RNS No 5658n
BRAMMER PLC
8th September 1997
1997 INTERIM RESULTS
CONTINUED GOOD PROGRESS
Brammer plc, the European industrial services group, today announces its
interim results for the six months ended 30 June 1997.
Highlights
Turnover #111.9m +8.9%
Profit before interest #14.3m +12.5%
Profit before tax #14.0m +9.9%
Earnings per share 21.0p +13.5%
Dividend per share 5.6p +6.7%
At constant exchange rates:
* Group profit before tax and EPS increased by 15.2% and 20.0%
respectively
* Increased market penetration, new products and acquisitions combined to
move distribution profits forward by 13.0% to #11.0m despite competitive
European market conditions
* Livingston, benefiting from its Dutch acquisition, Hamilton, and good
performances in the UK and France, made excellent progress increasing
profits by 39.6% to #3.2m
* Profits from continental Europe increased 52.6% to #3.6m
Hugh Lang, the chairman, commented:
"We continue to trade ahead of last year's levels. Market conditions in the
UK remain more subdued than we would like but we are giving a good account of
ourselves. In Spain and Holland we are producing very satisfactory results
and there are welcome signs of improvement in both France and Germany. If
these conditions continue we would expect to make further progress in the
remainder of the year."
Enquiries: Brammer plc 0171 638 9571 (8:00am-1:00pm)
0161 928 3363 (1:00pm-4.30pm)
Hugh Lang, Chairman
Robert Ffoulkes-Jones, Chief executive
John Cumming, Finance director
INTERIM ANNOUNCEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 1997
CHAIRMAN'S STATEMENT
Results
The first six months of 1997 was another successful period for Brammer with
both our core businesses continuing their profitable growth. Group turnover
increased to #111.9 million, some 8.9% higher than in the first half of the
previous year. Profit before tax was 9.9% ahead at #14.0 million, while
earnings per share rose by 13.5% to 21.0p. Although encouraging, this
outcome significantly understates the real performance of our businesses
whose results on translation have been reduced by the strength of sterling.
At constant exchange rates the turnover increase would have been 16.2%,
profit before tax would have risen by 15.2% and earnings per share by 20.0%.
In order to facilitate comparative analysis we have included figures, where
appropriate, adjusted to eliminate the effects of exchange rate movements
during the period.
Our control of working capital remained good, although net borrowings
increased during the half year from #0.4 million to #4.7 million after early
payment of a dividend of #4.8 million, which normally falls in the second
half year, and cash payments for acquisitions of #3.8 million.
Dividend
We have declared an interim divided of 5.6p per share, an increase of 6.7%
over the 1996 figure. This will be paid on 11 November 1997 to all
shareholders on the register at the close of business on 19 September 1997.
As usual, we are offering a scrip alternative.
Business highlights
We continued to make good progress, pushing forward with our strategy of
growing and developing our core business in distribution and electronic
equipment services in a European context.
Distribution
During the period our distribution business advanced with sales and profits
increasing, at constant exchange rates, by 15.6% to #91.7 million and 13.0%
to #11.0 million respectively.
The European bearings market has been extremely competitive with the
principal manufacturers all seeking to increase their market shares at a time
of sluggish demand. Power transmission products have generally enjoyed
better market conditions and we have increased our share in this sector,
particularly in France. New additions to our product range have also done
well. We have substantially increased our business in seals following the
acquisitions of Abec and Mecro; and BSL is now the leading UK distributor.
Also BSL has recently launched a new range of more than 8,000 industrial
tools in response to our customers' demand for "one stop shopping".
We are pleased with our recent acquisitions. Mecro has been smoothly
integrated with BSL and at nine locations we have already merged the two
operations. Abec was initially more difficult, but we
are now benefiting from Abec's know-how in seals and other fields
such as industrial tools and motion control.
BSL Engineering has had a good first half continuing to progress
our motion control business and commencing delivery of important
aerospace orders referred to at last year end. The added value
brought to our distribution business by BSL Engineering, through
our gearbox rebuilding and other specialised services, is of
growing importance.
In France at Roulement Service, despite a tough economic
environment, both sales and profits have moved ahead, while we
have taken steps to increase our penetration of the very large market in
Ile-de-France. In Spain we have continued to invest to bring
Rodamientos fully into the group fold. We have moved into more
appropriate new offices on the same site as our warehouse and we
have been busy preparing for the new IT system which is due to be
installed early next year.
Our progress can be measured by the fact that we now have 176
customer service centres in the UK, France and Spain, compared to
150 this time last year. In March we took the important step of
adopting a common house style across our European distribution
business, using the distinctive genie logo to project our message
of quality and customer service. This is already bringing
benefits in terms of marketing, customer recognition and employee
motivation. Our strategy remains to build a specialised European
network, taking advantage of increasing economies of scale,
handling more of the supply chain for our customers and
strengthening our leadership position.
Electronic equipment services
Livingston, our electronic equipment services business, made
excellent progress in the first half year. Sales and profits, at
constant exchange rates, were up 19.2% to #20.2 million and 39.6%
to #3.2 million respectively.
Our new business in Holland which we acquired in July 1996
contributed significantly to these pleasing figures, while in both
the UK and France we performed well. In Germany the results were
below those of the previous year, but important new contracts have
been secured which will lead to improved trading in the second
half year.
Very much in line with Livingston's strategy for growing its
business with Europe's leading high technology companies we have
contracted with a number of leading companies in several different
countries for both the calibration and the management of their
inventories of specialist electronic equipment. We are confident
that more business will flow from these partnerships enabling us
to continue to widen the range of services that we offer.
Current trading and prospects
We continue to trade ahead of last year's levels. Market
conditions in the UK remain more subdued than we would like but we
are giving a good account of ourselves. In Spain and Holland we
are producing very satisfactory results and there are welcome
signs of improvement in both France and Germany. If these
conditions continue we would expect to make further progress in
the remainder of the year.
Hugh Lang
Brammer
Consolidated profit and loss account
The unaudited group results for the six months
Six months Six months Full year Six months Full year
to 30 June to 30 to 30
June June
1997 1996 1996 1996 1996
Proforma Proforma
#'000 #'000 #'000 #'000 #'000
Turnover
Continuing 111,911 91,855 180,059 97,302 184,671
operations
Acquisitions - 4,429 18,687 5,442 20,132
_______ _______ _______ _______ _______
Total turnover 111,911 96,284 198,746 102,744 204,803
Cost of sales (68,580) (59,567) (120,598) (63,589) (124,294)
_______ _______ _______ _______ _______
Gross profit 43,331 36,717 78,148 39,155 80,509
Distribution costs (19,530) (15,193) (32,302) (16,403) (33,570)
Administrative (9,909) (9,834) (18,661) (10,511) (19,437)
expenses _______ _______ _______ _______ _______
Operating profit _______ _______ _______ _______
Continuing 10,914 24,256 11,273 24,316
operations
Acquisitions 776 2,929 968 3,186
_______ _______ _______ _______
Total operating 13,892 11,690 27,185 12,241 27,502
profit
Profit on sale of 361 377 779 431 836
fixed assets _______ _______ _______ _______ _______
Profit on ordinary
activities
before interest 14,253 12,067 27,964 12,672 28,338
Net interest (211) (144) (415) (161) (439)
_______ _______ _______ _______ _______
Profit on ordinary
activities
after interest 14,042 11,923 27,549 12,511 27,899
Share of - 266 280 266 280
associate's pre-
tax profit
_______ _______ _______ _______ _______
Profit on ordinary 14,042 12,189 27,829 12,777 28,179
activities before
tax
Tax (4,364) (4,226) (9,446) (4,376) (9,574)
_______ _______ _______ _______ _______
Profit on ordinary
activities after
tax being profit 9,678 7,963 18,383 8,401 18,605
for the financial
period
Dividends (2,624) (2,389) (7,358) (2,389) (7,358)
__________________ _______ _______ _______ _______ _______
Profit for the
period retained
in the business 7,054 5,574 11,025 6,012 11,247
__________________ _______ _______ _______ _______ _______
Earnings per share 21.0p 17.5p 40.3p 18.5p 40.7p
__________________ _______ _______ _______ _______ _______
Dividend per share 5.60p 5.25p 16.00p 5.25p 16.00p
__________________ _______ _______ _______ _______ _______
The proforma figures for 1996 represent the group's results for
1996 translated at the rates of exchange which ruled as at 30 June
1997.
During 1997, apart from Mecro (see note 3), the group consisted of
only continuing businesses.
There is no significant difference between the results as
disclosed above and the results on an unmodified historic cost
basis.
Brammer
Consolidated balance sheet
The unaudited group financial position as at
30 June 30 June 31 Dec 30 June 31 Dec
1997 1996 1996 1996 1996
Proforma Proforma
#'000 #'000 #'000 #'000 #'000
Fixed assets
Tangible assets 37,577 28,660 32,160 30,819 33,373
______ ______ ______ ______ ______
Current assets
Stock 30,607 29,663 31,355 31,845 32,258
Debtors 53,761 45,876 47,050 49,866 48,766
Cash and deposits 15,428 24,447 20,158 25,107 20,642
______ ______ ______ ______ ______
99,796 99,986 98,563 106,818 101,666
Creditors - due (66,324) (60,707) (64,743) (64,317) (66,477)
within one year
Net current assets ______ ______ ______ ______ ______
33,472 39,279 33,820 42,501 35,189
______ ______ ______ ______ ______
Total assets less 71,049 67,939 65,980 73,320 68,562
current
liabilities
Creditors - due (19,895) (15,152) (19,262) (20,245) (21,597)
after one year
Provisions for (2,135) (2,811) (2,205) (2,881) (2,242)
liabilities and
charges
__________________ ______ ______ ______ ______ ______
Net assets 49,019 49,976 44,513 50,194 44,723
employed
__________________ ______ ______ ______ ______ ______
Capital and
reserves
Called up share 9,274 9,102 9,202 9,102 9,202
capital
Shares to be 45 57 52 57 52
issued
Share premium 12,290 10,967 11,454 10,967 11,454
account
Revaluation 75 75 75 75 75
reserve
Merger reserve (18,070) (6,628) (18,070) (6,628) (18,070)
Profit and loss 45,405 36,403 41,800 36,621 42,010
account
__________________ ______ ______ ______ ______ ______
Shareholders' 49,019 49,976 44,513 50,194 44,723
equity
__________________ ______ ______ ______ ______ ______
Brammer
Consolidated cash flow statement
The unaudited group cash flow for the six months
Six months Six months Full year Six months Full year
to 30 June to 30 June to 30 June
1997 1996 1996 1996 1996
Proforma Proforma
#'000 #'000 #'000 #'000 #'000
Operating profit 13,892 11,690 27,185 12,241 27,502
Loss on sale of - - 339 - 339
subsidiary
Depreciation of 7,228 5,693 12,364 6,144 12,848
tangible fixed
assets
Movement in (7,849) (6,168) (2,376) (7,728) (2,977)
working capital
Net cash inflow ______ ______ ______ ______ ______
from
operating activities 13,271 11,215 37,512 10,657 37,712
Returns on ______ ______ ______ ______ ______
investments and
servicing of finance
Interest received 244 865 1,386 874 1,390
Interest paid (528) (906) (1,587) (938) (1,615)
______ ______ ______ ______ ______
(284) (41) (201) (64) (225)
______ ______ ______ ______ ______
Tax paid (1,104) (337) (8,184) (433) (8,226)
Capital ______ ______ ______ ______ ______
expenditure and
financial investment
Purchase of (13,955) (7,949) (18,998) (8,236) (19,731)
tangible fixed assets
Sale of 3,362 2,957 6,469 2,939 6,812
tangible fixed assets
______ ______ ______ ______ ______
(10,593) (4,992) (12,529) (5,297) (12,919)
Acquisitions and ______ ______ ______ ______ ______
disposals
Purchase of (2,730) (8,147) (18,745) (8,147) (18,745)
business
Net cash acquired (43) - 2,132 - 2,132
______ ______ ______ ______ ______
(2,773) (8,147) (16,613) (8,147) (16,613)
Disposal of - - 128 - 128
subsidiary
Deferred (996) - - - -
consideration
______ ______ ______ ______ ______
(3,769) (8,147) (16,485) (8,147) (16,485)
______ ______ ______ ______ ______
Equity dividends (4,796) - (6,334) - (6,334)
paid ______ ______ ______ ______ ______
Net cash outflow before
management of liquid
resources and
financing (7,275) (2,302) (6,221) (3,284) (6,477)
______ ______ ______ ______ ______
Financing
Share options 721 207 326 207 326
SAYE scheme - - 1 - 1
Deposits (1,669) - - - -
Loans less than (6) 655 (2,315) 805 (1,709)
one year
Loans greater 1,452 (4,231) (3,286) (2,937) (1,168)
than one year
Finance leases (61) (56) (132) (67) (142)
______ ______ ______ ______ ______
437 (3,425) (5,406) (1,992) (2,692)
______ ______ ______ ______ ______
Decrease in cash (6,838) (5,727) (11,627) (5,276) (9,169)
______ ______ ______ ______ ______
Brammer
Notes to the accounts
1.Comparative results
Comparative figures for the year ended 31 December 1996 are
taken from the company's statutory accounts which have been
delivered to the Registrar of Companies with an unqualified
audit report. The proforma figures for 1996 represent the
group's results for 1996 translated at the rates of exchange
which ruled as at 30 June 1997.
2.Segmental analysis
Six months ended 30 June
Turnover Profit before interest
1997 1996 1996 1997 1996 1996
Proforma Proforma
#'000 % #'000 % #'000 % #'000 % #'000 % #'000 %
Business
Distr- 91,722 82 79,341 82 83,952 82 11,016 77 9,749 81 10,129 80
ibution
Electronic
equipment
services 20,189 18 16,943 18 18,792 18 3,237 23 2,318 19 2,543 20
_____ __ _____ __ _____ __ _____ __ _____ __ _____ __
111,911 100 96,284 100 102,744 100 14,253 100 12,067 100 12,672 100
_____ __ _____ __ _____ __ _____ __ _____ __ _____ __
Geographic
United 75,928 68 67,380 70 67,380 66 10,640 75 9,699 80 9,699 77
Kingdom
Other 35,983 32 28,904 30 35,364 34 3,613 25 2,368 20 2,973 23
Europe
_____ __ _____ __ _____ __ _____ __ _____ __ _____ __
111,911 100 96,284 100 102,744 100 14,253 100 12,067 100 12,672 100
_____ __ _____ __ _____ __ _____ __ _____ __ _____ __
3.Acquisitions
On 27 January 1997 the group acquired the assets and business
of the Mecro Group Limited ("Mecro"). As the business of Mecro
was immediately absorbed by BSL Limited it is not possible to
separately identify their results.
4.Reconciliation of net cash flow to movement in net debt
Six months Six months Full year Six months Full year
to 30 June to 30 June to 30 June
1997 1996 1996 1996 1996
Proforma Proforma
#'000 #'000 #'000 #'000 #'000
Decrease in cash (6,838) (5,727) (11,627) (5,276) (9,169)
in the period
Cash inflow from
increase
in debt and lease 284 3,632 5,733 2,199 3,019
financing
_____ _____ _____ _____ _____
(6,554) (2,095) (5,894) (3,077) (6,150)
Loans acquired - - (3,542) - (3,542)
with subsidiaries
Translation 2,267 5,433 6,517 1,626 4,676
differences
_____ _____ _____ _____ _____
Movement in net (4,287) 3,338 (2,919) (1,451) (5,016)
funds
_____ _____ _____ _____ _____
Net funds at 31 (426) 4,590 4,590 4,590 4,590
December 1996
_____ _____ _____ _____ _____
Net funds at 30 (4,713) 7,928 1,671 3,139 (426)
June 1997 _____ _____ _____ _____ _____
5.A copy of the interim announcement is available for inspection
at the registered office of the company, 1 Tabley Court,
Victoria Street, Altrincham, Cheshire WA14 1EZ and the offices
of Dewe Rogerson Ltd, 3 1/2 London Wall Buildings, London Wall,
London EC2M 5SY, and will be posted to shareholders.
6.Relevant dates concerning the payment of the interim dividend
are:
Record date 19 September 1997
Payment date 11 November 1997
END
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