- Northamber says improvements reported in last November's Interim Management Statement, then stalled in keeping with the economy at large and the company's sector in particular.

Though not comparative, following the ongoing reprofiling changes, Sales for the half year were £53.8 million against £67.7 million reported a year ago.

After discontinued very low margin bulk export sales are ignored, turnover for the first six months of the current year was £53.8 million. Some 7% ahead of the same period for the previous year. In this business an on-going comparative result gives a more accurate assessment of progress.

The November Interim Management Statement reminded the changes made during last year (to June 2011) where Northamber commenced reviewing and then progressively discontinuing low margin sales; which though contributing turnover volume, after price erosion had surpassed empty revenue and become costly.

Whilst the company continues the reprofiling tasks, Gross Margins for the period improved by 80 basis points over the comparative period for the previous year.

The combination of reduced turnover and the unavoidable time lag for pending efficiencies, Gross Profits were £3.8 million compared with £4.2 million in the comparative period last year.

Distribution expenses are a very significant cost and were and still are heavily impacted by inflation. They are 4% higher than in the previous year, whilst the carriage cost component is 14% higher, reflecting the increases in fuel and other charges.

Administration expenses increased by only 1%. This was partly due to an increase in our provision for bad debts in the period. However, the total bad debt charge for the period even on our normal cautious basis, remains at only just over 0.1% of sales.

The resulting operating loss was £487,000 for the first half year compared with an operating profit of £75,000 for the same period last year.

As has now become the norm; earnings on cash remain at a low level and despite a closing balance of £13.2 million at the end of December. Our interest earned for the six months only amounted to £69,000 (2110: £76,000).

Cash generated in the period was £2.5 million. The principal element of this was the conscious decision to reduce inventory and increase stock turn.

At 10:01am: [LON:NAR] Northamber share price was -3p at 47p

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