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Northamber lifts hatches and comes out to play

A display of financial prudence

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Northamber has released its year-end results and given a good indication of how its year of careful financial management has gone. Chairman David Phillips said: "These strong, rewarding results cover a protracted period of adverse and then lacklustre market conditions, pre and post the millennium."

He may be right or wrong about the market - but both Compel and Computacenter got nobbled by Y2K - but what is clear is that Northamber buttoned down the hatches this year and has maintained the same turnover as last year. In fact, sales nudged up slightly from £277.7 million last year to £284.3 million.

However, by greatly reducing the cash it held (down 80 per cent), increasing its debtors (up 20 per cent), reducing its creditors (down 10 per cent) and reducing its tangible assets (most likely the amount of stock held in warehouses - down 9 per cent), it managed to weed a lot more out of the same sales. Hence pre-tax profits are up 19.1 per cent to £7.52 million. This leads to a 28 per cent increase in earnings per share.

The company also, wisely, decided that its shares were undervalued and so bought back over 17 times the amount it purchased last year - nearly half a million quids worth. Shareholders are thanked with a 20 per cent rise in dividend to 6p.

So what of the future? Well, ole Dave first wants to explain why the results aren't sexier. He blames mostly Windows 2000 and faster Intel chips for not allowing the company to pick up on its service and maintenance business. That said, Northamber's "very high level of technical expertise and added value" remain the heart of the company. And that's about it really. Staff levels are down one person. The new financial year starts "on a more stable basis" and the Board is "confident of a successful outcome for the current year".

Exciting it's not but it is good business. ®

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