RNS Number:4776I
Brammer PLC
05 September 2006
2006 INTERIM RESULTS
FURTHER REVENUE GROWTH, CONTINUED IMPROVEMENT IN PROFITABILITY AND MARKET SHARE
Brammer plc, the European industrial services group, today announces its results
for the six months ended 30 June 2006.
FINANCIAL SUMMARY
2006 2005
#m #m Change
Total operations - all continuing
Turnover 157.5 145.5 8.2%
Profit before tax on ordinary activities before exceptional
non cash pension curtailment 6.0 5.3 13.2%
Exceptional non cash pension curtailment 2.8 -
Profit before tax 8.8 5.3
Net debt (52.9) (51.5)
Earnings per share pence pence
Basic 12.6 7.6 65.8%
Diluted 12.6 7.6 65.8%
Before exceptional non cash pension curtailment and
related tax charge 8.5 7.6 11.8%
Highlights
* Sales growth targets met and European market leading position
further strengthened with Brammer now represented in over 265 locations in 11
countries
* Overall sales per working day grew 7.2% with the growth rate
accelerating throughout the half representing significant market share gains
* Key account sales grew by 10%. With a high pipeline of new prospects,
an acceleration in the growth rate is expected in the second half
* Trading profit margin improved reflecting increased volumes and cost
control
* Acquisition of Ramaekers BV, a privately owned Belgian business in
June, now gives Brammer a leading position in bearings and mechanical power
transmission in that country
* Cash generated from operating activities increased to #4.3 million
(2005: #3.9 million).
David Dunn, chairman, said:
"Further progress has been made with all elements of our strategy. Sales
growth has met our objective and we have made good progress in strengthening our
capabilities. We continue to search for bolt on opportunities that fit our
strict criteria and that will increase our share of the highly fragmented
European markets in which we operate. We were delighted to welcome Ramaekers to
the Group which now gives us a leading position in bearings and mechanical power
transmission in Belgium.
"Trading since the end of June has been satisfactory and this encourages us to
expect further good progress in the second half.
"The Board has declared an increased interim dividend of 1.8p (2005 1.65p). This
will be paid on the 3rd November 2006 to shareholders on the register at the
close of business on 6th October 2006."
Enquiries: Brammer plc 020 7638 9571 (8.00am - 1.00pm)
0161 902 5599 (1.00pm - 4.30pm)
David Dunn, chairman
Ian Fraser, chief executive
Paul Thwaite, finance director
Issued: Citigate Dewe Rogerson Ltd 020 7638 9571
Martin Jackson
BRAMMER PLC
2006 PRELIMINARY RESULTS
CHAIRMAN'S STATEMENT
Overview
It is pleasing to announce another set of satisfactory results for Brammer which
demonstrate continued progress across a broad front. In the six months to 30
June 2006 turnover increased by 8.2% to #157.5m and profit before tax and
exceptional non cash pension curtailment was #6.0m compared to #5.3m for the
equivalent period in 2005. Basic earnings per share on this basis grew 12% to
8.5p from 7.6p in 2005.
The exceptional non cash pension curtailment of #2.8m has been determined in
accordance with IFRS (IAS 19 "Employee benefits"), and reflects the impact of
the closure of the defined benefit section of the group's UK retirement benefits
scheme to future accrual with effect from 1 March 2006. This, together with
actuarial gains, has reduced the pension deficit to #21.7m (December 2005:
#33.7m)
Trading
The increase in sales was spread across all geographic locations with the
exception of France which was unchanged having been affected by a slower period
in the important automotive business sector. Growth in all other territories was
encouraging and Brammer continues to win market share especially in its key
corporate accounts business.
Markets remain highly competitive but we have been able to capitalise upon our
unique European footprint to leverage both sales and purchasing opportunities to
our advantage. As we have previously indicated, gross margins remain under
pressure. However, as volumes have increased, improved purchasing and tight
control of sales, distribution, and administration costs are reflected in an
overall improvement in the trading profit margin (before exceptional non cash
pension curtailment) which increased to 4.6%.
Cash flow during the period, which includes the initial payment of #1.7m for the
acquisition of Ramaekers, was also satisfactory and resulted in closing net debt
of #52.9m.
Strategy
Further progress has been made with all elements of the strategy that we have
previously outlined. Sales growth has met our objective and we have made good
progress in strengthening our capabilities through recruitment and training, and
in our systems development. Importantly the pipeline of new corporate account
prospects remains high and our ability to implement and service our key customer
programmes continues to improve. Our systems and people skills are critical to
successful growth and, following an increase in investment, we are confident of
our ability to advance further in these areas.
In our last two reports to shareholders we have referred to the opportunities to
acquire quality bolt on acquisitions and increase our share of the highly
fragmented European markets in which we operate. We were therefore delighted to
announce the acquisition of Ramaekers BV, a privately owned Belgian business in
June. In 2005 Ramaekers had sales of Euro9.8m with EBIT of Euro0.8m. Together with
Brammer's existing small presence in Belgium this acquisition gives us a leading
position in bearings and mechanical power transmission in that country. As a
high quality, profitable business, Ramaekers fits precisely into Brammer's
acquisition criteria and we welcome Rudi Ramaekers and his team to our
organisation.
We will continue to search for further quality businesses in our chosen
territories to increase the scope and range of Brammer against a very strict set
of acquisition measures. We expect to be able to fund these acquisition
opportunities from within our existing resources.
Dividend
The interim dividend is 1.8p an increase of 9.1% over last year. This will be
paid on 3 November to shareholders on the register at the close of business on 6
October 2006.
Outlook
The outlook for the remainder of the year is positive and we expect to be able
to maintain our progress during this period.
David Dunn
5 September 2006
CHIEF EXECUTIVE'S REVIEW
Overview
In the first half of 2006 we further strengthened Brammer's market leading
position in Europe. We concentrated on the implementation of our clear and
simple strategy and continued to progress the concept of "One Brammer" - a
business which can offer consistent products and services in each of over 265
locations in 11 countries. Our ultimate aim is to deliver to our customers a
consistent quality of service across the entire bearings, power transmission and
fluid power product range anywhere in Europe.
Operational Review
Brammer is the leading European supplier of technical components and related
services to the maintenance, repair and operations ("MRO") markets. In the
first half of 2006 revenues increased by 8.2% to #157.5 million, whilst
operating profit before exceptional items and interest increased by 11% to #7.3
million. Profits improved both on the continent and in the UK. Operating margin
improved to 4.6%. Cash generated from operating activities was #4.3 million
(#3.9 million in the half year to June 2005).
At the end of the first half, total headcount in Brammer (on a full-time
equivalent basis and adjusted for acquisitions) was 1,933 compared to 1,866 at
the end of last year. Revenues per head increased by 7.2% to #81,500 for the
half year compared with the second half of last year, indicating continuing
improvement in productivity.
In the UK, revenues on a sales per working day basis ("SPWD") increased by 2.5%,
with a slight decline in the first quarter followed by strong growth of 5.6% in
the second quarter, as a significant number of new contracts came on stream. We
increased sales through Insites and part-time insites (those locations where we
have several regular clinics with the customer's staff each week) by 17.3%.
Customer locations where we have contracted to provide either full or part-time
regular on site support, or where we provide a consigned stock solution to the
site, grew by 13.9%. Several new contracts were won with customers such as
BNFL, British Nuclear Group, Tarmac, Cemex, Associated British Foods and IESA.
In Germany SPWD grew by 7.3%, costs were tightly controlled and operating profit
increased by 14.4% compared with last year. Excellent progress was made on key
accounts, with revenues in this segment up 21.8%. New contracts won included
Visteon with Hagemeyer, M+W Zander, Rexam, Benteler and Norske Skog. Headcount
remained steady at 395 and productivity as measured by sales per head increased
by 6.7% compared with the first half of 2005.
In France SPWD were flat compared with the first half of 2005. Declines in the
automotive sector, which represents over 20% of our revenues, could not be
offset by growth in industrial key accounts and base MRO business. Despite
tight control of costs, operating profit declined by 5.9% to #1.1 million. New
contracts were won with DCN, Timken, Jean Caby and Cofatech.
In Spain SPWD grew 4.8%. We continued to increase our sales to the MRO market
(up 6.7%) reducing further our exposure to the more cyclical original equipment
manufacturers ("OEM") marketplace (up 5.1%). As stated last year, the
considerable SDA investment in both marketing and our branch network has now
produced a positive return with operating profit up 10.7%. Key account sales
grew by 11.1%, but still represent only 18.2% of Spanish revenues. We won new
contracts with Altadis, Delphi and Fantini Sciantini. New product introductions
contributed to growth with fluid power up 80% and gearboxes and motors up 31.2%.
Within Benelux, the Netherlands SPWD were up 19.6%, with good growth in all
areas of the business. Tight cost control helped operating profit grow by 28.8%.
In Belgium we are delighted to welcome Rudi Ramaekers and his team. The
combination of Ramaekers and Brammer Belgium will produce the market leader in
the provision of bearings and power transmission products. In our Developing
Businesses, overall SPWD increased by 58.8%, and total revenues were #10.1
million. In Austria, the integration of two companies under one management team
has been achieved and significant operating improvements have resulted, with
SPWD growth of 10.3%. In the Czech Republic our acquisition of MHBH is on plan.
In Hungary, considerable progress has been made with new product introductions
and key accounts, resulting in SPWD growth of 83.8%. In our start-up in Italy we
continued to develop our relationship with key accounts such as Eaton
Corporation, GKN and Smurfit.
Strategy
Growth
* Overall SPWD growth was 7.2%, and accelerated through the half year,
representing significant market share gains.
* Key account sales grew by 10%. We expect the key account growth rate
to accelerate in the second half.
* We continued to evaluate bolt-on acquisition opportunities in each of
our businesses on the continent.
Costs/Synergies
* We continued to develop closer relationships with strategic suppliers,
and increased concentration of spend with those suppliers, leading to both cost
benefits and greater supplier marketing support in the field.
* The development of the Brammer Brand continues. All our businesses are
now either using the 'linked Brand name' or have moved directly to the Brammer
Brand. This development is on track for a complete make-over of the Group by 1
January 2007.
Capability
* With more than 2000 people in over 265 locations in 11 countries our
continuing challenge is to create learning which is accessible and meaningful to
all. We have revised our universally available Foundation Programme, an
e-learning programme developed to inform all of our staff about Brammer and the
products we provide to our customers. This is now available in seven languages
and over 80% of our people have completed this programme across the Group.
* We have completed our newest programme in our Distributed Learning '
Brammer University' which will provide a "commercial complement" to the
Foundation Programme. The aim of this programme - "The Business of Brammer" -
is to enhance the commercial skills of our people - to help them to understand
the basics of the business. It includes modules on selling our products and
services, making our deals profitable, keeping our costs under control and the
fundamentals of business finance.
The future
We have a strong presence within Europe upon which to build and anticipate
further gains in market share in a fragmented market place. The trend for
customers to seek a single European source of supply for our chosen product
range is increasing, and we continue investing to take advantage of this trend.
The satisfactory cash flow generated by the business should continue for the
foreseeable future. We aim to match our organic growth with an equal volume of
acquisitive growth and believe that we can achieve this level of growth from
internally generated cash flow.
Ian Fraser
5 September 2006
Brammer CONSOLIDATED INTERIM INCOME STATEMENT
Six months to Six months to Year to
30 June 2006 30 June 2005 31 Dec 2005
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
All continuing operations
Revenue (note 2) 157,466 145,528 287,390
Cost of sales (109,547) (100,903) (198,588)
Gross profit 47,919 44,625 88,802
Distribution costs (40,605) (38,033) (76,260)
Exceptional non cash pension curtailment (note 3) 2,811 - -
Total distribution costs (37,794) (38,033) (76,260)
Operating profit (note 2) 10,125 6,592 12,542
Finance expense (1,369) (1,422) (2,683)
Finance income 13 96 225
Profit before tax 8,769 5,266 10,084
Taxation (2,720) (1,640) (2,535)
Profit for the period attributable to equity shareholders 6,049 3,626 7,549
Earnings per share - total (note 4)
Basic 12.6p 7.6p 15.8p
Diluted 12.6p 7.6p 15.7p
Earnings per share - on profit before exceptional non cash
pension curtailment and related tax charge
Basic 8.5p 7.6p 15.8p
Diluted 8.5p 7.6p 15.7p
The notes on pages 12 to 19 form part of these accounts.
Brammer CONSOLIDATED INTERIM STATEMENT OF RECOGNISED INCOME AND EXPENSE
Six months to Six months to Year to
30 June 2006 30 June 2005 31 Dec 2005
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Profit for the period 6,049 3,626 7,549
Net exchange differences on translating foreign operations 104 (365) (663)
Actuarial gains/(losses) 8,858 1,520 (1,595)
Tax on actuarial gains/losses (2,682) (456) 508
Net gains/(losses) not recognised in income statement 6,280 699 (1,750)
Total recognised income and expense 12,329 4,325 5,799
The notes on pages 12 to 19 form part of these accounts.
Brammer CONSOLIDATED INTERIM BALANCE SHEET
30 June 2006 30 June 2005 31 Dec 2005
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Assets
Non-current assets
Goodwill 43,673 35,890 39,009
Intangible assets 3,683 1,301 2,559
Property, plant and equipment 10,984 10,072 9,944
Deferred tax assets 8,865 10,506 12,480
67,205 57,769 63,992
Current assets
Inventories 44,773 41,811 44,341
Trade and other receivables 60,541 59,150 51,175
Cash and cash equivalents 9,956 8,171 9,445
115,270 109,132 104,961
Liabilities
Current liabilities
Financial liabilities - borrowings (12,287) (10,879) (10,991)
Trade and other payables (68,173) (66,566) (61,639)
Deferred consideration (358) (1,724) (375)
Current tax liabilities (3,727) (3,318) (2,965)
(84,545) (82,487) (75,970)
Net current assets 30,725 26,645 28,991
Non-current liabilities
Financial liabilities - borrowings (50,559) (48,760) (49,106)
Deferred tax liabilities (5,002) (4,114) (4,863)
Provisions (2,290) (646) (1,979)
Deferred consideration (6,362) (163) (2,241)
Retirement benefit obligations (21,683) (30,809) (33,726)
(85,896) (84,492) (91,915)
Net assets / ( liabilities) 12,034 (78) 1,068
Shareholders' equity
Share capital 9,573 9,573 9,573
Share premium 3,552 3,552 3,552
Translation reserve (437) (243) (541)
Retained earnings (654) (12,960) (11,516)
Total equity 12,034 (78) 1,068
The notes on pages 12 to 19 form part of these accounts.
Brammer CONSOLIDATED INTERIM CASH FLOW STATEMENT
Six months to Six months to Year to
30 June 2006 30 June 2005 31 Dec 2005
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Retained profit 6,049 3,626 7,549
Tax charge 2,720 1,640 2,535
Depreciation of tangible and intangible assets 1,390 1,210 2,437
Share options - value of employee services 428 248 623
(Gain)/loss on sale of property, plant and equipment (29) - 7
Net financing expense 1,356 1,326 2,458
Movement in working capital (4,474) (4,078) 135
Pension obligations (3,185) (60) (258)
Cash generated from operating activities 4,255 3,912 15,486
Interest received 22 97 208
Interest paid (1,396) (950) (2,945)
Tax paid (1,149) (594) (2,165)
Net cash generated from operating activities 1,732 2,465 10,584
Cash flows from investing activities
Proceeds from disposal of subsidiaries (net of cash disposed 1,000 3,000 4,500
of)
Acquisition of subsidiaries (net of cash acquired) (1,947) - (1,986)
Deferred consideration paid on prior acquisitions (154) (948) (2,674)
Proceeds from sale of property, plant and equipment 79 17 225
Purchase of property, plant and equipment (1,455) (833) (1,975)
Purchase of software (709) (67) (987)
Net cash (used in) / generated from investing activities (3,186) 1,169 (2,897)
Cash flows from financing activities
New loans taken out/(repayment) of loans 2,051 (2,199) (4,104)
Finance lease principal payments (16) (53) (73)
Dividends paid to shareholders - - (2,323)
Net cash generated from/(used in) financing activities 2,035 (2,252) (6,500)
Net increase in cash and cash equivalents 581 1,382 1,187
Exchange gains and losses on cash and cash equivalents 37 (1,015) (257)
Cash and cash equivalents at beginning of period 8,734 7,804 7,804
Net cash at end of period 9,352 8,171 8,734
Cash and cash equivalents 9,956 8,171 9,445
Overdrafts (604) - (711)
Net cash at end of period 9,352 8,171 8,734
The notes on pages 12 to 19 form part of these accounts.
Brammer ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these interim
financial statements are included in the financial statements for the year ended
31 December 2005. These policies have been consistently applied to all the
periods presented, unless otherwise stated.
Basis of preparation
The interim financial statements of Brammer PLC for the half year period ended
30 June 2006 are unaudited and do not comprise statutory accounts within the
meaning of Section 240 of the Companies Act 1985.
This interim financial information for the half year ended 30 June 2006 has been
prepared in accordance with IAS 34, "Interim financial reporting". The interim
condensed financial report should be read in conjunction with the annual
financial statements for the year ended 31 December 2005.
The financial statements have been prepared under the historical cost
convention.
The group's stated accounting policies remain unchanged.
Brammer NOTES TO THE ACCOUNTS
1 COMPARATIVE RESULTS
Comparative figures for the year ended 31 December 2005 are taken from the
company's statutory accounts which have been delivered to the Registrar of
Companies with an unqualified audit report. Copies of the 2005 annual report and
the 2005 interim report are available on the company's web site
(www.brammer.biz).
2 SEGMENTAL ANALYSIS
Continuing operations
Continuing operations represent the Brammer distribution business which is a
separately identifiable segment. The group is primarily controlled on a country
by country basis in line with legal structure of the group. Segment assets
include property, plant and equipment, intangible assets, inventories, and trade
and other receivables. Segment liabilities comprise trade and other payables,
and provisions. All inter-segmental trading is at an arms-length basis.
UK France Germany Spain Benelux Other Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Six months ended 30 June
2006
Revenue
Sales to external customers 54,123 27,279 41,835 14,953 12,170 7,106 157,466
Inter company sales 120 132 556 174 3,130 (4,112) -
Total 54,243 27,411 42,391 15,127 15,300 2,994 157,466
Operating profit before
exceptional non cash
pension curtailment 893 1,100 2,859 1,462 1,145 (145) 7,314
Exceptional non cash
pension curtailment 2,811 2,811
Total operating profit 893 1,100 2,859 1,462 1,145 2,666 10,125
Finance expense (1,369)
Finance income 13
Profit before tax 8,769
Tax (2,720)
Profit for the year 6,049
Segment assets 36,398 24,012 22,544 14,118 15,213 7,696 119,981
Goodwill - 2,229 27,998 1,295 8,922 3,229 43,673
36,398 26,241 50,542 15,413 24,135 10,925 163,654
Cash 9,956
Deferred tax 8,865
Total assets 182,475
Segment liabilities (23,006) (15,005) (8,680) (11,052) (7,335) (3,655) (68,733)
Current tax (3,727)
Deferred tax (5,002)
Dividends (1,730)
Deferred consideration (6,720)
Financial liabilities (62,846)
Retirement benefit (21,683)
obligations
Total liabilities (170,441)
Net assets 12,034
Other segment items
Capital expenditure 589 65 68 147 128 1,167 2,164
Depreciation and (559) (109) (179) (99) (107) (337) (1,390)
amortisation
UK France Germany Spain Benelux Other Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Six months ended 30 June
2005
Revenue
Sales to external customers 52,285 27,161 38,501 13,981 10,292 3,308 145,528
Inter company sales 188 162 594 184 799 (1,927) -
Total 52,473 27,323 39,095 14,165 11,091 1,381 145,528
Operating profit 839 1,169 2,500 1,321 865 (102) 6,592
Finance expense (1,422)
Finance income 96
Profit before tax 5,266
Tax (1,640)
Profit for the year 3,626
Segment assets 35,626 24,693 21,829 14,767 11,525 3,894 112,334
Goodwill - 2,177 27,357 1,581 3,846 929 35,890
35,626 26,870 49,186 16,348 15,371 4,823 148,224
Cash 8,171
Deferred tax 10,506
Total assets 166,901
Segment liabilities (24,608) (13,021) (10,005) (10,133) (4,637) (3,228) (65,632)
Current tax (3,318)
Deferred tax (4,114)
Dividends (1,580)
Deferred consideration (1,887)
Financial liabilities (59,639)
Retirement benefit (30,809)
obligations
Total liabilities (166,979)
Net liabilities (78)
Other segment items
Capital expenditure 416 70 62 183 36 133 900
Depreciation and (591) (145) (123) (96) (71) (184) (1,210)
amortisation
3 EXCEPTIONAL NON CASH PENSION CURTAILMENT
The exceptional non cash pension curtailment comprises the curtailment gain of
#2,811,000 which reflects the impact of closing the defined benefit section of
the Brammer Services Limited Retirement Benefits Scheme to future accrual. As
stated in the 2005 annual report this defined benefit section was closed to
future accrual with effect from 1 March 2006.
This curtailment gain has been calculated by an independent actuary, KPMG LLP.
4 EARNINGS PER SHARE
Half year 2006
Earnings per share
Earnings Basic Diluted
#'000
Weighted average number of shares in issue ('000) 47,865 48,182
Total - all continuing operations
Profit for the period 6,049 12.6p 12.6p
Exceptional non cash pension curtailment (2,811)
Tax on exceptional non cash pension curtailment 843
Earnings before exceptional non cash pension curtailment and related tax 4,081 8.5p 8.5p
Half year 2005
Earnings per share
Earnings Basic Diluted
#'000
Weighted average number of shares in issue ('000) 47,865 47,985
Total - all continuing operations
Profit for the period 3,626 7.6p 7.6p
Earnings 3,626 7.6p 7.6p
Full year 2005
Earnings per share
Earnings Basic Diluted
#'000
Weighted average number of shares in issue ('000) 47,865 48,083
Total - all continuing operations
Profit for the financial year 7,549 15.8p 15.7p
Earnings 7,549 15.8p 15.7p
5 PENSIONS
The valuations used for IAS 19 disclosures have been based on the most recent actuarial valuation at 1
January 2003 updated by KPMG LLP to take account of the requirements of IAS 19 in order to assess the
liabilities of each of the schemes at 30 June 2006. Assets are stated at their market value at 30 June
2006.
The financial assumptions used to calculate the liabilities
under IAS 19 are
UK
Six months to Six months to Year to
30 June 2006 30 June 2005 31 Dec
2005
Inflation rate 2.90% 2.80% 2.90%
Rate of increase in salaries * 2.90% 4.30% 4.15%
Rate of increase of pensions in payment 2.90% 2.80% 2.90%
Rate of increase for deferred pensioners 2.90% 2.80% 2.90%
Discount rate 5.40% 5.30% 4.85%
* limited to inflation increase only following curtailment.
Netherlands
Six months to Six months to Year to
30 June 2006 30 June 2005 31 Dec
2005
Inflation rate 2.00% 2.00% 2.00%
Rate of increase in salaries 3.00% 3.00% 3.00%
Rate of increase of pensions in payment 2.00% 2.00% 2.00%
Rate of increase for deferred pensioners 2.00% 2.00% 2.00%
Discount rate 4.80% 4.75% 4.00%
The amounts recognised in the balance sheet are determined as
follows:
30 June 2006 30 June 2005 31 Dec 2005
#m #m #m
Present value of defined benefit obligations 92.1 90.6 103.5
Fair value of plan assets (70.4) (59.8) (69.8)
Net liability recognised in the balance sheet 21.7 30.8 33.7
The amounts recognised in the income statement are as follows
Six months to Six months to Year to
30 June 2006 30 June 2005 31 Dec
2005
#m #m #m
Current service cost 0.4 0.9 1.6
Interest cost 2.4 2.3 4.7
Expected return on plan assets (2.2) (2.0) (4.1)
On-going pension expense included within distribution costs 0.6 1.2 2.2
Curtailment gain shown as exceptional non cash pension (2.8) - -
curtailment
Total pension (income)/expense (2.2) 1.2 2.2
Analysis of the movement in the balance sheet net liability
Six months to Six months to Year to
30 June 2006 30 June 2005 31 Dec
2005
#m #m #m
Opening 33.7 32.4 32.4
Exchange adjustments - (0.1) (0.1)
On-going expense as above 0.6 1.2 2.2
Employer contributions (1.0) (1.2) (2.4)
Actuarial (gain)/loss recognised in the 'SORIE' (8.8) (1.5) 1.6
Curtailment gain as above (2.8) - -
Closing 21.7 30.8 33.7
The on-going pension expense has been included in distribution costs. The actual return on plan assets was
#0.2m (2005: #4.1m)
6 CLOSING NET DEBT
At 30 June 2006 At 30 June At 31 Dec
2005 2005
#'000 #'000 #'000
Borrowings - current (12,287) (10,879) (10,991)
Borrowings - non-current (50,559) (48,760) (49,106)
Cash and cash equivalents 9,956 8,171 9,445
Closing net debt (52,890) (51,468) (50,652)
Reconciliation of net cash flow to movement in net debt
Six months to Six months to Year to
30 June 2006 30 June 2005 31 Dec
2005
#'000 #'000 #'000
Net increase in cash 581 1,382 1,187
Debt and leases (2,035) 2,252 4,177
(1,454) 3,634 5,364
Loans acquired (509) - (310)
Exchange (275) 1,939 1,335
Net cash movement (2,238) 5,573 6,389
Opening net debt (50,652) (57,041) (57,041)
Closing net debt (52,890) (51,468) (50,652)
7 CHANGES IN SHAREHOLDERS' EQUITY
Share Share Treasury Translation Retained
capital premium shares reserve earnings Total
#'000 #'000 #'000 #'000 #'000 #'000
For the period ended 30 June 2006
At 1 January 9,573 3,552 (958) (541) (10,558) 1,068
Profit for the year attributable
to equity shareholders
- - - - 6,049 6,049
Unrealised exchange movement - - - 104 - 104
Transfer on vesting of own shares - - 443 - (443) -
Tax on own shares vesting - - - - (179) (179)
Share options - Value of employee - - - - 428 428
services
Tax on share options - - - - 118 118
Dividends - - - - (1,730) (1,730)
Actuarial gains on pensions - - - - 8,858 8,858
schemes
Tax on actuarial gains on pensions - - - - (2,682) (2,682)
schemes
Movement in period - - 443 104 10,419 10,966
At 30 June 9,573 3,552 (515) (437) (139) 12,034
For the period ended 30 June 2005
At 1 January 9,573 3,552 (958) 122 (15,360) (3,071)
Profit for the year attributable
to equity shareholders
- - - - 3,626 3,626
Unrealised exchange movement - - - (365) - (365)
Share options - Value of employee - - - - 248 248
services
Dividends - - - - (1,580) (1,580)
Actuarial gains on pensions - - - - 1,520 1,520
schemes
Tax on actuarial gains on pensions - - - - (456) (456)
schemes
Movement in period - - - (365) 3,358 2,993
At 30 June 9,573 3,552 (958) (243) (12,002) (78)
For the year ended 31 December
2005
At 1 January 9,573 3,552 (958) 122 (15,360) (3,071)
Profit for the year attributable
to equity shareholders
- - - - 7,549 7,549
Unrealised exchange movement - - - (663) - (663)
Share options - Value of employee - - - - 623 623
services
Tax on share options - - - - 40 40
Dividends - - - - (2,323) (2,323)
Actuarial losses on pensions - - - - (1,595) (1,595)
schemes
Tax on actuarial losses on - - - - 508 508
pensions schemes
Movement in period - - - (663) 4,802 4,139
At 31 December 9,573 3,552 (958) (541) (10,558) 1,068
Retained earnings as disclosed in the Balance Sheet page 10 represent the
retained earnings and treasury share balances above.
8 ACQUISITIONS
The group purchased 51% of Aandrijvingen Ramaekers NV on 20 June 2006 for a
consideration of #1.7 million in cash. The second stage will be the purchase, by
2012 of the remaining 49% for a consideration in the range #1.7 million to #4.1
million.
The acquisition has been accounted for as a single transaction as, under the
terms of the sale and purchase agreement, the group is entitled to the full
economic benefits associated with 100% ownership of the business.
As the date of acquisition was just prior to the half year end no amounts have
been included in the income statement in respect of the acquired business, as
they are not considered to be material in relation to the group as a whole, and
the assets acquired are included at their carrying value because provisional
fair values have not yet been determined.
The residual excess over the net assets acquired is recognised as goodwill in
the financial statements.
Carrying
values pre
acquisition
#'000
Property, plant and equipment 735
Inventories 1,114
Receivables 1,944
Payables (2,068)
Taxation - current (148)
Cash and cash equivalents 164
Loans (509)
Total 1,232
Net assets acquired 1,232
Goodwill 4,871
Maximum consideration to be wholly satisfied in cash 6,103
The outflow of cash and cash equivalents on the acquisition of Ramaekers is
calculated as follows:
#'000
Cash consideration 1,728
Expenses and related costs 204
Cash acquired (164)
Total 1,768
The results of operations for the group, as if the above acquisition had been
made at the beginning of the year are as follows:
#'000
Revenue 161,229
Profit after tax 6,038
This information is not necessarily indicative of the results of operations that
would have occurred had the purchase been made at the beginning of the period
presented or the future results of the combined operations.
On 29 May 2006 the group acquired the net assets and trading business of KS
Csapagy Kft., a business based in Hungary, for Euro201,000 and immediately merged
this business into the existing Brammer operation in Hungary.
A further review of the fair value adjustments in respect of the acquisition of
MHBH has been carried out during the first half of the year. As a result of this
review adjustments have been made to reclassify from goodwill the separately
identifiable intangible assets which amounted to #667,000 together with a
related deferred tax liability of #160,000. An amortisation charge of #86,000 in
respect of these intangible assets has been reflected in the income statement
for the half year.
A final review of the fair value adjustments will be undertaken and any further
changes will be reflected in the 2006 annual report.
9 BASIS OF ACCOUNTING
The interim financial statements have been prepared on the basis of the
accounting policies set out above. The interim financial statements were
approved on 5 September 2006 by a duly appointed and authorised committee of the
board and are not audited by the auditors.
10 INTERIM ANNOUNCEMENT
A copy of the interim announcement is available for inspection at the registered
office of the company, Claverton Court, Claverton Road, Wythenshawe, Manchester,
M23 9NE and the offices of Citigate Dewe Rogerson Ltd, 3 London Wall Buildings,
London Wall, London EC2M 5SY, and will be posted to shareholders.
11 INTERIM DIVIDEND
Relevant dates concerning the payment of the interim dividend are
Record date 6 October 2006
Payment date 3 November 2006
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BIGDCRSGGGLS
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