Preliminary Results and Directorate Change

 

13 July 2020

Northern Bear PLC

("Northern Bear" or the "Company")

 

Preliminary results for the year ended 31 March 2020 and Directorate change

 

The board of directors of Northern Bear (the "Board") is pleased to announce its unaudited preliminary results for the year ended 31 March 2020 for the Company and its subsidiaries (together, the "Group").

 

Financial summary

·      Revenue of £54.4m (2019: £56.6m)

·      Operating profit of £2.1m (2019: £3.3m)

·      Adjusted operating profit* of £2.2m (2019: £3.2m)

·      Adjusted operating profit* contributed by our trading subsidiaries of £3.1 million (2019: £4.3 million)

·      Basic earnings per share of 8.0p (2019: 14.0p)

·      Adjusted basic earnings per share* of 8.7p (2019: 13.5p)         

·      Net cash position at year end of £0.2m (2019: net cash of £2.0m)

·      Results significantly affected by events outside the control of the Group

·      Very strong order book which has continued to grow throughout the year

* stated prior to the impact of amortisation and transaction and other one-off costs

 

Steve Roberts, Executive Chairman of Northern Bear, commented:

"In light of the unprecedented set of circumstances which faced the Group throughout the financial year, we are very pleased with the Group's financial performance. Whilst those circumstances meant that the Group could not generate the level of profitability which would ordinarily have been possible from its very strong opening order book, that order book has grown further which should lead to a sustained period of strong profitability now that a more normal level of operating activity appears to be in the process of returning."

 

For further information contact:

Northern Bear PLC Steve Roberts - Executive Chairman Tom Hayes - Finance Director	+44 (0) 166 182 0369 +44 (0) 166 182 0369
Strand Hanson Limited (Nominated Adviser and Broker) James Harris James Bellman	+44 (0) 20 7409 3494

 

 

Chairman's Statement

 

Introduction

I am pleased to report the results for the year to 31 March 2020 ("FY20") for Northern Bear and its subsidiaries (together, the "Group"). 

The word 'unprecedented' has been overused in recent times but is, nonetheless, very appropriate to describe a financial period which included:

-               the lengthy and continuing uncertainty of Brexit;

-               the political upheaval of a General Election;

-               a spring of record breaking storms; and

-               a global pandemic.

 

It was also a frustrating year.  We started the year with an exceptionally strong order book.  That order book then remained with the Group throughout the year and has continued into FY21, as the circumstances referred to above prevented us from maximising our operating performance.

In light of all the above, we are very pleased with the performance of the Group in FY20.

The continued strength of our order book also stands us in good stead to produce strong and sustained levels of profitability now that a more normal level of operating activity appears to be in the process of returning.

Trading

When we reported our interim results in November 2019, we stated that we had experienced contract delays in the three months ended 30 June 2019 ("Q1"), but trading had since improved and the strong momentum in the three months ended 30 September 2019 ("Q2") had continued into the second half of the financial year. 

In December 2019 and January 2020, despite very wet and windy weather conditions, the Group continued to trade well and broadly in line with our prior year comparatives, which themselves represented exceptional results for the Group.  Unfortunately, the severe weather in February, where we experienced three major storms in the UK and the wettest month on record, had a significant impact on our ability to work on construction and roofing projects. 

Trading in March 2020 began well but, during the course of the last two weeks of the month, the majority of the Group was impacted by site closures related to the COVID-19 pandemic.  We comment further on the effects of the pandemic below.

The last two months of the financial year are usually an important period for the Company and ordinarily account for a significant proportion of the Group's full year profits.  The above events were all extremely frustrating as we had, and continue to have, an excellent order book across the Group and our only issue has been our inability to deliver the work on site due to factors beyond our control.    

In light of the contract delays in Q1, the effects of the political uncertainty surrounding both Brexit and the General Election in December, the wet winter which culminated in the storms of February, and the impact of COVID-19, we are pleased with the performance for the full year.   

Overall turnover was £54.4 million (2019: £56.6 million) and gross profit was £10.9 million (2019: £11.9 million).  Gross margin reduced slightly to 20.0% (2019: 21.1%) as a result of a change in sales mix.  Gross margin remains a key focus for us and we continue to review our approach to contract tendering and authorisation. 

Administrative expenses were £8.7 million (2019: £8.7 million), in line with the prior year.  Expenses were impacted by the acquisition of Lister Holdings (York) Limited and its trading subsidiary J Lister Electrical Limited (together, "J Lister") in January 2020.  

As in the prior year, we have presented amortisation and certain other adjustments separately within the Consolidated Statement of Comprehensive Income, in addition to an adjusted earnings per share calculation in the notes to the accounts, in order to provide an indication of underlying trading performance. 

Operating profit before amortisation and other adjustments is in line with the estimated range given in our trading update of 31 March 2020 at £2.2 million (2019: £3.2 million).   After taking adjustments into account, operating profit was £2.1 million (2019: £3.3 million).  The adjustments in the current year include the write-back of deferred consideration, transaction costs related to the acquisition of J Lister and the tender offer in September 2019, payments to departing employees and all associated professional costs. 

We have also presented adjusted earnings per share for the year, the calculation for which is included later in this document.  Adjusted basic earnings per share was 8.7p (2019: 13.5p).  Reported basic earnings per share was 8.0p (2019: 14.0p).

The element of operating profit before amortisation and other adjustments contributed by our trading subsidiaries was £3.1 million (2019: £4.3 million), offset by corporate and central costs of £0.9 million (2019: £1.1 million).  While we were able to make some savings on the latter in the year, this cost is more fixed than variable.  Should future subsidiary profits increase via organic growth or acquisition then central costs would not be expected to increase proportionately and this would provide some operating leverage.

Cash flow and bank facilities

The Group had a net cash position (defined as cash balances less revolving credit facility) of £0.2 million at 31 March 2020 (£2.0 million at 31 March 2019).  Cash generated from operations during the year was £1.4 million (2019: £5.1 million). 

We stated in the commentary on the 2019 results that the net cash position at 31 March 2019 reflected some favourable working capital swings which, to an extent, would be expected to reverse post year-end.  This proved to be the case and the current customer and contract mix has led to an increased working capital requirement within the Group. The net cash position was also impacted by the initial consideration of £0.8 million payable for the J Lister acquisition in January 2020.

As we have emphasised in previous years' results, our net cash/bank debt position represents a snapshot at a particular point in time and can move by up to £1.5 million in a matter of days, given the nature, size and variety of contracts that we work on and the related working capital balances. 

The lowest position during the year was £4.2 million net bank debt, the highest was £2.0 million net cash, and the average was £1.7 million net bank debt.  Following some adverse working capital movements during the second half of the financial year, the Group finance function implemented a number of initiatives in an attempt to improve working capital management procedures and this has proved invaluable for cash management prior to and during the COVID-19 pandemic. 

The Group's working capital requirements will continue to vary depending on the ongoing customer and contract mix.  I believe that the Group's cash results, when considered on a rolling basis, have demonstrated a strong ratio of profit to operating cash generation. 

New bank facilities

Our existing £3.5m revolving credit facility with Yorkshire Bank, which was due for renewal in May 2020, was renewed in March 2020, ahead of schedule and with better terms than those previously in place. This reflects the strength of our banking relationship and provides us with committed working capital facilities to May 2023.  In addition, we retain a £1m overdraft facility, which is renewable annually. 

I would like to thank both our finance team and Yorkshire Bank for their hard work in ensuring that facilities were renewed ahead of schedule and prior to the national lockdown which commenced towards the end of March.  We appreciate the continued support of Yorkshire Bank.     

 

COVID-19 impact and Outlook

The Company was admitted to trading on AIM in 2006, but the majority of businesses in our Group were established long before then.  On average, our businesses, excluding those established by us following our listing, were founded some 40 years ago. As such, most have significant experience and expertise of operating in challenging periods in the construction industry, including in the early 1990s and the late 2000s.

We feel confident that we have a robust group of specialist construction businesses, run by an outstanding team of people and with a workforce that is second to none.

The impact of the COVID-19 pandemic is unprecedented, in our experience, and has proved a major challenge.  The majority of our businesses saw construction sites close in late March and, with the exception of Isoler Limited (our fire protection business), where many of its ongoing projects were deemed essential works, our Group companies had limited on-site work opportunities at that time.

At the outset of the COVID-19 pandemic, we asked each of our subsidiary Managing Directors to produce a plan to be implemented following the enforced reduction in work levels, which included using the Coronavirus Job Retention Scheme to temporarily furlough employees and keeping a tight control over the remaining cost base and cash.  This focus on costs included temporary pay reductions for the Company's Executive Directors and the Group's senior management team.

Our priority since then has been to retain and protect our employees and to seek to resume activities, while following all Government guidance on operational safety.  Special praise must go to our health and safety advisory business, Northern Bear Safety Limited.  It has played a critical part in managing operations, working very closely with our employees and customers to implement and document revised safety guidance in order to ensure that our employees can resume work in a controlled and safe manner. 

I am pleased to say that, while activity levels were low during April, we have seen a gradual and sustained improvement during the latter part of May and June, with a number of private sector and local authority contracts resuming.  At the time of writing I am pleased to state that we are back to circa 75% of normal activity levels and the short term outlook is positive.  Whilst there remains the possibility of a second wave of COVID-19 infections and renewed restrictions, the Government has encouraged the construction industry to remain active and we hope that the revised safety guidance now in place will reduce future disruption to our site activities. 

In the meantime, we have an even stronger order book, which has pleasingly continued to increase during the lock down period and should support a return to a much improved level of operating performance across the Group in the coming months.

Dividend

In the light of the fact that most of our businesses have been unable to operate on site with the consequent furloughing of direct and indirect staff, we have received significant sums from the Government's Coronavirus Job Retention Scheme. When this is considered, together with our asking non-furloughed staff to take temporary pay reductions across the Group, and a number of senior staff volunteering to reduce their wages even further, we do not consider it appropriate to return capital to shareholders via a final dividend for the year ended 31 March 2020.

I would note that, despite the impact of COVID-19 on recent trading, we have the cash resources available to pay a final dividend commensurable with last year's level, should it have been deemed appropriate.

Should trading continue to improve in line with our expectations, and subject to the ongoing cash requirements of the Group as a result of the continuing pandemic, then our intention is to resume dividend payments in respect of the year ending 31 March 2021.

The Board will continue to assess dividend levels generally and our intention for the longer term remains to adjust future dividends in line with the Group's relative performance, after taking into account the Group's available cash, working capital requirements, corporate opportunities, debt obligations, and the macro-economic environment at the relevant time. 

Strategy and Acquisition

We continue to seek acquisitions of established specialist building services businesses, either in the same or complementary sectors to our current operations.  Our main criteria are that a business is well-established in its sector, has a consistent track record of profitability and cash generation and has a strong management team who are committed to remaining with the business.  Any potential acquisition would, in addition, need to be earnings accretive and provide an acceptable return on investment.

In January 2020 we announced the acquisition of Lister Holdings (York) Limited and its trading subsidiary J Lister Electrical Limited.  We had looked at a large number of opportunities since the acquisition of H Peel & Sons (Holdings) Limited ("H Peel") in July 2017.  The J Lister acquisition represented a real opportunity to acquire a well-established, consistently profitable and cash generative business with a strong management team, committed to remaining with the business.  In addition, J Lister has a number of opportunities for expansion which the Group is well placed to help it take advantage of, as well as providing an opportunity to cross-sell with our existing Group companies.  I would like to welcome all of the J Lister employees to our Group and we look forward to working with them. 

People

Graham Jennings

Graham Jennings left the Board of the Company on 31 March 2020.  Following a board reorganisation in October 2011, Graham became Group Managing Director, performing that role alongside his position as Managing Director of Jennings Roofing Limited. Graham was instrumental in steering the Group to renewed success.  In addition to fulfilling his other duties, Graham also played a key role in the acquisitions of H Peel and J Lister. 

Having put a strong and capable management structure in place at Jennings Roofing Limited, from April 2018 Graham focused all of his time on his Group role. One of his primary responsibilities was the creation of a succession plan for each of the other operating subsidiaries.

Graham departed in March 2020 having agreed with the rest of the Board that his primary responsibility had been fulfilled.  The succession plan is now in place at each Group company.  He remains a supporter of Northern Bear and I would like to thank him for his hard work which has helped in making Northern Bear what it is today. 

There is no immediate plan to replace Graham as the Group's businesses are well placed to operate independently, without day-to-day involvement.  Graham's Group responsibilities have been shared amongst the remaining members of the executive management team.

Jeff Baryshnik

Jeff was appointed as a non-executive Director of the Company on 6 March 2020.  Jeff acquired a major interest in the Company's issued share capital following a tender offer announced on 26 September 2019 and both myself and my colleagues were delighted to welcome him to the Board.  Jeff has substantial experience in the asset management, real estate and financial services industries and we look forward to working with him in the coming months and years.

Howard Gold

Howard Gold, non-executive Director, has retired from the Company's Board as of today's date.  Howard has been involved with the Group since inception, initially as Deputy Chairman, and was appointed non-executive Chairman in October 2008.  In February 2014 he stepped down from that role in order to focus more on other business commitments, remaining as a non-executive Director of the Company. 

In his role as Chairman, Howard guided the Group through difficult circumstances, including a severe recession and a major restructuring process, and his continued involvement and advice have proved invaluable to us all.  Accordingly, the Board have asked Howard to remain involved as Life President of the Group, alongside his other business interests, and he will retain his ambassadorial role in the North East professional community and beyond.  I look forward to continuing to work with Howard in the coming years.

Our workforce

As always, our loyal, dedicated, and skilled workforce is a key part of our success and we make every effort to support them through continued training and health and safety compliance.

Conclusion

I am pleased with the Group's results, given the continued level of uncertainty which existed for much of the year and the unprecedented events which subsequently unfolded. I would like to thank all of our employees for their hard work and their fortitude in the face of the challenges in recent months. 

Our order book is stronger than ever, and, with our solid financial position, we believe we are very well positioned to deliver a sustained period of strong operating performance as we progress towards a more normal level of operating activity.  This is, of course, subject to the wider economic climate in which we operate and, in particular, no further major impact on our operations from any resurgence of COVID-19 cases.

 

 

 

Steve Roberts

Executive Chairman

13 July 2020

 

 

Consolidated statement of comprehensive income

for the year ended 31 March 2020

 

		2020		2019
		£000		£000
Revenue		54,421		56,575
Cost of sales		(43,545)		(44,659)
Gross profit		10,876		11,916
Other operating income		25		24
Administrative expenses		(8,682)		(8,725)
Operating profit (before amortisation and other adjustments)		2,219		3,215
Transaction and other one-off costs		(264)		-
Deferred consideration adjustments		277		265
Amortisation of intangible assets arising on acquisitions		(155)		(152)
Operating profit		2,077		3,328
Finance costs		(229)		(197)
Profit before income tax		1,848		3,131
Income tax expense		(360)		(540)
Profit for the year		1,488		2,591
Total comprehensive income attributable to equity holders of the parent		1,488		2,591
Earnings per share from continuing operations
Basic earnings per share		8.0p		14.0p
Diluted earnings per share		8.0p		13.9p

 

 

 

 

 

 

Consolidated balance sheet

at 31 March 2020

 

 

		2020		2019
		£000		£000
Assets
Property, plant and equipment		3,213		3,033
Right of use asset		1,132		-
Intangible assets		20,923		20,476
Trade and other receivables		1,063		1,057
Total non-current assets		26,331		24,566
Inventories		1,007		652
Trade and other receivables		8,218		8,709
Cash and cash equivalents		3,658		3,038
Total current assets		12,883		12,399
Total assets		39,214		36,965
Equity
Share capital		190		189
Capital redemption reserve		6		6
Share premium		5,169		5,169
Merger reserve		9,703		9,605
Retained earnings		9,011		8,277
Total equity attributable to equity holders of the Company		24,079		23,246
Liabilities
Loans and borrowings		3,500		1,236
Deferred consideration		50		217
Trade and other payables		88		-
Lease liabilities		1,072		-
Deferred tax liabilities		354		295
Total non-current liabilities		5,064		1,748
Loans and borrowings		31		232
Deferred consideration		50		97
Trade and other payables		9,103		11,152
Lease liabilities		549		-
Current tax payable		338		490
Total current liabilities		10,071		11,971
Total liabilities		15,135		13,719
Total equity and liabilities		39,214		36,965

 

 

Consolidated statement of changes in equity

 

or the year ended 31 March 2020

 

 

 

 

		Share capital	Capital redemption reserve	Share premium	Merger reserve	Retained earnings	Total equity
		£000	£000	£000	£000	£000	£000
At 1 April 2018		189	6	5,169	9,605	6,409	21,378
Total comprehensive income for the year
Profit for the year		-	-	-	-	2,591	2,591
Transactions with owners, recorded directly in equity
Exercise of share options		-	-	-	-	17	17
Equity dividends paid		-	-	-	-	(740)	(740)
At 31 March 2019		189	6	5,169	9,605	8,277	23,246
At 1 April 2019		189	6	5,169	9,605	8,277	23,246
Effect of adoption of IFRS 16		-	-	-	-	(18)	(18)
At 1 April 2019 (adjusted)		189	6	5,169	9,605	8,259	23,228
Total comprehensive income for the year
Profit for the year		-	-	-	-	1,488	1,488
Transactions with owners, recorded directly in equity
Issue of shares		1	-	-	-	-	1
Exercise of share options		-	-	-	-	5	5
Equity dividends paid		-	-	-	-	(741)	(741)
Merger reserve arising on acquisition		-	-	-	98	-	98
At 31 March 2020		190	6	5,169	9,703	9,011	24,079

 

 

 

 

 

 

 

Consolidated statement of cash flows

for the year ended 31 March 2020

 

 

		2020		2019
		£000		£000
Cash flows from operating activities
Operating profit for the year		2,077		3,328
Adjustments for:
Depreciation of property, plant and equipment		570		538
Depreciation of lease asset		367		-
Amortisation		155		152
Loss on sale of property, plant and equipment		1		17
Deferred consideration adjustments		(277)		(265)
		2,893		3,770
Change in inventories		(275)		163
Change in trade and other receivables		1,039		332
Change in trade and other payables		(2,215)		819
Cash generated from operations		1,442		5,084
Interest paid		(202)		(127)
Tax paid		(485)		(669)
Net cash flow from operating activities		755		4,288
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		671		518
Acquisition of property, plant and equipment		(1,156)		(581)
Acquisition of subsidiary (net of cash acquired)		(876)		(426)
Net cash from investing activities		(1,361)		(489)
Cash flows from financing activities
Issue/(repayment) of borrowings		2,513		(1,498)
Repayment of finance lease liabilities		-		(271)
Repayment of lease liabilities		(551)		-
Proceeds from the exercise of share options		5		17
Equity dividends paid		(741)		(740)
Net cash from financing activities		1,226		(2,492)
Net increase in cash and cash equivalents		620		1,307
Cash and cash equivalents at start of year		3,038		1,731
Cash and cash equivalents at end of year		3,658		3,038

 

 

 

 

Notes

1    Basis of preparation

This announcement has been prepared in accordance with the Company's accounting policies, which in turn are in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union ("EU") applied in accordance with the provisions of the Companies Act 2006. IFRS is subject to amendment and interpretation by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee and there is an on-going process of review and endorsement by the European Commission. The accounting policies comply with each IFRS that is mandatory for the financial year ended 31 March 2020.

 

The following standards, amendments and interpretations, which became effective for the first time, were adopted by the Group for the financial year ended 31 March 2020:

 

IFRS 16 'Leases'                        

 

The Group has adopted IFRS 16 'Leases' from 1 April 2019.  IFRS 16 requires lessees to record all leases on the balance sheet by recognising right of use assets relating to leased assets, and lease liabilities representing future lease payment obligations.  The Group's leases previously recognised as operating leases under IAS 17 'Leases' included land and buildings and motor vehicles.  Right of use assets and lease liabilities in relation to these leases have both been presented separately on the face of the Consolidated Balance Sheet in these financial statements. 

The Group has adopted IFRS 16 using the modified retrospective approach under which the cumulative effect of initial application is recognised as an opening reserves adjustment of £18,000 at 1 April 2019.  The Group's comparative information for prior years has not been restated under this approach. 

Under IFRS 16 the Group now recognises a right of use asset and a lease liability at the lease commencement date. 

The lease liability is measured initially at the present value of future lease payments from the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate under its current bank facilities, with appropriate adjustments if required for residual value guarantees, the exercise price of purchase options, and termination penalties.  The Group has predominantly used the incremental borrowing rate as the discount rate for this purpose.  On adoption of IFRS 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under IFRS 16 was 3.9%.

The right of use asset is measured based on the initial lease liability with adjustments as required for initial direct costs, the costs of removal and restoring, payments made at or prior to commencement, and lease incentives received.

Following initial adoption of IFRS 16 the Group recognised £902,000 of right of use assets and £920,000 of lease liabilities, both in relation to leases formerly classed as operating leases under IAS 17, on the Consolidated Balance Sheet at 1 April 2019.  The Group recognised £367,000 depreciation of right of use assets and £59,000 of interest payments in finance costs in the Consolidated Statement of Comprehensive Income during the year.   

The following standards, amendments and interpretations, which became effective for the first time, were also adopted by the Group:

·      IFRS 9 Financial Instruments (Amendment): Prepayment Features with Negative Compensation - effective date on or after 1 January 2019;

·      IFRIC 23 Uncertainty over Income Tax Treatments - effective date on or after 1 January 2019;

·      IAS 19 Employee Benefits (Amendment): Plan Amendment, Curtailment or Settlement - effective date on or after 1 January 2019; and

·      Annual Improvements to IFRSs (2015 - 2017 Cycle) - effective date on or after 1 January 2019.

The adoption of the above standards and interpretations has not had a significant impact on the Group's results for the year or equity.

 

For the purposes of their assessment of the appropriateness of the preparation of the Group's accounts on a going concern basis, the directors have considered the current cash position and forecasts of future trading including working capital and investment requirements.  This includes consideration of the impact of COVID-19 on the Group's results and the building services industry via a detailed forecasting and scenario planning exercise.  The Group's forecasts and projections, taking account of reasonable possible changes in trading performance, show that the Group and the Company should have sufficient cash resources to meet its requirements for at least the next 12 months.  Accordingly, the adoption of the going concern basis in preparing the financial statements remains appropriate.

 

2    Status of financial information

 

The financial information set out above does not constitute the Company's financial statements for the years ended 31 March 2020 or 31 March 2019. 

 

The financial information for the year ended 31 March 2019 is derived from the financial statements for that year, which have been delivered to the Registrar of Companies.  The auditor has reported on the 2019 financial statements; their report was i) unqualified, ii) did not include references to any matters to which the auditors drew attention by way of emphasis, without qualifying their report, and iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.  

 

The financial statements for 2020 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.  The results are unaudited; however, we do not expect there to be any difference between the numbers presented and those within the annual report.

 

3    Earnings per share

 

Basic earnings per share is the profit or loss for the year divided by the weighted average number of ordinary shares outstanding, excluding those in treasury, calculated as follows:

 

	2020		2019
Profit for the year (£000)	1,488		2,591
Weighted average number of ordinary shares excluding shares held in treasury for the proportion of the year held in treasury ('000)	18,548		18,515
Basic earnings per share	8.0p		14.0p

 

The calculation of diluted earnings per share is the profit or loss for the year divided by the weighted average number of ordinary shares outstanding, after adjustment for the effects of all potential dilutive ordinary shares, excluding those in treasury, calculated as follows:

	2020		2019
Profit for the year (£000)	1,488		2,591
Weighted average number of ordinary shares excluding shares held in treasury for the proportion of the year held in treasury ('000)	18,548		18,515
Effect of potential dilutive ordinary shares ('000)	57		63
Diluted weighted average number of ordinary shares excluding shares held in treasury for the proportion of the year held in treasury ('000)	18,605		18,578
Diluted earnings per share	8.0p		13.9p

The following additional earnings per share figures are presented as the directors believe they provide a better understanding of the trading performance of the Group.

Adjusted basic and diluted earnings per share is the profit for the year, adjusted for acquisition related items and transaction and other one-off costs, divided by the weighted average number of ordinary shares outstanding as presented above.

Adjusted earnings per share is calculated as follows:

	2020		2019
Profit for the year (£000)	1,488		2,591
Transaction and other one-off costs	264		-
Deferred consideration adjustments	(277)		(265)
Amortisation of intangible assets arising on acquisitions	155		152
Unwinding of discount on deferred consideration liabilities	28		70
Corporation tax effect of above items	(50)		(43)
Adjusted profit for the year (£000)	1,608		2,505
Weighted average number of ordinary shares excluding shares held in treasury for the proportion of the year held in treasury ('000)	18,548		18,515
Adjusted basic earnings per share	8.7p		13.5p
Adjusted diluted earnings per share	8.6p		13.5p

 

 

4    Finance costs

 

	2020 £'000		2019 £'000
On bank loans and overdrafts	114		106
Finance charges on lease liabilities	87		21
Unwinding of discount on deferred consideration liabilities	28		70
	229		197

 

 

5    Loans and borrowings

 

	2020 £'000		2019 £'000
Non-current liabilities
Secured bank loans	3,500		1,000
Finance lease liabilities	-		236
	3,500		1,236
Current liabilities
Current portion of finance lease liabilities	-		214
Other loans	31		18
	31		232

 

The Group retains a £3.5 million revolving credit facility and a £1.0 million overdraft facility, both with Yorkshire Bank, for working capital purposes.

As at 31 March 2020 a total of £3.5 million (2019: £1.0 million) was drawn down on this facility, which is committed until 31 May 2023, providing a net cash figure at 31 March 2020 of £0.2 million (2019: £2.0 million net cash) after offsetting cash and cash equivalents of £3.7 million (2019: £3.0 million).

The revolving credit facility was renewed on 19 March 2020 and is committed until 31 May 2023.  The overdraft facility was renewed on 19 March 2020 and is next due for routine review and renewal on 28 February 2021.

Following the adoption of IFRS 16 'Leases', any liabilities related to leases previously classified as finance leases have been included with lease liabilities as disclosed separately in the Consolidated Balance Sheet. 

 

6   Availability of financial statements

 

The Group's Annual Report and Financial Statements for the year ended 31 March 2020 are expected to be approved by 20 July 2020 and will be posted to shareholders during the week commencing 20 July 2020.  Further copies will be available to download on the Company's website at: http://www.northernbearplc.com/.  It is intended that the Annual General Meeting will take place at the Company's registered office, A1 Grainger, Prestwick Park, Prestwick, Newcastle upon Tyne, NE20 9SJ, at 10:00am on 18 August 2020. 

 

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.