TIDMBMTO
RNS Number : 6069J
Braime Group PLC
28 April 2022
BRAIME GROUP PLC
("Braime" or the "Company" and with its subsidiaries the
"Group")
ANNUAL RESULTS FOR THE YEARED 31ST DECEMBER 2021
At a meeting of the directors held today, the accounts for the
year ended 31st December 2021 were submitted and approved by the
directors. The accounts statement is as follows:
Chairman's statement
Overview
We expected 2021 to be challenging. Instead, all our
subsidiaries across the Group exceeded both their budget and their
prior year's sales. In particular, the revenues of Braime Pressings
increased substantially due to exceptionally high demand from its
external customers for commercial vehicle components, as well as
increased demand from its internal customers in the Group for the
supply of material handling components to the 4B division, due to a
surprising increase in infrastructure projects globally. The
combined effect was to lift the annual revenue of Braime Pressings
by 38%. In consequence, the manufacturing business made a very
significant contribution to the Group operating profit for the
first time in recent years.
Across the Group in 2021, Sales increased from GBP32.8m in 2020
to GBP36.4m in 2021, and the overall gross margin rose from 46.7%
to 48.4%. Meanwhile the effect of exchange rate movements on
overseas margins and earnings was marginally positive in 2021. So
the Group operating profit increased from GBP1.4m to GBP2.5m before
exceptional costs, an excellent result in the context of the
pandemic.
However, the results include GBP1.2m of exceptional costs,
GBP1.0m of which the Directors have set aside as a provision to
cover the costs of re-building part of the UK facility, which had
to be demolished in December. This issue is discussed further later
in the Statement. After deducting both the finance expense of
GBP0.2m and the exceptional cost of GBP1.2m the profit before tax,
is GBP1.1m, similar to the figure in 2020.
Dividends
The company paid an interim dividend of 4.25p in October 2021.
Based on the positive result for 2021, and strong current trading,
the directors propose paying a second dividend of 8.20p on the 8th
June to the holders of the Ordinary and "A" Ordinary Shares on the
Share Register on the 20th May 2022. (The ex-dividend date is the
19th May 2022). This brings the total dividend paid in relation to
2021 to12.45p, compared to 11.8p in 2020.
Strategy
The business has continued to pursue its longstanding Strategy
of aiming to achieve growth in sales and profit by consistently
investing in 3 key areas:-
- new machinery and equipment to achieve ongoing improvements in
productivity and efficiency;
- product development to add further innovative products for
existing and new customers;
- developing new markets which offer opportunities to expand the
customer base.
This strategy is pursued through a policy of maintaining low
central overheads, and by limiting central control to the areas of
finance, capital expenditure, product development and marketing
support. Control over other areas of the business is delegated to
the subsidiaries, who are best placed to develop policies to suit
their own local markets.
Capital Investment
In 2021 the Group made capital investments totalling GBP2.1m,
repeating the level of investment made in 2020. Of this, GBP0.7m
was invested in production equipment, GBP0.5m in the completion of
the new operating and distribution facility for 4B France, and
GBP0.7m spent towards the cost of the new warehouse being
constructed for our UK manufacturing facility.
The new premises at 4B France, completed in May 2021, provide
larger and more modern office and storage facilities, significantly
improve the ability to serve existing customers, support future
growth, and enable it to provide support, where necessary post
Brexit, to other European customers still supplied primarily from
the UK.
The new climate controlled warehouse in Leeds will provide
Braime Pressings with additional centralised climate-controlled
storage for both raw materials and finished parts. The new
warehouse, dispatch area, and extra employee parking were scheduled
for completion in October 2021 but have been seriously delayed by
the issue in the Chain Cell and the unexpected discovery of a 30m
deep water well at a point where the new building joins the
existing facility, as announced in February 2022.
The well, not marked on any current or historical maps, and
missed by the ground survey and exploratory bore holes, was
probably part of Union Foundry, built around 1850, occupying part
of the current manufacturing site prior to its acquisition by T.F.
& J.H. Braime in 1910. The cost of plugging and securing the
well beneath the foundations, and the resulting delay to the
building program, have added around GBP300,000 to the cost of this
project. Completion is finally expected in the summer of this
year.
New Product Development
In 2021, we brought to market a number of new innovative
products and continued our investment in product development. The
long process from original concept, through the assessment of the
technical and commercial feasibility of the idea, detailed design,
gaining the relevant approvals standard and certification, carrying
out field trials, to final product launch, takes a minimum of 3
years and sometimes much more. Devoting current time to
continuously progressing a stream of new product development is
crucial to the future of the business.
Repairs to the UK Facility
In July 2021, following a major storm, bricks under a beam
supporting the roof of the North-East corner of the Leeds facility,
fell to ground in the Chain Cell. Very fortunately nobody was hurt,
but the drop of a structural beam by 300mm, caused another
supporting beam to rotate off its location in the opposite "Chimney
Wall" and pushed out the top of an external wall running adjacent
to Sayner Lane, forcing the wall to bow outwards and the public
highway had to be closed.
Our structural engineers advised that the building would
inevitably deteriorate further, cause the roof to collapse and,
when it did so, would pull down further areas of roofing over the
main workshops and that the only option was full demolition. We
reserved GBP250,000 for this at the interim results stage.
The Leeds facility is a Grade II Listed Building. Under the 1990
Listed Buildings Act, it is a criminal offence to demolish or
materially alter a Listed Building without the prior consent of the
local authority, in our case Leeds City Council (LCC). Prior to
granting their consent for demolition, LCC required that our
structural engineers justified the demolition and that our
architects submitted a planning application for the demolition and
the restoration of the building, which included important features
of the historic structure deemed of particular value. These
features included rebuilding the original facade of the building
adjacent to Sayner Lane re-using the original bricks and restoring
the original fireplace and chimney, which dominated the rear of the
property and formed an important part of the Union Foundry, built
in the mid-19th Century, during the early industrial revolution in
Leeds.
Following an application for demolition and re-building, the
Planning Application was granted in mid-January 2022. The current
best estimate from specialist advisors is that the total cost will
be in the region of GBP850,000 which will have to be financed from
internal resources. However, we are still in discussion with LCC
planners, architects, and potential contractors to minimise the
cost of the re-construction, including the costly features required
by the council but creating a new low maintenance building designed
to increase efficiency, reduce operational costs and provide
additional usable space for storage and production. We hope to
receive firm pricing in early May and complete the works in 2022.
Further updates will be provided.
This unexpected event forced Braime Pressings to temporarily
relocate and condense some of its manufacturing operation in
another part of the UK facility, causing additional stress at a
time when resources were already fully stretched. The only
mitigating factors are that it involved the oldest part of the
facility, dating from 1850, was in poor condition, badly designed,
and built on clay without foundations. Despite these setbacks, the
overall results to date have remained positive.
Risk
Business risks are set out in the strategic report but the two
principal risks to the Group are its exposure to currency
fluctuations, and its exposure to claims for compensation linked to
product failure. These primary risks are due respectively, to the
very high proportion of the Group products which are sold overseas,
and to the specific nature of the markets in which it is
engaged.
The Group also buys part of its raw materials in overseas
currencies, and this partly offsets the fact that around 80% of
Group revenues are made in overseas markets and currencies. The
business holds substantial funds in key foreign currencies and, to
the limited extent to which this is possible, it minimises the risk
by reacting to currency fluctuations. This involves both judgement
and luck and the risk, inherent in the Groups profile, remains
unavoidable in the long-term.
A large proportion of the Group's products are sold into the
material handling market, primarily to storage and processing
facilities. In the case of the mechanical components, the parts are
used in physically transporting the granular product; in the case
of the electronic components, they are designed to help reduce the
risk that the combination of the dust and oxygen present in moving
high volumes of combustible product, triggers a fire or dust
explosion. As a result, the business is exposed periodically to
claims for financial compensation although no such claims have been
made in the financial year.
Great care is taken in the design and manufacture of our
products in order to meet and maintain a multitude of complex
international Standards and Approvals. This process involves
significant ongoing cost. Nevertheless, the risk cannot be entirely
eliminated so the Group carries insurance to enable it to defend
itself against any claims that may arise.
New Business Opportunity
In April 2022, the Group purchased the exclusive sales rights,
and customer list, for an additional range of electrical components
used in the bulk material handling industry. This product range
will be re-labelled and integrated with our own "4B" brand and the
purchase increases our current small UK market, expands our
customer base and creates potential for further growth.
Staff
In my 2020 Report, we praised our staff for their courage in
working through the pandemic and their willingness to change their
patterns of work to meet the much higher demand from our customers
and compensate for those employees who became ill or who needed to
be furloughed. The large degree of flexibility shown by our staff
in coping with the additional problems outlined above has continued
through 2021.
Just as everyone thought the pandemic was finally over and
normality was slowly returning, the workload of many of our staff
has been massively increased by further new challenges. As always,
the continued success of the business depends almost entirely on
the efforts and enthusiasm of our staff at all levels of the
business.
Current Trading and Outlook
The first quarter of 2022 has begun very positively. Sales
across the Group are currently running well ahead of the same
period in 2021, as customers continue to enjoy a post pandemic
bounce.
Group sales are diversified by product and industry and are sold
in a wide spread of overseas markets, some of which will be less
affected by any recession. In some cases, these markets will
actually benefit from the steep rise in grain and other commodity
prices. Currently though, the immediate future is uncertain and a
major recession in the UK, and Europe is widely anticipated.
The invasion of Ukraine by Russia has tragic and unimaginable
humanitarian consequences. It has also largely closed, for the
moment, two very significant markets for agro-industrial components
supplied both directly, and especially indirectly, by Group
subsidiaries.
The Group is being badly affected by huge increases in the cost
of our main raw materials, steel, plastic resin and rubber. In
2022, these increases have already averaged 50% and are
unprecedented in peacetime. Meanwhile, the over 600% increase in
the cost of sea freight, and the doubling of delivery times during
2021 has shown no sign of abating. On occasions, the shipping cost
now exceeds the ex-works cost of the products. The size of the
increases, and the long and unreliable delivery times, are very
disruptive for a Group dependent on trading globally.
These problems seriously affect purchasing, production and sales
and create a huge increase in the stress and the daily work of our
employees. Above all, the knock-on effect of this instability puts
every order and every customer perpetually "at risk". We therefore
look to the year ahead with concern, and anticipate difficult times
ahead, although historically, the diversity of our product range
and the global nature of our sales have together helped us weather
such challenges.
Nicholas Braime, Chairman
27th Apr il 2022
For further information please contact:
Braime Group PLC
Nicholas Braime/Cielo Cartwright
0113 245 7491
W. H. Ireland Limited
Katy Mitchell
0113 394 6628
The directors present their strategic report of the Company and
the Group for the year ended 31st December 2021.
Principal activities
The principal activities of the Group during the year under
review was the manufacture of deep drawn metal presswork and the
distribution of material handling components and monitoring
equipment. Manufacturing activity is delivered through the Group's
subsidiary Braime Pressings Limited and the distribution activity
through the Group's 4B division.
Braime Pressings specialises in metal presswork, including deep
drawing, multi-stage progression and transfer presswork. Founded in
1888, the business has over 130 years of manufacturing experience.
The metal presswork segment operates across several industries
including the automotive sector and supplies external as well as
group customers.
The subsidiaries within the 4B division are industry leaders in
developing high quality, innovative and dependable material
handling components for the agricultural and industrial sectors.
They provide a range of complementary products including elevator
buckets, elevator and conveyor belting, elevator bolts and belt
fasteners, forged chain, level monitors and sensors and controllers
for monitoring and providing preventative maintenance systems which
facilitate handling and minimise the risk of explosion in hazardous
areas. The 4B division has operations in the Americas, Europe,
Asia, Australia and Africa and in 2021 traded in ninety countries.
The US subsidiary also has an injection-molding plant. All
injection-molded products are made wholly for internal consumption
and this is classed as 4B division activity rather than included in
the manufacturing segment.
Performance highlights
The board is pleased to report a significant improvement in the
underlying results of the Group. For the year ended 31st December
2021, the Group generated revenues of GBP36.4m, up GBP3.6m from
prior year. Profit from operations before exceptional costs was
GBP2.5m, up GBP1.1m from prior year and EBITDA before exceptional
costs was GBP3.8m up GBP1.2m from prior year. As mentioned in the
Chairman's Statement, exceptional costs of GBP1.2m relate to
extensive repairs to the chain cell area of our Hunslet Road
property, following the discovery of a series of structural faults
along three walls. As at the year end, we had spent GBP0.2m
demolishing the wall, dismantling a large area of roofing and
securing the surrounding area.
However, because the property is Grade II listed, the external
walls will require careful restoration of original features using
materials agreed with the local authority conservation officers. At
the time of writing, we have provided for additional costs of
GBP0.85m being our best estimate of the required cost of
restoration. The chain cell repair has also contributed to GBP0.2m
of delays to the completion of our warehouse which is not now
expected to be completed until the summer and this is also included
in our provision. Profit before tax is GBP1.1m including
exceptional costs is in line with prior year (2020 - GBP1.2m).
At 31st December 2021, the Group had net assets of GBP15.7m.
Cash flow
Inventories increased by GBP1.3m as the Group planned for
increased demand partly as a result of the easing of Covid-19
restrictions on world economies, and partly to reduce the impact of
anticipated inflation on raw materials. Trade and other receivables
increased by GBP0.3m reflecting increased customer activity close
to the year end for the same reason. These were largely offset by
an increase in our trade and other payables of GBP0.2m and an
increase in provisions of GBP1.1m. In total the business generated
funds from operations of GBP1.9m (2020 - GBP2.7m). The Group
continued its investment programme during the year, spending
GBP2.1m on capital items; GBP0.7m of this was on the construction
of the new warehouse in the UK announced in the summer of 2021 and
a further GBP0.5m to complete the new warehouse in France which was
officially opened in May 2021. After the payment of other financial
costs and the dividend, the cash balance (net of overdraft) was
GBP1.0m, a decrease of GBP0.2m from the prior year.
Bank facilities
The Group's operating banking facilities are renewed annually.
As announced last year, the new UK warehouse construction is being
funded largely through the procurement of a development loan of
GBP0.9m from HSBC. The development loan will be converted to a five
year term loan when construction of the warehouse is completed. Our
facility with HSBC provides ample headroom for the Group to make
the necessary investments in the year and to carry out the repairs
mentioned above to the chain cell operations. The business
continues to enjoy good relations with its bankers.
Taxation
The tax charge for the year was GBP0.3m, with an effective rate
of tax of 29.9% (2020 - 28.5%). The effective rate is higher than
the standard UK tax rate of 19% (2020 - 19%); this results from the
blending effect of the different rates of tax applied by each of
the countries in which the Group operates, in particular, our US
operations' tax charge affects the blended rate. In any financial
year the effective rate will depend on the mix of countries in
which profits are made, however the Group continues to review its
tax profile to minimise the impact.
Capital expenditure
In 2021, the Group invested GBP2.1m (2020 - GBP2.1m) in
property, plant and equipment. In addition to GBP1.2m spent on both
the UK and French warehouse construction, the Group has made
improvements to its employee facilities and enhanced its
engineering capabilities, purchasing equipment in welding, bolt
threading and pointing, and has continued to expand its bucket
tooling portfolio.
Balance sheet
Net assets of the Group have increased to GBP15.7m (2020 -
GBP15.0m). A foreign exchange gain of GBP0.1m (2020 - GBP0.1m loss)
was recorded on the re-translation of the net assets of the
overseas operations, which has increased retained earnings in the
year.
Principal exchange rates
The Group reports its results in sterling, its presentational
currency. The Group operates in six other currencies and the
principal exchange rates in use during the year and the comparative
figures for the year ending 31st December 2020 are shown in the
table below.
Average rate Average rate Closing rate Closing rate
Currency Symbol Full year Full year 31st Dec 31st Dec
2021 2020 2021 2020
Australian Dollar AUD 1.838 1.867 1.859 1.763
Chinese Renminbi
(Yuan) CNY 8.875 8.880 8.606 8.890
Euro EUR 1.165 1.126 1.191 1.112
South African Rand ZAR 20.490 21.309 21.494 20.030
Thai Baht THB 44.073 40.404 44.690 40.838
United States Dollar USD 1.374 1.290 1.348 1.365
Our business model
The two segments of the Group are very different operations and
serve different markets, however together they provide
diversification, strength and balance to the Group and their
activities.
The focus of the manufacturing business is to produce quality,
technically demanding components. The use of automated equipment
allows us to produce in high volumes whilst maintaining flexibility
to respond to customer demands.
The material handling components business operates from a number
of locations around the globe allowing us to be close to our core
markets. The focus of the business is to provide innovative
solutions drawing on our expertise in material handling and access
to a broad product range.
Performance of Braime Pressings Limited, manufacturer of deep
drawn metal presswork
Braime Pressings Limited sales of GBP9.5m were up GBP2.7m on
prior year. Intercompany sales and external sales were GBP4.3m and
GBP5.2m as compared to GBP3.0m and GBP3.8m respectively in 2020.
Profit for the period was GBP0.8m (2020 - loss GBP0.2m). The
manufacturing arm benefitted from strong demand from the automotive
sector and from stronger intercompany sales as world economies
started to recover from the pandemic. The board believes the
business continues to add strategic value through its supply to the
4B division and complementary engineering expertise.
Performance of the 4B division, world-wide distributor of
components and monitoring systems for the material handling
industry
Revenues increased from GBP34.2m to GBP37.9m, with external
sales up GBP2.2m. The 4B group saw revenue growth as the world
economies started to recover from the covid pandemic. Revenue in
the European market increased by GBP0.1m compared to 2020 with the
Americas increasing by GBP0.6m and China by GBP0.5m. Profit for the
period fell by GBP0.2m to GBP1.3m with the prior year benefitting
from the forgiveness of GBP0.4m of a government loan received by
our US subsidiary.
Key performance indicators
The Group uses the following key performance indicators to
assess the performance of the Group as a whole and of the
individual businesses:
Key performance indicator Note 2021 2020
Turnover growth 1 11.0% (1.9%)
Gross margin 2 48.4% 46.7%
Operating profit before exceptional item 3 2.49m 1.38m
Stock days 4 184 days 182 days
Debtor days 5 54 days 56 days
Notes to KPI's
1. Turnover growth
The Group aims to increase shareholder value by measuring the
year on year growth in Group revenue. The board is pleased with the
significant turnaround of Group revenues following the global
pandemic.
2. Gross margin
Gross profit (revenue plus change in inventories less raw
materials used) as a percentage of revenue is monitored to maximise
profits available for reinvestment and distribution to
shareholders. The increase in gross margin is the result of
recovery from the pandemic.
3. Operating profit before exceptional item
Sustainable growth in operating profit is a strategic priority
to enable ongoing investment and increase shareholder value. The
increase in operating profit before exceptional items reflects
recovery from the pandemic.
4. Stock days
The average value of inventories divided by raw materials and
consumables used and changes in inventories of finished goods and
work in progress expressed as a number of days is monitored to
ensure the right level of stocks are held in order to meet customer
demands whilst not carrying excessive amounts which impacts upon
working capital requirements. Stockholding has increased due to
inventory build-up in December 2021 to mitigate the impact of
anticipated increases in raw materials costs in 2022.
5. Debtor days
The average value of trade receivables divided by revenue
expressed as a number of days. This is an important indicator of
working capital requirements. Debtor days have continued to improve
and management are focusing on reducing this to improve cashflows
given the significant outlays for the chain cell rebuild.
Other metrics monitored weekly or monthly include quality
measures (such as customer complaints), raw materials buying
prices, capital expenditure, line utilisation, reportable accidents
and near-misses.
Principal risks and uncertainties
In the current economic, political and physical, climate, the
only certainty is uncertainty. As the global economy emerges from
the impact of the Covid pandemic, increased demand and shortage of
raw materials has placed upward inflationary pressure on supply
chains.
The recent invasion of Ukraine and consequent sanctions placed
by the West on Russia has increased political tensions worldwide.
This is creating volatility in the energy and commodities markets.
Prior to this, the COP26 summit saw the UK government commit to
ambitious targets to cut greenhouse emissions, and this commitment
is being passed onto businesses. The UK's transition arrangements
with the EU ended at the end of 2021. A trade agreement with the EU
has been struck but the finer details of the agreement remain to be
negotiated. The directors consider that these events pose all
business threats but may well create other opportunities. The
Company's short reporting lines of management means it can remain
nimble footed to sudden and or large changes in the business
landscape.
The two principal risks associated with our particular business
model are discussed in the Chairman's statement.
General risks
The market remains challenging for our manufacturing division,
due to pricing pressures throughout the supply chain. The
maintenance of the TS16949 quality standard is important to the
Group and allows it to access growing markets within the automotive
and other sectors. A process of continual improvement in systems
and processes reduces this risk as well as providing increased
flexibility to allow the business to respond to customer
requirements.
Our 4B division maintains its competitive edge in a price
sensitive market through the provision of engineering expertise and
by working closely with our suppliers to design and supply
innovative components of the highest standard. In addition, ranges
of complementary products are sold into different industries. The
monitoring systems are developed and improved on a regular
basis.
The directors receive monthly reports on key customer and
operational metrics from subsidiary management and review these.
The potential impact of business risks and actions necessary to
mitigate the risks, are also discussed and considered at the
monthly board meetings. The directors have put in place formal
business continuity and disaster recovery plans with respect to its
UK and US operations. The more significant risks and uncertainties
faced by the Group are set out below:-
-- Raw material price fluctuation :- The Group is exposed to
fluctuations in steel and other raw material prices and to mitigate
this volatility, the Group fixes its prices with suppliers where
possible.
-- Reputational risk :- As the Group operates in relatively
small markets any damage to, or loss of reputation could be a major
concern. Rigorous management attention and quality control
procedures are in place to maximise right first time and on time
delivery. Responsibility is taken for ensuring swift remedial
action on any issues and complaints.
-- Damage to warehouse or factory:- Any significant damage to a
factory or warehouse will cause short-term disruption. To mitigate
these risks, the Group has arrangements with key suppliers to step
up supply in the event of a disruption.
-- Economic fluctuations :- The Group derives a significant
proportion of its profits from outside the UK and is therefore
sensitive to fluctuations in the economic conditions of overseas
operations including foreign currency fluctuations. As the Covid-19
pandemic has demonstrated, economies are greatly intertwined and
reverberations feed through the supply chain.
-- Cyber security :- All businesses now rely almost totally on
computers, networks and systems with 'data' information held on
them, and require privacy and integrity of this data. The
likelihood cyber security attacks and security threats are key
risks for every organisation. The Group reviews its security
measures regularly with its IT providers.
Financial instruments
The operations expose the Group to a variety of financial risks
including the effect of changes in interest rates on debt, foreign
exchange rates, credit risk and liquidity risk.
The Group's exposure in the areas identified above are discussed
in note 19 of the financial statements.
The Group's principal financial instruments comprise sterling
and foreign cash and bank deposits, bank loans and overdrafts,
other loans and obligations under finance leases together with
trade debtors and trade creditors that arise directly from
operations. The main risks arising from the Group's financial
instruments can be analysed as follows:
Price risk
The Group has no direct exposure to securities price risk, as it
holds no listed equity instruments. The Group maintains a defined
benefit scheme, the asset valuations are subject to market changes
(note 19).
Foreign currency risk
The Group operates a centralised treasury function which manages
the Group's banking facilities and all lines of funding. Forward
contracts are on occasions used to hedge against foreign exchange
differences arising on cash flows in currencies that differ from
the operational entity's reporting currency.
Credit risk
The Group's principal financial assets are bank balances, cash
and trade receivables, which represent the Group's maximum exposure
to credit risk in relation to financial assets.
The Group's credit risk is primarily attributable to its trade
receivables. Credit risk is mitigated by a stringent management of
customer credit limits by monitoring the aggregate amount and
duration of exposure to any one customer depending upon their
credit rating. The Group also has credit insurance in place. The
amounts presented in the balance sheet are net of allowance for
doubtful debts, estimated by the Group's management based on prior
experience and their assessment of the current economic
environment.
The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings assigned by
international credit-rating agencies. The Group has no significant
concentration of credit risk, with exposure spread over a large
number of counterparties and customers.
Liquidity risk
The Group's policy has been to ensure continuity of funding
through acquiring an element of the Group's fixed assets under
medium term loans and finance leases and arranging funding for
operations via bank overdrafts to aid short term flexibility.
Cash flow interest rate risk
Interest rate bearing assets comprise cash and bank deposits,
all of which earn interest at a fixed rate. The interest rate on
the bank overdraft is at market rate and the Group's policy is to
keep the overdraft within defined limits such that the risk that
could arise from a significant change in interest rates would not
have a material impact on cash flows. The Group's policy is to
maintain other borrowings at fixed rates to fix the amount of
future interest cash flows.
The directors monitor the level of borrowings and interest costs
to limit any adverse effects on the financial performance of the
Group.
Health and safety
We maintain healthy and safe working conditions on our sites and
measure our ability to keep employees and visitors safe. We
continuously aim to improve our working environments to ensure we
are able to provide safe occupational health and safety standards
to our employees and visitors. The directors receive monthly
H&S reports and we carry out regular risk management audits to
identify areas for improvement and to minimise safety risks. As a
global business, the Group is able to tap into the experience of
its various international locations to share best practice and
learning points. The experience of the past two years has improved
our plans and procedures in the event of future pandemics.
Research and development
The Group continues to invest in research and development and
from time to time liaises with university engineering groups with a
view to improving features of its products. This has resulted in
innovations in the products which will benefit the Group in the
medium to long term.
Duties to promote the success of the Company
Section 172 of the Companies Act 2006 requires the directors to
act in a way that they consider, in good faith, would be most
likely to promote the success of the Company for the benefit of its
members as a whole, and in doing so have regard (amongst other
matters) to:
- the most likely consequences of any decision in the long term;
- the interest of the Company's employees;
- the need to foster the Company's business relationships with
suppliers, customers and others;
- the impact of the Company's operations on the community and the environment;
- the desirability of the Company maintaining a reputation for
high standards of business conduct; and
- the need to act fairly between the members of the Company.
The board confirms that, during the year, it has had regard to
the matters set out above. Further details as to how the directors
have fulfilled their duties are set out below and in the Governance
Report which in particular, expands on directors' duties and
stakeholder liaison.
Business ethics and human rights
The board is respectful of the Company's long history, and
considers the long-lasting impact of its decisions. We are
committed to conducting our business ethically and responsibly, and
treating employees, customers, suppliers and shareholders in a
fair, open and honest manner. As a business, we receive audits by
both our independent auditors and by our customers and we look to
source from suppliers who share our values. We encourage our
employees to provide feedback on any issues they are concerned
about and have a whistle-blowing policy that gives our employees
the chance to report anything they believe is not meeting our
required standards.
The Group is similarly committed to conducting our business in a
way that is consistent with universal values on human rights and
complying with the Human Rights Act 1998. The Group gives
appropriate consideration to human rights issues in our approach to
supply chain management, overseas employment policies and
practices. Where appropriate, we support community partnering.
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. As a global business, the Group fully
recognises and seeks to harness the benefits of diversity within
its work force. The Group is grateful to its employees for
continuing to come to work in what has been a worrying time for
themselves and their families.
Environment
The Group's policy with regard to the environment is to
understand and effectively manage the actual and potential
environmental impact of our activities. Operations are conducted
such that we comply with all legal requirements relating to the
environment in all areas where we carry out our business. The Group
continuously looks for ways to harness energy reduction
(electricity and gas) and water. The Company already has a 190KW
solar system on its UK premises and is currently seeking permission
from the national grid to extend our installation of solar panels.
During the year, the Group conducted an energy audit of its
principal plant and property with the help of energy consultants
and has been implementing the findings to reduce our energy
consumption. During the period of this report the Group has not
incurred any fines or penalties or been investigated for any breach
of environmental regulations. The board is cognizant that climate
change will change the business landscape for the future and is
working to understand its wide-ranging impact on the Group's
activities and operations.
Social and community matters
We recognise our responsibility to work in partnership with the
communities in which we operate and we encourage active employee
support for their community in particular, in aid of technical
awareness and training. We regularly participate in a number of
education events encouraging interest in engineering in young
people. It is our policy not to provide political donations.
Consolidated income statement for the year ended 31st December
2021 (audited)
2021 2020
GBP'000 GBP'000
Revenue 36,406 32,803
Changes in inventories of finished goods and work
in progress 869 (63)
Raw materials and consumables used (19,656) (17,428)
Employee benefits costs (8,930) (8,408)
Depreciation and amortisation expense (1,334) (1,280)
Other expenses (4,954) (4,277)
Other operating income 88 30
--------------------------------------------------- ----------- -----------
Profit from operations before exceptional item 2,489 1,377
Exceptional item (1,217) -
--------------------------------------------------- ----------- -----------
Profit from operations 1,272 1,377
Finance expense (205) (191)
Finance income 3 9
--------------------------------------------------- ----------- -----------
Profit before tax 1,070 1,195
Tax expense (320) (341)
--------------------------------------------------- ----------- -----------
Profit for the year 750 854
--------------------------------------------------- ----------- -----------
Profit attributable to:
Owners of the parent 665 823
Non-controlling interests 85 31
--------------------------------------------------- ----------- -----------
750 854
--------------------------------------------------- ----------- -----------
Basic and diluted earnings per share 52.08p 59.31p
--------------------------------------------------- ----------- -----------
Consolidated statement of comprehensive income for the year
ended 31st December 2021 (audited)
2021 2020
GBP'000 GBP'000
Profit for the year 750 854
Items that will not be reclassified subsequently
to profit or loss
Net pension remeasurement gain on post employment
benefits 90 66
Items that may be reclassified subsequently to
profit or loss
Foreign exchange gain/(loss) on re-translation
of overseas operations 87 (133)
--------------------------------------------------- -------- --------
Other comprehensive income/(loss) for the year 177 (67)
Total comprehensive income for the year 927 787
--------------------------------------------------- -------- --------
Total comprehensive income attributable to:
Owners of the parent 817 744
Non-controlling interests 110 43
--------------------------------------------------- -------- --------
927 787
--------------------------------------------------- -------- --------
Consolidated balance sheet at 31st December 2021 (audited)
2021 2020
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 8,713 7,830
Intangible assets 25 37
Right of use assets 632 487
Total non-current assets 9,370 8,354
Current assets
Inventories 10,124 8,864
Trade and other receivables 6,211 5,855
Cash and cash equivalents 1,463 1,533
-------------------------------------------------- -------- --------
Total current assets 17,798 16,252
-------------------------------------------------- -------- --------
Total assets 27,168 24,606
-------------------------------------------------- -------- --------
Liabilities
Current liabilities
Bank overdraft 489 335
Trade and other payables 4,895 4,744
Other financial liabilities 2,902 2,133
Corporation tax liability 41 78
-------------------------------------------------- -------- --------
Total current liabilities 8,327 7,290
Non-current liabilities
Financial liabilities 2,046 2,075
Deferred income tax liability 24 278
Provision for liabilities 1,054 -
-------------------------------------------------- -------- --------
Total non-current liabilities 3,124 2,353
-------------------------------------------------- -------- --------
Total liabilities 11,451 9,643
-------------------------------------------------- -------- --------
Total net assets 15,717 14,963
-------------------------------------------------- -------- --------
Share capital 360 360
Capital reserve 257 257
Foreign exchange reserve (89) (151)
Retained earnings 15,382 14,800
-------------------------------------------------- -------- --------
Total equity attributable to the shareholders of
the parent 15,910 15,266
Non-controlling interests (193) (303)
-------------------------------------------------- -------- --------
Total equity 15,717 14,963
-------------------------------------------------- -------- --------
Consolidated cash flow statement for the year ended 31st
December 2021 (audited)
2021 2020
GBP'000 GBP'000
Operating activities
Net profit 750 854
Adjustments for:
Depreciation and amortisation 1,334 1,280
Foreign exchange gains/(losses) 210 (170)
Finance income (3) (9)
Finance expense 205 191
(Gain)/loss on sale of land and buildings, plant,
machinery and motor vehicles (38) 1
Adjustment in respect of defined benefit scheme 91 71
Income tax expense 320 341
Income taxes paid (679) (168)
---------------------------------------------------- -------- --------
1,440 1,537
---------------------------------------------------- -------- --------
Operating profit before changes in working capital
and provisions 2,190 2,391
Increase in trade and other receivables (288) (356)
Increase in inventories (1,259) (291)
Increase in trade and other payables 179 942
Increase in provisions 1,054 -
(314) 295
---------------------------------------------------- -------- --------
Cash generated from operations 1,876 2,686
Investing activities
Purchases of property, plant, machinery and motor
vehicles and intangible assets (2,074) (2,057)
Sale of land and buildings, plant, machinery and
motor vehicles 73 13
Interest received 2 4
---------------------------------------------------- -------- --------
(1,999) (2,040)
Financing activities
Proceeds from long term borrowings 1,145 1,117
Repayment of borrowings (452) (419)
Repayment of hire purchase creditors (182) (217)
Repayment of lease liabilities (234) (228)
Bank interest paid (124) (124)
Lease interest paid (65) (38)
Hire purchase interest paid (16) (29)
Dividends paid (173) (173)
---------------------------------------------------- -------- --------
(101) (111)
---------------------------------------------------- -------- --------
(Decrease)/increase in cash and cash equivalents (224) 535
Cash and cash equivalents, beginning of period 1,198 663
---------------------------------------------------- -------- --------
Cash and cash equivalents, end of period 974 1,198
---------------------------------------------------- -------- --------
Consolidated statement of changes in equity for the year ended
31st December 2021 (audited)
Foreign Non-
Share Capital Exchange Retained Controlling Total
Capital Reserve Reserve Earnings Total Interests Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1st January
2020 360 257 (6) 14,084 14,695 (346) 14,349
Comprehensive income
Profit - - - 823 823 31 854
Other comprehensive
income
Net pension remeasurement
gain recognised directly
in equity - - - 66 66 - 66
Foreign exchange losses
on re-translation of
overseas subsidiaries
consolidated operations - - (145) - (145) 12 (133)
--------------------------- ---------- ---------- ---------- ----------- -------- ------------- ---------
Total other comprehensive
income - - (145) 66 (79) 12 (67)
Total comprehensive
income - - (145) 889 744 43 787
--------------------------- ---------- ---------- ---------- ----------- -------- ------------- ---------
Transactions with owners
Dividends - - - (173) (173) - (173)
--------------------------- ---------- ---------- ---------- ----------- -------- ------------- ---------
Total transactions with
owners - - - (173) (173) - (173)
--------------------------- ---------- ---------- ---------- ----------- -------- ------------- ---------
Balance at 1st January
2021 360 257 (151) 14,800 15,266 (303) 14,963
Comprehensive income
Profit - - - 665 665 85 750
Other comprehensive
income
Net pension remeasurement
gain recognised directly
in equity - - - 90 90 - 90
Foreign exchange gains
on re-translation of
overseas subsidiaries
consolidated operations - - 62 - 62 25 87
--------------------------- ---- ---- ------ ------- ------- ------ -------
Total other comprehensive
income - - 62 90 152 25 177
Total comprehensive
income - - 62 755 817 110 927
--------------------------- ---- ---- ------ ------- ------- ------ -------
Transactions with owners
Dividends - - - (173) (173) - (173)
Total transactions with
owners - - - (173) (173) - (173)
--------------------------- ---- ---- ------ ------- ------- ------ -------
Balance at 31st December
2021 360 257 (89) 15,382 15,910 (193) 15,717
--------------------------- ---- ---- ------ ------- ------- ------ -------
1. EARNINGS PER SHARE AND DIVIDS
Both the basic and diluted earnings per share have been
calculated using the net results attributable to shareholders of
Braime Group PLC as the numerator.
The weighted average number of outstanding shares used for basic
earnings per share amounted to 1,440,000 shares (2020 - 1,440,000).
There are no potentially dilutive shares in issue.
Dividends paid 2021 2020
GBP'000 GBP'000
Equity shares
Ordinary shares
Interim of 7.80p (2020 - 8.00p) per share paid
on 25th May 2021 37 38
Interim of 4.25p (2020 - 4.00p) per share paid
on 14th October 2021 20 19
------------------------------------------------ -------- --------
57 57
------------------------------------------------ -------- --------
'A' Ordinary shares
Interim of 7.80p (2020 - 8.00p) per share paid
on 25th May 2021 75 77
Interim of 4.25p (2020 - 4.00p) per share paid
on 14th October 2021 41 39
------------------------------------------------ -------- --------
116 116
------------------------------------------------ -------- --------
Total dividends paid 173 173
------------------------------------------------ -------- --------
An interim dividend of 8.20p per Ordinary and 'A' Ordinary share
will be paid on 8th June 2022.
2. SEGMENTAL INFORMATION
Central Manufacturing Distribution Total
2021 2021 2021 2021
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External - 5,166 31,240 36,406
Inter Company 2,038 4,287 6,704 13,029
--------------------------------- -------- -------------- ------------- --------
Total 2,038 9,453 37,944 49,435
--------------------------------- -------- -------------- ------------- --------
Profit
EBITDA (740) 807 2,539 2,606
Finance costs (69) (37) (99) (205)
Finance income - 1 2 3
Depreciation and amortisation (608) (34) (692) (1,334)
Tax expense 144 30 (494) (320)
(Loss)/profit for the period (1,273) 767 1,256 750
--------------------------------- -------- -------------- ------------- --------
Assets
Total assets 5,839 6,402 14,927 27,168
Additions to non current assets 1,219 11 1,298 2,528
Liabilities
Total liabilities 2,109 2,525 6,817 11,451
Central Manufacturing Distribution Total
2020 2020 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External - 3,762 29,041 32,803
Inter Company 1,772 3,068 5,159 9,999
--------------------------------- -------- -------------- ------------- --------
Total 1,772 6,830 34,200 42,802
--------------------------------- -------- -------------- ------------- --------
Profit
EBITDA 309 (163) 2,511 2,657
Finance costs (105) (31) (55) (191)
Finance income - 7 2 9
Depreciation (592) (28) (660) (1,280)
Tax expense 32 - (373) (341)
(Loss)/profit for the period (356) (215) 1,425 854
--------------------------------- -------- -------------- ------------- --------
Assets
Total assets 5,178 4,200 15,228 24,606
Additions to non current assets 415 54 2,020 2,489
Liabilities
Total liabilities 801 2,025 6,817 9,643
3. BASIS OF PREPARATION
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards as
adopted by the UK (IFRSs as adopted by the UK), IFRIC
interpretations and the Companies Act 2006 applicable to companies
reporting under IFRS. The consolidated financial statements have
been prepared under the historical cost convention. The accounting
policies adopted are consistent with those of the annual financial
statements for the year ended 31st December 2021 as described in
those financial statements.
4. ANNUAL GENERAL MEETING
The Annual General Meeting of the members of the company will be
held at the registered office of the company at Hunslet Road,
Leeds, LS10 1JZ on Thursday 23rd June 2022 at 11.45am. The annual
report and financial statements will be sent to shareholders by
25th May 2021 and will also be available on the company's website (
www.braimegroup.com ) from that date.
The Company will take into account any Government guidance or
legislation in force at the time of the AGM and will implement any
measures it believes necessary to protect the health and safety of
attendees. Any changes to the format of the AGM will be
communicated to shareholders through the Company's website and,
where appropriate, by stock exchange announcement.
5. THE ANNOUNCEMENT
The financial information set out in this announcement does not
constitute statutory accounts as defined by section 434 of the
Company Act 2006. The financial information for the year ended 31st
December 2021 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 2020
have been delivered to the Registrar of Companies, and those for
2021 will be delivered in due course.
6. EVENTS AFTER THE REPORTING PERIOD
In April 2022, the Group entered into an exclusivity arrangement
with one of its trading partners to expand Group sales
distribution.
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END
FR BRGDSUSDDGDR
(END) Dow Jones Newswires
April 28, 2022 02:01 ET (06:01 GMT)
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