TIDMBMTO
RNS Number : 7711W
Braime Group PLC
27 April 2021
BRAIME GROUP PLC
(formerly T.F. & J.H. BRAIME (HOLDINGS) P.L.C.)
("Braime" or the "Company" and with its subsidiaries the
"Group")
ANNUAL RESULTS FOR THE YEARED 31ST DECEMBER 2020
At a meeting of the directors held today, the accounts for the
year ended 31st December 2020 were submitted and approved by the
directors. The accounts statement is as follows:
Chairman's statement
Overview of the year
Group sales revenue in 2020 reduced marginally by 2% from
GBP33.4m to GBP32.8m but the profit before tax fell by over 30%
from GBP1.75m in the previous year to GBP1.2m in 2020. The
disproportionate reduction in the profit before tax was due in part
to the strengthening in the value of Sterling against the
currencies in our principal markets but also due to the much higher
costs of maintaining production and sales during the Covid
pandemic.
In normal circumstances, the result in 2020 would be very
disappointing but in the quite exceptional circumstances which
affected the Group globally throughout 2020, the result achieved
was significantly better than we had dared hope for during much of
the year. Throughout the crisis, we achieved our twin aims of
maintaining the full employment of our valued staff, while
consistently continuing to supply our vital customer base.
We were only able to achieve this due to two factors; firstly
the work and enterprise of our management teams across all parts of
our Group, who successfully adapted our working practices and put
in place measures which minimised the risk to our employees of
continuing to work in very difficult circumstances; secondly, the
courage and the flexibility of our employees themselves in
continuing to work throughout the year and their willingness to
work the extra hours asked of them in order to compensate for the
hours lost by unavoidable absences or quarantine. As always, and
even more so in 2020, we depend on the efforts and the huge
contribution made by all our employees.
Having survived as a business through the past very challenging
12 months, we are starting this new year with a lot of renewed
positivity. The Group remains in a solid position financially; this
enables us to continue to invest in the future and in our ongoing
plans to secure more business through continually improving our
operations and our products.
Capital investments
During the pandemic, we worked hard to preserve our working
capital resources and in 2020 we generated GBP2.7m from our
operations, compared to GBP1.7m in the previous year.
Nevertheless, we invested during the year a total of GBP2.1m, of
which GBP1.5m was spent on building our new EUR2.2m sales and
distribution facility in France which we announced last year. We
had planned to occupy the new facility by February 2021 but
construction was delayed by the Covid restrictions and we now plan
to re-locate during May this year.
We also continued the major investment, started in 2019, in
another robotic production cell and took advantage of an
opportunity to purchase at auction, and refurbish internally, a
very large wide coil fed 400 tonne mechanical press. Installation
and commissioning of the latter investment enabled us to take on
specific new work in December.
Meanwhile we continue to invest time and energy in the
development of new products, including some which will be launched
later this year. We fund these development activities out of our
profits.
Dividend
In October 2020, the Company paid a first Interim dividend of
4.0p. Given what we believe was a very positive result in
exceptional circumstance, and the strength of our overall financial
position, the board proposes to pay a second interim dividend of
7.8p, making a total of 11.8p for the year, compared to 11.6p in
2019.
The second dividend of 7.8p will be paid on the 25(th) of May
2021 to the holders of the Ordinary and 'A' Ordinary shares on the
share register on 6(th) May 2021.
Free Trade Agreement with the EU
We were pleased that, at the very last minute, economic "common
sense" prevailed and a mutually beneficial Free Trade Agreement was
signed between the UK and the EU.
Although around three-quarters of our group sales are made
outside the EU, the European economic area remains a very important
market for us. As a result of the trade agreement, even when our
exports to the EU include raw materials sourced globally, our
valued European customers can continue to purchase of our products
duty free. Equally important, the Free Trade Agreement enables us
to continue to purchase and re-export supplies sourced from
existing partners in the EU.
We are fortunate that as a company we are well used to the
preparation of the standard documentation required to export
globally. Apart from one or two "hiccups "in the first weeks of
January, while we adapted our documentation to meet the new EU
requirements, our exports and imports to and from the EU have
continued seamlessly. The final resolution of this long-standing
issue will also now allow us to reduce the high levels of stocks
built up in our businesses, both in the UK and France, in order to
mitigate the situation in a worst-case scenario.
Important information regarding the AGM
The Company is closely monitoring public health guidance and
legislation issued by the UK government in relation to the Covid
pandemic. At the time of writing, the government continues to place
restrictions on mass gatherings and social contact. However, it is
expected shareholder attendance will be possible under the
government's published roadmap and we are therefore proposing to go
ahead with an open meeting. Shareholders intending to attend the
AGM are asked to register their intention as soon as possible by
emailing investor@braime.co.uk .
The health and safety of our colleagues and shareholders is very
important to us. Given the constantly evolving nature of the
situation, should circumstances change such that we consider it is
no longer possible for shareholders to attend the meeting or
limiting the numbers in attendance is required, we will notify
shareholders through the Company's website www.braimegroup.com and,
where appropriate, by a Regulatory News Service announcement.
For the same reason of uncertainty, we strongly encourage all
shareholders to exercise their votes by submitting their proxy by
post in advance of the meeting and shareholders are strongly
encouraged to appoint the Chairman of the meeting as their proxy.
Details of how to do this are set out in the notes accompanying
notes to the Notice. This will ensure that your votes are cast in
accordance with your wishes.
Irrespective of the guidelines in place at the time of the 2021
AGM, we understand that some shareholders may not wish to travel
but may still wish to ask questions of the board. Any questions
should be emailed to investor@braime.co.uk in advance and we will
endeavour to add a synopsis of all questions and answers to our
website shortly after the meeting.
Current trading, outlook, and risks
We have continued to support our customers worldwide throughout
the pandemic, and have proved the resilience of our business.
Hopefully we are now finally emerging in a relatively strong
position, and do so with renewed enthusiasm.
In spite of the major difficulties and challenges faced in 2020,
we have learnt valuable lessons on how to adapt our processes to
continue communication with our customers without direct contact.
However, the substantial improvements we have made this year to
maintain "virtual" contact with our customers will never replace
the importance of visiting and meeting our customers face to face
and we will re-commence direct customer contact and our
participation in trade exhibitions at the earliest opportunity. Our
business has been built on the lessons learnt and the ideas created
by close and regular contact with our customers and all our product
development is rooted in this process.
Meanwhile, we have still been able to continue to invest time
and resources to improve our operations and develop new products,
and this remains our long-term strategy. Although the intake of new
orders remains patchy, overall, we can see a gradual increase in
confidence and in the number of new projects generated by our
customers worldwide.
Currently a major area of concern across the Group is the sudden
steep increase in the cost of raw materials and the related issue
of longer delivery times of both inbound raw materials and outbound
deliveries to customer; both have been caused by the Covid pandemic
which has led to a major imbalance in container traffic and
deep-sea shipping. Adjusting to constantly fluctuating material
costs, while continuing to remain competitive and retain our
customers without seriously eroding our margins, is a going again
to be a challenging and time-consuming process.
Our product mix is well balanced and one of our strengths and is
made up by the combination of the manufacture of components for
commercial vehicles and the manufacture and distribution of
components used in the material handling and processing of granular
commodities, particularly food related. As a Group our worldwide
sales are weighted towards regions which offer the potential for
significant long-term growth.
Over 80% of Group sales are made in overseas markets and a
significant proportion of our products are still manufactured and
exported from the UK but sold in local currencies. In recent years,
the Group has benefited from a gradual decline in the value of
Sterling and this has increased our ability to compete. In
contrast, we remain exposed to any sudden strengthening of the
Pound. This point has been made before but it remains very
pertinent.
Nicholas Braime, Chairman
27th April 2021
For further information please contact:
Braime Group PLC
Nicholas Braime/Cielo Cartwright
0113 245 7491
W. H. Ireland Limited
Katy Mitchell
0113 394 6628
The directors present their strategic report of the Company and
the Group for the year ended 31st December 2020.
Principal activities
The principal activities of the Group during the year under
review was the manufacture of deep drawn metal presswork and the
distribution of material handling components and monitoring
equipment. Manufacturing activity is delivered through the Group's
subsidiary Braime Pressings Limited and the distribution activity
through the Group's 4B division.
Braime Pressings specialises in metal presswork, including deep
drawing, multi-stage progression and transfer presswork. Founded in
1888, the business has over 130 years of manufacturing experience.
The metal presswork segment operates across several industries
including the automotive sector and supplies external as well as
group customers.
The subsidiaries within the 4B division are industry leaders in
developing high quality, innovative and dependable material
handling components for the agricultural and industrial sectors.
They provide a range of complementary products including elevator
buckets, elevator and conveyor belting, elevator bolts and belt
fasteners, forged chain, level monitors and sensors and controllers
for monitoring safety and providing preventative maintenance
systems which facilitate handling and minimise the risk of
explosion in hazardous areas. The 4B division has operations in the
Americas, Europe, Asia, Australia and Africa and in 2020 traded in
ninety-seven countries. The US subsidiary also has an
injection-molding plant. All injection-molded products are made
wholly for internal consumption and this is classed as 4B division
activity rather than included in the manufacturing segment.
Performance highlights
For the year ended 31st December 2020, the Group generated
revenue of GBP32.8m, down GBP0.6m from prior year. Profit from
operations was GBP1.4m, down GBP0.8m from prior year. EBITDA was
GBP2.7m. At 31st December 2020, the Group had net assets of
GBP15.0m. The full year results are better than expectations at the
half-year, when there was even greater uncertainty facing the
global business as a result of the Covid-19 pandemic and ensuing
lockdown. The Group benefitted from the forgiveness of GBP0.4m of
the government loan which we reported in the half year had been
received by our US subsidiary. The loan was forgiven after the
business demonstrated that it had maintained its employee numbers
despite a reduction in sales from the pandemic.
Cash flow
Inventories increased by GBP0.3m as the business judiciously
prepared for the United Kingdom's departure from the EU by building
up a buffer of certain inventory lines, and trade and other
receivables increased by GBP0.4m reflecting increased customer
activity close to the year end for the same reason. These were more
than offset by an increase in our trade and other payables of
GBP0.9m. In total the business generated funds from operations of
GBP2.7m (2019 - GBP1.7m). The group continued its programme of
investment during the year, spending GBP2.1m on capital items;
GBP1.5m of this was on the construction of the new warehouse in
France which was announced by the Group in our 2019 annual report.
After the payment of other financial costs and the dividend, the
cash balance (net of overdraft) was GBP1.2m, an increase of GBP0.5m
from the prior year.
Bank facilities
The Group's operating banking facilities are renewed annually.
As announced early last year, the EUR2.2m French warehouse
construction is being funded largely through the procurement of a
syndicated loan of EUR1.7m from BNP and Credit du Nord and the
remaining from Group cashflows. Our facility with HSBC provides
ample headroom for the Group to make the necessary investments in
the year. The business continues to enjoy good relations with its
bankers who are cognizant of the general economic uncertainties
facing the business as the global economy continues to suffer from
the effects of the pandemic.
Taxation
The tax charge for the year was GBP0.3m, with an effective rate
of tax of 28.5% (2019 - 23%). The effective rate is higher than the
standard UK tax rate of 19% (2019 - 19%), this results from the
blending effect of the different rates of tax applied by each of
the countries in which the Group operates, in particular, our US
operations' tax charge affects the blended rate. In any financial
year the effective rate will depend on the mix of countries in
which profits are made, however the Group continues to review its
tax profile to minimise the impact.
Capital expenditure
In 2020, the Group invested GBP2.1m (2019 - GBP1.7m) in
property, plant and equipment. In addition to GBP1.5m of the French
warehouse construction, the Group also invested in a 400 ton press,
an automated tap plate assembly, more robotics and expanded its
bucket tooling portfolio.
Balance sheet
Net assets of the Group have increased to GBP15.0m (2019 -
GBP14.3m). A foreign exchange loss of GBP0.1m (2019 - GBP0.3m) was
recorded on the re-translation of the net assets of the overseas
operations, which has decreased retained earnings in the year.
Principal exchange rates
The Group reports its results in sterling, its presentational
currency. The Group operates in six other currencies and the
principal exchange rates in use during the year and the comparative
figures for the year ending 31st December 2019 are shown in the
table below. Following the exit of the UK from the EU, sterling
strengthened against many of the currencies in which we operate and
consequently as mentioned above the Group's reserves decreased by
GBP0.1m from losses in foreign currency translations.
Average rate Average rate Closing rate Closing rate
Currency Symbol Full year Full year 31st Dec 31st Dec
2020 2019 2020 2019
Australian Dollar AUD 1.867 1.840 1.763 1,883
Chinese Renminbi
(Yuan) CNY 8.880 8.810 8.890 9.150
Euro EUR 1.126 1.144 1.112 1.177
South African Rand ZAR 21.309 18.453 20.030 18.548
Thai Baht THB 40.404 39.578 40.838 39.346
United States Dollar USD 1.290 1.281 1.365 1.321
Our business model
The two segments of the Group are very different operations and
serve different markets, however together they provide
diversification, strength and balance to the Group and their
activities.
The focus of the manufacturing business is to produce quality,
technically demanding components. The use of automated equipment
allows us to produce in high volumes whilst maintaining flexibility
to respond to customer demands.
The material handling components business operates from a number
of locations around the globe allowing us to be close to our core
markets. The focus of the business is to provide innovative
solutions drawing on our expertise in material handling and access
to a broad product range.
Performance of Braime Pressings Limited, manufacturer of deep
drawn metal presswork
Braime Pressings Limited sales of GBP6.8m were in line with
prior year. Intercompany sales and external sales were GBP3.0m and
GBP3.8m as compared to GBP3.4m and GBP3.4m respectively in 2019.
Loss for the period was GBP0.2m (2019 - loss GBP0.3m). The
manufacturing arm continues to face pricing pressures in a highly
competitive environment. At the start of 2020 the business further
invested in sales development however activities were restricted by
the government-imposed lockdowns which prevented visits to customer
premises. The board believes the business continues to add
strategic value through its supply to the 4B division and
complementary engineering expertise.
Performance of the 4B division, world-wide distributor of
components and monitoring systems for the material handling
industry
Revenues fell from GBP36.2m to GBP34.2m, with external sales
down GBP1.0m. The 4B group sales were affected by the covid
pandemic with the geographical regions of the Americas and Africa
being particularly affected with sales decreasing by GBP1.0m and
GBP0.4m respectively. The European market by contrast increased by
GBP0.8m compared to 2019. Profit for the period fell by GBP0.3m to
GBP1.4m as a result of reduced sales.
We continue to invest in product development and during the year
we launched our internet ethernet node remote monitoring interface
(IE-NODE); this provides a visual view of all devices on the
network, allowing for easy identifying of each unit of the network
and for settings to be readily changed as needed. In 2020 we
launched our unique and patented round bottom version of the
popular Bolt-N-Go, which makes it much easier to install, replace
and maintain chain compared to conventional welded steel chain.
The Covid-19 pandemic continues to cast uncertainty over the
global economy. The new ways of working too, following Brexit will
take some time to iron out and there will be some disruption to
supply chains which may continue well into the year. The board is
pleased with business performance in 2020 given the challenging
environment. The Group's underlying business model is on a solid
base and its wide geographical presence in the agricultural
equipment sector, which is essential for the maintenance of food
supply, provides it with some buffer in the continuing unsettled
economic climate. With the continuing support of its bankers, the
loyalty of its dedicated employees and its longstanding customers
and partners, the Group remains positive it will weather these
adversities.
Key performance indicators
The Group uses the following key performance indicators to
assess the performance of the Group as a whole and of the
individual businesses:
Key performance indicator Note 2020 2019
Turnover growth 1 (1.9%) (6.4%)
Gross margin 2 46.7% 49.1%
Operating profit 3 1.38m GBP2.21m
Stock days 4 182 days 176 days
Debtor days 5 56 days 57 days
Notes to KPI's
1. Turnover growth
The Group aims to increase shareholder value by measuring the
year on year growth in Group revenue. Whilst 2020 is down on the
prior year, the board consider the results to be very positive
given the global pandemic.
2. Gross margin
Gross profit (revenue plus change in inventories less raw
materials used) as a percentage of revenue is monitored to maximise
profits available for reinvestment and distribution to
shareholders. The reduction in margin reflects pressures on the
supply chain.
3. Operating profit
Sustainable growth in operating profit is a strategic priority
to enable ongoing investment and increase shareholder value.
Reduced turnover has impacted operating profit which has also been
affected by sterling strengthening.
4. Stock days
The average value of inventories divided by raw materials and
consumables used and changes in inventories of finished goods and
work in progress expressed as a number of days is monitored to
ensure the right level of stocks are held in order to meet customer
demands whilst not carrying excessive amounts which impacts upon
working capital requirements. Stockholding has increased due to
inventory build-up in December 2020 to mitigate the impact of any
disruption caused by the United Kingdom finally leaving the EU.
5. Debtor days
The average value of trade receivables divided by revenue
expressed as a number of days. This is an important indicator of
working capital requirements. Debtor days have improved from the
position at the half year and management are focusing on reducing
this to improve cashflows.
Other metrics monitored weekly or monthly include quality
measures (such as customer complaints), raw materials buying
prices, capital expenditure, line utilisation, reportable accidents
and near-misses.
Principal risks and uncertainties
Coronavirus Covid-19
At the time of writing, the global number of cases of Covid-19
infections remains high. Cases in the Far East and Australia have
declined and the US and UK governments' rapid roll out of the
Covid-19 vaccine programme and the published roadmap in the UK for
easing the current lockdown restrictions provide grounds for
optimism that some normality may resume by the summer. At the same
time, however, the rest of Europe is experiencing a rise in
infection cases and there is a threat that new variants, resistant
to the current vaccines, could emerge. Covid-19 therefore remains a
business threat and presents itself in various forms, including but
not limited to the threat of continuity of supplies, the health of
our employees, the ability of customers to meet payments, currency
fluctuations and business interruption resulting from government
interventions and hastily introduced travel restrictions.
The Group has demonstrated its ability to maintain activity
during these unprecedented times but clearly the global pandemic
has impacted sales. The Group supplies essential components parts
into the agricultural materials handling sector and during 2020
governments took necessary steps to protect the food supply chain
and our operations were classified as operations that had to remain
open. Nevertheless, threats emerge from key personnel becoming
infected with the virus, suppliers being unable to fulfil orders,
be it raw materials or inventory supplies or logistics partners
unable to conduct deliveries. The Group has put in place
significant health and safety measures to maintain operations,
including the retraining of personnel in key processes, social
distancing and reviewing alternative suppliers. The Group's key
objective is to ensure the safety and well-being of our employees,
while continuing to trade as normally as possible.
General risks
The market remains challenging for our manufacturing division,
due to pricing pressures throughout the supply chain. The
maintenance of the TS16949 quality standard is important to the
Group and allows it to access growing markets within the automotive
and other sectors. A process of continual improvement in systems
and processes reduces this risk as well as providing increased
flexibility to allow the business to respond to customer
requirements.
Our 4B division maintains its competitive edge in a price
sensitive market through the provision of engineering expertise and
by working closely with our suppliers to design and supply
innovative components of the highest standard. In addition, ranges
of complementary products are sold into different industries. The
monitoring systems are developed and improved on a regular
basis.
The directors receive monthly reports on key customer and
operational metrics from subsidiary management and review these.
The potential impact of business risks and actions necessary to
mitigate the risks, are also discussed and considered at the
monthly board meetings. The directors have put in place formal
business continuity and disaster recovery plans with respect to its
UK and US operations. The more significant risks and uncertainties
faced by the Group are set out below:-
-- Raw material price fluctuation :- The Group is exposed to
fluctuations in steel and other raw material prices and to mitigate
this volatility, the Group fixes its prices with suppliers where
possible.
-- Reputational risk :- As the Group operates in relatively
small markets any damage to, or loss of reputation could be a major
concern. Rigorous management attention and quality control
procedures are in place to maximise right first time and on time
delivery. Responsibility is taken for ensuring swift remedial
action on any issues and complaints.
-- Damage to warehouse or factory:- Any significant damage to a
factory or warehouse will cause short-term disruption. To mitigate
these risks, the Group has arrangements with key suppliers to step
up supply in the event of a disruption.
-- Brexit impact:- The UK finally left the EU at the end of
2020. A trade agreement has been struck with the EU and whilst this
has alleviated much of the immediate uncertainties surrounding a
no-deal scenario, the finer details of the agreement remain to be
negotiated and some aspects of the trade deal are on transitional
arrangements only. The Group, along with other businesses, faces
economic and political uncertainty in the future resulting from
changes to these details as yet unknown. However, the directors
consider that its operations in Europe provide the group with
further trading options and the fact that three-quarters of the
Group's revenues are derived from markets outside the EU provides
the Group with some resilience to any impact.
-- Economic fluctuations :- The Group derives a significant
proportion of its profits from outside the UK and is therefore
sensitive to fluctuations in the economic conditions of overseas
operations including foreign currency fluctuations. As the Covid-19
pandemic has demonstrated, economies are greatly intertwined and
reverberations feed through the supply chain.
Financial instruments
The operations expose the Group to a variety of financial risks
including the effect of changes in interest rates on debt, foreign
exchange rates, credit risk and liquidity risk.
The Group's exposure in the areas identified above are discussed
in note 17 of the financial statements.
The Group's principal financial instruments comprise sterling
and foreign cash and bank deposits, bank loans and overdrafts,
other loans and obligations under finance leases together with
trade debtors and trade creditors that arise directly from
operations. The main risks arising from the Group's financial
instruments can be analysed as follows:
Price risk
The Group has no significant exposure to securities price risk,
as it holds no listed equity instruments.
Foreign currency risk
The Group has a centralised treasury function which manages the
Group's banking facilities and all lines of funding. Forward
contracts are on occasions used to hedge against foreign exchange
differences arising on cash flows in currencies that differ from
the operational entity's reporting currency.
Credit risk
The Group's principal financial assets are bank balances, cash
and trade receivables, which represent the Group's maximum exposure
to credit risk in relation to financial assets.
The Group's credit risk is primarily attributable to its trade
receivables. Credit risk is mitigated by a stringent management of
customer credit limits by monitoring the aggregate amount and
duration of exposure to any one customer depending upon their
credit rating. The Group also has credit insurance in place. The
amounts presented in the balance sheet are net of allowance for
doubtful debts, estimated by the Group's management based on prior
experience and their assessment of the current economic
environment.
The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by
international credit-rating agencies. The Group has no significant
concentration of credit risk, with exposure spread over a large
number of counterparties and customers.
Liquidity risk
The Group's policy has been to ensure continuity of funding
through acquiring an element of the Group's fixed assets under
medium term loans and finance leases and arranging funding for
operations via bank overdrafts to aid short term flexibility.
Cash flow interest rate risk
Interest rate bearing assets comprise cash and bank deposits,
all of which earn interest at a fixed rate. The interest rate on
the bank overdraft is at market rate and the Group's policy is to
keep the overdraft within defined limits such that the risk that
could arise from a significant change in interest rates would not
have a material impact on cash flows. The Group's policy is to
maintain other borrowings at fixed rates to fix the amount of
future interest cash flows.
The directors monitor the level of borrowings and interest costs
to limit any adverse effects on the financial performance of the
Group.
Health and safety
We maintain healthy and safe working conditions on our sites and
measure our ability to keep employees and visitors safe. We
continuously aim to improve our working environments to ensure we
are able to provide safe occupational health and safety standards
to our employees and visitors. The directors receive monthly
H&S reports and we carry out regular risk management audits to
identify areas for improvement and to minimise safety risks. Our
H&S manager has been involved in formulating plans and
procedures in the event of an outbreak of the Covid-19 virus in our
premises. As part of our precautionary measures we have introduced
social distancing and hand sanitisers in our factory and those able
to work from home are enabled to do so. As a global business, the
Group is able to tap into the experience of its various
international locations to share best practice and learning
points.
Research and development
The Group continues to invest in research and development and
regularly liaises with university engineering groups with a view to
improving features of its products. This has resulted in
innovations in the products which will benefit the Group in the
medium to long term.
Duties to promote the success of the Company
Section 172 of the Companies Act 2006 requires the directors to
act in a way that they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its
members as a whole, and in doing so have regard (amongst other
matters) to:
- the most likely consequences of any decision in the long term;
- the interest of the Company's employees;
- the need to foster the Company's business relationships with suppliers, customers and others;
- the impact of the Company's operations on the community and the environment;
- the desirability of the Company maintaining a reputation for
high standards of business conduct; and
- the need to act fairly between the members of the Company.
The Board confirms that, during the year, it has had regard to
the matters set out above. Further details as to how the directors
have fulfilled their duties are set out below and in the Governance
Report which in particular, expands on directors' duties and
stakeholder liaison.
Business ethics and human rights
The Board is respectful of the Company's long history, and
considers the long-lasting impact of its decisions. We are
committed to conducting our business ethically and responsibly, and
treating employees, customers, suppliers and shareholders in a
fair, open and honest manner. As a business, we receive audits by
both our independent auditors and by our customers and we look to
source from suppliers who share our values. We encourage our
employees to provide feedback on any issues they are concerned
about and have a whistle-blowing policy that gives our employees
the chance to report anything they believe is not meeting our
required standards.
The Group is similarly committed to conducting our business in a
way that is consistent with universal values on human rights and
complying with the Human Rights Act 1998. The Group gives
appropriate consideration to human rights issues in our approach to
supply chain management, overseas employment policies and
practices. Where appropriate, we support community partnering.
Employees
The quality and commitment of our people has played a major role
in our business success. This has been demonstrated in many ways,
including improvements in customer satisfaction, the development of
our product lines and the flexibility they have shown in adapting
to changing business requirements. Employee performance is aligned
to the achievement of goals set within each subsidiary and is
rewarded accordingly. Employees are encouraged to use their skills
to best effect and are offered training either externally or
internally to achieve this. As a global business, the Group fully
recognises and seeks to harness the benefits of diversity within
its work force. The Group is grateful to its employees for
continuing to come to work in what has been a worrying time for
themselves and their families
Environment
The Group's policy with regard to the environment is to
understand and effectively manage the actual and potential
environmental impact of our activities. Operations are conducted
such that we comply with all legal requirements relating to the
environment in all areas where we carry out our business. The Group
continuously looks for ways to harness energy reduction
(electricity and gas) and water. The Company has installed a 190KW
solar system on its UK premises and is currently seeking permission
from the national grid to extend our installation of solar panels.
The Group is conducting an energy audit of its principal plant and
property with the help of energy consultants to understand ways of
reducing our energy consumption and operating in an environmentally
sustainable manner. During the period of this report the Group has
not incurred any fines or penalties or been investigated for any
breach of environmental regulations.
Social and community matters
We recognise our responsibility to work in partnership with the
communities in which we operate and we encourage active employee
support for their community in particular, in aid of technical
awareness and training. We regularly participate in a number of
education events encouraging interest in engineering in young
people. It is our policy not to provide political donations.
Consolidated income statement for the year ended 31st December
2020 (audited)
2020 2019
GBP'000 GBP'000
Revenue 32,803 33,433
Changes in inventories of finished goods and work
in progress (63) 959
Raw materials and consumables used (17,428) (17,986)
Employee benefits costs (8,408) (8,530)
Depreciation and amortisation expense (1,280) (1,236)
Other expenses (4,277) (4,737)
Other operating income 30 318
--------------------------------------------------- ----------- -----------
Profit from operations 1,377 2,221
Finance expense (191) (477)
Finance income 9 2
--------------------------------------------------- ----------- -----------
Profit before tax 1,195 1,746
Tax expense (341) (397)
--------------------------------------------------- ----------- -----------
Profit for the year 854 1,349
--------------------------------------------------- ----------- -----------
Profit attributable to:
Owners of the parent 823 1,360
Non-controlling interests 31 (11)
--------------------------------------------------- ----------- -----------
854 1,349
--------------------------------------------------- ----------- -----------
Basic and diluted earnings per share 59.31p 93.68p
--------------------------------------------------- ----------- -----------
Consolidated statement of comprehensive income for the year
ended 31st December 2020 (audited)
2020 2019
GBP'000 GBP'000
Profit for the year 854 1,349
Items that will not be reclassified subsequently
to profit or loss
Net pension remeasurement gain on post employment
benefits 66 178
Items that may be reclassified subsequently to
profit or loss
Foreign exchange losses on re-translation of overseas
operations (133) (323)
------------------------------------------------------- -------- --------
Other comprehensive income for the year (67) (145)
Total comprehensive income for the year 787 1,204
------------------------------------------------------- -------- --------
Total comprehensive income attributable to:
Owners of the parent 744 1,231
Non-controlling interests 43 (27)
------------------------------------------------------- -------- --------
787 1,204
------------------------------------------------------- -------- --------
Consolidated balance sheet at 31st December 2020 (audited)
2020 2019
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 7,830 6,824
Intangible assets 37 48
Rights of use assets 487 278
Total non-current assets 8,354 7,150
Current assets
Inventories 8,864 8,573
Trade and other receivables 5,855 5,697
Cash and cash equivalents 1,533 1,679
-------------------------------------------------- -------- --------
Total current assets 16,252 15,949
-------------------------------------------------- -------- --------
Total assets 24,606 23,099
-------------------------------------------------- -------- --------
Liabilities
Current liabilities
Bank overdraft 335 1,016
Trade and other payables 4,744 3,808
Other financial liabilities 2,133 2,163
Corporation tax liability 78 19
-------------------------------------------------- -------- --------
Total current liabilities 7,290 7,006
Non-current liabilities
Financial liabilities 2,075 1,384
Deferred income tax liability 278 360
-------------------------------------------------- -------- --------
Total non-current liabilities 2,353 1,744
-------------------------------------------------- -------- --------
Total liabilities 9,643 8,750
-------------------------------------------------- -------- --------
Total net assets 14,963 14,349
-------------------------------------------------- -------- --------
Share capital 360 360
Capital reserve 257 257
Foreign exchange reserve (151) (6)
Retained earnings 14,800 14,084
-------------------------------------------------- -------- --------
Total equity attributable to the shareholders of
the parent 15,266 14,695
Non-controlling interests (303) (346)
-------------------------------------------------- -------- --------
Total equity 14,963 14,349
-------------------------------------------------- -------- --------
Consolidated cash flow statement for the year ended 31st
December 2020 (audited)
2020 2019
GBP'000 GBP'000
Operating activities
Net profit 854 1,349
Adjustments for:
Depreciation and amortisation 1,280 1,236
Foreign exchange losses (170) (255)
Finance income (9) (2)
Finance expense 191 477
Loss/(gain) on sale of land and buildings, plant,
machinery and motor vehicles 1 (12)
Adjustment in respect of defined benefits scheme 71 93
Income tax expense 341 397
Income taxes paid (168) (451)
---------------------------------------------------- -------- --------
1,537 1,483
---------------------------------------------------- -------- --------
Operating profit before changes in working capital
and provisions 2,391 2,832
(Increase)/decrease in trade and other receivables (356) 1,044
Increase in inventories (291) (701)
Increase/(decrease) in trade and other payables 942 (1,499)
295 (1,156)
---------------------------------------------------- -------- --------
Cash generated from operations 2,686 1,676
Investing activities
Purchases of property, plant, machinery and motor
vehicles and intangible assets (2,057) (1,660)
Sale of land and buildings, plant, machinery and
motor vehicles 13 27
Interest received 4 2
---------------------------------------------------- -------- --------
(2,040) (1,631)
Financing activities
Proceeds from long term borrowings 1,117 728
Repayment of borrowings (419) (459)
Repayment of hire purchase creditors (217) (281)
Repayment of lease liabilities (228) (210)
Bank interest paid (124) (426)
Lease interest paid (38) (33)
Hire purchase interest paid (29) (15)
Dividends paid (173) (167)
---------------------------------------------------- -------- --------
(111) (863)
---------------------------------------------------- -------- --------
Increase/(decrease) in cash and cash equivalents 535 (818)
Cash and cash equivalents, beginning of period 663 1,481
---------------------------------------------------- -------- --------
Cash and cash equivalents, end of period 1,198 663
---------------------------------------------------- -------- --------
Consolidated statement of changes in equity for the year ended
31st December 2020 (audited)
Foreign Non-
Share Capital Exchange Retained Controlling Total
Capital Reserve Reserve Earnings Total Interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1st January
2019 360 257 301 12,713 13,631 (319) 13,312
Comprehensive income
Profit - - - 1,360 1,360 (11) 1,349
Other comprehensive
income
Net pension remeasurement
gain recognised directly
in equity - - - 178 178 - 178
Foreign exchange losses
on re-translation of
overseas subsidiaries
consolidated operations - - (307) - (307) (16) (323)
--------------------------- ---------- ---------- ---------- ----------- -------- ------------- ---------
Total other comprehensive
income - - (307) 178 (129) (16) (145)
Total comprehensive
income - - (307) 1,538 1,231 (27) 1,204
--------------------------- ---------- ---------- ---------- ----------- -------- ------------- ---------
Transactions with owners
Dividends - - - (167) (167) - (167)
--------------------------- ---------- ---------- ---------- ----------- -------- ------------- ---------
Total transactions with
owners - - - (167) (167) - (167)
--------------------------- ---------- ---------- ---------- ----------- -------- ------------- ---------
Balance at 1st January
2020 360 257 (6) 14,084 14,695 (346) 14,349
Comprehensive income
Profit - - - 823 823 31 854
Other comprehensive
income
Net pension remeasurement
gain recognised directly
in equity - - - 66 66 - 66
Foreign exchange losses
on re-translation of
overseas subsidiaries
consolidated operations - - (145) - (145) 12 (133)
--------------------------- ---- ---- -------- ------- -------- ------ --------
Total other comprehensive
income - - (145) 66 (79) 12 (67)
Total comprehensive
income - - (145) 889 744 43 787
--------------------------- ---- ---- -------- ------- -------- ------ --------
Transactions with owners
Dividends - - - (173) (173) - (173)
Total transactions with
owners - - - (173) (173) - (173)
--------------------------- ---- ---- -------- ------- -------- ------ --------
Balance at 31st December
2020 360 257 (151) 14,800 15,266 (303) 14,963
--------------------------- ---- ---- -------- ------- -------- ------ --------
1. EARNINGS PER SHARE AND DIVIDENDS
Both the basic and diluted earnings per share have been
calculated using the net results attributable to shareholders of
Braime Group PLC as the numerator.
The weighted average number of outstanding shares used for basic
earnings per share amounted to 1,440,000 shares (2019 - 1,440,000).
There are no potentially dilutive shares in issue.
Dividends paid 2020 2019
GBP'000 GBP'000
Equity shares
Ordinary shares
Interim of 8.00p (2019 - 8.00p) per share paid
on 5th June 2020 38 38
Interim of 4.00p (2019 - 3.60p) per share paid
on 16th October 2020 19 17
------------------------------------------------ -------- --------
57 55
------------------------------------------------ -------- --------
'A' Ordinary shares
Interim of 8.00p (2019 - 8.00p) per share paid
on 5th June 2020 77 77
Interim of 4.00p (2019 - 3.60p) per share paid
on 16th October 2020 39 35
------------------------------------------------ -------- --------
116 112
------------------------------------------------ -------- --------
Total dividends paid 173 167
------------------------------------------------ -------- --------
An interim dividend of 7.80p per Ordinary and 'A' Ordinary share
will be paid on 25th May 2021.
2. SEGMENTAL INFORMATION
Central Manufacturing Distribution Total
2020 2020 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External - 3,762 29,041 32,803
Inter Company 1,772 3,068 5,159 9,999
--------------------------------- -------- -------------- ------------- --------
Total 1,772 6,830 34,200 42,802
--------------------------------- -------- -------------- ------------- --------
Profit
EBITDA 309 (163) 2,511 2,657
Finance costs (105) (31) (55) (191)
Finance income - 7 2 9
Depreciation and amortisation (592) (28) (660) (1,280)
Tax expense 32 - (373) (341)
(Loss)/profit for the period (356) (215) 1,425 854
--------------------------------- -------- -------------- ------------- --------
Assets
Total assets 5,178 4,200 15,228 24,606
Additions to non current assets 415 54 2,020 2,489
Liabilities
Total liabilities 801 2,025 6,817 9,643
Central Manufacturing Distribution Total
2019 2019 2019 2019
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External - 3,416 30,017 33,433
Inter Company 2,104 3,440 6,224 11,768
--------------------------------- -------- -------------- ------------- --------
Total 2,104 6,856 36,241 45,201
--------------------------------- -------- -------------- ------------- --------
Profit
EBITDA 851 (244) 2,850 3,457
Finance costs (305) (27) (145) (477)
Finance income - - 2 2
Depreciation (607) (18) (611) (1,236)
Tax expense (114) 39 (322) (397)
(Loss)/profit for the period (175) (250) 1,774 1,349
--------------------------------- -------- -------------- ------------- --------
Assets
Total assets 5,529 3,657 13,913 23,099
Additions to non current assets 1,138 76 607 1,821
Liabilities
Total liabilities 852 1,768 6,130 8,750
3. BASIS OF PREPARATION
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards as
adopted by the European Union (IFRSs as adopted by the EU), IFRIC
interpretations and the Companies Act 2006 applicable to companies
reporting under IFRS. The consolidated financial statements have
been prepared under the historical cost convention. The accounting
policies adopted are consistent with those of the annual financial
statements for the year ended 31st December 2020 as described in
those financial statements.
4. ANNUAL GENERAL MEETING
.
The Company is closely monitoring public health guidance and
legislation issued by the UK government in relation to the Covid
pandemic. At the time of writing, the government continues to place
restrictions on mass gatherings and social contact. However, it is
expected shareholder attendance will be possible under the
government's published roadmap and we are therefore proposing to go
ahead with an open meeting. Shareholders intending to attend the
AGM are asked to register their intention as soon as possible by
emailing investor@braime.co.uk .
The health and safety of our colleagues and shareholders is very
important to us. Given the constantly evolving nature of the
situation, should circumstances change such that we consider it is
no longer possible for shareholders to attend the meeting or
limiting the numbers in attendance is required, we will notify
shareholders through the Company's website www.braimegroup.com and,
where appropriate, by a Regulatory News Service announcement.
For the same reason of uncertainty, we strongly encourage all
shareholders to exercise their votes by submitting their proxy by
post in advance of the meeting and shareholders are strongly
encouraged to appoint the Chairman of the meeting as their proxy.
Details of how to do this are set out in the notes accompanying
notes to the Notice. This will ensure that your votes are cast in
accordance with your wishes.
Irrespective of the guidelines in place at the time of the 2021
AGM, we understand that some shareholders may not wish to travel
but may still wish to ask questions of the board. Any questions
should be emailed to investor@braime.co.uk in advance and we will
endeavour to add a synopsis of all questions and answers to our
website shortly after the meeting.
The Annual General Meeting of the members of the company will be
held at the registered office of the company at Hunslet Road,
Leeds, LS10 1JZ on Wednesday 23rd June 2021 at 11.45am. The annual
report and financial statements will be sent to shareholders by
25th May 2021 and will also be available on the company's website (
www.braimegroup.com ) from that date.
5. THE ANNOUNCEMENT
The financial information set out in this announcement does not
constitute statutory accounts as defined by section 434 of the
Company Act 2006. The financial information for the year ended 31st
December 2020 has been extracted from the Group's financial
statements upon which the auditor's opinion is unqualified, does
not include reference to any matters to which they wish to draw
attention by way of emphasis without qualifying their report, and
does not include any statement under section 498 of the Companies
Act 2006. Statutory accounts for the year ended 31st December 2019
have been delivered to the Registrar of Companies, and those for
2020 will be delivered in due course.
6. EVENTS AFTER THE REPORTING PERIOD
There were no events after the balance sheet date that would
require disclosure in accordance with IAS10, "Events after the
reporting period".
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END
FR BUGDSIDDDGBR
(END) Dow Jones Newswires
April 27, 2021 11:29 ET (15:29 GMT)
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