2020: GBP0.5m) and diluted earnings per share of
6.1p (H1 2020: 13.2p diluted loss per share).
In our last Annual Report and Accounts published in July 2021,
we noted the industry-wide challenges with respect to both
availability and price inflation of construction materials. There
also have been well-publicised challenges in relation to attracting
and retaining employees in the construction industry. Despite the
impact of these headwinds on our businesses, our Group generated
strong operating results that exceeded those of the comparable
pre-pandemic period for the six months ended 30 September 2019.
Trading
Despite industry-wide challenges, our Group companies generated
strong results in aggregate during the Period. Our roofing division
was somewhat more adversely impacted by materials shortages than
the other divisions, but our companies have strong and
well-established supplier relationships and have been able, on the
whole, to work with our robust supply chain to ensure continuity of
supply for contracts
Revenue for the Period was GBP30.0m (H1 2020: GBP20.1m) and,
through the greater economy of scale from higher revenues along
with continued careful contract selection and execution, gross
margins materially exceeded those of the period ending 30 September
2020 ("Prior Period") at 19.5% (H1 2020: 14.5%).
Administrative expenses increased to GBP4.5m (H1 2020: GBP3.8m)
due to both an element of semi-variable costs in the overhead base
and the voluntary and temporary wage reductions incurred by Group
directors during the Prior Period.
Overall profit before income tax for the Period was GBP1.4m (H1
2020: GBP2.4m loss) and diluted earnings per share was 6.1p (H1
2020: 13.2p diluted loss per share).
Cash flow
Net cash at 30 September 2021 was GBP0.6m (30 September 2020:
GBP0.6m, 31 March 2021: GBP2.1m).
We had stated in the March 2021 results that the cash position
at 31 March 2021 reflected some favourable working capital swings
which to an extent would be expected to reverse post year-end. This
was the case, and the current customer and contract mix has an
increased working capital requirement which reduced the cash
balance during the Period.
As we have emphasised previously, the net cash/bank debt
position represents a snapshot at a particular point in time and
our net cash/bank debt position can move by up to GBP1.5m in a
matter of days given the nature, size and variety of contracts and
their associated working capital requirements. The highest bank
position during the Period was GBP2.5m net cash, the lowest net
bank debt position during the period was GBP1.2m net bank debt, and
the average was GBP0.1m net cash.
Our existing GBP3.5m revolving credit facility with Virgin Money
plc (previously known as Yorkshire Bank) was renewed in March 2020
and provides us with committed working capital facilities to May
2023, along with a GBP1m overdraft facility which is renewable
annually.
Strategy and Dividend
Following recent Board appointments, as detailed below, I have
commenced a process of engaging with the Board and management to
discuss and review the Group's strategy and approach to capital
allocation, including the dividend policy. Once this process is
completed, we will provide further information to shareholders. Our
existing policy is to pay only a final dividend, at the Board's
discretion, and to assess future dividend levels in line with the
Group's relative performance, after taking into account 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 should support our
trading performance in the coming months, subject to the ongoing
supply chain and staffing challenges noted above and the
uncertainty over the long-term outlook for the COVID-19
pandemic.
People and Board changes
As announced on 11 November 2021, I am pleased that Harry Samuel
and Anil Khera were appointed to the Board as non-executive
directors effective as of that date.
Anil Khera began his career at Credit Suisse, within DLJ Real
Estate Capital Partners, before joining Blackstone's real estate
investment team in 2006 where he spent 10 years, becoming a
managing director of the Real Estate Capital Markets team in 2011.
In 2016, Mr Khera founded Node Living, a fully integrated
residential investment, development and management company based in
London which operates across Europe and North America.
Harry Samuel spent over 20 years across various leadership roles
within Royal Bank of Canada (RBC). This included roles as Global
Head of Funding and Liquidity Asset Management, Foreign Exchange
and Commodities, and Fixed Income and Currencies, before becoming
CEO of RBC Capital Markets Europe in 2011 and subsequently CEO of
RBC Investor & Treasury Services and Chair of RBC's European
Executive Committee from 2013 to 2019. Mr Samuel currently serves
as CEO of Affordable Housing Communities Limited and Managing
Director of Affordable Housing and Healthcare Group Limited, a
leading UK developer, constructor and operator of shared ownership
communities working in partnership with local authorities, NHS
Trusts and institutional investors to create socially impactful
developments.
The Company also announces that, further to the Company's
announcement of 24 August 2021, John Holroyd has retired from the
Board. Steve Roberts, formerly Executive Chairman, resigned as a
Director of the Company on 24 August and continues to be part of
the Group's operational management team and a Director of all our
subsidiary companies. The Board and I would like to thank John and
Steve for their contributions as Directors of the Company.
Conclusion
I am pleased to report a strong set of results for the Period
that exceeded those of the comparable pre-pandemic period for the
six months ended 30 September 2019 despite widespread industry
challenges. As always, our loyal, dedicated and skilled workforce
is a key part of our success, and we make every effort to support
them through continued training and health and safety compliance. I
would once more like to thank all of our employees for their hard
work and contribution.
Jeff Baryshnik
Non-Executive Chairman
26 November 2021
Consolidated statement of comprehensive income
for the six month period ended 30 September 2021
6 months ended 6 months ended Year ended
30 September 30 September
2021 2020 31 March 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 29,973 20,105 49,182
Cost of sales (24,114) (17,190) (40,726)
--------------- --------------- --------------
Gross profit 5,859 2,915 8,456
Other operating income 86 1,366 1,549
Administrative expenses (4,459) (3,806) (8,640)
--------------- --------------- --------------
Operating profit (before
amortisation and other
adjustments) 1,486 475 1,365
--------------- --------------- --------------
Impairment charge - (2,807) (2,807)
Amortisation of intangible
assets arising on acquisitions (7) (16) (13)
--------------- --------------- --------------
Operating profit/(loss) 1,479 (2,348) (1,455)
Finance costs (65) (68) (176)
--------------- --------------
Profit/(loss) before income
tax 1,414 (2,416) (1,631)
Income tax expense (270) (60) (162)
--------------- --------------- --------------
Profit/(loss) for the period 1,144 (2,476) (1,793)
--------------- --------------- --------------
Total comprehensive income/(loss)
attributable to equity
holders of the parent 1,144 (2,476) (1,793)
=============== =============== ==============
Earnings per share from
continuing operations
Basic earnings/(loss) per
share 6.1p (13.3p) (9.6p)
Diluted earnings/(loss)
per share 6.1p (13.2p) (9.6p)
Consolidated balance sheet
at 30 September 2021
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Property, plant and equipment 3,893 3,375 3,596
Right of use asset 1,183 1,198 1,094
Intangible assets 18,037 18,040 18,044
Trade and other receivables 1,006 1,080 872
Total non-current assets 24,119 23,693 23,606
Inventories 1,080 881 974
Trade and other receivables 12,010 10,673 9,843
Cash and cash equivalents 563 569 2,114
Total current assets 13,653 12,123 12,931
------------- ------------- ---------
Total assets 37,772 35,816 36,537
============= ============= =========
Equity
Share capital 190 190 190
Capital redemption reserve 6 6 6
Share premium 5,169 5,169 5,169
Merger reserve 9,703 9,703 9,703
Retained earnings 8,362 6,535 7,218
Total equity attributable to
equity holders of the Company 23,430 21,603 22,286
============= ============= =========
Liabilities
Deferred consideration 50 50 -
Trade and other payables - - 122
Lease liabilities 1,078 1,114 1,039
Deferred tax liabilities 487 294 487
Total non-current liabilities 1,615 1,458 1,648
------------- ------------- ---------
Loans and borrowings 22 31 28
Deferred consideration - 50 50
Trade and other payables 11,703 11,705 11,936
Lease liabilities 565 571 533
Current tax payable 437 398 56
Total current liabilities 12,727 12,755 12,603
------------- ------------- ---------
Total liabilities 14,342 14,213 14,251
============= ============= =========
Total equity and liabilities 37,772 35,816 36,537
============= ============= =========
Consolidated statement of changes in equity
for the six month period ended 30 September 2021
Capital
Share redemption Share Merger Retained Total
capital reserve premium reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2020 190 6 5,169 9,703 9,011 24,079
Total comprehensive income
for the period
Loss for the period - - - - (2,476) (2,476)
At 30 September 2020 190 6 5,169 9,703 6,535 21,603
========= ============ ========= ========= ========== ========
At 1 April 2020 190 6 5,169 9,703 9,011 24,079
Total comprehensive income
for the year
Loss for the year - - - - (1,793) (1,793)
At 31 March 2021 190 6 5,169 9,703 7,218 22,286
========= ============ ========= ========= ========== ========
At 1 April 2021 190 6 5,169 9,703 7,218 22,286
Total comprehensive income
for the period
Profit for the period - - - - 1,144 1,144
At 30 September 2021 190 6 5,169 9,703 8,362 23,430
========= ============ ========= ========= ========== ========
Consolidated statement of cash flows
for the six month period ended 30 September 2021
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating
activities
Operating profit/(loss) for
the period 1,479 (2,348) (1,455)
Adjustments for:
Depreciation of property,
plant and equipment 312 283 600
Depreciation of lease asset 174 185 373
Amortisation 7 16 13
Impairment charge - 2,807 2,807
Profit/(loss) on sale of property,
plant and equipment (5) 2 -
1,967 945 2,338
Change in inventories (106) 126 33
Change in trade and other
receivables (2,301) (2,472) (1,434)
Change in trade and other
payables (355) 2,514 2,867
--------------- --------------- -----------
Cash (used in)/generated from
operations (795) 1,113 3,804
Interest paid (42) (33) (176)
Tax paid 111 - (252)
--------------- --------------- -----------
Net cash flow from operating
activities (726) 1,080 3,376
--------------- --------------- -----------
Cash flows from investing
activities
Proceeds from sale of property,
plant and equipment 240 218 420
Acquisition of property, plant
and equipment (727) (591) (1,200)
Acquisition of subsidiary
(net of cash acquired) - - (50)
--------------- --------------- -----------
Net cash from investing activities (487) (373) (830)
--------------- --------------- -----------
Cash flows from financing
activities
Repayment of borrowings (6) (3,500) (3,503)
Repayment of lease liabilities (332) (296) (587)
Net cash from financing activities (338) (3,796) (4,090)
--------------- --------------- -----------
Net decrease in cash and cash
equivalents (1,551) (3,089) (1,544)
Cash and cash equivalents
at start of period 2,114 3,658 3,658
Cash and cash equivalents
at end of period 563 569 2,114
=============== =============== ===========
1. Basis of preparation
These interim consolidated financial statements have been
prepared using accounting policies based on International Financial
Reporting Standards (IFRS and IFRIC Interpretations) issued by the
International Accounting Standards Board ("IASB") as adopted for
use in the UK. They do not include all disclosures that would
otherwise be required in a complete set of financial statements and
should be read in conjunction with the 31 March 2021 Annual Report
and Financial Statements. The financial information for the half
years ended 30 September 2021 and 30 September 2020 does not
constitute statutory accounts within the meaning of Section 434 (3)
of the Companies Act 2006 and both periods are unaudited. The
financial information has not been prepared (and is not required to
be prepared) in accordance with IAS 34 Interim Financial
Reporting.
The annual consolidated financial statements of Northern Bear
plc (the "Company", or, together with its subsidiaries, the
"Group") are prepared in accordance with International Financial
Reporting Standards in conformity with the Companies Act 2006. The
comparative financial information for the year ended 31 March 2021
included within this report does not constitute the full statutory
Annual Report for that period. The statutory Annual Report and
Financial Statements for the year ended 31 March 2021 have been
filed with the Registrar of Companies. The Independent Auditors'
Report on the Annual Report and Financial Statements for the year
ended 31 March 2021 was i) unqualified, ii) did not draw attention
to any matters by way of emphasis, and iii) did not contain a
statement under 498(2) - (3) of the Companies Act 2006.
2. Accounting policies
The Group has applied the same accounting policies and methods
of computation in its interim consolidated financial statements as
in its 2021 annual financial statements, as set out in Notes 2 and
3 of that document, except for those that relate to new standards
and interpretations effective for the first time for periods
beginning on (or after) 1 April 2021, and will be adopted in the
2022 financial statements. The accounting policies applied are
based on the recognition and measurement principles of IFRS in
issue as adopted by the UK and are effective at 31 March 2022 or
are expected to be adopted and effective at 31 March 2022.
New and amended standards and interpretations issued by the IASB
that will apply for the first time in the next annual financial
statements include:
-- Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) - effective date on or after
1 January 2021.
-- Covid 19-Related Rent Concessions Beyond 30 June 2021
(Amendment to IFRS 16 Leases) - effective date on or after 1 April
2021.
Adoption of the above standards and interpretations is not
expected to have a material impact on the Group's financial
statements.
3. Taxation
The taxation charge for the six months ended 30 September 2021
is calculated by applying the Directors' best estimate of the
annual effective tax rate to the profit for the period.
4. Earnings per share
Basic earnings per share is the profit or loss for the period
divided by the weighted average number of ordinary shares
outstanding, excluding those held in treasury, calculated as
follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
Profit/(loss) for the period
(GBP'000) 1,144 (2,476) (1,793)
------------- ------------- -----------
Weighted average number of ordinary
shares excluding shares held
in treasury for the proportion
of the year held in treasury
('000) 18,665 18,665 18,665
Basic earnings/(loss) per share 6.1p (13.3p) (9.6p)
------------- ------------- -----------
The calculation of diluted earnings per share is the profit or
loss for the period 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:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
Profit/(loss) for the period
(GBP'000) 1,144 (2,476) (1,793)
------------- ------------- -----------
Weighted average number of
ordinary shares excluding shares
held in treasury for the proportion
of the year held in treasury
('000) 18,665 18,665 18,665
Effect of potential dilutive
ordinary shares ('000) 43 46 43
------------- ------------- -----------
Diluted weighted average number
of ordinary shares excluding
shares held in treasury for
the proportion of the year
held in treasury ('000) 18,708 18,711 18,708
------------- ------------- -----------
Diluted earnings/(loss) per
share 6.1p (13.2p) (9.6p)
------------- ------------- -----------
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 period, adjusted for impairment charges, acquisition
related items, and transaction and other one-off costs, divided by
the weighted average number of ordinary shares outstanding as
presented above.
Adjusted earnings per share is calculated as follows:
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
Profit/(loss) for the period (GBP'000) 1,144 (2,476) (1,793)
Impairment charge - 2,807 2,807
Amortisation of intangible assets
arising on acquisitions 7 16 13
Corporation tax effect of above
items - - -
------------- ------------- -----------
Adjusted profit for the period
(GBP'000) 1,151 347 1,027
------------- ------------- -----------
Weighted average number of ordinary
shares excluding shares held in
treasury for the proportion of
the year held in treasury ('000) 18,665 18,665 18,665
Adjusted basic earnings per
share 6.2p 1.9p 5.5p
------------- ------------- -----------
Adjusted diluted earnings per
share 6.2p 1.9p 5.5p
------------- ------------- -----------
5. Finance costs
6 months 6 months
ended ended Year ended
30 September 30 September 31 March
2021 2020 2021
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
On bank loans and overdrafts 42 33 97
Finance charges on lease liabilities 23 35 79
Unwinding of discount on deferred
consideration liabilities - - -
------------- ------------- -----------
Total finance costs 65 68 176
------------- ------------- -----------
6. Principal risks and uncertainties
The directors consider that the principal risks and
uncertainties which could have a material impact on the Group's
performance in the remaining six months of the financial year
remain the same as those stated on page 11 to 14, and 68 to 71 of
our Annual Report and Financial Statements for the year ended 31
March 2021, which are available on the Company's website,
www.northernbearplc.com .
7. Half year report
The condensed financial statements were approved by the Board of
Directors on 26 November 2021 and are available on the Company's
website, www.northernbearplc.com . Copies will be sent to
shareholders and are available on application to the Company's
registered office.
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 as it forms part of
United Kingdom domestic law pursuant to the European Union
(Withdrawal) Act 2018, as amended.
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END
IR DKPBPDBDBADB
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