Last checked at 30 Mar 2011 15:18
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. (`Braime' or the 'company' and with it subsidiaries the `group') ANNUAL RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2010
At a meeting of the directors held today, the accounts for the year ended 31st December 2010 were submitted and approved by the directors. The preliminary accounts statement is as follows:
Chairman's statement
Performance of group companies
The group continued to make good progress in 2010.
Over 80% of group sales are made in overseas markets, which have been less affected than the UK by the current recession. Many of the sales are to food related industries where there is still strong growth. We have also continued to benefit from largely favourable exchange rates.
Sales revenue increased by 15% to £18.10m from £15.70m. Pre tax profit rose to £1.36m from £0.62m and the profit after tax for 2010 was £945,000 compared to £ 387,000 in 2009.
In view of the above excellent result, the directors have already announced a second interim dividend of 4.80p to be paid on 1st April 2011, making a total for the tax year ending 5th April 2011 of 7.20p (compared to 4.50p in the previous year). As last year, a final dividend will not be paid.
Manufacturing of deep drawn pressings (Braime Pressings Limited)
Following the restructuring of this business, the level of loss made by our manufacturing business was reduced compared to 2009 but this reduction was much less than had been forecast.
During 2010 we were successful in improving the efficiency of the investment in the machinery producing existing work and significant improvements were made to the infrastructure and environment of the business.
However, despite the enormous efforts of our staff, we were unable to bring on stream in 2010 the two major new contracts which were critical to achieving our anticipated improvement. In addition to losing the expected contribution from this new work, we also had to absorb much higher than expected costs in modifying and commissioning the complex plant required to run the new work. The result for 2010 was also badly affected by an unexpectedly large increase in material costs, which we were unable to pass on to our customers until 2011.
The first of the new contracts finally came on stream successfully at the end of January 2011. We are currently in the midst of final trials for the second contract and expect this to be launched in the second quarter of this year. We have also secured additional volume for one of our existing product lines.
We are therefore hopeful in 2011, of achieving the substantial progress that we had forecast for 2010.
Distribution of components, under our 4B brand, to the bulk material handling industry
All of our subsidiaries distributing globally our brand of 4B material handling components again enjoyed record years, and the performance of 4B Elevator Components Limited in the USA was particularly strong.
The company continues to invest in developing both the diversity of our product range and in our distribution network. Specifically, in December 2010, we set up a new subsidiary, 4B Australia Pty Limited based in Brisbane. Two weeks later our premises were flooded! However, once having overcome this inauspicious start, we are showing signs of early progress.
We are seeing a very positive start to 2011 although sales to some markets remain affected by the recession.
Our main concerns in 2011 are the impact of the current political turbulence on our markets in the Middle East, the effect of the recent tragic natural disasters in both Australia and Japan and surging commodity prices, caused by the scale of the relatively new phenomenon of global speculation in commodities. The price of our key raw materials, steel, plastics and rubber have already increased by between 10% and 30% in just the first three months. Increases of this magnitude are hard to manage and difficult to pass on in a timely manner, they tie up cash in higher stock costs and create great uncertainty for both ourselves and our customers.
Investment
In 2010 the group invested £263,000 in plant and equipment. Of this, £53,000 was financed by hire purchase agreements, £35,000 financed through the sale of surplus plant and the balance of £175,000 was financed from funds generated internally.
At the year end, the company had committed to a further capital investment of £ 140,000 and, since the start of the new financial year, the company has placed orders for further investments totalling £232,000. All of these capital investments are being financed by hire purchase agreements.
Cash flow and debt
Although the company generated substantial funds as a result of the large improvement in profitability, the cash flow position for the year was negative by £87,728.
In addition to the £175,000 used for capital investments, a further £178,000 was required to finance the higher volume of business activity, being the difference between the amounts owed to us by customers and the amount owed to our suppliers.
However, the major reason for the net outflow of funds was an increase in stocks of £732,000. Some of this increase can be justified by exceptional circumstances, as we built up stocks to allow for the installation of new plant, and as we purchased forward in anticipation of the increases in raw materials. But, the steep rise in stocks is of concern and strenuous efforts are being made to reverse this trend.
Staff
Our most important resource is our staff and we thank them for their continuing effort and support to overcome the constant challenges we face as we try to implement major changes and improvements throughout the group.
Board appointments
I am delighted to announce the appointment to the board of my two sons, Carl and Alan as Group Sales Director and Group Commercial Director respectively. The appointments, made on 13th August 2010, will be subject to their election at the AGM.
Carl Braime gained a BSc at London University and an MA at Bristol University, before working in South America for three years, becoming fluent in Spanish. Since June 2006 Carl has been Sales Manager for Braime Elevator Components Limited, further developing our overseas distribution. He is currently completing the final year of an Executive MBA at Leeds University.
Alan Braime graduated from Newcastle with a 1st in Economics and qualified as a chartered accountant with KPMG in September 2006, prior to joining the business. Alan has played an important role in developing the strategy for the restructuring of our manufacturing business and is currently leading a project looking at the business systems across the group.
Both appointments will bring fresh ideas and new energy to the board, which are essential for the continuing development of the business.
Outlook
The directors believe that the new work coming on stream in Braime Pressings Limited should result in an improvement in its' financial performance but the outcome remains dependent on our ability to successfully complete the launch of these contracts and to make the necessary improvements in the operating efficiency of our new plant.
The 4B division has started the year very positively but we are concerned about the impact of the current levels of instability, particularly related to commodity prices, which threaten margins and jeopardise business confidence among customers. In this uncertain climate, it will be a challenge to hang on to the gains of the previous two years.
Nevertheless we believe overall that we can maintain the improvement in the performance of the group, albeit at a much slower rate.
Summarised Consolidated Income Statement for the year ended 31st December 2010
(audited) Note 2010 2009 £ £ Revenue 18,057,661 15,685,218 Changes in inventories of finished goods and 647,108 (406,362)work in progress Raw materials and consumables used (10,358,951) (8,156,328) Employee benefits costs (3,841,811) (3,685,404) Depreciation expense (286,938) (302,865) Other expenses (2,804,022) (2,434,978) Profit from operations 1,413,047 699,281 Finance costs (302,445) (285,338) Finance income 250,776 211,049 Profit before tax 1,361,378 624,992 Tax expense (416,240) (237,905) Profit for the year attributable to equity 945,138 387,087 shareholders of the parent company Basic and diluted earnings per share 1 65.63p 26.88p Summarised Consolidated Statement of Comprehensive Income for the year ended 31st December 2010(audited) 2010 2009 £ £ Profit for the year 945,138 387,087
Actuarial (losses)/gains recognised directly in (168,000) 76,000 equity
Foreign exchange losses on re-translation of (33,254) (107,605)overseas operations Adjustment in respect of minimum funding 137,000 (149,000)requirement per IFRIC14 Other comprehensive income for the year (64,254) (180,605) Total comprehensive income for the year 880,884 206,482 Summarised Consolidated Balance Sheet at 31st December 2010(audited) Note 2010 2010 2009 2009 £ £ £ £ Assets Non-current assets Property, plant and 1,223,980 1,249,460 equipment Goodwill 12,270 12,270 Employee benefits - - Total non-current 1,236,250 1,261,730 assets Current assets Inventories 3,593,680 2,862,149 Trade and other 3,291,602 2,400,384 receivables Cash and cash 1,844,934 1,947,207 equivalents Total current assets 8,730,216 7,209,740 Total assets 9,966,466 8,471,470 Liabilities Current liabilities Bank overdraft 1,145,421 1,159,966 Trade and other 2,707,169 2,019,053 payables Other financial 291,553 344,339 liabilities Corporation tax 171,054 - liability Total current 4,315,197 3,523,358 liabilities Non-current liabilities Financial liabilities 389,012 488,979 Total non-current 389,012 488,979 liabilities Total liabilities 4,704,209 4,012,337 Total net assets 5,262,257 4,459,133 Capital and reserves attributable to equity holders of the parent company Share capital 360,000 360,000 Capital reserves 77,319 77,319 Foreign exchange 286,292 319,546 reserve Retained earnings 4,538,646 3,702,268 Total equity 5,262,257 4,459,133
Summarised Consolidated Cash Flow Statement for the year ended 31st December
2010(audited) Note 2010 2010 2009 2009 £ £ £ £ Operating activities Net profit 945,138 387,087 Adjustments for: Depreciation 286,938 302,865 Grants amortised (1,656) (1,656) Foreign exchange losses (37,785) (119,426) Investment income (250,776) (211,049) Interest expense 302,445 285,338 Gain on sale of plant, (35,357) (8,748) machinery and motor vehicles Adjustment in respect (22,000) 57,000 of defined benefits scheme Income tax expense 416,240 237,905 658,049 542,229 Operating profit before 1,603,187 929,316 changes in working capital and provisions (Increase)/decrease in (891,218) 243,991 trade and other receivables (Increase)/decrease in (731,531) 481,862 inventories Increase in trade and 713,331 89,643 other payables (909,418) 815,496 Cash generated from 693,769 1,744,812 operations Income taxes paid (270,401) (375,533) Investing activities Purchases of plant, (210,154) (326,902) machinery and motor vehicles Sale of plant, 35,358 8,750 machinery and motor vehicles Interest received 4,776 11,049 (170,020) (307,103) Financing activities Repayment of hire (197,871) (124,157) purchase creditors Interest paid (65,445) (75,338) Dividends paid (77,760) (43,200) (341,076) (242,695) (Decrease)/increase in (87,728) 819,481 cash and cash equivalents Cash and cash 787,241 (32,240)equivalents, beginning of period Cash and cash 699,513 787,241 equivalents, end of period
Consolidated statement of changes in equity for the year ended 31st December
2010(audited) Foreign Share Capital Exchange Retained Capital Reserve Reserve Earnings Total £ £ £ £ £ Balance at 1st January 360,000 77,319 427,151 3,431,381 4,295,851 2009 Comprehensive income Profit - - - 387,087 387,087 Other comprehensive income Actuarial gains - - - 76,000 76,000 recognised directly in equity Foreign exchange losses - - (107,605) - (107,605)on re-translation of overseas operations Adjustment in respect of - - - (149,000) (149,000)minimum funding requirement per IFRIC14 Total other comprehensive - - (107,605) (73,000) (180,605)income Total comprehensive - - (107,605) 314,087 206,482 income Transaction with owners Dividends - - - (43,200) (43,200) Total transactions with - - - (43,200) (43,200)owners
Balance at 31st December 360,000 77,319 319,546 3,702,268 4,459,133 2009
Balance at 1st January 360,000 77,319 319,546 3,702,268 4,459,133 2010 Comprehensive income Profit - - - 945,138 945,138 Other comprehensive income Actuarial losses - - - (168,000) (168,000)recognised directly in equity Foreign exchange losses - - (33,254) - (33,254)on re-translation of overseas operations Adjustment in respect of - - - 137,000 137,000 minimum funding requirement per IFRIC14 Total other comprehensive - - (33,254) (31,000) (64,254)income Total comprehensive - - (33,254) 914,138 880,884 income Transaction with owners Dividends - - - (77,760) (77,760) Total transactions with - - - (77,760) (77,760)owners Balance at 31st December 360,000 77,319 286,292 4,538,646 5,262,257 2010 Notes
1. Earnings per share and dividends
Both the basic and diluted earnings per share have been calculated using the net results attributable to shareholders of T.F. & J.H. Braime (Holdings) P.L.C. as the numerator.
The weighted average number of outstanding shares used for basic earnings pershare amounted to 1,440,000 (2009 - 1,440,000). There are no potentiallydilutive shares in issue. Dividends paid 2010 2009 Equity shares Ordinary shares Interim of 3.00p (2009 - 1.50p) per share paid on 14,400 7,200 1st April 2010 Interim of 2.40p (2009 - 1.50p) per share paid on 11,520 7,200 15th October 2010 25,920 14,400 'A' Ordinary shares Interim of 3.00p (2009 - 1.50p) per share paid on 28,800 14,400 1st April 2010 Interim of 2.40p (2009 - 1.50p) per share paid on 23,040 14,400 15th October 2010 51,840 28,800 Total dividends paid 77,760 43,200 2. Cash and cash equivalents 2010 2009 £ £ Cash at bank and in hand 1,844,934 1,947,207 Bank overdrafts 1,145,421 1,159,966 699,513 787,241 3. Major non-cash transaction
During the year the group acquired tangible assets of £53,050 (2009 - £378,354) under hire purchase agreements.
4. Basis of preparation
The preliminary announcement has been prepared in accordance with applicable International Financial Reporting Standards as adopted by the EU and applied in accordance with the Companies Act 2006.
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31st December 2009, as described in those annual financial statements.
The financial statements have been prepared under the historical cost convention.
5. Annual general meeting
The annual general meeting of the company will be held in Leeds on Thursday 19th May 2011. Full details will be included in the published annual report and financial statements, which will be sent to shareholders by the 21st April 2011 and will also be available on the company's web-site (www.braimegroup.com) from that date.
30th March 2011
For further information please contact:
T.F. & J.H. Braime (Holdings) P.L.C.D. H. Brown FCA - Financial Director0113 245 7491W. H. Ireland LimitedKaty Mitchell LLB0113 394 6628
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