Financial Results

A copy of Northern Bear plc’s latest financial results can be accessed here.

Chairman’s Statement – Financial Results


I am pleased to report the results for the year to 31 March 2018 for Northern Bear and its subsidiaries (together “the Group”). 

The Group’s continuing operations delivered another excellent year’s trading, with turnover and operating profit from continuing operations ahead of the already strong results for the prior year.   

We also completed our first acquisition in almost ten years in July 2017 when we acquired H Peel & Sons (Holdings) Limited and its subsidiary (together, “H Peels”). H Peel has traded in line with our expectations since acquisition and has made a positive contribution to our results over the period.

The acquisition of H Peel, along with the disposal of Chirmarn Holdings Limited and its subsidiaries in the prior year, has allowed us to consolidate the Group’s core operations, while adding a well-established and high quality business to our portfolio of companies.


The Group’s continuing operations traded strongly and ahead of management expectations over the course of the financial year, despite the severe winter weather (particularly during he first three months of 2018). This is testament to the continued hard work of our Group managing director, Graham Jennings, our operations director, Keith Soulsby, and all of the operational management team.

This is the first winter for several years where we have experienced severe weather over a sustained period of time. I am therefore pleased to report that the Group was able to continue its strong performance despite such weather conditions, in part due to the diversity of its businesses.

From time to time we receive shareholder enquiries with regard to the impact of industry events and severe weather on the Group’s results. I would like to assure our shareholders that, if the Group’s results are likely to be materially affected by any such events, we will make an appropriate announcement immediately  as is required by the AIM Rules for Companies. Our policy continues to be to avoid issuing unnecessary market updates, or creating an expectation of providing ongoing commentary, on wider market events when the Board does not expect the Group’s performance to be materially affected.

Turnover from continuing operations increased to £53.6 million (2017: £45.6 million), which was due to a combination of increased turnover from existing operations and the impact of H Peel acquisition.

Gross profit from continuing operations increased to £10.5 million (2017: £9.3 million) while gross margin reduced to 19.6% (2017: 20.4%). The reduction in gross margin is the result of a change in sales mix. The Group’s Specialist Building Services division typically operates at lower margins than the Roofing and Materials Handling divisions, and accounted for a higher proportion of the Group’s turnover during the year.

Administrative expenses, before amortisation and transaction costs, increased to £7.5 million (2017: £6.8 million), largely to support increased activity levels in the period.

We have made the decision to present operating profit both before and after the impact of the amortisation of intangible assets and transaction costs totalling £0.3 million (2017: nil), in order to provide a better understanding of the Group’s underlying trading performance. Operating profit from continuing operations, prior to these costs, was £3.1 million (2017: £2.5 million). After the impact of these costs, operating profit from continuing operations was £2.8 million (2017: £2.5 million).

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 from continuing operations was 12.5p (2017: 11.3p). Reported basic earnings per share from continuing operations was 10.9p (2017: 11.3p).


Cash flow and  bank facilities

We stated in prior year results that the Group’s operating cash generation was significantly in excess of trading profits, due to some favourable payment terms on contract work. We stated at the time that this may reverse in due course. The Group’s working capital has since reverted to a more normal position, due to a change in contract mix, and, hence, cash generated from operations in the year was £1.4 million (2017: £4.5 million).

The Group’s working capital requirements will continue to vary depending on the ongoing customer and contract mix. I believe that the Group’s results, when considered over a period of more than one year, have demonstrated a strong ratio of profit to operating cash generation.

During the prior year we signed a new £3.5m revolving credit facility agreement with Yorkshire Bank to replace the previous term loan facility. This new facility was intended to provide the Group with a much more flexible funding structure and to support a wider range of options for capital allocation. It has since supported our acquisition of H Peel as well as the ordinary and special dividends paid during 2017. The facility is committed to 31 May 2020 and the Group also retains a £1.0m overdraft facility.

 Dividend policy

In view of the continued strong trading performance of the Group, I am pleased to announce that the Board proposes the payment of an increased final dividend of 3.0p per share (2017: 2.5p per share) for the year ended 31 March 2018.  This is subject to shareholder approval at the Annual General Meeting to be held on 20 August 2018. If approved, will be payable on 31 August 2018 to shareholders on the register at 10 August 2018. 

Due to the exceptional financial performance in the year, we have also decided to distribute funds which are surplus to our strategic requirements. Accordingly, we are also announcing a proposed special dividend of 1.0p per share (2016: 1.5p per share), which is also subject to shareholder approval and payable as above.

The Board will continue to assess the dividend levels, and our intention 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.


The Group continues to hold a high level of committed orders and trading in the new financial year has started well, which provides optimism for another good set of results in the year ending 31 March 2019.


I am delighted that the Group was able to complete the acquisition of H Peel in July 2017. H Peel is an interiors and fit out business based in Dewsbury, West Yorkshire. It has a blue chip client base, spread across the UK, and operates primarily in the hotel and leisure sectors.

H Peel met all of our acquistion criteria, which include that a business is well established in its sector, is consistently profitable and cash generative, and has a strong management team who are committed to remaining with the business.

The acquisition also provided us with further sectoral and geographical diversification. The management team at H Peel have settled in well and we look forward to sharing in their continued success.

We continue to be presented with acquisition opportunities on a regular basis. However, we will only proceed with an acquisition where we are confident that it will meet the above criteria, predictably enhance earnings and provide an attractive return on investment for our shareholders.


 During the year Graham Jennings, our Group managing director, stepped down from his role as managing director of Jennings Roofing in order to focus on his Group role and to support the further expansion and development of the Group.

Martin Briggs, who has worked closely with Graham for the past 26 years, was appointed as managing director at Jennings Roofing with effect from 1 April 2018. I would like to congratulate Martin on his promotion and I wish him well in his new role.

The Group’s loyal, dedicated and skilled workforce, along with continued investment in training new operatives and apprenticeship schemes, is a key part of our success. With HR overseen by Keith Soulsby, the Group continues to invest in its workforce, regardless of short term economic conditions. This is particularly important, given the continued shortage of skilled operatives and cost pressures in our sector.


I am delighted to be able to report such a positive set of results, and I would, once again, like to thank all our employees for their hard work and contribution to another period of strong performance for the Group.


Steve Roberts

Executive Chairman

23 July 2018