Brammer PLC Trading Update (5678C)
June 29 2016 - 1:00AM
UK Regulatory
TIDMBRAM
RNS Number : 5678C
Brammer PLC
29 June 2016
PRESS RELEASE
FOR RELEASE 07.00
29 June 2016
Brammer plc
("Brammer" or the "Group")
Trading Update
Brammer, Europe's leading distributor of quality industrial
maintenance, repair and overhaul products ("MRO"), today issues the
following trading update.
Since our last trading update on 13 May 2016, which covered the
period to 30 April 2016, we have seen a significant slowdown in
sales against our expectations. Sales per working day ("SPWD") in
May were down 3% compared with last year. We saw a weak performance
in the UK, which was down 6%, but also more broadly across
Continental Europe.
Whilst the last few days of the quarter are very significant for
the month's result, based on the performance to the end of last
week, it is now clear that the weakness seen in May has not
reversed as expected and has continued into June. The UK started
the month positively, but it has experienced a particularly weak
performance over the last few days. Underlying margin in May and
June month to date was down against the previous year.
The underlying margin for the first half is expected to be
slightly ahead of the prior year; however, this is more than offset
by the impact of lower rebate levels from reduced sales and stock
reduction. As such, we now anticipate Group adjusted profit before
tax in the first half to be below expectations at approximately
GBP5m. As a result of this reduced level of profitability, the
Group will be close to its net debt/EBITDA bank covenant(1) at the
period end.
In the light of current market conditions, we are reviewing the
Group's trading outlook for the year as a whole, and the UK in
particular (where recovery plans are still at an early stage). We
are taking measures to improve profitability and strengthen the
Group's balance sheet. Our stock reduction programme continues to
make progress and is still expected to deliver a GBP30m reduction
by the end of September 2016.
The Board is now reviewing whether it is appropriate to declare
an interim dividend in respect of the half year and will provide a
detailed update on its revised expectations for the full year at
the time of the interim results announcement on 4 August 2016.
Enquiries:
Brammer plc Tel: 01565 756801
Bill Whiteley, Chairman
Ian R Fraser, Chief Executive
Duncan Magrath, Group Finance Director
Hudson Sandler: Tel: 020 7796 4133
Andrew Hayes
Katie Matthews
Note:
1. The ratio of Consolidated Total Net Borrowings to
Consolidated EBITDA in relation to the trailing 12 month period
must not exceed 3.0:1.0. Both Consolidated Total Net Borrowings and
Consolidated EBITDA are calculated using the average exchange rates
for the trailing 12 month period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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