TIDMBMTO
RNS Number : 3637D
Braime (T.F.& J.H.) (Hldgs) PLC
27 March 2014
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 2013
At a meeting of the directors held today, the accounts for the
year ended 31st December 2013 were submitted and approved by the
directors. The preliminary accounts statement is as follows:
Chairman's statement
Performance of the group
Sales revenue increased in 2013 by 8.2% to GBP23.0 million, this
improvement was seen evenly across both the metal presswork and
material handling divisions. Profit from operations increased by
63.3% to GBP1.1 million. The principal reasons to this overall
improvement were the controls over sales margins and careful
monitoring of overhead expenses. Profit before tax increased by
49.0% to GBP1.0 million, this improvement was against a comparative
which included a one off gain on the disposal of a property.
Finance costs remained in line year on year despite the group
increasing its net borrowings to finance key asset acquisitions
during the period. Further commentary on the group's performance is
provided in the group strategic report.
In view of this year's encouraging performance, the board has
approved the payment, on 4th April 2014, of a second interim
dividend of 6.20p (increased from 5.40p in 2013), making a total
dividend for the tax year ending 5th April 2014 of 8.60p, compared
to 7.80p in the previous year.
The board remains firmly committed to progressive increases in
the dividend when justified by profitability and after taking into
account the cash flow requirements of the group.
Group highlights
A number of significant steps were taken in 2013 which greatly
strengthened the long term future of the group.
The transfer of our banking arrangements to HSBC was completed
in February and has both reduced finance costs and strengthened our
financial position.
As a result, the company was able to purchase our new, much
larger, office and distribution facility in Morton, Illinois. This
purchase was successfully completed in time to benefit from the
"roll over" tax relief from the sale of our previous US premises in
2012.
A new ERP system was successfully implemented in our US and
Australian business. As the group platform is rolled out around the
group, we gain improved visibility, a reduction in IT costs and
enhanced internal controls through the standardisation of
processes.
4B USA also purchased the trade and assets of a US based
manufacturing business. This has enabled the 4B division to
strengthen its manufacturing capabilities.
Braime Pressings acquired GBP441,000 of plant and machinery
which will significantly increase manufacturing capacity, much of
it to produce product already coming on schedule. We also purchased
two spray painting lines to widen our portfolio of services offered
to customers.
125th anniversary
In 2013, we proudly celebrated the 125th anniversary of the
company which was started in Hunslet, Leeds, in 1888 by T.F, (Tom
Braime) who was later joined by his brother, J.H (Harry Braime).
This culminated in a dinner dance for employees, customers and
suppliers, which was held in the historic canteen, and was a very
special event.
The past and the future of the business are based on the success
of the partnership of these three groups and on the support of all
our shareholders. The directors thank all of them for their
continuing loyalty.
Employees
I am also delighted that in 2013, we were able to increase the
number of our employees across the group, but particularly in
Leeds. In difficult economic times we are pleased to be able to
improve their long term job security. We are also proud to employ
apprentices in our Leeds manufacturing business and hope these
individuals will have a long and successful career in the
group.
Outlook
The result in 2013, while below our long term objective, was
positive when viewed against the weakness of economies worldwide.
Additionally, the group successfully implemented some major
projects and important investments, which have greatly strengthened
the group.
Almost the entire sales of Braime Pressings are indirect exports
to European markets. Additionally a very high proportion of the
sales of the 4B division are sold directly to either Europe or to
other export markets, so we are very dependent on the global
economy. While the USA and the UK are now out of recession, other
economies in Asia and, more particularly in Europe, remain very
weak. To this situation, has been added political instability in
the Middle East and now in Eastern Europe, Russia and its former
satellite states. So these factors have to temper any over
optimism.
Nevertheless, we believe that the group can build on the big
strides it made in 2013 and make further progress in 2014.
Group strategic report
Principal activities and risks and uncertainties
The group comprises of two core segments; manufacture of deep
drawn metal presswork, and the distribution of material handling
components and monitoring equipment.
The metal presswork segment operates across several industries
including the automotive sector. The market remains challenging due
to pricing pressures throughout the supply chain. The achievement
and retention of the TS16949 quality standard is important to the
group as it allows us to access growing markets. If lost, this
would adversely impact both existing and new business activity. A
process of continual improvement in systems, process and review
reduce this risk. Long term supply agreements are made with major
customers. The company is exposed to medium to long term
fluctuations in steel prices. In order to mitigate this volatility,
the company fixes its prices with suppliers where possible.
The material handling components subsidiaries trade from six
countries and export to over 50 countries. The division maintains
its competitive edge in a price sensitive market through the
provision of engineering expertise and by working closely with our
suppliers to supply innovative components of the highest standard.
In addition, ranges of complementary products are sold into
different industries. These monitoring systems are developed and
improved on a regular basis.
Exposure to customer credit risk is managed through a variety of
methods; credit insurance, credit checking and the setting and
monitoring of appropriate credit limits.
The group has a centralised treasury function which, through the
use of forward contracts, hedges against foreign exchange
differences arising on cash flows in currencies that differ to the
operational entity's reporting currency.
The centralised treasury function also controls the group
banking facilities, including all lines of funding. Liquidity risk
is managed through the matching of short and long term funding to
the needs of the business. Medium and long term cash flow
projections are prepared and regularly monitored.
Further information on the group's financial liabilities and
exposures are set out in note 16.
Our business model
The focus of the manufacturing business is to produce quality,
technically demanding components. Using automated equipment this
allows us to produce in high volumes, yet it also provides
flexibility.
The material handling components business is located around the
globe allowing us to be close to our core markets. The focus is to
provide innovative solutions drawing on our expertise and broad
product range.
The two segments are very different serving different markets,
however together they add strength and balance to the group.
Performance of Braime Pressings Limited, manufacturer of deep
drawn metal presswork
Sales of existing components increased and new work, that had
been previously delayed, began to come on stream, and the result
has improved significantly. In the middle of the year, the company
made a substantial investment in plant. The installation of part of
this investment has been completed and delivery of parts produced
down these automated cells has already commenced.
Further new work has been won in 2014 and is scheduled to start
in the next two months. The profitability of this company is
forecast to improve further in the second half of this year.
The company has employed a new specialist maintenance manager,
with considerable experience in the automotive sector. As well as
being tasked to both install new plant and improve our level of
preventative maintenance, he has begun major improvements aimed at
improving our working environment and reducing our energy
bills.
Performance of the 4B division, world wide distributor of
components and monitoring systems for the material handling
industry
The division continued to benefit from the year on year increase
in sales and the profitability of our US subsidiary, 4B Components
Limited. The relocation of 4B Components into a new and much larger
facility will enable the continuing growth of this business, while
the purchase of the trade and assets of a component manufacturer
has helped to simplify our supply chain and enhance our
manufacturing expertise.
Our UK based subsidiary, Braime Elevator Components Limited, had
a successful year, particularly in export markets. The two newer
subsidiaries in Australia and South Africa had reasonable years,
although their results, once translated, were affected by the steep
fall in the value of their local currencies.
In contrast our French subsidiary, 4B Setem, had a disappointing
year due to the ongoing recession in Europe.
Taxation
The effective rate of tax is 25.6% (2012 - 37.1%). The reduction
in the year is in part due to credits in relation to previous
years. The effective rate is above the standard UK tax rate of 23%
(2012 - 24%) due to the higher rates of tax incurred by the
overseas subsidiaries.
Capital expenditure
Total capital expenditure on land and buildings and plant,
machinery and equipment amounted to GBP2.2 million. The largest
element of this was the purchase of the US facility for GBP1.3
million. Expenditure in the manufacturing business amounted to
GBP441,000 and related to the expansion of the production capacity
and range. Expenditure in the 4B division was GBP489,000 and
primarily related to investments in manufacturing capacity and
improvements to IT hardware and infrastructure.
Cash flow
Cash generated from operations was GBP938,000 (2012 - GBP1.90
million). Working capital requirements increased to support the
higher activity levels with a marginal net increase in debtors
compared to creditors but, more specifically, by an increase in
inventory levels. The investment in new fixed assets in 2013,
including our new US office and distribution facility, plant
machinery and vehicles, together totalled GBP2.2 million (2012 -
GBP825,000). The company financed these investments by way of long
term loans amounting to GBP1.1 million and by cash generated from
operating activities. The group also repaid GBP142,000 of short
term borrowings and repaid hire purchase borrowings of GBP241,000.
At the year end the group held net cash of GBP76,000 (2012 -
GBP934,000).
Bank facilities
The group's operating banking facilities are renewed annually.
The new arrangements with HSBC provide significant headroom to the
group and have allowed us to make key strategic investments in the
year.
Balance sheet
Net assets of the group have increased to GBP6.70 million (2012
- GBP6.20 million). This increase is due to the strong profit
performance in the year. A foreign exchange loss of GBP200,000
(2012 - GBP58,000) was recorded on the re-translation of the net
assets of the overseas operations. The movement in the year was
primarily due to the strengthening of pound sterling against the
South African rand and the Australian dollar.
Key performance indicators
The group uses certain key performance indicators to assess the
performance of the group as a whole and of the individual business.
These financial KPIs comprise turnover growth, product margins and
operating net profit as demonstrated in note 3 in the financial
statements. Key balance sheet indicators such as inventory levels,
inventory aging, stock turnover and debtor days are monitored
monthly for both the group and individual entities.
Environment
The group's policy with regard to the environment is that we
understand and effectively manage the actual and potential
environmental impact of our activities. Our operations are
conducted such that we comply with all legal requirements relating
to the environment in all areas where we carry out our business.
During the period of this report the group has not incurred any
fines or penalties or been investigated for any breach of
environmental regulations.
Employees
The quality and commitment of our people has played a major role
in our business success. This has been demonstrated in many ways,
including improvements in customer satisfaction, the development of
our product lines and the flexibility they have shown in adapting
to changing business requirements. Employee performance is aligned
to the achievement of goals set within each subsidiary and is
rewarded accordingly. Employees are encouraged to use their skills
to best effect and are offered training either externally or
internally to achieve this.
Research and Development
The group continues to invest in research and development. This
has resulted in improvements in the products which will benefit the
group in the medium to long term.
Summarised Consolidated Income Statement for the year ended 31st
December 2013 (audited)
2013 2012
GBP GBP
Revenue 22,953,805 21,211,887
Changes in inventories of finished
goods and work in progress 311,144 (23,484)
Raw materials and consumables used (12,942,829) (11,849,425)
Employee benefits costs (5,021,454) (4,587,039)
Depreciation expense (520,945) (464,539)
Other expenses (3,704,402) (3,628,799)
--------------------------------------- ------------- -------------
Profit from operations 1,075,319 658,601
Profit on disposal of tangible fixed
assets 32,551 100,435
Finance costs (100,967) (101,541)
Finance income 3,330 20,726
--------------------------------------- ------------- -------------
Profit before tax 1,010,233 678,221
Tax expense (258,167) (251,346)
--------------------------------------- ------------- -------------
Profit for the year attributable
to equity shareholders of the parent
company 752,066 426,875
--------------------------------------- ------------- -------------
Basic and diluted earnings per share 52.23p 29.64p
--------------------------------------- ------------- -------------
Summarised Consolidated Statement of Comprehensive Income for
the year ended 31st December 2013 (audited)
2013 2012
GBP GBP
Profit for the year 752,066 426,875
Items that will not be reclassified subsequently
to profit or loss
Remeasurement gain/(loss) on post
employment benefits 6,000 (7,000)
Adjustment in respect of minimum
funding requirement per IFRIC14 25,000 10,000
Items that may be reclassified subsequently
to profit or loss
Foreign exchange losses on re-translation
of overseas operations (199,729) (57,608)
Other comprehensive income for the
year (168,729) (54,608)
Total comprehensive income for the
year 583,337 372,267
-------------------------------------------------- ------------ -----------
Summarised Consolidated Balance Sheet at 31st December 2013
(audited)
2013 2013 2012 2012
GBP GBP GBP GBP
Assets
Non-current assets
Property, plant
and equipment 3,119,378 1,504,575
Goodwill 12,270 12,270
Total non-current
assets 3,131,648 1,516,845
Current assets
Inventories 4,819,200 4,387,303
Trade and other
receivables 3,948,734 3,219,715
Cash and cash equivalents 567,226 1,576,283
--------------------------- ------------ ------------ ------------ -----------
Total current assets 9,335,160 9,183,301
--------------------------- ------------ ------------ ------------ -----------
Total assets 12,466,808 10,700,146
--------------------------- ------------ ------------ ------------ -----------
Liabilities
Current liabilities
Bank overdraft 490,944 642,492
Trade and other
payables 3,146,004 2,478,283
Other financial
liabilities 828,414 863,922
Corporation tax 43,494 -
liability
--------------------------- ------------ ------------ ------------ -----------
Total current liabilities 4,508,856 3,984,697
Non-current liabilities
Financial liabilities 1,170,923 515,437
Deferred income
tax liability 116,000 -
--------------------------- ------------ ------------ ------------ -----------
Total non-current
liabilities 1,286,923 515,437
--------------------------- ------------ ------------ ------------ -----------
Total liabilities 5,795,779 4,500,134
--------------------------- ------------ ------------ ------------ -----------
Total net assets 6,671,029 6,200,012
--------------------------- ------------ ------------ ------------ -----------
Capital and reserves attributable to equity holders
of the parent company
Share capital 360,000 360,000
Capital reserve 77,319 77,319
Foreign exchange
reserve 77,422 277,151
Retained earnings 6,156,288 5,485,542
--------------------------- ------------ ------------ ------------ -----------
Total equity 6,671,029 6,200,012
--------------------------- ------------ ------------ ------------ -----------
Summarised Consolidated Cash Flow Statement for the year ended
31st December 2013 (audited)
2013 2013 2012 2012
GBP GBP GBP GBP
Operating activities
Net profit 752,066 426,875
Adjustments for:
Depreciation 520,945 464,539
Grants amortised (1,656) (1,656)
Non-cash operating
charges 56,000 -
Foreign exchange
losses (186,189) (53,182)
Finance income (3,330) (20,726)
Finance expense 100,967 101,541
Gain on sale of land
and buildings, plant,
machinery and motor
vehicles (32,551) (100,435)
Adjustment in respect
of defined benefits
scheme 34,000 21,000
Income tax expense 258,167 251,346
--------------------------------- -------------- ------------ ------------ ------------
746,353 662,427
--------------------------------- -------------- ------------ ------------ ------------
Operating profit
before changes
in working capital
and provisions 1,498,419 1,089,302
(Increase)/decrease
in trade and other receivables (718,157) 363,898
(Increase)/decrease
in inventories (431,897) 14,430
Increase in trade and
other payables 590,038 444,808
(560,016) 823,136
--------------------------------- -------------- ------------ ------------ ------------
Cash generated
from operations 938,403 1,912,438
Income taxes paid (109,535) (441,784)
Investing activities
Purchases of property,
plant, machinery and
motor vehicles (2,205,287) (483,734)
Sale of land and buildings,
plant, machinery and
motor vehicles 32,551 378,440
Interest received 330 2,726
--------------------------------- -------------- ------------ ------------ ------------
(2,172,406) (102,568)
Financing activities
Proceeds from long
term borrowings 1,081,989 -
Repayment of borrowings (141,574) (247,065)
Repayment of hire purchase
creditors (241,099) (234,076)
Interest paid (100,967) (101,541)
Dividends paid (112,320) (112,320)
--------------------------------- -------------- ------------ ------------ ------------
486,029 (695,002)
--------------------------------- -------------- ------------ ------------ ------------
(Decrease)/increase
in cash and cash equivalents (857,509) 673,084
Cash and cash equivalents,
beginning of period 933,791 260,707
--------------------------------- -------------- ------------ ------------ ------------
Cash and cash equivalents,
end of period 76,282 933,791
--------------------------------- -------------- ------------ ------------ ------------
Consolidated statement of changes in equity for the year ended
31st December 2013 audited)
Foreign
Share Capital Exchange Retained
Capital Reserve Reserve Earnings Total
GBP GBP GBP GBP GBP
Balance at 1st January
2012 360,000 77,319 334,759 5,167,987 5,940,065
Comprehensive
income
Profit - - - 426,875 426,875
Other comprehensive
income
Remeasurement losses
recognised directly
in equity - - - (7,000) (7,000)
Foreign exchange losses
on re-translation of
overseas operations - - (57,608) - (57,608)
Adjustment in respect
of minimum funding
requirement per IFRIC14 - - - 10,000 10,000
--------------------------- ---------- ---------- ----------- ----------- -----------
Total other comprehensive
income - - (57,608) 3,000 (54,608)
Total comprehensive
income - - (57,608) 429,875 372,267
--------------------------- ---------- ---------- ----------- ----------- -----------
Transactions with owners
Dividends - - - (112,320) (112,320)
--------------------------- ---------- ---------- ----------- ----------- -----------
Total transactions
with owners - - - (112,320) (112,320)
--------------------------- ---------- ---------- ----------- ----------- -----------
Balance at 31st December
2012 360,000 77,319 277,151 5,485,542 6,200,012
--------------------------- ---------- ---------- ----------- ----------- -----------
Foreign
Share Capital Exchange Retained
Capital Reserve Reserve Earnings Total
GBP GBP GBP GBP GBP
Balance at 1st January
2013 360,000 77,319 277,151 5,485,542 6,200,012
Comprehensive
income
Profit - - - 752,066 752,066
Other comprehensive
income
Remeasurement gain
recognised directly
in equity - - - 6,000 6,000
Foreign exchange losses
on re-translation of
overseas operations - - (199,729) - (199,729)
Adjustment in respect
of minimum funding
requirement per IFRIC14 - - - 25,000 25,000
--------------------------- ---------- ---------- ------------ ------------ ------------
Total other comprehensive
income - - (199,729) 31,000 (168,729)
Total comprehensive
income (199,729) 783,066 583,337
--------------------------- ---------- ---------- ------------ ------------ ------------
Transactions with owners
Dividends - - - (112,320) (112,320)
--------------------------- ---------- ---------- ------------ ------------ ------------
Total transactions
with owners - - - (112,320) (112,320)
--------------------------- ---------- ---------- ------------ ------------ ------------
Balance at 31st December
2013 360,000 77,319 77,422 6,156,288 6,671,029
--------------------------- ---------- ---------- ------------ ------------ ------------
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 per share amounted to 1,440,000 (2012- 1,440,000). There
are no potentially dilutive shares in issue.
Dividends paid 2013 2012
GBP GBP
Equity shares
Ordinary shares
Interim of 5.40p (2012 - 5.40p) per
share paid on 4th April 2013 25,920 25,920
Interim of 2.40p (2012 - 2.40p) per
share paid on 9th October 2013 11,520 11,520
37,440 37,440
'A' Ordinary shares
Interim of 5.40p (2012 - 5.40p) per
share paid on 4th April 2013 51,840 51,840
Interim of 2.40p (2012 - 2.40p) per
share paid on 9th October 2013 23,040 23,040
74,880 74,880
Total dividends paid 112,320 112,320
2. Cash and cash equivalents 2013 2012
GBP GBP
Cash at bank and in hand 567,226 1,576,283
Bank overdrafts 490,944 642,492
76,282 933,791
3. Major non-cash transaction
During the year the group did not acquire any tangible assets
subject to finance (2012 - GBP340,816) under hire purchase
agreements.
4. Segmental information
Central Manufacturing Distribution Total
2013 2013 2013 2013
GBP GBP GBP GBP
Revenue
External - 3,010,216 19,943,589 22,953,805
Inter company 74,866 2,976,179 3,422,562 6,473,607
-------------------------- ------------ -------------- ------------- ------------
Total 74,866 5,986,395 23,366,151 29,427,412
-------------------------- ------------ -------------- ------------- ------------
Profit
EBITDA (40,251) 387,263 1,249,252 1,596,264
Gain on sale of tangible
fixed assets - 20,239 12,312 32,551
Finance costs (24,848) (40,703) (35,416) (100,967)
Finance income 201 3,000 129 3,330
Depreciation (3,675) (343,184) (174,086) (520,945)
Tax expense (15,690) 250,339 (492,816) (258,167)
(Loss)/profit for
the period (84,263) 276,954 559,375 752,066
-------------------------- ------------ -------------- ------------- ------------
Assets
Total assets 1,283,313 2,329,357 8,854,138 12,466,808
Additions to non
current assets 1,274,526 441,571 489,190 2,205,287
Liabilities
Total liabilities 395,378 1,541,182 3,859,219 5,795,779
Central Manufacturing Distribution Total
2012 2012 2012 2012
GBP GBP GBP GBP
Revenue
External - 2,992,202 18,219,685 21,211,887
Inter company 51,390 3,339,322 2,300,456 5,691,168
---------------------- --------- -------------- ------------- -----------
Total 51,390 6,331,524 20,520,141 26,903,055
---------------------- --------- -------------- ------------- -----------
Profit
EBITDA (20,799) 253,679 896,659 1,129,539
Gain on sale of land
and buildings 94,036 - - 94,036
Finance costs (11,302) (49,488) (40,751) (101,541)
Finance income 1,105 19,505 116 20,726
Depreciation - (331,640) (132,899) (464,539)
Tax expense (17,718) - (233,628) (251,346)
--------- -------------- ------------- -----------
Profit/(loss) for
the period 45,322 (107,944) 489,497 426,875
---------------------- --------- -------------- ------------- -----------
Assets
Total assets 625,569 2,250,827 7,823,750 10,700,146
Additions to non
current assets - 439,004 385,546 824,550
Liabilities
Total liabilities 458,973 1,670,920 2,370,341 4,500,134
5. Basis of preparation
The preliminary announcement has been prepared in accordance
with applicable International Financial Reporting Standards as
adopted by the European Union (IFRSs as adopted by the EU), IFRIC
interpretations and the Companies Act 2006 applicable to companies
reporting under IFRS.
The accounting policies adopted are consistent with those of the
annual financial statements for the year ended 31st December 2013,
as described in those annual financial statements.
The consolidated financial statements have been prepared on a
going concern basis and under the historical cost convention.
6. Annual general meeting
The annual general meeting of the company will be held in Leeds
on 16th May 2014. Full details will be included in the published
annual report and financial statements, which will be sent to
shareholders by the 22nd April 2014 and will also be available on
the company's web-site (www.braimegroup.com) from that date.
7. Preliminary statement
The financial statements set out in the preliminary announcement
do not constitute statutory accounts as defined by section 434 of
the Companies Act 2006. The financial information for the year
ended 31st December 2013 has been extracted from the group's
financial statements upon which the auditor's opinion is
unqualified, does not include reference to any matters to which
they wish to draw attention by way of emphasis without qualifying
their report, and does not include any statement under section 498
of the Companies Act 2006. Statutory accounts for the year ended
31st December 2012 have been delivered to the Registrar of
Companies, and those for 2013 will be delivered in due course.
8. Events after the reporting year
There were no events after the balance sheet date that would
require disclosure in accordance with IAS10, "Events after the
reporting period".
27th March 2014
For further information please contact:
T.F. & J.H. Braime (Holdings) P.L.C.
M. L. Mills - Financial Director
0113 245 7491
W. H. Ireland Limited
Katy Mitchell LLB
0113 394 6628
This information is provided by RNS
The company news service from the London Stock Exchange
END
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