TIDMBRAM
RNS Number : 1550Y
Brammer PLC
28 August 2009
FROM CITIGATE DEWE ROGERSON FOR
PRESS RELEASE
28 August 2009
2009 INTERIM RESULTS
STRATEGY CONTINUES TO PROVIDE RESILIENCE
Brammer plc, the leading pan European added value technical distributor, today
announces its results for the six months ended 30 June 2009.
+----------------------------------------------+---------------+-------------+----------+
| FINANCIAL SUMMARY |
+---------------------------------------------------------------------------------------+
| | 6 months to | 6 months to | |
+----------------------------------------------+---------------+-------------+----------+
| | 30 June 2009 | 30 June | Change |
| | | 2008 | |
+----------------------------------------------+---------------+-------------+----------+
| | | | |
+----------------------------------------------+---------------+-------------+----------+
| | GBPm | GBPm | |
+----------------------------------------------+---------------+-------------+----------+
| | | | |
+----------------------------------------------+---------------+-------------+----------+
| Revenue | 216.3 | 241.6 | -10% |
+----------------------------------------------+---------------+-------------+----------+
| Operating profit (pre amortisation and | 8.8 | 14.4 | -39% |
| exceptional items) | | | |
+----------------------------------------------+---------------+-------------+----------+
| Profit before tax (pre amortisation and | 6.0 | 11.4 | -47% |
| exceptional items) | | | |
+----------------------------------------------+---------------+-------------+----------+
| (Loss) / profit before tax | (2.6) | 11.0 | |
+----------------------------------------------+---------------+-------------+----------+
| Operating cash flow (pre exceptional items) | 18.4 | 11.7 | +57% |
+----------------------------------------------+---------------+-------------+----------+
| Net debt | (69.4) | (70.6) | |
+----------------------------------------------+---------------+-------------+----------+
| Earnings per share | pence | pence | |
+----------------------------------------------+---------------+-------------+----------+
| Basic - before amortisation and exceptional | 8.0 | 15.1 | -47% |
| items | | | |
+----------------------------------------------+---------------+-------------+----------+
| Basic | (3.3) | 14.6 | |
+----------------------------------------------+---------------+-------------+----------+
| Diluted | (3.3) | 14.4 | |
+----------------------------------------------+---------------+-------------+----------+
| Dividend | 2.6 | 2.6 | |
| | | | |
+----------------------------------------------+---------------+-------------+----------+
Highlights
* Overall revenue down by 10.5% but leading presence across Europe maintained.
* Focus on key growth drivers enabled continued market share wins in most
countries with even some overall growth managed in UK market where drivers most
developed.
* Key Account sales grew by 9.4%, now representing 33% of total sales. Five new
pan-European contracts were gained. The pipeline remains strong.
* Brammer's leadership position still only represents around 3% of the market
and the Company will continue to enjoy a sales performance which betters the
market as consolidation continues.
* Early actions taken resulting in an annualised reduction of around GBP15 million
(13%) of the SDA cost base and inventory levels reduced by GBP31.1 million in
total, equating to GBP20.6 million in constant currency terms, a reduction of
22%,
* Operating profit (before amortisation and exceptional items) decreased to GBP8.8
million (2008: GBP14.4 million).
* Operating profit margin (before amortisation and exceptional items) declined to
4.1% (2008: 5.9%) reflecting reduced volumes, offset by increased gross margin
percentage and significant operating cost reductions.
* Cash inflow from operating activities (before exceptional items) was strong at
GBP18.4 million (2008: GBP11.7 million), being 209% of operating profit (before
amortisation and exceptional items).
* Net debt was GBP69.4 million (2008 year end: GBP84.0 million), after expenditure
of GBP3.3 million on deferred consideration, GBP4.7 million on restructuring,
and a beneficial GBP10.5 million exchange rate impact.
* EPS (before amortisation and exceptional items) reduced to 8.0p (2008: 15.1p).
* Interim dividend unchanged at 2.6p per share.
David Dunn, Chairman, said:
"As we indicated in our July interim management statement there are signs of
stability in the majority of territories, albeit at lower levels than a year ago
and there does seem to be some rising confidence in the world's key economies
that the worst has passed. For the remainder of the year we expect to see some
modest increases in demand from recent levels, and also some benefit from new
Key Account contract wins. In the prevailing environment the focus on costs and
cash must remain a high priority. The Board continues to have full confidence in
Brammer's business model, its strategy, and its excellent long term prospects
for future growth."
+--------------------+----------------------------+----------------------------------+
| Enquiries: | Brammer plc | 020 7638 9571 (8.00am - 1.00pm) |
+--------------------+----------------------------+----------------------------------+
| | | 0161 902 5572 (1.00pm - 4.30pm) |
+--------------------+----------------------------+----------------------------------+
| | David Dunn, chairman | |
+--------------------+----------------------------+----------------------------------+
| | Ian Fraser, chief | |
| | executive | |
+--------------------+----------------------------+----------------------------------+
| | Paul Thwaite, finance | |
| | director | |
+--------------------+----------------------------+----------------------------------+
| | | |
+--------------------+----------------------------+----------------------------------+
| Issued: | Citigate Dewe Rogerson Ltd | 020 7638 9571 |
+--------------------+----------------------------+----------------------------------+
| | Martin Jackson | |
+--------------------+----------------------------+----------------------------------+
| | Nicola Smith | |
+--------------------+----------------------------+----------------------------------+
BRAMMER PLC
2009 INTERIM RESULTS
CHAIRMAN'S STATEMENT
Background
In my review of 2008, I indicated that the second half of that year and in
particular the final two months had become increasingly challenging for Brammer.
That period effectively saw the start of the recession for the group and, as
anticipated and reported in our interim management statements on 19 May 2009 and
most recently on 21 July, the first six months of 2009 have borne witness to
some very difficult trading conditions.
Whilst endeavouring to maximise sales from the reduced business available the
period has been dominated by a relentless focus on costs, working capital, and
cash. These results demonstrate how management have reacted to the challenge
presented and I commend the executive team for their efforts.
Trading
Reported first half sales at GBP216.3 million were 10.5% lower than in 2008,
which included two additional working days. Sales per working day were therefore
8.5% lower. Stripping out the benefits of acquisitions and currency, sales per
working day actually fell by 17.8%. The distribution of this fall is more fully
explained in the Chief Executive's report but contained some excellent gains in
the more resilient sectors such as Food and Drink and Utilities, being more than
offset by substantial losses in Automotive, Metals, and Construction and
Aggregates. Key Accounts have continued to increase their share of total sales.
With gross margins being broadly similar to last year, sales, distribution, and
administration costs were reduced by over GBP6.0 million, at constant currency,
in the period. This reduction incurred an exceptional charge of GBP8.0 million
(of which GBP4.7 million was the cash cost paid) representing a swift payback
and affecting approximately 10% of our staff. Interest costs were slightly below
last year's level resulting in a group profit before intangibles amortisation,
exceptional items, and tax of GBP6.0 million, compared with GBP11.4 million
achieved last year.
As with costs much attention has been directed at working capital and cash. It
is particularly pleasing to report a significant reduction in inventory which is
now GBP31.1 million lower than at the beginning of the year, of which GBP10.5
million reduction is attributable to exchange movements. For some time the group
has been developing its information technology strategy and it is good to see
the benefits of this now coming through strongly in the management of our
European inventories. Receivables reduced in line with sales, as did payables
reflecting lower purchasing levels and accrual reductions.
Notwithstanding GBP8.0 million of expenditure relating to deferred consideration
and exceptional items, net debt fell from the 2008 year end reported figure of
GBP84.0 million to GBP69.4 million, helped by a GBP10.5 million currency
movement. At that level Brammer is trading comfortably within its banking
facilities and has operated within its covenant terms.
Strategy
Acquisitions have been off the agenda in the current period. Whilst remaining
vigilant to opportunities the group has been focused on coping with the impact
of the significantly reduced business activity across all of the European
countries in which we trade. We have continued to implement our proven strategy
and attract new Key Accounts and Insites, and I have already commented on the
costs and systems aspects of the business.
This has been, and will continue to be, a difficult time for all of the people
in Brammer. The Board have appreciated the commitment and flexibility shown by
everyone, and the determination to support the group during this time.
Dividend
The interim dividend recommended by the Board is 2.6p per share which is
unchanged from last year. This will be paid on 5 November 2009 to shareholders
on the register at the close of business on 9 October 2009.
Current Trading and Prospects
As we indicated in our July interim management statement there are signs of
stability in the majority of territories, albeit at lower levels than a year ago
and there does seem to be some rising confidence in the world's key economies
that the worst has passed. For the remainder of the year we expect to see some
modest increases in demand from recent levels, and also some benefit from new
Key Account contract wins. In the prevailing environment the focus on costs and
cash must remain a high priority. The Board continues to have full confidence in
Brammer's business model, its strategy, and its excellent long term prospects
for future growth.
David Dunn
28 August 2009
CHIEF EXECUTIVE'S REVIEW
Overview
In the first half of 2009 we experienced the effects of the global downturn in
all of our territories. Overall, we believe we continued to win market share by
focusing on our key growth drivers of Key Accounts, attacking attractive market
segments, developing our Insite base, and cross-selling.
In the UK, our most mature business, and one where the Brammer growth drivers
have been most developed, we managed some growth in a market where manufacturing
output was down 13% over the last 12 months. In all other territories the
magnitude of the economic downturn was greater than our ability to win market
share and we experienced sales declines. It was necessary, therefore, to reduce
the cost base substantially and early action was taken, resulting in an
annualised cost reduction of around GBP15 million, or 13% of our sales,
distribution and administration (SDA) cost base. In addition, we were able to
realise the benefits of our earlier investments in systems and reduced our
inventory levels by GBP31.1 million in total, which, after GBP10.5 million of
reduction attributable to exchange movements, equates to GBP20.6 million in
constant currency, a reduction of 22%, somewhat greater than the 18% reduction
in sales in constant currency.
We have maintained our strong presence within Europe, and did not close any
branches; our leadership position still only represents around 3% of the market,
and the dynamics of the industry, combined with Brammer's growth strategy, means
we will continue to enjoy a sales performance which betters the market as
consolidation continues. We are well placed to benefit when the inevitable
economic recovery occurs, but we are not planning for this (other than in
particular market sectors) until well into 2010.
Operational Review
Brammer is the leading European supplier of technical components and related
services to the maintenance, repair and operations (MRO) markets. In the first
half of 2009 revenues decreased by 10.5% to GBP216.3 million (2008: GBP241.6
million), the gross profit margin in percentage terms improved slightly, and
operating profit (before amortisation and exceptional items) decreased by 39% to
GBP8.8 million (2008: GBP14.4 million). Operating margin (operating profit
before amortisation and exceptional items) declined to 4.1% (2008: 5.9%). Cash
generated from operating activities (before exceptional items) was GBP18.4
million (2008: GBP11.7 million) reflecting strong control of working capital,
including a significant reduction in inventory levels. Return on capital
employed (based on operating profit before amortisation and exceptional items)
declined to 21.4% (2008: 30.7%).
In the UK, overall sales per working day ("SPWD"), including the contribution
from the prior year acquisition CBS Rotary Power Motion ("CBS"), were up 0.7%,
whilst organically SPWD declined by 2%. Gross margins were slightly down mainly
due to product mix variations (higher growth in the new and lower margin product
groups of fluid power and tools), and costs were carefully managed, resulting in
operating profit growth of 11%. We continued to enjoy strong growth in fluid
power (up 14%) and tools and general maintenance (up 7%). New contracts,
renewals and extensions included Convatec, Cemex, Alcan, GKN, Heidelberg Hanson,
Ideal Standard, Rexam, Thames Water, Wincanton and nuclear power station
contracts with Magnox, Sellafield and Springfield. Key Accounts in the UK,
representing over 50% of sales, grew by 3%. We won 11 new Insites and increased
sales through our 53 full-time Insites by over 30%. Sales to all Insites (i.e.
full time Insites and part-time Insites - those locations where we have several
regular clinics with the customer's staff each week) grew by 27% and we now
operate at 137 locations. Good progress was made in the important segments of
Food and Drink, Paper and Packaging, and Water and Power generation, which more
than offset declines in Automotive and Building and Construction. We
successfully integrated the acquisition of CBS, and have achieved good results
in the West Midlands region combining Brammer's legacy business with that of
CBS.
In Germany SPWD on a constant currency basis declined by 30%, with significant
declines in the automotive sector and manufacturing export companies. Despite
significant operating cost reductions, and an improvement in gross margin,
operating profit declined by 43%. Key Account revenues declined by 26%,with many
sectors, such as Automotive and Engineering, declining by more than 40%. Good
progress was made in Food and Drink (up 29%), Fast Moving Consumer Goods
("FMCG") (up 15%) and Utilities. New contracts won included Europart, Flamm,
and Knorr-Bremse. The decline in mechanical power transmission ("MPT") was 10%
less than the average, suggesting continued market share gains, and we
introduced the tools and general maintenance product range. We won 3 Insites in
the first half and now have 13 Insites in Germany with Insite sales in the first
half of 2009 down 11%.
In France SPWD on a constant currency basis declined by 18%, two percentage
points better than the trade association performance, GIFEC. Gross margin
declined by over 1% due to intense competitive pressure, and despite a
significant cost reduction programme, operating profit declined by 59%. Key
Account sales declined by just 7% with good performances from Food and Drink (up
7%, and now the largest sector) offsetting declines of 32% in Industrial
Machinery and 27% in Metals. Sales to the Automotive sector declined by 32.5%
and base MRO declined by 19%, roughly in line with the market. New contracts
were won with Holcim, Cofely, Emin Leydier, and Rexam. We launched the tools and
general maintenance product range, and expect this to benefit sales in the
second half.
In Spain SPWD on a constant currency basis declined by 25%, though we believe
the market declined by over 30%. Gross margin declined by over 1% as competitors
fought for volume, but costs were reduced significantly, resulting in an
operating profit decline of 38%. Key Account sales declined by just 9%, as we
developed our business with Valeo, Emcon Technologies and Amcor, and rolled out
a new contract with the Sada-Nutreco group. Insite sales growth was an
impressive 39%, the number of Insites having doubled to 12 over the last two
years. We completed the introduction of the tools and general maintenance
product range and expect this to contribute in the second half.
Within Benelux, the Netherlands SPWD on a constant currency basis were down 18%.
We introduced 15 new product lines in the first half and expect these to
generate additional growth in the second half, including further investments in
the tools and general maintenance product range. In Belgium, SPWD in constant
currency declined by 22%.
In Eastern Europe, our Polish business developed well, with SPWD up 5% (down 4%
excluding the effect of Masterpol), and the integration of Masterpol, a
hydraulics specialist, proceeded to plan. The overall growth was aided by good
Key Account development with a number of Brammer European Key Accounts. In the
Czech Republic, overall SPWD decline was 30% whilst new Key Accounts were gained
with InBev and Draka Kabely. In Hungary, SPWD declined by 18%.
In our Developing Businesses, on a constant currency basis, overall SPWD
increased by 20.0%. In Austria, SPWD declined by 19% whilst Food and Drink grew
by 127%, and Pulp and Paper grew by 20%, offsetting a decline of 13% in
Construction and Aggregates. In Italy we continued to develop our relationship
with Key Accounts and grew SPWD by 19.2% organically (80% including the
contribution from Tecnoforniture).
Strategy
Growth
* The overall SPWD decline was 8.5%, with a resilient performance from Key
Accounts (up 9.4%, and now representing 33.4% of total revenues).We won new Key
Account contracts with Coca-Cola Enterprises, Emcon Technologies, Invista and
Rexam, and renewed contracts with Crown Cork, Eaton and GKN.
* We continued to focus our energies on defensive market segments, and within the
Key Account arena we saw continued growth in Food and Drink (up 38% and now our
largest segment by a significant degree), Utilities (up 6%), FMCG (up 9%)
offsetting declines in Metals (down 22%), Automotive (down 31%) and Construction
and Aggregates (down 26%).
Costs/Synergies
* We continued to develop closer relationships with strategic suppliers, and
increased the concentration of spend with those suppliers, leading to both cost
benefits and greater supplier marketing support.
* Our Capital Employed Task Force ("CETF") was formed in 2008 in order to improve
the management of our inventory on a European basis with the objective of
increasing inventory turns and thereby reducing working capital. Implementation
of Momasse, our best-practice demand forecasting and stock planning system
continued. We were able to combine our three proprietary systems, Momasse,
Brammer Inline, our intra-group trading system, and MDM, our master data
management system giving a unique reference code to each part on a European
basis, to achieve a much faster rate of stock reduction than would otherwise
have been the case. As a result, we were able to reduce inventory by 22% at
constant currency rates and inventory turns improved from 3.2 times at the end
of 2008, to 3.7 times at the end of the first half, despite a significant
reduction in sales levels. We are confident that inventory turns can continue to
increase as we manage more of our inventory on a pan-European basis.
* Our cost reduction programme which started towards the end of 2008, continued
into the second quarter. Approximately 10% of our staff have left or will leave
the business, and this, together with careful management of non-personnel costs
and short-term working where available, has resulted in an annualised cost
saving of over GBP15 million.,
Capability
* A crucial component of our success as a service business is the skill and
commitment of our employees located in over 300 locations in 16 countries. Our people have to maintain their
understanding of the technical products that we sell as well as the applications
within which they are used. As an MRO supplier we are constantly seeking ways to
provide to our customers the products and services which will improve their
production efficiency, reduce their overall cost of acquisition, and reduce
their working capital. This requires extensive training which is provided for
all our technical sales people via our suppliers, and through Brammer's own
internal programmes.
* We continue to roll out our bespoke Distributed Learning collateral. This suite
of programmes is made available to our people in 8 languages electronically. In
crucial customer facing areas of the business the goal is to achieve 100% take
up of the two major foundation programmes, which explain the technical aspects
of the product range and the fundamental way the business works. Additional
modules provide our specialists with an understanding of key processes in the area of
managing Key Accounts and our Cost Savings approach, one of the core elements of
our Value Proposition.
The future
Our strategy continues to prove to be effective. Whilst our overall sales are
down, we believe we have continued to win market share. Our ability to achieve
growth in market share in the UK, our most mature and largest business, is
testimony to the success of our strategy, and we plan to continue investing in
the Brammer strategic growth drivers in all areas to achieve a similar level of
resilience throughout Europe. We have a strong presence within Europe upon which
to build and believe that the continued application of our growth drivers will
help us achieve growth levels significantly greater than the market for many
years to come. Although we have substantially reduced our cost base, we have not
diminished our branch network or customer service, nor have we reduced the
emphasis on our proven approaches to winning market share. Accordingly, when the
recovery occurs we will be well positioned to take significant advantage of the
opportunities available.
Ian Fraser
28 August 2009
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors confirm that this consolidated interim financial information has
been prepared in accordance with IAS 34 'Interim Financial Reporting' as
endorsed and adopted by the EU and that;
the interim management report includes a fair review of the information required
by:
+----------+---------------+
| a) | DTR |
| | 4.2.7R |
| | of the |
| | Disclosure |
| | and |
| | Transparency |
| | Rules, being |
| | an |
| | indication |
| | of important |
| | events that |
| | have |
| | occurred |
| | during the |
| | first six |
| | months of |
| | the |
| | financial |
| | year and |
| | their impact |
| | on the |
| | condensed |
| | set of |
| | financial |
| | statements; |
| | and a |
| | description |
| | of the |
| | principal |
| | risks and |
| | uncertainties |
| | for the |
| | remaining six |
| | months of the |
| | year; and |
+----------+---------------+
| | |
+----------+---------------+
| b) | DTR |
| | 4.2.8R |
| | of the |
| | Disclosure |
| | and |
| | Transparency |
| | Rules, being |
| | related |
| | party |
| | transactions |
| | that have |
| | materially |
| | affected the |
| | financial |
| | position or |
| | performance |
| | of the |
| | entity |
| | during that |
| | period; and |
| | any changes |
| | in the |
| | related |
| | party |
| | transactions |
| | described in |
| | the 2008 |
| | Annual |
| | Report. |
+----------+---------------+
On behalf of the Board
D Dunn
Chairman
P Thwaite
Finance director
28 August 2009
Brammer CONSOLIDATED INCOME STATEMENT
+----------------------------------+-------+-------------+-------------+-------------+
| | | 6 months to | 6 months to | Year to |
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| | | 30 June | 30 June | 31 Dec |
| | | 2009 | 2008 | 2008 |
+----------------------------------+-------+-------------+-------------+-------------+
| | | (unaudited) | (unaudited) | (audited) |
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| | Notes | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Continuing operations | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Revenue | 2 | 216,325 | 241,611 | 478,409 |
+----------------------------------+-------+-------------+-------------+-------------+
| Cost of sales | | (150,889) | (169,162) | (334,728) |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Gross profit | | 65,436 | 72,449 | 143,681 |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Distribution costs | | (56,610) | (58,079) | (117,528) |
+----------------------------------+-------+-------------+-------------+-------------+
| Amortisation of acquired | | (594) | (385) | (848) |
| intangibles | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Exceptional items | 3 | (8,006) | - | - |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Total distribution costs | | (65,210) | (58,464) | (118,376) |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Operating profit | 2 | 226 | 13,985 | 25,305 |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Operating profit before | | 8,826 | 14,370 | 26,153 |
| amortisation and exceptional | | | | |
| items | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Amortisation of acquired | | (594) | (385) | (848) |
| intangibles | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Exceptional items | | (8,006) | - | - |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Operating profit | | 226 | 13,985 | 25,305 |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Finance expense | | (2,840) | (3,013) | (6,534) |
+----------------------------------+-------+-------------+-------------+-------------+
| Finance income | | 55 | 64 | 118 |
+----------------------------------+-------+-------------+-------------+-------------+
| (Loss) / profit before tax | | (2,559) | 11,036 | 18,889 |
+----------------------------------+-------+-------------+-------------+-------------+
| Taxation | 4 | 782 | (3,312) | (5,925) |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| (Loss) / profit for the period | | (1,777) | 7,724 | 12,964 |
| attributable to equity | | | | |
| shareholders | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Earnings per share - total | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Basic | 5 | (3.3)p | 14.6p | 24.5p |
+----------------------------------+-------+-------------+-------------+-------------+
| Diluted | 5 | (3.3)p | 14.4p | 24.1p |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Earnings per share - on profit | | | | |
| before amortisation and | | | | |
| exceptional items | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
| Basic | 5 | 8.0p | 15.1p | 25.7p |
+----------------------------------+-------+-------------+-------------+-------------+
| Diluted | 5 | 8.0p | 15.0p | 25.3p |
+----------------------------------+-------+-------------+-------------+-------------+
| | | | | |
+----------------------------------+-------+-------------+-------------+-------------+
Brammer CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+------------------------------------------+--------------+---------------+------------+
| | 6 months to | 6 months to | Year to |
+------------------------------------------+--------------+---------------+------------+
| | 30 June | 30 June 2008 | 31 Dec |
| | 2009 | | 2008 |
+------------------------------------------+--------------+---------------+------------+
| | (unaudited) | (unaudited) | (audited) |
+------------------------------------------+--------------+---------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------------+--------------+---------------+------------+
| | | | |
+------------------------------------------+--------------+---------------+------------+
| (Loss)/profit for the period | (1,777) | 7,724 | 12,964 |
+------------------------------------------+--------------+---------------+------------+
| | | | |
+------------------------------------------+--------------+---------------+------------+
| Other comprehensive income | | | |
+------------------------------------------+--------------+---------------+------------+
| Net exchange differences on translating | (5,725) | 3,296 | 8,209 |
| foreign operations | | | |
+------------------------------------------+--------------+---------------+------------+
| Actuarial losses on pension schemes | (8,057) | (11,492) | (1,480) |
+------------------------------------------+--------------+---------------+------------+
| Deferred tax on actuarial losses on | 2,267 | 3,235 | 418 |
| pension schemes | | | |
+------------------------------------------+--------------+---------------+------------+
| Excess tax on share option schemes | - | 35 | - |
+------------------------------------------+--------------+---------------+------------+
| | | | |
+------------------------------------------+--------------+---------------+------------+
| Other comprehensive (expense)/income for | (11,515) | (4,926) | 7,147 |
| the period | | | |
+------------------------------------------+--------------+---------------+------------+
| | | | |
+------------------------------------------+--------------+---------------+------------+
| Total comprehensive (expense)/income for | (13,292) | 2,798 | 20,111 |
| the period | | | |
+------------------------------------------+--------------+---------------+------------+
Brammer CONSOLIDATED BALANCE SHEET
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | 30 June 2009 | 30 June 2008 | 31 Dec 2008 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | (unaudited) | (unaudited) | (audited) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | Notes | GBP000 | GBP000 | GBP000 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Assets | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Non-current assets | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Goodwill | 6 | 72,626 | 69,816 | 83,419 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Acquired intangible assets | 6 | 7,156 | 4,585 | 5,320 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Other intangible assets | 6 | 4,686 | 4,973 | 4,888 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Property, plant and equipment | 7 | 13,563 | 14,190 | 16,190 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Investment in associate | | 167 | 167 | 167 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Deferred tax assets | | 5,990 | 7,236 | 3,722 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | 104,188 | 100,967 | 113,706 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Current assets | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Inventories | | 71,976 | 73,639 | 103,113 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Trade and other receivables | | 73,841 | 99,919 | 93,938 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Cash and cash equivalents | 8 | 30,615 | 18,861 | 21,715 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | 176,432 | 192,419 | 218,766 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Liabilities | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Current liabilities | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Financial liabilities - borrowings | 8 | (6,399) | (18,567) | (7,693) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Trade and other payables | | (83,666) | (101,880) | (116,386) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Deferred consideration | | (9,169) | (6,413) | (8,340) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Current tax liabilities | | (2,556) | (5,190) | (3,939) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | (101,790) | (132,050) | (136,358) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Net current assets | | 74,642 | 60,369 | 82,408 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Non-current liabilities | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Financial liabilities - borrowings | 8 | (93,584) | (70,868) | (97,971) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Deferred tax liabilities | | (7,815) | (6,377) | (8,067) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Provisions | | (3,962) | (841) | (1,030) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Deferred consideration | | (9,830) | (15,200) | (16,623) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Retirement benefit obligations | 9 | (20,547) | (24,633) | (13,333) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | (135,738) | (117,919) | (137,024) |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Net assets | | 43,092 | 43,417 | 59,090 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Shareholders equity | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Share capital | 10 | 10,629 | 10,587 | 10,590 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Share premium | | 18,092 | 18,089 | 18,092 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Translation reserve | | 4,286 | 5,098 | 10,011 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Retained earnings | | 10,085 | 9,643 | 20,397 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| | | | | |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
| Total equity | | 43,092 | 43,417 | 59,090 |
+----------------------------------------------+--------------+-----------------+------------------+----------------+
Brammer CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+------------------------------+---------+---------+----------+-------------+----------+----------+
| | Share | Share | Treasury | Translation | Retained | |
| | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| | Capital | Premium | Shares | reserve | Earnings | Total |
| | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Balance at 1 January 2008 | 10,575 | 18,017 | (53) | 1,802 | 13,966 | 44,307 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Profit for the period | - | - | - | - | 7,724 | 7,724 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Other comprehensive income | - | - | - | 3,296 | (8,222) | (4,926) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Shares issued during the | 12 | 72 | - | - | - | 84 |
| period | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Purchase of own shares | - | - | (1,768) | - | - | (1,768) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Transfer on vesting of own | - | - | 1,746 | - | (1,746) | - |
| shares | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Current tax on shares | - | - | - | - | 35 | 35 |
| vesting | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Deferred tax on shares | - | - | - | - | (35) | (35) |
| vesting | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Value of employee services | - | - | - | - | 685 | 685 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Dividends | - | - | - | - | (2,689) | (2,689) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Movement in period | 12 | 72 | (22) | 3,296 | (4,248) | (890) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| At 30 June 2008 | 10,587 | 18,089 | (75) | 5,098 | 9,718 | 43,417 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Profit for the period | - | - | - | - | 5,240 | 5,240 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Other comprehensive income | - | - | - | 4,913 | 7,160 | 12,073 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Shares issued during the | 3 | 3 | - | - | - | 6 |
| period | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Purchase of own shares | - | - | (552) | - | - | (552) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Value of employee services | - | - | - | - | 280 | 280 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Dividends | - | - | - | - | (1,374) | (1,374) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Movement in period | 3 | 3 | (552) | 4,913 | 11,306 | 15,673 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| At 31 December 2008 | 10,590 | 18,092 | (627) | 10,011 | 21,024 | 59,090 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Loss for the period | - | - | - | - | (1,777) | (1,777) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Other comprehensive income | - | - | - | (5,725) | (5,790) | (11,515) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Shares issued during the | 39 | - | - | - | - | 39 |
| period | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Purchase of own shares | - | - | (181) | - | - | (181) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Transfer on vesting of own | - | - | 665 | - | (665) | - |
| shares | | | | | | |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Value of employee services | - | - | - | - | 137 | 137 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Dividends | - | - | - | - | (2,701) | (2,701) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| Movement in period | 39 | - | 484 | (5,725) | (10,796) | (15,998) |
+------------------------------+---------+---------+----------+-------------+----------+----------+
| At 30 June 2009 | 10,629 | 18,092 | (143) | 4,286 | 10,228 | 43,092 |
+------------------------------+---------+---------+----------+-------------+----------+----------+
Brammer CONSOLIDATED CASH FLOW STATEMENT
+---------------------------------------------+-------------+--------------+------------+
| | 6 months to | 6 months to | Year to |
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| | 30 June | 30 June | 31 Dec |
| | 2009 | 2008 | 2008 |
+---------------------------------------------+-------------+--------------+------------+
| | (unaudited) | (unaudited) | (audited) |
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| (Loss) / profit for the period | (1,777) | 7,724 | 12,964 |
+---------------------------------------------+-------------+--------------+------------+
| Tax (credit) / charge | (782) | 3,312 | 5,925 |
+---------------------------------------------+-------------+--------------+------------+
| Depreciation of tangible and intangible | 2,952 | 2,608 | 5,655 |
| assets | | | |
+---------------------------------------------+-------------+--------------+------------+
| Share options - value of employee services | 137 | 685 | 965 |
+---------------------------------------------+-------------+--------------+------------+
| Gain on sale of property, plant and | (99) | (18) | (363) |
| equipment | | | |
+---------------------------------------------+-------------+--------------+------------+
| Net financing expense | 2,785 | 2,949 | 6,416 |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Movement in working capital | 10,491 | (5,594) | (2,347) |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Cash generated from operating activities | 13,707 | 11,666 | 29,215 |
+---------------------------------------------+-------------+--------------+------------+
| Cash generated from operating activities | 18,428 | 11,666 | 29,215 |
| before exceptional items | | | |
+---------------------------------------------+-------------+--------------+------------+
| Cash outflow from exceptional items | (4,721) | - | - |
+---------------------------------------------+-------------+--------------+------------+
| Cash generated from operating activities | 13,707 | 11,666 | 29,215 |
+---------------------------------------------+-------------+--------------+------------+
| Interest received | 55 | 64 | 118 |
+---------------------------------------------+-------------+--------------+------------+
| Interest paid | (3,903) | (2,620) | (4,042) |
+---------------------------------------------+-------------+--------------+------------+
| Tax paid | (817) | (1,606) | (4,178) |
+---------------------------------------------+-------------+--------------+------------+
| Pension obligations | (794) | (1,056) | (2,600) |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Net cash generated from operating | 8,248 | 6,448 | 18,513 |
| activities | | | |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Cash flows from investing activities | | | |
+---------------------------------------------+-------------+--------------+------------+
| Acquisition of subsidiaries (net of | - | (5,916) | (8,253) |
| cash/excluding | | | |
| debt acquired) | | | |
+---------------------------------------------+-------------+--------------+------------+
| Investment in associate | - | (167) | (167) |
+---------------------------------------------+-------------+--------------+------------+
| Deferred consideration paid on prior | (3,278) | (1,404) | (1,424) |
| acquisitions | | | |
+---------------------------------------------+-------------+--------------+------------+
| Proceeds from sale of property, plant and | 498 | 159 | 483 |
| equipment | | | |
+---------------------------------------------+-------------+--------------+------------+
| Purchase of property, plant and equipment | (987) | (1,463) | (3,801) |
+---------------------------------------------+-------------+--------------+------------+
| Additions to software development | (270) | (415) | (1,041) |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Net cash used in investing activities | (4,037) | (9,206) | (14,203) |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Cash flows from financing activities | | | |
+---------------------------------------------+-------------+--------------+------------+
| Net proceeds from issue of ordinary share | 39 | 84 | 90 |
| capital | | | |
+---------------------------------------------+-------------+--------------+------------+
| New loans taken out | 8,652 | 12,104 | 11,433 |
+---------------------------------------------+-------------+--------------+------------+
| Finance lease principal payments | (19) | (38) | (101) |
+---------------------------------------------+-------------+--------------+------------+
| Dividends paid to shareholders | - | - | (4,063) |
+---------------------------------------------+-------------+--------------+------------+
| Purchase of own shares | (181) | (1,768) | (2,320) |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Net cash generated from financing | 8,491 | 10,382 | 5,039 |
| activities | | | |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Net increase in cash and cash equivalents | 12,702 | 7,624 | 9,349 |
+---------------------------------------------+-------------+--------------+------------+
| Exchange gains and losses on cash and cash | (2,440) | 273 | 898 |
| equivalents | | | |
+---------------------------------------------+-------------+--------------+------------+
| Cash and cash equivalents at beginning of | 18,186 | 7,939 | 7,939 |
| period | | | |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Net cash at end of period | 28,448 | 15,836 | 18,186 |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Cash and cash equivalents | 30,615 | 18,861 | 21,715 |
+---------------------------------------------+-------------+--------------+------------+
| Overdrafts | (2,167) | (3,025) | (3,529) |
+---------------------------------------------+-------------+--------------+------------+
| | | | |
+---------------------------------------------+-------------+--------------+------------+
| Net cash at end of period | 28,448 | 15,836 | 18,186 |
+---------------------------------------------+-------------+--------------+------------+
Brammer NOTES TO THE INTERIM FINANCIAL INFORMATION
1 STATUS OF INTERIM REPORT AND ACCOUNTING POLICIES
General information
Brammer plc is a company incorporated and domiciled in the UK, and listed on the
London Stock Exchange.
This consolidated interim financial information was approved for issue by a duly
appointed and authorised committee of the Board on 28 August 2009.
This consolidated interim financial information for the six months ended 30 June
2009 does not comprise statutory accounts within the meaning of Section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31 December 2008
were approved by the Board on 23 February 2009 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified, did not
contain an emphasis of matter paragraph and did not contain any statement under
section 498 of the Companies Act 2006.
The consolidated financial statements of the group for the year ended 31
December 2008 are available from the company's registered office or website
(www.brammer.biz).
This consolidated interim financial information is unaudited.
Basis of preparation
This consolidated interim financial information for the six months ended 30 June
2009 has been prepared in accordance with the Disclosure and Transparency Rules
of the Financial Services Authority and with IAS 34, "Interim financial
reporting" as adopted by the EU. The consolidated interim condensed financial
information should be read in conjunction with the annual financial statements
for the year ended 31 December 2008 which have been prepared in accordance with
IFRSs as adopted by the EU.
The financial information is presented in pounds sterling and has been prepared
on the historical cost basis.
The directors confirm that they have a reasonable expectation that the group has
adequate resources to enable it to continue in existence for the foreseeable
future and, accordingly, the consolidated interim financial information has been
prepared on a going concern basis. In forming its opinion as to going concern,
the Board prepares a cashflow forecast based upon its assumptions as to trading
and taking into account the banking facilities available to the group. The Board
also models a number of alternative scenarios, taking account of business
variables and key risks and uncertainties, and maintains under continuous review
the capital structure of the group and the financing options available to the
group.
Accounting policies
Except as described below, the principal accounting policies adopted in the
preparation of this interim financial information are included in the
consolidated financial statements for the year ended 31 December 2008. These
policies have been consistently applied to all the periods presented.
No standards have been early adopted by the group. The implications for the
group of new standards, amendments to standards or interpretations which are
mandatory for the first time for the financial year ending 31 December 2009 are
summarised below.
Taxes on income in the interim periods are accrued using the tax rate that would
be applicable to expected total annual earnings.
New standards, amendments to standards or interpretations
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial year beginning 1 January 2009:
IAS 1 (revised), 'Presentation of financial statements', effective for annual
periods beginning on or after 1 January 2009, has resulted in the Statement of
Recognised Income and Expense being renamed the Statement of Comprehensive
Income and the introduction of the Statement of Changes in Equity as a primary
statement. The interim financial statements have been prepared under the revised
disclosure requirements. IAS 1 (revised) has no impact on the group's net cash
flows, financial position, total comprehensive income or earnings per share.
Entities can choose whether to present one performance statement (the statement
of comprehensive income) or two statements (the income statement and statement
of comprehensive income).
The group has chosen to present two statements, an income statement and a
statement of comprehensive income.
IFRS 8, 'Operating segments'. IFRS 8 replaces IAS 14, 'Segment reporting'. It
requires a 'management approach' under which segment information is presented on
the same basis as that used for internal reporting purposes.
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief operating
decision-maker has been identified as the Board.
IFRIC 16, 'Hedges of a net investment in a foreign operation'. This has not had
any impact on the group.
The following new standards, amendments to standards and interpretations are
mandatory for the first time for the financial year beginning 1 January 2009 but
are not currently relevant for the group:
IFRIC 13, 'Customer loyalty programmes'.
IFRIC 15, 'Agreements for the construction of real estate'.
IAS 39 (amendment), 'Financial instruments: Recognition and measurement'.
The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the financial year beginning 1 January
2009 and have not been early adopted:
IFRS 3 (revised), 'Business combinations' and consequential amendments to IAS
27, 'Consolidated and separate financial statements', IAS 28, 'Investments in
associates' and IAS 31, 'Interests in joint ventures', effective prospectively
to business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after 1 July
2009. Management is assessing the impact of the new requirements regarding
acquisition accounting, consolidation and associates on the group.
IFRIC 17, 'Distributions of non-cash assets to owners', effective for annual
periods beginning on or after 1 July 2009. This is not currently applicable to
the group, as it has not made any non-cash distributions.
IFRIC 18, 'Transfers of assets from customers', effective for transfers of
assets received on or after 1 July 2009. This is not relevant to the group, as
it has not received any assets from customers.
Accounting estimates and judgements
The preparation of interim financial information requires management to make
judgements, estimates and assumptions that affect the application of accounting
policies and the reported amount of income, expense, assets and liabilities. The
significant estimates and judgements made by management were consistent with
those applied to the consolidated financial statements for the year ended 31
December 2008.
Risks and uncertainties
The principal strategic level risks and uncertainties affecting the group remain
those set out on pages 18 and 19 in the 2008 Annual Report.
The chairman's statement and chief executive's review in this interim report
include comments on the outlook for the remaining six months of the financial
year.
Forward-looking statements
This interim report contains forward-looking statements. Although the group
believes that the expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that these expectations will prove to have
been correct. Due to the inherent uncertainties, including both economic and
business risk factors underlying such forward-looking information, actual
results may differ materially from those expressed or implied by these
forward-looking statements.
The group undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.
2 SEGMENTAL ANALYSIS
The Board has been identified as the chief operating decision-maker. The Board
reviews the group's internal reporting as the basis for assessing performance
and allocating resources. Management has determined the operating segments based
on these reports. The group is primarily controlled on a country by country
basis, in line with the legal structure, and accordingly the operating segments
are unchanged from those previously reported, except for the inclusion of
Eastern Europe which is now recognised as a reportable operating segment because
it has attained the levels warranting disclosure.
The group's internal reporting is primarily based on performance reports run at
'management' exchange rates - exchange rates which are set at the beginning of
each year.
Accordingly the segment information below is shown at the 'management' exchange
rates with the exchange effect being a reconciling item between the segment
results and the totals reported in the financial statements.
The Board assesses the performance of the operating segments based on their
underlying operating profit, which comprises profit before interest and
taxation, excluding amortisation of acquired intangibles and non-recurring or
exceptional items such as restructuring costs and impairments when the
impairment is the result of an isolated, non-recurring event.
Segment assets include property, plant and equipment, software development,
inventories, and trade and other receivables. All inter-segmental trading is at
an arms-length basis.
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | UK | Germany | France | Spain | Benelux | Eastern | Other | Total |
| | | | | | | Europe | operating | |
| | | | | | | | segments | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Six | | | | | | | | |
| months | | | | | | | | |
| ended 30 | | | | | | | | |
| June | | | | | | | | |
| 2009 | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Revenue | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | 65,864 | 44,385 | 31,626 | 17,219 | 19,655 | 21,183 | 6,540 | 206,472 |
| revenue | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Inter | (966) | (1,249) | (367) | (568) | (777) | (201) | (98) | (4,226) |
| company | | | | | | | | |
| sales | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Sales to | 64,898 | 43,136 | 31,259 | 16,651 | 18,878 | 20,982 | 6,442 | 202,246 |
| external | | | | | | | | |
| customers | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | 14,079 |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 216,325 |
| sales to | | | | | | | | |
| external | | | | | | | | |
| customers | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Underlying | 2,442 | 2,381 | 601 | 1,160 | 773 | 1,370 | (221) | 8,506 |
| operating | | | | | | | | |
| profit | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | 320 |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 8,826 |
| underlying | | | | | | | | |
| operating | | | | | | | | |
| profit | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Amortisation | | | | | | | | (594) |
| of acquired | | | | | | | | |
| intangibles | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exceptional | | | | | | | | (8,006) |
| items | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 226 |
| operating | | | | | | | | |
| profit | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Finance | | | | | | | | (2,840) |
| expense | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Finance | | | | | | | | 55 |
| income | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Loss | | | | | | | | (2,559) |
| before | | | | | | | | |
| tax | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Tax | | | | | | | | 782 |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Loss for | | | | | | | | (1,777) |
| the | | | | | | | | |
| period | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Segment | 43,274 | 25,123 | 21,919 | 16,209 | 19,981 | 22,267 | 10,729 | 159,502 |
| assets | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | 4,564 |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 164,066 |
| segment | | | | | | | | |
| assets | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Goodwill | | | | | | | | 72,626 |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Acquired | | | | | | | | 7,156 |
| intangibles | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Investment | | | | | | | | 167 |
| in | | | | | | | | |
| associate | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Cash | | | | | | | | 30,615 |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Deferred | | | | | | | | 5,990 |
| tax | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 280,620 |
| assets | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Other | | | | | | | | |
| segment | | | | | | | | |
| items | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Capital | 230 | 90 | 46 | 115 | 350 | 146 | 221 | 1,198 |
| expenditure | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | 59 |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 1,257 |
| capital | | | | | | | | |
| expenditure | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Depreciation | (989) | (174) | (171) | (251) | (290) | (446) | (477) | (2,798) |
| and | | | | | | | | |
| amortisation | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | (154) |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | (2,952) |
| depreciation | | | | | | | | |
| and | | | | | | | | |
| amortisation | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | UK | Germany | France | Spain | Benelux | Eastern | Other | Total |
| | | | | | | Europe | operating | |
| | | | | | | | segments | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Six | | | | | | | | |
| months | | | | | | | | |
| ended 30 | | | | | | | | |
| June | | | | | | | | |
| 2008 | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Revenue | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | 66,482 | 56,795 | 34,189 | 20,201 | 21,572 | 19,342 | 4,940 | 223,521 |
| revenue | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Inter | (354) | (859) | (343) | (286) | (944) | (97) | (98) | (2,981) |
| company | | | | | | | | |
| sales | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Sales to | 66,128 | 55,936 | 33,846 | 19,915 | 20,628 | 19,245 | 4,842 | 220,540 |
| external | | | | | | | | |
| customers | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | 21,071 |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 241,611 |
| sales to | | | | | | | | |
| external | | | | | | | | |
| customers | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Underlying | 2,201 | 4,177 | 1,480 | 1,871 | 1,648 | 1,414 | (65) | 12,726 |
| operating | | | | | | | | |
| profit | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | 1,644 |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 14,370 |
| underlying | | | | | | | | |
| operating | | | | | | | | |
| profit | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Amortisation | | | | | | | | (385) |
| of acquired | | | | | | | | |
| intangibles | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 13,985 |
| operating | | | | | | | | |
| profit | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Finance | | | | | | | | (3,013) |
| expense | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Finance | | | | | | | | 64 |
| income | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Profit | | | | | | | | 11,036 |
| before | | | | | | | | |
| tax | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Tax | | | | | | | | (3,312) |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Profit | | | | | | | | 7,724 |
| for the | | | | | | | | |
| period | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Segment | 43,407 | 26,795 | 29,816 | 21,168 | 19,296 | 18,164 | 12,028 | 170,674 |
| assets | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | 22,047 |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 192,721 |
| segment | | | | | | | | |
| assets | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Goodwill | | | | | | | | 69,816 |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Acquired | | | | | | | | 4,585 |
| intangibles | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Investment | | | | | | | | 167 |
| in | | | | | | | | |
| associate | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Cash | | | | | | | | 18,861 |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Deferred | | | | | | | | 7,236 |
| tax | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 293,386 |
| assets | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Other | | | | | | | | |
| segment | | | | | | | | |
| items | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Capital | 522 | 170 | 73 | 110 | 207 | 86 | 542 | 1,710 |
| expenditure | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | 168 |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | 1,878 |
| capital | | | | | | | | |
| expenditure | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Depreciation | (690) | (195) | (119) | (211) | (252) | (435) | (491) | (2,393) |
| and | | | | | | | | |
| amortisation | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Exchange | | | | | | | | (215) |
| effect | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
| Total | | | | | | | | (2,608) |
| depreciation | | | | | | | | |
| and | | | | | | | | |
| amortisation | | | | | | | | |
+--------------+----------+----------+----------+----------+----------+----------+-----------+----------+
3 EXCEPTIONAL ITEMS
The exceptional charge of GBP8.0 million comprises the costs of restructuring
the group's operations to respond to the difficult conditions in the group's
markets. The restructuring costs principally relate to the termination of
employment.
Of the GBP8.0 million charge, GBP4.7 million had been paid in the period and a
provision of GBP3.3 million has been recognised in these financial statements
representing the estimated costs which the group is committed to incur, after 30
June, in respect of specified employees who had been notified by 30 June of the
intention to terminate their contracts of employment.
4 TAXATION
The charge for taxation is recognised based on management's best estimate of the
weighted average annual corporate tax rate expected for the full financial year.
The estimated average annual tax rate used for 2009 is 30.6% (the estimated tax
rate for the first half year of 2008 was 30%).
5 EARNINGS PER SHARE
+----------------------------------------------------+-----------+----------+----------+
| | Half year 2009 |
+----------------------------------------------------+---------------------------------+
| | | Earnings per |
| | | share |
+----------------------------------------------------+-----------+---------------------+
| | Earnings | Basic | Diluted |
+----------------------------------------------------+-----------+----------+----------+
| | GBP'000 | | |
+----------------------------------------------------+-----------+----------+----------+
| Weighted average number of shares in issue ('000) | | 53,045 | 53,408 |
+----------------------------------------------------+-----------+----------+----------+
| | | | |
+----------------------------------------------------+-----------+----------+----------+
| Total - all continuing operations | | | |
+----------------------------------------------------+-----------+----------+----------+
| Loss for the period | (1,777) | (3.3)p | (3.3)p |
+----------------------------------------------------+-----------+----------+----------+
| Amortisation of acquired intangibles | 594 | | |
+----------------------------------------------------+-----------+----------+----------+
| Exceptional items | 8,006 | | |
+----------------------------------------------------+-----------+----------+----------+
| Tax on exceptional items | (2,426) | | |
+----------------------------------------------------+-----------+----------+----------+
| Tax on amortisation of acquired intangibles | (137) | | |
+----------------------------------------------------+-----------+----------+----------+
| | | | |
+----------------------------------------------------+-----------+----------+----------+
| Earnings before amortisation and exceptional items | 4,260 | 8.0p | 8.0p |
| | | | |
+----------------------------------------------------+-----------+----------+----------+
+----------------------------------------------------+-----------+----------+----------+
| | Half year 2008 |
+----------------------------------------------------+---------------------------------+
| | | Earnings per |
| | | share |
+----------------------------------------------------+-----------+---------------------+
| | Earnings | Basic | Diluted |
+----------------------------------------------------+-----------+----------+----------+
| | GBP'000 | | |
+----------------------------------------------------+-----------+----------+----------+
| Weighted average number of shares in issue ('000) | | 52,899 | 53,500 |
+----------------------------------------------------+-----------+----------+----------+
| | | | |
+----------------------------------------------------+-----------+----------+----------+
| Total - all continuing operations | | | |
+----------------------------------------------------+-----------+----------+----------+
| Profit for the period | 7,724 | 14.6p | 14.4p |
+----------------------------------------------------+-----------+----------+----------+
| Amortisation of acquired intangibles | 385 | | |
+----------------------------------------------------+-----------+----------+----------+
| Tax on amortisation of acquired intangibles | (96) | | |
+----------------------------------------------------+-----------+----------+----------+
| | | | |
+----------------------------------------------------+-----------+----------+----------+
| Earnings before amortisation of acquired | 8,013 | 15.1p | 15.0p |
| intangibles | | | |
+----------------------------------------------------+-----------+----------+----------+
+----------------------------------------------------+-----------+----------+----------+
| | Full year 2008 |
+----------------------------------------------------+---------------------------------+
| | | Earnings per |
| | | share |
+----------------------------------------------------+-----------+---------------------+
| | Earnings | Basic | Diluted |
+----------------------------------------------------+-----------+----------+----------+
| | GBP'000 | | |
+----------------------------------------------------+-----------+----------+----------+
| Weighted average number of shares in issue ('000) | | 52,921 | 53,835 |
+----------------------------------------------------+-----------+----------+----------+
| | | | |
+----------------------------------------------------+-----------+----------+----------+
| Total - all continuing operations | | | |
+----------------------------------------------------+-----------+----------+----------+
| Profit for the financial year | 12,964 | 24.5p | 24.1p |
+----------------------------------------------------+-----------+----------+----------+
| Amortisation of acquired intangibles | 848 | | |
+----------------------------------------------------+-----------+----------+----------+
| Tax on amortisation of acquired intangibles | (204) | | |
+----------------------------------------------------+-----------+----------+----------+
| | | | |
+----------------------------------------------------+-----------+----------+----------+
| Earnings before amortisation of acquired | 13,608 | 25.7p | 25.3p |
| intangibles | | | |
+----------------------------------------------------+-----------+----------+----------+
6 INTANGIBLE ASSETS
+----------------------------------------------+------------+--------------+--------------+
| | Goodwill | Acquired | Software |
| | | intangibles | Development |
+----------------------------------------------+------------+--------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------+------------+--------------+--------------+
| Cost | | | |
+----------------------------------------------+------------+--------------+--------------+
| At 1 January 2009 | 83,419 | 7,133 | 11,400 |
+----------------------------------------------+------------+--------------+--------------+
| Exchange adjustments | (9,426) | (978) | (854) |
+----------------------------------------------+------------+--------------+--------------+
| Additions | 771 | - | 270 |
+----------------------------------------------+------------+--------------+--------------+
| Reclassifications | (2,138) | 3,160 | 173 |
+----------------------------------------------+------------+--------------+--------------+
| | | | |
+----------------------------------------------+------------+--------------+--------------+
| At 30 June 2009 | 72,626 | 9,315 | 10,989 |
+----------------------------------------------+------------+--------------+--------------+
+----------------------------------------------+------------+-----------+-----------+
| Amortisation | | | |
+----------------------------------------------+------------+-----------+-----------+
| At 1 January 2009 | - | 1,813 | 6,512 |
+----------------------------------------------+------------+-----------+-----------+
| Exchange adjustments | - | (248) | (783) |
+----------------------------------------------+------------+-----------+-----------+
| Charge for the period | - | 594 | 574 |
+----------------------------------------------+------------+-----------+-----------+
| | | | |
+----------------------------------------------+------------+-----------+-----------+
| At 30 June 2009 | - | 2,159 | 6,303 |
+----------------------------------------------+------------+-----------+-----------+
+----------------------------------------------+------------+-----------+-----------+
| Net book value | | | |
+----------------------------------------------+------------+-----------+-----------+
| At 30 June 2009 | 72,626 | 7,156 | 4,686 |
+----------------------------------------------+------------+-----------+-----------+
| At 31 December 2008 | 83,419 | 5,320 | 4,888 |
+----------------------------------------------+------------+-----------+-----------+
Additions to goodwill reflect the fair value adjustments made during the period
following a final review of the acquisitions of CBS Rotary Power Motion and
Tecnoforniture made in 2008.
The reclassification from goodwill to acquired intangibles reflects the
separately identifiable intangible assets recognised from the acquisitions of
CBS Rotary Power Motion and Tecnoforniture.
7 PROPERTY, PLANT AND EQUIPMENT
+----------------------------------------------+------------+------------+-----------+
| | Land and | Equipment | Total |
| | Buildings | | |
+----------------------------------------------+------------+------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------------------+------------+------------+-----------+
| Cost | | | |
+----------------------------------------------+------------+------------+-----------+
| At 1 January 2009 | 14,220 | 35,414 | 49,634 |
+----------------------------------------------+------------+------------+-----------+
| Exchange adjustments | (859) | (2,450) | (3,309) |
+----------------------------------------------+------------+------------+-----------+
| Additions | 172 | 815 | 987 |
+----------------------------------------------+------------+------------+-----------+
| Reclassifications | - | (173) | (173) |
+----------------------------------------------+------------+------------+-----------+
| Disposals | (229) | (609) | (838) |
+----------------------------------------------+------------+------------+-----------+
| | | | |
+----------------------------------------------+------------+------------+-----------+
| At 30 June 2009 | 13,304 | 32,997 | 46,301 |
+----------------------------------------------+------------+------------+-----------+
+----------------------------------------------+------------+-----------+-----------+
| Depreciation | | | |
+----------------------------------------------+------------+-----------+-----------+
| At 1 January 2009 | 6,755 | 26,689 | 33,444 |
+----------------------------------------------+------------+-----------+-----------+
| Exchange adjustments | (292) | (1,759) | (2,051) |
+----------------------------------------------+------------+-----------+-----------+
| Charge for the period | 320 | 1,464 | 1,784 |
+----------------------------------------------+------------+-----------+-----------+
| Disposals | (93) | (346) | (439) |
+----------------------------------------------+------------+-----------+-----------+
| | | | |
+----------------------------------------------+------------+-----------+-----------+
| At 30 June 2009 | 6,690 | 26,048 | 32,738 |
+----------------------------------------------+------------+-----------+-----------+
+----------------------------------------------+------------+-----------+-----------+
| Net book value | | | |
+----------------------------------------------+------------+-----------+-----------+
| At 30 June 2009 | 6,614 | 6,949 | 13,563 |
+----------------------------------------------+------------+-----------+-----------+
| At 31 December 2008 | 7,465 | 8,725 | 16,190 |
+----------------------------------------------+------------+-----------+-----------+
8 CLOSING NET DEBT
+---------------------------------------------+------------+------------+------------+
| | At 30 June | At 30 June | At 31 Dec |
| | 2009 | 2008 | 2008 |
+---------------------------------------------+------------+------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------------+------------+------------+------------+
| Borrowings - current - overdrafts | (2,167) | (3,025) | (3,529) |
+---------------------------------------------+------------+------------+------------+
| Borrowings - current portion of long term | (4,232) | (15,542) | (4,164) |
| loans | | | |
+---------------------------------------------+------------+------------+------------+
| Borrowings - non-current | (93,584) | (70,868) | (97,971) |
+---------------------------------------------+------------+------------+------------+
| Cash and cash equivalents | 30,615 | 18,861 | 21,715 |
+---------------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------------+------------+------------+------------+
| Closing net debt | (69,368) | (70,574) | (83,949) |
+---------------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------------+------------+------------+------------+
| Reconciliation of net cash flow to movement | | | |
| in net debt | | | |
+---------------------------------------------+------------+------------+------------+
| | 6 months | 6 months | Year to |
| | to | to | 31 Dec |
| | 30 June | 30 June | 2008 |
| | 2009 | 2008 | |
+---------------------------------------------+------------+------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------------------------+------------+------------+------------+
| | | | |
+---------------------------------------------+------------+------------+------------+
| Net increase in cash and cash equivalents | 12,702 | 7,624 | 9,349 |
+---------------------------------------------+------------+------------+------------+
| Net (increase) in borrowings | (8,633) | (12,066) | (11,332) |
+---------------------------------------------+------------+------------+------------+
| | 4,069 | (4,442) | (1,983) |
+---------------------------------------------+------------+------------+------------+
| Exchange | 10,512 | (6,728) | (22,562) |
+---------------------------------------------+------------+------------+------------+
| Movement in net debt | 14,581 | (11,170) | (24,545) |
+---------------------------------------------+------------+------------+------------+
| Opening net debt | (83,949) | (59,404) | (59,404) |
+---------------------------------------------+------------+------------+------------+
| Closing net debt | (69,368) | (70,574) | (83,949) |
+---------------------------------------------+------------+------------+------------+
9 PENSIONS
The valuations used for IAS 19 disclosures have been based on the most recent
actuarial valuation at 31 December 2005 updated by KPMG LLP to take account of
the requirements of IAS 19 in order to assess the liabilities of each of the
schemes at 30 June 2009. Assets are stated at their market value at 30 June
2009. A full funding valuation of the UK scheme is being carried out with an
effective date of 31 December 2008.
The financial assumptions used to calculate the liabilities under IAS 19 are:
+----------------------------------------------+----------------+-----------+-----------+
| | UK |
+----------------------------------------------+----------------------------------------+
| | 6 months to | 6 months | Year to |
| | 30 June 2009 | to | 31 Dec |
| | | 30 June | 2008 |
| | | 2008 | |
+----------------------------------------------+----------------+-----------+-----------+
| Inflation rate | 3.55% | 4.05% | 2.95% |
+----------------------------------------------+----------------+-----------+-----------+
| Rate of increase of pensions in payment | 3.55% | 4.05% | 2.95% |
+----------------------------------------------+----------------+-----------+-----------+
| Rate of increase for deferred pensioners | 3.55% | 4.05% | 2.95% |
+----------------------------------------------+----------------+-----------+-----------+
| Discount rate | 6.45% | 6.20% | 6.40% |
+----------------------------------------------+----------------+-----------+-----------+
| | | | |
+----------------------------------------------+----------------+-----------+-----------+
| | Netherlands |
+----------------------------------------------+----------------------------------------+
| | 6 months to | 6 months | Year to |
| | 30 June 2009 | to | 31 Dec |
| | | 30 June | 2008 |
| | | 2008 | |
+----------------------------------------------+----------------+-----------+-----------+
| Inflation rate | 2.00% | 2.70% | 2.00% |
+----------------------------------------------+----------------+-----------+-----------+
| Rate of increase in salaries | 3.00% | 3.70% | 3.00% |
+----------------------------------------------+----------------+-----------+-----------+
| Rate of increase of pensions in payment | 2.00% | 2.70% | 2.00% |
+----------------------------------------------+----------------+-----------+-----------+
| Rate of increase for deferred pensioners | 2.00% | 2.70% | 2.00% |
+----------------------------------------------+----------------+-----------+-----------+
| Discount rate | 6.20% | 6.70% | 5.80% |
+----------------------------------------------+----------------+-----------+-----------+
| | | | |
+----------------------------------------------+----------------+-----------+-----------+
| The amounts recognised in the balance sheet | | | |
| are determined as follows: | | | |
+----------------------------------------------+----------------+-----------+-----------+
| | 30 June 2009 | 30 June | 31 Dec |
| | | 2008 | 2008 |
+----------------------------------------------+----------------+-----------+-----------+
| | GBPm | GBPm | GBPm |
+----------------------------------------------+----------------+-----------+-----------+
| Present value of defined benefit obligations | 89.9 | 101.3 | 81.0 |
+----------------------------------------------+----------------+-----------+-----------+
| Fair value of plan assets | (69.3) | (76.7) | (67.7) |
+----------------------------------------------+----------------+-----------+-----------+
| | | | |
+----------------------------------------------+----------------+-----------+-----------+
| Net liability recognised in the balance | 20.6 | 24.6 | 13.3 |
| sheet | | | |
+----------------------------------------------+----------------+-----------+-----------+
| The amounts recognised in the income | | | |
| statement are as follows: | | | |
+----------------------------------------------+----------------+-----------+-----------+
| | 6 months to | 6 months | Year to |
| | 30 June 2009 | to | 31 Dec |
| | | 30 June | 2008 |
| | | 2008 | |
+----------------------------------------------+----------------+-----------+-----------+
| | GBPm | GBPm | GBPm |
+----------------------------------------------+----------------+-----------+-----------+
| Current service cost | 0.1 | 0.1 | 0.2 |
+----------------------------------------------+----------------+-----------+-----------+
| Interest cost | 2.5 | 2.7 | 5.4 |
+----------------------------------------------+----------------+-----------+-----------+
| Expected return on plan assets | (2.0) | (2.7) | (5.5) |
+----------------------------------------------+----------------+-----------+-----------+
| | | | |
+----------------------------------------------+----------------+-----------+-----------+
| Total pension expense included within | 0.6 | 0.1 | 0.1 |
| distribution costs | | | |
+----------------------------------------------+----------------+-----------+-----------+
| | | | |
+----------------------------------------------+----------------+-----------+-----------+
| Analysis of the movement in the balance | | | |
| sheet net liability | | | |
+----------------------------------------------+----------------+-----------+-----------+
| | 6 months to | 6 months | Year to |
| | 30 June 2009 | to | 31 Dec |
| | | 30 June | 2008 |
| | | 2008 | |
+----------------------------------------------+----------------+-----------+-----------+
| | GBPm | GBPm | GBPm |
+----------------------------------------------+----------------+-----------+-----------+
| Opening | 13.3 | 14.3 | 14.3 |
+----------------------------------------------+----------------+-----------+-----------+
| Exchange adjustments | - | - | 0.1 |
+----------------------------------------------+----------------+-----------+-----------+
| On-going expense as above | 0.6 | 0.1 | 0.1 |
+----------------------------------------------+----------------+-----------+-----------+
| Employer contributions | (1.4) | (1.3) | (2.7) |
+----------------------------------------------+----------------+-----------+-----------+
| Actuarial losses recognised as a reserves | 8.1 | 11.5 | 1.5 |
| movement | | | |
+----------------------------------------------+----------------+-----------+-----------+
| | | | |
+----------------------------------------------+----------------+-----------+-----------+
| Closing | 20.6 | 24.6 | 13.3 |
+----------------------------------------------+----------------+-----------+-----------+
The pension expense has been included in distribution costs. The actual return
on plan assets was GBP1.9m (2008: GBP5.2m negative return). The retirement
benefit liability at the end of June was GBP20.6m (2008: GBP24.6m), an increase
of GBP7.3m in the liability from 31 December 2008 (GBP13.3m). This increase
reflects the impact of the higher price inflation rate used in the actuarial
calculation of future pension liabilities.
10 SHARE CAPITAL AND RESERVES
Purchase of own shares
During the period the company purchased 365,207 of its own shares of 20p each,
representing 0.7% of the issued share capital of the company as at 30 June 2009,
through the Brammer plc Employee Share Ownership Trust ("the Trust") for an
aggregate consideration of GBP181,027, which has been deducted from
shareholders' equity. The Trust holds the shares in order to satisfy vestings
under the company's performance share plans and share matching plans. During the
period 540,299 shares were transferred to directors and senior managers to meet
vestings under these plans.
At 30 June 2009 the Trust held a total 176,443 shares in the company in order to
meet part of the company's liabilities under the company's performance share
plans and share matching plans. The Trust deed contains a dividend waiver
provision in respect of these shares.
Ordinary shares issued
During the period the Trust subscribed for 194,672 ordinary 20p shares at par,
which were duly issued fully paid.
No options were exercised during the period under the group's employee share
option schemes.
The number of ordinary 20p shares in issue at 30 June 2009 was 53,142,794 (30
June 2008: 52,939,122; 31 December 2008: 52,948,122).
Dividends
A dividend, amounting to GBP2,701,000, which relates to 2008, was paid on 2 July
2009 (2008: GBP2,689,000). In addition, the directors propose an interim
dividend of 2.6p per share (2008: 2.6p per share) payable on 5 November 2009 to
shareholders who are on the register at 9 October 2009. This interim dividend,
amounting to GBP1,380,000 (2008: GBP1,374,000) has not been recognised as a
liability in these interim financial statements.
11 RELATED PARTY TRANSACTIONS
Other than the remuneration of executive and non-executive directors, there were
no related party transactions during the period.
12 INTERIM REPORT
A copy of the interim report is available for inspection at the registered
office of the company, Claverton Court, Claverton Road, Wythenshawe, Manchester,
M23 9NE and the offices of Citigate Dewe Rogerson Ltd, 3 London Wall Buildings,
London Wall, London EC2M 5SY.
Current regulations permit the company not to send copies of its interim results
to shareholders. Accordingly the 2009 interim results published on 28 August
2009 will not be sent to shareholders. The 2009 interim results and other
information about Brammer are available on the company's website at
www.brammer.biz.
13 INTERIM DIVIDEND
Relevant dates concerning the payment of the interim dividend are
+-------------------+---------------------------------------------------------------+
| Record date | 9 October 2009 |
+-------------------+---------------------------------------------------------------+
| Payment date | 5 November 2009 |
+-------------------+---------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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