Northamber boss takes massive salary cut
Distributor returns to profit as chairman David Phillips opts to draw a small fraction of his £180,000 salary
Northamber chairman David Phillips has opted to pay himself a contractual salary of just £15,000 in a move that enabled the distributor to return to the black for its fiscal 2012.
In a stock exchange announcement this morning, Phillips revealed he has taken less than a tenth of his annual wage of £180,000, propelling the broadliner to a pre-tax profit of £37,000 for the 12 months to 30 June.
This compares favourably with the £418,000 loss Northamber registered a year earlier.
"As chairman and with a substantial shareholding, I am conscious of the impact that my contractual salary could have on the finances of the company," Phillips said.
As the firm had anticipated, revenue fell by 17 per cent to £101m, reflecting the distributor's efforts to abandon high-volume business that equates to "empty revenue" in favour of higher-value products.
This, along with a £600,000 reduction in its wage bill, propelled Northamber's gross margins from 6.8 per cent to 7.7 per cent for the year.
During the year, the distributor took the "unpleasant but necessary" action of chopping 13 per cent of its workforce.
Phillips claimed the revenue slide had not been as severe as that seen at competitors, but cursed the Olympics for taking the shine off its performance in the first quarter of its new fiscal year.
"Combined with the extended "holiday effect", this unavoidably means that the first quarter of the current year is not looking as encouraging as we might otherwise have expected," Phillips said. "Nevertheless, we continue with our proven policy of attention to the basics, balance sheet strength, solvency and concentration on profitable activities."
Phillips' £15,000 salary is commensurate with Northamber's non-executive directors' remuneration and compares with the £90,000 wage he drew last year.
The board is proposing to pay a final dividend of 0.75 pence per share for the year.