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

 

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