Final Results
17/04/2012 14:12
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
(`Braime' or the 'company' and with it subsidiaries the `group')
ANNUAL RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2011
At a meeting of the directors held yesterday, the accounts for the year ended
31st December 2011 were submitted and approved by the directors. The
preliminary accounts statement is as follows:
Chairman's statement
Performance of group companies
Sales revenue increased by 11% continuing the steady growth achieved over the
past five years, albeit at a slower pace, increasing from 18.10m in 2010 to
20.10m in 2011. In contrast profit before tax fell from 1.36m to 1.24m. After
an increase in tax payable, the profit after tax reduced by 14% from the record
high of 945,000 in 2010 to 814,000 for the year ending 31st December 2011.
The drop in profitability was due primarily to a reduction in our gross margin
in the second half of the year. This was caused, in part, by the strengthening
of the pound against the euro, which reduced the margin on goods sold in euros
and, secondly, by the continuing steep increases in the cost of raw materials,
where, in a highly competitive market, we were unable to pass on immediately
the increases in the cost of our products.
The directors paid a first interim dividend of 2.40p on 14th October 2011,
unchanged from the previous year. In view of the continuing underlying sales
increase and the benefits which will accrue in 2012 from new product lines
coming on stream, the directors paid a second interim dividend of 5.40p on 2nd
April 2012, making a total for the tax year ending 5th April 2012 of 7.80p,
compared to 7.20p in the previous tax year.
Braime Pressings Limited, manufacturer of deep drawn metal presswork
The company continued to make a loss despite the successful implementation of
capital projects to reduce manufacturing costs. Huge efforts were made by our
small management, development and maintenance teams to bring on stream the new
product lines on which the future of the business depends but their
introduction was again subject to further unforeseen delays.
However, since the start of 2012, considerable progress has been made.
Production has now started on one of the new product ranges, final production
trials on a second range of products has been successfully completed and we are
now waiting for a bulk schedule from our customer, which is expected in April.
We are close to completing production trials on the third new range and hope to
be in full production by June/July of this year. Once all these new lines are
on stream, we finally expect Braime Pressings Limited to return to
profitability.
4B division, distributor worldwide of components and monitoring systems for the
material handling industry
Overall sales revenue continued to grow but in 2011 the individual performance
of the subsidiaries within the 4B division varied significantly due to the
differing regional impact on each subsidiary of the current economic crisis and
of the steep rise of commodity prices.
For the first time in many years the sales and profitability of our US
subsidiary were largely flat, whereas all the other subsidiaries achieved
significant sales growth. Some of the subsidiaries also increased profitability
but those operating primarily in the euro zone saw their margins eroded by the
effect of the fall in the value of the euro and by fierce competition in a
market badly affected by recession.
Trade in the first quarter of 2012 has begun very positively. There continues
to be major investment in the primary processing of food and the USA appears to
be coming out of recession. Nevertheless, given the current crisis in Europe
and the global instability of both currencies and raw material prices, it is
almost impossible to predict with any level of confidence what will be the
final outcome for the 4B division in 2012
Investment
The company has continued its high level of investment in its manufacturing
facility, in developing new products and in expanding its global distribution.
In January of this year our USA subsidiary relocated to bespoke premises with
8,000 sq ft of offices and 45,000 sq ft of warehousing, providing the
facilities which it needs to continue its growth.
In 2011, 600,000 was invested in plant and machinery, of which 280,000 was
financed by HP and 320,000 financed from earnings. The company has existing
capital commitments of 150,000 for further capital investment in 2012.
Expenditure on R & D in 2011 was 225,000.
Cash flow and debt
The company was cash negative in 2011 by 439,000 due partly to the exceptional
level of capital investment and by the need to finance the increase in sales
revenue, while the net increase in trade debtors grew in line with the increase
in group sales revenue. However inventories grew by 808,000, reflecting the
increase in the cost of raw materials and components purchased for resale and
stocks in the fledgling subsidiaries. This also follows an increase in stocks
in 2010 of 730,000.
The overall effect of the exceptional level of capital investment and the
increase in working capital led to an increase in our bank borrowings of
469,000 and to an increase in HP finance of 90,000.
In 2012 we are investing in the installation of an ERP computer system. One of
the many benefits of this will be to increase our ability to control our stock
levels in what is now a global business and this is fundamental to the future
expansion of the business.
Staff
All the business sectors in which we operate are exposed to global competition
and to survive and grow it is no longer enough to be good at what we do; we
have to be exceptional and to change and improve constantly. This presents an
enormous challenge for our dedicated and determined staff all across the group
and we thank them for their continuing support and loyalty.
David Brown, our Financial Director for just over 31 years retired on 10th
April 2012. David has always been a source of wise and independent advice to
both the individual directors and to the board as a whole and we are all
indebted to him for his contribution and loyalty.
David has had to cope with enormous changes in the focus of the group as it has
transformed itself into a global business operating in many locations and in
many currencies and, in parallel, he has had to comply with the complex and
often baffling changes in the regulatory regime which have been imposed on even
small businesses such as ourselves. We will miss David's intellect and dry
sense of humour!
Marcus Mills joined the company on 13th February 2012 as Financial Controller
and it is anticipated he will be David's successor as Financial Director.
Marcus, although only 38, comes to us with outstanding qualifications and a
proven track record. We believe he will bring to us the benefits of his
enthusiasm, training and experience.
I would also like to pay tribute to Jim Mawson, our Senior Technical Manager of
4B, colleague and personal friend who died recently on 12th February. Jim
joined the company in July 1983 at the mere age of 60 and retired finally in
July of last year after 29 years with the company. He played a major part in
the establishment of our US business and indeed of the development of the 4B
division. He was recognised across the world as one of the leading experts in
our field of bulk material handling and is missed by both his work colleagues
and the many business friends that he made across the world.
Outlook
Providing that the anticipated volume of business from the existing and new
product lines materialise and that the further new ranges of products come on
stream at the times we now predict, the contribution from Braime Pressings
Limited to the group result should be significant.
While the year has started positively in all the subsidiaries which make up 4B,
it is extremely difficult to forecast the result for 2012 , given the current
economic uncertainty and volatility in exchange rates. Moreover the level of
competition we face grows ever stronger.
Overall, we are reasonably confident that in 2012 the group can at least repeat
the result for 2011.
Summarised Consolidated Income Statement for the year ended 31st December 2011
(audited)
Note 2011 2010
Revenue 20,067,905 18,057,661
Changes in inventories of finished goods and 777,134 647,108
work in
progress
Raw materials and consumables used (11,791,200) (10,358,951)
Employee benefits costs (4,132,824) (3,841,811)
Depreciation expense (395,200) (286,938)
Other expenses (3,210,533) (2,804,022)
Profit from operations 1,315,282 1,413,047
Finance costs (345,455) (302,445)
Finance income 274,406 250,776
Profit before tax 1,244,233 1,361,378
Tax expense (430,212) (416,240)
Profit for the year attributable to equity 814,021 945,138
shareholders of the parent company
Basic and diluted earnings per share 1 56.53p 65.63p
Summarised Consolidated Statement of Comprehensive Incomefor the year ended
31st December 2011(audited)
2011 2010
Profit for the year 814,021 945,138
Actuarial losses recognised directly in equity (50,000) (168,000)
Foreign exchange gains/(losses) on 48,467 (33,254)
re-translation of overseas operations
Adjustment in respect of minimum funding (31,000) 137,000
requirement per IFRIC14
Other comprehensive income for the year (32,533) (64,254)
Total comprehensive income for the year 781,488 880,884
Summarised Consolidated Balance Sheet at 31st December 2011(audited)
Note 2011 2011 2010 2010
Assets
Non-current assets
Property, plant and 1,426,995 1,223,980
equipment
Goodwill 12,270 12,270
Employee benefits - -
Total non-current 1,439,265 1,236,250
assets
Current assets
Inventories 4,401,733 3,593,680
Trade and other 3,507,494 3,291,602
receivables
Cash and cash 1,746,464 1,844,934
equivalents
Total current assets 9,655,691 8,730,216
Total assets 11,094,956 9,966,466
Liabilities
Current liabilities
Bank overdraft 1,485,757 1,145,421
Trade and other 2,656,483 2,707,169
payables
Other financial 350,859 291,553
liabilities
Corporation tax 114,319 171,054
liability
Total current 4,607,418 4,315,197
liabilities
Non-current liabilities
Financial liabilities 547,473 389,012
Total non-current 547,473 389,012
liabilities
Total liabilities 5,154,891 4,704,209
Total net assets 5,940,065 5,262,257
Capital and reserves
attributable to equity
holders of the parent
company
Share capital 360,000 360,000
Capital reserves 77,319 77,319
Foreign exchange 334,759 286,292
reserve
Retained earnings 5,167,987 4,538,646
Total equity 5,940,065 5,262,257
Summarised Consolidated Cash Flow Statement for the year ended 31st December
2011(audited)
Note 2011 2011 2010 2010
Operating activities
Net profit 814,021 945,138
Adjustments for:
Depreciation 395,200 286,938
Grants amortised (1,656) (1,656)
Foreign exchange gains/ 47,391 (37,785)
(losses)
Investment income (274,406) (250,776)
Interest expense 345,455 302,445
Gain on sale of plant, (21,617) (35,357)
machinery and motor
vehicles
Adjustment in respect (74,000) (22,000)
of defined benefits
scheme
Income tax expense 430,212 416,240
846,579 658,049
Operating profit before 1,660,600 1,603,187
changes in working
capital and provisions
Increase in trade and (215,892) (891,218)
other receivables
Increase in inventories (808,053) (731,531)
(Decrease)/increase in (50,686) 713,331
trade and other
payables
(1,074,631) (909,418)
Cash generated from 585,969 693,769
operations
Income taxes paid (486,947) (270,401)
Investing activities
Purchases of plant, (320,241) (210,154)
machinery and motor
vehicles
Sale of plant, 21,620 35,358
machinery and motor
vehicles
Interest received 4,406 4,776
(294,215) (170,020)
Financing activities
Proceeds from long term 133,196 -
borrowings
Repayment of hire (190,674) (197,871)
purchase creditors
Interest paid (82,455) (65,445)
Dividends paid (103,680) (77,760)
(243,613) (341,076)
Decrease in cash and (438,806) (87,728)
cash equivalents
Cash and cash 699,513 787,241
equivalents, beginning
of period
Cash and cash 260,707 699,513
equivalents, end of
period
Consolidated statement of changes in equity for the year ended 31st December
2011(audited)
Foreign
Share Capital Exchange Retained
Capital Reserve Reserve Earnings Total
Balance at 1st January 360,000 77,319 319,546 3,702,268 4,459,133
2010
Comprehensive income
Profit - - - 945,138 945,138
Other comprehensive
income
Actuarial gains - - - (168,000) (168,000)
recognised directly in
equity
Foreign exchange losses - - (33,254) - (33,254)
on re-translation of
overseas operations
Adjustment in respect of - - - 137,000 137,000
minimum funding
requirement per IFRIC14
Total other comprehensive - - (33,254) (31,000) (64,254)
income
Total comprehensive - - (33,254) 914,138 880,884
income
Transaction with owners
Dividends - - - (77,760) (77,760)
Total transactions with - - - (77,760) (77,760)
owners
Balance at 31st December 360,000 77,319 286,292 4,538,646 5,262,257
2010
Balance at 1st January 360,000 77,319 286,292 4,538,646 5,262,257
2011
Comprehensive income
Profit - - - 814,021 814,021
Other comprehensive
income
Actuarial losses - - - (50,000) (50,000)
recognised directly in
equity
Foreign exchange losses - - 48,467 - 48,467
on re-translation of
overseas operations
Adjustment in respect of - - - (31,000) (31,000)
minimum funding
requirement per IFRIC14
Total other comprehensive - - 48,467 (81,000) (32,533)
income
Total comprehensive - - 48,467 733,021 781,488
income
Transaction with owners
Dividends - - - (103,680) (103,680)
Total transactions with - - - (103,680) (103,680)
owners
Balance at 31st December 360,000 77,319 334,759 5,167,987 5,940,065
2011
Notes
1. Earnings per share and dividends
Both the basic and diluted earnings per share have been calculated using the
net results attributable to shareholders of T.F. & J.H. Braime (Holdings)
P.L.C. as the numerator.
The weighted average number of outstanding shares used for basic earnings per
share amounted to 1,440,000 (2010 - 1,440,000). There are no potentially
dilutive shares in issue.
Dividends paid 2011 2010
Equity shares
Ordinary shares
Interim of 4.80p (2010 - 3.00p) per share paid on 23,040 14,400
1st April 2011
Interim of 2.40p (2010 - 2.40p) per share paid on 11,520 11,520
14th October 2011
34,560 25,920
'A' Ordinary shares
Interim of 4.80p (2010 - 3.00p) per share paid on 46,080 28,800
1st April 2011
Interim of 2.40p (2010 - 2.40p) per share paid on 23,040 23,040
14th October 2011
69,120 51,840
Total dividends paid 103,680 77,760
2. Cash and cash equivalents 2011 2010
Cash at bank and in hand 1,746,464 1,844,934
Bank overdrafts 1,485,757 1,145,421
260,707 699,513
3. Major non-cash transaction
During the year the group acquired tangible assets subject to finance of
281,170 (2010 - 53,050) under hire purchase agreements.
4. Segmental information
Central Manufacturing Distribution Total
2011 2011 2011 2011
Revenue
External - 2,510,726 17,557,179 20,067,905
Inter company 61,443 3,026,539 1,828,853 4,916,835
Total 61,443 5,537,265 19,386,032 24,984,740
Profit
EBITDA (12,901) 274,159 1,449,224 1,710,482
Finance costs (14,812) (301,808) (28,835) (345,455)
Finance income 1,679 272,722 5 274,406
Depreciation - (322,728) (72,472) (395,200)
Tax expense (23,079) - (407,133) (430,212)
(Loss)/profit for the (49,113) (77,655) 940,789 814,021
period
Assets
Total assets 810,551 2,874,795 7,409,610 11,094,956
Additions to non current - 396,164 205,247 601,411
assets
Liabilities
Total liabilities 526,570 1,849,717 2,778,604 5,154,891
Central Manufacturing Distribution Total
2010 2010 2010 2010
Revenue
External - 2,126,262 15,931,399 18,057,661
Inter company 64,743 2,787,705 1,606,740 4,459,188
Total 64,743 4,913,967 17,538,139 22,516,849
Profit
EBITDA (15,617) 125,391 1,590,211 1,699,985
Finance costs (14,493) (267,354) (20,598) (302,445)
Finance income 1,719 248,699 358 250,776
Depreciation - (249,366) (37,572) (286,938)
Tax expense (21,450) 5,545 (400,335) (416,240)
(Loss)/profit for the (49,841) (137,085) 1,132,064 945,138
period
Assets
Total assets 766,618 2,846,980 6,352,868 9,966,466
Additions to non current - 199,946 63,258 263,204
assets
Liabilities
Total liabilities 480,636 2,063,659 2,159,914 4,704,209
5. Basis of preparation
The preliminary announcement has been prepared in accordance with applicable
International Financial Reporting Standards as adopted by the European Union
(IFRSs as adopted by the EU), IFRIC interpretations and the Companies Act 2006
applicable to companies reporting under IFRS.
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31st December 2010, as described in
those annual financial statements.
The consolidated financial statements have been prepared on a going concern
basis and under the historical cost convention.
6. Annual general meeting
The annual general meeting of the company will be held in Leeds on Friday 25th
May 2012. Full details will be included in the published annual report and
financial statements, which will be sent to shareholders by the 26th April 2012
and will also be available on the company's web-site (www.braimegroup.com) from
that date.
7. Preliminary statement
The financial statements set out in the preliminary announcement do not
constitute statutory accounts as defined by section 434 of the Companies Act
2006. The financial information for the year ended 31st December 2011 has been
extracted from the group's financial statements upon which the auditor's
opinion is unqualified, does not include reference to any matters to which they
wish to draw attention by way of emphasis without qualifying their report, and
does not include any statement under section 498 of the Companies Act 2006.
Statutory accounts for the year ended 31st December 2010 have been delivered to
the Registrar of Companies, and those for 2011 will be delivered in due course.
Approved by the Board 16 April 2012
For further information please contact:
T.F. & J.H. Braime (Holdings) P.L.C.
A. Q. Braime A.C.A. - Operations Director
0113 245 7491
W. H. Ireland Limited
Katy Mitchell LLB
0113 394 6628
END