Roofing and building materials outfit Northern Bear Plc (LON:NTBR) could be finally out of the woods after a prolonged, tough spell.
The company’s trading update for the year to the end of March revealed that earnings per share should be in line with market expectations, despite the dismal weather conditions in the north of England during the winter months.
Cash flow continues to improve while the once heavily indebted company has seen a “further significant decrease” in net bank debt, enabling it to continue with its progressive dividend policy.
Turnover and operating profits will be lower than the previous year’s numbers of £41.7mln and £2.5mln, respectively, the company revealed, reflecting the unprecedented floods and high winds that made life especially difficult for the roofing division.
On the plus side, overall net profitability will be little changed year-on-year, thanks to the group’s decision to eschew low margin work and lower interest charges after the renegotiation of bank facilities in March 2015.
The current order book is strong and the new financial year has started well.
"We are very pleased with the performance in the year, particularly given the weather impact on the ability to trade on site in the second half of the year,” said Steve Roberts, executive chairman of Northern Bear.
“After many years of tireless efforts to improve profitability and reduce the level of bank debt, it is rewarding to be able to continue with a progressive dividend policy for the benefit of shareholders. We continue to consider acquisition opportunities but will only execute a transaction where we are confident that the acquisition will be earnings enhancing and provide an attractive return on investment," he added.
Shares in Northern Bear were up 4.6% at 46.625p in mid-morning trading.