BRAM.L Regulatory News (BRAM)

19 May 2009 13:00



FROM CITIGATE DEWE ROGERSON FOR

PRESS RELEASE 

FOR RELEASE 13:00 19 May 2009 

Brammer plc 

Interim Management Statement

Brammer plc, the leading pan European added value technical distributor today issued its Interim Management Statement for the period from 1st January 2009 to date.  This statement is being issued to the Group's Annual General Meeting which is being held today.

Trading

The Board of Brammer is able to report that trading in the period 1 January to 18 May 2009 has reflected the difficult trading conditions prevailing in most of our markets. For the 4 month period to 30 April, overall sales at actual currency rates are down 5.6%, although there were 2 more working days in the period in 2008 compared with 2009.

On a sales per working day basis (SPWD), at actual currency rates, sales are down 3%. Excluding the year on year effect of acquisitions, SPWD at actual rates are down 6%. Excluding the benefits of currency and acquisitions, SPWD were down 16%. Key account sales at constant currency were down 5% overall, with good growth in food and beverage (up 41%), utilities (up 5%) and FMCG (up 12%) offsetting declines in automotive (down 31%) metals (down 23%) and construction and aggregates (down 18%). Overall, in constant currency, SPWD were up 3% in the UK, and down 27% in Germany, 16% in France, 24% in Spain, 13% in Benelux, and up 3% in the rest of Europe (down 14% excluding acquisitions).

Gross profit margins were maintained at similar levels to last year. In order to protect profitability, management has implemented cost reduction programmes in all territories. Based on measures completed and initiated so far, we expect reported sales, distribution and administration costs, at constant currency, to be at least £10 million lower than 2008 representing less than 12 months payback and this will be taken as an exceptional cost.  Inventory levels have been reduced significantly in the period, and close attention to cash management remains a priority. Debt facilities, which are secured until 2012, remain comfortably in excess of the group's net debt. Discussions are progressing satisfactorily with our key lenders regarding the resetting of terms appropriate for our needs.   

Outlook

Sales in March and April were slightly down on sales in January and February, but current trading is in line with management's expectations. We see some early signs that sales overall have stabilised at this new level. During these uncertain economic times the Board intends to continue its focus on cost control, cash flow and driving greater efficiencies from the business, whilst continuing to support our key growth drivers. We are confident that our strategy of focusing on key accounts, insites and cross selling throughout Europe to drive profitable market share gains remains sound for the medium and longer term and that Brammer will be stronger when the economic environment improves.