Brammer PLC Interim Results -4-
July 29 2014 - 1:01AM
UK Regulatory
sales -% 56.7 57.3 62.5 67.7 71.6 74.5
Non Key Accounts proportion
of total sales -% 43.3 42.7 37.5 32.3 28.4 25.5
Insites proportion of total
sales -% 33.2 34.4 40.0 38.3 43.7 42.6
Bearings proportion of total
sales -% 22.3 22.1 20.6 12.4 11.9 10.3
T&GM as a proportion of total
sales -% 10.1 10.7 13.0 47.5 47.7 47.9
Fluid Power as a proportion
of total sales -% 20.0 20.4 19.9 12.0 12.3 12.8
* Includes Buck & Hickman
Revenues in SPWD for the UK decreased by 1.4%, with operating
profit down 3.5% to GBP8.2 million.
Key Account sales increased by 1.4%, a lower growth rate than
historically experienced in the UK, where the Brammer strategy is
most advanced. The moderation in growth rate is largely due to
several specific national Key Account contracts who have delayed
maintenance programmes during the first half. Therefore, whilst the
National Contract tier of Key Accounts declined 4.6% in the period,
the main tier of pan-European Key Accounts reflected more typical
growth rates of 10.9% in the period. Insite(TM) sales and Tools and
General Maintenance sales have therefore also declined although we
anticipate growth will recover somewhat in the second half.
The proportion of turnover which is Key Accounts has increased
by 2.9 percentage points and now represents 74.5% of turnover. Our
value proposition continues to be attractive to new customers and
we continued to win new Key Accounts including Honeywell
Technologies, Smurfit Kappa and Tarmac.
The number of full time and part time Insites(TM) now totals
195, four more than last year. Twelve new Insites(TM) opened in the
period, including ten relating to Tools and General Maintenance
customers.
Bearing sales declined 4.3% reflecting a challenging market, as
some customers restrict discretionary spend, but our ongoing
cross-selling initiatives delivered improvements in Tools and
General Maintenance and Fluid Power sales as a proportion of total
sales.
The integration of the Buck & Hickman business has been
extremely successful and ongoing synergy benefits continue to be
ahead of our original expectations. The proposal to merge the
logistics and administrative functions of Buck & Hickman and
Brammer UK during the second half of the year represents a further
opportunity to drive efficiency and would provide a large step
towards the full integration of the businesses.
Germany
H1
2009 2010 2011 2012 2013 2014
SPWD growth -% -30.8 13.4 19.2 0.0 -2.4 7.7
Key Account sales growth -% -22.4 20.9 24.1 7.2 11.5 10.6
Insite sales growth -% -6.7 36.8 37.2 16.4 12.1 18.4
Insite numbers 12 20 37 47 54 55
Customer signed off cost savings
-GBP'm 0.5 5.4 9.4 7.9 12.7 3.2
Bearings Growth -% -38.1 9.7 14.7 -10.6 -10.6 -2.6
Non bearings
Mechanical Power Transmission
sales growth -% -30.0 27.0 11.0 1.4 7.3 0.3
Fluid Power sales growth -% -50.5 2.3 28.1 13.0 1.3 7.4
Tools and General Maintenance
(T&GM) sales growth -% -25.6 24.4 58.6 13.9 45.9 62.4
Key Accounts proportion of total
sales -% 22.8 24.1 26.8 30.5 35.3 36.4
Non Key Accounts proportion
of total sales -% 77.2 75.9 73.2 69.5 64.7 63.6
Insites proportion of total
sales -% 3.8 4.5 7.9 9.4 11.6 13.9
Bearings proportion of total
sales -% 33.3 32.0 31.6 28.5 26.0 24.4
T&GM as a proportion of total
sales -% 2.1 2.3 3.4 3.9 4.3 5.4
Fluid Power as a proportion
of total sales -% 18.1 16.2 17.9 20.5 22.2 22.2
SPWD returned to growth in 2014, increasing by 7.7% in the
period and trading profit increased by 27.6% to GBP3.7 million.
Bearings sales declined 2.6% in the year reflecting a
challenging market, but the rate of decline significantly reduced
compared to the 10.6% decline experienced in the full year 2013.
Our focus on product range extension saw a 9.9% growth in
non-bearings products, including the bolt-on acquisition of a small
tools and general maintenance specialist during the period. This
has helped growth in Tools and General Maintenance accelerate to
62.4% compared to the 2013 full year reflecting an important step
change in this key product range.
Key Accounts growth continued into the fifth consecutive year,
at 10.6% and we continued to win new Key Accounts including St
Gobain and Daimler. The number of Insite(TM) locations continues to
increase and now totals 55 with seven Insites(TM) opening during
the period and six others closing. Despite a similar number of
Insites(TM) to 2013, Insite(TM) sales growth accelerated by 6.3
percentage points to 18.4%.
France
H1
2009 2010 2011 2012 2013 2014
SPWD growth -% -14.6 11.1 14.2 3.5 -4.7 3.9
Key Account sales growth -% -4.1 18.8 19.1 12.3 3.1 5.7
Insite sales growth -% -14.0 38.7 16.0 27.3 30.9 6.7
Insite numbers 20 22 31 39 45 50
Customer signed off cost savings
-GBP'm 2.0 2.6 3.8 2.6 4.5 10.4
Bearings Growth -% -18.5 6.1 9.2 -5.0 -8.4 -5.5
Non bearings
Mechanical Power Transmission
sales growth -% -10.1 9.8 10.6 3.5 -9.4 -5.9
Fluid Power sales growth -% -7.2 28.0 25.6 14.6 1.5 6.7
Tools and General Maintenance
(T&GM) sales growth -% 21.8 84.4 32.7 16.5 39.8 39.2
Key Accounts proportion of total
sales -% 31.0 33.3 35.8 40.0 44.1 44.2
Non Key Accounts proportion
of total sales -% 69.0 66.7 64.2 60.0 55.9 55.8
Insites proportion of total
sales -% 5.0 6.2 6.6 9.6 13.7 13.8
Bearings proportion of total
sales -% 38.6 36.5 35.0 32.1 30.6 28.0
T&GM as a proportion of total
sales -% 2.4 4.0 4.6 5.2 7.6 8.9
Fluid Power as a proportion
of total sales -% 12.2 13.9 15.4 17.0 18.0 17.9
SPWD grew by 3.9% with a growth of 21.4% in operating profit to
GBP1.7million. In the face of continuing difficult conditions in
the market, bearings sales declined by 5.5%, but Key Account growth
accelerated to 5.7%. We won new contracts including Rio Tinto,
Massily, Polyrey, Safran and Fleury Michon, and Key Accounts now
represent 44.2% of sales.
A small bolt-on acquisition made in the second quarter will
contribute to future Fluid Power growth. Sales of Tools and General
Maintenance product grew at 39.2%. Although this is a similar
growth rate to the full year 2013, quarter on quarter growth rates
are accelerating this year.
We opened five Insites(TM) in the first half, only one fewer
than the six in the full year of 2013 and there is a healthy
pipeline of future contracted Insite(TM) agreements.
Spain
H1
2009 2010 2011 2012 2013 2014
SPWD growth -% -22.3 9.5 12.3 -0.3 3.8 14.0
Key Account sales growth -% -4.2 19.5 28.5 15.3 19.5 32.9
Insite sales growth -% 27.6 22.0 46.3 31.8 56.0 64.9
Insite numbers 13 15 22 30 38 39
Customer signed off cost savings
-GBP'm 1.7 1.3 2.3 2.1 1.2 0.5
Bearings Growth -% -28.4 4.4 3.3 -10.1 3.3 0.3
Non bearings
Mechanical Power Transmission
sales growth -% -21.9 7.0 14.9 -4.9 -0.9 10.4
Fluid Power sales growth -% -0.1 34.2 46.1 23.9 23.4 30.6
Tools and General Maintenance
(T&GM) sales growth -% 4.3 48.0 33.2 89.0 71.5 78.8
Key Accounts proportion of total
sales -% 25.0 26.8 31.2 36.4 40.6 47.0
Non Key Accounts proportion
of total sales -% 75.0 73.2 68.8 63.6 59.4 53.0
Insites proportion of total
sales -% 5.6 6.3 10.5 13.7 21.2 27.3
Bearings proportion of total
sales -% 43.4 41.2 37.9 34.1 32.6 28.2
T&GM as a proportion of total
sales -% 1.7 2.3 2.7 5.1 8.0 11.3
Fluid Power as a proportion
of total sales -% 7.3 8.9 11.6 14.3 16.4 18.3
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