Northern Bear (AIM:NTBR) reported revenue of £38.9m for the six months to 30 September, down from £49.4m a year earlier, as the AIM-quoted holding company for a group of specialist building and support services businesses confirmed the fall was in line with management expectations.
The London-listed group said adjusted operating profit fell to £2.1m from £2.8m in the prior-year period, once a £1.3m non-recurring operating profit booked in H1 FY26 is stripped out of last year's comparative. Gross margin slipped to 23.6% from 24.7%, which chief executive John Davies attributed to challenging market conditions and the comparison against last year's underlying margin performance.
Adjusted basic earnings per share came in at 11.2p, down from 14.6p in H1 FY26 on the same adjusted basis.
The group generated £1.1m of cash from operations, against £3.1m a year earlier, and ended the period with net cash of £4.8m, down from £6.2m at the start of the financial year but up from £3.8m at the same point last year.
Northern Bear paid a 2.5p ordinary dividend and a 5.0p special dividend in the period, against a 2.5p ordinary and 1.0p special dividend in H1 FY26, taking total dividends paid to £1m.
"The Group produced a resilient set of results in the Period, which has also seen continued investment in our operations with a view to supporting future growth despite the prevailing economic challenges," Davies said.
The company is pressing ahead with investment across its divisions: Isoler, its fire protection business, has opened a London office to expand into the South East and is appointing a regional director, while Callisto Glass Facades, set up within MGM in FY25, has been restructured into a standalone subsidiary and turned a small operating profit in the period.
Arcas Building Services will relocate to the MGM facility by 31 December, with Northern Bear itself moving into the building Arcas vacates, a restructuring the company said will cut running costs for both businesses despite an initial cost.
Market conditions are described as largely flat, with pressure building on businesses exposed to private sector clients, specifically Alcor Handling Solutions and Arcas, and the board said it does not expect any market uplift in the foreseeable future given the macroeconomic backdrop.
Northern Bear also announced a proposed return of capital of up to £9.1m via a tender offer for up to 6.9m shares at 132.5p each, subject to shareholder approval, with results expected around 7 December and a general meeting around 22 December.
Simon Bissell joined as full-time Group Finance Director on 28 September, bringing a background in construction, manufacturing and FMCG finance roles, including supporting a regional construction company through an Employee Ownership Trust conversion.
The company said the full-year outcome for FY27 is expected to be broadly in line with market expectations, after adjusting for the non-recurring operating profit, assuming market conditions do not worsen, there are no further one-off losses, and no major weather-related disruption between October and March.
The forward order book remains stable, the company said, which it expects to support trading performance in the coming months.