29th Jul 2014 11:02
LONDON (Alliance News) - Brammer PLC Tuesday increased its interim dividend by almost 6%, despite acquisition costs denting profit in the first-half.
The specialist distributor of industrial maintenance, repair and overhaul products posted pretax profit of GBP11.6 million for the six months ended June 30, down from GBP14.6 million a year earlier, while revenue rose 11% to GBP364.1 million from GBP328.4 million.
Despite a profit fall, the company increased its interim dividend almost 6% to 3.6 pence from 3.4 pence a year earlier, "reflecting the board's confidence in the outlook for the business."
Brammer blamed the profit fall on acquisition-related costs and exceptional items of GBP5.3 million. In January, Brammer acquired Scandinavian distribution firm Lönne Holding AS in a deal worth GBP19 million, in additional to six small acquisitions for EUR9.5 million.
The company said revenue growth reflected continued progress made on focusing on Key Accounts, its Insites service and cross-selling, together with a contribution from its strategic acquisition of Lönne.
It said during the period Key Accounts grew by 9.6%, with four new pan-European accounts signed, while cross selling saw sales growth of 17%. There was also further growth in Insites, with 13 new Insites established and sales growth of 12%.
Brammer's Insite service offers a range of outsourced solutions which provides companies with technical support and inventory management.
The company said gross profit margin increased to 31.3% compared with 30.7% a year earlier.
Brammer said it has continued to demonstrate "resilience" despite only modest improvements in economic conditions across Europe. The company estimated that its customer base spends around EUR6.5 million on its defined product range.
"Our share of our customers' total spend is, therefore, around 10%, representing an opportunity to achieve significant growth through cross-selling," Brammer said.
Manchester-based Brammer said as a consequence its market share will not be a constraint to growth for many years to come.
Brammer also said its acquisition pipeline remains strong despite spending more than EUR18 million adding to the business during the first-half.
"We continue to identify opportunities to acquire businesses which will complement and enhance Brammer's range and since the period end we have completed a further two bolt-on acquisitions, of a Tools and General Maintenance specialist in Spain, and a Fluid Power specialist in Italy," the company said.
Brammer shares were quoted up 4.2% at 422.31 pence Tuesday.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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