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

BraimeAnnouncement

26/04/2017 11:55

RNS Number : 4084D
Braime (T.F.& J.H.) (Hldgs) PLC
26 April 2017
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 31ST DECEMBER 2016
At a meeting of the directors held today, the accounts for the year ended 31st December 2016 were submitted and approved by the directors. The accounts statement is as follows:
Chairman's statement
Overall performance of the group
Sales revenuein 2016 increased by 7.3% to 28.4m compared to 26.5m in 2015 and the profit from operations increased to 1.4m from 0.9m in the previous year.
The profit before tax in 2016 reduced to 1.27m compared to 1.95m in 2015 however the prior year result had benefitted from the exceptional profit of 1.16m from the sale of part of the Hunslet site.
Results from some subsidiaries of the group were below expectations but the performance in other parts of the group more than offset this and, overall, the 2016 result was positive. The group also benefited, like many UK exporters, from the immediate fall in pound sterling following the result of the EU Referendum.
Dividends
The directors have decided to increase the total dividend for 2016 by 2.2% to 9.30p. The first interim dividend of 2.90p, paid in October 2016, was unchangedbut the second interim dividend will be increased to 6.40p (2015 - 6.20p). Accordingly, an interim dividend of 6.40p per Ordinary and 'A' Ordinary share will be paid on 12th May 2017 to shareholders on the record on 5th May 2017.
Capex
During 2016, the group invested 1.1m in plant and equipment. Further major investments are planned for 2017, focusing on improving productivity in manufacturing and extending our overseas distribution. The final 'go ahead' for these investments and their timing are dependent on maintaining adequate cash flow and the availability of long term finance.
Cash flow
Continuous monitoring of the cash flow and the headroom between the actual borrowingsand the agreed maximum borrowing facility with our bankers is increasingly important. Although the group hasdistinct 'seasonal' periods when outgoings peak, the timing of payments for exceptional purchases fluctuate throughout the year.
In 2016, the group generated a 1.9m cash inflow from operations and, after taking account of the net increase in working capital required, the payment of other financial costs and the dividend, the group was cash positive by 427,000. 
The group revenue continues to grow year on year. To do so in 2016 it required an increase in both stocks and debtors, by 400,000 and 208,000 respectively, although the increase in debtors was more than offset by an increase in the creditors of 272,000. 
Group stocks increased by 7.0%, roughly in line with the 7.3% increase in sales revenue,but overall group stocks remain high. Reducing them is an important potential source of funds required for ongoing investment, while maintaining adequate stock is a pre-requisite of achieving the all-important delivery performance required by our customers. Achieving this balance is a never-ending battle and rightly remains a key individual responsibility for the managing directors of each subsidiary and for the group directors.
Staff
The positive and proactive contribution of all individual staff at all levels and in all parts of the group is crucial to the continuing success of the business.
Every year customers look for improvements in pricingand for higher standards of quality and delivery. This puts pressure on management, office staff and on everyone involved in production. This in turn impacts family life as many of our technicaland sales staff are required to spend more time travelling away from home.
We thank them all for their ongoing effort.
Braime Pressings Limited
The new transfer line came on stream in the third quarter of 2016 but initially did not achieve its potential throughput. Combined with exceptional demand, this resulted in additional shifts which disproportionally increased manufacturing costs and resulted in a disappointing result. With the significant contribution being made by new senior staff, the situation is gradually improving in 2017.
Additionally the company has secured a large contract for a new product line which we are confident we can produce competitively based on our existing skill set. When this product comes on stream in late 2017, it will make a major positive contribution.
4B material handling division
The results from the subsidiaries making up the 4B division were mixed in 2016. 
4B USA,operating in both North and South America, enjoyed a strong year, as did both 4B Africa and 4B Australia. In contrast,4B France had a poor year due to weak demand resulting from a lower than expected harvest. The result from the UK division, 4B Braime, was initially damaged by the very high value of sterling in the first half of 2016 and only partially rectified in the second part of 2016 by the effective 10% devaluation in June. 4B Asia Pacific faced major additional short term costs but is now meeting our positive long term expectations.
Overall the 4B group had a positive year which illustrates the benefit provided by the diversity of products it offers to customers and the wide range of industries and regions which make up its customer base.
Brexit
As 80% of group sales are made in overseas markets, the company benefited substantially from the steep fall in the value of pound sterling following the referendum. The lower value of sterling considerably increased the margins both on direct overseas sales and those made through an overseas subsidiary. Additionally, the contribution of the individual overseas subsidiaries are enhanced when converted back into sterling and consolidated in the group result.
The medium term effects of Brexit will be much more complex. The company imports the majority of its raw materials for manufacture and imports some products for re-sale in the UK. In both cases,it will be difficult to pass on the magnitude of these cost increases to customers.
Where the company buys products from overseas suppliers in euros or dollars and then resells the products in export markets, the effect may be neutral - but may not be if the products involved have to be imported and processed first in the UK before being re-exported. The company may have to look at different locations for stocking and processing products. Until agreements are finalised with the EU, and probably beyond that, there is going to remain a great deal of uncertainty as to the overall effect on the group. 
That said, only 25% of group sales are made to the EU compared to 55% to other overseas markets and the likelihood is that the group will be a major beneficiary from Brexit. Moreover, the group had already identified the overseas markets outside the EU as the regions with the greatest potential for future growth and has for some time been focused on their development. Brexit offers a major opportunity that the group needs to seize.
Ironically the one major risk is that the currency market itself decides that on balance the UK is going to be a long term "winner" from Brexit and the fall in the pound is reversed,just at the same timeas the UK facesnew tariffs. In the long term, the level of the pound relative to other currencies is likely to play a bigger factor than the possible implementation of tariffs by the EU. 
Outlook
We continue to invest in the future, in improving productivity, in developing new marketsand in introducing new innovative products.
In spite of the current level of uncertainty and ever increasing competition, the group has started this financial year positively and overall is currently performing ahead of both last year and the 2017 budget.
O. N. A. Braime, Chairman
26th April 2017
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 2016 (audited)

2016
2015




Revenue
28,415,449
26,470,084



Changes in inventories of finished goods and work in progress
337,116
886,480
Raw materials and consumables used
(15,890,401)
(15,529,776)
Employee benefits costs
(6,726,428)
(6,022,492)
Depreciation expense
(801,376)
(758,589)
Other expenses
(3,940,015)
(4,148,272)



Profit from operations
1,394,345
897,435



Profit on disposal of tangible fixed assets
-
1,158,140
Finance expense
(150,142)
(116,830)
Finance income
29,902
11,726



Profit before tax
1,274,105
1,950,471



Tax expense
(419,588)
(408,937)



Profit for the year
854,517
1,541,534



Profit attributable to:


Owners of the parent
932,101
1,584,748
Non-controlling interests
(77,584)
(43,214)




854,517
1,541,534






Basic and diluted earnings per share
59.34p
107.05p
Summarised consolidated statement of comprehensive income for the year ended 31st December 2016 (audited)

2016
2015




Profit for the year
854,517
1,541,534



Items that will not be reclassified subsequently to profit or loss


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



Items that may be reclassified subsequently to profit or loss


Foreign exchange gains/(losses) on re-translation of overseas operations
597,976
(146,822)



Other comprehensive income for the year
607,976
(136,822)



Total comprehensive income for the year
1,462,493
1,404,712



Total comprehensive income attributable to:


Owners of the parent
1,540,077
1,447,926
Non-controlling interests
(77,584)
(43,214)




1,462,493
1,404,712
Summarised consolidated balance sheet at 31st December 2016 (audited)

2016
2016
2015
2015

Assets




Non-current assets




Property, plant and equipment
5,357,772

4,677,456

Goodwill
12,270

12,270

Financial assets
-

51,877

Total non-current assets

5,370,042

4,741,603





Current assets




Inventories
6,119,495

5,719,654

Trade and other receivables
5,213,019

5,005,099

Financial assets
51,877

57,777

Cash and cash equivalents
742,474

931,018

Total current assets

12,126,865

11,713,548





Total assets

17,496,907

16,455,151





Liabilities




Current liabilities




Bank overdraft
-

615,038

Trade and other payables
4,181,683

4,053,220

Other financial liabilities
1,730,288

1,498,171

Corporation tax liability
146,703

66,854

Total current liabilities

6,058,674

6,233,283





Non-current liabilities




Financial liabilities
1,360,947

1,363,524

Deferred income tax liability
117,724

230,235

Total non-current liabilities

1,478,671

1,593,759





Total liabilities

7,537,345

7,827,042





Total net assets

9,959,562

8,628,109






Share capital

360,000

360,000
Capital reserve

257,319

257,319
Foreign exchange reserve

539,395

(58,581)
Retained earnings

9,005,528

8,194,467
Total equity attributable to the shareholders of the parent

10,162,242

8,753,205
Non-controlling interests

(202,680)

(125,096)





Total equity

9,959,562

8,628,109


Summarised consolidated cash flow statement for the year ended 31st December 2016 (audited)

2016
2016
2015
2015

Operating activities




Net profit

854,517

1,541,534
Adjustments for:




Depreciation
801,376

758,589

Grants amortised
(6,568)

(1,656)

Foreign exchange gains/(losses)
525,324

(146,677)

Finance income
(29,902)

(11,726)

Finance expense
150,142

116,830

Gain on sale of land and buildings, plant, machinery and motor vehicles
(12,538)

(1,158,140)

Adjustment in respect of defined benefits scheme
12,000

13,000

Income tax expense
419,588

408,937

Income taxes paid
(491,778)

(490,525)



1,367,644

(511,368)
Operating profit before changes in working capital and provisions

2,222,161

1,030,166





Increase in trade and other receivables
(207,920)

(93,991)

Increase in inventories
(399,841)

(831,471)

Increase in trade and other payables
272,025

329,488



(335,736)

(595,974)
Cash generated from operations

1,886,425

434,192





Investing activities




Purchases of property, plant, machinery and motor vehicles
(998,617)

(1,010,401)

Sale of land and buildings, plant, machinery and motor vehicles
12,538

1,190,561

Interest received
27,902

8,726



(958,177)

188,886
Financing activities




Proceeds from long term borrowings
-

300,000

Loan financing repayments
57,777

90,346

Repayment of borrowings
(101,917)

(171,020)

Repayment of hire purchase creditors
(176,432)

(130,335)

Interest paid
(150,142)

(116,830)

Dividends paid
(131,040)

(131,040)



(501,754)

(158,879)
Increase in cash and cash equivalents

426,494

464,199
Cash and cash equivalents, beginning of period

315,980

(148,219)
Cash and cash equivalents, end of period

742,474

315,980


Consolidated statement of changes in equity for the year ended 31st December 2016 (audited)

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 losses 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
Balance at 1st January 2016
360,000
257,319
(58,581)
8,194,467
8,753,205
(125,096)
8,628,109








Comprehensive income







Profit
-
-
-
932,101
932,101
(77,584)
854,517








Other comprehensive income







Net pension remeasurement gain recognised directly in equity
-
-
-
10,000
10,000
-
10,000
Foreign exchange gains on re-translation of overseas subsidiaries consolidated operations
-
-
597,976
-
597,976
-
597,976
Total other comprehensive income
-
-
597,976
10,000
607,976
-
607,976
Total comprehensive income
-
-
597,976
942,101
1,540,077
(77,584)
1,462,493








Transactions with owners







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








Balance at 31st December 2016
360,000
257,319
539,395
9,005,528
10,162,242
(202,680)
9,959,562


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 (2015 - 1,440,000). There are no potentially dilutive shares in issue.
Dividends paid
2016
2015




Equity shares


Ordinary shares


Interim of 6.20p (2015 - 6.20p) per share paid on 12th May 2016
29,760
29,760
Interim of 2.90p (2015 - 2.90p) per share paid on 21st October 2016
13,920
13,920

43,680
43,680
'A' Ordinary shares


Interim of 6.20p (2015 - 6.20p) per share paid on 12th May 2016
59,520
59,520
Interim of 2.90p (2015 - 2.90p) per share paid on 21st October 2016
27,840
27,840

87,360
87,360
Total dividends paid
131,040
131,040
An interim dividend of 6.40p per Ordinary and 'A' Ordinary share will be paid on 12th May 2017.
2. SEGMENTAL INFORMATION

Central
Manufacturing
Distribution
Total

2016
2016
2016
2016

Revenue




External
-
3,564,987
24,850,462
28,415,449
Inter company
472,671
2,659,476
4,443,233
7,575,380
Total
472,671
6,224,463
29,293,695
35,990,829





Profit




EBITDA
(143,881)
180,991
2,158,611
2,195,721
Finance costs 
(73,959)
(25,867)
(50,316)
(150,142)
Finance income
-
2,489
27,413
29,902
Depreciation
(279,022)
(140,585)
(381,769)
(801,376)
Tax expense
(40,740)
98,242
(477,090)
(419,588)
Profit/(loss) for the period
(537,602)
115,270
1,276,849
854,517





Assets




Total assets
4,497,238
1,008,429
11,991,240
17,496,907
Additions to non current assets
1,022,501
-
347,010
1,369,511
Liabilities




Total liabilities
1,022,777
2,139,638
4,374,930
7,537,345



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
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 31st December 2016 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 1st June 2017 at 11.45am. The annual report and financial statements will be sent to shareholders by 10th May 2017 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 Company Act 2006. The financial information for the year ended 31st December 2016 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 2015 have been delivered to the Registrar of Companies, and those for 2016 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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