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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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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 | |
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0.00 | 0.00% | 164.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS No 1094e BRAMMER PLC 8 September 1999 1999 INTERIM RESULTS Focus on Expansion in Europe Brammer plc, the European industrial services group, today announces its results for the six months ending 30 June 1999. Highlights 1999 1998 Increase Turnover #122.2m #117.3m 4.2% Profit before interest #10.6m #13.6m (22.3)% Profit before tax #10.1m #13.4m (24.3)% Earnings per share 14.6p 19.4p (24.7)% Dividend per share 6.2p 6.0p 3.3% . Strong growth in sales and profits from Livingston and European distribution activities was offset by weak market conditions faced by UK distribution business. . UK sales, at constant exchange rates, declined 5.6% while continental European sales rose 21.3%. Europe now accounts for 41.4% of group sales. . Livingston made excellent progress with sales ahead 41.6% and operating profit up 29.5%. . The recently acquired calibration businesses in Holland, France and Spain are making good progress and widening Livingston's external customer base for calibration management. Robert Ffoulkes-Jones, chairman, said: "Although Livingston continues to move ahead strongly, the uncertain conditions affecting our core UK distribution business make it difficult to predict the outcome for the group for the year as a whole. We are not planning for any real improvement in market conditions in the second half. However, should manufacturing activity pick up, and there is some indication that it may do so when the destocking phase ends, we would expect to be early beneficiaries." Enquiries: Brammer plc 0171 638 9571 (8.00am - 1.00pm) 0161 928 3363 (1.00pm - 4.30pm) Robert Ffoulkes-Jones, chairman Ian Fraser, chief executive John Cumming, finance director Citigate Dewe Rogerson Ltd 0171 638 9571 Martin Jackson / Duncan Murray BRAMMER plc 1999 INTERIM RESULTS CHAIRMAN'S STATEMENT Results Our first half bears the imprint of two different forces. The benefits of our strategy to develop Livingston and our continental European activities are clear in their strong growth in both sales and profits. This improvement, however, was more than offset by the weak market conditions faced by our UK distribution business. In the six months to 30 June 1999, group profit before tax at #10.1 million was 24.3% lower than the first half of 1998, but, at constant exchange rates, marginally ahead of the second half of that year. This decline resulted in earnings per share falling to 14.6p (1998 19.4p). Group sales, at constant exchange rates, increased by 4.0% reflecting a decline in the UK of 5.6% and an increase in continental Europe of 21.3%. Our sales split is now 58.6% (1998 64.5%) from the UK and 41.4% (1998 35.5%) from the continent. Net cash flow from operating activities increased by #5.8 million as we reduced the level of inventory in our distribution business to reflect current demand. However, to support Livingston s rapid growth, our fixed asset investment in rental inventory at the end of the period was a gross #71 million, up #26 million on the first half of last year. Our distribution and administrative costs as a percentage of sales are up from 26.1% to 28.2% on the comparable period last year as we continue to support new initiatives and as the mix of our business has moved in favour of Livingston. However, in response to weak market conditions, particularly in the UK, management has put in place a significant cost reduction programme, which will be cost neutral during the second half. The restructuring, which will aim to reduce annual costs by some #2.5 million, will not adversely affect the sharp end of our business. We will take advantage of greater efficiencies made possible through improved processes. As a measure of our continuing confidence, we have declared an interim dividend of 6.2p, up 3.3% on last year, which will be paid on 11 November 1999 to all shareholders on the register at the close of business on 24 September 1999. Distribution Sales, at constant exchange rates, decreased by 5.7% and operating profit by 42.5% largely due to the difficult trading conditions faced by BSL in the UK where our markets remain patchy with growth predicted to return to certain sectors whilst others are still reporting severe trading conditions. The continued strength of sterling has adversely affected many of BSL's customers. General engineering, by way of example, has been particularly hard hit whilst we have seen fairly flat conditions in the automotive sector but some buoyancy amongst the utilities. In the UK, we have concentrated our efforts in the first half on restoring gross margins and have managed to reverse a falling trend. In France we have been delighted with the success of our efforts to take a greater share of the Paris market. However, in Spain we have had some teething problems with our new IT systems although these are now largely behind us. Recognising the need for long term growth, we continue to invest significantly in new products and services and in IT to provide operational efficiencies. Our newer product ranges, including fluid power, have made good progress and we will continue to broaden our range developing new market potential and increasing growth opportunities. Our proposed new central warehouse is starting to take shape and we should open this facility next July, when we expect to achieve further operational and cost efficiencies together with higher service levels. Our Insite programme (a BSL service centre on the customer's premises) is progressing well with eight sites now operational and further opportunities identified. IT systems will play a key role in our future and I am confident that the developments we have underway will give us the flexibility to meet the changing needs of the market. Trials have begun on Internet trading with two major customers using our "Genius" system which some of you will have seen at our last annual general meeting. Our strategic review has given further impetus to our efforts to grow our distribution business both geographically and by extending our range of products and services. In July, we announced a 49% participation in KNS, a leading distributor in Holland, having acquired a 25% interest in Rolamentos, Portugal, in November 1998. We are now clear market leaders in Europe with strong positions in the UK, France, Holland, Spain and Portugal. Our aim, over the next three years, is to extend our leadership, which will involve further acquisitions. It is our belief that keeping in step with our suppliers and customers in providing Europe-wide coverage is essential for Brammer's long term success. Livingston Livingston, our electronic equipment management business, made excellent progress with sales and operating profit, at constant exchange rates, ahead 41.6% and 29.5% respectively. In the UK and continental Europe, sales were well up with Germany and the Netherlands particularly strong. We have also taken the opportunity to raise the profile of our equipment management capability in our UK computer business, which is progressing well under our new management team. It is well worth noting that over the last five years, Livingston has grown impressively with sales up from an annual rate of #30 million to #68 million and gross investment in rental equipment up from #27 million to #71 million. We have now achieved critical mass in almost all our markets and have established a strong leadership position across Europe. We now have equipment management contracts in all of the larger European countries and with most of the leading computer manufacturers. Many of these contracts are now dealt with via the Internet. Our contracts with KPN and Thomson-CSF are progressing well. However, at this stage of their implementation, they are absorbing cash and management resources. Our recently acquired calibration businesses in Holland (from KPN Telecom), France (from Thomson-CSF) and Spain (from Tektronix) are making good progress and widening our external customer base for calibration management. Current trading Although Livingston continues to move ahead strongly, the uncertain conditions affecting our core UK distribution business make it difficult to predict the outcome for the group for the year as a whole. We are not planning for any real improvement in market conditions in the second half. However, should manufacturing activity pick up, and there is some indication that it may do so when the destocking phase ends, we would expect to be early beneficiaries. Robert Ffoulkes-Jones Chairman 8 September 1999 Brammer Consolidated profit and loss account The unaudited group results for the six months Six months to June 1999 Existing Acquired Total #'000 #'000 #'000 ------------ ------------ ------------ Turnover 119,320 2,922 122,242 Cost of sales (76,344) (1,676) (78,020) ------------ ------------ ------------ Gross profit 42,976 1,246 44,222 Distribution costs (21,321) (150) (21,471) Administrative expenses (12,164) (702) (12,866) Amortisation of goodwill - (159) (159) ----------- ----------- ----------- Total administrative expenses (12,164) (861) (13,025) ----------- ----------- ----------- Operating profit 9,491 235 9,726 Share of associate's operating profit 1 - 1 Profit on sale of fixed assets 827 - 827 ----------- ----------- ----------- Profit on ordinary activities before interest 10,319 235 10,554 Net interest (436) ------------ ------------ ------------ Profit on ordinary activities before tax 10,118 Tax (3,200) ------------ ------------ ------------ Profit on ordinary activities after tax being profit for the financial period 6,918 Dividends (2,932) ------------ ------------ ------------ Profit for the period retained in the business 3,986 ------------ ------------ ------------ ------------ ------------ ------------ Earnings per share Basic 14.6p Diluted 14.4p ------------ ----------- ------------ Dividend per share 6.2p ----------- ----------- ------------ Full year 1998 1998 Total Total #'000 #'000 ------------ ------------ Turnover 117,339 238,369 Cost of sales (73,390) (150,572) ------------ ------------- Gross profit 43,949 87,797 Distribution costs (20,396) (43,409) Administrative expenses (10,286) (20,861) Amortisation of goodwill - - ----------- ----------- Total administrative expenses (10,286) (20,861) ----------- ----------- Operating profit 13,267 23,527 Share of associate's operating profit - (7) Profit on sale of fixed assets 321 1,050 ----------- ----------- Profit on ordinary activities before interest 13,588 24,570 Net interest (217) (635) ----------- ----------- Profit on ordinary activities before tax 13,371 23,935 Tax (4,212) (7,380) ------------ ------------ Profit on ordinary activities after tax being profit for the financial period 9,159 16,555 Dividends (2,822) (8,393) ------------ ------------ Profit for the period retained in the business 6,337 8,162 ------------ ------------ ------------ ------------ Earnings per share Basic 19.4p 35.2p Diluted 19.0p 35.1p ------------ ------------ Dividend per share 6.0p 17.8p ------------ ------------ During 1998 the group consisted solely of existing 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 1999 1998 1998 #'000 #'000 #'000 ------------ ------------ ----------- Fixed assets Intangible assets 1,505 - 1,574 Tangible assets 65,216 50,270 59,953 Investment in associate 412 - 414 ------------ ------------ ----------- 67,133 50,270 61,941 ------------ ------------ ----------- Current assets Stock 30,891 39,399 33,218 Debtors 60,842 55,511 55,189 Cash and deposits 17,740 18,340 24,050 ------------ ----------- ------------ 109,473 113,250 112,457 Creditors - due within one year (64,607) (69,232) (66,112) ------------ ------------ ------------ Net current assets 44,866 44,018 46,345 ------------ ------------ ------------ Total assets less current liabilities 111,999 94,288 108,286 Creditors - due after one year (37,755) (28,728) (37,648) Provisions for liabilities and charges (4,185) (3,241) (4,344) ------------ ------------ ------------ Net assets employed 70,059 62,319 66,294 ------------ ------------ ------------ Capital and reserves Called up share capital 9,459 9,351 9,440 Shares to be issued - 16 - Share premium account 1,523 1,304 1,307 Profit and loss account 59,077 51,648 55,547 ------------ ------------ ------------ Shareholders'equity 70,059 62,319 66,294 ------------ ------------ ----------- Brammer Consolidated cash flow statement The unaudited group cash flow for the six months Six months Six months Full year to 30 June to 30 June 1999 1998 1998 #'000 #'000 #'000 ------------ ------------ ------------ Operating profit 9,726 13,267 23,527 Depreciation of tangible fixed assets 13,690 9,636 21,732 Amortisation of goodwill 159 - - Movement in working capital (5,970) (11,110) (576) ------------ ------------ ------------ Net cash inflow from operating 17,605 11,793 44,683 activities ------------ ------------ ------------ Returns on investments and servicing of finance Interest received 145 489 799 Interest paid (683) (674) (1,359) ----------- ------------ ------------ (538) (185) (560) ------------ ------------ ------------ Tax paid (1,295) (808) (8,388) ------------ ------------ ------------ Capital expenditure and financial investment Purchase of tangible fixed assets (28,363) (23,177) (47,692) Sale of tangible fixed assets 6,044 6,121 12,074 ------------ ------------ ------------ (22,319) (17,056) (35,618) ------------ ------------ ------------ Acquisitions and disposals Purchase of business (745) - (421) Net cash acquired 839 - - ------------ ------------ ------------ 94 - (421) Deferred consideration (2,569) (855) (855) ------------ ------------ ------------ (2,475) (855) (1,276) ------------ ------------ ------------ Equity dividends paid - - (6,405) ------------ ------------ ------------ Net cash outflow before management of liquid resources and financing (9,022) (7,111) (7,564) ------------ ------------ ------------ Management of liquid resources Deposits (567) 1,143 690 ------------ ------------ ------------ Financing Share options 217 237 236 SAYE scheme 12 65 68 Loans less than one year 401 122 (454) Loans greater than one year 2,720 4,830 12,344 Finance leases (62) (60) (143) ------------ ------------ ------------ 3,288 5,194 12,051 ------------ ------------ ------------ (Decrease) / increase in cash (6,301) (774) 5,177 ------------ ------------ ------------ Brammer Consolidated statement of total recognised gains and losses Six months Six months Full year to 30 June to 30 June to Dec 1999 1998 1998 #'000 #'000 #'000 ------------ ------------ ------------ Profit for the period 6,918 9,159 16,555 Exchange differences on foreign currency net investments (406) (100) 201 ------------ ------------ ------------ Total recognised gains and 6,512 9,059 16,756 losses for the period ------------ ------------ ------------ Notes to the accounts 1. Comparative results Comparative figures for the year ended 31 December 1998 are taken from the company's statutory accounts which have been delivered to the Registrar of Companies with an unqualified audit report. 2. Segmental analysis Six months ended 30 June Turnover Profit before interest 1999 1998 1998 1999 1998 1998 Proforma Proforma #'000 #' 000 #'000 #'000 #'000 #'000 -------- -------- -------- -------- -------- -------- Business Distribution 88,151 93,508 93,368 5,646 9,823 9,822 Associate - - - 1 - - Electronic equipment management 34,091 24,079 23,971 4,907 3,789 3,766 -------- ------- -------- -------- -------- -------- 122,242 117,587 117,339 10,554 13,612 13,588 -------- -------- -------- -------- -------- -------- Geographic United Kingdom 71,607 75,858 75,858 4,039 8,202 8,202 Associate - - - 1 - - Other Europe 50,635 41,729 41,481 6,514 5,410 5,386 -------- -------- -------- -------- -------- -------- 122,242 117,587 117,339 10,554 13,612 13,588 -------- -------- -------- -------- -------- -------- Net operating assets 1999 1998 1998 Proforma #'000 #'000 #'000 ----------- ------------ ----------- Business Distribution 56,094 59,810 59,716 Associate 415 - - Electronic equipment management 51,897 34,352 34,188 ------------ ------------ ----------- 108,406 94,162 93,904 ------------ ------------ ----------- Geographic United Kingdom 56,197 54,590 54,590 Associate 415 - - Other Europe 51,794 39,572 39,314 ------------ ------------ ---------- 108,406 94,162 93,904 ------------ ------------ ---------- The proforma figures for 1998 represent the group s results for 1998 translated at the rates of exchange which ruled as at 30 June 1999. 3. Acquisitions On 31 December 1998 a company was formed in Holland, 40% owned, but controlled, by the group, to acquire the calibration related assets and business of KPN Telecom. On 15 March 1999 the group acquired a 50.1% interest in Thomson-CSF Instrumentation Services SA. Details of these acquisitions are shown in notes 18 and 19 to the group s 1998 annual report. On 25 May 1999 the group announced that it had acquired the assets of the commercial calibration division of Tektronix Espana ("Tektronix"). Tektronix is a leading manufacturer of test and measurement equipment. The group has also won an outsourcing contract to be the Authorised Service Provider of calibration and repair services to Tektronix and its customers in Spain. The results of the above three companies are shown in the "acquired" column on the profit and loss account. On 8 July 1999 the group announced that it had acquired a 49% interest in KNS Aandrijftechniek B.V. ("KNS"), based in Holland, for a maximum consideration of Dutch Guilders ("NLG") 4.2 million (#1.2 million) in cash. In addition, Brammer will lend KNS up to NLG 2.5 million (#740,000) to repay vendor loans and provide working capital. KNS, whose business is similar to that of Brammer's distribution division, operates in the Netherlands, Belgium, Austria and Germany. Its customer base includes a broad range of industrial companies and it is an authorised distributor for some of the world's leading bearing manufacturers, a number of whom are common to the group. 4.Reconciliation of net cash flow to movement in net debt Six months Six months Full year to 30 June to 30 June to 31 Dec 1999 1998 1998 #'000 #'000 #'000 ------------ ------------ ------------ (Decrease) / increase in cash in (6,301) (774) 5,177 the period Cash inflow from increase in debt and lease financing (2,441) (6,035) (12,437) ------------ ------------ ------------ (8,742) (6,809) (7,260) New finance leases (51) - - Loans acquired with subsidiaries - - - Translation differences 3,002 477 (2,301) ------------ ------------ ------------ Movement in net funds (5,791) (6,332) (9,561) Net funds at 31 December 1998 (13,048) (3,487) (3,487) ------------ ------------ ------------ Net funds at 30 June 1999 (18,839) (9,819) (13,048) ------------ ------------ ------------ 5.Millennium & Euro The process of addressing the year 2000 computer and instrumentation issue, referred to in the 1998 financial review, has continued during the first half of 1999. As part of this process we have now estimated that the total cost of the programme, over and above normal on-going upgrade expenditure, will be #527,000 of which #343,000 has already been incurred and charged to the profit and loss account. As stated in the 1998 financial review the complexities of the issue are such that it is not possible to guarantee full year 2000 compliance prior to 1 January 2000. However, the directors are confident that the internal risks have materially reduced. The impact on the group of the introduction of the Euro at the beginning of this year has also been assessed. Each company has implemented a programme to address the problems that have been identified. We have estimated that the total cost of amending our systems to be able to handle the Euro at #74,000 of which #46,000 has already been incurred and charged to the profit and loss account. For the group as a whole, we will continue with our current foreign currency hedging techniques using financial instruments that may be designated in Euros as well as other currencies where appropriate. 6.Interim announcement 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 Citigate Dewe Rogerson Ltd, 3 London Wall Buildings, London Wall, London EC2M 5SY, and will be posted to shareholders. 7.Interim dividend Relevant dates concerning the payment of the interim dividend are Record date 24 September 1999 Payment date 11 November 1999 END IR DBGBCUGGCCCR
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