27 June 2022

Northern Bear plc

("Northern Bear" or the "Company")

Trading Update, Strategy Update, and Notice of Results

The board of directors of Northern Bear (NTBR) (the "Board") provides an update on trading for the Company and its subsidiaries (together, the "Group") for the year ended 31 March 2022 ("FY22"), the financial year-end cash position, and the ongoing business strategy review.

This update is provided subject to finalisation of our audited results for FY22.  The Group's unaudited preliminary results for FY22 are expected to be released in the week commencing 18 July 2022.

Trading update

In the interim report for the six months to 30 September 2021 ("HY22"), we noted the industry-wide challenges with respect to both the availability and price inflation of construction materials, along with the well-publicised issues with attracting and retaining employees in our industry. 

Despite the impact of these headwinds, we reported that our Group generated strong operating results in HY22.  Our companies have strong and well-established supplier relationships and have been able, on the whole, to work with our robust supply chain to ensure continuity of supply for contracts. 

This situation has continued through the second half of FY22, and the Group has generated strong operating results that continue to exceed those from the prior year to 31 March 2021 ("FY21"), as well as those from the comparable pre-pandemic year to 31 March 2020 ("FY20"). 

The Board's current expectation, subject to audit finalisation, is that operating profit for FY22, stated before amortisation, one-off costs and other adjustments (in the format used in prior years' results), will be in the range of £2.5 million to £2.6 million. 

Year-end cash position

The Group reported net cash of £0.6 million as at 30 September 2021 (31 March 2021: net cash £2.1 million).  Since then, our cash position has remained strong and, whilst it reflects only a snapshot in time and our working capital requirements change on a daily basis, the Group had a substantial net cash position as at 31 March 2022 of £2.2 million.   

Our cash position is often at a high point at year-end due to the timing of working capital movements.  These have, to an extent, reversed post year-end and we have on occasion made use of our £1.0 million overdraft facility and up to £0.5 million of our revolving credit facility although the Group's financial position remains strong. 

We retain our committed £1 million overdraft and £3.5 million revolving credit facility with Virgin Money plc.  This financial position and bank facility headroom provides us with ample cash resources for the Group's current strategic and operational requirements as we look ahead to the coming financial year with optimism.

Strategy update

Following Board changes in 2021, including Jeff Baryshnik's appointment as Non-Executive Chairman, Jeff commenced a process of engaging with the Board and management to discuss and review the Group's strategy and approach to capital allocation.

This review remains ongoing and in recent months we have assessed two potentially accretive acquisitions of a more substantial size than those we have made previously, which ultimately did not come to fruition.  We continue to explore avenues for increasing shareholder value. 

Jeff Baryshnik, Non-Executive Chairman of Northern Bear, commented:

"We are pleased to announce strong expected operating results for FY22, despite ongoing headwinds."

"It is a testament to the executive team and the subsidiary operating teams that FY22 results are expected to exceed those from the comparable pre-pandemic period of FY20."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.

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