Trading Update

The board of directors of Northern Bear plc (the “Board”) is pleased to provide an update on its trading for the year ended 31 March 2015 (“FY2015”).


  • Trading for FY2015 was ahead of management expectations.
  • Current order book is strong with good visibility.
  • Net bank debt has continued to decrease (31 March 2014: £5.6m) and improved facilities have been negotiated.
  • Streamlining of operations through move to Team Valley Trading Estate largely completed.
  • Expectation of increased dividend (FY2014: 0.75p per share).


The Board is delighted to announce that the unaudited preliminary results for the year ended 31 March 2015 are again expected to exceed internal management forecasts and prior year results despite the exceptional items referred to below.

Revenue is expected to exceed that generated last year (FY2014: £36.8m) and we expect to report improved basic earnings per share (FY2014: 7.6p) despite the impact of one off and exceptional items.

Exceptional bad debt
On 9 March 2015, Tony Nygate and Graham Newton of BDO LLP were appointed as Administrators of GB Building Solutions Limited (“GB Building Solutions”). The Group had an exposure of £259,000 and this will be fully provided in the FY2015 results although it is hoped that the Group will generate additional work in relation to the completion of the projects for which GB Building Solutions were previously responsible.

Despite operating in a difficult marketplace in recent years, Northern Bear has an impressive record in terms of minimising bad debts despite some well publicised failures in the sector in which it operates.

Bank facilities and fees
The Group renewed and renegotiated its bank facilities on 31 March 2015 and reduced the margin on all debt by 1 per cent to LIBOR plus 3.25 per cent.

Historically, directly attributable bank fees were amortised over the life of the term loans to which they related. Having assessed the impact of the bank facility restructuring on 7 April 2014, the Group considers that the terms of bank facilities have been substantially modified and accordingly will write off all relevant unamortised fees. This will result in a one-off charge to finance expenses in FY2015 of £239,000. This is a non cash item as the fees had already been paid and will, together with the interest reduction above, result in a substantial annual saving in finance expenses in future years.

Reduction in bank debt

The Company was in a position to re-introduce the payment of a dividend last year and the strategy of bank debt reduction has been maintained. The continued reduction in debt has supported the advantageous renegotiation of facilities referred to above. The Group is grateful for the continued support of Yorkshire Bank plc.

Operational Matters

The Group has recently undertaken a project to streamline its operations, with Northern Bear Building Services Limited, MGM Limited and Northern Bear Safety Limited being integrated into new offices at Team Valley Trading Estate in Gateshead. Other businesses will also be moved to the new premises shortly. This strategy has already resulted in operational efficiencies and the opportunity to make significant overhead reductions is already being reflected in current trading figures.

As part of this move, Neil Jukes has been appointed as Managing Director of MGM Limited in addition to his role as Managing Director of Northern Bear Building Services Limited. Neil has done an excellent job in growing Northern Bear Building Services from a new venture in 2011 to making an important contribution to the Group’s results and I am confident that he is the right candidate to take control at MGM.

From a Health and Safety point of view, the move has been of great benefit to the Group as it has enabled Northern Bear Safety Limited to establish a CITB approved training centre which will provide benefits to the Group’s employees as well as all of our external Safety customers.


Current order book levels remain very strong across the Group and the new financial year has started well. Whilst there was a downturn in project commencement until the outcome of the recent UK General Election was known, the Company was well positioned to capitalise on future work irrespective of the outcome of that election. The Group has announced a number of new projects in recent weeks, including Newcastle’s Seven Stories refurbishment, Pele Tower in Corbridge and Percy Road in Whitley Bay.


In view of the strong performance of the Group, the Board is pleased to announce that it is planning, subject to business opportunities which may present themselves or any unforeseen circumstances, to increase the final dividend in respect of the year ended 31 March 2015 (FY2014: 0.75p per share).

Steve Roberts, Executive Chairman of Northern Bear, commented:
“The year ended 31 March 2015 saw a further strong performance across our business, which is testament to the hard work of our staff. Whilst continuing to reward Shareholders through dividend payments and further reducing bank debt, the Group is well placed to take advantage of opportunities as and when they arise both through organic growth and bolt-on acquisitions.”

For further information please contact:

Northern Bear Plc
Steve Roberts – Executive Chairman
Tom Hayes – Finance Director
+44 (0) 84 5680 2369

Strand Hanson Ltd
James Harris / James Spinney
+44 (0) 20 7409 3494