TIDMBRAM
RNS Number : 8057L
Brammer PLC
05 August 2011
2011 INTERIM RESULTS
STRATEGY CONTINUES TO DRIVE MARKET SHARE GAINS
Brammer plc, the leading pan-European added value technical
distributor, today announces its results for the six months ended
30 June 2011.
FINANCIAL SUMMARY
6 months
6 months to to
30 June 2011 30 June 2010 Change
GBPm GBPm
Revenue 275.2 230.0 +19.7%
============== ==============
Operating profit (pre
amortisation) 15.4 11.0 +40%
-------------- --------------
Profit before tax (pre
amortisation) 14.3 9.7 +47%
Amortisation of acquired intangibles (0.6) (0.7)
Profit before tax 13.7 9.0 +52%
============== ==============
Net debt (40.6) (40.2)
Earnings per share pence pence
Basic - before amortisation 10.0 6.4 +56%
Basic 9.6 5.9
Diluted 9.6 5.9
Dividend per share 2.70 2.10 +28.6%
Highlights
-- Overall revenue up by 19.7% driven by organic growth. Sales
in constant currency up 18.8%, with all countries showing an
improving sales trend.
-- Key Accounts sales growth of 24.2% and Insite sales growth of
28.4%, at constant currency, enabled continued market share growth.
Key Accounts now represent 38.3% of total revenues.
-- Six new pan-European contracts and a net 22 new Insites were
gained, and the pipeline remains strong.
-- Base business (non Key Account) revenues grew by 15.6% in
constant currency, driven by cross-selling initiatives.
-- Operating profit (pre amortisation) increased by 40% to
GBP15.4 million (2010: GBP11.0 million).
-- Operating margins (operating profit pre amortisation)
improved from 4.8% to 5.6% whilst absorbing substantially increased
charges totalling GBP3.2 million in respect of long-term incentive
plans and bonus accruals.
-- Profit before tax (pre amortisation) up 47% to GBP14.3
million (2010: GBP9.7 million).
-- Net debt increased by GBP3.9 million to GBP40.6 million (2010
year end: GBP36.7 million) of which GBP2.2 million increase was the
adverse currency impact.
-- Inventory turns improved from 4.8 (June 2010) to 5.2 (June
2011).
-- Banking facilities renewed; the new facility is for EUR100.0
million (GBP90.3 million at 30 June closing exchange rates) with a
five year term commencing 11 July 2011.
-- EPS (before amortisation) improved by 56% to 10.0p (2010:
6.4p).
-- Interim dividend increased by 28.6% to 2.70p per share (2010:
2.10p).
David Dunn, Chairman, said:
"Brammer is the leading European supplier of technical
components and related services to the MRO market and with only a
small market share there is the opportunity for considerable
further growth. Our customer proposition is unique and delivers
real value to our customers as well as shareholders. We are
strongly cash generative and have a healthy balance sheet.
Looking ahead, we are pleased to report a good start to the
second half of the year and the group is well positioned for
continued good progress at a time when the comparators from the
second half of last year will be increasingly challenging. We are
nonetheless mindful of economic uncertainties which prevail across
Europe."
Enquiries: Brammer plc 020 7638 9571 (8.00am - 1.00pm)
0161 902 5572 (1.00pm - 4.30pm)
David Dunn, chairman
Ian Fraser, chief executive
Paul Thwaite, finance
director
Citigate Dewe Rogerson
Issued: Ltd 020 7638 9571
Toby Mountford
Kate Lehane
BRAMMER PLC
2011 INTERIM RESULTS
CHAIRMAN'S STATEMENT
Summary
I am delighted to report that trading for Brammer in the first
six months of 2011 has been excellent. We indicated in the full
year results for 2010 that, as we entered 2011, the growth momentum
in the business was encouraging. This has certainly continued in
the period to 30 June driven by improvement in our markets and
further market share gains. I believe these results again vindicate
the assiduous pursuit of our tried and tested strategy and the
excellence of our management team.
Trading Results
For the six months to 30 June 2011 sales were GBP275.2 million
which represents an increase of 19.7% over the previous year. On a
like for like basis sales per working day were up by 18.1%. All of
the key growth drivers contributed to this growth. Key Accounts
grew by 24.2%, with six new accounts signed in the period and the
prospect for further gains remains excellent. There was further
growth in Insites and new products, and importantly, every
geographic territory in which Brammer operates reported double
digit sales growth.
Gross profit margins at 30.2% slightly improved on the previous
year, but have generally remained stable notwithstanding product
mix changes. Sales, distribution, and administrative costs
increased by 16.5% to GBP68.4 million. This increase included the
cost of the return to full time employment of certain employees,
particularly in Germany, the recruitment of additional Key Account
and management personnel in anticipation of further growth, and the
accrual of charges relating to the group's long-term incentive
plans (the non cash equity-settled charge and associated national
insurance charge) reflecting management's expectation that shares
awarded under these plans will vest at the end of this financial
year. This latter charge which amounts to GBP1.7 million in these
results relates to plan awards made since 2009. No such charges
were recognised in the past two years as performance targets were
not achieved during the recession and its immediate aftermath.
The outcome of the above is a 40% increase in operating profit
to GBP15.4 million. Operating margins (operating profit before
amortisation) improved from 4.8% to 5.6% in the period. Pre-tax
profits (before amortisation) increased by 47% to GBP14.3 million
with basic earnings per share before amortisation of acquired
intangibles at 10.0 pence per share up 56%.
Net debt
Net debt at GBP40.6 million is broadly similar to a year ago but
GBP3.9 million higher than at 31 December 2010. This increase was
largely due to the adverse currency exchange movement but also
included some working capital increases associated with the level
of growth in the business. Importantly inventory turns continue to
improve.
For some years the group has had syndicated term bank facilities
in place. At December 2010 these provided a total borrowing
capacity of EUR120.0 million. These arrangements were due to expire
in February 2012. I am pleased to report that during July the group
has signed new banking facilities for a further five years which
will provide up to EUR100.0 million (GBP90.3 million) of debt
finance. This secures the necessary funding for Brammer for the
future on acceptable and reasonable terms, and the company is
pleased that the arrangements are in place well ahead of the 2012
expiry date.
Strategy
The group's strategy remains unchanged. We believe it has been a
success and, given the scope still available to develop the
business, it continues to be appropriate to our current and future
growth ambitions.
Dividend
The Board proposes to increase the interim dividend by 28.6% to
2.70 pence per share. This reflects the strong growth in earnings
during the period and the Board's confidence in Brammer's
prospects.
Prospects
Brammer is the leading European supplier of technical components
and related services to the MRO market and with only a small market
share there is the opportunity for considerable further growth. Our
customer proposition is unique and delivers real value to our
customers as well as shareholders. We are strongly cash generative
and have a healthy balance sheet.
Looking ahead, we are pleased to report a good start to the
second half of the year and the group is well positioned for
continued good progress at a time when the comparators from the
second half of last year will be increasingly challenging. We are
nonetheless mindful of economic uncertainties which prevail across
Europe.
David Dunn
5 August 2011
CHIEF EXECUTIVE'S REVIEW
Overview
In the first half of 2011 we saw a continuation of the high
level of growth and market share gains which we enjoyed throughout
2010. Our decision to maintain investment in our growth drivers
throughout the caliginous days of 2009 served us well. In the first
half of 2011, once again, our strategy remained unchanged; we
continued to focus on our four growth drivers, and achieved a year
on year organic growth rate in sales per working day at constant
currency ("SPWD") of 18.1%, and a reported overall growth of close
to 20%. We believe we have continued to gain market share in most
territories throughout this period.
Operational Review
Brammer is the leading European supplier of technical components
and related services to the MRO markets. In the six months to 30
June 2011, revenue increased by 19.7% to GBP275.2 million (2010:
GBP230.0 million), gross margin was slightly up at 30.2%, whilst
operating profit before amortisation increased by 40% to GBP15.4
million (2010: GBP11.0 million). Operating profit excluding the
accrual of charges relating to the group's long term incentive
plans (the non cash equity-settled charge and associated national
insurance charge totalling GBP1.7 million - 2010: GBPnil) increased
by 55%. Earnings per share (before amortisation) increased by 56%
to 10.0 pence per share (2010: 6.4 pence per share). Cash generated
from operations before outflows relating to exceptional items was
GBP5.6 million (2010: GBP5.7 million), driven significantly by an
improvement in inventory days (from 76 days a year ago to 70
days).
Operating margin (operating profit before amortisation)
increased from 4.8% to 5.6% and revenue per head was GBP111,000
(2010: GBP101,000). Excluding the GBP1.7 million charge relating to
the long-term incentive plans, operating margin was 6.2%.
Summary trading
performance by segment at
2011 constant currency
rates (EUR1.20 : GBP1)
Organic
Operating SPWD**
External Revenue Profit* Growth
2011 2010 2011 2010 2011 2010
GBPm GBPm GBPm GBPm % %
UK 79.6 68.8 4.2 2.8 16.5% 5.8%
Germany 58.9 48.0 3.6 2.5 21.9% 4.3%
France 42.6 36.4 1.9 1.5 15.4% 9.2%
Spain 22.4 19.1 1.8 1.4 14.4% 6.9%
Benelux 24.8 21.2 1.5 1.1 14.6% 5.7%
Eastern
Europe 28.7 22.7 2.0 1.2 26.0% 11.3%
Other 9.0 7.8 0.0 0.2 16.1% 15.2%
Total 266.0 224.0 15.0 10.7 18.1% 6.7%
=============== ====== ===== ===== ====== ======
* operating profit before amortisation.
** sales per working day.
UK (including Iceland)
Our largest operation, and the one where the Brammer strategy is
most mature, achieved sales per working day (SPWD) growth of 16.5%,
and increased operating profit by 50% to GBP4.2 million. The growth
rate accelerated throughout the half.
Key Account sales grew by 20.2%, and now represent 61.2% of
turnover. Several new contracts were won with customers such as
Tata Steel and EDF Energy. Our value proposition continues to be
attractive to customers delivering over 1,650 individual cost
savings for 668 customers, with a combined saving of more than
GBP12.0 million. Base business sales grew by 8.9% driven by our
cross-selling initiatives.
We opened 11 new full time Insites and sales through Insites and
part-time Insites (those locations where we have several regular
clinics with the customer's staff each week) increased by 27%..Four
existing full time Insites closed giving a net increase of seven.
We opened two new branches in Fort William and Reykjavik and expect
to open more in the future.
Finally, our cross-selling initiatives continued to be
successful with sales growth of 17.9% in our Fluid Power range and
28.6% in our Tools and General Maintenance range.
Germany
SPWD on a constant currency basis grew by 21.9%. Operating
profit improved by 44% to GBP3.6 million. Key Account growth was
27.6% and we won new contracts with Stora Enso and Daimler. No
contracts were lost. Our value proposition provided EUR3.4 million
of signed off cost savings to our Key Account customers and Key
Accounts now represent 24.9% of total revenues.
Our investment in Mechanical Power Transmission and Motors
generated healthy sales growth of 17.7%, whilst additional
investment in sales and technical support for Fluid Power resulted
in growth of 27.5%. We won ten new Insites and Insite sales grew
49.2%. Our focus on the market segments of Food and Drink (up
29.4%) and Metals (up 41.6%) resulted in several new contract wins
and increased market share. Recovery and market share gains
continued in Automotive (up 30.5%) and Industrial Machinery (up
28.5%). We held 90 customer workshops across Germany addressing
more than 1,000 MRO specialists from our targeted segments, raising
the awareness of Brammer as a solution provider. The Brammer
Germany MRO catalogue has significantly improved our ability to
cross-sell to existing customers.
France
SPWD in constant currency increased by 15.4%, whilst operating
profit increased by 27% to GBP1.9 million. Key Account sales
increased 18.3% and, including Automotive, now represent 47% of
turnover. We delivered a total of 327 signed off cost savings to
our customers, representing EUR3.9 million of savings. New
contracts were won with Essilor, Albea, Saica, Georgia-Pacific, and
Champagne Cereales. The new product initiative of Tools and General
Maintenance produced sales growth of 42.9% whilst Fluid Power also
continued to grow, with sales up 25.9%, now representing 15% of
total sales. We focused our marketing activity on Food and Drink,
Utilities, Metals and Automotive with 35 customer events attracting
nearly 850 existing and potential customers.
Spain
SPWD on a constant currency basis increased by 14.4%, whilst
operating profit increased by 29% to GBP1.8 million. Our Key
Account revenues increased by 27.9%. Key Accounts now represent
28.9% of sales and we provided over EUR1 million of cost savings to
our Key Account customers. Three new full time Insites were won,
with Insite sales increasing by 41%. Our marketing focus was on
Food and Drink (up 21.2%), Automotive (up 18.4%), Metals (up 111%)
and Chemical (up 30.4%). A total of 25 customer symposiums
attracted 41 existing and potential customers. Good progress was
made in Product Range Extension, with sales of the Tools and
General Maintenance range up 47.8%, and Fluid Power up 55.5%. These
two product ranges which represented only 10.4% of sales in 2009
contributed just under one third of total revenue growth in the
first half year.
Benelux
SPWD in the Benelux countries grew by 14.6%, whilst operating
profit increased by 36% to GBP1.5 million. We won new contracts
with Bosch, Harsco, Nexans, Toyota, Vivasqua and PSA. Overall Key
Account growth in the Benelux was 30.0% and now represents 26.7% of
total sales. In Holland we introduced many new product lines, with
Mechanical Power Transmission sales growing by 35.7% and Fluid
Power by 23.0%. In Belgium, Fluid Power grew by 19.1%, and Tools
and General Maintenance by 26.3%. Sales through existing Insites
increased by 23.5%. Our focus on Food and Drink gave rise to 58%
growth in Holland and 10.2% growth in Belgium in this segment, and
now represents 10.9% of Benelux sales.
Eastern Europe
In our Eastern European businesses (comprising Poland, Hungary,
the Czech Republic and Slovakia), total SPWD in constant currency
grew by 26%, whilst operating profit increased by 67% to GBP2.0
million. In Poland, SPWD increased by 24.6% in constant currency.
The new Key Account team continued to be successful, with Key
Account growth of 56.6% and good development with Cargill, Kraft
Foods, Monier and Cemex. In the Czech Republic and Slovakia, SPWD
in constant currency increased by 21.6%. Key Accounts grew by
33.4%, and new contracts were won with Schneider Electric, Kraft
Foods and Cabot. We opened one more Insite and extended the
pipeline. In Hungary, the SPWD growth was 74.7%, Key Account sales
growth was 93%, and we opened one new Insite in Hungary, as well as
a new branch location in Debrecen.
Other segments
In respect of the other segments, Austria, Ireland and Italy,
SPWD grew by 16.1%, whilst operating profit decreased slightly
reflecting investment in additional sales staff to support growth
opportunities. In Austria SPWD were up 14%, in Italy SPWD were up
19.1%, whilst in Ireland SPWD growth was just 1%.
Strategy
Our strategy remains unchanged under the headings of Growth,
Capabilities, Synergies and Costs.
Growth
Reported growth was 19.7% whilst overall revenue growth in
constant currency and sales per working day was 18.1%, a result we
believe is significantly better than the market. It is evident that
our strategies of attacking market segments with focused marketing
material and specialist sales people, growth through Key Accounts,
the development of Insites, and growth through cross-selling and
Product Range Extension are contributing to significant market
share gains in most territories.
We continued to focus on a market segmentation approach,
increasing our knowledge of customers' processes and selling to
their specific needs. The growth rate achieved in our target
segments was as follows:
at 2011 constant currency rates (EUR1.20
: GBP1)
Total Revenue
2011 2010 Growth
GBPm GBPm %
Food and Drink 33.3 24.5 35.9%
Pulp and Paper 11.9 8.3 43.4%
Industrial Machinery 60.6 46.4 30.6%
Automotive 24.7 16.9 46.2%
Metals 33.4 25.0 33.6%
Key Account sales grew by 24.2% and now represent 38.3% of total
sales. Six new European contracts were won, each with a minimum
contract period of three years, and ultimate potential annual
revenues in excess of EUR60 million. We continued to focus our
business on defensive segments and within Key Accounts, increased
our sales to the Food and Drink segment by 20.3%, FMCG by 46.0%,
and Packaging by 29.1%. We also saw continued recovery and further
market share gains in the more cyclical sectors of Automotive (up
42.7%), Construction (up 20.7%), and Metals (up 37.3%). Our value
proposition proved increasingly attractive to customers and we
provided nearly 2,300 separate cost savings to our customers worth
over EUR23 million.
The number of Insites increased by a net total of 22, with 16
new full time and 53 new part time Insites opened, with overall
growth in sales of 28.4% to GBP43.2 million. However, 47 Insites
were closed due to customer factory closures or reduced demand,
giving rise to a total of 244 Insites at the period end.
Extending the product offering to reflect the full Brammer range
in every territory continued and whilst bearing sales grew by
16.5%, non bearing sales rose 20.0%, suggesting significant market
share gains driven by growth of 28.3% in Tools and Maintenance to
GBP17.6 million and 24.8% growth in Fluid Power to GBP44.6 million.
Cross-selling continued to drive good base business (non Key
Account) growth in the first half. Overall sales growth in constant
currency was 18.8%, which represented 24.2% growth in Key Accounts,
and 15.6% growth in the base business. This base business growth
rate was driven by Fluid Power (up 21.2%), Tools and General
Maintenance (up 22.1%), and Fasteners and Standard Parts (up
25.2%). This development augurs well for the future growth in base
business as we have a picayune market share of less than 1% across
Europe in Fluid Power and Tools and General Maintenance.
We made no acquisitions in the first half of 2011, but
maintained contact with and are monitoring a number of interesting
bolt-on opportunities.
Capabilities
The focus of our people and organisational capability continues
to be on supporting our growth. To that end, our pan-European
Marketing team are continuing the roll out of our Market
Segmentation material across the group. We continued our
development of the Brammer Manual for Insite Operations with this
manual available in English, French, German and Spanish and are
rolling out an Insite training programme to help raise the
awareness of the processes and tools involved in identifying,
targeting and setting up Insites. The Brammer Insite concept is now
also managed and co-ordinated across Europe by the newly created
role of European Insite Manager, who is responsible for driving our
Insite growth across our 15 country territories.
In order to develop our focus on extending our product range and
increase cross-selling, we recruited two European Product Managers
who will be responsible for developing and growing our business in
Hydraulics, Pneumatics, Tools and General Maintenance products. A
third European Product Manager will be recruited in the second half
of the year to develop and grow our Mechanical Power Transmission
components business across the group.
In January and February 2011 we conducted an external in-depth
customer satisfaction survey, which involved 250 telephone
interviews with customers across Europe, along with an online
questionnaire sent out to a random sample of our 100,000 customers.
This has brought us a greater level of insight into our customers'
requirements and has helped us develop methodologies to serve them
more effectively, with the results from the survey already feeding
into our strategy and local operational activity.
We continue to roll out our bespoke suite of Distributed
Learning programmes which are made available to our people in nine
languages electronically. In crucial customer facing areas of the
business the goal is to achieve 100% take up of the two major
foundation programmes, which explain the technical aspects of the
product range and the fundamental way the business works. These
foundation programmes have been rebuilt with improved functionality
and were re-launched in 2011 together with new product training
modules to provide a better learning experience.We will continue to
work with our suppliers ensuring our people receive the best
product training. We will also upgrade our learning management
system in the second half to consistently track, record and report
on all training activity across the group.
The Brammer European Council of employee representatives meets
annually in June. This forum facilitates communication between the
Works Councils and Employee Forums from each country in the group,
ensuring that we can listen and respond to the concerns and issues
raised by our people.
Synergies
We continued to roll out the Master Data Management ("MDM")
application which now contains over 4.3 million part numbers and
over six million technical features. Brammer Inline provides
visibility of stock across 10 European countries, and fully
integrated electronic trading between Brammer country businesses.
The Brammer Inline application continued to evolve, with the focus
on reducing order processing times and costs, and has been
progressively extended to all internal warehouses as well as
suppliers' stocks. MDM and Brammer Inline, together with a content
rich tool which is the repository for detailed product information,
have formed the basis for our pan-European Webshop - known as
Brammer Online. This application has now been successfully trialled
in Spain and Poland, and will be rolled out across Europe during
the rest of the year.
Our bespoke MOMASSE demand forecasting and planning tool,
combined with Brammer Inline continued to aid the optimisation of
stock levels and deliver higher levels of stock availability for a
lower investment in inventory. Inventory turns increased by over 8%
from 4.8 times one year ago to 5.2 times at the end of the first
half year.
Costs
We continued to work on increasing our spend with a smaller
number of suppliers, and improving the level of marketing support,
pricing, and cooperation in the field received from those
suppliers. Gross profit improved slightly compared with the same
period last year.
Sales Distribution and Administrative costs ("SDA") remain under
tight control. Although, at constant exchange rates, SDA increased
by 15.3%, this increase includes the GBP1.7 million charge relating
to the group's long-term incentive plans together with increased
accruals for bonus and sales commission, and the cessation of
short-time working in Germany. Excluding these substantial
incremental charges, the increase in constant currency is 10.0%,
which represents further investment in people to support our
current and planned growth levels through the second half of 2011
into 2012.
The future
We have now enjoyed 25 consecutive months of sequential growth
since the low point in June 2009. Our Key Account business remains
strong, cross-selling initiatives to both Key Accounts and the base
business are proceeding well and we expect to achieve healthy
double digit growth in revenues in 2011. We will continue to lead
the consolidation of the European market in Bearings, Mechanical
Power Transmission, Fluid Power, and Tools and General Maintenance
products. As a result, we are increasingly confident that our
strategy will continue to give us growth substantially greater than
the market.
Ian R Fraser
5 August 2011
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that this consolidated interim financial
information has been prepared in accordance with IAS 34 'Interim
Financial Reporting' as adopted by the European Union and that the
interim management report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R , namely:
-- an indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements; and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last Annual Report.
The directors of Brammer plc are listed in the Brammer plc
Annual Report for 2010.
On behalf of the Board
D Dunn
Chairman
P Thwaite
Finance director
5 August 2011
Brammer CONSOLIDATED INCOME STATEMENT
6 months 6 months
to to Year to
30 June 2011 30 June 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
Continuing operations
Revenue 2 275.2 230.0 468.4
Cost of sales (192.0) (161.0) (327.3)
Gross profit 83.2 69.0 141.1
-------------------------- ------ ------------- ------------- ------------
Distribution costs (67.8) (58.0) (118.1)
Amortisation of acquired
intangibles (0.6) (0.7) (1.3)
Total sales distribution
and administrative costs (68.4) (58.7) (119.4)
-------------------------- ------ ------------- ------------- ------------
Operating profit 2 14.8 10.3 21.7
Operating profit before
amortisation 15.4 11.0 23.0
Amortisation of acquired
intangibles (0.6) (0.7) (1.3)
Operating profit 14.8 10.3 21.7
-------------------------- ------ ------------- ------------- ------------
Finance expense (1.1) (1.3) (2.5)
Finance income - - 0.1
-------------------------- ------ ------------- ------------- ------------
Profit before tax 13.7 9.0 19.3
Profit before tax before
amortisation 14.3 9.7 20.6
Amortisation of acquired
intangibles (0.6) (0.7) (1.3)
Profit before tax 13.7 9.0 19.3
-------------------------- ------ ------------- ------------- ------------
Taxation 3 (3.5) (2.7) (5.5)
Profit for the period
from continuing
operations 10.2 6.3 13.8
Profit for the period 10.2 6.3 13.8
-------------------------- ------ ------------- ------------- ------------
Earnings per share
- total
Basic 4 9.6p 5.9p 13.0p
Diluted 4 9.6p 5.9p 13.0p
- from continuing operations before amortisation
Basic 4 10.0p 6.4p 13.9p
Diluted 4 10.0p 6.4p 13.9p
-------------------------- ------ ------------- ------------- ------------
The notes on pages 17 to 26 form an integral part of this
consolidated interim financial information.
Brammer CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months
to 6 months to Year to
31 December
30 June 2011 30 June 2010 2010
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Profit for the period 10.2 6.3 13.8
Other comprehensive income
Net exchange differences on
translating foreign operations 4.1 (4.2) (1.0)
Actuarial gains/(losses) on
retirement benefit obligations 0.3 (1.8) 5.2
Other comprehensive
income/(expense) for the period,
net of tax 4.4 (6.0) 4.2
Total comprehensive income for
the period 14.6 0.3 18.0
---------------------------------- ------------- ------------- ------------
The notes on pages 17 to 26 form an integral part of this
consolidated interim financial information.
Brammer CONSOLIDATED BALANCE SHEET
30 June 2011 30 June 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
Assets
Non-current assets
Goodwill 5 78.7 71.4 74.8
Acquired intangible
assets 5 4.8 5.6 5.3
Other intangible assets 5 5.1 4.1 4.9
Property, plant and
equipment 6 11.4 11.3 11.0
Deferred tax assets 5.4 7.7 6.4
105.4 100.1 102.4
-------------------------- ------ ------------- ------------- ------------
Current assets
Inventories 74.9 63.7 71.3
Trade and other
receivables 101.1 79.7 81.4
Cash and cash equivalents 7 24.5 19.9 21.7
200.5 163.3 174.4
-------------------------- ------ ------------- ------------- ------------
Liabilities
Current liabilities
Financial liabilities -
borrowings 7 (61.7) (4.0) (3.8)
Trade and other payables (106.8) (83.4) (94.3)
Provisions 8 (0.6) (0.7) (0.7)
Deferred consideration (7.8) (3.8) (8.0)
Current tax liabilities (4.5) (2.9) (2.7)
(181.4) (94.8) (109.5)
-------------------------- ------ ------------- ------------- ------------
Net current assets 19.1 68.5 64.9
Non-current liabilities
Financial liabilities -
borrowings 7 (3.4) (56.1) (54.6)
Deferred tax liabilities (9.5) (7.2) (9.7)
Provisions 8 (0.1) (0.4) (0.2)
Deferred consideration - (6.6) -
Retirement benefit
obligations 9 (13.7) (26.9) (15.8)
(26.7) (97.2) (80.3)
-------------------------- ------ ------------- ------------- ------------
Net assets 97.8 71.4 87.0
-------------------------- ------ ------------- ------------- ------------
Shareholders' equity
Share capital 10 21.3 21.2 21.3
Share premium 18.2 18.1 18.1
Translation reserve 8.5 1.2 4.4
Retained earnings 49.8 30.9 43.2
Total equity 97.8 71.4 87.0
-------------------------- ------ ------------- ------------- ------------
The notes on pages 17 to 26 form an integral part of this
consolidated interim financial information.
Brammer CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Treasury Translation Retained
Capital Premium Shares Reserve Earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 1
January 2010 21.2 18.1 (0.2) 5.4 30.4 74.9
--------------- -------- -------- --------- ------------ --------- ------
Profit for
the period - - - - 6.3 6.3
Other
comprehensive
income - - - (4.2) (1.8) (6.0)
--------------- -------- -------- --------- ------------ --------- ------
Total
comprehensive
income - - - (4.2) 4.5 0.3
--------------- -------- -------- --------- ------------ --------- ------
Transactions
with owners
Dividends - - - - (3.8) (3.8)
Total
transactions
with owners - - - - (3.8) (3.8)
--------------- -------- -------- --------- ------------ --------- ------
Movement in
period - - - (4.2) 0.7 (3.5)
--------------- -------- -------- --------- ------------ --------- ------
At 30 June
2010 21.2 18.1 (0.2) 1.2 31.1 71.4
Profit for
the period - - - - 7.5 7.5
Other
comprehensive
income - - - 3.2 7.0 10.2
--------------- -------- -------- --------- ------------ --------- ------
Total
comprehensive
income - - - 3.2 14.5 17.7
--------------- -------- -------- --------- ------------ --------- ------
Transactions
with owners
Shares issued
during the
period 0.1 - - - - 0.1
Dividends - - - - (2.2) (2.2)
Total
transactions
with owners 0.1 - - - (2.2) (2.1)
--------------- -------- -------- --------- ------------ --------- ------
Movement in
period 0.1 - - 3.2 12.3 15.6
--------------- -------- -------- --------- ------------ --------- ------
At 31 December
2010 21.3 18.1 (0.2) 4.4 43.4 87.0
Profit for
the period - - - - 10.2 10.2
Other
comprehensive
income - - - 4.1 0.3 4.4
--------------- -------- -------- --------- ------------ --------- ------
Total
comprehensive
income - - - 4.1 10.5 14.6
--------------- -------- -------- --------- ------------ --------- ------
Transactions
with owners
Shares issued
during the
period - 0.1 - - - 0.1
Purchase of
own shares - - (0.1) - - (0.1)
Transfer on
vesting of
own shares - - 0.1 - (0.1) -
Value of
employee
services - - - - 1.0 1.0
Dividends - - - - (4.8) (4.8)
Total
transactions
with owners - 0.1 - - (3.9) (3.8)
--------------- -------- -------- --------- ------------ --------- ------
Movement in
period - 0.1 - 4.1 6.6 10.8
--------------- -------- -------- --------- ------------ --------- ------
At 30 June
2011 21.3 18.2 (0.2) 8.5 50.0 97.8
--------------- -------- -------- --------- ------------ --------- ------
Retained earnings as disclosed in the Balance Sheet on page 14
represent the retained earnings and treasury shares balances
above.
The notes on pages 17 to 26 form an integral part of this
consolidated interim financial information.
Brammer CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months
to to Year to
30 June 2011 30 June 2010 31 Dec 2010
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Profit for the period 10.2 6.3 13.8
Tax charge on continuing
operations 3.5 2.7 5.5
Depreciation and amortisation of
tangible and intangible assets 2.7 2.8 5.6
Share options - value of employee
services 1.0 - -
Gain on sale of property, plant
and equipment (0.2) - -
Net financing expense 1.1 1.3 2.5
Movement in working capital (13.0) (8.7) (1.3)
Cash generated from operating
activities 5.3 4.4 26.1
---------------------------------- ------------- ------------- ------------
Cash generated from operating
activities before exceptional
items 5.6 5.7 27.5
Cash outflow from exceptional
items (0.3) (1.3) (1.4)
---------------------------------- ------------- ------------- ------------
Cash generated from operating
activities 5.3 4.4 26.1
---------------------------------- ------------- ------------- ------------
Interest paid (1.0) (1.1) (2.2)
Tax paid (1.5) (0.7) (2.7)
Decrease in pension obligations (1.8) (1.1) (2.6)
Net cash generated from operating
activities 1.0 1.5 18.6
---------------------------------- ------------- ------------- ------------
Cash flows from investing
activities
Deferred consideration paid on
prior acquisitions (0.7) (4.5) (7.6)
Earn-out paid on prior
acquisitions - (0.3) (0.3)
Proceeds from sale of property,
plant and equipment 0.3 0.1 0.2
Purchase of property, plant and
equipment (1.3) (1.1) (1.9)
Additions to other intangible
assets (1.0) (0.1) (1.6)
Net cash used in investing
activities (2.7) (5.9) (11.2)
---------------------------------- ------------- ------------- ------------
Cash flows from financing
activities
Net proceeds from issue of
ordinary share capital 0.1 - 0.1
Net issue/(repayment) of
borrowings 2.9 (6.5) (11.3)
Dividends paid to shareholders - - (6.0)
Purchase of own shares (0.1) - -
Net cash generated from/(used) in
financing activities 2.9 (6.5) (17.2)
---------------------------------- ------------- ------------- ------------
Net increase/(decrease) in cash
and cash equivalents 1.2 (10.9) (9.8)
Exchange gains/(losses) on cash
and cash equivalents 1.1 (1.5) (0.6)
Cash and cash equivalents at
beginning of period 21.0 31.4 31.4
Net cash at end of period 23.3 19.0 21.0
---------------------------------- ------------- ------------- ------------
Cash and cash equivalents 24.5 19.9 21.7
Overdrafts (1.2) (0.9) (0.7)
Net cash at end of period 23.3 19.0 21.0
---------------------------------- ------------- ------------- ------------
The notes on pages 17 to 26 form an integral part of this
consolidated interim financial information.
Brammer NOTES TO THE INTERIM FINANCIAL INFORMATION
1 STATUS OF INTERIM REPORT AND ACCOUNTING POLICIES
General information
Brammer plc is a company incorporated and domiciled in the UK,
and listed on the London Stock Exchange.
This consolidated interim financial information was approved for
issue by a duly appointed and authorised committee of the Board on
5 August 2011.
This consolidated interim financial information for the six
months ended 30 June 2011 does not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2010 were
approved by the Board on 22 February 2011 and delivered to the
Registrar of Companies. The report of the auditors on those
accounts was unqualified, did not contain an emphasis of matter
paragraph and did not contain any statement under section 498 of
the Companies Act 2006.
The consolidated financial statements of the group for the year
ended 31 December 2010 are available from the company's registered
office or website (www.brammer.biz).
This consolidated interim financial information is
unaudited.
Basis of preparation
This consolidated interim financial information for the six
months ended 30 June 2011 has been prepared in accordance with the
Disclosure and Transparency Rules of the Financial Services
Authority and with IAS 34, "Interim Financial Reporting" as adopted
by the EU. The consolidated interim condensed financial information
should be read in conjunction with the annual financial statements
for the year ended 31 December 2010 which have been prepared in
accordance with IFRSs as adopted by the EU.
The financial information is presented in pounds sterling and
has been prepared on the historical cost basis.
The directors confirm that they have a reasonable expectation
that the group has adequate resources to enable it to continue in
existence for the foreseeable future and, accordingly, the
consolidated interim financial information has been prepared on a
going concern basis. In forming its opinion as to going concern,
the Board prepares a cashflow forecast based upon its assumptions
as to trading and taking into account the banking facilities
available to the group. The Board also models a number of
alternative scenarios, taking account of business variables and key
risks and uncertainties, and maintains under continuous review the
capital structure of the group and the financing options available
to the group.
Accounting policies
Except as described below, the principal accounting policies
adopted in the preparation of this interim financial information
are included in the consolidated financial statements for the year
ended 31 December 2010. These policies have been consistently
applied to all the periods presented.
No standards have been early adopted by the group. The
implications for the group of new standards, amendments to
standards or interpretations which are mandatory for the first time
for the financial year ending 31 December 2011 are summarised
below.
Taxes on income in the interim periods are accrued using the tax
rate that would be applicable to expected total annual
earnings.
New standards, amendments to standards or interpretations
The following new standards, amendments to standards or
interpretations are mandatory for the first time for the financial
year beginning 1 January 2011:
The group has adopted the following new standards, amendments
and interpretations now applicable. None of these standards and
interpretations has had any material effect on the group's results
or net assets.
Standard or Content Applicable for financial
interpretation years beginning on
or after
------------------------ ------------------------- -------------------------
Amendment: IFRS 2 Group cash-settled 1 January 2010
share-based payment
transactions
------------------------ ------------------------- -------------------------
Amendment: IFRS 1 Additional exemptions 1 January 2010
for first-time adopters
------------------------ ------------------------- -------------------------
IFRIC 19 Extinguishing financial 1 July 2010
liabilities with equity
investments
------------------------ ------------------------- -------------------------
IFRIC 14, IAS 19 Prepayments of a minimum 1 January 2011
funding requirement
------------------------ ------------------------- -------------------------
Amendment: IAS 24 Related party 1 January 2011
disclosures
------------------------ ------------------------- -------------------------
Amendment: IAS 32 Classification of rights 1 February 2010
issues
------------------------ ------------------------- -------------------------
Annual improvements Various 1 January 2011
to IFRSs (issued 2010)
------------------------ ------------------------- -------------------------
The following standards, amendments and interpretations are not
yet effective and have not been adopted early by the group:
Standard or Content Applicable for financial
interpretation years beginning on
or after
------------------------ ------------------------- -------------------------
IFRS 9* Financial instruments: 1 January 2013
Classification and
measurement
------------------------ ------------------------- -------------------------
Amendment: IAS 12* Income Taxes 1 January 2012
------------------------ ------------------------- -------------------------
IFRS 10 Consolidated financial 1 January 2013
statements
------------------------ ------------------------- -------------------------
IFRS 11 Joint arrangements 1 January 2013
------------------------ ------------------------- -------------------------
IFRS 12 Disclosures of Interests 1 January 2013
in Other Entities
------------------------ ------------------------- -------------------------
IFRS 13 Fair Value Measurement 1 January 2013
------------------------ ------------------------- -------------------------
*These standards are not expected to be relevant to the group
Accounting estimates and judgements
The preparation of interim financial information requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amount of income, expense, assets and liabilities. The significant
estimates and judgements made by management were consistent with
those applied to the consolidated financial statements for the year
ended 31 December 2010.
Risks and uncertainties
The principal strategic level risks and uncertainties affecting
the group remain those set out on pages 20 and 21 in the 2010
Annual Report. With regard to financial and capital risks, the
group was pleased to announce in July that it had successfully
renewed banking facilities, with a facility of EUR100 million for a
five year term, replacing the established facility which was due to
expire in February 2012.
The chairman's statement and chief executive's review in this
interim report include comments on the outlook for the remaining
six months of the financial year.
Forward-looking statements
This interim report contains forward-looking statements.
Although the group believes that the expectations reflected in
these forward-looking statements are reasonable, it can give no
assurance that these expectations will prove to have been correct.
Due to the inherent uncertainties, including both economic and
business risk factors underlying such forward-looking information,
actual results may differ materially from those expressed or
implied by these forward-looking statements.
The group undertakes no obligation to update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
2 SEGMENTAL ANALYSIS
The Board has been identified as the chief operating
decision-maker. The Board reviews the group's internal reporting as
the basis for assessing performance and allocating resources.
Management has determined the operating segments based on these
reports. The group is primarily controlled on a country by country
basis, in line with the legal structure. The operating segments are
unchanged from those previously reported.
The group's internal reporting is primarily based on performance
reports run at 'management' exchange rates - exchange rates which
are set at the beginning of each year. For 2011 the management rate
used is EUR1.20 : GBP1.
Accordingly the segment information below is shown at the
'management' exchange rates with the exchange effect being a
reconciling item between the segment results and the totals
reported in the financial statements at actual exchange rates. The
management rate applies to income statement, balance sheet and cash
flows.
The Board assesses the performance of the operating segments
based on their underlying operating profit, which comprises profit
before interest and taxation, excluding amortisation of acquired
intangibles and non-recurring or exceptional items such as
restructuring costs and impairments when the impairment is the
result of an isolated, non-recurring event.
Segment assets include property, plant and equipment, software
development, inventories, and trade and other receivables. All
inter-segmental trading is at an arms-length basis.
Other
Eastern operating
UK Germany France Spain Benelux Europe segments Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Six months
ended 30 June
2011
Revenue
Total revenue 81.1 60.7 43.2 22.9 25.7 28.8 9.1 271.5
Inter company
sales (1.5) (1.8) (0.6) (0.5) (0.9) (0.1) (0.1) (5.5)
Sales to
external
customers 79.6 58.9 42.6 22.4 24.8 28.7 9.0 266.0
Exchange effect 9.2
------
Total sales to
external
customers 275.2
------
Underlying
operating
profit* 4.2 3.6 1.9 1.8 1.5 2.0 0.0 15.0
Exchange effect 0.4
------
Total
underlying
operating
profit 15.4
Amortisation of
acquired
intangibles (0.6)
Total operating
profit 14.8
Finance expense (1.1)
Finance income -
Profit before
tax 13.7
Tax (3.5)
Profit for the
period 10.2
---------------- ------ -------- ------- ------ -------- -------- ---------- ------
Segment assets 48.0 25.6 29.6 17.8 21.3 25.6 13.9 181.8
Exchange effect 10.7
------
Total segment
assets 192.5
Goodwill 78.7
Acquired
intangibles 4.8
Cash 24.5
Deferred tax 5.4
Total assets 305.9
---------------- ------ -------- ------- ------ -------- -------- ---------- ------
Other segment
items
Capital
expenditure 0.5 0.1 0.1 0.2 0.3 0.2 0.8 2.2
Exchange effect 0.1
------
Total capital
expenditure 2.3
------
Amortisation
and
depreciation (0.4) (0.1) (0.1) (0.2) (0.3) (0.2) (0.7) (2.0)
Exchange effect (0.1)
------
Total
amortisation
and
depreciation** (2.1)
------
SEGMENTAL ANALYSIS (continued)
Other
Eastern operating
UK Germany France Spain Benelux Europe segments Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Six months
ended 30 June
2010
Revenue
Total revenue 70.2 49.4 37.1 19.5 22.0 22.8 8.0 229.0
Inter company
sales (1.4) (1.4) (0.7) (0.4) (0.8) (0.1) (0.2) (5.0)
Sales to
external
customers 68.8 48.0 36.4 19.1 21.2 22.7 7.8 224.0
Exchange effect 6.0
------
Total sales to
external
customers 230.0
------
Underlying
operating
profit* 2.8 2.5 1.5 1.4 1.1 1.2 0.2 10.7
Exchange effect 0.3
------
Total
underlying
operating
profit 11.0
Amortisation of
acquired
intangibles (0.7)
Total operating
profit 10.3
Finance expense (1.3)
Finance income -
Profit before
tax 9.0
Tax (2.7)
Profit for the
period 6.3
---------------- ------ -------- ------- ------ -------- -------- ---------- ------
Segment assets 41.8 23.1 25.3 16.5 20.3 22.3 11.5 160.8
Exchange effect (2.0)
------
Total segment
assets 158.8
Goodwill 71.4
Acquired
intangibles 5.6
Cash 19.9
Deferred tax 7.7
Total assets 263.4
---------------- ------ -------- ------- ------ -------- -------- ---------- ------
Other segment
items
Capital
expenditure 0.1 0.1 0.4 0.1 0.1 0.1 0.3 1.2
Exchange effect -
------
Total capital
expenditure 1.2
------
Amortisation
and
depreciation (0.6) (0.2) (0.1) (0.2) (0.3) (0.2) (0.5) (2.1)
Exchange effect -
------
Total
amortisation
and
depreciation** (2.1)
------
* Operating profit excluding the amortisation of acquired
intangibles.
** Total amortisation and depreciation excluding the
amortisation of acquired intangibles.
The table below details the 'management rate' used and the
actual exchange rates used for the primary exchange rate of
Sterling to Euro for the current period and the prior period:
30 June 2011 30 June 2010
Management rate EUR1.20 EUR1.20
Actual average rate EUR1.146 EUR1.153
Balance sheet rate EUR1.107 EUR1.221
3 TAXATION
The charge for taxation is recognised based on management's best
estimate of the weighted average annual corporate tax rate expected
for the full financial year. The estimated average annual tax rate
used for 2011 is 25.4% (the estimated tax rate for the first half
year of 2010 was 30.2%).
4 EARNINGS PER SHARE
Half year 2011
-----------------------------
Earnings per
share
------------------
Earnings Basic Diluted
GBPm
Weighted average number of shares in issue
('000) 106,365 106,525
Total - all continuing operations
Profit for the period 10.2 9.6p 9.6p
Amortisation of acquired intangibles 0.6
Tax on amortisation of acquired intangibles (0.1)
Earnings before amortisation of acquired 10.7 10.0p 10.0p
intangibles
--------------------------------------------- --------- -------- --------
Half year 2010
-----------------------------
Earnings per
share
------------------
Earnings Basic Diluted
GBPm
Weighted average number of shares in issue
('000) 106,286 106,286
Total - all continuing operations
Profit for the period 6.3 5.9p 5.9p
Amortisation of acquired intangibles 0.7
Tax on amortisation of acquired intangibles (0.2)
Earnings before amortisation of acquired 6.8 6.4p 6.4p
intangibles
--------------------------------------------- --------- -------- --------
Full year 2010
-----------------------------
Earnings per
share
------------------
Earnings Basic Diluted
GBPm
Weighted average number of shares in issue
('000) 106,290 106,290
Total - all continuing operations
Profit for the financial year 13.8 13.0p 13.0p
Amortisation of acquired intangibles 1.3
Tax on amortisation of acquired intangibles (0.3)
Earnings before amortisation of acquired 14.8 13.9p 13.9p
intangibles
--------------------------------------------- --------- -------- --------
5 INTANGIBLE ASSETS
Acquired Other -software
Goodwill intangibles development
GBPm GBPm GBPm
Cost
At 1 January 2011 74.8 9.8 13.4
Exchange adjustments 3.9 0.4 0.3
Additions - - 1.0
Disposals - - (0.1)
At 30 June 2011 78.7 10.2 14.6
--------- ------------- ----------------
Amortisation
At 1 January 2011 - 4.5 8.5
Exchange adjustments - 0.3 0.3
Charge for the period - 0.6 0.7
At 30 June 2011 - 5.4 9.5
--- ---- ----
Net book value
At 30 June 2011 78.7 4.8 5.1
At 31 December 2010 74.8 5.3 4.9
6 PROPERTY, PLANT AND EQUIPMENT
Land and
Buildings Equipment Total
GBPm GBPm GBPm
Cost
At 1 January 2011 13.4 33.1 46.5
Exchange adjustments 0.3 1.0 1.3
Additions 0.1 1.2 1.3
Disposals - (1.2) (1.2)
At 30 June 2011 13.8 34.1 47.9
----------- ---------- ------
Depreciation
At 1 January 2011 7.6 27.9 35.5
Exchange adjustments 0.1 0.7 0.8
Charge for the period 0.3 1.1 1.4
Disposals - (1.2) (1.2)
At 30 June 2011 8.0 28.5 36.5
---- ------ ------
Net book value
At 30 June 2011 5.8 5.6 11.4
At 31 December 2010 5.8 5.2 11.0
7 CLOSING NET DEBT
At 30 June At 30 June At 31 Dec
2011 2010 2010
GBPm GBPm GBPm
Borrowings - current - overdrafts (1.2) (0.9) (0.7)
Borrowings - current portion of long
term loans (60.5) (3.1) (3.1)
Borrowings - non-current (3.4) (56.1) (54.6)
Cash and cash equivalents 24.5 19.9 21.7
Closing net debt (40.6) (40.2) (36.7)
----------- ----------- ----------
Reconciliation of net cash flow to
movement in net debt
6 months 6 months
to to Year to
30 June 30 June 31 Dec
2011 2010 2010
GBPm GBPm GBPm
Net increase/(decrease) in cash and
cash equivalents 1.2 (10.9) (9.8)
Net (increase)/decrease in borrowings (2.9) 6.5 11.3
----------- ----------
(1.7) (4.4) 1.5
Exchange (2.2) 4.1 1.7
Movement in net debt (3.9) (0.3) 3.2
Opening net debt (36.7) (39.9) (39.9)
----------- ----------- ----------
Closing net debt (40.6) (40.2) (36.7)
----------- ----------- ----------
8 PROVISIONS
Restructuring Other Total
GBPm GBPm GBPm
At 1 January 2011 0.7 0.2 0.9
Exchange adjustments 0.1 - 0.1
Utilised in the period (0.3) - (0.3)
At 30 June 2011 0.5 0.2 0.7
-------------- ------ ------
The restructuring provision was created at December 2009 and is
expected to be fully utilised within one to two years. Other
provisions relate to warranty claims for the disposal of a
discontinued business.
9 PENSIONS
The valuations used for IAS 19 disclosures for the UK scheme
have been based on the most recent actuarial valuation at 31
December 2008 updated by KPMG LLP to take account of the
requirements of IAS 19 in order to assess the liabilities of the
scheme at 30 June 2011. Assets are stated at their market value at
30 June 2011.
The latest completed actuarial valuation of the UK scheme was
carried out as at 31 December 2008, using the defined accrued
benefit method (the same method that was used at the previous
valuation), by an independent actuary employed by Barnett
Waddingham LLP. The assumptions, which were agreed between the
company and trustees, that have the most significant effect on the
results of the valuation are those related to the rates of return
on investments and the rates of increase in future price inflation
and pensions. Over the long term, the returns on investments
backing the scheme's liabilities were assumed to be 5.80% per annum
before retirement and 4.30% per annum after retirement. For
pensions in payment (for both current pensioners and non-retired
members) the return on underlying investments was assumed to exceed
future pension increases (in excess of the guaranteed minimum
pension) by 1.55% per annum. Pensions in excess of the guaranteed
minimum pension were assumed to increase at 2.75% per annum. The
valuation showed that the market value of the scheme's assets was
GBP63.5 million as at 31 December 2008, which represented 63% of
the value of the benefits that had accrued to members at that
date.
The financial assumptions used to calculate the liabilities under
IAS 19 are:
UK scheme
6 months
to Year to
6 months to 30 June 31 Dec
30 June 2011 2010 2010
Inflation rate 3.70% 3.35% 3.60%
Rate of increase of pensions in payment 3.70% 3.35% 3.60%
Rate of increase for deferred pensioners 3.20% 3.35% 3.10%
Discount rate 5.70% 5.50% 5.50%
----------------------------------------- -------------- --------- --------
The amounts recognised in the balance
sheet are determined as follows:
30 June 31 Dec
30 June 2011 2010 2010
GBPm GBPm GBPm
Present value of defined benefit
obligations 110.4 109.2 110.2
Fair value of plan assets (96.7) (82.3) (94.4)
Net liability recognised in the balance
sheet 13.7 26.9 15.8
-------------- --------- --------
The amounts recognised in the income
statement are as follows:
6 months
to Year to
6 months to 30 June 31 Dec
30 June 2011 2010 2010
GBPm GBPm GBPm
Current service cost 0.2 0.1 0.2
Interest cost 2.8 3.0 6.0
Expected return on plan assets (3.0) (2.8) (5.6)
Total pension expense included within
distribution costs - 0.3 0.6
-------------- --------- --------
Analysis of the movement in the balance
sheet net liability
6 months
to Year to
6 months to 30 June 31 Dec
30 June 2011 2010 2010
GBPm GBPm GBPm
Opening 15.8 25.7 25.7
Exchange adjustments 0.1 (0.1) -
On-going expense as above - 0.3 0.6
Employer contributions (1.8) (1.4) (3.3)
Actuarial (gains)/losses recognised
as a reserves movement (0.4) 2.4 (7.2)
Closing 13.7 26.9 15.8
-------------- --------- --------
The pension expense is included in distribution costs. The
actual return on plan assets was GBP1.5 million (2010: GBP1.6
million). The retirement benefit liability at the end of June was
GBP13.7 million (2010: GBP26.9 million), a net reduction of GBP2.1
million from 31 December 2010 (GBP15.8 million). This reduction
reflects a lower than expected return on the UK scheme's assets
offset by an increase in corporate bond yields leading to a higher
discount rate being used to value the liabilities, together with
GBP1.8 million of employers' contributions.
10 SHARE CAPITAL AND RESERVES
Purchase of own shares
During the period the company acquired 75,447 of its own shares
of 20p each through the Brammer plc Employee Share Ownership Trust
("the Trust") for an aggregate consideration of GBP122,982, which
has been deducted from shareholders' equity. The Trust holds the
shares in order to satisfy vestings under the company's performance
share plans and share matching plans. During the period 88,567
shares were transferred to directors and senior managers to meet
vestings under these plans.
At 30 June 2011 the Trust held a total 208,121 shares in the
company in order to meet part of the company's liabilities under
the company's performance share plans and share matching plans. The
Trust deed contains a dividend waiver provision in respect of these
shares.
Ordinary shares issued
56,393 options were exercised during the period under the
group's employee share option schemes with exercise proceeds of
GBP54,717.
The number of ordinary 20p shares in issue at 30 June 2011 was
106,409,074 (30 June 2010: 106,285,588; 31 December 2010:
106,361,185).
Dividends
The final dividend for the year ended 31 December 2010,
amounting to GBP4,779,000, was approved by shareholders at the
Annual General Meeting on 17 May 2011 and was paid on 5 July 2011
(2010: GBP3,816,000). In addition, the directors propose an interim
dividend of 2.70p per share (2010: 2.10p per share) payable on 4
November 2011 to shareholders who are on the register at 7 October
2011. This interim dividend, amounting to GBP2,873,000 (2010:
GBP2,226,000) has not been recognised as a liability in these
interim financial statements.
11 RELATED PARTY TRANSACTIONS
Other than the remuneration of executive and non-executive
directors which will be disclosed in the group's Annual Report for
the year ending 31 December 2011, there were no related party
transactions during the period.
12 INTERIM REPORT
A copy of the interim report 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.
Current regulations permit the company not to send copies of its
interim results to shareholders. Accordingly the 2011 interim
results published on 5 August 2011 will not be sent to
shareholders. The 2011 interim results and other information about
Brammer are available on the company's website at
www.brammer.biz.
13 INTERIM DIVIDEND
Relevant dates concerning the payment of the interim dividend
are
Record date 7 October 2011
Payment date 4 November 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR USAORAOAWRUR
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