RNS Number:7052T
Braime (T.F.& J.H.) (Hldgs) PLC
02 May 2008
At a meeting of the directors held here today, the accounts for the year ended
31st December 2007 were submitted and approved by the directors. The
preliminary profits statement is as follows:
Chairman's statement
After two years of losses I am pleased to be able to report that the group made
a profit before tax of #138,057 (compared to a loss in 2006 of #116,200). Group
revenue increased in 2007 by 6.5% to #11,838,813 (2006 - #11,119,745).
The tax charge, payable on profits generated in the USA, reduces the profit
after tax to #9,264 (compared to a loss in 2006 of #187,376). Although the
result is very far from satisfactory, the turnaround in the operating profit is
in line with our forecasts and does represent a significant recovery from the
low point in 2005, when the after tax loss approached #300,000. Overall group
revenue for the first quarter of 2008 is running well ahead of 2007 and we
believe that the group is on course to make further progress in 2008.
However, the directors have very reluctantly decided that it would not be
prudent to pay a final dividend out of reserves, particularly given the strain
put on our resources as a result of the accumulated losses, in the period
2005-2006, which approached #500,000. The directors are acutely aware that there
has been no dividend for two years and the return to a regular payment of
dividends to shareholders is a key priority of the board.
Move to AIM
The resolution to transfer the listing of the company's shares from the Official
List to AIM was passed at a general meeting on 25th May 2007. The transfer was
successfully completed on 27th June 2007.
Braime Pressings Limited
We continue to struggle to turnaround our manufacturing business. Progress has
been made in reducing our overhead costs and in increasing operating
efficiencies and the level of loss has been substantially reduced. However, the
fundamental problem of insufficient revenue volume remains with revenue up by
only 3.6% in 2007.
A major project, which would have fundamentally changed this situation and which
was scheduled to come on stream last July, was repeatedly postponed by late
changes in our customer's specifications. Start up is now planned for July 2008
but the long delay had a very serious negative impact on the 2007 result.
In December, a major customer, Electrolux announced the closure of its domestic
cooker plant in Spennymoor and the relocation of manufacturing to Poland. This
will have little effect on us in the current year and we have been offered the
opportunity to retain some of this business to the new Polish plant in 2009.
Meanwhile some replacement work has been recently secured from other customers.
Braime Elevator Components Limited
As part of the "4B" division, distributing specialised components to the bulk
material handling industry worldwide, the company had a successful year with
revenue up by 17.5%. Systems to monitor and help maintain the safe working of
process plant now form an important part of our product range and the company
benefited in 2007 from a major contract in this field. We continue to invest in
new product development in order to maintain the growth in this sector of the
business.
The company is currently operating just below an ambitious revenue budget but we
are hopeful that the progress made in 2007 can be continued.
Sarl S.E.T.E.M (France and Germany)
Revenue increased by 14%, largely due to increased exports to Germany and other
European markets. The company made a small loss in 2007 but is currently trading
above budget and is forecast to make a positive contribution to group profit in
2008.
4B Elevator Components Limited (USA)
In spite of the fall in the value of the US dollar, which both reduced turnover
when expressed in sterling and reduced the margins on UK sourced products, the
company had an outstanding year. With costs largely maintained at 2006 levels,
an 11% increase in revenue resulted in a substantial increase in operating
profit.
Revenue in the first quarter of 2008 is well above that for the same period of
2007 and we are confident this subsidiary will have another good year.
4B Asia Pacific and 4B Africa
In February 2008, we formed a Thai based, but UK controlled subsidiary to
replace the sales agent and also set up a new 100% owned subsidiary, 4B Africa.
These are important regions for future revenue of material handling components
and can be best developed by having our own staff on the ground to provide
customer support.
Cash flow and debt
In 2007 the group invested #298,724 in property, plant and equipment, of which
#135,000 was financed through hire purchase contracts.
Although our bank overdraft remained largely unchanged from 2006, the amount of
borrowing under an invoice discounting scheme increased by #113,000 and our
hire purchase contract borrowings increased by #27,000 and there was cash
outflow of #177,000. This was caused by the capital investment, the small
increase in trade debtors due to the overall increase in turnover and, more
significantly, to a rise in group inventories of #338,000. Part of this increase
was due to an attempt to anticipate the recent surge in the price of raw
materials. The high level of inventories is an area to which the board is paying
particular attention.
We continue to operate within our borrowing facility and our anticipation for
2008 is that the group will be cash positive.
Relocation
Our Hunslet Road site is being marketed by joint agents Knight Frank and Swift
Property Services. Not surprisingly, in view of the current economic situation,
we have as yet received a lot of interest but no offers based on the primarily
residential brief developed in conjunction with the planning officers of Leeds
City Council. However, we have a number of developers interested in a more mixed
development on the site and their ideas are being actively explored. Meanwhile
any decision on relocation to more cost effective premises has been put on hold.
Staff
The commercial pressures on the business and on our staff increase year by year
as a result of global competition. The future of the business depends on their
ability to respond positively to these pressures and we are grateful for their
ongoing support in this endeavour.
Outlook
The current state of the economy raises very considerable concerns, particularly
the sudden and dramatic global rise in the cost of raw materials, specifically
steel and oil based commodities (polyethylene and rubber), as these provide the
input for many of our products.
Nevertheless we believe that the group is relatively well positioned to cope
with these difficulties. 63% of group revenue is outside the UK and our main
markets are focused on both the capital investment and the maintenance of the
production, storage and handling of food or industrial raw material, two of the
main sectors actually strongly benefiting from today's economic situation.
The prospects for our UK based manufacturing business are reliant on the
successful introduction of current projects which will finally inject the volume
on which depends the turnaround of this business.
Overall the group is forecast to make further progress in its recovery in 2008
and at the end of the first quarter, the group is ahead of forecast.
Consolidated Income Statement for the year ended 31st December 2007 (audited)
Note 2007 2006
# #
Revenue 11,838,813 11,119,745
Changes in inventories of finished goods and work in progress 304,567 4,676
Raw materials and consumables used (6,521,446) (6,011,478)
Employee benefits costs (3,253,886) (3,225,406)
Depreciation expense (168,183) (125,623)
Other expenses (2,032,513) (1,887,710)
Profit/(loss) from operations 167,352 (125,796)
Finance costs (321,762) (282,913)
Finance income 292,467 292,509
Profit/(loss) before tax 138,057 (116,200)
UK corporation tax 5,449 12,800
Foreign corporation tax (134,242) (83,976)
Profit/(loss) for the year attributable to shareholders 9,264 (187,376)
Basic and diluted earnings/(loss) per share 1 0.01p (13.0p)
Consolidated Statement of Recognised Income and Expense for the year ended 31st
December 2007 (audited)
2007 2006
# #
Foreign exchange gains/(losses) on re-translation of overseas operations 17,557 (35,370)
Actuarial gains recognised directly in equity 118,000 73,000
Total income and expense recognised in equity 135,557 37,630
Gain/(loss) for the year 9,264 (187,376)
Total recognised income and expense for the year attributable to equity shareholders of the 144,821 (149,746)
parent company
Consolidated Balance Sheet at 31st December 2007 (audited)
Note 2007 2007 2006 2006
# # # #
Assets
Non-current assets
Property, plant and equipment 862,998 733,481
Employee benefits 97,000 -
Total non-current assets 959,998 733,481
Current assets
Inventories 2,535,671 2,197,922
Trade and other receivables 2,713,165 2,611,737
Cash and cash equivalents 1,493,734 1,629,317
Total current assets 6,742,570 6,438,976
Total assets 7,702,568 7,172,457
Liabilities
Current liabilities
Bank overdraft 1,387,668 1,346,114
Trade and other payables 2,162,084 1,846,792
Other financial liabilities 231,645 182,292
Corporation tax liability 35,667 33,063
Total current liabilities 3,817,064 3,408,261
Non-current liabilities
Financial liabilities 337,354 348,867
Employee benefits - 12,000
Total non-current liabilities 337,354 360,867
Total liabilities 4,154,418 3,769,128
Total net assets 3,548,150 3,403,329
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 (8,992) (26,549)
Retained earnings 3,119,823 2,992,559
Total equity 2 3,548,150 3,403,329
Consolidated Cash Flow Statement for the year ended 31st December 2007 (audited)
Note 2007 2007 2006 2006
# # # #
Operating activities
Net profit/(loss) 9,264 (187,376)
Adjustments for:
Depreciation 168,183 125,623
Grants amortised (1,656) (1,656)
Foreign exchange gains/(losses) 19,535 (34,791)
Investment income (292,467) (292,509)
Interest expense 321,762 282,913
Gain on sale of plant, machinery and motor vehicles (6,123) (9,394)
Income tax expense 128,793 71,176
Operating profit before changes in working capital and provisions 338,027 141,362
Increase in trade and other receivables (153,188) (726,998)
(Increase)/decrease in inventories (337,749) 144,441
Increase in trade and other payables 327,326 982,205
Decrease in provisions and employee benefits 35,000 36,000
(128,611) 435,648
Cash generated from operations 218,680 389,634
Income taxes paid (131,397) (71,146)
Investing activities
Purchases of plant, machinery and motor vehicles (163,474) (142,730)
Sale of plant, machinery and motor vehicles 10,375 30,308
Interest received 59,467 48,509
(93,632) (63,913)
Financing activities
Repayment of hire purchase creditors (56,026) (40,999)
Interest paid (114,762) (87,913)
(170,788) (128,912)
(Decrease)/increase in cash and cash equivalents (177,137) 125,663
Cash and cash equivalents, beginning of period 283,203 157,540
Cash and cash equivalents, end of period 106,066 283,203
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 (2006 - 1,440,000). There are no potentially
dilutive shares in issue.
During the twelve months to 31st December 2007, T.F. & J.H. Braime (Holdings)
P.L.C. paid dividends of #Nil to its equity shareholders (2006 - #Nil).
2. Changes in shareholders' equity 2007 2006
# #
Total recognised income and expense 144,821 (149,746)
Capital and reserves attributable to equity holders of the parent company at the 3,403,329 3,553,075
beginning of the period
Capital and reserves attributable to equity holders of the parent company at the end of the 3,548,150 3,403,329
period
3. Cash and cash equivalents 2007 2006
# #
Cash at bank and in hand 1,493,734 1,629,317
Bank overdrafts 1,387,668 1,346,114
106,066 283,203
4. Major non-cash transaction
During the year the group acquired #135,250 (2006 - #Nil) of tangible assets
under hire purchase agreements.
5. Basis of preparation
The results incorporated in the preliminary announcement have been prepared in
accordance with International Financial Reporting Standards (IFRS and IFRIC
interpretations) issued by the International Accounting Standards Board (IASB)
as adopted by the EU and with those parts of the Companies Act 1985 applicable
to companies preparing their accounts under IFRS.
The financial information set out above does not constitute the company's
statutory accounts for the years ended 31st December 2007 or 2006. Statutory
accounts for 2006 have been delivered to the Registrar of Companies. The
statutory accounts for 2007 will be delivered to the Registrar of Companies
following the company's annual general meeting. The auditors have reported on
the 2007 and 2006 accounts; their reports were unqualified, did not include
references to any matters to which the auditors drew attention by way of
emphasis without qualifying their reports and did not contain a statement under
S237(2) or (3) of the Companies Act 1985.
D. H. Brown
Company Secretary
T.F. & J.H. Braime (Holdings) P.L.C.
2nd May 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
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