TIDMBRAM
RNS Number : 8602I
Brammer PLC
31 July 2012
FROM HUDSON SANDLER FOR BRAMMER
PRESS RELEASE
31 July 2012
Brammer plc ("Brammer" or the "Group")
2012 INTERIM RESULTS
PROVEN STRATEGY DELIVERING GROWTH
Brammer plc, the leading pan-European added value distributor of
industrial maintenance, repair and overhaul products, today
announces its results for the six months ended 30 June 2012.
Financial Highlights
-- Record group revenue up 20.3% to GBP331.1 million (2011:
GBP275.2 million). At constant currency total revenue growth is
25.1%. Organic growth in constant currency of 6.7% (including the
incremental growth of Buck & Hickman).
-- Profit before tax (pre amortisation and exceptional items)
increased by 19.6% to GBP17.1 million (2011: GBP14.3 million). At
constant currency profit before tax increased by 24.5%.
-- Operating profit (pre amortisation and exceptional items)
increased by 20.1% to GBP18.5 million (2011: GBP15.4 million). At
constant currency operating profit grew by 24.7%.
-- Operating margins (pre amortisation and exceptional items)
held at 5.6%; excluding Buck & Hickman operating margin
improved to 6.0%.
-- Cash generated from operating activities (before outflows
from exceptional items) increased to GBP6.0 million (2011: GBP5.6
million) reflecting continued focus on working capital control.
-- EPS (pre amortisation and exceptional items) increased by
10.0% to 11.0p (2011: 10.0p). At constant currency EPS growth is
14.3%.
-- Dividend up 11.1% to 3.0p (2011: 2.7p) reflecting the Board's
confidence in the outlook for the business.
Operational Highlights
-- Continued successful execution of organic growth strategy;
- Key Account sales per working day growth of 13.4%* with sales,
following the acquisition of Buck & Hickman, now representing
35.8% of revenues (2011: 38.3%). Five new pan-European contracts
won taking the total to 45.
- Insite sales growth of 10.4%* (2011: growth of 28.4%) with a net 31 new locations.
- Overall Brammer delivered GBP28.3 million of validated cost savings to our customers.
- Pan-European tools and general maintenance catalogue scheduled
for launch in September 2012.
*at constant currency
-- Integration of Buck & Hickman business proceeding as
planned, providing significant cross-selling opportunities in the
European market with existing customers.
- Buck & Hickman sales per working day growth of 14.0%, and
revenue growth of 15.0%, compared to prior year.
- Synergy benefits are meeting expectations and we are confident
that the savings target of GBP2.5 million for the year will be
achieved.
- Co-location of Buck & Hickman and Brammer UK branches
continue in line with plan, four branches having been co-located in
the first half and a further eight scheduled for the remainder of
the year.
Ian Fraser, Chief executive said:
"Looking ahead, we are pleased to report that recent trading has
been encouraging and the group is well positioned for continued
good progress. We are nonetheless mindful of economic uncertainties
which prevail across Europe".
Enquiries: Brammer plc 020 7638 9571 (8.00am - 1.00pm)
0161 902 5572 (1.00pm - 4.30pm)
Bill Whiteley, Chairman
Ian Fraser, Chief executive
Paul Thwaite, Finance
director
Issued: Hudson Sandler 020 7796 4133
Andrew Hayes
Andrew Leach
Katie Matthews
BRAMMER PLC
2012 INTERIM RESULTS
INTERIM STATEMENT
Summary
We are delighted to report that, in the face of challenging
markets across Europe, trading for Brammer in the first six months
of 2012 has been robust. Our revenue growth rate in constant
currency of 25.1% reflects an excellent performance from Buck &
Hickman and good progress in the Brammer growth drivers of Key
Accounts, Insites(TM) and cross-selling, resulting in continued
gains in market share. Our customers are facing increasing
challenges in competitive markets and our ability to add value
through the Brammer Value Proposition is proving highly attractive
and effective.
For the six months to 30 June 2012 sales were GBP331.1 million
which represents an increase of 20.3% over the previous year. On a
constant currency basis organic growth in sales per working day
(SPWD) (including incremental growth in Buck & Hickman) was
6.6%. All of the key growth drivers contributed to this growth. Key
Accounts grew by 13.6%, with five new accounts signed in the period
and the prospects for further wins remain excellent. There was
further growth in Insites(TM) with 31 (net) new Insites(TM)
established and sales growth of 10.4% to GBP49.8 million.
Cross-selling contributed strongly: non-bearing sales (excluding
Buck & Hickman) grew by 8.8% though bearing sales declined by
5.7% due to weaker markets.
As anticipated, gross profit margin at 29.7% was slightly down
on the previous year due to the impact of lower margin Buck &
Hickman revenues. However, the gross margin excluding Buck &
Hickman improved by 130 basis points to 31.5%. Sales, distribution,
and administrative costs ("SDA") (excluding amortisation of
acquired intangibles and exceptional items) increased by 17.7% to
GBP79.8 million, with organic SDA growth of 7.7%, reflecting the
recruitment of additional Key Account and management personnel in
support of the growth drivers, as well as the creation of the
European Product Division for Tools and General Maintenance
products designed to boost sales of this line on the continent.
However, in certain countries we established resource at the end of
2011 against an expectation of stronger economic conditions, with
the result that there has been a degree of under-recovery of these
costs. We are carefully managing expenditure and are confident that
as we continue to grow through the rest of the year we will recover
the correct balance in our SDA spending.
The outcome of the above is a 20.1% increase in operating profit
before amortisation and exceptional items to GBP18.5 million.
Operating margins (operating profit before amortisation and
exceptional items) were maintained at 5.6%, though the margin on
organic business improved from 5.6% to 6.0%. Pre-tax profits
(before amortisation and exceptional items) increased by 19.6% to
GBP17.1 million with basic earnings per share (before amortisation
and exceptional items) at 11.0 pence per share up 10%.
Net debt
Net debt at GBP38.6 million is slightly below a year ago, but
GBP3.3 million higher than at 31 December 2011. This increase is
largely due to seasonal effects, but also included some exceptional
cash costs associated with the integration of Buck & Hickman.
Importantly, inventory turns have improved from 5.0 times at
December to 5.2 times at June. On 11 July deferred consideration of
GBP10.1 million was paid in respect of Fin Brammer, our business in
Poland.
Operational Review
Summary trading performance by segment at 2012 constant
currency rates (EUR1.20 : GBP1)
External Revenue RevenueGrowth SPWD** Growth Operating Operating
(Like for Profit* Profit growth*
like)
2012 2011 2012 2012 2012 2011 2012
GBPm GBPm % % GBPm GBPm %
UK(+) 142.3 79.6 78.8% 12.7% 7.7 4.2 83.3%
Germany 61.1 58.9 3.7% 3.0% 4.3 3.6 19.4%
France 45.0 42.6 5.6% 6.1% 1.9 1.9 -
Spain 22.8 22.4 1.8% 1.8% 2.1 1.8 16.7%
Benelux 27.3 24.8 10.1% 10.3% 1.5 1.5 -
Eastern
Europe 25.8 28.7 -10.1% -4.2% 1.4 2.0 -30.0%
Other 8.5 9.0 -5.6% -4.2% (0.2) 0.0 n/a
Total 332.8 266.0 25.1% 6.6% 18.7 15.0 24.7%
--------- -------- -------------- -------------- ------ -------- -----------------
Exchange
effect*** (1.7) 9.2 -4.8% -4.7% (0.2) 0.4 -4.6%
--------- -------- -------------- -------------- ------ -------- -----------------
As reported 331.1 275.2 20.3% 1.9% 18.5 15.4 20.1%
========= ======== ============== ============== ====== ======== =================
* operating profit before amortisation and exceptional items
** sales per working day
*** to reconcile results and analysis to actual exchange rates
for 2012 and 2011
(+) including Buck & Hickman
UK (including Iceland and Norway, but excluding Buck &
Hickman)
Our largest operation, and the one where the Brammer strategy is
most mature, achieved sales per working day (SPWD) growth of 4.0%,
and increased operating profit by 59% to GBP6.6 million.
Key Account sales grew by 11.9%, and now represent 67.0% of
turnover. Several new contracts were won with customers such as
Innospec, Wincanton and De La Rue, and the implementation of last
year's major contracts with Tata Steel, British Aerospace and EDF
Energy proceeded well. Our value proposition continues to be
attractive to customers delivering more than 1,300 individual cost
savings for 600 customers, with a combined saving of more than
GBP7.6 million. Base business sales declined by 6.9% in a very
difficult market.
We opened 18 new full time Insites(TM) and sales through
Insites(TM) and part-time Insites(TM) (those locations where we
have several regular clinics with the customer's staff each week)
increased by 3.1%.14 existing full time Insites(TM) closed giving a
net increase of four. We opened our second Insite in Norway.
We launched our first Mobile Centre of Excellence in January.
This mobile demonstration centre is available to our customers to
experience a wide range of innovative solutions from our leading
suppliers. Since launch we have held more than 70 customer events
and hosted more than 2,000 people on board generating more than
1,300 sales enquiries.
Finally, our cross-selling initiatives continued to be
successful with sales growth of 23.2% in our Tools and General
Maintenance range which now represents 13.7% of sales.
Buck & Hickman
The performance of Buck & Hickman has exceeded our
expectations. Despite the weak market conditions, the Buck &
Hickman business performed very well during the first half with
like-for-like sales per working day growth of 14.0%. This excellent
growth momentum is largely due to a strong performance from
existing Key Account contracts in the aerospace and automotive
sectors, as well as the ramp-up of new contracts in the metals,
aerospace, engineering and transportation sectors.
The base business has also grown 4% on a like-for-like basis
reflecting market share gains from focused marketing and sales
initiatives in the first half, including the launch of a new Buck
& Hickman catalogue - the first since 2010.
Gross margins have been stable during the first half and we
strongly believe this presents an opportunity for improvement as we
implement the Brammer strategy of supplier consolidation.
We have managed a successful leadership transition to bring the
business under the direction of the Brammer UK Managing Director
and have further achieved our goal to begin to extract the
significant synergies that exist between both UK businesses in the
areas of purchasing, product substitution, logistics and property -
without distracting management from the day job of growing the
business.
Germany
SPWD on a constant currency basis grew by 3.0%, whilst operating
profit improved by 19.4% to GBP4.3 million. Key Account growth was
13.1%, with Key Accounts now representing 28.9% of total sales; we
won new contracts with Johnson Controls and Prettl. Our value
proposition provided EUR2.5 million of signed-off cost savings to
our Key Account customers.
Our investment in Mechanical Power Transmission and Motors
generated continued sales growth of 4.4%, whilst additional
investment in sales and technical support for Fluid Power resulted
in growth of 18.9%. Our recent investment in Tools gave us 70%
growth. We won six new Insites(TM) and Insite(TM) sales grew 13.8%.
Our focus on the market segments of Food and Drink (up 48.8%) and
Metals (up 7.1%) resulted in several new contract wins and
increased market share. Market share gains continued in Automotive
(up 49.0%) although our industrial machinery segment, representing
38% of revenues, declined by 9.7%. We held 85 customer workshops
across Germany addressing more than 850 MRO specialists from our
targeted segments, raising the awareness of Brammer as a solutions
provider.
France
SPWD in constant currency increased by 6.1%, whilst operating
profit was flat, reflecting investment in SDA to generate future
growth. Industrial Key Account sales increased by 15.7%, whilst
Automotive Key Accounts were flat. As a result, overall Key
Accounts grew by 11.0% and now represent 49.9% of turnover. We
delivered a total of 240 signed-off cost savings to our customers,
representing EUR1.3 million of savings. New contracts were won with
Yoplait, Terreal, Lucart and Wienerberger. The new product
initiative of Tools and General Maintenance produced sales growth
of 18.0% whilst Fluid Power also continued to grow, with sales up
19.8%, now representing 16.9% of total sales. We focused our
marketing activity on Food and Drink, Utilities, Metals and
Automotive with 17 customer events attracting nearly 500 existing
and potential customers.
Spain
SPWD on a constant currency basis increased by 1.8%, whilst
operating profit increased by 16.7% to GBP2.1 million. Our Key
Account revenues increased by 18.0%. Key Accounts now represent
34.8% of sales and we provided over EUR1.7 million of cost savings
to our Key Account customers. Seven new Insites(TM) were won, with
Insite(TM) sales increasing by 28.5%. Our marketing focus was on
Food and Drink (up 12%), Automotive (up 15.2%), Metals (flat) and
Chemical (up 10.0%). Industrial Machinery, representing 19.3% of
sales, was down 9.5%. A total of 73 customer symposiums attracted
233 existing and potential customers. Continued progress was made
in Product Range Extension, with sales of the Tools and General
Maintenance range up 63.8%, and Fluid Power up 35.7%.
Benelux
SPWD in the Benelux countries grew by 10.3%, whilst operating
profit was flat reflecting investment in SDA to generate future
growth. We won new contracts with McBride, PepsiCo and Valeo.
Overall Key Account growth in the Benelux was 20.5% and now
represents 30.8% of total sales. In Holland Mechanical Power
Transmission sales grew by 13.2%, Fluid Power by 45.0%, and Tools
and Maintenance by 25%. In Belgium, Tools and General Maintenance
grew by 9.5% and bearings grew by 12.6%, although Fluid Power
declined by 7.5%. Sales through existing Insites(TM) increased by
10.5%. Our focus on Food and Drink gave rise to growth in both
territories in this segment, which now represents 14.6% of Benelux
sales.
Eastern Europe
In our Eastern European businesses (comprising Poland, Hungary,
the Czech Republic and Slovakia), total SPWD in constant currency
declined by 4.2%, whilst operating profit declined by 30% to GBP1.4
million. In Poland, SPWD increased by 7.9% in constant currency.
Key Accounts in Poland grew by 26.9%. In the Czech Republic and
Slovakia, SPWD in constant currency decreased by 25.5% with
industrial machinery, representing 44.0% of sales, declining by
9.2% and sales to OEM customers representing 45% of sales declining
by 24.2%. Key Account sales were flat, although new contracts were
won with Amcor and PepsiCo and we opened one Insite(TM). In
Hungary, SPWD was flat, Key Account sales declined by 2.1%, and we
opened one Insite(TM).
Other segments
In respect of the other segments, Austria, Ireland and Italy,
SPWD declined by 4.2%, whilst operating profit was flat.
Strategy
Our strategy remains unchanged under the headings of Growth,
Capabilities, Synergies and Costs.
Growth
Key Account sales grew by 13.6% and now represent 35.8% of total
sales. Five new European contracts were won, each with a minimum
contract period of three years, and ultimate potential annual
revenues in excess of EUR25 million. We continued to focus our
business on defensive segments, and within Key Accounts increased
our sales to the Food and Drink segment by 9.2%, FMCG by 4.5%, and
Packaging by 7.5%. We also saw continued recovery and further
market share gains in the more cyclical sectors of Automotive (up
17.2%) and Metals (up 14.5%). Our value proposition proved
increasingly attractive to customers and we provided over 2,300
separate cost savings to our customers worth over EUR34.0
million.
The number of Insites(TM) increased by a net total of 31, with
31 new full time and 28 new part time Insites(TM) opened, with
overall growth in sales of 10.4% to GBP49.8 million. However, 28
Insites(TM) were closed due to customer factory closures or reduced
demand, giving rise to a total of 301 Insites(TM) at the period
end.
Extending the product offering to reflect the full Brammer range
in every territory continued and whilst bearing sales declined by
5.7%, non bearing sales excluding Buck & Hickman rose 8.8%,
suggesting significant market share gains driven by growth of 23.0%
in Tools and Maintenance to GBP21.7 million and 11.2% growth in
Fluid Power to GBP49.3 million.
In the first half of 2012 we maintained contact with and are
monitoring a number of interesting bolt-on acquisition
opportunities.
European Product Division Tools and General Maintenance
We have now established the European Product Division to support
the sales of Tools and General Maintenance in every Brammer
territory. The top team, led by Philippe Hervieux our former French
managing director, and experienced Tools and Maintenance
professionals formerly with Buck & Hickman, have extensive
experience in product management, tender management, business
development, added value services, supply chain and supplier
relationships.
The business development team has started to engage with our Key
Accounts across Europe to support the winning of new contracts for
Tools and Maintenance and the range expansion at existing
customers. As a result of this, significant protective personal
equipment ("PPE") contracts have been won with PepsiCo and Alcoa,
and a number of other opportunities are being pursued.
Our pan-European Tools & Maintenance catalogue will be
published in September. This catalogue will consist of 45 different
brands featuring around 17,000 stock keeping units, over 700 pages
and 70,000 catalogues will be released in nine languages across our
16 countries. All suppliers included in the catalogue have agreed
to fully support the Brammer European strategy. As a result, we
have been able to build a comprehensive, unique, pan-European brand
leading product offering to benefit all of our existing customers
across Europe.
Capabilities
The focus of our people and organisational capability continues
to be on supporting our growth. To that end, our pan-European
Marketing team are continuing the roll out of our new Market
Segmentation material across Europe, with a newly updated series of
the material distributed across our 16 country businesses combined
with training on how to use the sector specific material and a
continuous audit of the branch network. We have also developed and
launched a new sales training programme considering best practice,
our industry sector approach and Brammer's value proposition.
Our Sales team is continuing to develop the Brammer Insite(TM)
Operations Manual, localised into English, French, German and
Spanish. During 2012 we introduced an Insite(TM) training programme
designed to raise awareness of the prerequisite methods and
processes to identify, target and set up a new Insite(TM). A
European Insite(TM) Manager was appointed during the year to manage
the growth of Insite(TM)services across all 16 countries.
We developed a new website with e-commerce functionality, aiming
to increase customer conversions via an enhanced user journey and
easy to find call-to-action opportunities. The new site features
more interactive content including "Quick Tips video clips"; we
will be adding new clips and other content regularly throughout
2012. Our e-commerce solution is already live in Poland, Spain,
France and Netherlands, and will be launched in the remaining
countries during 2012 and 2013.
In February 2012 we continued our Europe-wide customer
satisfaction survey, involving 45-minute telephone interviews with
over 300 customers across Europe, and an online questionnaire sent
to a random sample of 10,000 of our 100,000 customers. This
research further strengthened our insight into our customers,
helping us to appreciate their current and future needs in detail,
and assist us with our strategic and operational planning and
service delivery.
During the period Brammer's Distributed Learning programme
(e-learning) was updated with new product training modules and
enhanced functionality to provide a better learning experience in
nine languages. This training is a key element of Brammer's
employee induction programme; and for critical, customer-facing
roles we are achieving 100% take-up of the two major foundation
programmes. Going forward, we will continue to work with our
suppliers to ensure our employees receive the best possible product
training.
From analysis of the 2012 internal employee survey, we have
developed regional and functional action plans to maintain and
enhance the excellent links between our strategy and our
personnel.
The Brammer European Council of employee representatives meets
annually in June. This forum facilitates communication between the
Works Councils and Employee Forums from each country in the group,
ensuring that the concerns and issues raised by our people can be
listened to and responded to.
Costs
We continued to work on increasing our spend with a smaller
number of suppliers, and improving the level of marketing support,
pricing, and cooperation in the field received from those
suppliers. Gross profit in the organic business therefore improved
slightly compared with the same period last year.
Dividend
The Board proposes to increase the interim dividend by 11.1% to
3.0 pence per share. This reflects the Board's confidence in
Brammer's prospects.
Prospects
Brammer is the leading European supplier of technical components
and related services to the MRO market and with only small market
share there is the opportunity for considerable further growth. Our
customer proposition is unique and delivers real value to our
customers as well as shareholders. We are strongly cash generative
and have a healthy balance sheet.
Looking ahead, we are pleased to report that recent trading has
been encouraging and the group is well positioned for continued
good progress. We are nonetheless mindful of economic uncertainties
which prevail across Europe.
Ian R Fraser
31 July 2012
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 adopted by the European Union and that the
interim management report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R , namely:
-- 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 financial year; and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last Annual Report.
The directors of Brammer plc and their respective
responsibilities are as listed in the Brammer plc Annual Report for
2011 with the exception of the following changes in the period:
Duncan Magrath was appointed to the Board in February 2012 with
effect from 1 March 2012; David Dunn stepped down as Chairman and
retired from the Board on 17 May 2012 and Bill Whiteley took over
as Chairman at that date.
On behalf of the Board
Ian Fraser
Chief Executive
Paul Thwaite
Finance director
31 July 2012
Brammer CONSOLIDATED INCOME STATEMENT
6 months 6 months Year to
to to
30 June 2012 30 June 2011 31 Dec 2011
(unaudited) (unaudited) (audited)
Notes GBPm GBPm GBPm
Revenue 2 331.1 275.2 571.5
Cost of sales (232.8) (192.0) (398.2)
Gross profit 98.3 83.2 173.3
------------------------------- ------ ------------- ------------- ------------
Distribution costs (81.8) (67.8) (144.7)
Amortisation of acquired
intangibles (0.7) (0.6) (1.3)
Total sales distribution
and administrative costs (82.5) (68.4) (146.0)
------------------------------- ------ ------------- ------------- ------------
Operating profit 2 15.8 14.8 27.3
Operating profit before
amortisation and exceptional
items 18.5 15.4 31.8
Amortisation of acquired
intangibles (0.7) (0.6) (1.3)
Exceptional items 5 (2.0) - (3.2)
Operating profit 15.8 14.8 27.3
------------------------------- ------ ------------- ------------- ------------
Finance expense (1.4) (1.1) (2.9)
Finance income - - 0.1
------------------------------- ------ ------------- ------------- ------------
Profit before tax 14.4 13.7 24.5
Profit before tax before
amortisation and exceptional
items 17.1 14.3 29.0
Amortisation of acquired
intangibles (0.7) (0.6) (1.3)
Exceptional items 5 (2.0) - (3.2)
Profit before tax 14.4 13.7 24.5
------------------------------- ------ ------------- ------------- ------------
Taxation 3 (3.5) (3.5) (6.2)
Profit for the period 10.9 10.2 18.3
------------------------------- ------ ------------- ------------- ------------
Earnings per share
- total
Basic 4 9.3p 9.6p 16.8p
Diluted 4 9.1p 9.6p 16.4p
- pre amortisation and exceptional items
Basic 4 11.0p 10.0p 19.8p
Diluted 4 10.8p 10.0p 19.3p
------------------------------- ------ ------------- ------------- ------------
The notes on pages 15 to 25 form an integral part of this
consolidated interim financial information.
Brammer CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6 months 6 months to Year to
to
30 June 2012 30 June 2011 31 December
2011
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Profit for the period 10.9 10.2 18.3
Other comprehensive income
Net exchange differences on translating
foreign operations (3.1) 4.1 (3.1)
Actuarial gains/(losses) on retirement
benefit obligations 2.8 0.3 (4.2)
Other comprehensive (expense)/income
for the period, net of tax (0.3) 4.4 (7.3)
Total comprehensive income for the
period 10.6 14.6 11.0
----------------------------------------- ------------- ------------- ------------
Items in the statement above are disclosed net of tax.
The notes on pages 15 to 25 form an integral part of this
consolidated interim financial information.
Brammer CONSOLIDATED BALANCE SHEET
30 June 2012 30 June 2011 31 Dec 2011
(unaudited) (unaudited) *
Notes GBPm GBPm GBPm
Assets
Non-current assets
Goodwill 6 86.7 78.7 88.4
Acquired intangible assets 6 10.9 4.8 11.7
Other intangible assets 6 7.1 5.1 7.4
Property, plant and equipment 7 13.5 11.4 13.8
Deferred tax assets 7.2 5.4 7.0
125.4 105.4 128.3
------------------------------------ ------ ------------- ------------- ------------
Current assets
Inventories 82.8 74.9 87.7
Trade and other receivables 121.6 101.1 114.8
Cash and cash equivalents 8 7.1 24.5 15.9
211.5 200.5 218.4
------------------------------------ ------ ------------- ------------- ------------
Liabilities
Current liabilities
Financial liabilities - borrowings 8 (4.8) (61.7) (3.4)
Trade and other payables (126.3) (106.8) (131.6)
Provisions 9 (1.2) (0.6) (1.3)
Deferred consideration (10.8) (7.8) (10.8)
Current tax liabilities (5.3) (4.5) (5.0)
(148.4) (181.4) (152.1)
------------------------------------ ------ ------------- ------------- ------------
Net current assets 63.1 19.1 66.3
Non-current liabilities
Financial liabilities - borrowings 8 (40.9) (3.4) (47.8)
Deferred tax liabilities (9.6) (9.5) (8.8)
Provisions 9 (0.2) (0.1) -
Deferred consideration (4.1) - (3.6)
Retirement benefit obligations 10 (11.7) (13.7) (16.8)
(66.5) (26.7) (77.0)
------------------------------------ ------ ------------- ------------- ------------
Net assets 122.0 97.8 117.6
------------------------------------ ------ ------------- ------------- ------------
Shareholders' equity
Share capital 11 23.5 21.3 23.4
Share premium 18.2 18.2 18.2
Translation reserve (1.8) 8.5 1.3
Retained earnings 82.1 49.8 74.7
Total equity 122.0 97.8 117.6
------------------------------------ ------ ------------- ------------- ------------
*December 2011 balance sheet restated for fair value adjustments
to the assets and liabilities acquired with the Buck & Hickman
business on 30 September 2011 (note 6).
The notes on pages 15 to 25 form an integral part of this
consolidated interim financial information.
Brammer CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share Share Treasury Translation Retained
Capital Premium Shares Reserve Earnings Total
GBPm GBPm GBPm GBPm GBPm GBPm
Balance at 1 January 2011 21.3 18.1 (0.2) 4.4 43.4 87.0
--------------------------------- -------- -------- --------- ------------ --------- -------
Profit for the period - - - - 10.2 10.2
Other comprehensive income - - - 4.1 0.3 4.4
--------------------------------- -------- -------- --------- ------------ --------- -------
Total comprehensive income - - - 4.1 10.5 14.6
--------------------------------- -------- -------- --------- ------------ --------- -------
Transactions with owners
Shares issued during the
period - 0.1 - - - 0.1
Purchase of own shares - - (0.1) - - (0.1)
Transfer on vesting of
own shares - - 0.1 - (0.1) -
Value of employee services - - - - 1.0 1.0
Dividends - - - - (4.8) (4.8)
Total transactions with
owners - 0.1 - - (3.9) (3.8)
--------------------------------- -------- -------- --------- ------------ --------- -------
Movement in period - 0.1 - 4.1 6.6 10.8
--------------------------------- -------- -------- --------- ------------ --------- -------
At 30 June 2011 21.3 18.2 (0.2) 8.5 50.0 97.8
Profit for the period - - - - 8.1 8.1
Other comprehensive income - - - (7.2) (4.5) (11.7)
--------------------------------- -------- -------- --------- ------------ --------- -------
Total comprehensive income - - - (7.2) 3.6 (3.6)
--------------------------------- -------- -------- --------- ------------ --------- -------
Transactions with owners
Shares issued in respect
of the placing 2.1 - - - 22.7 24.8
Value of employee services - - - - 1.0 1.0
Tax credit on share performance
plans - - - - 0.7 0.7
Dividends - - - - (3.1) (3.1)
Total transactions with
owners 2.1 - - - 21.3 23.4
--------------------------------- -------- -------- --------- ------------ --------- -------
Movement in period 2.1 - - (7.2) 24.9 19.8
--------------------------------- -------- -------- --------- ------------ --------- -------
At 31 December 2011 23.4 18.2 (0.2) 1.3 74.9 117.6
Profit for the period - - - - 10.9 10.9
Other comprehensive income - - - (3.1) 2.8 (0.3)
--------------------------------- -------- -------- --------- ------------ --------- -------
Total comprehensive income - - - (3.1) 13.7 10.6
--------------------------------- -------- -------- --------- ------------ --------- -------
Transactions with owners
Shares issued during the
period 0.1 - - - - 0.1
Purchase of own shares - - (1.0) - - (1.0)
Transfer on vesting of
own shares - - 1.0 - (1.0) -
Value of employee services - - - - 0.9 0.9
Tax credit on share performance
plans - - - - 0.5 0.5
Dividends - - - - (6.7) (6.7)
Total transactions with
owners 0.1 - - - (6.3) (6.2)
--------------------------------- -------- -------- --------- ------------ --------- -------
Movement in period 0.1 - - (3.1) 7.4 4.4
--------------------------------- -------- -------- --------- ------------ --------- -------
At 30 June 2012 23.5 18.2 (0.2) (1.8) 82.3 122.0
--------------------------------- -------- -------- --------- ------------ --------- -------
Retained earnings as disclosed in the Balance Sheet on page 12
represent the retained earnings and treasury shares balances
above.
The notes on pages 15 to 25 form an integral part of this
consolidated interim financial information.
Brammer CONSOLIDATED CASH FLOW STATEMENT
6 months 6 months Year to
to to
30 June 2012 30 June 2011 31 Dec
2011
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Profit for the period 10.9 10.2 18.3
Tax charge 3.5 3.5 6.2
Depreciation and amortisation of tangible
and intangible assets 3.9 2.7 5.7
Share options - value of employee
services 0.9 1.0 2.0
Gain on disposal of tangible and intangible
assets - (0.2) (0.3)
Financing expense 1.4 1.1 2.8
Movement in working capital (15.2) (13.0) (6.5)
Cash generated from operating activities 5.4 5.3 28.2
--------------------------------------------- ------------- ------------- ----------
Cash generated from operating activities
before exceptional items 6.0 5.6 28.9
Cash outflow from exceptional items (0.6) (0.3) (0.7)
--------------------------------------------- ------------- ------------- ----------
Cash generated from operating activities 5.4 5.3 28.2
--------------------------------------------- ------------- ------------- ----------
Interest paid (1.3) (1.0) (2.4)
Tax paid (2.8) (1.5) (4.1)
Funding of pension schemes less income
statement charge (1.3) (1.8) (3.3)
Net cash generated from operating
activities - 1.0 18.4
--------------------------------------------- ------------- ------------- ----------
Cash flows from investing activities
Acquisition of businesses (net of
cash acquired) (0.4) - (26.9)
Deferred consideration paid on prior
acquisitions - (0.7) (1.8)
Proceeds from sale of property, plant
and equipment 0.1 0.3 0.5
Purchase of property, plant and equipment (1.2) (1.3) (3.0)
Additions to other intangible assets (1.4) (1.0) (3.3)
Net cash used in investing activities (2.9) (2.7) (34.5)
--------------------------------------------- ------------- ------------- ----------
Cash flows from financing activities
Net proceeds from issue of ordinary
share capital 0.1 0.1 0.1
Net proceeds from share placing - - 24.8
Repayment of loans under old financing
facility - - (56.1)
Net (repayment)/issue of borrowings (4.4) 2.9 50.5
Dividends paid to shareholders - - (7.9)
Purchase of own shares (1.0) (0.1) (0.1)
Net cash (used in)/generated from
financing activities (5.3) 2.9 11.3
--------------------------------------------- ------------- ------------- ----------
Net (decrease)/increase in cash and
cash equivalents (8.2) 1.2 (4.8)
Exchange gains/(losses) on cash and
cash equivalents (0.5) 1.1 (0.6)
Cash and cash equivalents at beginning
of period 15.6 21.0 21.0
Net cash at end of period 6.9 23.3 15.6
--------------------------------------------- ------------- ------------- ----------
Cash and cash equivalents 7.1 24.5 15.9
Overdrafts (0.2) (1.2) (0.3)
Net cash at end of period 6.9 23.3 15.6
--------------------------------------------- ------------- ------------- ----------
The notes on pages 15 to 25 form an integral part of this
consolidated interim financial information.
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
31 July 2012.
This consolidated interim financial information for the six
months ended 30 June 2012 does not constitute statutory accounts
within the meaning of Section 434 of the Companies Act 2006.
Statutory accounts for the year ended 31 December 2011 were
approved by the Board on 14 February 2012 and delivered to the
Registrar of Companies. The auditors' report 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 2011 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 2012 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 2011 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 2011. 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 2012 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 2012:
The group has adopted the following new standards, amendments
and interpretations now applicable. None of these standards and
interpretations has had any material effect on the group's results
or net assets.
Standard or interpretation Content Applicable for financial
years beginning on
or after
--------------------------- ----------------------- -------------------------
Amendment to IFRS 7* Financial Instruments: 1 July 2011
Disclosures
--------------------------- ----------------------- -------------------------
Amendment: IAS 12* Income Taxes 1 January 2012
--------------------------- ----------------------- -------------------------
The following standards, amendments and interpretations are not
yet effective and have not been adopted early by the group:
Standard or interpretation Content Applicable for financial
years beginning on
or after
--------------------------- -------------------------- -------------------------
Amendment to IAS 1* Presentation of financial 1 July 2012
statements Instruments
on OCI
--------------------------- -------------------------- -------------------------
Amendment to IFRS 7* Financial Instruments: 1 January 2013
asset and liability
offsetting
--------------------------- -------------------------- -------------------------
IFRS 10 Consolidated financial 1 January 2013
statements
--------------------------- -------------------------- -------------------------
IFRS 11* Joint arrangements 1 January 2013
--------------------------- -------------------------- -------------------------
IFRS 12* Disclosures of Interests 1 January 2013
in Other Entities
--------------------------- -------------------------- -------------------------
IFRS 13* Fair Value Measurement 1 January 2013
--------------------------- -------------------------- -------------------------
IAS 19R (revised 2011) Employee benefits 1 January 2013
--------------------------- -------------------------- -------------------------
IAS 27 (revised 2011)* Separate financial 1 January 2013
statements
--------------------------- -------------------------- -------------------------
IAS 28 (revised 2011)* Associates and joint 1 January 2013
ventures
--------------------------- -------------------------- -------------------------
Annual improvements Various 1 January 2013
to IFRSs 2011
--------------------------- -------------------------- -------------------------
IFRIC 20* Stripping costs in 1 January 2013
the production phase
of a surface mine
--------------------------- -------------------------- -------------------------
IFRS 9* Financial instruments: 1 January 2015
Classification and
measurement
--------------------------- -------------------------- -------------------------
*These standards are not expected to be relevant to the group
IAS 19R - Employee benefits - is likely to have a significant
impact on future financial statements when it is adopted. Under IAS
19R the interest cost on the defined benefit obligation, and the
expected rate of return on plan assets, will be replaced with a net
interest charge that is calculated by applying the discount rate to
the net defined benefit liability. With effect from 1 January 2013
this is likely to result in a higher charge being recognised in the
income statement.
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 2011.
Risks and uncertainties
The principal strategic level risks and uncertainties affecting
the group, together with the approach to their mitigation, remain
as set out in the Financial Review on pages 18 and 19 in the 2011
Annual Report, which is available on the group's website
(www.brammer.biz). In summary the group's principal risks and
uncertainties are:
Slowdown of industrial activity Adverse euro exchange rates
----------------------------------- ------------------------------------
Withdrawal of a major supplier Financial and capital risks
----------------------------------- ------------------------------------
Loss of major customers Expected benefits from acquisitions
not realised
----------------------------------- ------------------------------------
Customers relocating to lower cost Loss of key employees
countries
----------------------------------- ------------------------------------
Loss of infrastructure/systems
----------------------------------- ------------------------------------
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. The operating segments are
unchanged from those previously reported.
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. For 2012 the management rate
used is EUR1.20 : GBP1.
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 at actual exchange rates. The
management rate applies to income statement, balance sheet and cash
flows.
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 on an arms-length basis.
UK Germany France Spain Benelux Eastern Other Total
Europe operating
segments
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Six months ended
30 June 2012
Revenue
Total revenue 143.5 62.5 45.5 23.2 28.0 25.9 8.7 337.3
Inter company
sales (1.2) (1.4) (0.5) (0.4) (0.7) (0.1) (0.2) (4.5)
Sales to external
customers 142.3 61.1 45.0 22.8 27.3 25.8 8.5 332.8
Exchange effect (1.7)
-------
Total sales to
external customers 331.1
-------
Underlying operating
profit* 7.7 4.3 1.9 2.1 1.5 1.4 (0.2) 18.7
Exchange effect (0.2)
-------
Total underlying
operating profit 18.5
Amortisation of
acquired intangibles (0.7)
Exceptional operating
items (2.0)
Operating profit 15.8
Finance expense (1.4)
Profit before
tax 14.4
Tax (3.5)
Profit for the
period 10.9
----------------------- ------ -------- ------- ------ -------- -------- ----------- -------
Segment assets 88.5 27.7 31.0 16.9 23.3 25.5 15.7 228.6
Exchange effect (3.6)
-------
Total segment
assets 225.0
Goodwill 86.7
Acquired intangibles 10.9
Cash and cash
equivalents 7.1
Deferred tax 7.2
Total assets 336.9
----------------------- ------ -------- ------- ------ -------- -------- ----------- -------
Other segment
items
Capital expenditure 0.6 0.2 0.2 0.1 0.3 0.2 1.2 2.8
Exchange effect (0.1)
-------
Total capital
expenditure 2.7
-------
Amortisation and
depreciation (0.6) (0.2) (0.2) (0.2) (0.3) (0.2) (0.8) (2.5)
Exchange effect 0.1
-------
Total amortisation
and depreciation** (2.4)
-------
SEGMENTAL ANALYSIS (continued)
UK Germany France Spain Benelux Eastern Other Total
Europe operating
segments
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Six months ended
30 June 2011
Revenue
Total revenue 81.1 60.7 43.2 22.9 25.7 28.8 9.1 271.5
Inter company
sales (1.5) (1.8) (0.6) (0.5) (0.9) (0.1) (0.1) (5.5)
Sales to external
customers 79.6 58.9 42.6 22.4 24.8 28.7 9.0 266.0
Exchange effect 9.2
-------
Total sales to
external customers 275.2
-------
Underlying operating
profit* 4.2 3.6 1.9 1.8 1.5 2.0 0.0 15.0
Exchange effect 0.4
-------
Total underlying
operating profit 15.4
Amortisation of
acquired intangibles (0.6)
Operating profit 14.8
Finance expense (1.1)
Profit before
tax 13.7
Tax (3.5)
Profit for the
period 10.2
----------------------- ------ -------- ------- ------ -------- -------- ----------- -------
Segment assets 48.0 25.6 29.6 17.8 21.3 25.6 13.9 181.8
Exchange effect 10.7
-------
Total segment
assets 192.5
Goodwill 78.7
Acquired intangibles 4.8
Cash and cash
equivalents 24.5
Deferred tax 5.4
Total assets 305.9
----------------------- ------ -------- ------- ------ -------- -------- ----------- -------
Other segment
items
Capital expenditure 0.5 0.1 0.1 0.2 0.3 0.2 0.8 2.2
Exchange effect 0.1
-------
Total capital
expenditure 2.3
-------
Amortisation and
depreciation (0.4) (0.1) (0.1) (0.2) (0.3) (0.2) (0.7) (2.0)
Exchange effect (0.1)
-------
Total amortisation
and depreciation** (2.1)
-------
* Operating profit excluding the amortisation of acquired
intangibles and exceptional items.
** Total amortisation and depreciation excluding the
amortisation of acquired intangibles.
The table below details the 'management rate' used and the
actual exchange rates used for the primary exchange rate of
Sterling to Euro for the current period and the prior period:
30 June 2012 30 June 2011 31 December
2011
Management rate EUR1.20 EUR1.20 EUR1.20
Actual average rate EUR1.214 EUR1.146 EUR1.152
Balance sheet rate EUR1.236 EUR1.107 EUR1.192
3 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 2012 is 24.5% (the estimated tax rate for the first half
year of 2011 was 25.4%).
4 EARNINGS PER SHARE
Half year 2012
-----------------------------
Earnings per
share
------------------
Earnings Basic Diluted
GBPm
Weighted average number of shares in issue
('000) 117,074 119,814
Earnings
Profit for the period 10.9 9.3p 9.1p
Amortisation of acquired intangibles 0.7
Exceptional items 2.0
Tax on exceptional items (0.5)
Tax on amortisation of acquired intangibles (0.2)
Earnings before amortisation of acquired
intangibles and exceptional items 12.9 11.0p 10.8p
--------------------------------------------- --------- -------- --------
Half year 2011
-----------------------------
Earnings per
share
------------------
Earnings Basic Diluted
GBPm
Weighted average number of shares in issue
('000) 106,365 106,525
Earnings
Profit for the period 10.2 9.6p 9.6p
Amortisation of acquired intangibles 0.6
Tax on amortisation of acquired intangibles (0.1)
Earnings before amortisation of acquired
intangibles 10.7 10.0p 10.0p
--------------------------------------------- --------- -------- --------
Full year 2011
-----------------------------
Earnings per
share
------------------
Earnings Basic Diluted
GBPm
Weighted average number of shares in issue
('000) 109,019 111,759
Earnings
Profit for the financial year 18.3 16.8p 16.4p
Amortisation of acquired intangibles 1.3
Exceptional items 3.2
Tax on exceptional items (0.9)
Tax on amortisation of acquired intangibles (0.3)
Earnings before amortisation of acquired
intangibles and exceptional items 21.6 19.8p 19.3p
--------------------------------------------- --------- -------- --------
5 EXCEPTIONAL ITEMS
As part of the continuing programme of integrating the Buck
& Hickman business, which was acquired on 30 September 2011,
the following charges have been incurred in the period:
-further lines of stock have been identified as no longer
integral to Brammer's core tools & general maintenance product
portfolio and future trading strategy; accordingly, these lines
have been written down to their estimated net realisable value;
-software which will no longer be developed or supported in the
combined business going forward has been written down to reflect
its revised estimated useful life.
In addition, headcount costs have been incurred as a result of a
reorganisation of certain senior management roles together with the
closure of a branch. The charge includes the cost of settling
employment contracts and other related social benefit charges.
GBPm
Stock provision 0.4
Write-down of intangible assets 0.8
Headcount and other related costs 0.8
Total exceptional items 2.0 `
----------------------------------- -----
Details of exceptional items included in the full year operating
profit for December 2011 were given in note 4 on page 64 of the
2011 Annual Report.
6 INTANGIBLE ASSETS
Goodwill Acquired Other -software
intangibles development
GBPm GBPm GBPm
Cost
At 1 January 2012 89.5 9.3 17.9
Prior year adjustment (1.1) 7.9 -
---------------------------- --------- ------------- ----------------
At 1 January 2012 restated 88.4 17.2 17.9
Exchange adjustments (2.2) (0.2) (0.2)
Additions 0.5 - 1.4
At 30 June 2012 86.7 17.0 19.1
--------- ------------- ----------------
Amortisation
At 1 January 2012 - 5.5 9.9
Prior year adjustment - - 0.6
---------------------------------------- --- ------ ------
At 1 January 2012 restated - 5.5 10.5
Exchange adjustments - (0.1) (0.2)
Charge for the period - 0.7 0.9
Write-down of software included in
exceptional items on income statement - - 0.8
At 30 June 2012 - 6.1 12.0
--- ------ ------
Net book value
At 30 June 2012 86.7 10.9 7.1
At 31 December 2011 88.4 11.7 7.4
Additions to goodwill of GBP0.5 million relate to the goodwill
arising on a small bolt-on business in the Netherlands, the trade
and assets of which were purchased on 1 March 2012.
As permitted by IFRS 3 (revised) 'Business Combinations', at 31
December 2011, the fair values of the assets and liabilities
acquired in respect of the acquisition of the Buck & Hickman
business were considered to be provisional. During the period ended
30 June 2012, further work has been done to separately identify the
intangible assets acquired, together with assessing the fair values
of assets and liabilities acquired.
The acquired intangibles recognised comprise GBP5.2 million of
trade names which are considered to have an indefinite life and
GBP2.7 million of customer relationships which are considered to
have estimated useful lives of 20 years. Fair value adjustments
identified during the period include GBP0.6 million of additional
depreciation on bringing asset lives into line with the group
accounting policy, GBP3.2 million provision for slow-moving and
obsolete stock following a detailed line-by-line review of stock
held, and GBP2.7 million provision for onerous contracts including
leases relating to certain of the business's properties.
The comparative information at 31 December 2011, included in
this interim financial information, has been restated to reflect
these adjustments in accordance with IFRS 3 (revised). This
restatement has no impact on reported profits, equity or cash flows
for the year ended 31 December 2011.
The measurement period for adjusting the fair values runs until
30 September 2012; accordingly management are still assessing the
fair values which remain provisional and the goodwill arising on
the acquisition will be finalised in the full year financial
statements at 31 December 2012, which may lead to additional
restatement.
7 PROPERTY, PLANT AND EQUIPMENT
Land and Equipment Total
Buildings
GBPm GBPm GBPm
Cost
At 1 January 2012 16.7 35.5 52.2
Exchange adjustments (0.2) (0.6) (0.8)
Additions 0.1 1.2 1.3
Disposals (0.5) (0.8) (1.3)
At 30 June 2012 16.1 35.3 51.4
----------- ---------- ------
Depreciation
At 1 January 2012 9.6 28.8 38.4
Exchange adjustments (0.2) (0.5) (0.7)
Charge for the period 0.4 1.1 1.5
Disposals (0.5) (0.8) (1.3)
At 30 June 2012 9.3 28.6 37.9
------ ------ ------
Net book value
At 30 June 2012 6.8 6.7 13.5
At 31 December 2011 7.1 6.7 13.8
8 CLOSING NET DEBT
At 30 June At 30 June At 31 Dec
2012 2011 2011
GBPm GBPm GBPm
Borrowings - current - overdrafts (0.2) (1.2) (0.3)
Borrowings - current portion of long
term loans (4.6) (60.5) (3.1)
Borrowings - non-current (40.9) (3.4) (47.8)
Cash and cash equivalents 7.1 24.5 15.9
Closing net debt (38.6) (40.6) (35.3)
----------- ----------- ----------
Reconciliation of net cash flow to
movement in net debt
6 months 6 months Year to
to to 31 Dec
30 June 30 June 2011
2012 2011
GBPm GBPm GBPm
Net (decrease)/increase in cash and
cash equivalents (8.2) 1.2 (4.8)
Net decrease/(increase) in borrowings 4.4 (2.9) 5.6
----------- ----------
(3.8) (1.7) 0.8
Exchange 0.5 (2.2) 0.6
Movement in net debt (3.3) (3.9) 1.4
Opening net debt (35.3) (36.7) (36.7)
----------- ----------- ----------
Closing net debt (38.6) (40.6) (35.3)
----------- ----------- ----------
On 11 July deferred consideration of GBP10.1 million was paid in
respect of Fin Brammer, our business in Poland.
9 PROVISIONS
Restructuring Other Total
GBPm GBPm GBPm
At 1 January 2012 1.1 0.2 1.3
Charged to income statement in the
period 0.7 - 0.7
Utilised in the period (0.6) - (0.6)
At 30 June 2012 1.2 0.2 1.4
-------------- ------ ------
The restructuring provision is expected to be fully utilised
within one to two years. Other provisions relate to warranty claims
for the disposal of a discontinued business.
10 PENSIONS
The valuations used for IAS 19 disclosures for the UK scheme
have been based on the most recent actuarial valuation at 31
December 2008 updated by KPMG LLP to take account of the
requirements of IAS 19 in order to assess the liabilities of the
scheme at 30 June 2012. Assets are stated at their market value at
30 June 2012.
The latest completed actuarial valuation of the UK scheme was
carried out as at 31 December 2008, using the defined accrued
benefit method (the same method that was used at the previous
valuation), by an independent actuary employed by Barnett
Waddingham LLP. The assumptions, which were agreed between the
company and trustees, that have the most significant effect on the
results of the valuation are those related to the rates of return
on investments and the rates of increase in future price inflation
and pensions. Over the long term, the returns on investments
backing the scheme's liabilities were assumed to be 5.80% per annum
before retirement and 4.30% per annum after retirement. For
pensions in payment (for both current pensioners and non-retired
members) the return on underlying investments was assumed to exceed
future pension increases (in excess of the guaranteed minimum
pension) by 1.55% per annum. Pensions in excess of the guaranteed
minimum pension were assumed to increase at 2.75% per annum. The
valuation showed that the market value of the scheme's assets was
GBP63.5 million as at 31 December 2008, which represented 63% of
the value of the benefits that had accrued to members at that date.
The next triennial valuation is being carried out with an effective
date of 31 December 2011.
The principal financial assumptions used to calculate the liabilities
under IAS 19 are:
UK scheme
6 months to 6 months Year to
30 June 2012 to 31 Dec
30 June 2011
2011
Inflation rate 3.00% 3.70% 3.20%
Rate of increase of pensions in payment 3.00% 3.70% 3.00%
Rate of increase for deferred pensioners 2.20% 3.20% 2.40%
Discount rate 4.75% 5.70% 4.80%
---------------------------------------------- -------------- --------- --------
The amounts recognised in the balance
sheet are determined as follows:
30 June 2012 30 June 31 Dec
2011 2011
GBPm GBPm GBPm
Present value of defined benefit obligations 110.8 110.4 112.6
Fair value of plan assets (99.1) (96.7) (95.8)
Net liability recognised in the balance
sheet 11.7 13.7 16.8
-------------- --------- --------
The amounts recognised in the income
statement are as follows:
6 months to 6 months Year to
30 June 2012 to 31 Dec
30 June 2011
2011
GBPm GBPm GBPm
Current service cost 0.2 0.2 0.4
Interest cost 2.7 2.8 5.9
Expected return on plan assets (2.4) (3.0) (6.2)
Total pension expense included within
distribution costs 0.5 - 0.1
-------------- --------- --------
Analysis of the movement in the balance
sheet net liability
6 months to 6 months Year to
30 June 2012 to 31 Dec
30 June 2011
2011
GBPm GBPm GBPm
Opening 16.8 15.8 15.8
Exchange adjustments - 0.1 -
On-going expense as above 0.5 - 0.1
Employer contributions (1.8) (1.8) (3.4)
Actuarial (gains)/losses recognised
as a reserves movement (3.8) (0.4) 5.1
Valuation adjustments to Dutch schemes - - (0.8)
Closing 11.7 13.7 16.8
-------------- --------- --------
The pension expense is included in distribution costs. The
actual return on plan assets was GBP2.9 million (2011: GBP1.5
million). The retirement benefit liability at the end of June was
GBP11.7 million (2011: GBP13.7 million), a net reduction of GBP5.1
million from 31 December 2011 (GBP16.8 million). This reduction
primarily reflects a decrease in the inflation rate applied in the
calculation of the scheme liabilities together with GBP1.8 million
of employers' contributions.
11 SHARE CAPITAL AND RESERVES
Purchase of own shares
During the period the company acquired 542,731 of its own shares
of 20p each through the Brammer plc Employee Share Ownership Trust
("the Trust") for an aggregate consideration of GBP972,241, 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 642,666
shares were transferred to directors and senior managers to meet
vestings under these plans.
At 30 June 2012 the Trust held a total 78,911 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 260,000 ordinary
shares of 20p each at par.
29,275 options were exercised during the period under the
group's employee share option schemes with exercise proceeds of
GBP29,129.
The number of ordinary 20p shares in issue at 30 June 2012 was
117,204,074 (30 June 2011: 106,409,074; 31 December 2011:
116,944,074).
Dividends
The final dividend for the year ended 31 December 2011,
amounting to GBP6,676,000, was approved by shareholders at the
Annual General Meeting on 17 May 2012 and was paid on 5 July 2012
(2011: GBP4,779,000). In addition, the directors propose an interim
dividend of 3.0p per share (2011: 2.70p per share) payable on 2
November 2012 to shareholders who are on the register at 5 October
2012. This interim dividend, amounting to GBP3,516,000 (2011:
GBP3,152,000) has not been recognised as a liability in these
interim financial statements.
12 RELATED PARTY TRANSACTIONS
Other than the remuneration of executive and non-executive
directors which will be disclosed in the group's Annual Report for
the year ending 31 December 2012, there were no related party
transactions during the period.
13 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 Hudson Sandler
Limited, 29 Cloth Fair, London EC1A 7NN.
Current regulations permit the company not to send copies of its
interim results to shareholders. Accordingly the 2012 interim
results published on 31 July 2012 will not be sent to shareholders.
The 2012 interim results and other information about Brammer are
available on the company's website at www.brammer.biz.
14 INTERIM DIVIDEND
Relevant dates concerning the payment of the interim dividend
are
Record date 5 October 2012
Payment date 2 November 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
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