Braime Group Plc Regulatory News (BMTO)

28 Sep 2009 17:10



T.F. & J.H. Braime (Holdings) P.L.C.

("Braime" or the "company")

Interim results for the six months ended 30th June 2009

Group sales revenue for the first six months of 2009 increased by 7% from £7.28m in 2008 to £7.77m and the company made a profit before tax for the first half of 2009 of £216,000 compared to a profit of £125,000 in 2008 for the same period.

In view of the steady recovery in profitability, the directors have decided to pay an interim dividend of 1.50p per share on 16th October 2009 to shareholders whose names are on the register on 9th October 2009.

Performance of group companies

4B division

In spite of the recession, sales by all the subsidiaries selling the 4B brand of components to the material handling industry held up, above forecast, and ahead of the record levels of 2008. Profitability improved, relative to the first half of last year, due to the combination of favourable exchange rates and a decline in the cost of raw materials.

Since the half year, there has been a noticeable decline in activity, and sales for the full year by this division are likely to be in line with our budget, at a level slightly below that achieved in 2008. In view of the very high percentage of sales made in overseas markets, exchange rates will be a major factor in determining the contribution of this division to the group result for 2009.

Pressings division

Sales for the first six months fell by 55%, compared to the same period of 2008, due to the particular severity of the recession in the UK. The general fall in demand was exacerbated by the initial de-stocking carried out by all major customers as they re-adjusted their own production to match drastically lower sales.

This situation has forced the company to speed up its strategy of moving away from its traditional "mid-volume" general sub-contract presswork, supplied to a wide customer base, to instead concentrating on supplying a limited number of customers, each requiring high volumes of specialized product. The manufacture of the products retained will be made in totally automated production cells. The company has notified most of its' customers of its' decision to discontinue manufacture of their requirements and since July the company has been working at close to full capacity supplying these customers with agreed "run-out" volumes.

Very sadly, the implementation of the above strategy also requires a large reduction in our workforce through redundancies and the company is currently engaged in this process. However, the painful changes being made now will result in a long term viable future for the manufacturing business and more secure employment for those employees that remain.

Outlook

The very recent decline in demand for components supplied to the material handling industry is a concern. Nevertheless the primary sectors into which these components are supplied, specifically food related industries, remain relatively immune from the recession and the company is reasonably confident that the fall in demand will be short term.

The restructuring of the manufacturing business will reduce the significant losses being made by this subsidiary and stem the outflow of cash that this has caused.

Providing exchange rates remain close to current levels, the directors believe that the result for the full year will show a continuation in the gradual recovery of the past two years. However, given the continuation of the recession, the pace of the improvement in profitability is likely to be at a slower rate than was achieved in the second half of 2008.

Condensed consolidated income statement for the six months ended 30th June 2009

Condensed consolidated statement of comprehensive income for the six months ended

30th June 2009

Condensed statement of charges in equity for the six months ended 30th June 2009

Condensed consolidated balance sheet at 30th June 2009

Condensed consolidated cash flow statement for the six months ended 30th June 2009

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 2008 and those which management expects to apply in the group's full financial statement to 31st December 2009.

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 2008 but is derived from the accounts. Statutory accounts for the period ended 31st December 2008 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 237(2) or (3) Companies Act 1985.

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 2008, which have been applied consistently throughout the current and preceding periods with the exception of new standards adopted in the current period (see below).

Changes in accounting policy

The group has adopted IFRS 8 "Operating Segments" for the first time in this Interim Report. This standard requires the group to report segmental information on the basis of internal reports which are regularly reviewed by the group board and used to allocate the resources of the business, and supersedes IAS 14 "Segment Reporting". The group has also adopted IAS 1 "Presentation of Financial Statements" (revised 2007) for the first time in this Interim Report. The amendments arising from this require the inclusion of the Condensed Consolidated Statement of Changes in Equity as a primary statement in the condensed interim financial information. The group has complied fully with the requirements of IFRS 8 and IAS 1 in the period, which apply to disclosure matters only, and has presented updated prior year comparatives in accordance with these standards.

2. Segmental information

28th September 2009 

For further information please contact:

T.F & J.H. Braime (Holdings) P.L.C.

David H. Brown FCA - Financial Director

0113 245 7491

W. H. Ireland Limited

Katy Mitchell LLB

0113 3946628