Braime Holdings Regulatory News (BMT)

2 May 2008 16:17

Braime (T.F.& J.H.) (Hldgs) PLC02 May 2008 At a meeting of the directors held here today, the accounts for the year ended31st December 2007 were submitted and approved by the directors. Thepreliminary profits statement is as follows: Chairman's statement After two years of losses I am pleased to be able to report that the group madea profit before tax of £138,057 (compared to a loss in 2006 of £116,200). Grouprevenue increased in 2007 by 6.5% to £11,838,813 (2006 - £11,119,745). The tax charge, payable on profits generated in the USA, reduces the profitafter tax to £9,264 (compared to a loss in 2006 of £187,376). Although theresult is very far from satisfactory, the turnaround in the operating profit isin line with our forecasts and does represent a significant recovery from thelow point in 2005, when the after tax loss approached £300,000. Overall grouprevenue for the first quarter of 2008 is running well ahead of 2007 and webelieve that the group is on course to make further progress in 2008. However, the directors have very reluctantly decided that it would not beprudent to pay a final dividend out of reserves, particularly given the strainput on our resources as a result of the accumulated losses, in the period2005-2006, which approached £500,000. The directors are acutely aware that therehas been no dividend for two years and the return to a regular payment ofdividends to shareholders is a key priority of the board. Move to AIM The resolution to transfer the listing of the company's shares from the OfficialList to AIM was passed at a general meeting on 25th May 2007. The transfer wassuccessfully completed on 27th June 2007. Braime Pressings Limited We continue to struggle to turnaround our manufacturing business. Progress hasbeen made in reducing our overhead costs and in increasing operatingefficiencies and the level of loss has been substantially reduced. However, thefundamental problem of insufficient revenue volume remains with revenue up byonly 3.6% in 2007. A major project, which would have fundamentally changed this situation and whichwas scheduled to come on stream last July, was repeatedly postponed by latechanges in our customer's specifications. Start up is now planned for July 2008but the long delay had a very serious negative impact on the 2007 result. In December, a major customer, Electrolux announced the closure of its domesticcooker plant in Spennymoor and the relocation of manufacturing to Poland. Thiswill have little effect on us in the current year and we have been offered theopportunity to retain some of this business to the new Polish plant in 2009.Meanwhile some replacement work has been recently secured from other customers. Braime Elevator Components Limited As part of the "4B" division, distributing specialised components to the bulkmaterial handling industry worldwide, the company had a successful year withrevenue up by 17.5%. Systems to monitor and help maintain the safe working ofprocess plant now form an important part of our product range and the companybenefited in 2007 from a major contract in this field. We continue to invest innew product development in order to maintain the growth in this sector of thebusiness. The company is currently operating just below an ambitious revenue budget but weare hopeful that the progress made in 2007 can be continued. Sarl S.E.T.E.M (France and Germany) Revenue increased by 14%, largely due to increased exports to Germany and otherEuropean markets. The company made a small loss in 2007 but is currently tradingabove budget and is forecast to make a positive contribution to group profit in2008. 4B Elevator Components Limited (USA) In spite of the fall in the value of the US dollar, which both reduced turnoverwhen expressed in sterling and reduced the margins on UK sourced products, thecompany had an outstanding year. With costs largely maintained at 2006 levels,an 11% increase in revenue resulted in a substantial increase in operatingprofit. Revenue in the first quarter of 2008 is well above that for the same period of2007 and we are confident this subsidiary will have another good year. 4B Asia Pacific and 4B Africa In February 2008, we formed a Thai based, but UK controlled subsidiary toreplace the sales agent and also set up a new 100% owned subsidiary, 4B Africa.These are important regions for future revenue of material handling componentsand can be best developed by having our own staff on the ground to providecustomer support. Cash flow and debt In 2007 the group invested £298,724 in property, plant and equipment, of which£135,000 was financed through hire purchase contracts. Although our bank overdraft remained largely unchanged from 2006, the amount ofborrowing under an invoice discounting scheme increased by £113,000 and ourhire purchase contract borrowings increased by £27,000 and there was cashoutflow of £177,000. This was caused by the capital investment, the smallincrease in trade debtors due to the overall increase in turnover and, moresignificantly, to a rise in group inventories of £338,000. Part of this increasewas due to an attempt to anticipate the recent surge in the price of rawmaterials. The high level of inventories is an area to which the board is payingparticular attention. We continue to operate within our borrowing facility and our anticipation for2008 is that the group will be cash positive. Relocation Our Hunslet Road site is being marketed by joint agents Knight Frank and SwiftProperty Services. Not surprisingly, in view of the current economic situation,we have as yet received a lot of interest but no offers based on the primarilyresidential brief developed in conjunction with the planning officers of LeedsCity Council. However, we have a number of developers interested in a more mixeddevelopment on the site and their ideas are being actively explored. Meanwhileany decision on relocation to more cost effective premises has been put on hold. Staff The commercial pressures on the business and on our staff increase year by yearas a result of global competition. The future of the business depends on theirability to respond positively to these pressures and we are grateful for theirongoing support in this endeavour. Outlook The current state of the economy raises very considerable concerns, particularlythe sudden and dramatic global rise in the cost of raw materials, specificallysteel and oil based commodities (polyethylene and rubber), as these provide theinput for many of our products. Nevertheless we believe that the group is relatively well positioned to copewith these difficulties. 63% of group revenue is outside the UK and our mainmarkets are focused on both the capital investment and the maintenance of theproduction, storage and handling of food or industrial raw material, two of themain sectors actually strongly benefiting from today's economic situation. The prospects for our UK based manufacturing business are reliant on thesuccessful introduction of current projects which will finally inject the volumeon which depends the turnaround of this business. Overall the group is forecast to make further progress in its recovery in 2008and at the end of the first quarter, the group is ahead of forecast. Consolidated Income Statement for the year ended 31st December 2007 (audited) Note 2007 2006 £ £Revenue 11,838,813 11,119,745 Changes in inventories of finished goods and work in progress 304,567 4,676Raw materials and consumables used (6,521,446) (6,011,478)Employee benefits costs (3,253,886) (3,225,406)Depreciation expense (168,183) (125,623)Other expenses (2,032,513) (1,887,710) Profit/(loss) from operations 167,352 (125,796) Finance costs (321,762) (282,913)Finance income 292,467 292,509 Profit/(loss) before tax 138,057 (116,200) UK corporation tax 5,449 12,800Foreign corporation tax (134,242) (83,976) Profit/(loss) for the year attributable to shareholders 9,264 (187,376) Basic and diluted earnings/(loss) per share 1 0.01p (13.0p) Consolidated Statement of Recognised Income and Expense for the year ended 31st December 2007 (audited) 2007 2006 £ £Foreign exchange gains/(losses) on re-translation of overseas operations 17,557 (35,370)Actuarial gains recognised directly in equity 118,000 73,000Total income and expense recognised in equity 135,557 37,630 Gain/(loss) for the year 9,264 (187,376) Total recognised income and expense for the year attributable to equity shareholders of the 144,821 (149,746)parent company Consolidated Balance Sheet at 31st December 2007 (audited) Note 2007 2007 2006 2006 £ £ £ £AssetsNon-current assetsProperty, plant and equipment 862,998 733,481Employee benefits 97,000 -Total non-current assets 959,998 733,481 Current assetsInventories 2,535,671 2,197,922Trade and other receivables 2,713,165 2,611,737Cash and cash equivalents 1,493,734 1,629,317Total current assets 6,742,570 6,438,976 Total assets 7,702,568 7,172,457 LiabilitiesCurrent liabilitiesBank overdraft 1,387,668 1,346,114Trade and other payables 2,162,084 1,846,792Other financial liabilities 231,645 182,292Corporation tax liability 35,667 33,063Total current liabilities 3,817,064 3,408,261 Non-current liabilitiesFinancial liabilities 337,354 348,867Employee benefits - 12,000Total non-current liabilities 337,354 360,867 Total liabilities 4,154,418 3,769,128 Total net assets 3,548,150 3,403,329 Capital and reserves attributable to equity holders of the parentcompanyShare capital 360,000 360,000Capital reserve 77,319 77,319Foreign exchange reserve (8,992) (26,549)Retained earnings 3,119,823 2,992,559 Total equity 2 3,548,150 3,403,329 Consolidated Cash Flow Statement for the year ended 31st December 2007 (audited) Note 2007 2007 2006 2006 £ £ £ £Operating activitiesNet profit/(loss) 9,264 (187,376)Adjustments for:Depreciation 168,183 125,623Grants amortised (1,656) (1,656)Foreign exchange gains/(losses) 19,535 (34,791)Investment income (292,467) (292,509)Interest expense 321,762 282,913Gain on sale of plant, machinery and motor vehicles (6,123) (9,394)Income tax expense 128,793 71,176Operating profit before changes in working capital and provisions 338,027 141,362 Increase in trade and other receivables (153,188) (726,998)(Increase)/decrease in inventories (337,749) 144,441Increase in trade and other payables 327,326 982,205Decrease in provisions and employee benefits 35,000 36,000 (128,611) 435,648 Cash generated from operations 218,680 389,634 Income taxes paid (131,397) (71,146) Investing activitiesPurchases of plant, machinery and motor vehicles (163,474) (142,730)Sale of plant, machinery and motor vehicles 10,375 30,308Interest received 59,467 48,509 (93,632) (63,913) Financing activitiesRepayment of hire purchase creditors (56,026) (40,999)Interest paid (114,762) (87,913) (170,788) (128,912)(Decrease)/increase in cash and cash equivalents (177,137) 125,663Cash and cash equivalents, beginning of period 283,203 157,540Cash and cash equivalents, end of period 106,066 283,203 Notes 1. Earnings per share and dividends Both the basic and diluted earnings per share have been calculated using the netresults attributable to shareholders of T.F. & J.H. Braime (Holdings) P.L.C. asthe numerator. The weighted average number of outstanding shares used for basic earnings pershare amounted to 1,440,000 (2006 - 1,440,000). There are no potentiallydilutive shares in issue. During the twelve months to 31st December 2007, T.F. & J.H. Braime (Holdings)P.L.C. paid dividends of £Nil to its equity shareholders (2006 - £Nil). 2. Changes in shareholders' equity 2007 2006 £ £ Total recognised income and expense 144,821 (149,746) Capital and reserves attributable to equity holders of the parent company at the 3,403,329 3,553,075 beginning of the period Capital and reserves attributable to equity holders of the parent company at the end of the 3,548,150 3,403,329 period 3. Cash and cash equivalents 2007 2006 £ £ Cash at bank and in hand 1,493,734 1,629,317 Bank overdrafts 1,387,668 1,346,114 106,066 283,203 4. Major non-cash transaction During the year the group acquired £135,250 (2006 - £Nil) of tangible assetsunder hire purchase agreements. 5. Basis of preparation The results incorporated in the preliminary announcement have been prepared inaccordance with International Financial Reporting Standards (IFRS and IFRICinterpretations) issued by the International Accounting Standards Board (IASB)as adopted by the EU and with those parts of the Companies Act 1985 applicableto companies preparing their accounts under IFRS. The financial information set out above does not constitute the company'sstatutory accounts for the years ended 31st December 2007 or 2006. Statutoryaccounts for 2006 have been delivered to the Registrar of Companies. Thestatutory accounts for 2007 will be delivered to the Registrar of Companiesfollowing the company's annual general meeting. The auditors have reported onthe 2007 and 2006 accounts; their reports were unqualified, did not includereferences to any matters to which the auditors drew attention by way ofemphasis without qualifying their reports and did not contain a statement underS237(2) or (3) of the Companies Act 1985. D. H. BrownCompany SecretaryT.F. & J.H. Braime (Holdings) P.L.C. 2nd May 2008 This information is provided by RNS The company news service from the London Stock Exchange