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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Brammer | LSE:BRAM | London | Ordinary Share | GB0001195089 | ORD 20P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 164.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
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RNS No 9071m
BRAMMER PLC
24th March 1998
1997 PRELIMINARY RESULTS
GOOD PROGRESS OVER A WIDE FRONT
Brammer plc, the European industrial services group, today announces
preliminary results for the year ended 31 December 1997.
Highlights
1997 1996 1996
Proforma Increase Reported
Increase
Turnover #223m #198m 13% #205m
9%
Profit before interest #30.7m #27.9m 10% #28.3m
8%
Profit before tax #30.5m #27.8m 10% #28.2m
8%
Net cash inflow from #40.1m #37.5m 7% #37.7m
6%
operating activities
Earnings per share 46.1p 40.0p 15% 40.6p
14%
Dividend per share 17.2p 16.0p 8% 16.0p
8%
The proforma figures for 1996, which are unaudited, represent the group's
results for 1996 translated at the rates of exchange which ruled as at 31
December 1997.
* At constant exchange rates profit before tax was 10% ahead while
earnings per share were up 15%.
* 37% growth in continental Europe profit before interest means some 26%
of group profits now earned outside the UK.
* Adoption by distribution businesses of a common identity across Europe
has increased visibility and given a considerable boost to
pan-European ambitions.
* Livingston successfully pioneered a new inventory management service
with leading electronics and computer companies.
* Livingston was selected by Hewlett-Packard to be its European rental
partner.
Commenting on current trading and prospects, Hugh Lang, the chairman, said:
"We expect our profit for the first quarter of 1998 to be slightly ahead of
the corresponding period last year, with Europe continuing to do well while
business in the UK remains flat. We have many new initiatives under way and
a number of important contracts under negotiation. We expect to convert a
reasonable proportion of these opportunities into new business in the months
ahead. For the year as a whole, we are again planning for growth and,
provided there are no major economic upheavals in the markets that we serve,
we expect to make further progress."
Issued by: Dewe Rogerson Tel: 0171-638 9571
Martin Jackson
Enquiries: Brammer plc Tel: 0171-638 9571
(24 March)
Hugh Lang, Chairman 0161-928 3363
Robert Ffoulkes-Jones, Chief executive
John Cumming, Finance director
BRAMMER plc
1997 PRELIMINARY RESULTS
Performance
We made good progress again in 1997. As predicted a year ago our growth was
at a lower rate than in the previous three years, but we believe that an
increase in profit before tax of 8% to #30.5 million should be considered
creditable in a year in which currency movements were again unhelpful and, in
the second six months, UK manufacturing industry lost momentum. If our 1996
results had been converted at the exchange rates ruling at the end of 1997,
our 1997 profits growth would have been 10% and our earnings per share growth
15%.
On a lower tax charge of 30%, earnings per share rose by 14% to 46.1 pence.
Our balance sheet shows gearing of 6% after 1% a year before. This was
mainly due to increases in the stock levels and rental assets required to
support considerably higher turnover. After writing off goodwill of #3.6
million on the acquisition of Mecro in January 1997, our shareholders' equity
increased by 25% from #44.7 million to #55.8 million.
1997 in brief
We are making progress on a wide front involving both our core businesses of
distribution and electronic equipment management in the Benelux countries,
France, Germany, Ireland and Spain, as well as in the UK. With growth being
achieved fairly evenly throughout the group the balance of our businesses
remained more or less unchanged with some 80% of sales in distribution and
the UK accounting for roughly two thirds of our turnover. However, looking
at profitability, it is very encouraging to see that, in 1997, some 26% of
our profits were earned outside the UK, after 22% the previous year. This
bodes well for the future of the group.
During the first half of 1997 we experienced weak business conditions in
continental Europe followed by a much stronger second half. In the UK,
conditions became tougher as the year progressed with many of our customers
being adversely affected by the strengthening pound.
Throughout the group it has been a busy year. We have expanded our product
range and our services in both divisions; we have further enhanced our IT
systems; we have continued our management development programmes; our
distribution businesses have adopted a common identity across Europe; we have
integrated two acquisitions into BSL; we have moved our Spanish central
office to a new purpose-built facility; and Livingston is now undertaking
equipment management contracts.
Distribution
At constant exchange rates, sales at #181.0 million were up 12% while the
operating profit of #24.1 million was 9% higher. The lower net profit
margins reflect the higher operating costs of our two acquisitions and the
more difficult trading conditions in the UK.
Early in 1997 our distribution businesses across Europe adopted a common
identity incorporating the genie logo designed for BSL in 1990 and this has
raised our profile and given a considerable boost to our European ambitions.
In the UK we acquired Abec (September 1996) and Mecro (January 1997). The
integration of these acquisitions into BSL is now largely complete and,
although in the short term they have increased our cost base relative to
sales, we are seeing the benefits of new products and services as well as
increased volumes. As a result of the acquisitions we have an increase in
our physical presence in the UK of some 10 branches for a new total of 117.
Following the acquisitions, BSL continued to improve efficiency throughout
its business. We also introduced new products and added-value services and,
in September, we launched "The Works", a new catalogue featuring some 8,000
new products - principally tools for the work place. This new venture has
been well received. We also continue to work proactively with customers and
suppliers to find ways of reducing their costs in areas such as stock
holding, administration and maintenance. We have expanded our presence in
the market for seals and we are becoming more active in the fluid power
market; both initiatives being encouraged by the recent acquisitions.
BSL Engineering had a very good year; both in supporting BSL and with our
direct business in the aerospace and automotive industries. Tight control of
operating costs, strong balance sheet management and the assimilation of ISO
9002 quality standards have been important contributors to our success. We
have adopted the common identity of the distribution division and will soon
move into new purpose-designed premises in south Manchester where we expect
to make further progress.
During the year BSL Engineering opened a new gearbox rebuild and drive centre
in Maidstone and the results from that have been encouraging confirming the
importance of our specialised added-value approach to service.
In France, after a fairly slow start to the year, Roulement Service increased
sales as well as operating profit and return on capital employed. During the
year bearing prices fell as the major suppliers went for market share but,
even against this trend, our sales increased by some 4%. Management has done
well to control costs and squeeze the balance sheet resulting in improved
quality of profit and a strong cash flow.
Our plan to increase our presence in the greater Paris region is under way
and we should start to see the benefits towards the end of 1998. Our
warehouse to the south of Paris together with our increased sales presence
should enable us to improve our competitive position in that important
market.
In Spain, Rodamientos USA had a good year, well up to our expectations, with
sales ahead by some 7%. These results have been helped by the improving
Spanish economy which now enjoys both low inflation and low interest rates.
As part of our strategy for Spain a great deal of investment, both capital
and revenue, has been made during the year. The need for this was identified
at the time of our acquisition following a period of some stagnation in the
business. We have moved the administration office from the centre of Bilbao
to our new purpose-built facility in the outskirts of the city. We also
opened four new branches taking the total to 21 and, since our acquisition
last year, we have substantially upgraded four others. We embarked on a
major IT systems development which is due to go live later this year and
which is expected to bring us significant improvements in inventory
management, customer service and financial control as well as being year 2000
compliant.
Electronic equipment management
At constant exchange rates, sales in 1997 of #42.1 million were up 15% and
operating profit was at a record level of #6.7 million, some 15% ahead of
1996. Markets for Livingston in the UK were relatively weak in the second
half, but, on the continent, they strengthened significantly as the year
progressed. Our calibration business in the UK and Livingston TES in Scotland
both did well. Calibration is core to our equipment management service giving
us strong links into the key operations of our customers.
During the year we pioneered a new service with leading companies in the
electronics and computer industries where we manage their demonstration
inventories. This service, in which they contact us via the Internet, allows
their customers enhanced product availability from our inventory and gives
overall improved use of capital. The German market was quick to see the
advantage of our equipment management service and we supported this with
significant investment in our own rental assets. As a result, Livingston
Germany has grown considerably and, together with France and Holland, now
represents 55% of Livingston business. Our critical mass in these countries
now gives us a much more profitable base on which to expand.
In December we were selected by Hewlett-Packard to be their European rental
partner giving us exposure to their large customer base. In the coming
months we expect to contract with companies in the defence and
telecommunications industries to manage their instrumentation inventories; in
effect, they would outsource to us the management of this element of their
business. We have every reason to believe that equipment management will be
a growing part of our business in the future.
Dividends
On the basis of these results we are recommending a final dividend of 11.6p
per share which, if approved, will be paid on 1 July 1998 to all shareholders
on the register at 14 April 1998. The total dividend for the year of 17.2p
per share is 8% higher than the previous year and is covered 2.7 times by our
earnings.
Current trading and prospects
We expect our profit for the first quarter of 1998 to be slightly ahead of
the corresponding period last year, with Europe continuing to do well while
business in the UK remains flat. We have many new initiatives under way and
a number of important contracts under negotiation. We expect to convert a
reasonable proportion of these opportunities into new business in the months
ahead. For the year as a whole, we are again planning for growth and,
provided there are no major economic upheavals in the markets that we serve,
we expect to make further progress.
Brammer plc
Preliminary Announcement
Consolidated profit and loss account for the year ended 31 December 1997
The group 1997 1996 1996
Proforma
Notes #'000 #'000 #'000
Turnover 1 223,055 197,727 204,803
Cost of sales (135,287) (119,975) (124,294)
--------- --------- ---------
Gross profit 87,768 77,752 80,509
Distribution costs (39,280) (32,104) (33,570)
Administrative expenses (18,683) (18,520) (19,437)
--------- --------- ---------
Operating profit 29,805 27,128 27,502
Profit on sale of fixed assets 911 766 836
--------- --------- ---------
Profit on ordinary activities before 1 30,716 27,894 28,338
interest
Net interest (216) (414) (439)
--------- --------- ---------
Profit on ordinary activities after interest 30,500 27,480 27,899
Share of associate's pre-tax profit - 280 280
--------- --------- ---------
Profit on ordinary activities before tax 1 30,500 27,760 28,179
Tax (9,098) (9,422) (9,574)
--------- --------- ---------
Profit on ordinary activities after tax 21,402 18,338 18,605
Dividends 5 (8,037) (7,358) (7,358)
--------- --------- ---------
Profit for the year retained in the business 13,365 10,980 11,247
--------- --------- ---------
Earnings per share 2 46.1p 40.0p 40.6p
Dividend per share 5 17.2p 16.0p 16.0p
The proforma figures for 1996, which are unaudited, represent the group's
results for 1996 translated at the rates of exchange which ruled as at 31
December 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.
Consolidated cash flow statement for the year ended 31 December 1997
1997 1996 1996
Proforma
#'000 #'000 #'000
Operating profit 29,805 27,128 27,502
Loss on disposal of - 339 339
subsidiary
Depreciation of tangible 15,637 12,285 12,848
fixed assets ------------ ----------- -----------
45,442 39,752 40,689
------------ ----------- -----------
Movement in working capital
Stock (5,590) 488 46
Debtors (7,189) 365 (93)
Creditors 7,389 (3,095) (2,930)
------------ ------------ ------------
(5,390) (2,242) (2,977)
-------------- ------------- ------------
Net cash inflow from operating 40,052 37,510 37,712
activities -------------- ------------- ------------
Returns on investments and
servicing of finance
Interest received 690 1,382 1,390
Interest paid (1,053) (1,582) (1,615)
-------------- ------------- ------------
(363) (200) (225)
-------------- ------------- ------------
Tax paid (10,243) (8,156) (8,226)
-------------- ------------- ------------
Capital expenditure and
financial investment
Purchase of tangible fixed (32,342) (18,816) (19,731)
assets
Sale of tangible fixed assets 7,178 6,350 6,812
-------------- ------------- ------------
(25,164) (12,466) (12,919)
-------------- -------------- --------------
Acquisitions and disposals
Purchase of subsidiaries and (2,719) (19,012) (18,745)
businesses -------------- -------------- --------------
Net cash acquired (43) 2,132 2,132
-------------- -------------- --------------
(2,762) (16,880) (16,613)
-------------- -------------- --------------
Disposal of subsidiary - 128 128
-------------- -------------- --------------
Deferred consideration (1,343) -
-------------- -------------- --------------
(4,105) (16,752) (16,485)
-------------- -------------- --------------
Equity dividends paid (6,762) (6,334) (6,334)
-------------- -------------- --------------
Net cash (outflow) / inflow
before management of
liquid resources and (6,585) (6,398) (6,477)
financing -------------- -------------- --------------
Management of liquid resources
Deposits (2,650) - -
-------------- -------------- --------------
Financing
Share options 825 326 326
SAYE scheme 220 1 1
Loans less than one year (288) (2,341) (1,709)
Loans greater than one year 6,464 (3,490) (1,168)
Finance leases (199) (131) (142)
-------------- -------------- --------------
7,022 (5,635) (2,692)
-------------- -------------- --------------
(Decrease) / increase in cash (2,213) (12,033) (9,169)
-------------- -------------- --------------
Cash (outflow) / inflow from (3,327) 5,962 3,019
(decrease) / increase in debt -------------- -------------- --------------
and lease financing
(5,540) (6,071) (6,150)
New finance leases (51) - -
Loans acquired with - (3,542) (3,542)
subsidiaries
Exchange movements 2,530 7,067 4,676
-------------- -------------- --------------
Movement in net funds (3,061) (2,546) (5,016)
Net funds at 31 December 1996 (426) 4,590 4,590
Net funds at 31 December 1997 (3,487) 2,044 (426)
-------------- -------------- --------------
The proforma figures for 1996, which are unaudited, represent the group's
results for 1996 translated at the rates of exchange which ruled as at 31
December 1997.
Notes
1 Turnover, profit and net assets
The business analysis of turnover, profit before tax and net assets
employed is as follows
Turnover Profit before interest
1997 1996 1996 1997 1996 1996
Proforma Proforma
#'000 #'000 #'000 #'000 #'000 #'000
Distribution 180,980 161,257 166,227 24,057 22,110 22,314
Electronic equipment management 42,075 36,470 38,576 6,659 5,784 6,024
223,055 197,727 204,803 30,716 27,894 28,338
Financing - - - (216) (414) (439)
Associate - - - - 280 280
223,055 197,727 204,803 30,500 27,760 28,179
Net operating assets
1997 1996 1996
Proforma
#'000 #'000 #'000
Distribution 47,018 41,140 42,849
Electronic equipment management 27,815 17,540 18,723
74,833 58,680 61,572
Financing (19,053) (14,203) (16,849)
Associate - - -
55,780 44,477 44,723
Financing represents interest, net funds, dividends and tax payable, all
of which relate to the group as a whole and cannot meaningfully be
allocated between different business sectors.
The geographic analysis of turnover, profit before interest and net
operating assets is as follows
Turnover Profit before interest
1997 1996 1996 1997 1996 1996
Proforma Proforma
#'000 #'000 #'000 #'000 #'000 #'000
United Kingdom 150,515 137,465 137,465 22,806 22,107 22,107
Other Europe 72,540 60,262 67,338 7,910 5,787 6,231
------- ------- ------- ------- ------- -------
223,055 197,727 204,803 30,716 27,894 28,338
------- ------- ------- ------- ------- -------
Net operating assets
1997 1996 1996
Proforma
#'000 #'000 #'000
United Kingdom 43,569 37,118 37,118
Other Europe 31,264 21,562 24,454
---------- ----------- ---------
74,833 58,680 61,572
Turnover to third parties by destination is not materially different to
turnover by origin.
Net operating assets excludes net funds, dividends and tax payable, all
of which relate to the group as a whole and cannot meaningfully be
allocated between different geographic sectors.
2 Earnings per share
Earnings per share are calculated on a weighted average number of shares
in issue amounting to 46,409,000 (1996 45,818,000) and on earnings after
tax of #21,402,000 (1996 #18,605,000). Neither the exercise of options
nor the issue of shares in respect of the deferred considerations would
have a material effect on the earnings per share.
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 Balance sheet highlights
1997 1996
#'000 #'000
Fixed assets 42,914 33,373
Working capital excluding tax and net funds 26,505 23,249
Tax (10,152) (11,473)
Net funds (3,487) (426)
Financed by
------------- -------------
Shareholders' equity 55,780 44,723
------------- -------------
5. Dividend
Relevant dates concerning the payment of the final dividend are:
Record date 14 April 1998
Annual general meeting 2 June 1998
Payment date 1 July 1998
6. Comparative results
The comparative results for 1996 are an extract from the published
accounts of the group. The published accounts in original form have been
delivered to the Registrar of Companies with an unqualified audit
report.
7. Preliminary announcement
A copy of the preliminary 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 Limited,
3+ London Wall Buildings, London Wall, London EC2M 5SY.
END
FR ALLLTVVIVFAT
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