It is pleasing to be able to report that we have seen revenues increase in the first half from £24.2 million to £26.3 million for the comparative period last year especially as this has been combined with an increase of percentage Gross Margin from 8.41% to 8.76%; the cumulative effect of both was to increase Gross Profit from £2.04 million to £2.3 million. Revenue and margin growth has been supported by growth from some of our strategic focus areas including Audio Visual and Solutions.
To support this increase in Gross Profit and the planned continued growth in Gross Profits our Distribution costs increased year on year from £1.39 million to £1.53 million. Administrative costs remained largely consistent year on year as we continued our focus on cost management meaning that our loss from operations for the first half was reduced from £0.5 million to £0.4million.
The Group sold its Weybridge distribution centre for £16.4 million against a net book value of £6.02 million. The Group also paid £0.18 million for legal and professional costs for the sale of the property. The gain on the sale is reported as an Exceptional Item. The Board were cautious to ensure this sale would not disrupt our core operations and were pleased to have agreed a sale and leaseback on the Weybridge distribution centre (at a rental cost of £85k for the first half) to allow us time to find a new suitable site and effect a move with the minimum possible disruption to our trading activity. A new warehouse has been purchased in Swindon for £3.2 million and we expect to complete the move from Weybridge during the second half of this financial year.
Maintaining our prudence in financial matters, our working capital management is reflected in the Net Current Assets ratio which at 3.7 times (2018: 2.6 times) is a significant improvement.
Cash was £14.7 million at 31 December 2019 compared with £2.9 million at 31 December 2018, reflecting the sale of the distribution centre and the purchase of the new warehouse property. With Fixed Assets at book value at £5.2 million, including two unencumbered freehold properties, the Company’s overall financial position is sound.
Net Assets at 91.3p per share are considerably in excess of the average price of the ordinary shares throughout the period.
With great sadness, we lost our founder and Chairman David Phillips in December 2019. David made a very significant contribution to the development and leadership of the Company since he founded Northamber in 1980 and he will be greatly missed.
We are pleased to welcome David’s son Alex Phillips who has recently joined our very experienced Board as Commercial Director. Alex joined the Company in 2013 as Director of Strategy and gained valuable experience of the business and the wider sector.
As in previous years, your Board has had regard to the strength of our debt free, tangible asset strong balance sheet and is proposing the interim dividend be 0.3p, at a total cost of £82,070. The dividend will be paid on 15 May 2020 to shareholders on the register as at 16 April 2020.
We continue to invest in our evolving business model with added skills based services and which are heavily reliant on our staff to achieve our business case evolution and I am very grateful to all of our staff for their continued support and flexibility.
Event after the reporting date.
In January 2020 the Company acquired Audio Visual Material Limited (AVM), an Audio Visual Distributor, to enhance and expand Northamber’s specialist AV division to focus on driving higher margin profitable growth. I am pleased to report the integration of AVM is going well and the Board is confident that the business will make an important contribution to Northamber in the years ahead.
Whilst we are optimistic in the long-term strategy, we remain cautious due to the economic uncertainty, Brexit and the potential impact of coronavirus on the supply chain. Our continued focus on the new higher margin value categories continues to be an area we are confident and excited about, and where we see future opportunities for organic growth. We will continue to review non-organic opportunities for growth should an appropriate acquisition be identified which meets our strict criteria and adds value for our shareholders.