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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 2010
At a meeting of the directors held today, the accounts for the year ended 31st
December 2010 were submitted and approved by the directors. The preliminary
accounts statement is as follows:
Chairman's statement
Performance of group companies
The group continued to make good progress in 2010.
Over 80% of group sales are made in overseas markets, which have been less
affected than the UK by the current recession. Many of the sales are to food
related industries where there is still strong growth. We have also continued
to benefit from largely favourable exchange rates.
Sales revenue increased by 15% to GBP18.10m from GBP15.70m. Pre tax profit rose to
GBP1.36m from GBP0.62m and the profit after tax for 2010 was GBP945,000 compared to GBP
387,000 in 2009.
In view of the above excellent result, the directors have already announced a
second interim dividend of 4.80p to be paid on 1st April 2011, making a total
for the tax year ending 5th April 2011 of 7.20p (compared to 4.50p in the
previous year). As last year, a final dividend will not be paid.
Manufacturing of deep drawn pressings (Braime Pressings Limited)
Following the restructuring of this business, the level of loss made by our
manufacturing business was reduced compared to 2009 but this reduction was much
less than had been forecast.
During 2010 we were successful in improving the efficiency of the investment in
the machinery producing existing work and significant improvements were made to
the infrastructure and environment of the business.
However, despite the enormous efforts of our staff, we were unable to bring on
stream in 2010 the two major new contracts which were critical to achieving our
anticipated improvement. In addition to losing the expected contribution from
this new work, we also had to absorb much higher than expected costs in
modifying and commissioning the complex plant required to run the new work. The
result for 2010 was also badly affected by an unexpectedly large increase in
material costs, which we were unable to pass on to our customers until 2011.
The first of the new contracts finally came on stream successfully at the end
of January 2011. We are currently in the midst of final trials for the second
contract and expect this to be launched in the second quarter of this year. We
have also secured additional volume for one of our existing product lines.
We are therefore hopeful in 2011, of achieving the substantial progress that we
had forecast for 2010.
Distribution of components, under our 4B brand, to the bulk material handling
industry
All of our subsidiaries distributing globally our brand of 4B material handling
components again enjoyed record years, and the performance of 4B Elevator
Components Limited in the USA was particularly strong.
The company continues to invest in developing both the diversity of our product
range and in our distribution network. Specifically, in December 2010, we set
up a new subsidiary, 4B Australia Pty Limited based in Brisbane. Two weeks
later our premises were flooded! However, once having overcome this
inauspicious start, we are showing signs of early progress.
We are seeing a very positive start to 2011 although sales to some markets
remain affected by the recession.
Our main concerns in 2011 are the impact of the current political turbulence on
our markets in the Middle East, the effect of the recent tragic natural
disasters in both Australia and Japan and surging commodity prices, caused by
the scale of the relatively new phenomenon of global speculation in
commodities. The price of our key raw materials, steel, plastics and rubber
have already increased by between 10% and 30% in just the first three months.
Increases of this magnitude are hard to manage and difficult to pass on in a
timely manner, they tie up cash in higher stock costs and create great
uncertainty for both ourselves and our customers.
Investment
In 2010 the group invested GBP263,000 in plant and equipment. Of this, GBP53,000
was financed by hire purchase agreements, GBP35,000 financed through the sale of
surplus plant and the balance of GBP175,000 was financed from funds generated
internally.
At the year end, the company had committed to a further capital investment of GBP
140,000 and, since the start of the new financial year, the company has placed
orders for further investments totalling GBP232,000. All of these capital
investments are being financed by hire purchase agreements.
Cash flow and debt
Although the company generated substantial funds as a result of the large
improvement in profitability, the cash flow position for the year was negative
by GBP87,728.
In addition to the GBP175,000 used for capital investments, a further GBP178,000
was required to finance the higher volume of business activity, being the
difference between the amounts owed to us by customers and the amount owed to
our suppliers.
However, the major reason for the net outflow of funds was an increase in
stocks of GBP732,000. Some of this increase can be justified by exceptional
circumstances, as we built up stocks to allow for the installation of new
plant, and as we purchased forward in anticipation of the increases in raw
materials. But, the steep rise in stocks is of concern and strenuous efforts
are being made to reverse this trend.
Staff
Our most important resource is our staff and we thank them for their continuing
effort and support to overcome the constant challenges we face as we try to
implement major changes and improvements throughout the group.
Board appointments
I am delighted to announce the appointment to the board of my two sons, Carl
and Alan as Group Sales Director and Group Commercial Director respectively.
The appointments, made on 13th August 2010, will be subject to their election
at the AGM.
Carl Braime gained a BSc at London University and an MA at Bristol University,
before working in South America for three years, becoming fluent in Spanish.
Since June 2006 Carl has been Sales Manager for Braime Elevator Components
Limited, further developing our overseas distribution. He is currently
completing the final year of an Executive MBA at Leeds University.
Alan Braime graduated from Newcastle with a 1st in Economics and qualified as a
chartered accountant with KPMG in September 2006, prior to joining the
business. Alan has played an important role in developing the strategy for the
restructuring of our manufacturing business and is currently leading a project
looking at the business systems across the group.
Both appointments will bring fresh ideas and new energy to the board, which are
essential for the continuing development of the business.
Outlook
The directors believe that the new work coming on stream in Braime Pressings
Limited should result in an improvement in its' financial performance but the
outcome remains dependent on our ability to successfully complete the launch of
these contracts and to make the necessary improvements in the operating
efficiency of our new plant.
The 4B division has started the year very positively but we are concerned about
the impact of the current levels of instability, particularly related to
commodity prices, which threaten margins and jeopardise business confidence
among customers. In this uncertain climate, it will be a challenge to hang on
to the gains of the previous two years.
Nevertheless we believe overall that we can maintain the improvement in the
performance of the group, albeit at a much slower rate.
Summarised Consolidated Income Statement for the year ended 31st December 2010
(audited)
Note 2010 2009
GBP GBP
Revenue 18,057,661 15,685,218
Changes in inventories of finished goods and 647,108 (406,362)
work in
progress
Raw materials and consumables used (10,358,951) (8,156,328)
Employee benefits costs (3,841,811) (3,685,404)
Depreciation expense (286,938) (302,865)
Other expenses (2,804,022) (2,434,978)
Profit from operations 1,413,047 699,281
Finance costs (302,445) (285,338)
Finance income 250,776 211,049
Profit before tax 1,361,378 624,992
Tax expense (416,240) (237,905)
Profit for the year attributable to equity 945,138 387,087
shareholders of the parent company
Basic and diluted earnings per share 1 65.63p 26.88p
Summarised Consolidated Statement of Comprehensive Income for the year ended
31st December 2010(audited)
2010 2009
GBP GBP
Profit for the year 945,138 387,087
Actuarial (losses)/gains recognised directly in (168,000) 76,000
equity
Foreign exchange losses on re-translation of (33,254) (107,605)
overseas operations
Adjustment in respect of minimum funding 137,000 (149,000)
requirement per IFRIC14
Other comprehensive income for the year (64,254) (180,605)
Total comprehensive income for the year 880,884 206,482
Summarised Consolidated Balance Sheet at 31st December 2010(audited)
Note 2010 2010 2009 2009
GBP GBP GBP GBP
Assets
Non-current assets
Property, plant and 1,223,980 1,249,460
equipment
Goodwill 12,270 12,270
Employee benefits - -
Total non-current 1,236,250 1,261,730
assets
Current assets
Inventories 3,593,680 2,862,149
Trade and other 3,291,602 2,400,384
receivables
Cash and cash 1,844,934 1,947,207
equivalents
Total current assets 8,730,216 7,209,740
Total assets 9,966,466 8,471,470
Liabilities
Current liabilities
Bank overdraft 1,145,421 1,159,966
Trade and other 2,707,169 2,019,053
payables
Other financial 291,553 344,339
liabilities
Corporation tax 171,054 -
liability
Total current 4,315,197 3,523,358
liabilities
Non-current liabilities
Financial liabilities 389,012 488,979
Total non-current 389,012 488,979
liabilities
Total liabilities 4,704,209 4,012,337
Total net assets 5,262,257 4,459,133
Capital and reserves
attributable to equity
holders of the parent
company
Share capital 360,000 360,000
Capital reserves 77,319 77,319
Foreign exchange 286,292 319,546
reserve
Retained earnings 4,538,646 3,702,268
Total equity 5,262,257 4,459,133
Summarised Consolidated Cash Flow Statement for the year ended 31st December
2010(audited)
Note 2010 2010 2009 2009
GBP GBP GBP GBP
Operating activities
Net profit 945,138 387,087
Adjustments for:
Depreciation 286,938 302,865
Grants amortised (1,656) (1,656)
Foreign exchange losses (37,785) (119,426)
Investment income (250,776) (211,049)
Interest expense 302,445 285,338
Gain on sale of plant, (35,357) (8,748)
machinery and motor
vehicles
Adjustment in respect (22,000) 57,000
of defined benefits
scheme
Income tax expense 416,240 237,905
658,049 542,229
Operating profit before 1,603,187 929,316
changes in working
capital and provisions
(Increase)/decrease in (891,218) 243,991
trade and other
receivables
(Increase)/decrease in (731,531) 481,862
inventories
Increase in trade and 713,331 89,643
other payables
(909,418) 815,496
Cash generated from 693,769 1,744,812
operations
Income taxes paid (270,401) (375,533)
Investing activities
Purchases of plant, (210,154) (326,902)
machinery and motor
vehicles
Sale of plant, 35,358 8,750
machinery and motor
vehicles
Interest received 4,776 11,049
(170,020) (307,103)
Financing activities
Repayment of hire (197,871) (124,157)
purchase creditors
Interest paid (65,445) (75,338)
Dividends paid (77,760) (43,200)
(341,076) (242,695)
(Decrease)/increase in (87,728) 819,481
cash and cash
equivalents
Cash and cash 787,241 (32,240)
equivalents, beginning
of period
Cash and cash 699,513 787,241
equivalents, end of
period
Consolidated statement of changes in equity for the year ended 31st December
2010(audited)
Foreign
Share Capital Exchange Retained
Capital Reserve Reserve Earnings Total
GBP GBP GBP GBP GBP
Balance at 1st January 360,000 77,319 427,151 3,431,381 4,295,851
2009
Comprehensive income
Profit - - - 387,087 387,087
Other comprehensive
income
Actuarial gains - - - 76,000 76,000
recognised directly in
equity
Foreign exchange losses - - (107,605) - (107,605)
on re-translation of
overseas operations
Adjustment in respect of - - - (149,000) (149,000)
minimum funding
requirement per IFRIC14
Total other comprehensive - - (107,605) (73,000) (180,605)
income
Total comprehensive - - (107,605) 314,087 206,482
income
Transaction with owners
Dividends - - - (43,200) (43,200)
Total transactions with - - - (43,200) (43,200)
owners
Balance at 31st December 360,000 77,319 319,546 3,702,268 4,459,133
2009
Balance at 1st January 360,000 77,319 319,546 3,702,268 4,459,133
2010
Comprehensive income
Profit - - - 945,138 945,138
Other comprehensive
income
Actuarial losses - - - (168,000) (168,000)
recognised directly in
equity
Foreign exchange losses - - (33,254) - (33,254)
on re-translation of
overseas operations
Adjustment in respect of - - - 137,000 137,000
minimum funding
requirement per IFRIC14
Total other comprehensive - - (33,254) (31,000) (64,254)
income
Total comprehensive - - (33,254) 914,138 880,884
income
Transaction with owners
Dividends - - - (77,760) (77,760)
Total transactions with - - - (77,760) (77,760)
owners
Balance at 31st December 360,000 77,319 286,292 4,538,646 5,262,257
2010
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 (2009 - 1,440,000). There are no potentially
dilutive shares in issue.
Dividends paid 2010 2009
Equity shares
Ordinary shares
Interim of 3.00p (2009 - 1.50p) per share paid on 14,400 7,200
1st April 2010
Interim of 2.40p (2009 - 1.50p) per share paid on 11,520 7,200
15th October 2010
25,920 14,400
'A' Ordinary shares
Interim of 3.00p (2009 - 1.50p) per share paid on 28,800 14,400
1st April 2010
Interim of 2.40p (2009 - 1.50p) per share paid on 23,040 14,400
15th October 2010
51,840 28,800
Total dividends paid 77,760 43,200
2. Cash and cash equivalents 2010 2009
GBP GBP
Cash at bank and in hand 1,844,934 1,947,207
Bank overdrafts 1,145,421 1,159,966
699,513 787,241
3. Major non-cash transaction
During the year the group acquired tangible assets of GBP53,050 (2009 - GBP378,354)
under hire purchase agreements.
4. Basis of preparation
The preliminary announcement has been prepared in accordance with applicable
International Financial Reporting Standards as adopted by the EU and applied in
accordance with the Companies Act 2006.
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31st December 2009, as described in
those annual financial statements.
The financial statements have been prepared under the historical cost
convention.
5. Annual general meeting
The annual general meeting of the company will be held in Leeds on Thursday
19th May 2011. Full details will be included in the published annual report and
financial statements, which will be sent to shareholders by the 21st April 2011
and will also be available on the company's web-site (www.braimegroup.com) from
that date.
30th March 2011
For further information please contact:
T.F. & J.H. Braime (Holdings) P.L.C.
D. H. Brown FCA - Financial Director
0113 245 7491
W. H. Ireland Limited
Katy Mitchell LLB
0113 394 6628
END
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