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
Notice of Meeting
2
3
5
13
17
20
28
29
30
38
39
41
43
45
71
1
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
Years ending 30 June
2022
£’000
2021
£’000
2020
£’000
2019
£’000
2018
£’000
Revenue
(Loss)/Profit before tax
(Loss)/Earnings per share
Net Assets per share
Dividends paid per share (net)
66,260
(447)
(1.64)p
89.8p
0.7 p
60,009
385
1.24p
92.1p
0.6 p
52,835
9,925
31.16p
91.5p
0.2p
50,329
(598)
(2.17)p
60.8p
0.2p
58,136
(489)
(1.74)p
62.2p
0.2p
2
NORTHAMBER PLC
CHAIRMAN’S STATEMENT
Results
We are pleased to share that we have continued to grow revenue year on year by 10.4% from £60.01m
to £66.26m whilst achieving gross margins at 12.8% (13.0% prior year) despite challenging and very
dynamic market conditions. This served to generate a continued increase in gross margins of £0.66m
year on year to £8.47m and reflected our continued focus on evolving our product mix towards higher
margin, more technical products through Northamber and AVM. The trend of this growth can be better
seen when comparing results to even the year prior to that (June 2020) which had revenue of £52.8m
and Gross Margins were £5.48m, albeit AVM was acquired early in the second half of that year.
Despite pleasing sales and gross margin growth for the year, performance in some of our focus areas
remained impacted by the gradual recovery from Covid with continuing uncertainty for resuming events
and large venue installations, as well as market disruptions from rapid changes in Sterling, particularly
against the US Dollar. We remain optimistic and confident in these focus areas and believe that we can
deliver significant long term value and growth in these segments for our partners and shareholders.
Distribution costs increased significantly from £4.59m to £5.56m as we continued to invest in
developing the team for our significant growth ambitions. We were also affected by significant
increases year on year on carriage costs (our biggest non-payroll cost).
The fall in the value of Sterling translated into a swing from a foreign exchange profit of £223k in 2021
to a loss of £164k in 2022, which was the main driver in increased administration costs from £2.84m to
£3.36m.
It is frustrating that factors over which we have no control have led to increases in distribution and
administration costs, which have outweighed the margin growth. The impact of carriage costs and a
weaker Sterling, totalling approximately £0.3m resulted in a reduction of EBITDA year on year to a
loss of £75k and an operating loss for the year of £0.45m versus a profit of £0.38m last year.
We feel strongly, however, that to drive significant long term profitable growth it is important that we
continue to invest for the future, albeit these investments are measured against the ability to generate
value.
Financial position
We made a deliberate decision to profitably support our partners by maintaining sufficient stock in
country during the uncertainty of chip shortages together with continued impact on supply chains of
Brexit, the war in Ukraine and COVID. As a consequence, stock levels increased from £8.5 million in
2021 to £10.6 million at 30 June 2022. This investment in inventory meant that cash reserves fell from
£7.45m at 30 June 2021 to £4.70m. With Fixed Assets at book value at £6.92m, including three
unencumbered freehold properties, the Group’s overall financial position is very sound. Net Assets at
89.8p per share are considerably in excess of the average price of the ordinary shares throughout the
period.
Since the end of the financial year, the Board took the decision to relocate AVM into existing premises
and to sell the freehold office where they are based. The Company has exchanged contracts for the sale
of the office and completion is scheduled to occur on 28 November 2022. The consideration will be
£1.48m, before costs, payable in cash, against a net book value of £1.43m. The net proceeds will be
added to our cash reserves.
3
NORTHAMBER PLC
CHAIRMAN’S STATEMENT (continued)
Board changes
In July 2022, Peter Dosanjh joined the Board as a director. Peter has over 25 years' experience within
B2B AV and IT hardware resellers alongside AV distribution.
Geoff Walters is to stand down as a non-executive director with effect from 31 December 2022 and will
not stand for re-election at this year’s AGM. Geoff joined the Board in February 2016 and the Board
is grateful for his contribution during this period and we wish him well for the future.
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 January 2023 to shareholders on the register as at 16 December 2022.
Staff
Our staff remain a key asset for the business and an area we continue to invest in. The team has
continued to work hard to support our partners and each other. Our plans remain to continue to invest
in our evolving business model by continuing to invest in building out the best team in the market to
achieve our business evolution.
Outlook
In keeping with prior outlooks that we shared, we remain cautiously optimistic that the investments we
have made in supporting our partners will allow us to continue to drive growth of strategic business
units. We have yet to fully benefit from these investments, given the ongoing impact of COVID, forex
movements and supply chain issues which together with wider economic uncertainty due to rising
interest rates, inflation and subsequent cost of living impacts, necessarily mean we must remain cautious
about the near term. We do feel strongly, however, that our continued focus on strategic higher margin
value categories provides a solid road map for the future with profitable growth opportunities and the
ability to unlock long term value for shareholders. The strength of our balance sheet allows us to
continue to do what is best for the business strategically and we continue to review organic and non-
organic opportunities for growth which meet our strict criteria and add value for our shareholders.
C.M. Thompson
Chairman
17 November 2022
4
NORTHAMBER PLC
STRATEGY AND PERFORMANCE
The Directors present their strategic report on the Group for the year ended 30 June 2022.
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 purchases goods from manufacturers and sells these 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. 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.
5
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
3. Key Performance Indicators
The Group has an extensive management reporting system and uses a wide variety of information
in its everyday management of the business. 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:-
Format
KPI
Revenue
£m
Gross Profit Percentage Margin %
Net Assets per share
Working Capital Ratio *1
Pence
Times
2021-22
66.26
12.78
89.8
2.59
2020-21
60.01
13.01
92.1
2.47
*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.
5. Financial Review and Position
Revenue increased 10.4% to £66.26 million compared with last year with an increase in gross margin
of 8.5% from £7.81 million to £8.47 million.
Our cash balance at the end of the financial year was £4.7 million reduced from £7.5 million due
mainly to an increased investment in inventories from £8.47 million to £10.65 million.
Some 28.3% of the Net Assets comprise the carrying value of freehold properties, 19.2% cash and
the balance working capital. The Net Assets were 89.8p per share (2021: 92.1p per share) which
represented more than the average share price in the year.
6. Principal Risks and Uncertainties
Financial Risks
The Group uses various financial instruments, including cash, trade receivables and trade payables
in the course of its operations.
6
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
The use of these instruments gives rise to risks associated with exchange rate risk, liquidity risk,
interest rate risk, credit risk, inventory risk and reputational 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.
Inventory Risk
The Group operates in the technology industry and has an inventory risk in that older inventory can
decrease in value. The Group mitigates this risk by having strong contracts with suppliers which
allow the return and rotation of stock, and by internal control procedures where the ageing of
inventory is regularly reviewed and actioned.
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.
7
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
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 27. 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.
Brexit
The Group assessed the risks around Brexit and identified the main ones as foreign exchange rates
and disruption of supply chain. As our customers are mainly based in the UK we have not
experienced any major issues and likewise no major issues were experienced 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.
The Group has managed its stock holdings to minimise disruption from any supply chain delays and
as a result the Group has experienced little major disruption due to Brexit.
8
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
Covid-19
The ongoing implications resulting from the Covid-19 pandemic had a potential impact across all
stakeholders. Our continued approach has been focussed on the health, safety and well-being of our
people and following HM Government’s advice on working practices. Despite no formal lockdown
periods during the financial year, we followed Government advice and our office-based employees
worked from home for the first 9 months of the year moving to a hybrid working policy of 2 days
per week in the office from 1 April 2022. All our office based employees continued to be able to
work remotely and securely during the period.
A continuing impact was experienced within some of our focus suppliers within the Pro Audio
Visual, Infrastructure and large Document Management sectors where many sales continued to be
delayed due to restricted site access for installation, however following the relaxation of
restrictions these issues are now receding.
During the closure of the office for the 9 months:
Our distribution centre was fully functional throughout the period
Our sales and administration teams were able to operate remotely with minimal disruption
Inflationary Risk
In line with most businesses, the Group has experienced rising supply prices due to the increases in
energy prices and market uncertainty due to interest rate rises and supply chain issues. Whilst the
Group will aim to pass on price rises this will cause uncertainty in demand. The Group believes that
there is likely to be a slowdown in demand for some of its products but believes that with its diverse
range it can mitigate any demand decreases.
7. Future Prospects
The 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 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
The company has exchanged contracts on the sale of it Lightwater office which is due to complete
on 28 November for a consideration of £1.48m before costs against a net book value of £1.43m.
9
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
Section 172 statement
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 4 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.
Although there were no formal lockdown periods during the financial year, the company followed
Government advice and the office remained closed for the period to 31 March 2022. As a result
of the periods of remote working 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.
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.
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.
10
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
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.
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.
Our goal in terms of climate change is to do all we reasonably can to reduce the impact of our
activities on the climate. This involves working with our suppliers to meet the growing demand for
more sustainable, greener products.
We are investing in electric car schemes and have installed solar panels to power our warehouse and
are looking at solar power options for our other buildings.
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;
dividends paid and 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 17)
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.
Acquisitions
There were no acquisitions made during the reporting period.
11
NORTHAMBER PLC
STRATEGY AND PERFORMANCE (continued)
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
17 November 2022
12
REPORT OF THE DIRECTORS
The Directors have pleasure in presenting their report and the accounts for the year ended 30 June 2022.
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 and the premises at Lightwater which are the offices
for Audio Visual Material Limited. These freehold premises were purchased during the year to 30 June
2020. 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 2022.
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
expose 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 20 to 27 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 2022
Ordinary dividends
Previous year’s final dividend paid
Interim paid
2022
£’000
109
82
191
2021
£’000
82
81
163
The final proposed dividend of 0.3p (2021: 0.4p) will be paid on 18 January 2023 to all members on
the register at the close of business on 16 December 2022.
Directors
Directors of the company who have served at any time during the year are listed on page 29.
13
REPORT OF THE DIRECTORS (continued)
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.
Share Capital
At 30 June 2022, the company had 27,231,586 (2021: 27,231,586) Ordinary shares of 1p each issued.
The shares have no special rights and there is no restriction on their voting rights.
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 16 November 2022.
Mr A.M. Phillips
Herald Investment Management Limited
Mr & Mrs Rockliff
Quiros Limited
Worsley Investors Limited
Purchase of Own Shares
Ordinary Shares of 1p each
62.88%
7.37%
3.67%
3.49%
5.02%
At the end of the year, the Directors had authority, under the shareholders’ resolutions of 21 December
2021 to purchase through the market 2,723,158 (2021: 2,723,158) of the company’s ordinary shares at
prices ranging between 1p and 105% (2021: 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 21 December
2022, the date of the next Annual General Meeting.
Auditors
A resolution to re-appoint Mazars LLP as the Group’s auditors will be proposed at the forthcoming
Annual General Meeting.
Employee Engagement
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.
14
REPORT OF THE DIRECTORS (continued)
Energy and carbon reporting
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.
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.
UK Energy Use
To 30 June 2022
To 30 June 2021
Consumption
Greenhouse
Gas (GHG)
Emissions Consumption
Greenhouse
Gas (GHG)
Emissions
Notes
(tCO2e)
(tCO2e)
Electricity
212.0, MWH
49
237.1, MWH
55
Gas
355.6, MWH
72
639.8, MWH
130
TOTAL
121
185
Methodology
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 2022
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 2022 for this sort of natural gas use.
During the year the company actively reduced the gas heating in its warehouse and provided
suitable winter clothing to its staff.
Motor Vehicles. The company owned one van and one petrol company car and one electric
company car for the year and one 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 2022: 1.8 (2021: 3.1).
15
REPORT OF THE DIRECTORS (continued)
Energy Efficiency Activity
he business completed an installation of solar power to power the warehouse in Swindon in July 2022.
The company is also investing in a scheme to provide electric cars as a salary sacrifice arrangement.
The Company is mindful of its environmental obligations and will examine opportunities to further cut
its carbon emissions.
Customers and Suppliers
The Directors foster and maintain strong relationships with customers and suppliers as set out in the
s172 Report on pages 10 to 12.
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
17 November 2022
16
REPORT TO SHAREHOLDERS BY THE BOARD ON DIRECTORS’
REMUNERATION
The Group voluntarily provides the following Directors’ Remuneration Report
Remuneration Committee
The Remuneration Committee comprised the Non-Executive Directors Mr C.M. Thompson, Mr G.P.
Walters and Mr R. Reggio. This committee meets at least once a year and decides the remuneration
policy that applies to executive Directors.
In setting the policy it considers a number of factors including:
(a)
(b)
(c)
the basic salaries and benefits available to executive Directors of comparable companies;
the need to attract and retain Directors of an appropriate calibre and experience; and
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)
(b)
(c)
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;
link individual remuneration packages to the company’s performance through target-related
bonuses which are not considered to be excessive in terms of salary;
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.
17
REPORT TO SHAREHOLDERS BY THE BOARD ON DIRECTORS’
REMUNERATION (continued)
Contracts of Service
The three executive Directors, Mr A.M. Phillips, Mr J.P. Henry and Mr A.R. Lee, have service
contracts. All three 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
Mr J.P. Henry
Mr A.R. Lee
- Notice period – six months
- Notice period – six months
- 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.
Directors’ Detailed Emoluments
Details of Directors’ emoluments are as follows:
During the year pension contributions were made by the company on behalf of 3 Executive Directors
under money purchase schemes. The aggregate amounts paid are shown in the table below.
Directors’ Interests
Executive
Salaries and
Fees
2022
2021
£’000 £’000
Benefits
Pension
Total
2022
2021
£’000 £’000
2022
2021
£’000 £’000
2022
2021
£’000 £’000
Mr J.P. Henry
Mr A.M. Phillips
Mr A.R. Lee (Appointed on
1 April 2021)
Non-Executive
Mr G.P. Walters
Mr C.M. Thompson
Mr R. G. Reggio (appointed
on 1 April 2021)
100
50
100
20
57
20
100
88
25
20
56
5
14
8
10
-
-
-
14
11
3
-
-
-
10
10
10
-
-
-
10
6
3
-
-
-
124
68
120
20
57
20
124
105
31
20
56
5
347
294
32
28
30
19
409
341
The amounts above include £37,000 for IT consultancy fees paid to C Thompson (2021: £36,000).
For the year ended 30 June 2022 Mr A.M. Phillips has waived £50,000 of his salary.
18
REPORT TO SHAREHOLDERS BY THE BOARD ON DIRECTORS’
REMUNERATION (continued)
Directors in office at 30 June 2022 had the following beneficial interests in the shares of the company:
Ordinary Shares of 1p each
30 June
2022
30 June 2021
Mr A.M. Phillips
Mr J.P. Henry
Mr A.R. Lee
Mr G.P. Walters
Mr R. Reggio
Mr C.M. Thompson
17,154,874
-
-
-
-
14,500
17,154,874
-
-
-
-
14,500
Between 30 June 2022 and 16 November 2022 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 16 November 2022 was 46.0p. The range of market prices
during the year was 69 p to 51p.
S. Yoganathan ACMA.
By order of the Board
17 November 2022
19
CORPORATE GOVERNANCE
The Corporate Governance Report forms part of the Directors’ Report included on pages 13 to 16.
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 5. 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 14 under Substantial Shareholdings, 81.44% of the shares are held by five parties,
of which Alexander Philips holds 62.88%, leaving only 18.56% 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.
20
CORPORATE GOVERNANCE (continued)
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.
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 7 to 9. 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 3 executive and 3 independent Non-Executive Directors.
The biographies of the Directors are set out on page 29. Similarly, the method of establishing the
effectiveness and appropriateness of the Board is set out on page 25. 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 17 & 24.
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 24.
21
CORPORATE GOVERNANCE (continued)
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.
Governance Structures and Processes
The Corporate Governance structure and processes are set out on pages 20 to 27.
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.
22
CORPORATE GOVERNANCE (continued)
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 17 to 19.
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 three
executive and three Non-Executive Directors. Biographical details of each director in office during the
year appear on page 29.
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.
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
23
CORPORATE GOVERNANCE (continued)
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 29, 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
The following table shows the attendance of Directors at the Board meetings held in the last year.
Number of Board Meetings
Entitled to Attend
5
5
5
5
5
5
Attended
5
5
5
5
5
4
Mr Alexander Michael Phillips
Mr John Phelim Henry
Mr Antony Richard Lee
Mr Colin Mark Thompson
Mr Riccardo Reggio
Mr Geoffrey Paul Walters
Audit Committee
The Audit Committee, currently chaired by Mr G.P. Walters, comprised the three Non-Executive
Directors, all 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;
matters that could influence or distort the presentation of accounts and key information;
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 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.
24
CORPORATE GOVERNANCE (continued)
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 2021 annual report and financial statements and the December 2021 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
agreed the fees to be paid to the external auditors for their audit of the 2021 report and financial
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 re-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.
Operations Committee
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.
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.
25
CORPORATE GOVERNANCE (continued)
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 5 to 16. The financial
position of the Group, its cash flow and its liquidity position are described in the Chairman’s Statement
on pages 3 to 4. 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 September 2022 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.
26
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 2021. 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
17 November 2022
27
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 accounting standards in conformity with the
requirements of the Companies Act 2006. The Group financial statements are required by law and
International Accounting Standards in conformity with the requirement of the Companies Act 2006 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; and
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.
28
DIRECTORS AND ADVISERS
Non-Executive Directors
Geoffrey Paul Walters *† (Age 70) ACA
Non executive director.
Geoffrey Walters has a vast experience in a wide range of industries.
Colin Mark Thompson *† (Age 62)
Non executive director and Chairman.
Colin Thompson has over 39 years’ experience in the distribution sector, and was a Director in the
Company from September 1991 to January 1999.
Riccardo Reggio *† (Age 50)
Riccardo Reggio is an experienced corporate strategy and M&A adviser who works with a variety of
companies to help them achieve their strategic goals.
* Member of Remuneration Committee
† Member of Audit Committee
Executive Directors
John Phelim Henry (Age 60)
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 36)
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.
Antony Richard Lee (Age 56)
Finance director
Antony Lee joined Northamber plc in 2020 as Director of Finance and was appointed as Finance
Director in 2021.
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
30 Old Bailey
London
EC4M 7AU
29
Bankers
Barclays Bank plc
6 Clarence Street
Kingston upon Thames
Surrey
KT1 1NY
Atlantic Bank
405 Park Avenue
New York
NY 100022
USA
Nominated Adviser & Broker
Singer Capital Markets
One Bartholomew Lane
London
EC2N 2AX
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 2022, 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,
the 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 UK-
adopted international accounting standards 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 2022 and of the group’s loss for the year then ended;
have been properly prepared in accordance with UK-adopted international accounting standards
and, as regards the parent company financial statements, as applied in accordance with the
provisions of the Companies Act 2006; and
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 group and 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
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
Our audit procedures to evaluate the directors’ assessment of the group’s and the parent company's
ability to continue to adopt the going concern basis of accounting included but were not limited to:
Undertaking an initial assessment at the planning stage of the audit to identify events or conditions
that may cast significant doubt on the group’s and the parent company’s ability to continue as a
going concern;
Evaluating the directors’ method to assess the group’s and the parent company’s ability to continue
as a going concern;
Reviewing the directors’ going concern assessment, including evaluating judgements applied by
the directors and consideration given to significant cash position held at the year end in forming
their conclusions; and
Reviewing the appropriateness of the directors’ disclosures in the financial statements.
30
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the group’s and the
parent company’s ability to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report.
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.
Key Audit Matter
Impairment of
Goodwill (group)
Intangible assets
including
How our scope addressed this matter
Our procedures over the impairment of goodwill
and intangible assets included, but were not limited
to, the following:
Northamber has recognised Intangible assets
(Brand and customer relationships) of £396,000
and Goodwill of £1,025,000 from the acquisition
of Audio Visual Material Limited in the prior
year.
Refer to Accounting Policies (page 51); and Note
11 of the Consolidated Financial Statements
(pages 61-62)
In accordance with IAS 36: Impairment of assets,
Goodwill and intangible assets are required to be
assessed for impairment on an annual basis. The
determination of the value in use of the CGU to
which the Goodwill and Intangible assets are
allocated involves management judgement and
estimates including the discount rate, and both
short term and long term growth rates.
• We reviewed the methodology applied for the
impairment review including consideration of the
review and approval processes adopted;
• We reviewed management’s impairment model,
including assessing and challenging the
appropriateness of key assumptions underlying
management’s discounted cash flow (‘DCF’)
projections, which included revenue growth, long
term growth rate and the discount rate;
• We reviewed the accuracy of the calculations in
the DCF projections and the historical accuracy of
management’s forecasts;
• We performed our own sensitivity analysis on
management’s impairment model to consider the
impact of severe but plausible scenarios;
As such, there is a risk that if the judgements
taken and assumptions used are inappropriate,
goodwill may be materially misstated.
• We considered whether the related financial
statement disclosures were adequate and
appropriate.
Our observations
Based on the procedures performed, we consider
management’s judgements relating to the
impairment of intangible assets to be appropriate.
31
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
Our audit procedures included, but were not limited
to:
Considering the results of the assessment
for impairment indicators of the Goodwill
and intangibles detailed above; and
Evaluating whether the relevant disclosures
in the financial statements are reasonable.
Valuation of investment in the Subsidiary Audio
(Parent
Visual Material Limited “AVM”
company only)
The group’s accounting policies in respect of
investments is set out under “investments” and on
page 52 and note 17 to the financial statements.
There is a risk that if there are any impairment
indicators that would impact the carrying value of
the CGU of AVM these may also impact the
carrying value in the parent company of its
investment in AVM.
Our observations
Based on the work performed, nothing has come to
our attention which suggests that there were
unidentified indicators for impairment not
considered by the management.
32
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
Our application of materiality and an overview of the scope of our audit
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:
Group materiality
Overall materiality
How we determined it
Group materiality: £1,004k, which is approximately 1.5%
of group revenue.
Parent company materiality: £903k, which is
approximately 1.5% of parent company 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 stable basis for materiality.
Rationale for benchmark applied
Group performance materiality: £753k
Parent company performance materiality: £678k
Performance materiality is set to reduce to an
appropriately low 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, we have set our
performance materiality at 75% 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 £30k for the
Group and £27k for the Parent (representing 3% of
overall materiality) together with differences below that
threshold that, in our view, warranted reporting on
qualitative grounds.
Reporting threshold
As part of designing our audit, we assessed the risk of material misstatement in the financial statements,
whether due to fraud or error, and then designed and performed audit procedures responsive to those
risks. In particular, we looked at where the directors made subjective judgements, such as assumptions
on significant accounting estimates.
33
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
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 our risk assessment, our
understanding of the group and the parent company, their environment, controls, and critical business
processes, to consider qualitative factors to ensure that we obtained sufficient coverage across all
financial statement line items.
Our group audit scope included an audit of the group and parent company financial statements of
Northamber Plc. Based on our risk assessment, Northamber Plc and Audio Visual Material Limited
were subject to full scope audit and this was performed by the group audit team; these two components
account for 100% of group revenue. The one remaining component was subject to analytical procedures
to respond to any potential risks of material misstatement to the Group financial statements.
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 £100k and £903k
being all below group financial statement materiality.
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 other information comprises the information included in the Report and Accounts other than the
financial statements and our auditor’s report thereon. The directors are responsible for the other
information. 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.
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
course of audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves. 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:
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
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
34
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
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 28, 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.
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 the financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed
below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud.
35
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
Based on our understanding of the group and the parent company and their industry, we considered that
non-compliance with the following laws and regulations might have a material effect on the financial
statements: employment regulation, health and safety regulation, anti-bribery, corruption and fraud,
anti-money laundering regulation, general data protection regulations and alternative investment market
“AIM” rules.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and
assessing the risks of material misstatement in respect to non-compliance, our procedures included, but
were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether
the group and the parent company is in compliance with laws and regulations, and discussing their
policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any
indications of non-compliance throughout our audit; and
Considering the risk of acts by the group and the parent company which were contrary to applicable
laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the
financial statements, such as tax legislation, pension legislation and the Companies Act 2006.
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent
manipulation of the financial statements (including the risk of override of controls) and determined that
the principal risks were related to posting manual journal entries to manipulate financial performance,
management bias through judgements and assumptions in significant accounting estimates and
significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual,
suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal
entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility
for the prevention and detection of irregularities including fraud rests with management. As with any
audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery,
intentional omissions, misrepresentations or the override of internal controls.
The risks of material misstatement that had the greatest effect on our audit are discussed in the “Key
audit matters” section of this report.
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.
36
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
(continued)
Use of the audit report
This report is made solely to the 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
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 company and the company’s members as a body for our audit work, for this
report, or for the opinions we have formed.
Stephen Brown (Senior Statutory Auditor) for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
30 Old Bailey
London
EC4M 7AU
17 November 2022
37
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2022
Revenue
Cost of sales
Gross Profit
Distribution costs
Administrative costs
Operating (Loss)/profit
Finance income
Finance cost
(Loss)/Profit before tax
Tax charge
Notes
3
4
6
2022
£’000
66,260
(57,791)
2021
£’000
60,009
(52,200)
8,469
7,809
(5,556)
(3,365)
(4,595)
(2,837)
(452)
377
5
-
(447)
-
8
-
385
(48)
(Loss)/Profit for the year and total comprehensive
income attributable to the owners
(447)
337
Basic and diluted (Loss)/profit per ordinary share
8
(1.64) p
1.24p
The above results arise from continuing operations
The notes on pages 45 to 70 form part of the financial statements
38
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
Share
Capital
£’000
Share
Premium
Account
£’000
Capital
Redemption
Reserve
£’000
Retained
Earnings
Total
Equity
£’000
£’000
272
5,734
1,514
17,395
24,915
-
-
-
-
-
-
-
-
-
(163)
(163)
(163)
(163)
337
337
272
5,734
1,514
17,569
25,089
-
-
-
-
-
-
-
-
-
(191)
(191)
(191)
(191)
(447)
(447)
272
5,734
1,514
16,931
24,451
Balance at 1 July
2020
Dividends
Transactions with
owners
Profit and total
comprehensive
income for the year
Balance at 30 June
2021
Dividends
Transactions with
owners
Loss and total
comprehensive
income for the year
Balance at 30 June
2022
39
NORTHAMBER PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
Share
Capital
£’000
Share
Premium
Account
£’000
Capital
Redemption
Reserve
£’000
Retained
Earnings
Total
Equity
£’000
£’000
272
5,734
1,514
5,167
12,687
-
-
-
-
-
-
-
-
-
(163)
(163)
(163)
(163)
338
338
272
5,734
1,514
5,342
12,862
-
-
-
-
-
-
-
-
-
(191)
(191)
(191)
(191)
(617)
(617)
272
5,734
1,514
4,534
12,054
Balance at 1 July
2020
Dividends
Transactions with
owners
Profit and total
comprehensive
loss for the year
Balance at 30
June 2021
Dividends
Transactions with
owners
Loss and total
comprehensive
income for the
year
Balance at 30
June 2022
40
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2022
Notes
2022
£’000
2021
£’000
Non-current assets
Property, plant and equipment
Goodwill and intangible assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Corporation tax payable
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Equity shareholders’ funds attributable to the
owners of the parent
9
11
12
13
14
15
16
6,919
1,309
8,228
10,649
11,245
4,696
26,590
7,079
1,365
8,444
8,468
10,753
7,449
26,670
34,818
35,114
(10,329)
(38)
(9,866)
(159)
(10,367)
(10,025)
24,451
25,089
272
5,734
1,514
16,931
272
5,734
1,514
17,569
24,451
25,089
The financial statements on pages 38 to 70 were approved by the Board of Directors on 17 November 2022 and
were signed on its behalf by:
A.R. Lee J.P. Henry
Director
Director
Company Registration number: 01499584
41
NORTHAMBER PLC
COMPANY STATEMENT OF FINANCIAL POSITION
At 30 June 2022
Notes
2022
£’000
2021
£’000
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
Corporation tax payable
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Equity shareholders’ funds attributable to the
owners of the parent
10
17
12
13
14
15
16
1,652
2,135
3,787
9,689
11,525
4,104
25,318
29,105
1,685
2,135
3,820
7,681
11,168
6,200
25,049
28,869
(17,051)
-
(15,997)
(10)
(17,051
(16,007)
12,054
12,862
272
5,734
1,514
4,534
272
5,734
1,514
5,342
12,054
12,862
The loss after tax for the individual parent company was £617,000 (2021: profit of £338,000)
The financial statements on pages 39 to 70 were approved by the Board of Directors on 17 November 2022 and
were signed on its behalf by:
A.R.Lee
Director
J.P. Henry
Director
Company Registration number: 01499584
42
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2022
Note
2022
£’000
2021
£’000
Cash flows from operating activities
Operating (Loss)/profit from continuing operations
Depreciation of property, plant and equipment 4
Amortisation of intangible assets
Profit on disposal of property, plant and equipment 4
Operating (loss)/profit before changes in working capital
(Increase) in inventories
(Increase) in trade and other receivables
Increase in trade and other payables
Cash used in operations
Income taxes paid
Net cash used in operating activities
Cash flows from investing activities
Interest received
Proceeds from disposal of Property, plant and
equipment
Purchase of property, plant equipment
Net cash used in investing activities
Cash flows from financing activities
Dividends paid to equity shareholders 7
Interest Paid
Net cash used in financing activities
(452)
336
56
(15)
(75)
(2,181)
(492)
463
(2,285)
(120)
(2,405)
5
60
(222)
(157)
(191)
-
(191)
377
350
56
(13)
770
(2,520)
(3,003)
2,923
(1,830)
(1,302)
(3,132)
8
17
(249)
(224)
(163)
-
(163)
Net(decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
14
(2,753)
7,449
(3,519)
10,968
Cash and cash equivalents at end of year 14
4,696
7,449
43
NORTHAMBER PLC
COMPANY STATEMENT OF CASH FLOWS
For the year ended 30 June 2022
Cash flows from operating activities
Operating (Loss) /profit from continuing operations
Depreciation of property, plant and equipment
(Profit) on disposal of property, plant and equipment
Operating (loss) /profit before changes in working capital
(Increase) in inventories
Decrease/(increase) in trade and other receivables
Increase in trade and other payables
Cash used in operations
Income taxes paid
Net cash used in operating activities
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and
equipment
Net cash from investing activities
Cash flows from financing activities
Dividends paid to equity shareholders
Net cash used in financing activities
Net(decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Note
2022
£’000
2021
£’000
(623)
145
(15)
(493)
(2,008)
(357)
1054
(1,804)
(10)
(1,814)
5
(157)
60
(92)
(191)
(191)
(2,096)
6,200
340
144
-
484
(2,377)
(2,835)
6,464
1,736
-
1,736
8
(81)
-
(73)
(163)
(163)
1,500
4,700
Cash and cash equivalents at end of year
4,104
6,200
44
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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 29. The nature of the
company’s operations and its principal activities are set out in the Strategic Report and the
Directors’ Report on pages 6 to 16.
2. Significant accounting policies
Basis of accounting
The financial statements have been prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act 2006.
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 2022 or 30 June 2021.
The Directors of Anitass Limited, the subsidiary of Northamber plc, have claimed audit
exemption for the year ended 30 June 2022 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 2022 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.
45
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
2. Significant accounting policies (continued)
New and amended standards adopted by the Group
The Group has applied the following new standards and interpretations for the first time for the annual
reporting period ending 30 June 2022:
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 16 Leases (Amendment): Covid19-related Rent Concessions Beyond 30 June 2021
The adoption of the standards and interpretations listed above has not led to any changes to the
Group’s accounting policies or had any material impact on the financial position or performance of
the Group.
Standards issued but not yet effective
At the date of authorisation of these financial statements, the following standards and interpretations
relevant to the Group and which have not been applied in the financial statements, were in issue but
were not yet effective.
IFRS amendments effective from 1 January 2022
IAS 16 Amendment: Property, Plant and Equipment: Proceeds before Intended Use
IAS 37 Amendment: Onerous Contracts: Cost of Fulfilling a Contract
IFRS 3 Amendment: Reference to the Conceptual Framework
Annual Improvements Cycle 2018 to 2020
IFRS standards effective from 1 January 2023 onwards
IAS 1 Amendment: Disclosure of Accounting Policies
IAS 8 Amendment: Definition of Accounting Estimates
IAS 1 Amendment: Classification of Liabilities as Current or Non-current and Non-current Liabilities
with Covenants
IAS 12 Amendment: Deferred Tax related to Assets and Liabilities arising from a Single Transaction
IFRS 16 (Amendment: Lease Liability in a Sale and Leaseback
The adoption of the above mentioned standards, amendments and interpretations in future years are
not expected to have a material impact on the Group or Company’s financial statements.
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
46
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
2. Significant accounting policies (continued)
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.
Critical judgements in applying the Group’s accounting policies
No critical judgements have been made during the financial year
Key sources of estimation uncertainty
Impairment of intangible assets including goodwill
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 carrying amount at the
end of the reporting period is £1,308,000 and details of the assumptions made are provided in note 11.
No impairment has been identified during the year or at year end.
Impairment of Investment – Parent entity
The Directors assess the recoverability of investments in subsidiaries at the reporting date by
reference to the profitability and its net asset position. Impairment reviews require management to
make subjective judgements concerning the future cash flows arising from the subsidiary. Estimates
over the future cash flows are made by management. Where applicable, investments in subsidiaries
are impaired down to the amount assessed as recoverable. Directors have made an estimate of the
future cash flows expected to arise from the investment and a suitable discount rate to calculate
present value. The carrying amount at the end of the reporting period is £2,135,000, the details of the
assumptions made are provided in note 11 as these are the same as the goodwill impairment review.
No impairment has been identified during the year or at year end.
The principal accounting policies adopted are set out below.
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. Payment terms are varying
between 30 and 90 days.
The Group has determined therefore that revenue on sale of goods is recognised at the date the
delivery of goods to the customer leaves the warehouse. Revenue is recognised at a point in time.
47
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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 (a) the reason for
the bill-and-hold arrangement must be substantive (for example, the customer has requested the
arrangement); (b) the product must be identified separately as belonging to the customer; (c) the
product currently must be ready for physical transfer to the customer; and (d) the company cannot
have the ability to use the product or to direct it to another customer. The revenue is recognised at the
time of invoicing, which is also when the goods are identified and made ready for the buyer and
despatched.
Revenues are stated after discounts, rebates, price reductions and provision for estimated levels of
returns. Customers only have a right to return goods in accordance with contractual terms. Warranties
are provided directly by the Group’s suppliers to customers.
Investment revenue is accrued on a time basis in accordance with the effective interest rate method.
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.
Profit from operations
Profit from operations is stated before investment income and finance costs.
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.
Taxation
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
48
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
Deferred tax balances have not been discounted.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes by the same taxation
authority and the Group intends to settle its current tax assets and liabilities on a net basis.
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.
Fair value assessment
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 11.
49
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Acquisition costs
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
Customer relationships
7 years straight line
7 years straight line
Property, plant and equipment
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.
50
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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)
Plant and equipment
4% on freehold buildings, freehold improvements 25% straight line
2.5% 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.
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.
Inventories
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.
51
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
Credit insurance is used for the large majority of trade receivables to mitigate against any potential
risk of non-payment. The point at which the trade receivable is de-recognised and an insurance asset
is recognised under IAS37 when the economic benefit arising from the claim is virtually certain.
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.
52
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
(ii)
Financial liabilities
The Group has one class of financial liability that is measured at amortised cost 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.
Equity instruments
Equity instruments issued by the Company are recorded at fair value on initial recognition net of
transaction costs.
Equity comprises the following:
Share Capital
– represents the nominal value of equity shares.
Share Premium
– 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.
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.
53
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
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 26.
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 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 attributed to
individual countries based on the location of the customer.
Revenues comprise:
Revenue from
contracts with
customers – UK
Revenue from
contracts with
customers – Non UK
2022
£’000
2021
£’000
65,602
59,137
658
66,260
872
60,009
54
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
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.
No customer accounted for more than 10% of the Group’s revenue for the year.
All non-current assets are located in the country of domicile.
4. (Loss)/profit from operations
Operating (loss)/profit is stated after (crediting)/charging:
Foreign exchange loss/ (profit)
Depreciation of property, plant and equipment
Amortisation of intangible assets
Fees paid to the company’s auditor
-
-
for the audit of the company annual financial
statements
for the audit of subsidiary undertakings
2022
£’000
2021
£’000
164
336
57
78
17
(224)
350
56
70
15
Employee benefit expense
5,173
4,635
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 £618,000 (2021: Profit of £181,000) and is stated after taxation. Gro
5. Staff costs
The average monthly number of persons (including executive Directors) employed by the Group and
company during the year was:
Sales
Administration
Warehouse
Engineering
2022
Number
2021
Number
61
36
13
1
111
55
32
14
1
102
55
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Their aggregate remuneration comprised:
Staff costs:
Wages and salaries
Social security costs
Pension costs
Other benefits
2022
£’000
2021
£’000
4,514
520
111
28
5,173
4,086
435
90
24
4,635
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 18. 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. Tax on profit on ordinary activities
Current taxation
Charge for the year
2022
£’000
2021
£’000
347
34
30
32
443
294
29
19
28
370
Group
2022
£’000
2021
£’000
-
-
48
48
56
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The charge for the year can be reconciled to the profit per the Statement of comprehensive income as
follows:
Group
2022
£’000
2021
£’000
(Loss)/profit on ordinary activities before tax
Tax at the UK corporation tax rate of 19.00% (2021:19.00%)
Profit on disposal of fixed assets
Capital gain
Non-deductible expenses
Sundry items
Use of post April 2017 losses brought forward
Loss available to carry forward
Total actual amount of charge for the year
(447)
(85)
-
-
23
-
-
62
-
385
73
(2)
-
38
-
(61)
-
48
The corporation tax rate for the year ended 30 June 2022 was 19%. During the year, it was announced
in the Budget on 3 March 2021 the rate of corporation tax would be increased to 25% with effect from
1 April 2023. The effect of this change would not be material. Legislation was enacted on 24 May 2021
in the Finance Bill 2021.
The Group has tax losses of £3.7 million (2021: £3.4 million) to carry forward. No deferred tax asset
is recognised in respect of the losses.
7. Dividends
Amounts recognised as distribution to equity holders in the period:
Dividends paid in year
Final – for year ended 30 June 2021 and 30
June 2020
Interim – for year ended 30 June 2022 and
30 June 2021
Proposed final for the year ended 30 June
2022 and 30 June 2021
2022
2021
Pence
Per
Share
Pence
Per
Share
£’000
£’000
0.40
0.30
0.70
0.30
109
82
191
82
0.30
0.30
0.60
0.40
82
81
163
109
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.
57
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
8. Profit per ordinary share
The calculation of the basic and diluted earnings per share is based on the following data:
(Loss)/Profit for the year attributable to equity holders of the
parent company
(447)
337
2022
£’000
2021
£’000
Number of shares
2022
Number
2021
Number
Weighted average number of ordinary shares for the purpose
of basic earnings per share and diluted earnings per share
27,231,586
27,231,586
Basic and diluted 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.
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.
58
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
9. Property, plant and equipment
Group
Cost
At 1 July 2020
Additions
Disposals
At 30 June 2021
Depreciation
At 1 July 2020
Depreciation charge for the year
Disposals
At 30 June 2021
Land
and
Buildings
£’000
Plant and
Equipment
Total
£’000
£’000
7,474
-
-
7,474
1,099
142
-
1,241
1,172
249
(33)
1,388
363
208
(29)
542
8,646
249
(33)
8,862
1,462
350
(29)
1,783
Net book value at 30 June 2021
6,233
846
7,079
Group
Cost
At 1 July 2021
Additions
Disposals
At 30 June 2022
Depreciation
At 1 July 2021
Depreciation charge for the year
Disposals
At 30 June 2022
7,474
-
-
7,474
1,241
141
-
1,382
1,388
222
(66)
1,544
542
195
(20)
717
8,862
222
(66)
9,018
1,783
336
(20)
2,099
Net book value at 30 June 2022
6,092
827
6,919
59
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
10. Property, plant and equipment
Company
Cost
At 1 July 2020
Additions
Disposals
At 30 June 2021
Depreciation
At 1 July 2020
Depreciation charge for the year
Disposals
At 30 June 2021
Land
and
Buildings
£’000
Plant and
Equipment
Total
£’000
£’000
2,574
-
-
2,574
1,059
56
-
1,115
539
81
(29)
591
306
88
(29)
365
3,113
81
(29)
3,165
1,365
144
(29)
1,480
Net book value at 30 June 2021
1,459
226
1,685
Cost
At 1 July 2021
Additions
Disposals
At 30 June 2022
Depreciation
At 1 July 2021
Depreciation charge for the year
Disposals
At 30 June 2022
2,574
-
-
2,574
1,115
56
-
1,171
591
157
(66)
682
365
88
(20)
433
3,165
157
(66)
3,256
1,480
144
(20)
1,604
Net book value at 30 June 2022
1,403
249
1,652
60
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2021
11. Goodwill and intangible assets
Cost
At 30 June 2021 and 30 June
2022
Amortisation and impairment
At 1 July 2020 and 2021
Amortisation during the year
At 30 June 2022
Carrying Amount
At 30 June 2022
At 30 June 2021
Goodwill
Brands
£000
£000
Customer
Relationships
£000
1,025
63
333
-
-
-
1,025
1,025
(9)
(9)
(18)
45
54
(47)
(47)
(94)
239
286
Total
£000
1,421
(56)
(56)
(113)
1,309
1,365
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 5-year period, including the latest one year forecast approved by the Board. 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 using a 5-times EBITDA multiple is used as
the basis for the final year.
Key assumptions used in value in use calculation
The key assumptions for the value in use calculation are those regarding:
• pre-tax discount rate;
• revenue;
• gross profit margins; 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.
61
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The Audio Visual market has been impacted in the past 2 years by Covid-19, However management
are expecting revenue to return to pre-Covid-19 levels over the next 12-18 months. Once normal trading
has returned, management’s forecasts are based on the business plan when the business was acquired.
Gross profit margins
The gross profit growth rate used in Year 1 is 15.8% and thereafter the average annual gross margin
growth rates are 10.2%. With the opening up of trade events and exhibitions following the pandemic
AVM Limited expects its high margin rental business to increase back to pre-covid levels in the next
12-18 months.
Gross profit margin percentages over the extrapolation period are 20%, which is based on historical
financial performance and expectations of future market developments.
Operating profit margins
Operating profit margins in the one year forecast are derived from the expected gross margin and the
overhead cost base.
Operating profit margins average 5.9% over the period.
Sensitivity to changes in assumptions
There is headroom in the value in use calculation compared to the carrying value of the CGU.
AVM has a recoverable amount of £2.7 million (2021: £2.45 million) exceeds its carrying amount
by £0.6 million (2021: £0.35 million).
If any one of the following changes were made to the above key assumptions, the carrying
amount and recoverable amount would be equal.
Discount rate increase from 22.5% to 31%
Gross margin falls to 17.44% each year on the above revenue growth rates
If operating margins fall to 3.92% each year on the above revenue growth rates
12. Inventories
Group
Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Goods for resale 10,649
8,468
9,689
7,681
Cost of sales include £57,791,000 (2021: £52,200,000) inventory expensed in the year’s statement of
comprehensive income. An impairment charge of Nil is recognised in cost of sales (2021: Nil). A
provision against slow moving stock has been included amounting to £284,000 (2021: £234,000).
62
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
13. Trade and other receivables
Trade receivables
Less provision for impairment of receivables
Group
Company
2022
£’000
10,566
(330)
2021
£’000
10,531
(268)
2022
£’000
9,882
(312)
2021
£’000
10,144
(250)
Net trade receivables
10,236
10,263
9,570
9,894
Intercompany receivables
Prepayments and other receivables
-
1,009
-
490
1,006
949
824
450
11,245
10,753
11,525
11,168
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 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:
Group
Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
218
0-30 days past due
30 - 60 days past due
66
60 - 90 days past due 28
90+ days past due 442
142
17
4
353
143
32
28
442
115
16
4
353
63
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Trade and other receivables impairment provision
Balance at beginning of period
Amounts written off as uncollectable
Increase in impairment loss provision
Group
Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
268
-
62
330
291
(42)
19
268
250
-
62
312
268
(42)
24
250
At 30 June 2022 the Group’s total lifetime credit loss provision was £330,000, of which trade
receivables of £287,000 had lifetime expected credit losses of the full value of the receivables.
At 30 June 2022 the Company’s total lifetime credit loss provision was £312,000, of which trade
receivables of £282,000 had lifetime expected credit losses of the full value of the receivables.
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.
Credit risk is deemed a risk due to default in payment. The Group’s exposure to credit risk is influenced
mainly by the individual characteristics of each customer. However, management also considers the
factors that may influence the credit risk of its customer base, including the default risk associated with
the industry. Receivables are written off where it is considered there is no chance of recoverability
generally due to the cessation of trade of a customer.
The Group has established a credit policy under which each new customer is analysed individually for
creditworthiness before the Group’s standard payment and delivery terms and conditions are offered.
The Group’s review includes external ratings, if they are available, financial statements, credit agency
information, credit insurers recommendations and industry information.
Sale limits are established for each customer and reviewed regularly. Any sales exceeding those limits
require approval. The Group limits its exposure to credit risk from trade receivables by establishing a
maximum payment period of one and three months.
The Group uses credit insurance to mitigate against any potential risk of non-payment.
14. Cash and cash equivalents
Group
Company
2022
£’000
2021
£’000
2022
£’000
2021
£’000
Bank balances and cash in hand
4,696
7,449
4,104
6,200
Cash and cash equivalents in statement of cash
flows
4,696
7,449
4,104
6,200
64
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
15. Trade and other payables
Trade payables
Inter company payables
Other payables
VAT
Other tax and social security
Accruals and deferred income
Group
Company
2022
£’000
8,293
-
79
1,319
162
476
10,329
2021
£’000
7,595
-
90
1,416
148
617
9,866
2022
£’000
7,586
7,467
46
1,359
150
443
17,051
2021
£’000
7,051
6,904
41
1,334
127
540
15,997
The financial liabilities shown above are those which were outstanding at 30 June 2022. The average
credit period taken for trade payables is 42 days (2021: 44 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.
16. Share capital
Authorised shares of 1p each
At 30 June 2022 and 2021
Group and Company
Number
£’000
80,000,000
2,000
Issued and fully paid shares of 1p each
At 30 June 2022 and 2021
27,231,586
272
The company has one class of ordinary shares which carry no right to fixed income.
65
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
17. Investment in Group companies
Company
Cost
At 1 July
Addition
At 30 June
2022
£’000
2021
£’000
2,135
2,135
-
-
2,135 2,135
An impairment review has been undertaken at the end of the financial year as required under IAS36:
Impairment of assets. See note 11 for the assumptions and sensitivity analysis.
In the opinion of the Directors, the value of the company’s investments 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
England
England
England
England
England
% owned
Status
100
100
99
100
100
Operational
Operational
Dormant
Dormant
Dormant
The registered office of all of these companies is detailed on page 29.
18. Capital commitments
There were no capital commitments at 30 June 2022 (2021: £Nil).
19. Related party transactions
Mr A.M. Phillips is the ultimate controlling party of the company.
During the year, the company paid £300,000 (2021: £300,000) rent to Anitass Limited, a wholly owned
subsidiary. At the year- end Northamber plc owed Anitass Limited £7,467,000 (2021: £6,904,000).
During the year, the company received £46,500 (2021: £46,500) rent and £66,000 (2021: £93,000)
management charge from Audio Visual Material Limited “AVM”, a wholly owned subsidiary.
During the year AVM purchased £640,000(2021:432,000) worth of goods from Northamber Plc and
Northamber Plc purchased £639,000(2021:£96,000) worth of goods from AVM. AVM owed £831,000
(2021: £824,000).
66
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
20. Events after the reporting date
Since the end of the financial year, the Board took the decision to relocate AVM into leased premises
and to sell the freehold office where they are based. Contracts have been exchanged for the sale of the
office and completion is scheduled to occur on 28 November 2022. The consideration will be £1.48m,
before costs, payable in cash, against a net book value of £1.43m. The net proceeds will be added to
the Group’s cash reserves.
21. 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 2022 until those liabilities are satisfied in full.
22. 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 2022 are categorised below.
The interest rate exposure of the financial assets and liabilities of the Group and company as at 30 June
2021 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.
67
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Note 15 above refers to further matters relating to credit risk as does the Strategic Report under the
heading of Financial Risk.
Group – Year ended 30 June 2022
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)
Other payables
Total
Group _ Year ended 30 June 2021
Financial assets at amortised cost
Cash and cash equivalents:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Trade and other receivables
Total
Floating
£’000
Zero
£’000
Total
£’000
4,368
144
184
-
4,696
-
-
-
9,884
9,884
4,368
144
184
9,884
14,580
Floating
£’000
Zero
£’000
Total
£’000
-
-
-
-
-
5,722
1,636
563
79
8,000
5,722
1,636
563
79
8,000
Floating
£’000
Zero
£’000
Total
£’000
5,931
1,098
420
-
7,449
-
-
-
10,263
10,263
5,931
1,098
420
10,263
17,712
68
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Financial liabilities at amortised cost
Trade payables:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Other payables
Total
Company – Year ended 30 June 2022
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
Floating
£’000
Zero
£’000
Total
£’000
-
-
-
-
-
5,736
1,435
423
90
7,684
5,736
1,435
423
90
7,684
Floating
£’000
Zero
£’000
Total
£’000
3,776
144
184
-
4,104
-
-
-
9,197
9,197
3,776
144
184
9,197
13,301
Floating
£’000
Zero
£’000
Total
£’000
-
-
-
-
-
4,839
1,636
563
6,636
46
13,720
4,839
1,636
563
6,636
46
13,720
The Directors estimate that an increase or decrease in annual average interest rates of 0.5% would
increase/decrease profit before tax by approximately £30,000 (2021: £46,000).
69
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Company – Year ended 30 June 2021
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
Floating
£’000
Zero
£’000
Total
£’000
4,682
1,098
420
-
6,200
-
-
-
9,894
9,894
4,682
1,098
420
9,894
16,094
Floating
£’000
Zero
£’000
Total
£’000
-
-
-
-
-
5,193
1,435
423
6,080
41
13,172
5,193
1,435
423
6,080
41
13,172
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.
70
NOTICE OF MEETING
Notice is hereby given that the Annual General Meeting of Northamber plc will be held at the
Company’s offices at Namber House, 23 Davis Road, Chessington, Surrey, KT9 1HS on 21 December
2022 at 2 pm for the following purposes:
1.
2.
3.
4.
5.
6.
To receive and adopt the company’s accounts for the year ended 30 June 2022 and the Directors’
and auditors’ reports thereon.
To propose the following ordinary resolution: That the Directors’ remuneration report for the
year ended 30 June 2022 be received and approved.
To declare a dividend on the ordinary shares of the company.
Re-elect Mr John Henry as a director.
To elect Mr Peter Dosanjh as a director.
To re-appoint Mazars LLP as auditors and to authorise the Directors to fix their remuneration.
ORDINARY RESOLUTION
7.
THAT, the Directors be generally and unconditionally authorised to allot equity securities (as
defined by Section 560 of the Companies Act 2006 (the "Act”), up to an aggregate nominal
amount of £90,771(such amount to be reduced by the nominal amount of any Relevant Securities
allotted under paragraph 10 below) in connection with an offer by way of a rights issue:
(a)
(b)
to holders of ordinary shares in proportion (as nearly as may be practicable) to their
respective holdings; and
to holders of other equity securities as required by the rights of those securities or as the
Directors otherwise consider necessary, but subject to such exclusions or other
arrangements as the Board may deem necessary or expedient in relation to treasury shares,
fractional entitlements, record dates, legal or practical problems in or under the laws of
any territory or the requirements of any regulatory body or stock exchange.
SPECIAL RESOLUTIONS
8.
THAT, the Directors be authorised to allot equity securities pursuant to Resolution 8 above up to
an aggregate nominal amount of £27,231 as if Section 561 of the Act (existing shareholders’
rights of pre-emption):
(a)
(b)
(c)
did not apply to the allotment, or
applied to the allotment with such modifications as the Directors may determine
provided that this authority shall, unless renewed, varied or revoked by the company,
expire on the 18 March 2023 or, if earlier, the date of the next Annual General Meeting of
the company save that the company may, before such expiry, make offers or agreements
which would or might require equity securities to be allotted and the Directors may allot
equity securities in pursuance of such offer or agreement notwithstanding that the authority
conferred by this resolution has expired.
9.
THAT the company be and is hereby unconditionally and generally authorised to make market
purchases (within the meaning of Section 693(4) of the Act of ordinary shares of 1p in the capital
of the company, provided that:
(a)
(b)
the maximum number of shares hereby authorised to be acquired is 2,723,158 representing
10 per cent of the present issued share capital;
the minimum price which may be paid for such shares is 1p per share (exclusive of all
expenses);
71
NOTICE OF MEETING (continued)
(c)
(d)
(e)
the maximum price which may be paid for such shares is, in respect of a share contracted
to be purchased on any day, an amount (exclusive of expenses) equal to 105 per cent of
the average middle market quotations of the ordinary shares of the company as derived
from the Daily Official List of The London Stock Exchange on the 10 dealing days
immediately preceding the day on which the shares are contracted to be purchased;
the authority hereby conferred shall (subject to sub-clause (e) below) expire on the date of
the next Annual General Meeting of the company after the passing of this resolution; and
the company may make a contract to purchase its own shares under the authority hereby
conferred prior to the expiry of such authority which will, or may be, executed wholly or
partly after the expiry of such authority, and may make a purchase of its own shares in
pursuance of any such contracts.
By Order of the Board
S. Yoganathan
Company Secretary
Registered Office:
Namber House
23 Davis Road,
Chessington,
Surrey,
KT9 1HS
Notes:
(1) A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and,
on a poll, vote instead of him or her. A proxy need not be a member of the company. Completion
and return of a form of proxy will not prevent a member from attending and voting at the meeting.
(2) The instrument appointing a proxy and the power of attorney (if any) under which it is signed
must be deposited at the offices of the registrars of the company, not less than forty-eight hours
before the time of the meeting.
(3) There will be available for inspection at the registered office of the company during normal
business hours from the date of this Notice until the date of the Annual General Meeting and, at
the place of the Annual General Meeting, from at least fifteen minutes prior to and until the
conclusion of the Annual General Meeting:
(a) copies of the executive Directors’ service agreements with the company;
(b) the Register of Directors’ Interests;
(c) a copy of the current Articles of Association of the Company.
72
Perivan 264756