BRAM.L Share News (BRAM)

(ShareCast News) - Industrial products distributor Brammer has warned it will be close to breaking its debt covenents and is reviewing whether to pay an interim dividend as profits for the year are likely to fall short of expectations.A significant slowdown in sales in May and June has not reversed, with a "particularly weak" performance since the Brexit vote result.Underlying profit margins in May and June so far have been down against the previous year, with underlying margin for the first-half expected to be slightly ahead of the prior year.Group adjusted pre-tax profit in half year to end-June are now expected to be roughly £5m, which is below target, after the impact of lower rebate levels from reduced sales and stock reduction.As a result of the smaller profits, Brammer said it will be close to its net debt/EBITDA bank covenant at the period end."In the light of current market conditions, we are reviewing the group's trading outlook for the year as a whole, and the UK in particular - where recovery plans are still at an early stage," the company said in a statement."We are taking measures to improve profitability and strengthen the group's balance sheet. Our stock reduction programme continues to make progress and is still expected to deliver a £30m reduction by the end of September 2016."Brammer shares lost more than half their value, dipping below 60p just afetr midday on Wednesday, their lowest level since 2002.