CONTENTS
Summary Information
Strategic Report:
- Chairman’s Statement
- Strategy and performance
Report of the Directors
Report to Shareholders by the Board on Directors’ Remuneration
Corporate Governance
Statement of Directors’ Responsibilities
Directors and Advisers
Report of the Independent Auditor
Statement of Comprehensive Income
Statements of Changes in Equity
Statements of Financial Position
Statements of Cash Flows
Notes to the Financial Statements
4
5-7
8-15
16-19
20-21
22-29
30
31
32-39
40
41-42
43-44
45-46
47-71
3
In memory of David Phillips,
founder and chairman
from June 1980 to December 2019
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER SUMMARY INFORMATION
Northamber plc and its subsidiaries are primarily distributors of computers, peripheral equipment and related
services to resellers who then sell on to the general public and corporations – the end users.
The company’s shares are listed on AIM, a market operated and regulated by the London Stock Exchange
under stock symbol “NAR”.
Summary of last five years’ trading
Revenue
Adjusted operating loss*
Profit/(Loss) before tax
Earnings/(Loss) per share
Net Assets per share
Dividends paid per share (net)
2020
£’000
52,835
(736)
9,925
31.16p
91.5p
0.6 p
2019
£’000
50,329
(598)
(598)
(2.17)p
60.8p
0.2p
Years ending 30 June
2018
£’000
58,136
(489)
(489)
(1.74)p
62.2p
0.2p
2017
£’000
57,288
(999)
(999)
(3.55)p
64.1p
0.2p
2016
£’000
61,844
(1,233)
(1,233)
(4.38)p
67.9p
0.4p
*Excludes exceptional gain from sale of warehouse
NORTHAMBER PLC
CHAIRMAN’S STATEMENT
Results
It has been a challenging year for many of us driven by significant changes and challenges on Demand and
Supply due to Covid-19 and the uncertainty it created. We took the early decision to keep true to our core
values and prioritise looking after our team and partners for as long as we could by avoiding any furlough or
Covid-19 related redundancy across the Group. By staying fully staffed and operational we believed we could
better support all our stakeholders throughout lockdown – the hope was that this would also allow us to gain
long term market share. We are pleased to advise that this decision to keep fully resourced, combined with our
nimble structure, rewarded us with modest organic sales growth but significant margin growth year on year
as we picked up opportunities from our major competitors.
The year has also been one of deliberate change, which began with the sale of the Weybridge distribution
centre in July 2019 for cash consideration of £16.4 million. We leased the site whilst looking for a new
permanent home for our distribution centre which we found in Swindon, purchasing the site in December
2019 for £3.4 million. By surrendering the lease of the Weybridge warehouse within 12 months we realised
additional consideration of £0.6 million. Against a net book value of £6.02 million, the sale of the distribution
centre realised a significant exceptional profit in the year. We are very pleased to have moved into the
Swindon warehouse from the Weybridge site during the second half of the financial year. Despite the
pandemic, we managed to ensure that there was no customer disruption by simultaneously operating from
the two sites, although this resulted in dual running costs of the sites.
Another significant event was the acquisition in February of Audio Visual Materials Limited (“AVM”) for £2.14
million which reaffirms our commitment to investing in technical, value add distribution which offers more
attractive margins. AVM now benefits from the Group’s back end infrastructure but is operated as a largely
standalone business as we sought to protect its core focus. We are pleased to advise that despite AVM’s sector
experiencing a very heavy Covid-19 contraction, that negatively impacted AVM’s sales and profitability, the
Group has not made any redundancies at AVM whether due to Covid-19, integration or any other reason and
indeed has continued to invest to ensure AVM prospers in the longer term including building its presence in
future key technologies. The Group is excited for the future with AVM and expects to see a strong recovery
from AVM in a post Covid-19 world.
Following the AVM acquisition, the Group purchased an office for £1.5 million to house the AVM team near to
its previous location. This provided an immediate rent saving for AVM, additional office space for the Group to
expand our sales team in a strong catchment area and came with an incumbent sub-tenant which served to
further reduce the operating cost of the office.
Turning to our financial results, across the Group, like-for-like revenue increased by 2.1% year on year with total
Group revenue increasing by 5% from £50.3 million to £52.8 million, including the contribution from AVM,
despite very challenging conditions for many of our focus suppliers within Pro AV, Infrastructure and large
Document Management where many sales were delayed due to restricted site access for installation due to
lockdown. An increased demand for IT equipment to facilitate home working meant that there was a limited
overall impact on sales during the lockdown period.
Our continued investment and focus on these more technical, higher margin categories, coupled with an
early move to support partners with remote working deployments, was rewarded as gross margins in our
core business increased significantly from 8.60% to 10.03%. Market declines in some of our core categories
however meant that we missed out on volume achievement rebates with some suppliers with rebates down
significantly year on year; we would expect these to return in the future however as the market recovers in
these impacted segments. AVM enjoys significantly higher gross margins of around 20% and we anticipate
that the Group’s gross margins will further improve from a change in sales mix post Covid-19.
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NORTHAMBER PLC
CHAIRMAN’S STATEMENT (continued)
Staff
Our staff have been the differentiator in our business for decades and we are pleased that we were able to
work side by side with them throughout this unprecedented period and offer them continued job security.
We remain incredibly grateful to them and continue to invest in our evolving business model with added
skills based services and which are heavily reliant on our staff to achieve our business evolution. The quality
of our team is evident in delivering these growth figures whilst working remotely, moving logistics centre and
supporting our partners in a tough period with unpredictable demand.
Outlook
We are pleased to advise that we have been trading well so far since the start of the new financial year and we
are quietly optimistic that the investments we have made in supporting our partners coupled with removing
the one off costs tied to moving warehouse should be reflected in the trading results for the current financial
year. Clearly we remain highly cautious however due to the economic uncertainty, Brexit and the potential
further impact of Covid-19 on the demand and supply chain. We remain committed to our continued focus on
our strategic, higher margin value categories and we see future opportunities to grow our market share. The
strength of our balance sheet provides an excellent platform from which to do so, and inspires confidence in
our customers and suppliers that Northamber is here for the long haul.
C.M. Thompson
Chairman
29 January 2021
NORTHAMBER PLC
CHAIRMAN’S STATEMENT (continued)
Overall, Gross Profit increased from £4.33 million to £5.48 million which is a 26.5% increase year on year.
Revenue and margin growth has been supported by growth from some of our strategic focus areas, together
with the addition of higher margin revenues from AVM, as well as some tactical gains in supporting remote
working deployments; we would have expected more significant revenue growth if not for lockdowns
restricting access to site.
The corporate activity undertaken during the year inevitably led to the Group incurring some, non-recurring
costs such as warehouse duplication and restructuring costs following the move from Weybridge to Swindon
which have impacted the results for the year but which won’t be repeated in the following financial year. Due
to the extra costs associated with operating the AVM business, the investment in our sales capabilities and
supporting the planned continued growth in Gross Profit our distribution costs increased year on year from
£2.85 million to £3.60 million and administrative costs increased from £2.35 million to £2.61 million. Costs
remain closely monitored however and as ever this is a key focus area for the business and our Board.
Similarly, the £9.93 million pre-tax profit for the Group (£0.60 million loss prior year) after exceptional income
from the Warehouse sale would have been stronger but for the non-recurring costs mentioned above.
The Board are very proud of how the team pulled together in this tough year to help our community, some
specific examples include working with customers & suppliers to quickly prioritise supporting the NHS
including Nightingale efforts, offering warehousing free of charge to the local NHS Trust, supporting Clap for
our Carers by providing resources from AVM for illuminating local churches, sourcing products globally that
were constrained in the UK to support remote working all whilst rolling out remote working for our entire
office based team.
Financial position
Maintaining our prudence in financial matters, our working capital management is reflected in the Net Current
Assets ratio which at 4.7 times (2019: 2.5 times) is a significant improvement.
Stock levels are higher than last year at £5.9 million vs £3.3 million, in part due to the AVM acquisition and also
as we continued to seek to profitably support our partners by maintaining sufficient stock in country during
the uncertainty of logistics due to Covid-19 as supply chains were creaking. We see our flexibility on local stock
levels as a key driver of our future with our partners.
Cash was £10.96 million at 30 June 2020 compared with £3.4 million at 30 June 2019, reflecting the sale of the
distribution centre and the purchase of the new warehouse property, AVM and a new office. With Fixed Assets
at book value at £7.2 million, including three unencumbered freehold properties, the Group’s’ overall financial
position is very sound.
Net Assets at 91.5p per share are considerably in excess of the average price of the ordinary shares throughout
the period.
Board
With great sadness, we lost our founder and Chairman David Phillips in December 2019. David made a very
significant contribution to the development and leadership of the Company since he founded Northamber in
1980 and he will be greatly missed.
Alex Phillips, who is the son of David Phillips, joined the board in February and was appointed Managing
Director of the Group in August having formerly been the Commercial Director, whilst Colin Thompson was
appointed Chairman in October.
Dividend
As in previous years, your Board has had regard to the strength of our debt free, tangible asset strong balance
sheet and is proposing the final dividend be 0.3p, at a total cost of £81,695. The dividend will be paid on 18
March 2021 to shareholders on the register as at 12 February 2021.
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STRATEGY AND PERFORMANCE
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
The directors present their strategic report on the group for the year ended 30 June 2020.
3. Key Performance Indicators
This report provides an overview of the group’s strategy, its business model and a review of how the group
has performed for the year. It also sets out the principal risks involved in its business and the financial position
of the group at the year end. There are also some comments and observations on the future prospects for the
Group.
1. The Group’s Strategy
As explained below in the notes on the business model, the group is not directly involved with the
ultimate users of the products it sells. It acts as a hub through which manufacturers provide products to
resellers for sale to the ultimate end user.
This being the case requires us to develop strategies with both suppliers and resellers to satisfy the needs
of those ultimate users of the products.
Our strategy has always been to assess the requirements of the end users and then source quality products
and services from manufacturers and make them available to resellers at the best prices in the most
efficient time frame. With an ever changing product range it has also been part of our strategy to support
fresh new products which will be attractive to end users.
In addition to the supply of hardware and software products we also ensure that our customers are
provided with the technical support either directly or through the suppliers which they may require to
effectively use the high tech products we sell, thus ensuring quality of supply and satisfaction to users.
2. The Business Model
The Group has, since its inception, been involved in the distribution of electronics and computer related
products. Initially this was predominantly printers but this has been extended over the years to include not
only computers themselves but also a wide range of peripheral and ancillary related products including
audio visual.
The Group has a two pronged approach in driving the business, being both demand driven and supply
driven. The demand drivers are the requirements of our customers where we strive to provide a wide
range of products and get them to the customer in the quickest possible time and at acceptable prices.
The supply drivers are the requirements of our suppliers – the vendors. Vendors in the main are one of two
types, there is the major brand type of supplier who is looking for us to increase its turnover, to physically
get products to the customer and bear the risk of the customer defaulting. The second type of supplier
differs only in that they tend to be the smaller producers, who often develop new or innovative products
and are looking for a method of reaching an established wide ranging customer base which is beyond
their own resources.
Our business model is to satisfy all those wants by providing a marketing and selling operation to optimise
the penetration of the products to the customers and a distribution facility which includes warehousing
and bulk breaking using sophisticated systems and procedures to achieve a first class delivery service.
The group has an extensive management reporting system and uses a wide variety of information in its
everyday management of the business, including both those of a financial and non-financial nature. This
information is tailored to the various aspects of the business with individual managers being responsible
for variances in movements within their particular sphere of operations to the executive management of
the company.
The principal KPIs which are used and which have been reported elsewhere in our Annual Report are the
following:-
KPI
Revenue
Gross Profit Percentage Margin
Net Assets per share
Working Capital Ratio *1
Format
2019-20
2018-19
£m
%
Pence
Times
52.8
10.37
91.5
2.49
50.3
8.61
60.81
2.0
*1 Working Capital Ratio is calculated by adding Inventory and Net Trade Receivables, divided by Trade Payables
4. Performance Review
For some time the group has been following a strategy of change away from the basic hardware type
products which are in the main physically larger type products with relatively low margin and subject to
great price pressure, towards more application intensive type products where there is greater scope for
adding value and gaining margin.
However such changes need very careful planning and implementation to minimise the inevitable
consequences which usually includes not only significant costs upfront before the benefits of the changes
are manifest but also some tail off of some parts of the existing business.
There was a continuation of the move towards consolidation in some parts of the industry, particularly
towards the ultimate consumer end of the industry.
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STRATEGY AND PERFORMANCE (continued)
5. Financial Review and Position
Turnover increased by £2.6 million compared with last year.
Our cash balance at the end of the financial year was £7.52 million more than last year at £10.97 million
due primarily to cash consideration of £16.4 million received in July 2019 for the sale of the warehouse
premises, the purchase of a new warehouse and the office building for a total value of £4.9 million, and the
acquisition of AVM Ltd for £2.1million before costs.
Some 29.6% of the Net Assets comprise the carrying value of freehold properties, 45.2% cash and the
balance working capital. The Net Assets were 91.5p per share which represented more than the highest
share price of 67.5p. in the year.
6. Principal Risks and Uncertainties
Financial Risks
The group uses various financial instruments, including cash, equity, trade receivables and trade payables
in the course of its operations.
The use of these instruments gives rise to risks associated with exchange rate risk, liquidity risk, interest
rate risk and credit risk. The directors review and agree policies to deal with each of these risks as
summarised below.
Exchange Rate Risk
The group purchases some of its products in foreign currency. Foreign currency purchases are subject to
close management supervision. The directors are informed regularly of the potential impact of exchange
rate movements on the business and act to mitigate any adverse movement wherever possible. It is the
group’s policy not to speculate in derivative financial instruments in either sterling or foreign currencies,
nor to hedge translation or currency exposures.
Liquidity Risk
The group seeks to manage financial risk of liquidity by ensuring it has sufficient cash resources available
to meet foreseeable needs at all times through cash flow forecasting.
Interest Rate Risk
The group’s exposure to interest rate risk is principally with its cash asset.
It is the policy of the Group not to have long term loans or other financial instruments except in particular
circumstances and when specifically approved by the board. There have been no changes in the role of
financial instruments during the year.
Credit Risk
Credit risk is deemed a risk due to default in payment. The group’s principal financial assets are cash and
trade receivables. The credit risk associated with cash is reduced through ensuring the funds are held with
major financial institutions and where possible deposits being split across a number of banks. The credit
risk arising from the group and company’s trade receivables is reduced through prescribing credit limits for
customers based on a combination of payment history, third party credit references and credit insurance
levels. Credit limits are reviewed on a regular basis in conjunction with debt ageing, collection history and
credit insurance levels. Given the current economic climate the Group feel it prudent to maintain Credit
Insurance.
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
Reputational Risk
The Group’s reputation is reliant on timely delivery of goods and services according to customer
requirements and associated goodwill generated with customers. The principal risk involved is that
the warehouse could be destroyed or made inoperable although the cost of such eventuality is of
course covered by insurance, including loss of profits cover, but the operation is such that alternative
accommodation could quickly be brought into action, or alternatively a warehousing function could be
subcontracted at very short notice. Although such an event would have costs attached and would cause
some disruption in the business, it would be far from catastrophic.
The existence of the group’s facilities such as the warehouse, the sales staff, the control systems and not
least the financial soundness of the company means that we can offer a distribution facility which is quick
and efficient, an attraction to both vendors and customers.
Market Risk
The group is subject to both general market conditions and particularly to those affecting its own
particular industry. The group is a distributor of other businesses’ products and is therefore dependent on
the suppliers of such products to continue to provide products which are required by the customers of the
company, at prices which are acceptable to those customers. This is managed within the group by being
alert to all the movements in the market place relating to both products and suppliers and to negotiating
with existing and prospective suppliers for the supply of goods on the best possible terms to enable the
company to trade effectively.
Where products are bought in foreign currency, the group manages the risk inherent in such currencies by
continuously updating its rates of conversion in calculating its costs to ensure prices remain competitive
and in order to minimise the currency conversion risk.
The Group recognises the importance of providing additional services to its customers in relation to next
day deliveries, credit limits, handling queries efficiently and maintaining a strong relationship with the
customer and in this way aims to resist the competitive pressures in the sector.
Other Principal Risks and Uncertainties
Other than the risks stated above in the opinion of the directors, the principal operating risks are as stated
in the section on Internal Control on page 29. The risks and uncertainties associated with the business
model are set out below.
The model depends in part on working closely with the brand names in the industry as it is often the
products from these vendors which form the core of the business, and in part on the development of new
vendors particularly for the innovative products which are integral to the IT industry. Co-operation with
vendors is therefore key and this risk of attrition is addressed by a combination of mutual co-operation
with vendors on the range of products being offered, the pricing of those products and the marketing
of those products. The company’s continual search for new and improved products, particularly in
peripherals, from new vendors also improves the range of products we can offer and thereby attract more
customers to ourselves which enhances our attraction to the vendors and reduces the risk of loss
of vendors.
All systems within the group, including the control systems, are backed up securely on a regular basis, thus
limiting the risk of data loss to a short period. The financial soundness of the Group is a matter which is
constantly in the minds of the senior staff and directors of the Group. Systems are in place to ensure that
any deviation from the norm is immediately brought to the attention of staff and directors. These systems
have a proven history as shown in the strength of the Statement of Financial Position. The Group has
sufficient working capital to enable it to meet its requirements.
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STRATEGY AND PERFORMANCE (continued)
Brexit
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
Section 172 statement
There is still a large amount of uncertainty surrounding Brexit. The main potential risks to the Business are
foreign exchange rate, and disruption of supply chain. As our customers are mainly based in the UK we do
not envisage any major issues. We do not envisage any major issues with our workforce. As detailed above
we constantly review our foreign exchange rate exposure and will continue to do this. We work closely
with our suppliers to minimise any potential disruptions to supply of the products.
In order to prepare for Brexit the Group has increased its stock holdings to minimise disruption from
any supply chain delays. The Group has not experienced any major disruption in the early weeks
following Brexit.
Covid-19
The implications resulting from the Covid-19 pandemic had a potential impact across all stakeholders.
Our initial response was focussed on the health, safety and well-being of our people and following HM
Government’s advice on working practices. We quickly enabled all our employees to work remotely and
securely from the commencement of lockdown. The ability to operate remotely has been enhanced by
investments made to improve remote working capabilities of the group.
As stated in the Chairman’s Statement on Page 5, despite very challenging conditions for many of our
focus suppliers within the Pro Audio Visual, Infrastructure and large Document Management sectors
where many sales were delayed due to restricted site access for installation due to lockdown, an increased
demand for IT equipment to facilitate home working meant that there was a limited overall impact on
sales during the lockdown period.
The impact of the lockdown was as follows:
• Our distribution centre was fully functional throughout the period
• Our sales and administration teams were able to operate remotely with minimal disruption
• The group’s cash generation remained robust throughout and after the lockdown period and the
group has maintained low levels of debt and a strong financial position. As a result of this we have not
made any claims under the Government’s coronavirus support schemes.
7. Future Prospects
Your board’s long term approach to investment decisions is well documented and often referenced in
these statements. This approach was continued in the last year as we invested significantly in our new
focus categories to help drive the business forward. This coupled with other investments in acquisitions,
new vendors, customer acquisition and our renewed strategy leave us excited about the revenue and
margin opportunities for the coming year.
We see significant potential in both our existing vendors and categories and the new categories we are
developing and exploring. We will continue our customer-centric focus and ensuring that our offering and
service levels allow our customers to profitably grow their business and consequently grow ours.
8. Events after the reporting period
There were no significant events after the reporting period.
The following disclosure forms the directors’ statement required under section 414CZA of the Companies
Act 2006 on how the directors have had regard to the matters set out in section 172 (1) (a) to (f) in
performing their duties. The board recognises that engagement with its stakeholders is fundamental to
the long-term success of the company and considers the views and interests of all key stakeholders in its
decision making.
People
As reported on Page 7 our people are key stakeholders in the business as the recruitment, training and
retention of experienced staff is key to the high quality service delivery to our customers.
Employee engagement and interaction is encouraged through a variety of means including:
•
•
•
corporate intranets;
team meetings; and
staff one-to-one appraisals throughout the year.
As a result of the period of remote working during the Covid-19 outbreak we have ensured that our
employees have appropriate equipment to enable them to operate efficiently and to enable continued
communication and interaction across the business and between colleagues.
The group’s financial performance is communicated regularly by the chairman.
We invest in the development of future talent within the Group providing financial support for employees
who are undertaking professional training to gain the qualifications required to progress with their careers.
In addition we strongly support training and accreditation schemes from our suppliers to further the
professional development of our employees.
Following the sale and relocation of the warehouse during the year a full consultation process was carried
out with regard to any affected employees.
Shareholders
The chairman and company secretary have primary responsibility for investor relations (IR).
The company makes announcements using the regulatory news service (RNS) throughout the financial
year so that all investors are aware of current developments and financial performance of the group.
The annual general meeting of the company, which is generally attended by all directors, provides an
opportunity for all shareholders to ask questions and to meet the directors. The board is always open to
meet separately with shareholders on request.
Customers
Our customers are key stakeholders as their retention and acquisition are fundamental to the ongoing
success of our business.
The group has a diverse customer base across all our sectors servicing clients of all sizes. Our customer
facing teams are in continuous contact with their base and have responsibility for both understanding
their expectations and managing the delivery of our products and solutions.
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NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
Acquisitions
The group completed an acquisition in the year which was in line with the strategy to increase value for all
stakeholders and is for the long-term benefit of the group. As stated on Page 5 the acquired company AVM
Limited enjoys higher gross margins and has a complementary customer base.
Governance
The board believes that it is has the right mix of skills and experience in order to deliver its strategy for the
benefit of all stakeholders.
On behalf of the Board
J.P. Henry
Operations Director
29 January 2021
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
Suppliers
Our suppliers are key stakeholders to the business as the Group is reliant on the constant flow of quality
products and solutions to service our customer base and maintain and gain market share.
The Group has periodic reviews with all existing suppliers to ensure that business objectives are met and to
ensure that quality of products and services is maintained at all times.
The Group employs product specialists who constantly review the market for new suppliers who can maintain
the high quality of products and services offered by the Group, and can complement existing products and
services offered.
The impact of the company’s operations on the community and the environment
The Company is committed to ensuring that it is an asset to the local community and seeks to ensure that
it meets the highest level of health and safety standards, and minimises its impact on the environment. The
Company seeks to engage with the community, where appropriate, to achieve this.
We strive to ensure that responsible and transparent relations with the communities where we operate
form an integral part of our activities and operations, generating value for society and contributing to the
economic, social and environmental development of those areas. One of the formulae to achieve this is to
open up as many opportunities for local content as possible for the communities within the areas of influence
of our operations.
We ensure local communities are involved in our operations through these strategies, which aim to encourage
and give priority to hiring workers and purchasing products and services from the local area.
In order to support the community during the Covid-19 pandemic, the company has provided warehousing
for the NHS free of charge and provided lighting for a local cathedral.
Our goal in terms of climate change is to do everything within our power to reduce the impact of our activities
on the climate. This involves constantly working with our suppliers to meet the growing demand for more
sustainable, greener products.
The decisions made by the board in light of Covid-19, which impacted on our key stakeholders
included:
•
•
supplier payments made in line with normal contractual terms in order to support suppliers in this difficult
time and maintain good relationships despite any impact on the company’s financial position which
remained strong throughout;
interim dividend paid and final dividend recommended in line with our progressive dividend policy,
having considered the group’s liquidity and the balanced treatment of all other stakeholders in response
to the Covid-19 crisis;
• executive remuneration was considered (as detailed in the remuneration report on page 20) in the context
of group financial performance in the year, financial outlook for the new financial year and the balanced
treatment of other stakeholders in response to Covid-19, although it was decided no reductions were
necessary given the company’s strong financial position.
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NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
REPORT OF THE DIRECTORS
The directors have pleasure in presenting their report and the accounts for the year ended 30 June 2020.
The financial statements include the individual entity Northamber plc and its wholly owned subsidiaries
Anitass Limited and Audio Visual Material Limited. Anitass Limited owns the freehold of the premises at
Swindon which is the group’s distribution centre. As described in the Strategic Report these freehold premises
were purchased during the year. Audio Visual Material Limited trades as a distributor and was acquired by
Northamber plc on 31 January 2020. The other subsidiaries of Northamber plc are dormant and not material to
the financial statements for the year to 30 June 2020.
Principal Activities
The group’s and company’s principal activities are those of specialist supply of computer hardware, computer
printers and peripheral products, computer telephony products and other electronic transmission equipment.
Financial Risks
The group uses various financial instruments including cash, equity and various items such as trade
receivables and trade payables that arise directly from its operations. The existence of these instruments
exposed the group to a number of financial risks, the main ones being exchange rate risk, liquidity risk,
interest rate risk and credit risk. The directors review and agree policies for managing each of these risks and
these are summarised in the Strategic Report.
Corporate Governance
The Corporate Governance Report on pages 22 to 29 forms part of the Directors’ Report and is incorporated
into this report by reference.
Dividends
The following dividends were paid in the year ended 30 June 2020
Ordinary dividends
Previous year’s final dividend paid
Interim paid
2020
£’000
82
82
164
2019
£’000
28
27
55
REPORT OF THE DIRECTORS (continued)
Share Capital
At 30 June 2020, the company had 27,231,586 (2019: 27,356,586) Ordinary shares of 1p each issued. The shares
have no special rights and there is no restriction on their voting rights.
The company repurchased 100,000 ordinary shares of 1p each in the year. The aggregate consideration paid
for the shares was £68,000, The directors have authorised the repurchase of shares in accordance with the
authority under the special resolution passed at the last AGM and in accordance with the advice given by the
company’s Nominated Advisor & Broker to improve the return for the shareholders rather than holding the
money under deposit in the bank account.125,000 of the shares were cancelled in the year, being 0.36% of the
issued share capital. The minimum number of shares in issue at any time in the year was 27,231,586.
Substantial Shareholdings
The company has been notified that the following shareholders held beneficial interest of 3 per cent or more
of the company’s issued share capital at 14 January 2021.
Mr D.M. Phillips (deceased)
BNY(OCS) Nominees Limited
Mr H.W. Matthews
Mr & Mrs J. Rockliff
Worsley Investors Limited
Purchase of Own Shares
Ordinary Shares of 1p each
63.32%
9.24%
3.69%
3.67%
3.00%
At the end of the year, the directors had authority, under the shareholders’ resolutions of 18 December 2019
to purchase through the market 2,723,158 (2019: 2,735,658) of the company’s ordinary shares at prices ranging
between 1p and 105% (2019: 1p and 105%) of the average middle market quotations for those shares as
derived from the London Stock Exchange on the ten dealing days immediately preceding the day on which
the shares are contracted to be purchased. This authority expires on 10 March 2021, the date of the next
Annual General Meeting.
Auditors
During the year the directors appointed Mazars LLP as auditor. A resolution to re-appoint Mazars LLP as the
group’s auditors will be proposed at the forthcoming Annual General Meeting.
The final proposed dividend of 0.3p (2019: 0.3p) will be paid on 18 March 2021 to all members on the register
at the close of business on 12 February 2021.
Employees
Directors
Directors of the company who have served at any time during the year are listed on page 31.
Directors’ indemnity provision
Qualifying third-party indemnity provision was in place for all directors throughout the financial year and at
the date of approval of this report.
Every effort is made to keep staff as fully informed as possible about the operations and progress of the
company. This is achieved through regular communication from the Operations Director to all staff and from
the CEO to the Operational Management team meetings.
The group encourages its staff to pursue career development and to that end has made available resources for
training courses including video and computer training aids.
Applications received from disabled persons are given full and equal consideration but are small in number.
The company fulfils its obligations towards employees who are disabled or who become so whilst in the
employment of the company.
16
17
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
REPORT OF THE DIRECTORS (continued)
Energy and carbon reporting
REPORT OF THE DIRECTORS (continued)
Customers and Suppliers
Under the Streamlined Energy and Carbon Reporting Regime, the Company is required to report its energy
consumption and greenhouse gas emissions arising in the UK.
The directors foster and maintain strong relationships with customers and suppliers as set out in the s172
Report on pages 13 to 15.
Events after the reporting period
Details of important events occurring after the end of the reporting period are described in the Strategic
Report, and the details are incorporated into this directors’ report by cross-reference.
Statement of disclosure to auditor
The directors confirm that:
•
•
in so far as each director is aware there is no relevant audit information of which the company’s auditors
are unaware; and
the directors have taken all steps that they ought to have taken as directors to make themselves aware of
any relevant audit information and to establish that the auditors are aware of that information.
By order of the Board
S. Yoganathan ACMA
Company Secretary
29 January 2021
Our disclosures are set out below and include energy and emissions from the entire Group, regardless of
whether individual companies would be required to report.
This is the first time that the Company has been required to report and accordingly, the report does not
include comparative figures for the prior financial year.
UK Energy Use
To 30 June 2020
Consumption
Greenhouse Gas
(GHG) Emissions
(tCO2e)
Notes
Electricity
433.4, MWH
499.2, MWH
Gas
TOTAL
Methodology
101
102
203
Electricity consumed relates to routine
office and warehouse power requirements
Gas used to fuel heating and hot water
boilers in office and warehouse locations
• Electricity – The electricity consumed by the Group relates solely to the routine power requirements of its
offices and warehousing – lighting, heating, IT, air conditioning etc. To calculate the tCO2e figure we have
taken our overall electricity usage for the year to which a kgCo2e factor of 0.23314 was applied, being the
UK Government’s Conversion Factor 2020 for this type of electricity use.
• Gas – The gas consumed by the Group relates solely to the use of natural gas for the running of boilers
for heating and hot water in its offices and warehouse. To calculate the tCO2e figure we have taken our
overall gas usage for the year to which a kgCo2e factor of 0.20374 was applied, being the UK Government’s
Conversion Factor 2020 for this sort of natural gas use.
Motor Vehicles. The company owned one van and one company car for part of the year so emissions are
not included above as not considered material.
Intensity Ratio
Tonnes of CO2e per total £m sales revenue during the year to 30 June 2020: 3.9.
Energy Efficiency Activity
The business did not undertake any particular energy efficiency activities over the year. However, the
Company is mindful of its environmental obligations and will examine opportunities to further cut its carbon
emissions.
18
19
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
REPORT TO SHAREHOLDERS BY THE BOARD ON DIRECTORS’
REMUNERATION
The group voluntarily provides the following Directors’ Remuneration Report
REPORT TO SHAREHOLDERS BY THE BOARD ON DIRECTORS’
REMUNERATION (continued)
Directors’ Detailed Emoluments
Remuneration Committee
Details of directors’ emoluments are as follows:
The Remuneration Committee comprised the non-executive directors Mr C.M. Thompson and Mr G.P. Walters.
This committee meets at least once a year and decides the remuneration policy that applies to executive
directors.
Salaries and Fees
Benefits
2020
2019
£’000 £’000
2020
2019
£’000 £’000
Pension
2020
2019
£’000 £’000
Total
2020
2019
£’000 £’000
In setting the policy it considers a number of factors including:
(a) the basic salaries and benefits available to executive directors of comparable companies;
(b) the need to attract and retain directors of an appropriate calibre and experience; and
(c) the need to ensure executive directors’ commitment to the continued success of the company by means of
incentive schemes.
The group’s remuneration policy for executive directors is to:
(a) have regard to the directors’ experience and the nature and complexity of their work in order to pay a
competitive salary that attracts and retains management of the highest quality;
(b) link individual remuneration packages to the company’s performance through target-related bonuses
which are not considered to be excessive in terms of salary;
(c) provide employment-related benefits including the provision of a company car, life assurance, insurance
relating to the directors’ duties and medical insurance.
The final determination of an individual director’s remuneration is taken by the board as a whole but with no
director participating in the discussions, nor voting on, his own remuneration package.
The non-executive directors each receive a fee for their services which is agreed by the Board following
recommendation by the chairman. The non-executive directors do not receive any pension or other benefits
from the company, nor do they participate in any of the bonus or incentive schemes.
When reviewing or amending remuneration arrangements the committee considers any impact on the cost to
the company, employee behaviour, stakeholders (including shareholders, governance bodies and employees)
best practice, corporate governance and market competitiveness.
Salaries and Benefits
The remuneration packages for executive directors are benchmarked to ensure comparability with companies
of a similar size and complexity. The bonuses have regard to personal performance measured against pre-
stated objectives and profitability of the company.
Share Options
There are no share option schemes in force in the group or company.
Contracts of Service
The two executive directors, Mr A.M. Phillips and Mr J.P. Henry, have service contracts. Both contracts are one
year rolling contracts and contain no specific provisions in relation to any termination payments over and
above the notice periods as stated below.
Mr A.M. Phillips
- Notice period – six months
Mr J.P. Henry
- Notice period – six months
The non-executive directors do not have service contracts with the company. The terms of their appointment
are reviewed by the board every two years.
Executive
Mr D.M. Phillips
(Deceased 4 December 2019)
Mr J.P. Henry
Mr A.M. Phillips
(Appointed on
6 February 2020)
Non-Executive
Mr G.P. Walters
Mr C.M. Thompson
-
89
-
72
11
7
15
5
-
10
-
10
11
106
15
87
36
-
20
20
165
20
7
99
-
-
-
-
-
-
2
-
-
-
-
-
38
-
20
20
20
7
18
20
12
10
195
129
For the year ended 30 June 2020, Mr D.M. Phillips has waived £75,000 of his salary (2019: £180,000 was waived).
During the year pension contributions were made by the company on behalf of 2 Executive Directors under
money purchase schemes. The aggregate amounts paid are shown in the table above.
Directors’ Interests
Directors in office at 30 June 2020 had the following beneficial interests in the shares of the company:
Ordinary Shares of 1p each
The Estate of Mr D.M. Phillips
Mr A.M. Phillips
Mr J.P. Henry
Mr G.P. Walters
Mr C.M .Thompson
30 June 2020 30 June 2019
17,243,055
-
-
-
14,500
17,243,055
32,620
-
-
14,500
Between 30 June 2020 and 25 January 2021 there have been no changes in the interests of the above named
directors in the shares of the company.
The market price of the company’s shares at 25 January 2021 was 57.5p. The range of market prices during the
year was 41.5p to 67.5p.
S. Yoganathan ACMA.
By order of the Board
29 January 2021
20
21
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
CORPORATE GOVERNANCE
The Corporate Governance Report forms part of the Directors’ Report included on pages 16 to 19.
Northamber plc (“the Company”) is an AIM quoted Company and is committed to high ethical values and
professionalism in all its activities. As an essential part of this commitment, the Directors acknowledge the
importance of high standards of Corporate Governance and, given the Group’s size and the constitution of the
Board, have decided to apply the principles set out in the Corporate Governance Code for small and mid-sized
companies published by the QCA in April 2018 (‘‘QCA Code’’). The Board is accountable to the Company’s
shareholders for good Governance.
CORPORATE GOVERNANCE POLICY
The group’s policy on Corporate Governance is published on the group’s website which is
www.northamber.com.
The Company’s objective is in alignment with the purpose of the QCA Code in that it is to deliver growth
in long-term shareholder value and to deliver benefits to other stakeholders, accompanied by good
communication to promote confidence and trust.
Set out below are the principles of the QCA Code and the Company’s approach to compliance with the QCA
Code, in support of its medium to long term success. In some areas, further development is required internally
to more fully comply with the QCA Code and as these take place the website will be updated.
Strategy for long term shareholder growth
The Company’s strategy is set out in full on page 8. Whilst the basic strategy remains the same, changes to its
implementation from time to time to meet changing circumstances are determined by the Board as necessary.
The management team, reporting to the Board, is responsible for implementing the strategy and managing
the business at an operational level.
Meeting shareholders’ needs and expectations
As set out on page 17 under Substantial Shareholdings, 82.92% of the shares are held by five parties, of which
the Estate of David Philips (deceased) holds 63.32%, leaving only 17.08% in other shareholders’ hands. The
Chairman is in contact with shareholders from time to time and via the Company’s brokers issues the
Half-yearly Statements and other statutory information. In addition, the holding of an Annual General
Meeting at a convenient time and place enables contact between shareholders and Directors. Notice of the
Annual General Meeting is circulated to all shareholders at least 21 days prior to the meeting. Directors attend
the AGM and will be available to answer shareholders’ questions.
Shareholders may, at any time, communicate with the Company either via the Company Secretary or through
the Company’s brokers.
The Company intends to announce the detailed results of Shareholder voting at the AGM to the market,
including any actions to be taken as a result of resolutions for which votes against have been received from at
least 20 per cent of independent shareholders.
The Company has a policy of being socially responsible and has established Social and Community Policy
to be followed by the Company in respect of Social, Community and Environmental matters. The Board
also recognises the need to maintain effective working relationships across a range of stakeholder groups,
including shareholders, employees, partners and suppliers.
The Company’s operations and working methodologies take account of the need to balance the needs of all
of these stakeholder groups while maintaining focus on the Board’s primary responsibility to promote the
success of Northamber for the benefit of its members as a whole.
CORPORATE GOVERNANCE (continued)
Effective Risk Management
The Board is responsible for the systems of risk management and internal control and for reviewing their
effectiveness. The internal controls are designed to manage rather than eliminate risk and provide reasonable
but not absolute assurance against material misstatement or loss. The Company’s detailed approach to the
management of risk is set out in the section on Principal Risks and Uncertainties on pages 10 to 12. There is a
risk assessment carried out by the Board at regular intervals.
The Board maintains full control and direction over appropriate strategic, financial, organisational
and compliance issues and has put in place an organisational structure with formally defined lines of
responsibilities and delegation of authority. There are established procedures for planning, capital
expenditure, information and reporting systems and for monitoring the company’s business and its
performance. The Board has delegated to executive management the implementation of the systems of
internal control within an established framework that applies within the Company.
Effective, well-functioning Board, with up to date skills and experience
The Board normally comprises 2 executive and 2 independent non-executive Directors.
The biographies of the Directors are set out on page 31. Similarly the method of establishing the effectiveness
and appropriateness of the Board is set out on page 28. This process includes the assessment of the range of
skills and an evaluation of the effectiveness of each Director.
All Directors have access to the advice and services of the Company Secretary and the board has established
a procedure whereby any Director may seek independent professional advice in the furtherance of his duties
at the Company’s expense. All Directors are able to allocate sufficient time to the company to discharge their
responsibilities.
As required by the Company’s articles of association, in every year at least one-third of the Directors offer
themselves for re-election at the Annual General Meeting.
The Board is responsible to the shareholders for the proper management of Northamber and meets at least
four times a year to set the overall direction and strategy, to review operational and financial performance and
to advise on management appointments. All key operational and investment decisions are subject to Board
approval. The Board also regularly discusses matters informally through the year. Any Board member may
request the Company Secretary to report on any specific matter and prepare information for discussion at the
Board meetings.
In addition to the Main Board there is an Audit Committee and Remuneration Committee, in each case chaired
by a non-executive Director. Further details regarding the responsibilities of these committees can be found
on pages 20 & 26.
22
23
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
CORPORATE GOVERNANCE (continued)
In view of the size of the Company and its share and Board structure it has determined that the appointment
of a Nominations Committee is not warranted.
Below the Main Board there is an Operations Committee comprising the executive Directors and senior
management of the Company.
The Director’s attendance at board meetings is shown on page 26.
The role of the Board is to ensure that the Company is managed to optimise the benefits to its stakeholders
including shareholders, staff, customers, suppliers and the community at large. To achieve this objective the
Board reserves to itself certain matters such as the formulation of strategy, the assessment of risk, and the
setting of internal control systems. Certain areas of responsibility of the Board are dealt with by committees of
the Board such as the audit committee and the remuneration committee reporting back to the Main Board.
The implementation of the decisions of the Main Board is delegated to the senior management of the
company through the Operations Committee chaired by the Operations Director.
During the year, the Board reviewed each aspect of its role to ensure that it was fulfilling its role effectively and
that each Director was individually making a full and effective contribution to the process. This was carried
out by the Chairman reviewing the individual and collective contribution of the Board members against
objectives.
The result of that review was that, having reviewed each Director’s contribution and the requirements of the
Company as a whole, each Director was effective and that the composition of the Board was appropriate and
more than adequate for the time being.
The Chairman, in conjunction with the executive team, ensures that the Directors’ knowledge is kept up
to date on key issues and developments pertaining to financial and governance matters, its operational
environment and to the Directors’ responsibilities as members of the Board. During the course of the year,
Directors received updates from the Company Secretary and various external advisers on a number of
corporate governance matters.
Corporate Culture and Ethical Structures
The corporate culture and ethics is based on honesty and integrity in all matters and relating to all parties.
There are policies in place within the working practices within the Company to ensure compliance with the
high standards set. Whistle blowing provisions are also in place to deal with any infringements of the policies.
The policies are regularly reviewed, updated and communicated to all staff.
The Company has adopted a share dealing code for the Directors and certain employees, which is appropriate
for a company whose shares are admitted to trading on AIM (including relating to the restrictions on dealings
during close periods in accordance with MAR and with Rule 21 of the AIM Rules for Companies). The Company
takes all reasonable steps to ensure compliance with the share dealing code by the Directors and any relevant
employees.
CORPORATE GOVERNANCE (continued)
Governance Structures and Processes
The Corporate Governance structure and processes are set out on pages 22 to 29.
The Board is led by the non-executive chairman and is responsible for the overall direction and strategy of the
Company. The non-executive Directors are responsible for bringing independent and objective judgment to
Board decisions, bringing a range of views and experience from different fields. As part of their role, the non-
executive Directors constructively challenge and develop proposals on strategy.
The Company Secretary is responsible for ensuring that Board procedures are followed and applicable rules
and regulations are complied with.
The Board has established an Audit Committee and a Remuneration Committee, each with formally delegated
duties and responsibilities.
The Audit Committee, which meets at least twice a year, is responsible for keeping under review the scope
and results of the audit, its cost effectiveness and the independence of the auditor.
The Remuneration Committee, which meets at least once a year, is responsible for considering the
remuneration packages for executive Directors and making recommendations as appropriate.
The Directors’ Remuneration Report is set out on pages 20 to 21.
Detailed processes and procedures are in place and available to all employees on a dedicated in house system
to ensure that all operations, actions and decisions made by the employees are fully compliant and avoid
undue risk.
The internal procedures are reviewed and updated regularly to maintain the highest level of standards.
Communication
The Board places a high priority on regular communications with its various stakeholder groups and aims to
ensure that all communications concerning Northamber’s activities are clear, fair and accurate. In addition
to the statutory published information, the Company regularly updates its website for the benefit of
shareholders, customers and suppliers. Communications with employees are maintained both by personal
interaction with the Directors and senior management on a daily basis and through formal procedures.
Communications with professional advisers ensure that the Company maintains and complies with up to date
regulations regarding both internal and external communications.
The results of voting on all resolutions in future general meetings will be posted to the website, including any
actions to be taken as a result of resolutions for which votes against have been received from at least 20 per
cent of independent shareholders.
DIRECTORS
Board of Directors
The group is led and controlled through the Board of Directors, which during the year comprised two
executive and two non-executive directors. Biographical details of each director in office during the year
appear on page 31.
All directors have access to the advice and services of the company secretary and the board has established
a procedure whereby any director may seek independent professional advice in the furtherance of his duties
at the company’s expense. All directors are able to allocate sufficient time to the company to discharge their
responsibilities.
As required by the company’s articles of association, one third of the directors offer themselves for re-election
every year.
24
25
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER CORPORATE GOVERNANCE (continued)
Non-Executive Directors
The board considers that the non-executive directors were independent throughout the year. The non-
executive directors actively contribute to the functioning of the board and bring a range of views and
experience from different fields.
As part of their role, the non-executive directors constructively challenge and develop proposals on strategy.
The non-executive directors scrutinise the performance of management in meeting agreed goals and
objectives and monitor the reporting of performance. They satisfy themselves on the integrity of financial
information and that financial controls and systems of risk management are robust and defensible. They
determine appropriate levels of remuneration of executive directors and have a prime role in appointing and,
where necessary, removing executive directors, and in succession planning.
The senior independent non-executive director, as included in the biographical details on page 31, is available
to shareholders if they have concerns which contact through the normal channels of chairman or other
executive directors have failed to resolve or for which such contact is inappropriate.
Directors’ Attendance
CORPORATE GOVERNANCE (continued)
The audit committee reports to the board its findings identifying any matters which it considers requires that
action or improvement is required and makes recommendations on the steps to be taken.
The committee’s terms of reference include all relevant matters required by the Disclosure and Transparency
Rules and the relevant code provisions. The terms of reference of the audit committee have been reviewed
and are available on request by writing to the company secretary at the registered address and on the
Company’s website.
Overview of the Actions Taken by the Audit Committee to Discharge its Duties
During the year the audit committee:-
•
•
•
reviewed the June 2019 annual report and financial statements and the December half yearly financial
report. As part of the review the committee received a report from the external auditors on their audit of
the annual report and financial statements
reviewed the effectiveness of the company’s internal controls
reviewed and agreed the scope of the audit work to be undertaken by the external auditors
The following table shows the attendance of directors at the board meetings held in the last year.
• agreed the fees to be paid to the external auditors for their audit of the 2020 report and financial
Mr David Michael Phillips
Mr John Phelim Henry
Mr Alexander Michael Phillips
Mr Colin Mark Thompson
Mr Geoffrey Paul Walters
Audit Committee
Number of Board Meetings
Entitled to Attend Attended
1
6
2
6
6
0
6
2
6
6
The Audit Committee, currently chaired by Mr G.P. Walters, comprised the two non-executive directors, both
of whom are considered by the board to be independent and to have sufficient recent and relevant financial
experience to discharge the committee’s duties.
The board considers that the members of the audit committee have the required understanding of:-
•
the principles of, content of and developments in financial reporting, including the applicable accounting
standards and statements of recommended practice;
• key aspects of the company’s operations, including corporate policies, financing and systems of internal
control;
statements
•
•
•
•
reviewed the whistle blowing procedures in place to enable staff to raise concerns in confidence about
possible wrongdoing
considered the requirement for an internal audit function in the company and decided to recommend to
the board that such a function was not necessary at this stage
recommended that the board remove RSM as external auditors
recommended that the board appoint the external auditors Mazars LLP
External Audit
The engagement and independence of external auditors is considered annually by the Audit Committee
before it recommends its selection to the board.
The fees paid to the Auditors in the year are disclosed in Note 4 to the Group financial statements.
Mazars LLP also follows its own ethical guidelines and continually reviews its audit team to ensure its
independence is not compromised.
• matters that could influence or distort the presentation of accounts and key information;
Operations Committee
•
the role of external auditors.
The primary function of the audit committee is to enable the board to monitor the integrity of the company’s
financial reports and manage the board’s relationship with the external auditors. Its other functions include
the review and monitoring of:-
•
•
•
•
the financial reporting process
the annual audit
the effectiveness of the company’s internal controls and risk management
the independence of the external auditors.
The Operations Committee comprises the executive directors and certain senior business managers. It
meets weekly, and deals with the operational matters of the company other than those dealt with by the
Remuneration and Audit Committees or by the full board.
26
27
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
CORPORATE GOVERNANCE (continued)
Board Effectiveness
The role of the board is to ensure that the company is managed to optimise the benefits to its stakeholders
including shareholders, staff, customers, suppliers and the community at large. To achieve this objective the
board reserves to itself certain matters such as the formulation of strategy, the assessment of risk, and the
setting of internal control systems. Certain areas of responsibility of the board are dealt with by committees
of the board such as the audit committee and the remuneration committee reporting back to the main
board. The implementation of the decisions of the main board is delegated to the senior management of the
company through the Operations Committee chaired by the operations director.
During the year the board reviewed each aspect of its role to ensure that it was fulfilling its role effectively and
that each director was individually making a full and effective contribution to the process. This was carried
out by the chairman reviewing the individual and collective contribution of the board members against
objectives and by the audit committee reviewing the performance of the chairman.
The result of that review was that, having reviewed each director’s contribution and the requirements of the
company as a whole, each director was effective and that the composition of the board was appropriate and
more than adequate for the time being.
GOING CONCERN BASIS
The group’s activities together with the factors likely to affect its future development, performance and
position are set out in the Strategic Report and the Directors’ Report on pages 8 to 18. The financial position
of the group, its cash flow and its liquidity position are described in the Chairman’s Statement on pages 5 to 7.
In addition, the Strategic Report also includes the group’s objectives, policies and processes for managing its
capital; its financial risk management objectives; and its exposure to credit risk and liquidity risk.
The group has considerable financial resources and established market profile and relationships with a
number of suppliers and customers. As a consequence, the directors believe that the company is well placed
to manage its business risks appropriately despite the current economic outlook.
In carrying out their duties in respect of going concern, the directors in January 2021 completed a review of
the group’s financial forecasts for a period exceeding 12 months from the date of approving these financial
statements to determine the potential impact on the group of reasonably possible downside scenarios,
including those arising from the Covid-19 pandemic and the resultant increase in risks for the group. The
Board are confident that with the strong balance sheet and cash position all working capital requirements will
be met.
As stated above the impact on these financial statements has been minimal due to the diversified portfolio
of products and solutions sold by the Group and the Group do not expect a significant impact from further
lockdown periods. There have been no significant changes in levels of trading since the year end date.
After making enquiries, the directors have formed a judgement, at the time of approving the financial
statements, that there is a reasonable expectation that the company has adequate resources to continue in
operational existence for the foreseeable future. For this reason the directors continue to adopt the going
concern basis in preparing the financial statements.
RELATIONS WITH SHAREHOLDERS
The Directors are available to meet with the group’s institutional shareholders throughout the year
on request.
Notice of the Annual General Meeting (AGM) is circulated to all shareholders at least 21 days prior to the
meeting. Directors attend the AGM and will be available to answer shareholders’ questions.
CORPORATE GOVERNANCE (continued)
ACCOUNTABILITY AND AUDIT
Financial Reporting
The board believes that its Annual Reports and financial statements represent a balanced and understandable
assessment of the company’s position and prospects whilst also complying with the legal and regulatory
requirements for financial reporting relevant to the company.
Internal Control
The board of directors has overall responsibility for the group’s systems of internal control and for monitoring
their effectiveness.
The board maintains full control and direction over appropriate strategic, financial, organisational
and compliance issues and has put in place an organisational structure with formally defined lines of
responsibilities and delegation of authority. There are established procedures for planning, capital
expenditure, information and reporting systems and for monitoring the company’s business and its
performance. The board has delegated to executive management the implementation of the systems of
internal control within an established framework that applies within the company.
The group’s control systems address key business and financial risks. The board considers the greatest risks
to be related to the realisable value of current assets, principally inventories and trade receivables. Particular
attention is paid to all matters relating to purchasing, inventories, revenues, trade receivables, cash, capital
expenditure and foreign exchange. Comprehensive documented procedures are used and are available to all
staff via the extensive computer system.
A system of control is designed to manage rather than eliminate the risk of failure to achieve business
objectives, and can only provide reasonable and not absolute assurance against material misstatement or
loss. As and when areas of improvement are brought to the attention of the board and management steps are
taken to further embed internal control and risk management into the operations of the business.
The board has considered the need for internal audit but has decided that because of the size of the group it
cannot be justified at present.
A review of internal control was undertaken by the board in April 2020. The conclusion of this review was that
the systems and operations of the internal controls including financial, operational and compliance controls
remained effective and appropriate to the operations of the company.
Other Matters
The Directors have published the company’s Corporate Governance policies which the directors consider are
relevant to the company on the company’s website.
Induction programmes for new directors are specifically designed for each director as appointed as the
content varies depending on the background and experience of the appointee. There is therefore no standard
induction programme for new directors.
By order of the Board
S. Yoganathan ACMA
Company Secretary
29 January 2021
28
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NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Directors’ Report, and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare group and company financial statements for each financial
year. Under that law the directors are required by the AIM rules of the London Stock Exchange to prepare
group financial statements, and have elected to prepare the parent company financial statements, in
accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU).
The group financial statements are required by law and IFRS adopted by the EU to present fairly the financial
position and performance of the group. The Companies Act 2006 provides in relation to such financial
statements that references in the relevant part of that Act to financial statements giving a true and fair view
are references to their achieving a fair presentation. Under company law the directors must not approve the
financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the
group and the company and profit or loss of the group for that period. In preparing these financial statements,
the directors are required to:
•
select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
•
state whether applicable IFRSs have been followed, subject to any material departures disclosed and
explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain
the group’s and the company’s transactions and disclose with reasonable accuracy at any time the financial
position of the group and the company and enable them to ensure that the financial statements comply with
the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the company
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
DIRECTORS AND ADVISERS
Non-Executive Directors
Geoffrey Paul Walters *† (Age 69) ACA
Non-executive director.
Geoffrey Walters has a vast experience in a wide range of industries.
Colin Mark Thompson *† (Age 60)
Non-executive director and Chairman.
Colin Thompson has over 38 years’ experience in the distribution sector, and was a Director in the Company
from September 1991 to January 1999.
* Member of Remuneration Committee
† Member of Audit Committee
Executive Directors
David Michael Phillips (deceased)
Executive chairman (until 4 December 2019)
David Phillips was the founder of Northamber plc.
John Phelim Henry (Age 58)
Operations director
John Henry joined Northamber plc in 1992 in the Sales Department. He was promoted to Operations Director
in 2012.
Alexander Michael Phillips (Age 34)
Managing director
Alex Phillips joined Northamber Plc in 2014 as Director of Strategy, was appointed as Commercial Director in
February 2020 and promoted to Managing Director in September 2020.
Registered Office
Namber House
23 Davis Road
Chessington
Surrey
KT9 1HS
Registrars
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol
BS13 8AE
Registered Auditor
Mazars LLP
Chartered Accountants
Tower Bridge House
St Katharines Way
London
E1W 1DD
Bankers
Allied Irish Bank (GB)
Mayfair Branch
10 Berkeley Square
London
W1J 6AA
Barclays Bank plc
6 Clarence Street
Kingston upon Thames
Surrey
KT1 1NY
Atlantic Bank
405 Park Avenue
New York
NY 100022
USA
Nominated Advisor & Broker
Nplus1 Singer Advisory LLP
One Bartholomew Lane
London
EC2N 2AX
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NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
Opinion
We have audited the financial statements of Northamber PLC (the ‘parent company’) and its subsidiaries (the
‘group’) for the year ended 30 June 2020, which comprise:
-
-
-
-
-
the Consolidated Statement of Comprehensive Income,
the Consolidated and Parent Company Statement of Changes in Equity,
the Consolidated and Parent Company Statement of Financial Position,
Consolidated and Parent Company Statement of Cash Flows; and
notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the
parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 30 June 2020 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted
by the European Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as
adopted by the European Union and as applied in accordance with the provisions of the
Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the Auditor’s
responsibilities for the audit of the financial statements section of our report. We are independent of the
parent company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard, as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to
report to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is
not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that
may cast significant doubt about the group’s or the parent company’s ability to continue to adopt the
going concern basis of accounting for a period of at least twelve months from the date when the financial
statements are authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
Key audit matter
How the matter was addressed in the audit
Revenue recognition and the risk of cut off (group
and parent company)
Revenue is recognised in accordance with
the group’s accounting policy (Page 50) and
International Financial Reporting Standard (IFRS) 15
- Revenue from Contracts with Customers. There is
a presumed risk that revenue may be misstated due
to the improper recognition of revenue as a result
of fraud.
For the group, we consider the risk around revenue
recognition to be principally related to cut off and
the risk that sales of IT equipment occurring close to
the year-end are not recorded in the correct period.
In addition, we note that the company has Bill and
Hold arrangements with certain customers and we
consider there to be a risk that revenue has been
recognised on Bill and Hold sales where the criteria
for recognition have not been met.
We adopted a substantive sampling approach to
revenue testing. Our procedures included, but were
not limited to, the following:
• Understanding the sales revenue business process
including how sales transactions are initiated,
recorded, processed, and reported.
• Understanding the application of the accounting
policies including assessing whether revenue is
recognised in accordance with such policies and IFRSs
• For a sample of sales transactions occurring
around the year end, we traced each item to the
corresponding proof of delivery to assess whether
the transaction had been recognised in the correct
accounting period.
• We reviewed credit notes issued around the
year end, obtaining the original sales invoices and
understanding the rationale for the credit note to
assess whether these were being used as a way of
manipulating revenue recognition at the year end.
• We obtained a listing of Bill and Hold sales that had
been recognised by the group but were still physically
held in the warehouse at the year end. For a sample of
customers, we assessed whether the criteria specified
by IFRS15 had been met, including whether the
products were separately identified, ready for physical
transfer, unavailable for sale to another customer
and obtaining evidence showing the customer had
requested the arrangement. We also considered
whether the group had any remaining performance
obligations in holding the products and assessed
whether any allocation of the transaction price was
required.
Key observations
Our sample based audit work indicated that revenue
has been recognised in the period when the
performance obligation is met, in line with the group’s
accounting policy.
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NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
Key audit matter
How the matter was addressed in the audit
Key audit matter
How the matter was addressed in the audit
Acquisition of Audio Visual Material Limited (group)
Audio Visual Material Limited (AVM) was acquired
by the group on 31 January 2020. See accounting
policy ‘Business Combinations’ on page 51, the
Intangible assets note (note 12) and the Acquisition
note (note 26). As required by IFRS3, an exercise has
been carried out by management with assistance
from an external expert to calculate the fair value
of the identifiable assets and liabilities acquired,
and the resulting goodwill arising on the business
combination.
Reflecting the requirement for management
judgement in acquisition accounting, in particular
the judgements involved in identifying the
intangible assets acquired and the estimation
procedures in valuing the intangible assets, we
considered the purchase price allocation as a key
audit matter.
Our audit procedures over the accounting entries in
respect of the acquisition of Audio Visual Material
Limited included, but were not limited to, the
following:
• We discussed the acquisition with management
and understood the business rationale behind the
transaction;
• We obtained and reviewed the signed share
purchase agreement to gain an understanding of the
acquisition terms and the date control transferred
to the group. We agreed the total consideration
recognised to the relevant sections of the share
purchase agreement and bank statements;
• We obtained the purchase price allocation exercise
carried out by management with assistance from
an external expert. We engaged our own valuation
experts to review the report and to evaluate the
valuation methodologies that had been used to
calculate the fair value of the assets acquired. Our
work included reviewing the underlying cash flow
projections and considering the appropriateness of
the assumptions applied;
• We verified the calculation of the resulting goodwill
arising on the business combination; and
• We reviewed the disclosures made in the financial
statements regarding the acquisition to assess
whether they are consistent with our understanding
and in accordance with IFRS3.
Key observations
In response to our challenge on the initial accounting
treatment of the acquisition, management engaged
an external expert to assist them in performing a
purchase price allocation exercise which resulted in
recognition of intangible assets relating to brand and
customer relationships, with a corresponding deferred
tax liability.
Management have made a number of updates and
amendments to the presentation of the business
combination in the financial statements, and we are
satisfied that the final disclosures are in accordance
with IFRS3.
Impact of the outbreak of Covid-19 on the going
concern assumption (group and parent company)
During the year there has been a global pandemic
from the outbreak of Covid-19. The potential impact
of Covid-19 became significant in March 2020 and
the pandemic is causing widespread disruption
to normal patterns of business activity across the
world, including the UK.
The directors’ consideration of the impact on the
financial statements is disclosed in the strategic
report on page 12 and in the going concern
assessment on page 28. Based on the information
available at this point in time, the directors have
assessed the impact of Covid-19 on the business and
have concluded that adopting the going concern
basis of preparation is appropriate.
We assessed the directors’ conclusion that adopting
the going concern basis for preparation of the
financial statements is appropriate. We considered:
• How the group had adapted and traded since the
pandemic in March 2020; and
• How the financial statements and business
operations of the group might be impacted by the
continued disruption.
In forming our conclusions over going concern, we
evaluated the directors’ going concern assessment by
performing the following procedures:
• We reviewed management’s going concern
assessment including forecasts taking into account
the expected impact of Covid-19 for a period
exceeding 12 months from the date of approval of the
financial statements;
• We evaluated the key assumptions in management’s
assessment and considered whether they appeared
reasonable; and
• We evaluated the adequacy and appropriateness
of the directors’ disclosures in respect of Covid-19
implications as well as disclosures regarding going
concern.
Our observations
Based on the work performed, we are satisfied that
the matter has been appropriately reflected in the
financial statements.
Our conclusions on going concern are set out above
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NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
Our application of materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial statement line items and
disclosures and in evaluating the effect of misstatements, both individually and on the financial statements as a
whole. Based on our professional judgement, we determined materiality for the financial statements as a whole
as follows:
Overall materiality
How we determined it
Rationale for benchmark applied
Group materiality: £528k
Parent company materiality: £514k
Group materiality: 1% of revenue
Parent company materiality: 1% of revenue
Revenue is a key performance indicator when monitoring the
performance of the business and we therefore consider this to be an
appropriate basis for determining materiality. We considered the use
of Profit Before Tax however this has fluctuated significantly around
the breakeven point year on year and therefore was not considered to
be a suitable basis for materiality.
Performance materiality
Group performance materiality: £370k
Parent company performance materiality: £360k
We performed our audit procedures using a lower level of materiality
– termed ‘performance materiality’ – which is set to reduce to an
appropriate level the probability that the aggregate of uncorrected
and undetected misstatements in the financial statements exceeds
materiality for the financial statements as a whole. Having considered
factors such as the group and parent company’s control environment
and the fact that this is our first year as the group auditor, we have set
our performance materiality at 70% of materiality.
We agreed with the Audit Committee that we would report to that
committee all identified corrected and uncorrected audit differences
in excess of £16,000 (representing 3% of overall materiality) together
with differences below that threshold that, in our view, warranted
reporting on qualitative grounds.
Reporting threshold
The range of financial statement materiality across components, audited to the lower of local statutory audit
materiality and materiality capped for group audit purposes, was between £185k and £360k, being all below
group financial statement materiality.
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the risk of material misstatement in
the financial statements. In particular, we looked at where the directors made subjective judgements such as
making assumptions on significant accounting estimates.
We gained an understanding of the legal and regulatory framework applicable to the group and parent
company, the structure of the group and the parent company and the industry in which it operates. We
considered the risk of acts by the company which were contrary to the applicable laws and regulations
including fraud. We designed our audit procedures to respond to those identified risks, including non-
compliance with laws and regulations (irregularities) that are material to the financial statements.
We focused on laws and regulations that could give rise to a material misstatement in the financial statements,
including, but not limited to, the Companies Act 2006.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on
the financial statements as a whole. We used the outputs of a risk assessment, our understanding of the parent
company and group’s accounting processes and controls and its environment, and considered qualitative
factors in order to ensure that we obtained sufficient coverage across all financial statement line items.
Our tests included, but were not limited to, obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by irregularities including fraud or error, review of minutes of directors’
meetings in the year and enquiries of management.
The risks of material misstatement that had the greatest effect on our audit, are discussed under “Key audit
matters” within this report.
Our group audit scope included an audit of the group and parent company financial statements of Northamber
PLC. Based on our risk assessment, only Northamber PLC was subject to full scope audit and this was performed
by the group audit team. Northamber PLC accounts for 97% of group revenue. One other component was
subject to specific scope audit procedures and the remaining component was subject to analytical procedures
to respond to any potential risks of material misstatement to the group financial statements. At the parent
company level we also tested the consolidation process and carried out analytical procedures to confirm our
conclusion that there were no significant risks of material misstatement of the aggregated financial information.
Other information
The directors are responsible for the other information. The other information comprises the information
included in the Report and Accounts, other than the financial statements and our auditor’s report thereon. Our
opinion on the financial statements does not cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of assurance conclusion thereon.
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NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the financial statements or a material misstatement of the other
information. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
•
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
Use of the audit report
the Strategic Report and the Directors’ Report have been prepared in accordance with applicable legal
requirements.
This report is made solely to the parent company’s members as a body in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent
company’s members those matters we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the parent company and the parent company’s members as a body for our audit work, for this report, or
for the opinions we have formed.
Claire Larquetoux (Senior Statutory Auditor) for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
Tower Bridge House
St Katharine’s Way
London
E1W 1DD
29 January 2021
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent company and its environment
obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or
the Directors’ Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and
returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement set out on page 30, the directors are
responsible for the preparation of the financial statements and for being satisfied that they give a true and
fair view, and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the directors either intend to liquidate the group or
the parent company or to cease operations, or have no realistic alternative but to do so.
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NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER NORTHAMBER PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2020
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
Revenue
Cost of sales
Gross Profit
Distribution costs
Administrative costs
Administrative costs – Exceptional acquisition costs
Other income – Exceptional gain on disposal
of property
Profit/(loss) from operations
Adjusted operating loss
Exceptional items
Operating profit/(loss)
Investment revenue
Finance cost
Profit/(loss) before tax
Tax charge
Notes
3
7
7
4
7
6
8
2020
£’000
52,835
(47,357)
2019
£’000
50,329
(45,998)
5,478
4,331
(3,601)
(2,613)
(220)
10,804
9,848
(736)
10,584
9,848
92
(15)
9,925
(1,413)
(2,849)
(2,352)
-
-
(870)
(870)
-
(870)
272
-
(598)
-
Profit/(loss) for the year and total comprehensive
loss attributable to the owners
8,512
(598)
Basic and diluted profit/ (loss) per ordinary share
10
31.16
(2.17)p
Share
Capital
£’000
281
Share
Capital
Premium Redemption
Reserve
Account
£’000
£’000
5,734
1,505
Balance at 1 July 2018
Dividends
Purchase and
cancellation of shares
Purchase of treasury shares
-
(8)
-
Transactions with owners
(8)
Loss and total
comprehensive loss
for the year
-
-
-
-
-
-
-
-
-
8
-
8
-
-
Treasury
Shares
Retained
Earnings
£’000
-
-
-
£’000
10,000
(55)
(225)
Total
Equity
£’000
17,520
(55)
(225)
(7)
-
(7)
(7)
(280)
-
-
(598)
-
(287)
(598)
-
Balance at 30 June
273
5,734
1,513
(7)
9,122
16,635
Dividends-
Purchase and
cancellation of shares
Cancellation of
treasury shares
Transactions with owners
Profit and total
comprehensive loss
for the year-
-
(1)
-
(1)
-
-
-
-
-
-
-
1
-
1
-
Balance at 30 June 2020
272
5,734
1,514
-
-
7
7
-
-
(164)
(164)
(68)
(68)
(7)
(239)
-
(232)
8,512
8,512
17,395
24,915
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NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2020
Share
Capital
£’000
281
Share
Capital
Premium Redemption
Reserve
Account
£’000
£’000
5,734
1,505
Treasury
Shares
Retained
Earnings
Balance at 1 July 2018
Dividends
Purchase and
cancellation of
of treasury shares
-
(8)
-
Transactions with owners
(8)
Loss and total
comprehensive
loss for the year
-
-
-
-
-
-
-
8
-
8
-
Balance at 30 June 2019
273
5,734
1,513
Dividends
Purchase and
cancellation of shares
Cancellation of
treasury shares
Transactions with owners
Loss and total
comprehensive
loss for the year
-
(1)
-
(1)
-
-
-
-
-
-
-
1
-
1
-
Balance at 30 June 2020
272
5,734
1,514
Total
Equity
£’000
14,500
(55)
(225)
(7)
£’000
6,980
(55)
(225)
-
(280)
(287)
(1,113)
(1,113)
5,587
13,100
(164)
(164)
(68)
(7)
(68)
-
(239)
(232)
(181)
(181)
5,167
12,687
£’000
-
-
-
(7)
(7)
-
(7)
-
-
7
7
-
-
Non -current assets
Property, plant and equipment
Goodwill and intangible assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets classified as held for sale
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Treasury shares
Retained earnings
Equity shareholders’ funds attributable to the
owners of the parent
Notes
11
12
13
14
15
16
2020
£’000
7,184
1,421
8,605
5,948
7,750
10,968
-
24,666
2019
£’000
1,792
-
1,792
3,320
9,492
3,446
6,019
22,277
33,271
24,069
17
(8,356)
(7,434)
18
(8,356)
(7,434)
24,915
16,635
272
5,734
1,514
-
17,395
273
5,734
1,513
(7)
9,122
24,915
16,635
The financial statements on pages 40 to 71 were approved by the board of directors on 29 January 2021 and
were signed on its behalf by:
G.P. Walters
Director
J.P. Henry
Director
Company Registration number: 01499584
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NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
COMPANY STATEMENT OF FINANCIAL POSITION
At 30 June 2020
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF CASHFLOWS
At 30 June 2020
Non-current assets
Property, plant and equipment
Investments
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Treasury shares
Retained earnings
Equity shareholders’ funds attributable to the
owners of the parent
Notes
11
19
13
14
15
2020
£’000
1,748
2,135
3,883
5,304
7,509
4,700
2019
£’000
1,792
6,588
8,380
3,320
9,492
3,320
17,513
16,132
21,396
24,512
Cash flows from operating activities
Operating profit/(loss) from continuing operations
Depreciation of property, plant and equipment
Profit on disposal of property
Operating loss/ before changes in working capital
(Increase)/decrease in inventories
Decrease /(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Cash used in operations
Income taxes paid
2020
£’000
9,848
228
(10,982)
(906)
(2,039)
2,899
(1,172)
(1,218)
-
2019
£’000
(870)
153
-
(717)
58
(1,346)
470
(1,535)
-
17
(8,709)
(11,412)
Net cash used in operating activities
(1,218)
(1,535)
18
(8,709)
(11,412)
12,687
13,100
272
5,734
1,514
-
5,167
273
5,734
1,513
(7)
5,587
12,687
13,100
Cash flows from investing activities
Interest received
Interest Paid
Proceeds from disposal of Property
Purchase of property, plant equipment
Purchase of AVM Ltd
Net cash from investing activities
Cash flows from financing activities
Dividends paid to equity shareholders
Purchase of and cancellation of shares
Purchase of treasury shares
Net cash used in financing activities
92
(15)
16,400
(5,370)
(2,135)
8,972
(164)
(68)
-
(232)
7,522
3,446
272
-
-
(71)
-
201
(55)
(225)
(7)
(287)
(1,621)
5,067
The loss after tax for the individual parent company was £181,000 (2019: £1,113,000)
The financial statements on pages 40 to 71 were approved by the board of directors on 29 January 2021 and
were signed on its behalf by:
Net Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
G.P. Walters
Director
J.P. Henry
Director
Company Registration number: 01499584
Cash and cash equivalents at end of year
10,968
3,446
44
45
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
COMPANY STATEMENT OF CASHFLOWS
For the year ended 30 June 2020
Cash flows from operating activities
Operating loss from continuing operations
Depreciation of property, plant and equipment
Operating loss before changes in working capital
(Increase)/decrease in inventories
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade and other payables
Cash used in operations
Income taxes paid
2020
£’000
(198)
131
(67)
(1,984)
1,983
(2,703)
(2,771)
2019
£’000
(1,385)
120
(1,265)
58
(1,347)
926
(1,628)
-
-
Net cash used in operating activities
(2,771)
(1,628)
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Purchase of AVM Ltd
Repayment of long term loan held as investment
Net cash from investing activities
Cash flows from financing activities
Dividends paid to equity shareholders
Purchase of and cancellation of shares
Purchase of Treasury shares
Net cash used in financing activities
Net Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
17
(87)
(2,135)
6,588
4,383
(164)
(68)
-
(232)
1,380
3,320
272
(71)
-
-
201
(55)
(225)
(7)
(287)
(1,714)
5,034
Cash and cash equivalents at end of year
4,700
3,320
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
1. General information
Northamber plc is a public limited company incorporated and domiciled in the United Kingdom under
the Companies Act 2006 and is listed on the London Stock Exchange on the Alternative Investment
Market. The address of the registered office is given on page 31. The nature of the company’s operations
and its principal activities are set out in the Strategic Report and the Directors’ Report on pages 8-19.
2. Significant accounting policies Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the EU.
The financial statements have been prepared under the historical cost basis.
The financial statements cover the individual entity Northamber plc and two subsidiaries Anitass Limited
and AVM Limited. All other subsidiaries are dormant and not material to the financial statements for the
year to 30 June 2020 or 30 June 2019.
The directors of Anitass Limited, the subsidiary of Northamber plc, have claimed audit exemption for
the year ended 30 June 2020 under Section 479A (Subsidiary Companies) of the Companies Act 2006.
The Board of Northamber plc have provided a guarantee on behalf of the Parent Company undertaking
stating that it guarantees Anitass Limited under section 479C of the Companies Act 2006. Northamber
Plc guarantees all outstanding liabilities to which Anitass Limited is subject at 30 June 2020 until they
are satisfied in full and the guarantee is enforceable against Northamber plc by any person to whom the
subsidiary company is liable in respect of those liabilities.
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.
46
47
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2. Significant accounting policies (continued)
Adoption of new and revised standards
Standards, amendments and interpretations adopted in the current financial year
The adoption of the following mentioned standards, amendments and interpretations in the current year
have not had a material impact on the Group’s or Company’s financial statements.
Standard
Annual Improvements to IFRSs (2015 - 2017)
IFRS 16: Leases
IFRIC 23 Uncertainty over Income Tax Treatments
See below the accounting policy for ‘Leases’.
Effective date, annual
period beginning on or after
1 January 2019
1 January 2019
1 January 2019
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
2. Significant accounting policies (continued)
Critical accounting judgements and other key sources of estimation uncertainty
In the process of applying the group’s accounting policies, the group is required to make certain
estimates, judgements and assumptions that it believes are reasonable based upon the information
available. These estimates and assumptions affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenue and expenses during the periods
presented.
On an ongoing basis, the group evaluates its estimates using historical experience, consultation with
experts and other methods considered reasonable in the particular circumstances. Actual results may
differ from the estimates, the effect of which is recognised in the period in which the facts that give rise
to the revision become known. The group believes that the estimates and judgements in relation to
goodwill and intangible assets have the most significant impact on the annual results under IFRS as set
out below.
Standards, amendments and interpretations in issue but not yet effective
Critical judgements in applying the Group’s accounting policies
The adoption of the following mentioned standards, amendments and interpretations in future years are
not expected to have a material impact on the Group or Company’s financial statements.
Standard
Effective date, annual
period beginning on or after
IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors (Amendment): Definition of Material
IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and
Measurement and IFRS 7 Financial Instruments: Disclosures (Amendments):
Interest Rate Benchmark Reform – Phase 1
Conceptual Framework (Amendment): Amendments to References to the
Conceptual Framework in IFRS Standards
IFRS 3 Business Combinations (Amendment): Definition of a Business
IFRS 16 Leases (Amendment): Covid-19-related Rent Concessions
IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and
Measurement, IFRS 7 Financial Instruments: Disclosures, IFRS 4 Insurance Contracts
and IFRS 16 Leases (Amendments): Interest Rate Benchmark Reform – Phase 2
IFRS 4 Insurance Contracts (Amendment): Extension of the Temporary Exemption
from Applying IFS 9
IAS 16 Property, Plant and Equipment (Amendment): Proceeds before Intended Use
IAS 37 Provisions, Contingent Liabilities and Contingent Assets: (Amendment):
Onerous Contracts – Cost of Fulfilling a Contract
IFRS 3 Business Combinations (Amendment): Reference to the Conceptual
Framework Annual Improvements to IFRSs (2018 – 2020 cycle)
IAS 1 Presentation of Financial Statements (Amendment): Classification of Liabilities
as Current or Non-current and Classification of Liabilities as Current or Non-current
- Deferral of Effective Date
1 January 2020
1 January 2020
1 January 2020
1 January 2020
1 June 2020
1 January 2021†*
1 January 2021†*
1 January 2022†*
1 January 2022†*
1 January 2022†*
1 January 2022†*
1 January 2023†*
Standards, amendments and interpretations cannot, in general, be adopted in the EU until they have been EU- endorsed.
† Pending endorsement.
* Expected to be endorsed by the IASB effective date.
** Expected endorsement date not yet announced.
48
Estimated useful economic lives of intangible assets
On the acquisition made during the financial year the identifiable intangible assets included brands
and customer relationships. The useful economic lives of these assets have been estimated at 7 years by
management.
Key sources of estimation uncertainty
Goodwill
The group records all assets and liabilities acquired in business combinations, including goodwill, at fair
value. Goodwill is not amortised but is subject, at a minimum, to annual tests for impairment or if there
has been an indication of any impairment in the year. The initial goodwill recorded and subsequent
impairment review require management to make subjective judgements concerning the value in use
of cash-generating units. This requires an estimate of the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate to calculate present value. The value in use calculation
prepared at the year end indicates that there is minimal headroom in the model and any adverse
movement in one of the key assumptions would lead to an impairment. The carrying amount at the end
of the reporting period is £1,025,000 and details of the assumptions made are provided in note 12.
Intangible assets in a business combination
On the acquisition made during the financial year the identifiable intangible assets included brands and
customer relationships. The fair value of these assets is determined by discounting estimated future
net cash flows generated by the asset where no active market for the assets exists. The use of different
assumptions for the expectations of future cash flows, the useful economic life and the discount rate
would change the valuation of the intangible assets. The carrying amount at the end of the reporting
period is £396,000 and details in relation to the current year acquisition is in note 26.
49
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
The principal accounting policies adopted are set out below.
Taxation
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable for goods provided in
the normal course of business, net of discounts, VAT and other sales related taxes.
Nearly all the group’s revenues relate to the sale of goods, and the performance obligation under
contracts with customers is satisfied on shipment of goods to the customer.
The group has determined therefore that revenue on sale of goods is recognised at the date of delivery of
goods to the customer that is at a point in time.
The group has a very small level of revenue from the provision of services, mainly assisting customers
with the installation of equipment. The performance obligation in this case is satisfied on installation and
is recognised as revenue at that point.
The company makes bill and hold sales, in which delivery is delayed at the buyer’s request but the buyer
takes title to and risk in the goods, and accepts billing. This is on the basis that it is probable that delivery
will be made; the goods are on hand, identified and ready for delivery to the buyer at the time the sale
is recognised; the buyer specifically acknowledges the deferred delivery instructions; and the usual
payment terms apply. The revenue is recognised at the time of invoicing, which is also when the goods
are identified and made ready for the buyer.
Revenues are stated after discounts, rebate and price reductions. Customers only have a right to return
goods in accordance with contractual terms. Warranties are provided directly by the Group’s suppliers to
customers.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net
profit as reported in the profit or loss because it excludes items of income or expense that are taxable
or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s liability for current tax is calculated using tax rates that have been enacted, or substantively
enacted, by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will
be available against which deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary differences arise from the initial recognition of goodwill or from the
initial recognition (other than in a business combination) of other assets and liabilities in a transaction
that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax is calculated at the tax rates that are substantively enacted in the period when the liability
is settled or the asset is realised. Deferred tax is charged or credited to the profit or loss, except when it
relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with
in equity.
Investment revenue is accrued on a time basis in accordance with the effective interest rate method.
Deferred tax balances have not been discounted.
Foreign currencies
Transactions in currencies other than pounds sterling, the functional currency of all group entities, are
recorded at the rates of exchange prevailing on the date of the transactions. At each reporting date,
monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates
prevailing on the reporting date. Exchange differences arising on the settlement of monetary items, and
on the retranslation of monetary items, are included in profit or loss for the period.
Loss from operations
Business combinations
The acquisition of subsidiaries and businesses is accounted for using the acquisition method.
Measurement of consideration
The consideration for each acquisition is measured at the aggregate of the fair values, at the date of
exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the group in
exchange for control of the acquiree.
Contingent consideration is initially measured at fair value at the date of the business combination. Any
subsequent adjustment to this fair value (such as meeting an earnings target), where the consideration is
payable in cash, is recognised in the consolidated statement of comprehensive income.
Loss from operations is stated before investment income and finance costs.
Fair value assessment
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are charged as an expense in the period in
which they are incurred. The Group has no defined benefit retirement schemes.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are measured initially at their fair values at the acquisition date. Where the fair value of the assets
and liabilities at acquisition cannot be determined reliably in the initial accounting, these values
are considered to be provisional for a period of 12 months from the date of acquisition. If additional
information relating to the condition of these assets and liabilities at the acquisition date is obtained
within this period, then the provisional values are adjusted retrospectively. This includes the restatement
of comparative information for prior periods.
Goodwill arises where the cost of the business combination exceeds the group’s interest in the net fair
value of the identifiable assets, liabilities and contingent liabilities recognised. This is recognised as an
asset and is subject to impairment tests as noted in note 12.
50
51
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Acquisition costs
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Property, plant and equipment
Acquisition costs are recognised in the consolidated statement of comprehensive income as incurred and
separately disclosed due to the nature of this expense.
Goodwill
Goodwill arising on consolidation is recognised as an asset.
Following initial recognition, goodwill is subject to impairment reviews, at least annually or if there is an
indication of impairment, and measured at cost less accumulated impairment losses. Any impairment is
recognised immediately in the consolidated statement of comprehensive income and is not subsequently
reversed.
On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the
gain or loss on disposal.
Other intangible assets
Other intangible assets are measured initially at cost and are amortised on a straight-line basis over their
estimated useful lives.
The carrying amount is reduced by any provision for impairment where necessary.
On a business combination, as well as recording separable intangible assets already recognised in the
balance sheet of the acquired entity at their fair value, identifiable intangible assets that are separable or
arise from contractual or other legal rights are also included in the acquisition balance sheet at fair value.
Amortisation is charged within administrative expenses in the consolidated statement of comprehensive
income so as to write off the cost or valuation of assets over their estimated useful lives, on the following
basis:
Intangible assets arising on acquisitions
Brands
7 years straight line
Customer relationships
7 years straight line
52
Land and buildings are held for use in the production or supply of goods and services, or for
administrative purposes and are stated in the balance sheet at cost less accumulated depreciation and
impairment losses.
Plant and equipment are stated at cost less accumulated depreciation and any recognised impairment
loss.
Depreciation is charged so as to write off the cost of assets less any residual value, other than land, over
their estimated useful lives, using the straight line method, on the following bases:
Land and Buildings:
Freehold
premises(Northamber)
Freehold premises (Anitass Ltd) 2.5% on freehold buildings, freehold improvements 25% straight line
Plant and equipment
4% on freehold buildings, freehold improvements 25% straight line
25% straight line
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between
the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Material residual value estimates are updated as required, but at least annually.
Assets held for sale
Assets are classified as held for sale where their carrying amount is to be recovered principally through a
sale transaction and a sale is considered highly probable. They are stated at the lower of carrying amount
and fair value less costs to sell.
Impairment of tangible and intangible assets
At each balance sheet date, the group reviews the carrying amounts of its tangible and intangible assets
to determine whether there is any indication that those assets have suffered an impairment loss. If any
such indication exists, the recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate cash flows that are independent from
other assets, the Company estimates the recoverable amount of the cash generating unit to which the
asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount.
An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a
revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset (cash generating unit) in prior years. A reversal of an impairment loss
is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a revaluation increase.
53
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Inventories
Equity instruments
Inventories are stated at the lower of cost and net realisable value. Cost is on the FIFO basis and comprises
finished goods and goods for resale. Net realisable value represents the estimated selling price less costs
to be incurred in marketing, selling and distribution.
Cost of inventories is based on original cost as amended by credits subsequently received or agreed with
suppliers in respect of specific products. The provision for obsolete and slow moving stock is determined
by frequent and regular reviews of stock, its ageing and rate of sale. Provisions are made which enable
such obsolete stock as not returned to suppliers and slow moving stock to be sold at no loss.
Investments
Investments in subsidiaries are held at cost less any provision for impairment.
Financial instruments
(i) Financial assets
The Group has one class of financial asset that is recorded at amortised cost as detailed below.
These assets, which are held to collect, arise principally from the provision of goods and services
to customers (e.g. trade receivables). Impairment provisions for current and non-current trade
receivables are recognised based on the simplified approach with IFRS 9 using a provision matrix in the
determination of the lifetime expected credit losses. During this process, the probability of the non-
payment of the trade receivables is assessed. The probability is then multiplied by the amount of the
expected loss arising from default to determine the lifetime expected credit loss for the trade receivables.
For trade receivables, which are reported net, such provisions are recorded in a separate provision
account with the loss being recognised within administrative expenses in the consolidated statement
of comprehensive income. On confirmation that the trade receivables will not be collectable, the gross
carrying value of the asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to related parties are recognised
based on a forward looking expected credit loss model. The methodology used to determine the amount
of the provision is based on whether there has been a significant increase in credit risk since initial
recognition of the financial asset. For those where the credit risk has not increased significantly since
initial recognition of the financial asset, twelve month expected credit losses along with gross interest
income are recognised. For those for which credit risk has increased significantly, lifetime expected credit
losses along with the gross interest income are recognised. For those that are determined to be credit
impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
The Group’s financial assets measured at amortised cost comprise trade and other receivables and cash
and cash equivalents in the consolidated statement of financial position. Cash and cash equivalents
include cash in hand, deposits held at call with banks and other short term highly liquid investments.
(ii) Financial liabilities
The Group has one class of financial liability that is recorded at fair value as detailed below.
Trade payables are initially recognised at fair value, net of any transaction costs directly attributable
to the issue of the instrument and are subsequently measured at amortised cost using the effective
interest method which ensures that any interest expense and associated finance costs over the period
to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of
financial position. For the purpose of each financial liability, interest expense includes initial transaction
costs and any premium payable on redemption as well as any interest payable while the liability is
outstanding. Contingent deferred consideration is initially measured at fair value, with subsequent
changes recorded at fair value through profit and loss.
54
Equity instruments issued by the Company are recorded at fair value on initial recognition net of
transaction costs.
Equity comprises the following:
Share Capital
Share Premium
– represents the nominal value of equity shares.
– represents the excess over nominal value of the fair value of
consideration received for equity shares, net of expenses of the
share issue.
Capital Redemption Reserve – represents the nominal value of shares which have been redeemed
and cancelled.
Treasury Shares
– represents the cost of shares held in Treasury.
Retained Earnings
– represents all current and prior period retained profits and losses.
The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any
related income tax benefit) to the extent that they are incremental costs directly attributable to the
equity transaction that otherwise would have been avoided. The costs of an equity transaction that is
abandoned are recognised as an expense.
Where the Company purchases the Company’s equity share capital (treasury shares), the consideration
paid including any directly attributable incremental costs is deducted from equity attributable to the
Company’s equity holders until the shares are cancelled or re-issued.
Where shares are cancelled a corresponding transfer of the nominal value of the shares cancelled is made
to the capital redemption reserve.
Capital management
The Group’s capital comprises equity, and its objectives when managing capital are to safeguard the
Group’s ability to continue as a going concern in order to provide returns to shareholders and to maintain
an optimal capital structure.
In order to manage the capital structure the Group can adjust the amount of dividends paid to
shareholders, purchase the Company’s shares, return capital to shareholders or issue new shares.
In line with Group policy, the group has no external debt finance hence gearing is not measured. The
company has paid final and interim dividends in the year.
Equity comprises the items detailed within the principal accounting policy for equity and financial details
can be found in the statement of financial position. The company adheres to the capital maintenance
requirements set out in the Companies Act 2006.
55
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
4. Profit/loss) from operations
Operating profit/(loss) is stated after (crediting)/charging:
Foreign exchange (gain)/loss
Depreciation of property, plant and equipment
Amounts written off inventory
Short term lease charges – land and buildings
Fees paid to the company’s auditor
- for the audit of the company annual financial statements
- for the audit of subsidiary undertakings
- for tax compliance services
- for corporate finance services
2020
£’000
(17)
228
11
171
57
11
-
-
2019
£’000
49
153
23
-
55
-
4
8
Employee benefit expense
3,911
3,232
No profit and loss account for Northamber plc has been presented as permitted by Section 408 of the
Companies Act 2006.
The retained loss for the financial year dealt with in the financial statements of the parent company,
Northamber plc, was £181,000 (2019: loss of £1,113,000) and is stated after taxation.
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Going Concern basis
The going concern basis of preparing the financial statements has been adopted as in the view of the
directors, as set out in the notes on Corporate Governance, the company has adequate resources to
continue in operational existence for the foreseeable future. Please see Corporate Governance Report for
further information on Page 29.
Segmental reporting
Management has determined that there is only one operating segment of the group as the total business
of the company is the sourcing and distribution of computer related products and this is how information
is reported to the Chief Operating Decision Maker. The board in carrying out its strategic planning and
decision making has, necessarily, to take consideration of the inter relatedness of the product range and
the customer base and thus treat the operations of the group as a whole. All decisions on the allocation
of resources impacts on all aspects of the group. Information presented to the Chief Operating Decision
Maker is the same as is reported in these financial statements.
Leases
Leases are recognised on the Balance sheet at the outset of the lease at the present value of future
payments. These leases are recognised under “Lease liabilities” and by “Right-of-use assets”. They are
amortised over the term of the lease, which is typically the fixed period of the lease unless there is a
stated intention to renew or terminate. In the statement of comprehensive income, depreciation and
amortisation expenses are recognised in the operating margin and interest expenses under net financial
income (expenses).
Leases of low-value assets or short-term leases are immediately expensed in profit or loss.
3. Revenue
Although the sales of the group are predominantly to the UK there are sales to other countries and the
following table sets out the split of the sales for the year. Revenue is attributable to individual countries
based on the location of the customer.
Revenues comprise:
Revenue from contracts with
customers - UK
- Other
2020
£’000
52,391
444
52,835
2019
£’000
49,655
674
50,329
Revenue from contracts with customers comprises sale of goods which are recognised at a point in time
and relate to electrical or electronic products. Service revenues are immaterial.
Revenues are stated after discounts, rebate and price reductions. Customers only have a right to return
goods in accordance with contractual terms. Warranties are provided directly by the Group’s suppliers to
the Group’s customers. Payment terms are varying between 30 and 90 days.
56
One customer accounted for more than 10% (2019: 10%) of the group’s revenue for the year, being
£5,900,000 (2019: £6,400,000).
57
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
5. Staff costs
7.
Exceptional items
The average monthly number of persons (including executive directors) employed by the group and
company during the year was:
Sales
Administration
Warehouse
Engineering
Their aggregate remuneration comprised:
Staff costs:
Wages and salaries
Social security costs
Pension costs
Other benefits
2020
Number
42
31
13
2
88
2020
£’000
3,445
353
81
32
3,911
2019
Number
33
27
12
1
73
2019
£’000
2,851
291
59
31
3,232
All pension costs relate to defined contribution schemes.
Included in the above is key management personnel compensation as set out below. Full details of
director’s remuneration are set out in the Report to Shareholders by the Board of Directors’ Remuneration
on page 20. The company has identified the key management personnel as the executive and non-
executive directors and all their remuneration received amounts to short-term employment benefits
except for pension contributions.
Remuneration
Salaries and Fees
Social security costs
Pension costs
Benefits
6.
Investment revenue
Bank interest receivable
Rental income
2020
£’000
165
17
12
18
212
2020
£’000
92
-
92
2019
£’000
99
10
10
20
139
2019
£’000
6
266
272
Group
Exceptional items comprise:
Profit from sale of Property
Less: Legal and professional fees
Net Profit on sale of property
Acquisition costs in relation to AVM Limited
Total exceptional income
2020
£’000
10,982
(178)
10,804
(220)
10,584
Group
2019
£’000
-
-
-
-
-
The profit from the sale of the property includes variable consideration of £602,000 which was
dependent on the early surrender of the lease. This was reasonably certain of being exercised at the year
end and has been recognised as part of the profit on sale.
8. Tax on profit/(loss) on ordinary activities
Current taxation
Charge for the year
Group
2019
£’000
-
-
2020
£’000
1,413
1,413
The charge for the year can be reconciled to the profit per the Statement of comprehensive income as
follows:
Profit/(loss) on ordinary activities before tax
Tax at the UK corporation tax rate of 19.00% (2019:19.00%)
Profit on disposal of fixed assets
Capital gain
Non-deductible expenses
Sundry items
Use of post April 2017 losses brought forward
Deferred tax asset not recognised
Total actual amount of charge for the year
2020
£’000
9,925
1,886
(1,939)
1,624
42
(32)
(168)
-
1,413
Group
2019
£’000
(598)
(114)
-
-
-
13
-
101
-
The corporation tax rate for the year ended 30 June 2020 was 19%. The Corporation Tax rate of 19% was
enacted with effect from 1 April 2017 and the Finance Act 2016 legislated the UK Corporation Tax rate to
decrease to 17% from 1 April 2020. However, on the 17th March 2020, using the Provisional Collection of
Taxes Act 1968, the UK Government cancelled the proposed drop in Corporation Tax rate to 17%.
The Group has tax losses of £3,723,000 (2019: £4,600,000) to carry forward. No deferred tax asset is
recognised in respect of the losses due to the uncertainty there will be sufficient taxable profits in future
to absorb them.
58
59
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
9. Dividends
11. Property, plant and equipment
Amounts recognised as distribution to equity holders in the period:
Dividends paid in year
Final – for year ended 30 June 2019
and 30 June 2018
Interim – for year ended 30 June 2020
and 30 June 2019
Proposed final for the year ended
30 June 2020 and 30 June 2019
2020
2019
Pence Per Share £’000
Pence Per Share £’000
0.30
82
0.30
0.60
82
164
0.30
82
0.10
0.10
0.20
0.30
28
27
55
82
The proposed final dividend is subject to approval at the Annual General Meeting and has not been
included as a liability in these financial statements.
10. Profit/(loss) per ordinary share
The calculation of the basic and diluted earnings per share is based on the following data:
Profit/(loss) for the year attributable to equity holders
of the parent company
Number of shares
2020
£’000
2019
£’000
8,512
(598)
2020
Number
2019
Number
Weighted average number of ordinary shares for the purpose
of basic earnings per share and diluted earnings per share
27,316,175
27,499,434
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by
the weighted average number of ordinary shares in issue during the year. Both basic and diluted earnings
per share have been calculated using the loss attributable to shareholders of the parent company as the
numerator; therefore no adjustments to loss were necessary in 2019 and 2020.
Net assets per share, as disclosed within the summary of the last five years of trading, is calculated by
dividing the net assets as disclosed in the consolidated statement of financial position by the number of
ordinary shares in issue at the year end.
Group
Cost
At 1 July 2018
Additions
Disposals
Assets held for sale
At 30 June 2019
Depreciation
At 1 July 2018
Depreciation charge for the year
Disposals
Assets held for sale
At 30 June 2019
Net book value at 30 June 2019
Group
Cost
At 1 July 2019
Additions
Disposals
At 30 June 2020
Depreciation
At 1 July 2019
Depreciation charge for the year
Disposals
At 30 June 2020
Net book value at 30 June 2020
9,266
-
-
(6,692)
2,574
1,587
89
-
(673)
1,003
1,571
2,574
4,900
-
Land and
Buildings
£’000
Plant and
Equipment
£’000
Total
£’000
10,631
71
(9)
(6,692)
4,001
2,738
153
(9)
(673)
2,209
1,365
71
(9)
-
1,427
1,151
64
(9)
-
1,206
221
1,792
1,427
720
(975)
4,001
5,620
(975)
7,474
1,172
8,646
1,003
96
-
1,099
6,375
1,206
132
(975)
363
809
2,209
228
(975)
1,462
7,184
Additions for current year Plant and Equipment includes £250,000 through acquisition (see note 26).
60
61
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
11. Property, Plant & Equipment
12. Goodwill and intangible assets
Company
Cost
At 1 July 2018
Additions
Disposals
At 30 June 2019
Depreciation
At 1 July 2018
Depreciation charge for the year
Disposals
At 30 June 2019
Net book value at 30 June 2019
Group Cost
At 1 July 2019
Additions
Disposals
At 30 June 2020
Depreciation
At 1 July 2019
Depreciation charge for the year
Disposals
At 30 June 2020
Net book value at 30 June 2020
Land and
Buildings
£’000
Plant and
Equipment
£’000
2,574
-
-
2,574
947
56
-
1,003
1,571
2,574
-
-
2,574
1,003
56
-
1,059
1,515
1,365
71
(9)
1,427
1,151
64
(9)
1,206
221
1,427
87
(975)
539
1,206
75
(975)
306
233
Total
£’000
3939
71
(9)
4,001
2,098
120
(9)
2,209
1,792
4,001
87
(975)
3,113
2,209
131
(975)
1,365
1,748
Additions for current year Plant and Equipment includes £250,000 through acquisition (see note 26).
Goodwill
£’000
Brands
£’000
Customer
Relationships
£’000
Cost
At 1 July 2019 and 1 July 2018
Arising on acquisition
At 30 June 2020
Amortisation and impairment
At 1 July 2019 and 1 July 2018
Amortisation during the year
At 30 June 2020
Carrying Amount
At 30 June 2020
At 30 June 2019
-
1,025
1,025
-
-
-
1,025
-
-
63
63
-
-
-
63
-
Total
£’000
-
1,421
1,421
-
-
-
-
333
333
-
-
-
333
-
1,421
-
The carrying value of intangible assets arising on acquisitions comprises brands of £63,000 (2019: £0) and
customer relationships of £333,000 (2019: 0). The remaining useful economic lives of intangible assets
arising on acquisition are seven years.
Goodwill acquired in a business combination is allocated, at acquisition, to the cash-generating units
(‘CGUs’) that are expected to benefit from that business combination. The carrying amount of goodwill
has been allocated wholly to the CGU.
The group tests goodwill annually for impairment or more frequently if there are indications that
goodwill might be impaired.
The recoverable amount of the CGU is based on a value in use calculation using cash flow projections
over a 7 year period, including the latest one year forecast approved by the board. A 7 year period
has been used as the directors believe this is an appropriate period to reflect cash flows based on a
2 year expected transition period for the impact of Covid-19 and a 5 year economic cycle thereafter.
The one year forecast is prepared considering expectations based on market knowledge, and financial
performance since the date of acquisition. The remaining years are based on anticipated sales over an
economic cycle, together with historical financial performance. A terminal value is used as the basis for
the final year.
62
63
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Key assumptions used in value in use calculation
13. Inventories
The key assumptions for the value in use calculation are those regarding:
• pre-tax discount rate;
• revenue; and
• operating profit margins.
Pre-tax discount rate
The group’s post-tax weighted average cost of capital has been used to calculate a group pre-tax
discount rate of 22.5%, which reflects current market assessments of the time value of money for the
period under review and the risks specific to the group.
Revenue
Revenue assumptions in the one year forecast are derived from expectations based on market
knowledge, and the financial performance since the date of acquisition. Future year revenue levels are
based on anticipated opportunities over an economic cycle. The average number of opportunities over
the period is in line with historical levels.
The Audio Visual market has been impacted by Covid-19, therefore management have factored this into
forecasts and expect there to be a two year transition period for the impact of Covid-19 to diminish.
After two years management expects revenue to return to pre-Covid-19 levels. Once normal trading has
returned, management’s forecasts are based on the business plan when the business was acquired.
The revenue growth rate used in Year 1 is 25% and thereafter the average annual revenue growth rates
are 11%. The calculation is based on stable growth in years 2 to 5 of 17.5% and reduced growth rates in
years 6 and 7 of 5%.
Operating profit margins
Operating profit margins in the one year forecast are derived from the expected gross margin and the
overhead cost base. Gross margins over the extrapolation period are 20%, which is based on historical
financial performance and expectations of future market developments.
Operating profit margins average 4% over the period.
Sensitivity to changes in assumptions
There is minimal headroom in the value in use calculation compared to the carrying value of the CGU. As
such, any adverse movements in the revenue projections or in the other key assumptions above would
lead to an impairment.
64
Group
2020
£’000
2019
£’000
Company
2020
£’000
2019
£’000
Goods for resale
5,948
3,320
5,304
3,320
Cost of sales include £47,357,000 (2019: £45,998,000) inventory expensed in the year’s statement of
comprehensive income. An impairment charge of £11,000 is recognised in cost of sales (2019: £23,000
credit)
14. Trade and other receivables
2020
£’000
Trade receivables
6,990
Less provision for impairment of receivables (291)
2019
£’000
9,401
(136)
2020
£’000
6,754
(268)
2019
£’000
9,401
(136)
Group
Company
Net trade receivables
6,699
9,265
6,486
9,265
Prepayments and other receivables
1,051
227
1,023
227
7,750
9,492
7,509
9,492
The directors do not consider the fair value of trade and other receivables to be significantly different
from their carrying values. The directors have used historical experience of collecting receivables,
supported by the level of default (non-payment from customer), together with forward looking
information to determine that that credit risk is very low.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime
expected credit loss provision for trade receivables. To measure expected credit losses on a collective
basis, trade receivables are assessed based on similar credit risk and ageing. The expected loss rates
are based on the Group’s historical credit losses experienced over the three year period prior to the
year end. The historical loss rates are then adjusted for current and forward-looking information on
macroeconomic factors affecting the Group’s customers. Credit insurance forms a key part of the credit
risk management strategy.
Trade receivables that are more than three months past due are reviewed for impairment on an individual
basis including consideration of previous payment history and the ongoing relationship with the
customer.
Trade receivables older than credit terms
Ageing of past due receivables are as follows:
0-30 days past due
30 - 60 days past due
60 - 90 days past due
90+ days past due
Group
Company
2020
£’000
113
44
10
291
458
2019
£’000
109
12
27
238
386
2020
£’000
71
39
10
291
411
2019
£’000
109
12
27
238
386
65
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Trade and other receivables impairment provision
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
17. Trade and other payables
Balance at beginning of period
Amounts written off as uncollectable
Increase in impairment loss provision
Group
Company
2020
£’000
136
(4)
159
291
2019
£’000
85
(13)
64
136
2020
£’000
136
(4)
136
268
2019
£’000
85
(13)
64
136
The Group impairment provision consists of a specific provision of £257,000 and a general provision of
£34,000. The Company impairment provision consists of a specific provision of £257,000 and a general
provision of £11,000.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable
mentioned above. The group does not hold any collateral as security.
15. Cash and cash equivalents
Bank balances and cash in hand
Cash and cash equivalents in
statement of cash flows
16. Assets held for sale
Property
Group
2020
£’000
10,968
2019
£’000
3,446
Company
2020
£’000
4,700
2019
£’000
3,320
Group
2020
£’000
-
2019
£’000
6,019
Company
2020
£’000
-
2019
£’000
-
Following the decision on 14 December 2018 by the board to sell the distribution centre this asset was
presented as held for sale. The sale was completed on 8 July 2019.
In accordance with IFRS 5 the asset was carried at the lower of carrying value and fair value less costs to
sell at the date the asset was first classified as held for sale, and this was updated at the reporting date. In
the opinion of the directors the fair value less costs to sell exceeded the carrying amount at both dates.
Depreciation of the asset ceased at the date of classification as held for sale.
Trade payables
Inter company payables
Other payables
VAT
Corporation tax
Other tax and social security
Accruals and deferred income
Group
Company
2020
£’000
5,082
-
83
1,201
1,413
135
442
8,356
2019
£’000
6,380
-
38
627
-
82
307
7,434
2020
£’000
4,750
2,328
39
1,057
-
116
419
8,709
2019
£’000
6,380
4,007
38
614
-
82
291
11,412
The financial liabilities shown above are those which were outstanding at 30 June 2020. The average credit
period taken for trade payables is 33 days (2019: 42 days).
The directors consider that the fair values of trade and other payables are not materially different from
those disclosed above. Trade payables are not interest bearing.
The liquidity in trade and other payables is managed by the company through the management of its cash
resources as referred to in the Strategic Report, to ensure that for all practical purposes creditors are paid in
accordance with the credit terms agreed with the suppliers.
Authorised shares of 1p each
At 30 June 2020 and 2019
Issued and fully paid shares of 1p each
At 1 July 2019
Cancellation of ordinary shares
At 30 June 2020
Group and Company
Number
£’000
80,000,000
2,000
27,356,586
(125,000)
27,231,586
273
(1)
272
The company has one class of ordinary shares which carry no right to fixed income.
The company acquired 100,000 shares through purchases on the London Stock Exchange during the year.
Of these 100,000 and 25,000 held as Treasury shares were cancelled.
10,968
3,446
4,700
3,320
18. Share capital
66
67
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
19. Investment in group companies
Company
Cost
At 1 July 2018 and 1 July 2019
Loan repayment
Addition
At 30 June 2020
2020
£’000
6,588
(6,588)
2,135
2,135
During the year, Anitass Limited repaid a long term loan which was classified in the accounts as an
investment, hence the reduction in the investment value.
The current year addition relates to the acquisition of Audio Visual Material Limited (Note 26).
In the opinion of the directors, the value of the company’s investment is not less than the amount included
in the company statement of financial position.
Name
Anitass Limited
Audio Visual Material Limited
Solution Point Limited
Solution Technology Limited
Thripple-Thrift Limited
Country of
Incorporation % owned
100
100
99
100
100
England
England
England
England
England
Status
Operational
Operational
Dormant
Dormant
Dormant
The registered office of all of these companies is detailed on page 31.
20. Capital commitments
There were no capital commitments at 30 June 2020 (2019: £Nil).
22. Related party transactions
Mr D.M. Phillips (deceased) is the ultimate controlling party of the company.
During the year, the company paid £38,000 (2019: £601,000) rent to Anitass Limited, a wholly owned
subsidiary. At the year end Northamber plc owed Anitass Limited £3,059,000 (2019: £4,007,000).
During the year AVM Limited purchased £68,000 worth of goods from Northamber Plc and Northamber
Plc purchased £4,000 worth of goods from AVM. Audio Visual Material Limited owed £731,000 (2019:Nil)
At the year end, Zero balance (2019: £135,000) was held by the company on Mr D.M. Phillips’ behalf. Interest
of £Nil (2019: £350) earned during the year, is included within the balance of Nil (2019: £135,000).
During the year the company paid £6,600 (2019: £13,300) for administrative and support work to
Bernadette Henry, the wife of the Operational Director Mr. John Henry. In the directors’ opinion the
payments are at an arm’s length basis.
The company paid £39,000 (2019: £12,780) to the Non-Executive Director Mr Colin Thompson for IT
Consultancy work.
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
23. Events after the reporting date
There were no significant events after the reporting date.
24. Contingent liabilities
In order for the Company’s subsidiary, Anitass Limited, to take the audit exemption in section 479A of
the Companies Act 2006, the Company has guaranteed all outstanding liabilities of that subsidiary
company at 30 June 2020 until those liabilities are satisfied in full.
25. Financial instruments exposure
Trade and other receivables, cash and cash equivalents, and trade and other payables are measured at
amortised cost. The accounting policies applied are set out in note 2. The carrying amounts of financial
assets and liabilities as at 30 June 2020 are categorised below.
The interest rate exposure of the financial assets and liabilities of the group and company as at 30 June
2020 is shown in the table below. The table includes trade receivables and payables as these do not attract
interest and are therefore subject to fair value interest rate risk.
Based on exposure at the reporting date, currency movements are not considered likely to have a material
effect on profits or equity.
Floating
£’000
Zero
£’000
Total
£’000
Group
Financial assets at amortised cost
Cash and cash equivalents:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Trade and other receivables
Total
10,654
208
106
-
10,968
Floating
£’000
Financial liabilities at amortised cost Trade payables:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Other payables
-
-
-
-
Total
-
-
-
-
6,719
6,719
Zero
£’000
4,263
592
227
83
5,165
10,654
208
106
6,719
17,687
Total
£’000
4,263
592
227
83
5,165
68
69
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2020 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
Floating
£’000
Zero
£’000
Company
Financial assets – at amortised cost
Cash and cash equivalents:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Trade and other receivables
Total
Financial liabilities at amortised cost
Trade payables:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Inter Company payables
Other payables
Total
4,386
208
106
-
4,700
Floating
£’000
-
-
-
-
-
-
-
-
-
6,486
6,486
Zero
£’000
3,931
592
227
2,328
39
7,117
Total
£’000
4,386
208
106
6,486
11,186
Total
£’000
3,931
592
227
2,328
39
7,117
The directors estimate that an increase or decrease in annual average interest rates of 0.5% would increase/
decrease profit before tax by approximately £36,000 (2019: £21,000).
Maturity of Financial Instruments
All financial liabilities are classified as current and are due within 60 days.
There is no material difference between the fair value and book value of financial instruments.
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2020
26. Acquisitions
On 31 January 2020, the Group acquired 100% of the issued share capital of Audio Visual Material Limited
(“AVM”). AVM is a specialist distributor of audio visual hardware and services. AVM was acquired to extend
the Group’s offering into the audio visual market and accelerates the Group’s evolution towards higher
Gross margins.
The acquisition develops a new customer base for the Group, complements the existing customer base
and provides the Group with additional market share in the significant audio visual market sector.
The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are set out
below:
Book
value
£’000
-
-
250
589
555
(680)
714
Fair value
adjustments
£’000
63
333
-
-
-
396
Net assets acquired
Intangible Asset – Brand
Intangible Asset – Customers relationships
Property, plant and equipment
Stock of finished goods
Trade and other receivables
Trade and other payables
Total identifiable assets
Satisfied by:
Consideration under IFRS 3
Cash consideration
Goodwill
Cash outflows arising on acquisition
Cash consideration
Fair
value
£’000
63
333
250
589
555
(680)
1,110
2,135
1,025
2,135
Acquisition costs of £220,000 have been charged to the statement of comprehensive income as a
transaction cost.
The acquisition contributed £1.55 million of revenue and £144,000 to the group’s operating loss (before
amortisation and transaction costs) for the period between the date of acquisition and the balance sheet
date.
70
71
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