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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 |
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RNS Number:9057R
Brammer PLC
27 February 2007
PRELIMINARY RESULTS
ORGANIC GROWTH EXCEEDS CORPORATE OBJECTIVE
Brammer is a market leading European industrial services group whose ultimate
aim is to supply its customers with a consistent quality of product and service,
across the entire bearings, power transmission and fluid power product range,
anywhere in Europe. Brammer presently operates in 276 locations in 11
countries.
Brammer today announces its results for the year ended 31 December 2006, under
IFRS as adopted by the EU.
FINANCIAL SUMMARY
2006 2005
#m #m Change
Revenue #314.3m #287.4m +9.4%
Profit before tax on ordinary activities (before amortisation of #12.0m #10.1m +18.8%
acquired intangibles and exceptional non cash pension curtailment)
Amortisation of acquired intangibles #(0.2)m #0.0m
Exceptional non cash pension curtailment #2.8m #0.0m
Profit before tax #14.6m #10.1m +44.6%
Net debt #54.2m #50.6m
Earnings per share - total
Basic 20.4p 15.8p +29.1%
Diluted 20.3p 15.7p
Earnings per share - on profit before amortisation of acquired
intangibles and exceptional non cash pension curtailment
Basic 16.6p 15.8p +5.1%
Diluted 16.6p 15.7p
Highlights
* Revenue increased 9.4% and profit before tax on ordinary activities
before amortisation of acquired intangibles and exceptional items by 18.8%,
driven by improving performance both on the continent and in the UK
* Market share grew in all European operations
* Overall growth in Sales per Working Day of 10.8%, at constant
exchange rates, significantly exceeded the corporate objective of 6%
* Key Account sales grew by 14.5%, now representing 28% of total
revenues, with important new Key Account wins across the Group
* Operating margins, before amortisation of acquired intangibles and
exceptional item, improved from 4.4% to 4.8% with underlying operating profit
increasing by 20.2% to #15.1 million
* Net borrowings increased from #50.6 million to #54.2 million,
reflecting acquisition costs and increased working capital driven by sales
growth and strategic investment in inventory
* Ramaekers BV acquisition in Belgium successfully integrated into
Brammer group. Conditional acquisition of Fin S.A. in Poland announced on 8
February
* On 1 January 2007 each business became known as Brammer, a major
step towards establishing a consistent service offering in every territory
David Dunn, chairman, said:
"We continue to implement successfully our very clear and consistent strategy.
That success can be seen in our sales growth, improving efficiencies and
capabilities, and in the opportunities now open to us. For 2007 we anticipate
further progress."
Enquiries: Brammer plc 020 7638 9571 (8.00am - 1.00pm)
0161 902 5572 (1.00pm - 4.30pm)
David Dunn, chairman
Ian Fraser, chief executive
Paul Thwaite, finance director
Issued: Citigate Dewe Rogerson Ltd 020 7638 9571
Martin Jackson
Nicola Smith
BRAMMER PLC
2006 PRELIMINARY RESULTS
CHAIRMAN'S STATEMENT
Overview
2006 was another year of considerable progress for Brammer. Revenue for the year
grew by over 9% to #314.3 million (2005: #287.4 million) and profit before tax,
pre the amortisation of acquired intangibles and exceptional non cash pension
curtailment, increased by 19% to #12.0 million (2005: #10.1million).
Performance highlights
Sales growth was achieved in every country in which Brammer trades. Key accounts
were an important element of this growth increasing by 14.5% and now
representing 28% of the Group's total sales. Importantly the sales momentum
increased as the year progressed, which is encouraging as we enter a new trading
year. We have continued to add capability to our sales organisation and systems
as our product offering has grown. Notwithstanding the inevitable cost increases
which this attracts, the Group's operating margin (operating profit before
amortisation of acquired intangibles and exceptional non cash pension
curtailment) increased from 4.4% to 4.8%.
For the first time in recent years net debt increased. The increase to #54.2
million (2005: #50.6 million) was largely a function of acquisition spend of
#1.9 million and an increase in working capital associated with the strong sales
growth in the last quarter and strategic investment in inventory. Nonetheless
stock and debtor days were reduced and all key financial ratios associated with
the Group's debt improved.
Strategy
The strategy remains unchanged and is being implemented in a clear and
consistent manner. At the half year we referred to the opportunities for Brammer
to acquire quality bolt on businesses in our chosen field and announced the
acquisition of Ramaekers BV, a privately owned Belgian business. This business
has since been merged with our existing operation in that country and with
effect from 1 January 2007 is trading as Brammer Belgium. We are delighted with
how well this merger has been received by employees and look forward to an
increasing contribution to the Group from the combined business.
On 8 February 2007 we announced the conditional acquisition of Fin S.A., a
privately owned Polish business. Combined with our own operation this will
provide a position of market leadership in Poland which is an important
territory for Brammer with excellent growth potential, particularly through the
servicing of Key Accounts. Fin is a high quality and profitable company with
sales of #17.5 million in 2006 and as with Ramaekers is an excellent fit with
Brammer.
We will continue to search for other such opportunities in the fragmented
European markets in which we operate and are confident we can identify further
good acquisition prospects.
The Board and our People
Chris Conway retired on 31 December 2006 after nine years of service as a non
executive director, latterly as the Senior Independent Director. His
contribution and wise counsel throughout that period has been immense. Terry
Garthwaite has succeeded Chris in the senior independent director role.
In December we welcomed Paul Forman to the Board as a non executive director. He
is currently Chief Executive of Low and Bonar plc and has considerable prior
experience in European distribution businesses.
In any business the quality and commitment of every employee is paramount to
success. Brammer is fortunate to employ a workforce which is contributing so
much to our growth. Training and development is a critical component within our
strategy and I am grateful to all our employees for their participation in the
Group's increasing scale of operations.
Dividend
The final dividend recommended by the Board is 4.2p (2005: 3.65p), which
together with the interim dividend of 1.8p (2005: 1.65p), totals 6.0p (2005:
5.3p) an increase of 13.2%. The final dividend will be payable to shareholders
on the register at the close of business on 8 June 2007.
Prospects
2007 has started well and we anticipate another year of progress.
David Dunn.
CHIEF EXECUTIVE'S REVIEW
Overview
During 2006 we made good progress in increasing Brammer's market share
throughout Europe. Our strategy remains unchanged and continues to produce
positive results. We have now established Brammer as a common Brand across
Europe, and the concept of "One Brammer" has become a reality - a business which
can offer consistent products and services in each of 276 locations in 11
countries. Our scale, geographic coverage, and focus as a technical specialist
on a core range of products, differentiates us from our competitors and drives
our successful European Key Account business. Our ultimate aim is to be the
supplier of choice for those customers wanting a consistent quality of product
and service, across the entire bearings, power transmission and fluid power
product range, anywhere in Europe.
Operational Review
Brammer is the leading European supplier of technical components and related
services to the maintenance, repair and operations ("MRO") markets. In 2006
Revenue increased by 9.4% to #314.3 million (2005: #287.4 million), whilst
operating profit before amortisation of acquired intangibles and exceptional non
cash pension curtailment increased by 20.2% to #15.1 million (2005: #12.5
million). Sales and profits in our UK and Spanish businesses recovered as
planned, but difficulties in the French market, particularly in the automotive
sector, caused profitability in our French business to decline. Earnings per
share (before amortisation of intangibles and exceptional items) increased by
5.1% to 16.6 pence per share (15.8 pence per share in 2005). Cash generated
from operations at #11.9 million was down on the previous year (2005: #15.7
million) due to an increase in working capital as we exited the year at a higher
rate of growth, and additional investment in inventory in our branches to
further improve customer service.
Operating margin (operating profit before amortisation of acquired intangibles
and exceptional non cash pension curtailment) improved from 4.4% to 4.8%. At
year-end total headcount in Brammer (on a full-time equivalent basis and
adjusted for acquisitions) was 1,963 compared to 1,866 at the end of last year.
Revenues per head increased by 4% to #160,000 indicating further improvement in
productivity.
In the UK, sales of #109.1 million represented an increase on a sales per
working day basis ("SPWD") of 6.1 % at constant exchange rates, which is the
basis used throughout this review, and produced an increase of #0.2 million in
operating profit. Growth accelerated throughout the year, with good progress in
Key Accounts and our base business resulting in a double digit growth rate in
the final quarter. Capital employed increased by #2.6 million to #14.4 million
due to the increasing rate of sales growth in the final quarter and additional
investment in inventory. We won 6 new Insites and increased sales through
Insites and part-time Insites (those locations where we have several regular
clinics with the customer's staff each week) by 23%. New contracts were won
with customers such as Associated British Foods, Cemex, British Nuclear Group,
British Nuclear Fuels, Tarmac and IESA. Our sales prospect pipeline continues to
increase as we invest heavily in sales training and development for our sales
force. Our value proposition has been clearly demonstrated with more than #7
million of signed off cost savings acknowledged by our customers.
German sales of #82.1 million represented an increase in SPWD of 10.6%, which
resulted in a 25.7% increase in operating profit to #6.0 million. We invested
further in our Key Accounts team and, once again saw significant revenue growth
in this segment, up 24.4%, now representing nearly 20% of total revenues. We
won new contracts with customers such as MAN, Visteon, Sandvik, Peguform,
Benteler and many others. We saw continued good growth in pneumatics, a new
product line in 2005, but were disappointed by only 13.4% growth in the
important but under-represented mechanical power transmission ("MPT") product
group. We plan a major campaign in MPT in 2007.
French sales of #53.7 million represented an increase in SPWD of just 1.9%, a
disappointing result affected by weakness in the French economy, particularly
the automotive sector which represents 20% of our business. Although we kept
tight control of costs with no operating expense increase year on year, profits
declined by #39k to #2.4 million. Key account growth (including automotive)
was 5.5%. New contracts were won with DCN, Jean Caby and Novandie, and we did
see growth accelerate throughout the year, exiting the fourth quarter with SPWD
4.8%.
Spanish sales of #28.2 million represented an increase in SPWD of 4.8%.
Operating profit recovered, increasing by #264k to #2.7 million. We continued
to increase our sales to the MRO market (up 4.7%), and key accounts grew by 11%.
We won new contracts with Michelin, Altadis, Cargill, Delphi, Benteler and many
others. Our new product lines contributed to growth with gearboxes and motors
up 33%, and fluid power up 51%.
Benelux sales of #27.0 million represented an increase in SPWD of 13.4%, and an
increase of #0.8 million in operating profit. Ramaekers has been integrated
with the former Brammer Belgium, and Rudi Ramaekers now leads our team in
Belgium. We believe the name change to Brammer in the Netherlands helped drive
double digit growth, together with several new product lines and the opening of
a greenfield site in Veenendaal. We won new contracts with Saint Gobain and
Dupont, and extended our contracts with all of our European key account
customers.
In our Developing Businesses (comprising Austria, Hungary, the Czech Republic,
Slovakia and Italy), total sales grew from #8.8 million to #14.3 million,
reflecting the pull through from Key Accounts. In Austria, we achieved 12.8%
growth on last year. In the Czech Republic and Slovakia, SPWD increased by 114%,
with new key account business with SAB miller, Masterfoods, Timken and Bosch. In
Hungary, SPWD growth was 51.5%, with good development with customers such as
Audi. Our sales in Italy grew by 34% as we gained further penetration at our
pan European key accounts.
Strategy
Our strategy remains unchanged under the headings of growth, capabilities,
synergies and costs.
Growth
Overall SPWD growth was 10.8%, significantly above our target of 6%. It is
evident that our strategies of Key Account growth, product range extension, and
attacking market segments with focussed marketing material and specialist sales
people are contributing to significant market share gains in all territories. We
have now declared an internal target of a minimum of 8% organic growth per year.
Key Account sales grew by 14.5% for the second year in a row, and now represent
28% of total sales. New European contracts were won with Bonduelle, Ahlstrom,
Michelin and a leading global consumer products company.
Extending the product range to the full Brammer range in every territory
continued, and whilst bearing sales grew by 8% on a SPWD basis, non bearing
sales grew by 13%.
The segment marketing packages introduced for the Food and Beverage market
segment in 2005 were rolled out in every country and we saw significant growth
in this area. We introduced new segment marketing packages covering pulp,
paper, and packaging, the water industry, and the aggregates industry, and we
expect to see benefits from these in 2007.
We were delighted to welcome Ramaekers in Belgium and, after the year end, Fin
S.A. in Poland. We continued to evaluate bolt-on acquisition opportunities in
each of our businesses, and are also now ready to consider acquisitions in the
UK. Our pipeline of acquisition opportunities gives us confidence that we shall
achieve further acquisitions in 2007. We aim, over the medium term, to match
our targeted 8% organic growth with an equivalent amount of acquisitive growth.
Capabilities
During the year over 80% of our 2,200 people have successfully completed our
Foundation Programme, an e-learning programme which enables them to understand
about the products and applications on which our business is based. In addition
we completed the Business of Brammer e-learning programme which was launched at
the end of the year to our business in the UK. During 2007 we will translate
this into 7 languages giving all of our people the opportunity of completing
this programme, thus helping them understand how the functions of the business
work together in order to make a profitable return on investment. These
programmes are part of our on-going quest to create "One Brammer" - a business
which offers a consistent standard of services and products across Europe.
In 2006 we established Brammer as the common brand throughout Europe. During
the last year the Group has developed a set of core values, described by the
words consistency, success and teamwork, which describe the manner in which we
are developing the internal focus of the organisation. These core values
complement our Value Proposition, where we stress our commitment to helping
customers to reduce the cost of acquisition, improve production efficiency and
reduce capital employed.
We continue to develop the skills and competence levels of our people through
product training, mainly supported by our suppliers and through sales and
management training. In addition, in order to support sales growth in each
country we have expanded our Market Segmentation approach. Under this initiative
we have developed a range of materials focused on the major segments in which we
operate, including research documentation, supporting material for sales people
and external documents for our customers. We are now developing further this
approach through close cooperation with some of our strategic suppliers.
We continue to implement action plans arising from the annual survey of our
people. In addition this year, we saw an increase of customer awareness of the
range of services and products offered by the Brammer companies, as measured by
our externally commissioned customer survey. Both these activities will be
maintained as this provides us an annual benchmark, internally and externally of
our effectiveness.
Synergies/costs
On 1 January 2007, each of our businesses became known as Brammer. This is a
major step in the journey towards integration into a consistent service offering
in every territory - the concept of "One Brammer". Our aim is to present a
single Brammer face to our customers, especially to our Key Accounts, at each
one of our 276 locations across Europe.
It is critical that the Information Systems used by the group are initially
aligned, and subsequently integrated into a comprehensive and consistent set of
solutions which support the needs of the integrated business, and to achieve
this we have developed a robust IS strategy, with a clear roadmap. Our Master
Data Management ("MDM") system, which will ultimately provide a single product
database for Brammer Europe wide, has been established for bearings in 7
countries and carries over 300,000 bearing part numbers. We have also begun the
migration of our mechanical power transmission product range onto MDM, and
anticipate that within 2 years the MDM database will be the "single point of
truth" for all of Brammer's product data, and will host part number and
parametric data for over 4 million product references. We further developed
the Brammer Inline system to support central development of E-commerce trading
solutions for a number of our customers.
Our Momasse Stock Planning System, the aim of which is to implement a best
practice methodology across all the Brammer businesses for demand forecasting
and stock profiling has been rolled out in 3 countries, and contributed to
improved inventory efficiency.
The future
Our European footprint and our specialisation in the field of bearings,
mechanical power transmission and fluid power products, is a strong platform
upon which to achieve further gains in market share in our fragmented market
place. We are seeing an accelerating trend for customers seeking a single
European source of supply for our chosen product range, and we shall continue to
invest in sales resource and service delivery skills to take advantage of this
trend and to meet the ever more sophisticated demands of these important
customers. Our approach to develop a market segment focus on specific markets
has proven successful, and sales growth through further development of this
approach should continue. Our pipeline of acquisition opportunities is
increasing and there are certainly sufficient opportunities which match
Brammer's product offering, approach to market, and culture to meet our
acquisitive growth aspirations. As reported we have elevated our internal
organic growth target from 6% to 8% per annum, and look forward to leading the
consolidation of the European market for bearings, mechanical power transmission
and fluid power.
Ian R Fraser
FINANCIAL REVIEW
Overview
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the EU.
Revenue
Revenue increased by 9.4%, of which continental Europe accounted for a 11.1%
increase and the UK a 6.2% increase. At constant exchange rates, turnover
increased by 10.3%. This equates to an increase in turnover per working day of
10.8%, comprising 13.4% in continental Europe and 6.1% in the UK (there being an
average of 0.9 less working days throughout the Group in 2006 than in 2005).
There was no significant impact from acquisitions.
Profit
The profit for the year before tax increased to #14.6 million (2005 #10.1
million). Profit before amortisation of acquired intangibles and exceptional
items, and after interest was #12.0 million (2005 #10.1 million).
Goodwill
Goodwill in the balance sheet stands at #39.4 million at the end of the year
(2005 #39.0 million). In 2006, goodwill increased by a net #1.6 million in
respect of acquisitions and decreased by #0.7 million due to exchange movements
on goodwill held in foreign currencies. In addition, #0.7 million of separately
identifiable intangible assets, net of a related deferred tax liability of #0.2
million, were reclassified from goodwill to acquired intangible assets; these
assets were recognised as part of the completion of the review of fair value
adjustments made in respect of the acquisition of MHBH. Impairment reviews have
been performed in accordance with IAS 36 and no impairment has been identified.
Trading during the year
Profit from operations before amortisation of acquired intangibles, exceptional
items, interest and tax ("underlying operating profit") increased by 20.2% to
#15.1 million (2005 #12.5 million), of which #7.4 million was delivered in the
first half and #7.7 million in the second half (see table below).
First half Second half Full year
#m #m #m
2006
Revenue 157.5 156.8 314.3
Underlying operating profit 7.4 7.7 15.1
2005 #m #m #m
Revenue 145.5 141.9 287.4
Underlying operating profit 6.6 5.9 12.5
For the first half, revenue increased by #12.0 million resulting in an increase
in underlying profit of #0.8 million and for the second half, revenue increased
by #14.9 million resulting in an increase in underlying profit of #1.8 million.
There was no significant impact on the year's results from exchange rates.
Interest
The net interest charge for the year of #3.1 million (2005 #2.5 million)
represents an effective interest rate on average net borrowings of 5.4% (2005
4.4%) reflecting higher average net borrowings and the increases in both
sterling and euro interest rates in 2006; the margin over interbank rates paid
by the group remained unchanged. Profit before interest, amortisation of
acquired intangibles, exceptional items and tax covers interest by 4.9x compared
to 5.0x in 2005.
Tax
The tax charge for the year of #4.8 million represents an effective rate of tax
of 33.0% (2005 25.1%). This includes deferred tax charges on the amortisation of
goodwill, primarily in Germany, and on the costs of share options. Going forward
the effective rate is anticipated to remain at a similar level. 2005 benefited
from a prior year credit for tax losses not previously recognised.
Cash flow
Cash flow
2006 2005
#m #m
Cash inflow from operating activities 11.9 15.7
Net capital expenditure (purchases net of disposals) (3.6) (2.8)
Operational cash generation 8.3 12.9
Acquisitions (net of cash acquired) (1.9) (2.0)
Deferred consideration (0.2) (2.7)
Disposals 1.0 4.5
Exchange 0.9 1.3
Tax (2.1) (2.2)
Interest, dividends, pension obligations & other (9.6) (5.4)
(Increase)/reduction in net debt (3.6) 6.4
Opening net debt (50.6) (57.0)
Closing net debt (54.2) (50.6)
Net debt increased by #3.6 million from #50.6 million to #54.2 million.
Cash inflow from operating activities of #11.9 million (including a working
capital increase of #9.2 million) was reduced by #3.6 million of net expenditure
on tangible and intangible fixed assets, by a payout of #1.7 million for
Ramaekers and by #0.2 million for deferred consideration, offset in part by the
repayment of loans from Livingston of #1.0 million. The working capital increase
reflected the high sales growth and strategic investment in inventory; working
capital ratios all showed modest improvement in 2006.
Average net borrowings in 2006 were #57.1 million compared to #55.3 million in
2005.
Treasury
The Group does not enter into speculative currency transactions.
The companies in the Group account in their local currency, principally either
sterling or euros and mostly trade within their domestic markets in their local
currency. Where companies trade into export markets, this is generally in
response to the requirements of domestic customers who trade globally.
Net operating assets and financing by currency at 31 December 2006 were as
illustrated in the table below.
Net operating assets Financing Net assets employed
#m #m #m
Sterling (6.8) (10.4) (17.2)
Euro 67.5 (43.4) 24.1
Other 5.8 (0.4) 5.4
66.5 (54.2) 12.3
Included in net operating assets is a pension fund liability primarily relating
to the UK scheme of #25.2 million (#17.6 million net of deferred tax) which in
2005 was #33.7 million (#23.6 million net of deferred tax). The reduction in the
liability reflects the exceptional non cash pension curtailment credit of #2.8m
together with a good performance in the UK scheme investments. With effect from
1 March 2006, the UK scheme was closed to future accrual. The company paid #1.5
million in 2006 (2005 #1.5 million) by way of contributions to close the deficit
and has currently agreed to pay #1.95 million per annum, indexed for inflation,
in each of the years 2007 to 2017 (inclusive). A full funding valuation of the
scheme was carried out with an effective date of 1 January 2006.
Overall therefore, at 31 December 2006, #67.5 million of the Group's net
operating assets were held in euros, #6.8 million of net liabilities in sterling
and #5.8 million net assets in other currencies. Net worth is #12.3 million
(2005: #1.1 million).
The directors consider the Group to have adequate resources to continue
operations for the foreseeable future and therefore continue to use the going
concern basis in the preparation of the financial statements.
We will continue to focus on generating cash to enable us to expand operations
in Europe, organically and by acquisition.
Earnings per share
Basic earnings per share, which benefited from the exceptional non cash pension
curtailment, increased from 15.8p in 2005 to 20.4p in 2006. Earnings per share
pre amortisation of acquired intangibles and exceptional non cash pension
curtailment was 16.6p (2005: 15.8p)
Paul Thwaite
Brammer Preliminary results announcement
Consolidated income statement for the year ended 31 December 2006
2006 2005
Note #'000 #'000
Continuing operations
Revenue 2 314,345 287,390
Cost of sales (218,359) (198,588)
Gross profit 95,986 88,802
Distribution costs (80,907) (76,260)
Amortisation of acquired intangibles (202) -
Exceptional non cash pension curtailment 2,811 -
Total distribution costs (78,298) (76,260)
Operating profit 2 17,688 12,542
Operating profit before amortisation of acquired 15,079 12,542
intangibles and exceptional non cash pension curtailment
Amortisation of acquired intangibles (202) -
Exceptional non cash pension curtailment 3 2,811 -
Operating profit 2 17,688 12,542
Finance expense (3,184) (2,683)
Finance income 88 225
14,592 10,084
Profit before tax (4,818) (2,535)
Taxation
Profit for the year attributable to equity shareholders 2 9,774 7,549
Earnings per share - total 4
Basic 20.4p 15.8p
Diluted 20.3p 15.7p
Earnings per share - on profit before amortisation 4
of acquired intangibles and exceptional item
Basic 16.6p 15.8p
Diluted 16.6p 15.7p
Brammer
Consolidated statement of recognised income and expense for the year ended 31
December 2006
2006 2005
Note #'000 #'000
Profit for the year 7 9,774 7,549
Net exchange differences on translating foreign operations 7 (583) (663)
Actuarial gains / (losses) 7 4,772 (1,595)
Tax on actuarial gains / losses 7 (1,432) 508
Excess tax on share option schemes 7 379 40
Net gains / (losses) not recognised 3,136 (1,710)
in income statement
Total recognised income and expense attributable to equity 12,910 5,839
shareholders
Brammer Consolidated balance sheet as at 31 December 2006
2006 2005
Note #'000 #'000
Assets
Non-current assets
Goodwill 39,426 39,009
Acquired intangible assets 1,227 -
Other intangible assets 4,184 2,559
Property, plant and equipment 10,105 9,944
Deferred tax assets 8,336 12,480
63,278 63,992
Current assets
Inventories 49,710 44,341
Trade and other receivables 57,708 51,175
Cash and cash equivalents 6 8,798 9,445
116,216 104,961
Liabilities
Current liabilities
Financial liabilities - borrowings 6 (18,536) (10,991)
Trade and other payables (66,900) (61,639)
Deferred consideration - (375)
Current tax liabilities (3,229) (2,965)
(88,665) (75,970)
Net current assets 27,551 28,991
Non-current liabilities
Financial liabilities - borrowings 6 (44,438) (49,106)
Deferred tax liabilities (4,321) (4,863)
Provisions (850) (1,979)
Deferred consideration (3,735) (2,241)
Retirement benefit obligations (25,211) (33,726)
(78,555) (91,915)
Net assets 12,274 1,068
Shareholders' equity 7
Share capital 9,585 9,573
Share premium 3,628 3,552
Translation reserve (1,124) (541)
Retained earnings 185 (11,516)
Total equity 12,274 1,068
Brammer Consolidated cash flow statement for the year ended 31 December 2006
2006 2005
Note #'000 #'000
Cash generated from operations 5 11,943 15,744
Interest received 88 208
Interest paid (2,870) (2,945)
Tax paid (2,132) (2,165)
Decrease in pension obligations (3,743) (258)
Net cash generated from operating activities 3,286 10,584
Cash flows from investing activities
Proceeds from disposal of discontinued businesses (net of cash 1,000 4,500
disposed of)
Acquisition of subsidiaries (net of cash acquired) (1,906) (1,986)
Deferred consideration paid on prior acquisitions (192) (2,674)
Proceeds from sale of property, plant and equipment 563 225
Purchase of property, plant and equipment (2,417) (1,975)
Additions to software development (1,777) (987)
Net cash used in investing activities (4,729) (2,897)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital 88 -
New loans taken out / loan (repayments) 2,908 (4,104)
Finance lease principal payments (58) (73)
Dividends paid to shareholders (2,583) (2,323)
Net cash generated from/(used in) financing activities 355 (6,500)
Net (decrease)/increase in cash and cash equivalents (1,088) 1,187
Exchange gains and losses on cash and cash equivalents (133) (257)
Cash and cash equivalents at beginning of period 8,734 7,804
Net cash at end of period 7,513 8,734
Cash and cash equivalents 8,798 9,445
Overdrafts (1,285) (711)
Net cash at end of period 7,513 8,734
Brammer Accounting policies
The principal accounting policies adopted in the preparation of these
consolidated financial statements are unchanged from those applied in the
preparation of the 2005 statements, and will be set out in full in the 2006
published financial statements.
These policies have been consistently applied to all the years presented.
Basis of preparation
This preliminary announcement does not comprise statutory accounts within the
meaning of Section 240 of the Companies Act 1985.
The consolidated financial statements of Brammer plc have been prepared in
accordance with EU Endorsed International Financial Reporting Standards (IFRS),
IFRIC interpretations and the Companies Act 1985 applicable to companies
reporting under IFRS. The consolidated financial statements have been prepared
under the historical cost convention.
Brammer NOTES TO THE ACCOUNTS
1 COMPARATIVE RESULTS
Comparative figures for the year ended 31 December 2005 are taken from the
company's statutory accounts which have been delivered to the Registrar of
Companies with an unqualified audit report. Copies of the 2005 annual report and
the 2006 interim report are available on the company's web site
(www.brammer.biz).
2 SEGMENTAL ANALYSIS
The Group is primarily controlled on a country by country basis in line with
legal structure of the group. Segment assets include property, plant and
equipment, intangible assets, inventories, and trade and other receivables.
Segment liabilities comprise trade and other payables, and provisions. All
inter-segmental trading is at an arms-length basis.
UK Germany France Spain Benelux Other Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Year ended 31 Dec 2006
Revenue
Sales to external customers 109,110 82,106 53,651 28,193 26,966 14,319 314,345
Inter company sales 263 1,468 299 375 2,083 (4,488) -
Total 109,373 83,574 53,950 28,568 29,049 9,831 314,345
Operating profit before 1,549 6,009 2,435 2,694 2,008 384 15,079
amortisation of acquired
intangibles and exceptional
items
Amortisation of acquired (202) (202)
intangibles
Exceptional non cash pension 2,811 2,811
curtailment
Total operating profit 1,549 6,009 2,435 2,694 2,008 2,993 17,688
Finance expense (3,184)
Finance income 88
Profit before tax 14,592
Taxation (4,818)
Profit for the year 9,774
attributable to equity
shareholders
Segment assets 37,923 22,261 25,988 12,785 16,170 7,807 122,934
Goodwill - 27,301 2,173 1,262 5,544 3,146 39,426
37,923 49,562 28,161 14,047 21,714 10,953 162,360
Cash and cash equivalents 8,798
Deferred tax 8,336
Total assets 179,494
Segment liabilities (22,393) (7,595) (15,695) (10,071) (7,969) (4,027) (67,750)
Current tax (3,229)
Deferred tax (4,321)
Deferred consideration (3,735)
Financial liabilities (62,974)
Retirement benefit liability (25,211)
Total liabilities (167,220)
Net assets 12,274
Other segment items
Capital expenditure:
- intangible assets - 16 - - 19 1,742 1,777
- property, plant & equipment 843 176 306 241 283 568 2,417
Amortisation/depreciation
- intangible assets - (220) - (27) (24) (313) (584)
- property, plant & equipment (1,125) (158) (255) (194) (303) (241) (2,276)
Trade receivables impairment (128) (46) - (17) 121 (70)
2 SEGMENTAL ANALYSIS
UK Germany France Spain Benelux Other Total
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Year ended 31 Dec 2005
Revenue
Sales to external customers 102,738 75,030 53,217 26,937 20,671 8,797 287,390
Inter company sales 328 1,094 311 419 2,132 (4,284) -
Total 103,066 76,124 53,528 27,356 22,803 4,513 287,390
Operating profit 1,336 4,780 2,474 2,430 1,233 289 12,542
Finance expense (2,683)
Finance income 225
Profit before tax 10,084
Taxation (2,535)
Profit for the year 7,549
attributable to equity
shareholders
Segment assets 33,409 20,632 24,403 13,633 10,523 5,419 108,019
Goodwill - 27,845 2,217 1,288 3,865 3,794 39,009
33,409 48,477 26,620 14,921 14,388 9,213 147,028
Cash and cash equivalents 9,445
Deferred tax 12,480
Total assets 168,953
Segment liabilities (21,509) (8,490) (15,648) (9,969) (5,190) (2,812) (63,618)
Current tax (2,965)
Deferred tax (4,863)
Deferred consideration (2,616)
Financial liabilities (60,097)
Retirement benefit liability (33,726)
Total liabilities (167,885)
Net assets 1,068
Other segment items
Continuing operations
Capital expenditure:
- intangible assets - - 3 - - 984 987
- property, plant & 914 114 148 360 142 297 1,975
equipment
Amortisation/depreciation
- intangible assets - (208) (3) - - (164) (375)
- property, plant & (1,129) (149) (291) (190) (193) (110) (2,062)
equipment
Trade receivables impairment - - (203) - (6) - (209)
3 EXCEPTIONAL NON CASH PENSION CURTAILMENT
The exceptional non cash pension curtailment comprises the curtailment gain of
#2,811,000 which reflects the impact of closing the defined benefit section of
the Brammer Services Limited Retirement Benefits Scheme to future accrual. As
stated in the 2005 annual report this defined benefit section was closed to
future accrual with effect from 1 March 2006.
This curtailment gain has been calculated by an independent actuary, KPMG LLP.
4 EARNINGS PER SHARE
2006
Earnings per share
Earnings Basic Diluted
#'000
Weighted average number of shares in issue ('000) 47,872 48,083
Profit for the financial year 9,774 20.4p 20.3p
Amortisation of acquired intangibles 202
Exceptional non cash pension curtailment (note 3) (2,811)
Tax on exceptional non cash pension curtailment 843
Tax on amortisation of intangibles (49)
Earnings before amortisation of acquired intangibles and exceptional non 7,959 16.6p 16.6p
cash pension curtailment
2005
Earnings per share
Earnings Basic Diluted
#'000
Weighted average number of shares in issue ('000) 47,865 48,083
Profit for the financial year 7,549 15.8p 15.7p
Earnings 7,549 15.8p 15.7p
5 CASH FLOW FROM OPERATING ACTIVITIES
2006 2005
#'000 #'000
Profit for the year attributable to equity shareholders 9,774 7,549
Tax charge 4,818 2,535
Depreciation of tangible and intangible assets 3,062 2,437
Share options - value of employee services 791 623
(Gain)/loss on sale of property, plant and equipment (383) 7
Financing expense 3,096 2,458
Movement in working capital (9,215) 135
Cash generated from operations 11,943 15,744
6 CLOSING NET DEBT
2006 2005
#'000 #'000
Borrowings - current (18,536) (10,991)
Borrowings - non-current (44,438) (49,106)
Cash and cash equivalents 8,798 9,445
Closing net debt (54,176) (50,652)
7 CHANGES IN SHAREHOLDERS' EQUITY
Share Share Treasury Translation Retained
capital premium shares reserve earnings Total
#'000 #'000 #'000 #'000 #'000 #'000
At 1 January 2006 9,573 3,552 (958) (541) (10,558) 1,068
Shares issued during the year 12 76 - - - 88
Profit for the year attributable
to equity shareholders
- - - - 9,774 9,774
Unrealised exchange movement - - - (583) - (583)
Transfer on vesting of own shares - - 443 - (443) -
Current tax on shares vesting - - - - 179 179
Deferred tax on shares vesting - - - - (179) (179)
Share options - Value of employee
services
- - - - 791 791
Excess tax on share option schemes - - - - 379 379
Dividends - - - - (2,583) (2,583)
Actuarial gains on pensions
schemes
- - - - 4,772 4,772
Tax on actuarial gains on pensions
schemes
- - - - (1,432) (1,432)
Movement in period 12 76 443 (583) 11,258 11,206
At 31 December 2006 9,585 3,628 (515) (1,124) 700 12,274
At 1 January 2005 9,573 3,552 (958) 122 (15,360) (3,071)
Profit for the year attributable
to equity shareholders
- - - - 7,549 7,549
Unrealised exchange movement - - - (663) - (663)
Share options - Value of employee - - - - 623 623
services
Excess tax on share option schemes - - - - 40 40
Dividends - - - - (2,323) (2,323)
Actuarial losses on pensions
schemes
- - - - (1,595) (1,595)
Tax on actuarial losses on
pensions schemes
- - - - 508 508
Movement in period - - - (663) 4,802 4,139
At 31 December 2005 9,573 3,552 (958) (541) (10,558) 1,068
Retained earnings as disclosed in the Balance Sheet (page 14) represent the
retained earnings and treasury share balances above.
8 PRELIMINARY ANNOUNCEMENT
A copy of the preliminary announcement is available for inspection at the
registered office of the company, Claverton Court, Claverton Road, Wythenshawe,
Manchester, M23 9NE and the offices of Citigate Dewe Rogerson Ltd, 3 London Wall
Buildings, London Wall, London EC2M 5SY. It will also be available on the
company's web site www.brammer.biz from 27 February 2007.
9 FINAL DIVIDEND
Relevant dates concerning the payment of the final dividend are
Annual general meeting 22 May 2007
Record date 8 June 2007
Payment date 9 July 2007
10 STATUTORY ACCOUNTS
This preliminary announcement is taken from the full accounts which have
received an unqualified report by the auditors and will be filed with the
Registrar of Companies following the company's annual general meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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