Interim Results

RNS Number : 7341C
Braime (T.F.& J.H.) (Hldgs) PLC
04 September 2008
 




Interim results for the six months ended 30th June 2008

Group sales revenue for the first six months of 2008 increased by 24% from £5.89m to £7.28m and the company made a profit before tax for the first half of 2008 of £125,000. This compares to a profit of £67,000 in 2007 and a loss of £218,000 in 2006 in the same period.


The group was cash negative in the first half of 2008. This was caused by an increase in trade debtors, following the significant increase in sales revenue, and an increase in inventories, due to the sudden and steep rise in the cost of raw materials. The company continues to trade well within its borrowing facilities and we expect the group to be cash generative for the full year, ending 31st December 2008.


The sizeable accumulated losses in 2005 and 2006 have put considerable strain on the company's financial resources, as has the need to finance the recent large increase in group revenue. As a result, the directors have reluctantly decided that it would not be appropriate to pay an interim dividend in 2008.


The profitability of the group continues to improve and, providing this is sustained, the directors plan to progressively restore dividend payments to the shareholders.


Performance of group companies

4B division

The subsidiaries distributing our 4B brand of components to the material handling sector worldwide have all enjoyed substantial growth and we expect this to continue in the second half of the year. We are fortunate that over 80% of sales of '4B' products are in overseas markets and are primarily to customers in the agro industry or process industries, sectors benefiting from the surge in commodity prices, insulating us from most of the consequences of the current economic problems in the UK.


The downside is that we have also seen unprecedented inflation in the cost of some of our raw materials, with UK steel prices rising 50% and world plastic prices increasing by 100% since the start of 2008. Given our complex product mix, passing on price increases to customers on a continuous basis is both time consuming and destabilizing and the inevitable delays in the acceptance by our customers of such large price increases has had a short term negative effect on our margins.


Pressings division

The sales revenue of Braime Pressings has remained largely unchanged from the first half of 2007 and the losses in this company have not been reduced. This is hugely disappointing.


Through no fault of our own, the start up of the new major product line for an automotive components supplier has been repeatedly delayed by our customer but is now scheduled finally to come on stream from September 2008. We have made a significant capital investment in this project and the long delay has had a serious effect on the performance of Braime Pressings both in 2007 and 2008. Equally, once this project commences, it will have a substantial long term positive impact both on the result of Braime Pressings and of the group.


Relocation

While the company is still receiving enquiries from parties interested in developing our site in Leeds, the effect of the downturn in the housing market makes it unlikely that a realistic offer, based on the primarily residential brief approved by the planning officers, will be forthcoming in the foreseeable future. The company still wishes to relocate its manufacturing business to more economic premises, as soon as this becomes a viable option, and continues to explore other alternatives.


Outlook

The UK economy appears to be entering a recession and across the world the huge inflation in commodity prices is creating economic instability. In spite of this unfavourable general economic background, the directors believe that the group will be able to continue the progress made over the past 18 months.


Condensed Consolidated Income Statement for the six months ended 30th June 2008


30th June 2008 

30th June 2007 

31st December  2007 


£ 

£ 

£ 


(unaudited) 

(unaudited) 

(audited) 





Revenue

7,277,564 

5,887,371 

11,838,813 





Profit from operations

152,203 

78,025 

167,352 

Finance costs

(161,247)

(162,913)

(321,762)

Finance income

133,623 

151,996 

292,467 

Result for the period before tax

124,579 

67,108 

138,057 

Tax expense @ 28% (2007 - 30%) for interim figures

   (34,882)

    (20,132)

(128,793)

Net result for the period

  89,697 

     46,976 

  9,264 





Basic profit per share

6.23p 

3.26p 

0.01p 


Condensed Consolidated Statement of Recognised Income and Expense for the six months ended 30th June 2008


30th June 2008 

30th June 2007 

31st December  2007 


£ 

 £ 

£ 


(unaudited) 

(unaudited) 

(audited) 





Exchange difference on translation of foreign operations

1,236 

(9,684)

17,557 

Actuarial gains recognised directly in equity

  - 

  - 

118,000 

Total income and expense recognised in equity

1,236 

(9,684)

135,557 





Net income/(expense) recognised in equity

1,236 

(9,684)

135,557 

Profit for period

89,697 

46,976 

  9,264 

Total recognised income and expense for the period

90,933 

37,292 

144,821 





Attributable to:




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

90,933 

37,292 

144,821 


Consolidated Balance Sheet at 30th June 2008



30th June 2008

30th June 2007 

31st December 

2007 


£ 

£ 

£ 


(unaudited) 

(unaudited) 

(audited) 

Assets




Non-current assets




Property, plant and equipment

802,916 

  689,748 

862,998 

Employee benefits

  74,000 

  - 

  97,000 

Total non-current assets

876,916 

  689,748 

  959,998 





Current assets




Inventories

2,656,962 

2,521,209 

2,535,671 

Trade and other receivables

3,315,784 

3,001,803 

2,713,165 

Cash and cash equivalents

1,419,603 

1,429,619 

1,493,734 

Total current assets

7,392,349 

6,952,631 

6,742,570 





Total assets

8,269,265 

7,642,379 

7,702,568 





Liabilities




Current liabilities




Bank overdraft

1,368,047 

1,294,875 

1,387,668 

Trade and other payables

2,604,927 

2,346,046 

2,162,084 

Other financial liabilities

273,114 

182,166 

231,645 

Corporation tax liability

  34,882 

  20,132 

  35,667 

Total current liabilities

4,280,970 

3,843,219 

3,817,064 





Non-current liabilities




Financial liabilities

349,212 

327,539 

337,354 

Employee benefits

  - 

  31,000 

  - 

Total non-current liabilities

  349,212 

  358,539 

  337,354 





Total liabilities

4,630,182 

4,201,758 

4,154,418 





Total net assets

3,639,083 

3,440,621 

3,548,150 









Capital and reserves attributable to equity holders of the parent company




Share capital

360,000 

360,000 

360,000 

Capital reserve

77,319 

77,319 

77,319 

Foreign exchange reserve

(7,756)

(36,233)

(8,992)

Retained earnings

3,209,520 

3,039,535 

3,119,823 

Total equity

3,639,083 

3,440,621 

3,548,150 


Consolidated Cash Flow Statement for the six months ended 30thJune 2008



30th June 2008 


30th June 2007 

31st December 

2007 


£ 

 £ 

£ 


(unaudited) 

(unaudited) 

(audited) 

Operating activities




Net profit from ordinary activities

  89,697 

  46,976 

  9,264 

Adjustments for:




Depreciation

105,021 

88,493 

168,183 

Grants amortised

(828)

(828)

(1,656)

Foreign exchange gains/(losses)

1,246 

(9,810)

19,535 

Investment income

(133,623)

(151,996)

(292,467)

Interest expense

161,247 

162,913 

321,762 

Gain on sale of plant, machinery and motor vehicles

-  

(6,123)

Income tax expense

  34,882 

  20,132 

128,793 

Operating profit before changes in working capital and provisions

167,945 

108,904 

338,027 





Increase in trade and other receivables

(602,619)

(390,066)

(153,188)

Increase in inventories

(121,291)

(323,287)

(337,749)

Increase in trade and other payables

454,170 

499,254 

327,326 

(Increase)/decrease in provisions and employee benefits

  27,000 

  34,000 

  35,000 


(242,740)

(180,099)

(128,611)





Cash generated from operations

  14,902 

(24,219)

218,680 





Income taxes paid

 (35,667)

 (33,063)

(131,397)





Investing activities




Purchases of plant, machinery and motor vehicles

(32,657)

(53,682)

(163,474)

Sale of plant, machinery and motor vehicles

35,843 

8,922 

10,375 

Interest received

  28,623 

  27,996 

  59,467 


  31,809 

 (16,764)

 (93,632)

Financing activities




Repayment of hire purchase creditors

(47,597)

(20,500)

(56,026)

Interest paid

(60,247)

(53,913)

(114,762)

Loan received

  42,300 

  - 

  - 


(65,544)

(74,413)

(170,788)





Decrease in cash and cash equivalents

(54,500)

(148,459)

(177,137)

Cash and cash equivalents (including overdrafts), beginning of period

106,066 

283,203 

283,203 

Cash and cash equivalents (including overdrafts), end of period

  51,566 

134,744 

106,066 


Notes to the interim financial report


Accounting policies

Basis of preparation

This 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 2007 and those which management expects to apply in the group's full financial statements to 31st December 2008.


This interim financial report in 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 2007 but is derived from the accounts. Statutory accounts for the period ended 31st December 2007 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.


4th September 2008


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


This information is provided by RNS
The company news service from the London Stock Exchange
 
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