More growth at Northern Bear

Acquisitive building services and materials concern Northern Bear has increased annual pre-tax profits 26 per cent to £2.85 million.

The Chester-le-Street-based company increased turnover 30 per cent to £42 million in the year to March in the face of market conditions described as ‘challenging’ by chief executive officer Graham Forrest. He argues long-term relationships and partnerships with ‘blue chip builders’ have helped insulate AIM-quoted Northern, as has the strategy of cutting new house build from 13 to 4 per cent of turnover.

Forrest says the company is continuing to win new business, partly thanks to recruiting key staff from competitors. Since Northern’s March year end, the company has experienced ‘an encouraging upturn’ in demand in some of its areas of activity.

According to Forrest, Northern intends to fund future acquisitions with vendor equity and its own resources, rather than using bank debt. At 58.5p, the shares value the company at £11 million and, say analysts, give it a prospective p/e ratio of little more than three, which seems grudging.