REG - Braime (T.F.& J.H.) - Final Results <Origin Href="QuoteRef">BMT.L</Origin>

BraimeAnnouncement

22/04/2016 07:05

RNS Number : 9864V
Braime (T.F.& J.H.) (Hldgs) PLC
22 April 2016
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
("Braime" or the "company" and with its subsidiaries the "group")
ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2015
At a meeting of the directors held today, the accounts for the year ended 31st December 2015 were submitted and approved by the directors. The accounts statement is as follows:
Chairman's statement
Overall performance of the group
Group sales revenue in 2015 maintained the consistent growth seen in recent years, increasing by 9% in 2015 to 26.5m from 24.3m in 2014.
Operating profit however fell to 897,000 from 1,236,000 in the previous year, as a result of the negative effects on 4B Braime Components of the steep fall in the value of the euro and a disappointing performance from Braime Pressings.
The overall profit before tax rose to 1,950,000 from 1,125,000, due to the exceptional circumstances explained below. After deducting tax, the final profit for the year nearly doubled to 1,542,000, compared to 782,000 in 2014.
In view of the overall result, the directors have decided to pay a second interim of 6.20p, leaving the total dividends of 9.10p, unchanged from the previous year.
Exceptional issues in 2015
During the year, the group completed the sale to the new University Technical College (UTC) of 1.15 acres of the Hunslet Road site. This eliminated both the annual running costs and the long term maintenance of 25% of the building. The funds raised from the sale have enabled the group to modernise the facilities of the UK material handling business and considerably improve its operating efficiency. 
The sale proceeds, plus an additional contribution from the UTC towards the structural work required, created a gain on disposal of 1,027,000 after taking into account the professional and legal fees required to facilitate the sale. Part of the proceeds were used to fund the construction of a new fire wall separating our facilities from the adjoining UTC building, reducing the gain by a further 258,000. Tax arising on this gain has been deferred against future capital investments in the business.
During the year, a fire in Braime Pressings seriously damaged a key automated press line. The group was fully insured against both the damage caused to the press, the additional costs incurred and the loss of contribution as a result of having to source replacement parts from a third party, based in the USA, to satisfy an existing customer contract; up to 31st December 2015 these costs amounted to 243,000. Given the costs and uncertainty involved in a repair, the insurance company determined that the lower risk option to them was to make a contribution of 375,000 towards the costs of a new press line. This will be commissioned during the first half of 2016 and the directors believe this will increase both capacity and productivity of this production cell.
In line with generally accepted accounting practice, the disposal of the damaged press, which was almost fully depreciated and the contribution received, gives rise to a further gain on disposal of 373,000. The new press line will be capitalised once it has been fully commissioned and then depreciated in line with normal policy. The accountancy treatment of the disposal has no effect on the tax charge.
Braime Pressings Limited
At an operating profit level, Braime Pressings Limited recorded a loss in 2015, as despite the significant investments in plant made in recent years, productivity has recently declined. The company has addressed this issue by the recruitment of new managers which the directors believe will have a positive impact on performance and quality. 
Pressings also faced unexpectedly high plant repairs and a significant increase in energy costs, even though the wiring was modernised throughout the facility and energy saving lighting installed in 2014.
A number of improvements to the layout of the plant were made in 2015. The tool room was relocated closer to the production area and a new comprehensive system of tool racking was installed. A temperature controlled storage area has also been created for finished parts and the heating system throughout the facility has been modernised to improve the working environment. 
The goods inwards and despatch areas have been re-located from the front of the building directly adjoining the dual carriageway leading to Leeds City Centre to the quieter rear of the facility, giving better vehicle accessibility and allowing for future increases in capacity. This significantly improves efficiency as the existing historic corner entrance was designed for horse drawn carts in 1911! 
4B material handling division
On the whole, the overseas subsidiaries within the 4B division increased both sales and profitability. The impact of movements in foreign exchange rates affected the apparent performance of a number of subsidiaries. The contribution to the group from 4B Africa and 4B France were both reduced by the depreciation in the value of their trading currencies during 2015 when consolidated in sterling into the group result. 
On the other hand, the largest subsidiary, 4B Components USA, had a good trading year and benefited from the movement in the dollar exchange rate which lowered the cost of imported goods and increased the value of the subsidiary's contribution to the group. 
Unfortunately, the profitability of 4B Braime Components in the UK was impacted by the fall of around 15% in the value of the euro compared to sterling. A large part of the sales of 4B Braime Components to Eurozone customers are priced in euros at the start of each year which meant that the fall in the exchange rate significantly reduced the gross margins achieved on sales in 2015.
The 4B division has for many years delivered continuous annual growth and in 2015 sales surpassed 22.5m; 4B is primarily a distribution business and therefore "if you don't have it, you won't sell it". Given the size of the product range, the long lead times and the global nature of the business, this rate of growth in sales inevitably puts upward pressure on stocks and the group's financial resources. The overall group stock grew by 831,000 in 2015 and most of this increase was within the 4B Division. Consequently, stock control within the division will need to be improved to enable the company to continue to invest in new plant and products.
Finance and cash flow
The company ended 2015 with positive cash reserves of 315,000; a net improvement of 464,000 over the equivalent position at the end of 2014. 
The cash flow statement shows that the group's working capital position declined year on year by 596,000. This has been caused by an increase in group stock of 831,000 and a small increase in trade debtors and other receivables of 94,000. This was only partly offset by an increase in trade creditor and other payables of 329,000. 
The increase in the group stock from 4,889,000 to 5,720,000 represents a 17% increase year on year compared to the 9% increase in sales achieved and this is a primary reason for the substantial increase in working capital. An immediate focus for 2016 will be to reduce stock to its previous ratio relative to sales and improved controls and processes are being put in place to achieve this.
Capex
In 2015, the group invested 689,000 in plant and equipment and motor vehicles. At 31st December 2015, the group had on order further capital investments of 427,000, made up largely of the new press line and other projects to improve the effectiveness of its manufacturing operations. Funds permitting, the group has plans to make further investments which will improve productivity, capacity, and quality control.
Staff
Staff are the group's most important asset. Turnover in staff is extremely low and the directors believe this indicates the level of their loyalty and commitment. Listening carefully to their ideas and encouraging their proactive support is essential, in order to maintain both the survival and the growth of the business in what are ever more challenging circumstances. Management continues to carefully invest in the employment of new staff to strengthen further the group and are very pleased to welcome them to the business.
Outlook
Truck components both for building new vehicles and for their regular maintenance are the key product of Braime Pressings and currently demand is running well below last year due to the economic slowdown seen across Europe. 
Demand for the range of 4B material components fell in the last quarter of 2015 leading all subsidiaries to express concerns for 2016. However, with the exception of 4B Braime in the UK, where demand remains subdued, the sales performance of the overseas subsidiaries is exceeding last year and is more than offsetting the effect of the underlying global downturn. 
The overall result for the group will continue to be affected, as in recent years, by movements in the exchange rates and the slowdown in the global economy which are impossible to predict. The underlying position of the group however, remains positive due to its reputation and the quality of its products and the services it offers. 
O. N. A. Braime, Chairman
21st April 2016
For further information please contact: 
T.F. & J.H. Braime (Holdings) P.L.C.
Nicholas Braime
0113 245 7491
W. H. Ireland Limited 
Katy Mitchell / Nick Prowting
0113 394 6628
Summarised consolidated income statement for the year ended 31st December 2015 (audited)


2015
2014






Revenue

26,470,084
24,291,700




Changes in inventories of finished goods and work in progress

886,480
161,071
Raw materials and consumables used

(15,529,776)
(13,535,766)
Employee benefits costs

(6,022,492)
(5,309,357)
Depreciation expense

(758,589)
(564,244)
Other expenses

(4,148,272)
(3,807,604)




Profit from operations

897,435
1,235,800




Profit on disposal of tangible fixed assets

1,158,140
2,796
Finance costs

(116,830)
(115,291)
Finance income

11,726
2,164




Profit before tax

1,950,471
1,125,469




Tax expense

(408,937)
(343,340)




Profit for the year

1,541,534
782,129




Profit attributable to:



Owners of the parent

1,584,748
864,011
Non-controlling interests

(43,214)
(81,882)






1,541,534
782,129








Basic and diluted earnings per share

107.05p
54.31p
Summarised consolidated statement of comprehensive income for the year ended 31st December 2015 (audited)


2015
2014






Profit for the year

1,541,534
782,129




Items that will not be reclassified subsequently to profit or loss


Net pension remeasurement gain on post employment benefits
10,000
44,000



Items that may be reclassified subsequently to profit or loss


Foreign exchange (losses)/gains on re-translation of overseas operations

(146,822)
10,819




Other comprehensive income for the year

(136,822)
54,819




Total comprehensive income for the year

1,404,712
836,948




Total comprehensive income attributable to:



Owners of the parent

1,447,926
918,830
Non-controlling interests

(43,214)
(81,882)






1,404,712
836,948
Summarised consolidated balance sheet at 31st December 2015 (audited)


2015
2015
2014
2014


Assets





Non-current assets





Property, plant and equipment

4,677,456

4,056,506

Goodwill

12,270

12,270

Financial assets

51,877

101,853

Total non-current assets


4,741,603

4,170,629






Current assets





Inventories

5,719,654

4,888,183

Trade and other receivables

5,005,099

4,911,108

Financial assets

57,777

98,147

Cash and cash equivalents

931,018

1,357,769

Total current assets


11,713,548

11,255,207






Total assets


16,455,151

15,425,836






Liabilities





Current liabilities





Bank overdraft

615,038

1,505,988

Trade and other payables

4,053,220

3,752,594

Other financial liabilities

1,498,171

1,323,095

Corporation tax liability

66,854

187,054

Total current liabilities


6,233,283

6,768,731






Non-current liabilities





Financial liabilities

1,363,524

1,111,045

Deferred income tax liability

230,235

191,623

Total non-current liabilities


1,593,759

1,302,668






Total liabilities


7,827,042

8,071,399






Total net assets


8,628,109

7,354,437






Capital and reserves attributable to equity holders of the parent company

Share capital


360,000

360,000
Capital reserve


257,319

257,319
Foreign exchange reserve


(58,581)

88,241
Retained earnings


8,194,467

6,730,759
Total equity attributable to the shareholders of the parent


8,753,205

7,436,319
Non-controlling interests


(125,096)

(81,882)






Total equity


8,628,109

7,354,437
Summarised consolidated cash flow statement for the year ended 31st December 2015 (audited)


2015
2015
2014
2014


Operating activities





Net profit


1,541,534

782,129
Adjustments for:





Depreciation

758,589

564,244

Grants amortised

(1,656)

(1,656)

Foreign exchange (losses)/gains

(146,677)

15,279

Finance income

(11,726)

(2,164)

Finance expense

116,830

115,291

Gain on sale of land and buildings, plant, machinery and motor vehicles
(1,158,140)

(2,796)

Adjustment in respect of defined benefits scheme

13,000

46,000

Income tax expense

408,937

343,340

Income taxes paid

(490,525)

(41,685)




(511,368)

1,035,853
Operating profit before changes in working capital and provisions

1,030,166

1,817,982






Increase in trade and other receivables

(93,991)

(1,044,846)

Increase in inventories

(831,471)

(68,983)

Increase in trade and other payables

329,488

1,114,877




(595,974)

1,048
Cash generated from operations


434,192

1,819,030






Investing activities





Purchases of property, plant, machinery and motor vehicles

(1,010,401)

(1,368,985)

Sale of land and buildings, plant, machinery and motor vehicles
1,190,561

14,540

Interest received

8,726

164




188,886

(1,354,281)
Financing activities





Proceeds from long term borrowings

300,000

200,000

Loan financing repayments/ (provided)

90,346

(200,000)

Repayment of borrowings

(171,020)

(272,688)

Repayment of hire purchase creditors

(130,335)

(170,231)

Interest paid

(116,830)

(115,291)

Dividends paid

(131,040)

(131,040)




(158,879)

(689,250)
Increase/(decrease) in cash and cash equivalents

464,199

(224,501)
Cash and cash equivalents, beginning of period


(148,219)

76,282
Cash and cash equivalents, end of period

315,980

(148,219)
Consolidated statement of changes in equity for the year ended 31st December 2015 (audited)

Share
Capital
Capital
Reserve
Foreign
Exchange
Reserve
Retained
Earnings
Total
Non-
Controlling
Interests
Total
Equity


Balance at 1st January 2014

360,000
77,319
77,422
6,156,288
6,671,029
-
6,671,029
Comprehensive income








Profit

-
-
-
864,011
864,011
(81,882)
782,129
Other comprehensive income








Net pension remeasurement gain recognised directly in equity
-
-
-
44,000
44,000
-
44,000
Foreign exchange gain on re-translation of overseas subsidiaries consolidated operations

-
-
10,819
-
10,819
-
10,819
Total other comprehensive income

-
-
10,819
44,000
54,819
-
54,819
Total comprehensive income

-
-
10,819
908,011
918,830
(81,882)
836,948









Transactions with owners








Dividends

-
-
-
(131,040)
(131,040)
-
(131,040)
Cancellation of Preference shares

-
180,000
-
(202,500)
(22,500)
-
(22,500)
Total transactions with owners

-
180,000
-
(333,540)
(153,540)
-
(153,540)
Balance at 31st December 2014

360,000
257,319
88,241
6,730,759
7,436,319
(81,882)
7,354,437

Share
Capital
Capital
Reserve
Foreign
Exchange
Reserve
Retained
Earnings
Total
Non-
Controlling
Interests
Total
Equity


Balance at 1st January 2015

360,000
257,319
88,241
6,730,759
7,436,319
(81,882)
7,354,437
Comprehensive income








Profit

-
-
-
1,584,748
1,584,748
(43,214)
1,541,534
Other comprehensive income








Net pension remeasurement gain recognised directly in equity
-
-
-
10,000
10,000
-
10,000
Foreign exchange loss on re-translation of overseas subsidiaries consolidated operations

-
-
(146,822)
-
(146,822)
-
(146,822)
Total other comprehensive income

-
-
(146,822)
10,000
(136,822)
-
(136,822)
Total comprehensive income

-
-
(146,822)
1,594,748
1,447,926
(43,214)
1,404,712









Transactions with owners








Dividends

-
-
-
(131,040)
(131,040)
-
(131,040)
Total transactions with owners

-
-
-
(131,040)
(131,040)
-
(131,040)
Balance at 31st December 2015

360,000
257,319
(58,581)
8,194,467
8,753,205
(125,096)
8,628,109
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 shares (2014 - 1,440,000). There are no potentially dilutive shares in issue.

Dividends paid
2015
2014



Equity shares



Ordinary shares



Interim of 6.20p (2014 - 6.20p) per share paid on 2nd April 2015
29,760
29,760

Interim of 2.90p (2014 - 2.90p) per share paid on 18th October 2015
13,920
13,920


43,680
43,680

'A' Ordinary shares



Interim of 6.20p (2014 - 6.20p) per share paid on 2nd April 2015
59,520
59,520

Interim of 2.90p (2014 - 2.90p) per share paid on 18th October 2015
27,840
27,840


87,360
87,360

Total dividends paid
131,040
131,040
An interim dividend of 6.20p per Ordinary and 'A' Ordinary share will be paid on 12th May 2016.
2. SEGMENTAL INFORMATION

Central
Manufacturing
Distribution
Total

2015
2015
2015
2015

Revenue




External
-
3,955,447
22,514,637
26,470,084
Inter company
122,593
3,267,777
4,411,488
7,801,858
Total
122,593
7,223,224
26,926,125
34,271,942





Profit




EBITDA
(102,140)
35,632
1,722,532
1,656,024
Gain on sale of tangible
fixed assets
-
1,149,629
8,511
1,158,140
Finance costs 
(48,347)
(30,566)
(37,917)
(116,830)
Finance income
-
3,666
8,060
11,726
Depreciation
-
(432,370)
(326,219)
(758,589)
Tax expense
(44,540)
-
(364,397)
(408,937)
(Loss)/profit for the period
(195,027)
725,991
1,010,570
1,541,534





Assets




Total assets
1,314,918
4,588,122
10,552,111
16,455,151
Additions to non current assets
-
1,146,385
265,722
1,412,107
Liabilities




Total liabilities
701,606
2,839,750
4,285,686
7,827,042

Central
Manufacturing
Distribution
Total

2014
2014
2014
2014

Revenue




External
-
3,621,626
20,670,074
24,291,700
Inter company
113,568
2,761,536
3,743,664
6,618,768
Total
113,568
6,383,162
24,413,738
30,910,468





Profit




EBITDA
(5,777)
219,116
1,589,501
1,802,840
Finance costs 
(27,820)
(46,387)
(41,084)
(115,291)
Finance income
-
2,000
164
2,164
Depreciation
(6,300)
(287,663)
(270,281)
(564,244)
Tax expense
(78,099)
(34,335)
(230,906)
(343,340)
(Loss)/profit for the period
(117,996)
(147,269)
1,047,394
782,129





Assets




Total assets
1,323,858
4,033,070
10,068,908
15,425,836
Additions to non current assets
-
1,118,171
399,405
1,517,576
Liabilities




Total liabilities
520,316
2,868,453
4,682,630
8,071,399
Revenue




3. BASIS OF PREPARATION
These consolidated financial statements have 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 consolidated financial statements have been prepared on a going concern basis and under the historical cost convention. The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2015 as described in those financial statements.
4. ANNUAL GENERAL MEETING
The Annual General Meeting of the members of the company will be held at the registered office of the company at Hunslet Road, Leeds, LS10 1JZ on Friday 10th June 2016 at 11.45am. The annual report and financial statements will be sent to shareholders by 12 May 2016 and will also be available on the company's website (www.braimegroup.com) from that date.
5.  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 2015 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 2014 have been delivered to the Registrar of Companies, and those for 2015 will be delivered in due course.
6.EVENTS AFTER THE REPORTING PERIOD
There were no events after the balance sheet date that would require disclosure in accordance with IAS10, "Events after the reporting period".

This information is provided by RNS
The company news service from the London Stock Exchange
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