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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 | |
---|---|---|---|---|---|---|---|---|---|---|
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 |
RNS Number:5277T Brammer PLC 22 December 2003 FOR IMMEDIATE RELEASE Brammer plc Proposed sale of the Livingston Calibration Business Highlights: - The proposed Disposal of Brammer's continental European calibration and equipment management services businesses (the "Livingston Calibration Business") to Air Liquide for cash consideration of Euro32 million (#22.5 million) - Brammer is in discussions regarding the disposal of its equipment rental and UK calibration businesses (the "Livingston Rental Business") - Brammer Industrial Services ("BIS") is the leading European supplier of technical components and related services to the maintenance, repair and operations markets - The net proceeds of the Disposal will be used to reduce the Brammer Group's indebtedness and significantly strengthens the Brammer balance sheet, positioning the group to accelerate progress in its strategic objectives - The Disposal is conditional, inter alia, upon the approval of Brammer's shareholders, which is to be sought at an Extraordinary General Meeting Commenting on the Disposal, Ian Fraser, Chief Executive of Brammer, said: "This Disposal will allow Brammer to focus on developing BIS and capitalise on its leading position in the European industrial services market for the benefit of both customers and shareholders." Enquiries: Brammer plc 0161 928 3363 David Dunn, Chairman Ian Fraser, Chief Executive Paul Thwaite, Finance Director Dresdner Kleinwort Wasserstein 020 7623 8000 Chris Treneman, Managing Director Citigate Dewe Rogerson 020 7638 9571 Martin Jackson Anthony Kennaway Dresdner Kleinwort Wasserstein Limited, which is authorised and regulated by the Financial Services Authority, is acting for Brammer plc and no-one else in connection with the contents of this announcement and will not be responsible to anyone other than Brammer plc for providing the protections afforded to customers of Dresdner Kleinwort Wasserstein Limited, or for affording advice in relation to the contents of this announcement or any matter referred to herein. Dresdner Kleinwort Wasserstein Limited has given and has not withdrawn its consent to the issue of this announcement with the inclusion of the references to its name in the form and context in which it is included. Brammer plc Proposed disposal of the Livingston Calibration Business Introduction The Board of Brammer announces that it has reached agreement to sell its continental European calibration and equipment management services businesses (the "Livingston Calibration Business") to Air Liquide for a cash consideration of Euro32 million (#22.5 million), calculated on a debt and cash-free basis, and subject to adjustment to reflect the amount of cash and debt in the business at completion. In view of the size of the Disposal relative to the Group, the Disposal is conditional upon, inter alia, the approval of Shareholders at an Extraordinary General Meeting of the Company. Information on the Livingston Calibration Business The Livingston Calibration Business comprises of the European (excluding the UK) calibration services businesses and the European equipment management services business. The calibration business is located in France, Germany, Spain and The Netherlands and provides calibration services for its customers' test and measurement equipment. The equipment management services business provides outsourced management for customers' test and measurement equipment. The Livingston Calibration Business reported sales of #38.7 million and an operating profit of #2.8 million for the year ended 31 December 2002, and as at 31 December 2002 had net assets of #1.8 million. Principal terms and conditions of the Disposal Under the Sale and Purchase Agreement, Brammer will sell (or procure the sale of) the Livingston Calibration Business to Air Liquide for a cash consideration of Euro32 million (#22.5 million) (calculated on a debt and cash-free basis, and subject to adjustment to reflect the amount of cash and debt in the business at completion of the Disposal). Completion of the Disposal is conditional, inter alia, upon the approval by Shareholders of the Disposal at the EGM, and is anticipated to take place by 31 March 2004. Strategy and background to and reasons for the Disposal Following the downturn in the technology and telecoms markets in mid-2001, the Board undertook a re-evaluation of the Group's long-term strategy. This review concluded that the Group should focus its resources on further developing Brammer Industrial Services as the leading European supplier of technical components and related services to the maintenance, repair and operations markets. In addition, the Board concluded that, at an appropriate time, the Group should seek to divest itself of the Livingston Division. In forming this view, the Board recognised that, despite the difficult conditions in recent years in the European industrial market that BIS serves, BIS has continued to develop an important market position across Europe, increasing its market share and developing extensive pan-European relationships with both customers and suppliers. The Directors also believe that a focused BIS business, separated from the capital demands of the Livingston Division, will be better able to exploit the significant opportunities for further development, including: * continued leverage of BIS' pan-European coverage to win market share, particularly through corporate accounts and the development of Insites (sales operations located within a customer's premises); * driving further purchasing economies from BIS' position as the largest customer to the majority of its main suppliers; * enhanced consolidation opportunities given the strengthened balance sheet of the Continuing Group. The European market for the distribution of bearings, power transmission and related products remains highly fragmented with most geographic markets still served by a large number of small distributors. The Directors believe that BIS accounts for approximately four per cent. of the market with the next biggest competitor representing less than two per cent. of the market; * further operating efficiencies through increased investment in logistics, infrastructure and back-office systems; and * continued cross-selling of a broader range of products to existing customers. Over the last two years the Board has undertaken a significant and extensive rationalisation of the Livingston Division in order to return it to profitability and reduce the Group's exposure to the technology and telecom markets whilst awaiting an appropriate opportunity to sell all or part of the Livingston Division. During this period, the Livingston Calibration Business has performed more resiliently than the Livingston Rental Business and has maintained its profitability at the trading profit (defined as operating profit before exceptional items and goodwill) level. However, in order to reduce the costs in the Livingston Calibration Business, the Group has incurred total exceptional restructuring costs of #4.8 million in respect of the Livingston Calibration Business in the 18 months ended 30 June 2003. Having received a proposal from Air Liquide in line with the Group's strategy, the Board concluded that it should pursue the Air Liquide proposal. Following commencement of these discussions, the Board has also received an approach for the remainder of the Livingston Division, comprising the Livingston Rental Business, which the Board is also currently pursuing. These discussions are ongoing, and accordingly there can be no certainty that satisfactory agreement will be reached with the prospective purchaser of the Livingston Rental Business. Current trading and future prospects of the Continuing Group Overall sales and trading remain broadly in line with the Board's expectations. Despite the medium term growth opportunities open to BIS, its markets continue to be difficult. In the Group's interim results for the six months ended 30 June 2003, announced on 2 September 2003, the Board reported that both sales and operating profit before goodwill amortisation and exceptional items in BIS grew by 12 per cent.. Trading in the second half has been slower with reported sales likely to be slightly above the same period last year. However, corporate account activity and Insite sales showed strong growth across the period. The Directors are confident that BIS continues to win new business across its major markets and remain confident in its prospects. Trading in the Group's rental businesses has remained difficult, and rental revenues over the last three months have been slightly below the levels of the previous quarter. Asset disposals have been at satisfactory prices and depreciation has been reduced. Further cost reductions have also been achieved. The sale of the Livingston Calibration Business is likely to result in exceptional profit, which if it had been completed on 30 June 2003 would have been approximately #7.2 million. In light of the prevailing market conditions, the Board envisages that it may be prudent to consider as part of its normal year-end review, making further provisions in respect of the rental inventory assets which may offset the exceptional pre-tax profit on the Disposal. The net proceeds of the Disposal will be used to reduce the net debt position of the Continuing Group. Financial effects of the Disposal The Board believes that the effect of the Disposal will be an exceptional pre-tax profit, which, if the Disposal had been completed on 30 June 2003, would have been of #7.2 million. Whilst the Group will no longer consolidate any future profits generated by the Livingston Calibration Business after the completion of the Disposal, its interest costs will be reduced as a result of the receipt of the net proceeds of the Disposal. Further information A circular to Shareholders providing further information on the Disposal and containing a notice of the Extraordinary General Meeting to approve the Disposal, will be posted to Shareholders shortly. Enquiries: Brammer plc 0161 928 3363 David Dunn, Chairman Ian Fraser, Chief Executive Paul Thwaite, Finance Director Dresdner Kleinwort Wasserstein 020 7623 8000 Chris Treneman, Managing Director Citigate Dewe Rogerson 020 7638 9571 Martin Jackson Anthony Kennaway Dresdner Kleinwort Wasserstein, which is authorised and regulated by the Financial Services Authority, is acting for Brammer plc and no-one else in connection with the contents of this announcement and will not be responsible to anyone other than Brammer plc for providing the protections afforded to customers of Dresdner Kleinwort Wasserstein, or for affording advice in relation to the contents of this announcement or any matter referred to herein. Dresdner Kleinwort Wasserstein has given and has not withdrawn its consent to the issue of this announcement with the inclusion of the references to its name in the form and context in which it is included. APPENDIX The following principal definitions apply throughout this announcement unless the context requires otherwise: "Air Liquide" L'Air Liquide S.A.; "BIS" Brammer Industrial Services Division; "Company" or "Brammer" Brammer plc; "Continuing Group" Brammer and its subsidiary undertakings, excluding the Livingston Calibration Business; "Directors" or "Board" the directors of the Company or a duly authorised committee thereof; "Disposal" the disposal of the Livingston Calibration Business in accordance with the Sale and Purchase Agreement; "Dresdner Kleinwort Wasserstein" Dresdner Kleinwort Wasserstein Limited; "Extraordinary General Meeting" or the extraordinary general meeting of the Company, notice of which "EGM" will be sent to Shareholders shortly; "Group" or "Brammer Group" Brammer and its subsidiary and associated undertakings; "Livingston Calibration Business" Brammer's European (excluding the UK) calibration services businesses and the European test and measurement services business; "Livingston Division" Brammer's Livingston division; "Livingston Rental Business" the whole of Brammer's equipment rental business and Brammer's UK calibration services businesses; "Sale and Purchase Agreement" the conditional agreement dated 19 December 2003 between (amongst others) the Company and Air Liquide relating to the Disposal; "Shareholders" holders of Shares; "Shares" ordinary shares of 20p each in the capital of the Company; "United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland. This information is provided by RNS The company news service from the London Stock Exchange END DISPUGMGPUPWPPG
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