Half-yearly Report
22/09/2011 14:14
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
("Braime" or the "company")
Interim results for the six months ended 30th June 2011
The significant increases in sales revenue achieved in recent years has
continued in the first six months of 2011, with sales revenue up by 16% from
8.32m in 2010 to 9.66m in 2011.
Profit before tax rose from 396,000 to 427,000, an increase of 7.8%. We
believe this slower rate of growth stemmed from a relative fall in the gross
margin in turn caused primarily by a large jump in commodity prices.
The group was cash negative in the first six months as a result of increases in
debtors and inventories supporting the increase in sales revenue. The group
also continued to invest in capital machinery to improve the efficiency of the
manufacturing business.
Accordingly the directors have decided to maintain the interim dividend at the
same level as paid in 2010. A dividend of 2.40p per share will be paid on 14th
October 2011 to the Ordinary and `A' Ordinary shareholders on the register on
30th September 2011.
Performance of group companies
4B division
All the subsidiary companies within this division have continued to perform
well ahead of both the same period last year and above budget, although margins
have been eroded in some product lines due to the massive increase in the cost
of materials. Inevitably in a fiercely competitive market, it has been
difficult to gain full and immediate acceptance of these cost increases by
customers.
Pressings division
We are seeing increasing demand from existing contracts and have secured sales
for additional parts. However, in spite of the enormous efforts made by our
staff, we have continued to experience frustrating delays in the launch of
these critical new contracts. As a result of these costly delays, the
manufacturing business continues to lose money.
Outlook
The group as a whole has made a positive start in the first half of 2011,
although the world wide explosion in commodity prices has had a negative effect
on our margins and is creating instability and a general lack of confidence
among our customers.
Up to this point in time, we have been fortunate in that the bulk of the
group's sales are to the commercial agro market world wide and the strength of
this sector has sheltered us from the recession. However, we are now seeing the
first signs of a fall off in demand, even within this sector, caused by the
growing economic uncertainty and the increasing difficulty in securing finance
for projects.
In these circumstances, it is important that we improve our stock management
within the 4B division and that we eliminate the losses in the manufacturing
division by finally bringing the new contracts on stream.
Condensed consolidated income statementfor thesix months ended 30th June 2011
Unaudited Unaudited Year to
6 months to 6 months to 31st
30th June 30th June December
Note 2011 2010 2010
Revenue 9,656,490 8,317,924 18,057,661
Cost of sales 7,494,668 6,379,779 13,553,654
Gross profit 2,161,822 1,938,145 4,504,007
Other operating expenses 1,700,753 1,513,886 3,090,960
Operating profit 461,069 424,259 1,413,047
Finance expense (172,229) (151,235) (302,445)
Finance income 138,041 122,982 250,776
Profit before tax 426,881 396,006 1,361,378
Income tax expenses (119,527) (110,042) (416,240)
Profit after tax 307,354 285,964 945,138
Basic and diluted earnings per 2 21.34p 19.86p 65.63p
share
Consolidated statement of comprehensive income for the six months ended
30th June 2011
Unaudited Unaudited Year to
6 months to 6 months to 31st
30th June 30th June December
2011 2010 2010
Profit for the period 307,354 285,964 945,138
Actuarial losses recognised directly - - (168,000)
in equity
Foreign exchange gains/(losses) on 56,427 25,717 (33,254)
re-translation of overseas operations
Adjustment in respect of minimum (25,000) - 137,000
funding requirement per IFRIC14
Total other comprehensive income for 31,427 25,717 (64,254)
the period
Total comprehensive income for the 338,781 311,681 880,884
period
Consolidated statement of financial positionat 30th June 2011
Unaudited Unaudited Year to
6 months to 6 months to 31st
30th June 30th June December
2011 2010 2010
Non-current assets
Property, plant and equipment 1,444,106 1,207,447 1,223,980
Goodwill 12,270 12,270 12,270
Total non-current assets 1,456,376 1,219,717 1,236,250
Current assets
Inventories 3,879,299 2,995,554 3,593,680
Trade and other receivables 4,077,310 3,282,853 3,291,602
Cash and cash equivalents 1,804,679 1,592,740 1,844,934
Total current assets 9,761,288 7,871,147 8,730,216
Total assets 11,217,664 9,090,864 9,966,466
Current liabilities
Bank overdraft 1,630,184 1,106,334 1,145,421
Trade and other payables 3,154,832 2,385,993 2,707,169
Other financial liabilities 352,862 314,985 291,553
Corporation tax liability 119,527 110,042 171,054
Total current liabilities 5,257,405 3,917,354 4,315,197
Non-current liabilities
Financial liabilities 428,341 445,896 389,012
Total non-current liabilities 428,341 445,896 389,012
Total liabilities 5,685,746 4,363,250 4,704,209
Total net assets 5,531,918 4,727,614 5,262,257
Capital and reserves
Share capital 360,000 360,000 360,000
Capital reserve 77,319 77,319 77,319
Foreign exchange reserve 342,719 345,263 286,292
Retained earnings 4,751,880 3,945,032 4,538,646
Total equity attributable to equity 5,531,918 4,727,614 5,262,257
shareholders of the company
Consolidated statement of changes in equity for thesix months ended 30th June
2011
Foreign
Share Capital Exchange Retained
Capital Reserve Reserve Earnings Total
Balance at 1st January 360,000 77,319 286,292 4,538,646 5,262,257
2011
Comprehensive income
Profit - - - 307,354 307,354
Other comprehensive
income
Actuarial gains - - - - -
recognised directly in
equity
Foreign exchange gains on - - 56,427 - 56,427
re-translation of
overseas operations
Adjustment in respect of - - - (25,000) (25,000)
minimum funding
requirement per IFRIC14
Total other comprehensive - - 56,427 (25,000) 31,427
income
Total comprehensive - - 56,427 282,354 338,781
income
Transaction with owners
Dividends - - - (69,120) (69,120)
Total transactions with - - - (69,120) (69,120)
owners
Balance at 30th June 2011 360,000 77,319 342,719 4,751,880 5,531,918
Balance at 1st January 360,000 77,319 319,546 3,702,268 4,459,133
2010
Comprehensive income
Profit - - - 285,964 285,964
Other comprehensive
income
Actuarial gains - - - - -
recognised directly in
equity
Foreign exchange losses - - 25,717 - 25,717
on re-translation of
overseas operations
Adjustment in respect of - - - - -
minimum funding
requirement per IFRIC14
Total other comprehensive - - 25,717 - 25,717
income
Total comprehensive - - 25,717 285,964 311,681
income
Transaction with owners
Dividends - - - (43,200) (43,200)
Total transactions with - - - (43,200) (43,200)
owners
Balance at 30th June 2010 360,000 77,319 345,263 3,945,032 4,727,614
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 losses - - - (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
Consolidated cash flow statementfor thesix months ended 30th June 2011
Unaudited Unaudited Year to
6 months to 6 months to 31st
30th June 30th June December
Note 2011 2010 2010
Operating activities
Net profit from ordinary 307,354 285,964 945,138
activities
Adjustments for:
Depreciation 186,713 139,045 286,938
Grants amortised (828) (828) (1,656)
Foreign exchange loss/(gain) 62,548 15,977 (37,785)
Investment income (138,041) (122,982) (250,776)
Interest expense 172,229 151,235 302,445
Gain on sale of plant and (6,212) (11,808) (35,357)
equipment
Adjustment in respect of (21,000) 3,000 (22,000)
defined benefit scheme
Income tax expense 119,527 110,042 416,240
Operating profit before 682,290 569,645 1,603,187
changes in working capital and
provisions
Increase in trade and other (785,708) (882,469) (891,218)
receivables
Increase in inventories (285,619) (133,405) (731,531)
Increase in trade and other 510,180 495,894 713,331
payables
(561,147) (519,980) (909,418)
Cash generated from operations 121,143 49,665 693,769
Income taxes paid (233,571) (128,954) (270,401)
Investing activities
Purchases of plant, machinery (207,670) (50,718) (210,154)
and motor vehicles
Sale of plant, machinery and 6,212 14,458 35,358
motor vehicles
Interest received 2,041 1,982 4,776
(199,417) (34,278) (170,020)
Financing activities
Repayment of hire purchase (103,824) (110,833) (197,871)
creditors
Interest paid (40,229) (33,235) (65,445)
Dividend paid (69,120) (43,200) (77,760)
(213,173) (187,268) (341,076)
Decrease in cash and cash 3 (525,018) (300,835) (87,728)
equivalents
Cash and cash equivalents 3 699,513 787,241 787,241
(including overdrafts),
beginning of period
Cash and cash equivalents 174,495 486,406 699,513
(including overdrafts), end of
period
Notes to the interim financial report
1. Accounting policies
Basis of preparation
The interim financial report has been prepared using accounting policies that
are consistent with those used in the preparation of the full financial
statements to 31st December 2010 and those which management expects to apply in
the group's full financial statements to 31st December 2011.
This interim financial report is unaudited. The comparative financial
information set out in this interim financial report does not constitute the
group's statutory accounts for the period ended 31st December 2010 but is
derived from the accounts. Statutory accounts for the period ended 31st
December 2010 have been delivered to the Registrar of Companies. The auditors
have reported on those accounts. Their audit report was unqualified and did not
contain any statements under Section 498 of the Companies Act 2006.
The group's condensed interim financial information has been prepared in
accordance with International Financial Reporting Standards (`IFRS') as adopted
for the use in the European Union and in accordance with IAS 34 `Interim
Financial Reporting' and the accounting policies included in the Annual Report
for the year ended 31st December 2010, which have been applied consistently
throughout the current and preceding periods.
2. 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.
2011
Dividends paid
Equity shares
Ordinary shares
Interim of 4.80p per share paid on 1st April 2011 23,040
`A' Ordinary shares
Interim of 4.80p per share paid on 1st April 2011 46,080
Total dividends paid 69,120
2010
Dividends paid
Equity shares
Ordinary shares
Interim of 3.0p per share paid on 1st April 2010 14,400
Interim of 2.40p per share paid on 15th October 2010 11,520
`A' Ordinary shares
Interim of 3.00p per share paid on 1st April 2010 28,800
Interim of 2.40p per share paid on 15th October 2010 23,040
Total dividends paid 77,760
3. Cash and cash equivalents
Unaudited Unaudited Year to
6 months to 6 months to 31st
30th June 30th June December
2011 2010 2010
Cash at bank and in hand 1,804,679 1,592,740 1,844,934
Bank overdrafts 1,630,184 1,106,334 1,145,421
174,495 486,406 699,513
4. Segmental information
Unaudited 6 months to 30th June 2011
Central Manufacturing Distribution Total
Revenue
External - 962,917 8,693,573 9,656,490
Inter company 29,885 1,310,367 751,557 2,091,809
Total 29,885 2,273,284 9,445,130 11,748,299
Profit
EBITDA (29,702) 6,395 671,089 647,782
Finance costs (7,168) (151,789) (13,272) (172,229)
Finance income 800 137,239 2 138,041
Depreciation - (157,267) (29,446) (186,713)
Tax expense (8,368) - (111,159) (119,527)
(Loss)/profit for the (44,438) (165,422) 517,214 307,354
period
Assets
Total assets 820,403 3,256,977 7,140,284 11,217,664
Additions to non - 346,454 57,336 403,790
current assets
Liabilities
Total liabilities 570,278 2,611,112 2,504,356 5,685,746
Unaudited 6 months to 30th June 2010
Central Manufacturing Distribution Total
Revenue
External - 1,093,574 7,224,350 8,317,924
Inter company 33,638 784,058 419,824 1,237,520
Total 33,638 1,877,632 7,644,174 9,555,444
Profit
EBITDA (8,914) (31,596) 603,814 563,304
Finance costs (6,815) (134,692) (9,728) (151,235)
Finance income 749 122,233 - 122,982
Depreciation - (111,600) (27,445) (139,045)
Tax expense (9,419) - (100,623) (110,042)
(Loss)/profit for the (24,399) (155,655) 466,018 285,964
period
Assets
Total assets 778,974 2,974,686 5,337,204 9,090,864
Additions to non - 80,050 23,718 103,768
current assets
Liabilities
Total liabilities 337,324 1,830,652 2,195,274 4,363,250
Audited year to 31st December 2010
Central Manufacturing Distribution Total
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 - 199,946 63,258 263,204
current assets
Liabilities
Total liabilities 480,636 2,063,659 2,159,914 4,704,209
22nd September 2011
A copy of this interim statement has been sent to all shareholders and is
available on the company's web-site (www.braimegroup.com).
For further information please contact:
T.F & J.H. Braime (Holdings) P.L.C.
David H. Brown FCA - Financial Director
0113 245 7491
W. H. Ireland Limited
Katy Mitchell LLB
0113 3946628
END