REG - Braime Group PLC - ANNUAL RESULTS YEAR ENDED 31ST DECEMBER 2023
22/04/2024 07:00
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RNS Number : 4162L Braime Group PLC 22 April 2024
BRAIME GROUP PLC
("Braime" or the "Company" and with its subsidiaries the "Group")
ANNUAL RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2023
At a meeting of the directors held today, the accounts for the year ended 31st
December 2023 were submitted and approved by the directors. The accounts
statement is as follows:
Chairman's statement
High level results
I am pleased to announce Group revenue for 2023 of £48.2m and profit before
tax of £3.3m. These results are discussed further in the Business Review
and the Group Strategic Report, however I am delighted with the results given
the general economic climate.
Dividends
The Company paid an interim dividend of 5.25p in October 2023. Based on the
results above the directors propose paying a second interim dividend of 9.50p
on the 24th May 2024 to the holders of the Ordinary and "A" Ordinary Shares on
the share register on 10th May 2024. The ex-dividend date is 9th May 2024.
This brings the total dividend paid in relation to the 2023 financial year to
14.75p, compared to 13.75p in 2022.
Overall strategy
Our strategy remains largely unchanged, continuing to invest in constantly
improving our production processes and exploring new global markets for our
niche products and developing new innovations for our customers' engineering
challenges.
Staff
I would like to thank all our staff and colleagues who have continued to
provide, commitment, ideas and enthusiasm throughout the year. The quality
and commitment of our people has been at the heart of our business success.
This has been demonstrated in many ways, including the deepening relationships
with our customers, and continual development of our product lines and their
flexibility in adapting to the ever-changing business landscape.
Current trading and outlook
Much of the world economy is currently either in recession, or at risk of
being in recession, and although its degree varies across different countries
and regions, nevertheless this will inevitably affect our own performance in
2024. This long predicted and widely discussed global economic downturn began
in early 2023 but thankfully affected our businesses less, and also much later
in the year, than I had thought when I wrote last year's Chairman's statement,
and the outlook at the half-year in 2023.
The principal market for a large proportion of the pressed steel components
manufactured by Braime Pressings is the commercial vehicle industry;
historically this has been the last sector to feel the effects of a downturn
in the economy and unfortunately has usually been the last sector to
recover. Although Braime Pressings has secured orders for additional
products from its customers in this important sector of our business, as well
as winning some large additional work for pressed steel components from
entirely new industry sectors, in this instance from both the energy and
building sectors, nevertheless current levels of sales remain slightly below
last year's figures and we expect this situation to continue for much of 2024.
The principal sales of the Group globally, made through the 4B division of the
Group, are of components for new equipment used in the "Bulk Material Handling
Industry." The highest volume of these sales are used in new machinery
required for even larger new facilities to store or process granular products
used primarily in food production. Although the construction and final
completion of these investments were often delayed on site by the Covid
epidemic, the number of investment projects to expand food production actually
increased through the post Covid period and continued to do so through 2022
and 2023. The quantity of these investments were the primary reason behind the
Group's sequence of positive results. However, we understand that the level
of such investments globally is currently much lower, so the activities of the
major original equipment manufacturers (OEMs) of new machinery, which require
large volumes of both the mechanical and electronic components supplied by the
Group, are similarly being supplied in more lower volumes, especially in the
Western European market. This leads to more competition for the same demand
and pressure on margins because of the increased competition for the supply to
the ongoing remaining projects. Eastern and Central Europe, including the
Ukraine, and more recently Russia itself, had become major areas of investment
in new facilities to store and process cereals, but these regions have largely
been closed; and this has also reduced the sales for our newer OEM customers
in the Asian markets. Fortunately, in 2024, we continue to benefit from
ongoing investment in new facilities in the USA and South America.
The 4B Division of the Group also makes substantial sales to existing
facilities we refer to as "End Users" and who provide a significant spares
market for our traditional mechanical products and also for the Group's new
electronic products, which improve safety and reduce maintenance. This is a
business sector that we have targeted and which remained buoyant both through
Covid and continues to be so even in the current downturn. This helps provide
the Group with stability at a time when we consider the market for new
machinery to be running at a low ebb and is a benefit of 4B division's
increasing product range and also of the Group's global geographic spread of
sales.
So overall, while we expect lower sales volume in 2024, this is offset
partially by sales of new product lines launched in late 2023. We remain
hopeful, in spite of the current parlous state of the global economy, of a
reasonably positive result in 2024.
Nicholas Braime, Chairman
22nd April 2024
For further information please contact:
Braime Group PLC
Nicholas Braime/Cielo Cartwright
0113 245 7491
W. H. Ireland Limited
Katy Mitchell
0113 394 6628
Business review
Business overview
We are delighted that the Group has had another excellent year despite a mixed
economic backdrop globally. Our group revenue of £48.2m is a new record.
We are pleased that post-covid, we have continued to see year on year sales
growth since 2020. Profit from operations was £3.7m and profit before tax
was £3.3m.
Much of the sales growth this year has been generated from the strong
performance in the USA and South American markets which have continued to see
investments in the grain and feed sector. The Americas increased sales by
22% in 2023 to £23m. By contrast, the European market has remained fairly
static in part due to the ongoing war in the Ukraine and the economic slowdown
and rising inflation across much of the continent which has dampened demand
for investment in new bulk handling facilities. We have seen some growth in
revenue in Africa while sales in the Asia Pacific region have remained in line
with prior year despite a considerable slowdown of the Chinese economy and
difficult market conditions in Australia and parts of SE Asia.
In the UK, our steel components manufacturing business has been impacted by a
more cautious approach to stock-build by external and internal customers and
revenues fell to £10.5m from £11.8m in 2022.
New business product development
As a Group we continue to benefit from our long-term strategy of investment in
continually developing new products and markets. The Group benefits from its
global presence with subsidiaries located across the world and a great
distribution network through its long-term partners. Our strategy going into
2024 is to continue to invest in manufacturing improvements, new innovative
products and developing new markets to extend our distribution.
The Group has strengthened its global presence and expanded its multinational
trading business with the opening of a new 4B subsidiary branch in the UAE in
the summer of 2023. 4B Middle East is 4B's 8th international trading entity,
further extending the company's global reach. 4B has been serving customers in
the Middle East for many years, across many industries ranging from grain
handling to fertilizer and cement. With its local office in the UAE, 4B is
now available to provide on-site engineering and after sales support, which
are at the heart of 4B's customer service philosophy. The opening of the 4B
Middle East office brings us closer to our customers in the region and enables
us to directly support them with technological material handling solutions.
The Middle East is an area of strategic importance with great resources and
is a region of significant economic growth.
The Group remains focused on innovation, a strategy that continues to maintain
4B at the leading edge of technology for our market sector. Recent product
releases such as the IE node and 4B Encoder have proven to be great additions
to our electronics product portfolio and have been well received by our
customers. In 2023, the Group has again launched a number of new innovative
electronics products designed for dust hazardous environments and condition
monitoring. The recently released IE-GuardFlex strengthens the range and
scope of hazard monitoring systems provided by 4B. This centralised
controller and distributed node-based solution fits perfectly to large end
user systems providing advanced hazard monitoring features suitable for all
machine types and offers a cost-effective alternative to traditional PLC based
implementations. Our universal speed relay has a simple and intuitive
graphical display which allows easy and precise machine set up to monitor
over- and under-speed, while our range of Mili-VIB 4-20mA sensors offer a
condition monitoring solution for continuous monitoring of vibration levels
and temperature in industrial environments and hazardous areas providing
reliable and accurate data that can be used to optimise performance and
increase equipment longevity.
Our UK manufacturing business has been working closely with customers to
convert costly manufacturing processes into lower cost volume presswork. The
knowledge and skill set of our manufacturing team has proved fundamental in
facilitating this new business and we now see opportunities in the application
of these processes to the construction and buildings industries.
New capital investments
The Group continues to spend capital to maintain its productivity and to
safeguard its asset base through appropriate redevelopment and refurbishment
of plant and property as well as the purchase of new machinery. In 2023, the
Group invested £1.6m in capital investments. £0.4m of this relates to
enhancements to the chain cell area. As discussed in last year's report, we
took advantage of the necessity forced upon us to rebuild the chain cell area
to improve the efficiency of production areas and to increase our existing
capacity to ensure the ongoing growth of this product line.
We also invested £0.4m on the redevelopment of our manufacturing dispatch
yard and the construction of an additional employee car park to the rear of
our Hunslet property which includes an attenuation tank to minimise the risk
of oil spillages contamination and is also a flood defense. As reported last
year, in February 2023 we completed the installation of the second phase of
our solar panel installation, an important feature of our sustainability.
In the USA, we strengthened our portfolio of plastic injection moulding
machines in our US facility with the purchase of a 528-tonne moulding machine
and invested in new tooling for our range of 5 inch projection CC-S buckets.
These investments help to strengthen our position as one of the top three
manufacturers of plastic elevator buckets in the USA and facilitate our
ability to provide a 'one stop shop' package solution of buckets, belts, bolts
and belt fasteners to our end user and OEM customers.
Similarly, investments made in our robotic lines for manufacturing steel
elevator buckets will help maintain our position as the market leader and
enable us to increase volumes while the refurbishment of our large hydraulic
400t press will also enable us to target new business in areas outside of the
automotive and materials handling industries.
2023 has built on the process improvements and innovation activities of 2022
and we look forward to an exciting year in 2024 continuing our strategy of
investment in improving manufacturing efficiencies, new product development
and new market opportunities.
The directors present their strategic report of the Company and the Group for
the year ended 31st December 2023.
Principal activities
The principal activities of the Group during the year under review was the
manufacture of deep drawn metal presswork and the distribution of material
handling components and monitoring equipment. Manufacturing activity is
delivered through the Group's subsidiary Braime Pressings Limited and the
distribution activity through the Group's 4B division.
Braime Pressings specialises in metal presswork, including deep drawing,
multi-stage progression and transfer presswork. Founded in 1888, the
business has over 130 years of manufacturing experience. The metal presswork
segment operates across several industries including the automotive sector and
supplies external as well as group customers.
The subsidiaries within the 4B division are industry leaders in developing
high quality, innovative and dependable material handling components for the
agricultural and industrial sectors. They provide a range of complementary
products including elevator buckets, elevator and conveyor belting, elevator
bolts and belt fasteners, forged chain, level monitors and sensors and
controllers for monitoring and providing preventative maintenance systems
which facilitate handling and minimise the risk of explosion in hazardous
areas. The 4B division has operations in the Americas, Europe, the Middle
East, Asia, Australia and Africa and in 2023 traded in ninety-eight
countries. The US subsidiary also has an injection-moulding plant. All
injection-moulded products are made wholly for 4B internal consumption and
this is classed as 4B division activity rather than included in the
manufacturing segment.
Performance highlights
The board is pleased to report better results than was anticipated at the
start of the year. For the year ended 31st December 2023, the Group
generated revenues of £48.2m, up £3.3m from prior year. Profit from
operations was £3.7m, down £351,000 from prior year and EBITDA was £5.4m,
down £208,000 from prior year.
Profit before tax was £3.3m, down £487,000 from prior year.
At 31st December 2023, the Group had net assets of £20.8m.
Cash flow
Inventories decreased by £702,000 as the Group utilised stock built up during
2022 when sales were rising rapidly. Trade and other receivables similarly
decreased, down £998,000 reflecting lower customer activity during the period
close to the year end. There was a corresponding decrease in our trade and
other payables of £2.1m reflecting the decrease in purchases of stock. In
total the business generated funds from operations of £3.2m (2022 -
£3.4m). During the year, the Group spent £1.6m on property, plant and
equipment; £775,000 of this was on improvements to our Hunslet property in
the UK, and £860,000 on purchases of plant and machinery, mainly for our
manufacturing division. After the payment of other financial costs and the
dividend, the cash balance (net of overdraft) was £2.2m, an increase of
£1.4m from the prior year.
Bank facilities
The Group's operating banking facilities are renewed annually. At the year
end, the available headroom on its operating facilities was £3.4m. As
previously announced, the Group had additionally obtained a development loan
facility of £1.5m from its bankers HSBC for the Hunslet Road chain cell
project, of which only £978,000 was ever drawn down. Post-year end in
February 2024, in line with expectations at the time of taking out the
development facility, this was converted to a term loan, repayable over five
years at an interest of 2.5% above base rate. The business continues to
enjoy good relations with its bankers.
Taxation
The tax charge for the year was £999,000, with an effective rate of tax of
30.0% (2022 - 28.8%). The effective rate is higher than the averaged UK
standard tax rate of 23.5% (2022 - 19%); this results from the blending effect
of the different rates of tax applied by each of the countries in which the
Group operates, in particular, our US operations' tax charge affects the
blended rate. In any financial year the effective rate will depend on the
mix of countries in which profits are made, however the Group continues to
review its tax profile to minimise the impact.
Capital expenditure
In 2023, the Group invested £1.6m (2022 - £2.8m) in property, plant and
equipment and intangible assets. In addition to £775,000 spent on the UK
chain cell enhancements, solar panels and improved rear car park facilities,
the Group has also spent £860,000 enhancing its engineering capabilities,
purchasing robotic controls and sensors, a new access control system, a 600t
press in the UK, and a new injection moulding machine and plastic bucket
moulds in the USA.
Balance sheet
Net assets of the Group have increased to £20.8m (2022 - £19.2m). Sterling
strengthened against the United States dollar in 2023 from a low base in
2022. Consequently, a foreign exchange loss of £505,000 (2022 - £815,000
gain) was recorded on the re-translation of the net assets of the overseas
operations, which has decreased retained earnings in the year.
Principal exchange rates
The Group reports its results in sterling, its presentational currency. The
Group operates in six other currencies and the principal exchange rates in use
during 2023 and the comparative figures for 2022 are shown in the table below.
Average rate Average rate Closing rate Closing rate
Currency Symbol Full year 2023 Full year 2022 31st Dec 2023 31st Dec 2022
Australian Dollar AUD 1.880 1.777 1.868 1.771
Chinese Renminbi (Yuan) CNY 8.821 8.354 9.041 8.394
Euro EUR 1.152 1.170 1.154 1.128
South African Rand ZAR 23.088 20.155 23.307 20.385
Thai Baht THB 43.423 43.159 43.805 41.589
United States Dollar USD 1.248 1.232 1.275 1.204
Our business model
The two segments of the Group are very different operations and serve
different markets, however together they provide diversification, strength and
balance to the Group and their activities.
The focus of the presswork manufacturing business is to produce quality,
technically demanding steel components. The use of automated equipment allows
us to produce in high volumes whilst maintaining flexibility to respond to
customer demands.
The material handling components business operates from a number of locations
around the globe allowing us to be close to our core markets. The focus of
the business is to provide innovative solutions drawing on our expertise in
material handling and access to a broad product range.
Performance of Braime Pressings Limited, manufacturer of deep drawn metal
presswork
Braime Pressings Limited sales of £10.5m were down £1.4m on prior year.
External sales and intercompany sales were £5.7m and £4.8m as compared to
£6.7m and £5.1m respectively in 2022. Profit for the period was £613,000
(2022 - £1.0m). The board believes the business continues to add strategic
value through its supply to the 4B division and complementary engineering
expertise.
Performance of the 4B division, world-wide supplier of components and
monitoring systems for the material handling industry
Revenues increased from £46.3m to £50.3m, with external sales up £4.3m to
£42.4m. Profit for the period fell by £550,000 to £2.3m. The North
American market continued its strong growth in 2023, with external revenues up
22% to £23m, and Africa also performed strongly with sales up 17%. However,
the ongoing war in Ukraine has continued to dampen European sales which are
down from 2023 and the Pacific region sales have remained static.
Key performance indicators
The Group uses the following key performance indicators to assess the
performance of the Group as a whole and of the individual businesses:
Key performance indicator Note 2023 2022
Turnover growth 1 7.3% 23.3%
Gross margin 2 46.8% 47.6%
Operating profit before exceptional item 3 3.75m 4.45m
Stock days 4 179 days 206 days
Debtor days 5 52 days 64 days
Notes to KPI's
1. Turnover growth
The Group aims to increase shareholder value by measuring the year on year
growth in Group revenue. Whilst growth is lower than 2022, which was an
exceptional year, the board remain pleased with the revenue growth achieved
particularly in the North American sector.
2. Gross margin
Gross profit (revenue plus change in inventories less raw materials used) as a
percentage of revenue is monitored to maximise profits available for
reinvestment and distribution to shareholders. The decrease in gross margin
is the result of continuing higher material prices, across all product
categories.
3. Operating profit before exceptional item
Sustainable growth in operating profit is a strategic priority to enable
ongoing investment and increase shareholder value. Reduction in operating
profit, follows an exceptionally strong year in 2022 and management remains
pleased with the results in the current economic climate.
4. Stock days
The value of period end inventories divided by raw materials and consumables
used and changes in inventories of finished goods and work in progress
expressed as a number of days is monitored to ensure the right level of stocks
are held in order to meet customer demands whilst not carrying excessive
amounts which impacts upon working capital requirements. Stock days have
decreased due to the unwinding of the inventory build-up in December 2022,
which was put in place to mitigate the impact of increases in raw materials
costs in 2022.
5. Debtor days
The value of period end trade receivables divided by revenue expressed as a
number of days. This is an important indicator of working capital
requirements. Debtor days have decreased as a result of lower sales growth
compared to 2022, particularly towards the end of the financial year.
Other metrics monitored weekly or monthly include quality measures (such as
customer complaints), raw materials buying prices, capital expenditure, line
utilisation, reportable accidents and near-misses.
Principal risks and uncertainties
The continued conflict in Ukraine and now Gaza as well as other geo-political
pressures create uncertainties in the world markets in which the Group
operates.
The Group's short reporting lines of management means it can remain nimble
footed to sudden and/or large changes in the business landscape.
General risks
The market remains challenging for our manufacturing division, due to pricing
pressures throughout the supply chain. The maintenance of the TS16949
quality standard is important to the Group and allows it to access growing
markets within the automotive and other sectors. A process of continual
improvement in systems and processes reduces this risk as well as providing
increased flexibility to allow the business to respond to customer
requirements.
Our 4B division maintains its competitive edge in a price sensitive market
through the provision of engineering expertise and by working closely with our
suppliers to design and supply innovative components of the highest
standard. In addition, ranges of complementary products are sold into
different industries. The monitoring systems are developed and improved on a
regular basis.
The directors receive monthly reports on key customer and operational metrics
from subsidiary management and review these. The potential impact of
business risks and actions necessary to mitigate the risks, are also discussed
and considered at the monthly board meetings. The directors have put in
place formal business continuity and disaster recovery plans with respect to
its UK and overseas operations. The more significant risks and uncertainties
faced by the Group are set out below:-
· Raw material price fluctuation:- The Group is exposed to fluctuations
in steel and other raw material prices and to mitigate this volatility, the
Group fixes its prices with suppliers where possible.
· Energy price fluctuation:- The manufacturing division is energy
intensive. It uses forward contracts to mitigate volatility and is
continually evaluating its processes to reduce energy consumption and generate
energy.
· Reputational risk:- As the Group operates in relatively small
markets any damage to, or loss of reputation could be a major concern.
Rigorous management attention and quality control procedures are in place to
maximise right first time and on time delivery. Responsibility is taken for
ensuring swift remedial action on any issues and complaints.
· Damage to warehouse or factory:- Any significant damage to a
factory or warehouse will cause short-term disruption. To mitigate these
risks, the Group has arrangements with key suppliers to step up supply in the
event of a disruption.
· Economic fluctuations:- The Group derives a significant proportion of
its profits from outside the UK and is therefore sensitive to fluctuations in
the economic conditions of overseas operations including foreign currency
fluctuations. As the Covid-19 pandemic has demonstrated, economies are
greatly intertwined and reverberations feed through the supply chain.
· Cyber security:- All businesses now rely almost totally on
computers, networks and systems with 'data' information held on them, and
require privacy and integrity of this data. The likelihood of cyber security
attacks and security threats are key risks for every organisation. The Group
reviews its security measures regularly with its IT providers.
Financial instruments
The operations expose the Group to a variety of financial risks including the
effect of changes in interest rates on debt, foreign exchange rates, credit
risk and liquidity risk.
The Group's exposure in the areas identified above are discussed in note 19 of
the financial statements.
The Group's principal financial instruments comprise sterling and foreign cash
and bank deposits, bank loans and overdrafts, other loans and obligations
under finance leases together with trade debtors and trade creditors that
arise directly from operations. The main risks arising from the Group's
financial instruments can be analysed as follows:
Price risk
The Group has no direct exposure to securities price risk, as it holds no
listed equity instruments. The Group maintains a defined benefit scheme, the
asset valuations are subject to market changes (note 21).
Foreign currency risk
The Group operates a centralised treasury function which manages the Group's
banking facilities and all lines of funding. Forward contracts are on
occasions used to hedge against foreign exchange differences arising on cash
flows in currencies that differ from the operational entity's reporting
currency.
Credit risk
The Group's principal financial assets are bank balances, cash and trade
receivables, which represent the Group's maximum exposure to credit risk in
relation to financial assets.
The Group's credit risk is primarily attributable to its trade receivables.
Credit risk is mitigated by a stringent management of customer credit limits
by monitoring the aggregate amount and duration of exposure to any one
customer depending upon their credit rating. The Group also has credit
insurance in place. The amounts presented in the balance sheet are net of
allowance for doubtful debts, estimated by the Group's management based on
prior experience and their assessment of the current economic environment.
The credit risk on liquid funds is limited because the counterparties are
banks with high credit-ratings assigned by international credit-rating
agencies. The Group has no significant concentration of credit risk, with
exposure spread over a large number of counterparties and customers.
Liquidity risk
The Group's policy has been to ensure continuity of funding through acquiring
an element of the Group's fixed assets under medium term loans and finance
leases and arranging funding for operations via bank overdrafts to aid short
term flexibility.
Cash flow interest rate risk
Interest rate bearing assets comprise cash and bank deposits, all of which
earn interest at a fixed rate. The interest rate on the bank overdraft is at
market rate and the Group's policy is to keep the overdraft within defined
limits such that the risk that could arise from a significant change in
interest rates would not have a material impact on cash flows. The Group's
policy is to maintain other borrowings at fixed rates to fix the amount of
future interest cash flows.
The directors monitor the level of borrowings and interest costs to limit any
adverse effects on the financial performance of the Group.
Research and development
The Group continues to invest in research and development and from time to
time liaises with university engineering groups with a view to improving
features of its products. This has resulted in innovations in the products
which will benefit the Group in the medium to long term.
Duties to promote the success of the Company
Section 172 of the Companies Act 2006 requires the directors to act in a way
that they consider, in good faith, would be most likely to promote the success
of the Company for the benefit of its members as a whole, and in doing so have
regard (amongst other matters) to:
- the most likely consequences of any decision in the long term;
- the interest of the Company's employees;
- the need to foster the Company's business relationships with
suppliers, customers and others;
- the impact of the Company's operations on the community and
the environment;
- the desirability of the Company maintaining a reputation for
high standards of business conduct; and
- the need to act fairly between the members of the Company.
The board confirms that, during the year, it has had regard to the matters set
out above. Further details as to how the directors have fulfilled their
duties are set out below and in the Governance Report which in particular,
expands on directors' duties and stakeholder liaison.
Corporate social responsibility
Business ethics and human rights
The board is respectful of the Company's long history, and considers the
long-lasting impact of its decisions. We are committed to conducting our
business ethically and responsibly, and treating employees, customers,
suppliers and shareholders in a fair, open and honest manner. As a business,
we receive audits by both our independent auditors and by our customers and we
look to source from suppliers who share our values. We encourage our
employees to provide feedback on any issues they are concerned about and have
a whistle-blowing policy that gives our employees the chance to report
anything they believe is not meeting our required standards.
The Group is similarly committed to conducting our business in a way that is
consistent with universal values on human rights and complying with the Human
Rights Act 1998. The Group gives appropriate consideration to human rights
issues in our approach to supply chain management, overseas employment
policies and practices. Where appropriate, we support community
partnering.
Health and safety
We maintain healthy and safe working conditions on our sites and measure our
ability to keep employees and visitors safe. We continuously aim to improve
our working environments to ensure we are able to provide safe occupational
health and safety standards to our employees and visitors. The directors
receive monthly H&S reports and we carry out regular risk management
audits to identify areas for improvement and to minimise safety risks. As a
global business, the Group is able to tap into the experience of its various
international locations to share best practice and learning points. The
experience of the past two years has improved our plans and procedures in the
event of future pandemics.
Employees
The quality and commitment of our people has played a major role in our
business success. This has been demonstrated in many ways, including
improvements in customer satisfaction, the development of our product lines
and the flexibility they have shown in adapting to changing business
requirements. Employee performance is aligned to the achievement of goals
set within each subsidiary and is rewarded accordingly. Employees are
encouraged to use their skills to best effect and are offered training either
externally or internally to achieve this. As a global business, the Group
fully recognises and seeks to harness the benefits of diversity within its
work force.
Environment
The Group's policy with regard to the environment is to understand and
effectively manage the actual and potential environmental impact of our
activities. Operations are conducted such that we comply with all legal
requirements relating to the environment in all areas where we carry out our
business and is currently looking at the new reporting requirements that may
fall due in the future. The Group continuously looks for ways to harness
energy reduction (electricity and gas) and water. The Company has already
installed two solar PV systems on its UK premises generating 310 KWh of
energy. During the period of this report the Group has not incurred any
fines or penalties or been investigated for any breach of environmental
regulations. The board is cognizant that climate change will change the
business landscape for the future and is working to understand its
wide-ranging impact on the Group's activities and operations.
Social and community matters
We recognise our responsibility to work in partnership with the communities in
which we operate and we encourage active employee support for their community
in particular, in aid of technical awareness and training. We regularly
participate in a number of education events encouraging interest in
engineering in young people. It is our policy not to provide political
donations.
Consolidated income statement for the year ended 31st December 2023 (audited)
2023 2022
£'000 £'000
Revenue 48,155 44,879
Changes in inventories of finished goods and work in progress (426) 2,925
Raw materials and consumables used (25,188) (26,456)
Employee benefits costs (11,009) (10,260)
Depreciation and amortisation expense (1,678) (1,535)
Other expenses (6,270) (5,391)
Other operating income 164 287
Profit from operations before exceptional item 3,748 4,449
Exceptional item - (350)
Profit from operations 3,748 4,099
Finance expense (485) (282)
Finance income 72 5
Profit before tax 3,335 3,822
Tax expense (999) (1,101)
Profit for the year 2,336 2,721
Profit attributable to:
Owners of the parent 2,274 2,768
Non-controlling interests 62 (47)
2,336 2,721
Basic and diluted earnings per share 162.22p 188.96p
Consolidated statement of comprehensive income for the year ended 31st
December 2023 (audited)
2023 2022
£'000 £'000
Profit for the year 2,336 2,721
Items that will not be reclassified subsequently to profit or loss
Net pension remeasurement gain on post employment benefits 19 128
Items that may be reclassified subsequently to profit or loss
Foreign exchange (loss)/gain on re-translation of overseas operations (505) 815
Other comprehensive income for the year 486 943
Total comprehensive income for the year 1,850 3,664
Total comprehensive income attributable to:
Owners of the parent 1,775 3,727
Non-controlling interests 75 (63)
1,850 3,664
Consolidated balance sheet at 31st December 2023 (audited)
2023 2022
£'000 £'000
Assets
Non-current assets
Property, plant and equipment 10,082 9,782
Intangible assets 489 636
Right of use assets 717 425
Total non-current assets 11,288 10,843
Current assets
Inventories 12,587 13,289
Trade and other receivables 7,973 8,760
Cash and cash equivalents 2,310 1,458
Total current assets 22,870 23,507
Total assets 34,158 34,350
Liabilities
Current liabilities
Bank overdraft 138 672
Trade and other payables 6,991 8,635
Other financial liabilities 3,769 3,219
Corporation tax liability 52 195
Total current liabilities 10,950 12,721
Non-current liabilities
Financial liabilities 2,325 2,343
Deferred income tax liability 44 92
Provision for liabilities - -
Total non-current liabilities 2,369 2,435
Total liabilities 13,319 15,156
Total net assets 20,839 19,194
Share capital 360 360
Capital reserve 257 257
Foreign exchange reserve 221 742
Retained earnings 20,182 18,091
Total equity attributable to the shareholders of the parent 21,020 19,450
Non-controlling interests (181) (256)
Total equity 20,839 19,194
Consolidated cash flow statement for the year ended 31st December 2023
(audited)
2023 2022
£'000 £'000
Operating activities
Net profit 2,336 2,721
Adjustments for:
Depreciation and amortisation 1,678 1,535
Foreign exchange (losses)/gains (424) 622
Finance income (72) (5)
Finance expense 485 282
Gain on sale of land and buildings, plant, machinery and motor vehicles (80) (188)
Adjustment in respect of defined benefit scheme 69 132
Income tax expense 999 1,101
Income taxes paid (1,401) (759)
1,254 2,720
Operating profit before changes in working capital and provisions 3,590 5,441
Decrease/(increase) in trade and other receivables 998 (2,669)
Decrease/(increase) in inventories 702 (3,165)
(Decrease)/increase in trade and other payables (2,053) 4,870
Decrease in provisions - (1,054)
(353) (2,018)
Cash generated from operations 3,237 3,423
Investing activities
Purchases of property, plant, machinery and motor vehicles (1,421) (2,053)
Purchase of intangible assets - (725)
Sale of land and buildings, plant, machinery and motor vehicles 88 216
Interest received 22 1
(1,311) (2,561)
Financing activities
Proceeds from long term borrowings 977 236
Repayment of borrowings (372) (392)
Repayment of hire purchase creditors (172) (158)
Repayment of lease liabilities (283) (268)
Bank interest paid (404) (210)
Lease interest paid (64) (60)
Hire purchase interest paid (17) (11)
Dividends paid (205) (187)
(540) (1,050)
Increase/(decrease) in cash and cash equivalents 1,386 (188)
Cash and cash equivalents, beginning of period 786 974
Cash and cash equivalents, end of period 2,172 786
Consolidated statement of changes in equity for the year ended 31st December
2023 (audited)
Foreign Non-
Share Capital Exchange Retained Controlling Total
Capital Reserve Reserve Earnings Total Interests Equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1st January 2022 360 257 (89) 15,382 15,910 (193) 15,717
Comprehensive income
Profit - - - 2,768 2,768 (47) 2,721
Other comprehensive income
Net pension remeasurement gain recognised directly in equity
- - - 128 128 - 128
Foreign exchange gains on re-translation of overseas subsidiaries consolidated
operations
- - 831 - 831 (16) 815
Total other comprehensive income - - 831 128 959 (16) 943
Total comprehensive income - - 831 2,896 3,727 (63) 3,664
Transactions with owners
Dividends - - - (187) (187) - (187)
Total transactions with owners - - - (187) (187) - (187)
Balance at 1st January 2023 360 257 742 18,091 19,450 (256) 19,194
Comprehensive income
Profit - - - 2,274 2,274 62 2,336
Other comprehensive income
Net pension remeasurement gain recognised
directly in equity - - - 19 19 - 19
Foreign exchange losses on re-translation of
overseas subsidiaries consolidated operations - - (521) 3 (518) 13 (505)
Total other comprehensive income - - (521) 22 (499) 13 (486)
Total comprehensive income - - (521) 2,296 1,775 75 1,850
Transactions with owners
Dividends - - - (205) (205) - (205)
Total transactions with owners - - - (205) (205) - (205)
Balance at 31st December 2023 360 257 221 20,182 21,020 (181) 20,839
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 Braime Group PLC as the numerator.
The weighted average number of outstanding shares used for basic earnings per
share amounted to 1,440,000 shares (2022 - 1,440,000). There are no
potentially dilutive shares in issue.
Dividends paid 2023 2022
£'000 £'000
Equity shares
Ordinary shares
Interim of 9.00p (2022 - 8.20p) per share paid on 26th May 2023 43 39
Interim of 5.25p (2022 - 4.75p) per share paid on 13th October 2023 25 23
68 62
'A' Ordinary shares
Interim of 9.00p (2022 - 8.20p) per share paid on 26th May 2023 87 79
Interim of 5.25p (2022 - 4.75p) per share paid on 13th October 2023 50 46
137 125
Total dividends paid 205 187
An interim dividend of 9.50p per Ordinary and 'A' Ordinary share will be paid
on 24th May 2024.
2. SEGMENTAL INFORMATION
Presswork
Central Manufacturing 4B Total
2023 2023 2023 2023
£'000 £'000 £'000 £'000
Revenue
External - 5,710 42,445 48,155
Inter Company 2,567 4,747 7,819 15,133
Total 2,567 10,457 50,264 63,288
Profit
EBITDA 490 692 4,244 5,426
Finance costs (255) (94) (136) (485)
Finance income - 50 22 72
Depreciation and amortisation (720) (35) (923) (1,678)
Tax expense (46) - (953) (999)
(Loss)/profit for the period (531) 613 2,254 2,336
Assets
Total assets 7,739 10,664 15,755 34,158
Additions to non current assets 1,319 40 879 2,238
Liabilities
Total liabilities 2,337 3,000 7,982 13,319
Presswork
Central Manufacturing 4B Total
2022 2022 2022 2022
£'000 £'000 £'000 £'000
Revenue
External - 6,688 38,191 44,879
Inter Company 1,880 5,149 8,087 15,116
Total 1,880 11,837 46,278 59,995
Profit
EBITDA (183) 1,118 4,699 5,634
Finance costs (114) (63) (105) (282)
Finance income - 4 1 5
Depreciation and amortisation (612) (35) (888) (1,535)
Tax expense (198) - (903) (1,101)
(Loss)/profit for the period (1,107) 1,024 2,804 2,721
Assets
Total assets 7,225 9,206 17,919 34,350
Additions to non current assets 1,886 8 922 2,816
Liabilities
Total liabilities 1,918 3,771 9,467 15,156
3. BASIS OF PREPARATION
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the UK (IFRSs as
adopted by the UK), IFRIC interpretations and the Companies Act 2006
applicable to companies reporting under IFRS. The consolidated financial
statements have been prepared under the historical cost convention. The
accounting policies adopted are consistent with those of the annual financial
statements for the year ended 31st December 2023 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 Thursday
27th June 2024 at 11.45am. The annual report and financial statements will
be sent to shareholders by 29th May 2024 and will also be available on the
company's website (www.braimegroup.com (http://www.braimegroup.com) ) from
that date.
The Company will take into account any Government guidance or legislation in
force at the time of the AGM and will implement any measures it believes
necessary to protect the health and safety of attendees. Any changes to the
format of the AGM will be communicated to shareholders through the Company's
website and, where appropriate, by stock exchange announcement.
5. THE ANNOUNCEMENT
The financial information set out in this announcement does not constitute
statutory accounts as defined by section 434 of the Company Act 2006. The
financial information for the year ended 31st December 2023 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 2022 have been delivered
to the Registrar of Companies, and those for 2023 will be delivered in due
course.
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