Last checked at 20 Sep 2012 12:17
T.F. & J.H. Braime (Holdings) P.L.C.
("Braime" or the "Company")
INTERIM REPORT
FOR THE SIX MONTHS ENDED 30TH JUNE 2012
The directors believe that the global recession, particularly the crisis in the Euro Zone, finally impacted on the performance of the group in the first six months of this year. Although the growth in revenue continued, increasing by 9.6% from £9,656,000 to £10,587,000, the profit before tax compared to the same period of 2011, dropped from £426,000 to £258,000, and the profit after tax from £307,000 to £179,000.
The main reasons for this were, firstly, a very significant reduction in the gross margin on sales within Europe due to fierce price competition in a weak market and, more importantly, to the fall in the value of the Euro, the currency in which most of our European sales are made. Secondly there was an increase in our labour overhead, mostly due to a deliberate decision to invest, in spite of the recession, in additional technical sales staff across all our 4B subsidiaries.
Cash and investments
The cash position as at 30th June 2012 was minus £82,000 compared to a positive position of £261,000 at 31st December 2011, a net reduction of £343,000. This was due to the repayment in full of a short term loan and the funding of capital investments in machinery for the pressings division and the fit out of our new premises in the USA.
Dividends
The second half of the year has begun brightly and we continue to benefit from the growth in our revenues across the whole group.
In these circumstances, in light of the underlying strength of our balance sheet, the directors have taken the decision to maintain the interim dividend at the same level as in the two previous years. A dividend of 2.40p per share will be paid on the 10th of October 2012 to the Ordinary and 'A' Ordinary shareholders on the register as at 28th September 2012.
Performance of group companies
4B division
All the subsidiaries in the 4B division which sell mechanical components and electronic monitoring systems to the bulk material handling industry worldwide, increased their sales revenue well above inflation - but those subsidiaries, whose sales are primarily in Euros, saw their gross margins severely eroded by the fall in value of the Euro.
During the first half of this year our US business relocated to new bespoke premises, nearly tripling their operating space. We are currently in the process of selling our previous US property. The relocation inevitably incurred one off exceptional costs and diverted scarce management time. It has also increased our overhead costs. Our South African subsidiary has recently gone through a similar relocation process.
Pressings division
Revenue for the first six months of this year was some 25% ahead of the same period last year, as sales from the new projects finally began slowly to come on stream and the level of loss increased on last year due in the main to higher depreciation charges. Ongoing investments to improve operating efficiencies are helping us to reduce future labour costs.
Outlook
We have been fortunate over the last two years to have been sheltered from the world recession, due, firstly, to the predominate focus of our business on the Commercial Agro business and, secondly, due to largely favourable exchange rates. The former situation has not changed substantially, but we have been affected this year by the sharp rise in the value of the Pound against the Euro and the first six months of this year have proved to be more challenging than expected.
The position of our manufacturing business is improving but we still need additional volume from the new contracts to come to fruition, in order for us to see the full benefits of the restructuring of this business.
In the first half of 2012 the group has absorbed a number of one off costs. With revenues still increasing, we expect to see a better second half but, at this stage, it is unlikely that we will be able to recover all the ground lost in the first six months.
In spite of the recession, the group has continued its policy of investment - in machinery, infrastructure, IT and communications, R & D in new products and in front line sales engineers - believing that this strategy remains correct and will enable us to sustain the substantial progress of recent years and achieve our twin goals of steadily increasing, over time, both the revenue and profitability of the group.
For further information please contact:
T.F. & J.H. Braime (Holdings) P.L.C.
O. N. A. Braime - Chairman
0113 245 7491
W. H. Ireland Limited
Katy Mitchell
0113 394 6628
Condensed consolidated income statement
Interim results
For the six months ended 30th June 2012
Note | Unaudited 6 months to 30th June 2012 | Unaudited 6 months to 30th June 2011 | Audited year to 31st December 2011 | |
£ | £ | £ | ||
Revenue | 10,586,601 | 9,656,490 | 20,067,905 | |
Cost of sales | 8,406,929 | 7,494,668 | 15,146,890 | |
Gross profit | 2,179,672 | 2,161,822 | 4,921,015 | |
Other operating expenses | 1,883,777 | 1,700,753 | 3,605,733 | |
Operating profit | 295,895 | 461,069 | 1,315,282 | |
Finance expense | (182,016) | (172,229) | (345,455) | |
Finance income | 144,273 | 138,041 | 274,406 | |
Profit before tax | 258,152 | 426,881 | 1,244,233 | |
Income tax expense | (79,121) | (119,527) | (430,212) | |
Profit after tax | 179,031 | 307,354 | 814,021 | |
Basic and diluted earnings per share |
2 |
12.43p |
21.34p |
56.53p |
Consolidated statement of comprehensive income
For the six months ended 30th June 2012
Unaudited 6 months to 30th June 2012 | Unaudited 6 months to 30th June 2011 | Audited year to 31st December 2011 | |
£ | £ | £ | |
Profit for the period | 179,031 | 307,354 | 814,021 |
Actuarial losses recognised directly in equity | - | - | (50,000) |
Foreign exchange (losses)/gains on re-translation of overseas operations |
(21,630) |
56,427 |
48,467 |
Adjustment in respect of minimum funding requirement per IFRIC14 | 3,000 | (25,000) | (31,000) |
Total other comprehensive income for the period | (18,630) | 31,427 | (32,533) |
Total comprehensive income for the period | 160,401 | 338,781 | 781,488 |
Consolidated statement of financial position
At 30th June 2012
Unaudited 6 months to 30th June 2012 | Unaudited 6 months to 30th June 2011 | Audited year to 31st December 2011 | |
£ | £ | £ | |
Non-current assets | |||
Property, plant and equipment | 1,711,300 | 1,444,106 | 1,426,995 |
Goodwill | 12,270 | 12,270 | 12,270 |
Total non-current assets | 1,723,570 | 1,456,376 | 1,439,265 |
Current assets | |||
Inventories | 4,381,296 | 3,879,299 | 4,401,733 |
Trade and other receivables | 4,116,516 | 4,077,310 | 3,507,494 |
Cash and cash equivalents | 1,972,761 | 1,804,679 | 1,746,464 |
Total current assets | 10,470,573 | 9,761,288 | 9,655,691 |
Total assets | 12,194,143 | 11,217,664 | 11,094,956 |
Current liabilities | |||
Bank overdraft | 2,055,431 | 1,630,184 | 1,485,757 |
Trade and other payables | 3,310,588 | 3,154,832 | 2,656,483 |
Other financial liabilities | 200,740 | 352,862 | 350,859 |
Corporation tax liability | 82 | 119,527 | 114,319 |
Total current liabilities | 5,566,841 | 5,257,405 | 4,607,418 |
Non-current liabilities | |||
Financial liabilities | 604,596 | 428,341 | 547,473 |
Total non-current liabilities | 604,596 | 428,341 | 547,473 |
Total liabilities | 6,171,437 | 5,685,746 | 5,154,891 |
Total net assets | 6,022,706 | 5,531,918 | 5,940,065 |
Capital and reserves | |||
Share capital | 360,000 | 360,000 | 360,000 |
Capital reserve | 77,319 | 77,319 | 77,319 |
Foreign exchange reserve | 313,129 | 342,719 | 334,759 |
Retained earnings | 5,272,258 | 4,751,880 | 5,167,987 |
Total equity attributable to equity shareholders of the company |
6,022,706 |
5,531,918 |
5,940,065 |
Consolidated statement of changes in equity
For the six months ended 30th June 2012
Share Capital |
Capital Reserve | Foreign Exchange Reserve |
Retained Earnings |
Total | |
£ | £ | £ | £ | £ | |
Balance at 1st January 2012 | 360,000 | 77,319 | 334,759 | 5,167,987 | 5,940,065 |
Comprehensive income | |||||
Profit | - | - | - | 179,031 | 179,031 |
Other comprehensive income | |||||
Actuarial gains recognised directly in equity |
- |
- |
- |
- |
- |
Foreign exchange losses on re-translation of overseas operations |
- |
- |
(21,630) |
- |
(21,630) |
Adjustment in respect of minimum funding requirement per IFRIC14 |
- |
- |
- |
3,000 |
3,000 |
Total other comprehensive income |
- |
- |
(21,630) |
3,000 |
(18,630) |
Total comprehensive income | - | - | (21,630) | 182,031 | 160,401 |
Transaction with owners | |||||
Dividends | - | - | - | (77,760) | (77,760) |
Total transactions with owners | - | - | - | (77,760) | (77,760) |
Balance at 30th June 2012 | 360,000 | 77,319 | 313,129 | 5,272,258 | 6,022,706 |
Balance at 1st January 2011 | 360,000 | 77,319 | 286,292 | 4,538,646 | 5,262,257 |
Comprehensive income | |||||
Profit | - | - | - | 307,354 | 307,354 |
Other comprehensive income | |||||
Actuarial gains recognised directly in equity |
- |
- |
- |
- |
- |
Foreign exchange gains on re-translation of overseas operations |
- |
- |
56,427 |
- |
56,427 |
Adjustment in respect of minimum funding requirement per IFRIC14 |
- |
- |
- |
(25,000) |
(25,000) |
Total other comprehensive income |
- |
- |
56,427 |
(25,000) |
31,427 |
Total comprehensive income | - | - | 56,427 | 282,354 | 338,781 |
Transaction with owners | |||||
Dividends | - | - | - | (69,120) | (69,120) |
Total transactions with owners | - | - | - | (69,120) | (69,120) |
Balance at 30th June 2011 | 360,000 | 77,319 | 342,719 | 4,751,880 | 5,531,918 |
Consolidated statement of changes in equity - continued
For the six months ended 30th June 2012
Share Capital |
Capital Reserve | Foreign Exchange Reserve |
Retained Earnings |
Total | |
£ | £ | £ | £ | £ | |
Balance at 1st January 2011 | 360,000 | 77,319 | 286,292 | 4,538,646 | 5,262,257 |
Comprehensive income | |||||
Profit | - | - | - | 814,021 | 814,021 |
Other comprehensive income | |||||
Actuarial losses recognised directly in equity |
- |
- |
- |
(50,000) |
(50,000) |
Foreign exchange gains on re-translation of overseas operations |
- |
- |
48,467 |
- |
48,,467 |
Adjustment in respect of minimum funding requirement per IFRIC14 |
- |
- |
- |
(31,000) |
(31,000) |
Total other comprehensive income |
- |
- |
48,467 |
(81,000) |
(32,533) |
Total comprehensive income | - | - | 48,467 | 733,021 | 781,488 |
Transaction with owners | |||||
Dividends | - | - | - | (103,680) | (103,680) |
Total transactions with owners | - | - | - | (103,680) | (103,680) |
Balance at 31st December 2011 | 360,000 | 77,319 | 334,759 | 5,167,987 | 5,940,065 |
Consolidated cash flow statement
For the six months ended 30th June 2012
|
Note | Unaudited 6 months to 30th June 2012 | Unaudited 6 months to 30th June 2011 | Audited year to 31st December 2011 | |
£ | £ | £ |
| ||
Operating activities |
| ||||
Net profit from ordinary activities | 179,031 | 307,354 | 814,021 |
| |
| |||||
Adjustments for: |
| ||||
Depreciation | 218,073 | 186,713 | 395,200 |
| |
Grants amortised | (828) | (828) | (1,656) |
| |
Foreign exchange (gain)/loss | (18,825) | 62,548 | 47,391 |
| |
Finance income | (144,273) | (138,041) | (274,406) |
| |
Finance expense | 182,016 | 172,229 | 345,455 |
| |
Gain on sale of plant and equipment | (5,900) | (6,212) | (21,617) |
| |
Adjustment in respect of defined benefit scheme |
13,000 |
(21,000) |
(74,000) |
| |
Income tax expense | 79,121 | 119,527 | 430,212 |
| |
| |||||
Operating profit before changes in working capital and provisions |
501,415 |
682,290 |
1,660,600 |
| |
| |||||
Increase in trade and other receivables | (609,022) | (785,708) | (215,892) |
| |
Decrease/(increase) in inventories | 20,437 | (285,619) | (808,053) |
| |
Increase/(decrease) in trade and other payables | 654,105 | 510,180 | (50,686) |
| |
| |||||
65,520 | (561,147) | (1,074,631) |
| ||
| |||||
Cash generated from operations | 566,935 | 121,143 | 585,969 |
| |
| |||||
Income taxes paid | (193,359) | (233,571) | (486,947) |
| |
| |||||
Investing activities |
| ||||
Purchases of plant, machinery and motor vehicles | (317,507) | (207,670) | (320,241) |
| |
Sale of plant, machinery and motor vehicles | 5,900 | 6,212 | 21,620 |
| |
Interest received | 2,273 | 2,041 | 4,406 |
| |
| |||||
(309,334) | (199,417) | (294,215) |
| ||
| |||||
Financing activities |
| ||||
Proceeds from long term borrowings | - | - | 133,196 |
| |
Repayment of long term borrowings | (7,597) | - | - |
| |
Repayment of short term borrowings | (165,540) | - | - |
| |
Repayment of hire purchase creditors | (106,706) | (103,824) | (190,674) |
| |
Interest paid | (50,016) | (40,229) | (82,455) |
| |
Dividend paid | (77,760) | (69,120) | (103,680) |
| |
| |||||
(407,619) | (213,173) | (243,613) |
| ||
| |||||
Decrease in cash and cash equivalents | 3 | (343,377) | (525,018) | (438,806) |
|
Cash and cash equivalents (including overdrafts), beginning of period |
3 |
260,707 |
699,513 |
699,513 |
|
Cash and cash equivalents (including overdrafts), end of period |
(82,670) |
174,495 |
260,707 |
| |
Notes to the interim financial report
1. Accounting policies
Basis of preparation
The interim financial report has been prepared using accounting policies that are consistent with those used in the preparation of the full financial statements to 31st December 2011 and those which management expects to apply in the group's full financial statements to 31st December 2012.
This interim financial report is unaudited. The comparative financial information set out in this interim financial report does not constitute the group's statutory accounts for the period ended 31st December 2011 but is derived from the accounts. Statutory accounts for the period ended 31st December 2011 have been delivered to the Registrar of Companies. The auditors have reported on those accounts. Their audit report was unqualified and did not contain any statements under Section 498 of the Companies Act 2006.
The group's condensed interim financial information has been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted for the use in the European Union and in accordance with IAS 34 'Interim Financial Reporting' and the accounting policies included in the Annual Report for the year ended 31st December 2011, which have been applied consistently throughout the current and preceding periods.
2. 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 per share amounted to 1,440,000 (2011 - 1,440,000). There are no potentially dilutive shares in issue.
6 months to 30th June 2012 | |
£ | |
Dividends paid | |
Equity shares | |
Ordinary shares | |
Interim of 5.40p per share paid on 2nd April 2012 | 25,920 |
'A' Ordinary shares | |
Interim of 5.40p per share paid on 2nd April 2012 | 51,840 |
Total dividends paid | 77,760 |
Year to 31st December 2011 | |
£ | |
Dividends paid | |
Equity shares | |
Ordinary shares | |
Interim of 4.80p per share paid on 1st April 2011 | 23,040 |
Interim of 2.40p per share paid on 14th October 2011 | 11,520 |
34,560 | |
'A' Ordinary shares | |
Interim of 4.80p per share paid on 1st April 2011 | 46,080 |
Interim of 2.40p per share paid on 14th October 2011 | 23,040 |
69,120 | |
Total dividends paid | 103,680 |
T.F. & J.H. Braime (Holdings) P.L.C.
Notes to the interim financial report - continued
3. Cash and cash equivalents
Unaudited 6 months to 30th June 2012 | Unaudited 6 months to 30th June 2011 | Audited year to 31st December 2011 | |
£ | £ | £ | |
Cash at bank and in hand | 1,972,761 | 1,804,679 | 1,746,464 |
Bank overdrafts | 2,055,431 | 1,630,184 | 1,485,757 |
(82,670) | 174,495 | 260,707 |
4. Segmental information
Unaudited 6 months to 30th June 2012 | ||||
Central | Manufacturing | Distribution | Total | |
£ | £ | £ | £ | |
Revenue | ||||
External | - | 1,381,341 | 9,205,260 | 10,586,601 |
Inter company | 31,074 | 1,511,451 | 857,751 | 2,400,276 |
Total | 31,074 | 2,892,792 | 10,063,011 | 12,986,877 |
Profit | ||||
EBITDA | (10,807) | (6,128) | 530,903 | 513,968 |
Finance costs | (6,913) | (156,718) | (18,385) | (182,016) |
Finance income | 728 | 143,475 | 70 | 144,273 |
Depreciation | - | (173,700) | (44,373) | (218,073) |
Tax expense | (11,227) | - | (67,894) | (79,121) |
(Loss)/profit for the period | (28,219) | (193,071) | 400,321 | 179,031 |
Assets | ||||
Total assets | 617,155 | 3,061,128 | 8,515,860 | 12,194,143 |
Additions to non current assets | - | 317,486 | 185,611 | 503,097 |
Liabilities | ||||
Total liabilities | 463,698 | 2,513,622 | 3,194,117 | 6,171,437 |
Unaudited 6 months to 30th June 2011 | ||||
Central | Manufacturing | Distribution | Total | |
£ | £ | £ | £ | |
Revenue | ||||
External | - | 1,110,366 | 8,546,124 | 9,656,490 |
Inter company | 29,885 | 1,162,918 | 899,006 | 2,091,809 |
Total | 29,885 | 2,273,284 | 9,445,130 | 11,748,299 |
Profit | ||||
EBITDA | (29,702) | 6,395 | 671,089 | 647,782 |
Finance costs | (7,168) | (151,789) | (13,272) | (172,229) |
Finance income | 800 | 137,239 | 2 | 138,041 |
Depreciation | - | (157,267) | (29,446) | (186,713) |
Tax expense | (8,368) | - | (111,159) | (119,527) |
(Loss)/profit for the period | (44,438) | (165,422) | 517,214 | 307,354 |
Assets | ||||
Total assets | 820,403 | 3,256,977 | 7,140,284 | 11,217,664 |
Additions to non current assets | - | 346,454 | 57,336 | 403,790 |
Liabilities | ||||
Total liabilities | 570,278 | 2,611,112 | 2,504,356 | 5,685,746 |
Audited year to 31st December 2011 | ||||
Central | Manufacturing | Distribution | Total | |
£ | £ | £ | £ | |
Revenue | ||||
External | - | 2,510,726 | 17,557,179 | 20,067,905 |
Inter company | 61,443 | 3,026,539 | 1,828,853 | 4,916,835 |
Total | 61,443 | 5,537,265 | 19,386,032 | 24,984,740 |
Profit | ||||
EBITDA | (12,901) | 274,159 | 1,449,224 | 1,710,482 |
Finance costs | (14,812) | (301,808) | (28,835) | (345,455) |
Finance income | 1,679 | 272,722 | 5 | 274,406 |
Depreciation | - | (322,728) | (72,472) | (395,200) |
Tax expense | (23,079) | - | (407,133) | (430,212) |
(Loss)/profit for the period | (49,113) | (77,655) | 940,789 | 814,021 |
Assets | ||||
Total assets | 810,551 | 2,874,795 | 7,409,610 | 11,094,956 |
Additions to non current assets | - | 396,164 | 205,247 | 601,411 |
Liabilities | ||||
Total liabilities | 526,570 | 1,849,717 | 2,778,604 | 5,154,891 |
20th September 2012