2nd Mar 2005 07:01
Brammer PLC02 March 2005 PRESS RELEASE FOR IMMEDIATE RELEASE 2 March 2005 2004 PRELIMINARY RESULTS CONTINUING PROGRESS Brammer plc, the European services group, today announces preliminary resultsfor the year ended 31 December 2004. Highlights 2004 2003 Change Turnover £290m £349m -17%Profit / (loss) on ordinary activities after tax £0.9m £(36.3)mProfit before goodwill, exceptional items and tax £9.5m £7.0m +36% Movement in net debt £22.7m £(17.0)mNet debt £(57.0)m £(79.7)mEquity shareholders' funds £16.3m £20.2m Earning per share Basic 1.9p (75.9)p Diluted 1.9p (75.9)p Before amortisation of goodwill and exceptional items 13.8p 11.8p +17%Dividend per share 4.8p 4.5p +7% • Profit before goodwill, exceptional items and tax up 36% at £9.5 million • Earnings per share before amortisation of goodwill and exceptional items up 17% • Dividend increased by 7% to 4.8p • Net debt reduced by £22.7 million to £57.0 million • Livingston disposal completed in March 2004 • Continuing business revenues increased by 3% to £270.8 million, whilst operating profit before goodwill, exceptional items and interest increased by 9% to £10.5 million • Significant market share gains achieved, particularly in the second half of the year • Operating profits improved significantly on the continent, growing by 24% in Germany and 27% in France • After a poor first half, the UK is now seeing continuing improvement with second half growth in revenues of 4% on a sales per working day basis • Key account business enjoyed excellent growth David Dunn, chairman, said: "I believe the future for Brammer is bright after several difficult years. Ourperformance in the second half of 2004 was on an improving trend and theevidence to date in 2005 leads us to believe we shall be able to demonstratefurther good progress this year." Enquiries: Brammer plc 020 7638 9571 (8.00am - 1.00pm) 0161 902 5599 (1.00pm - 4.30pm) David Dunn, chairman Ian Fraser, chief executive Paul Thwaite, finance director Issued: Citigate Dewe Rogerson Ltd 020 7638 9571 Martin Jackson Anthony Kennaway Brammer plc 2004 PRELIMINARY RESULTS Chairman's statement Overview Following the positive results and outlook I was able to refer to in the 2004interim report, I am pleased to indicate further good progress in the secondhalf of the year. Profit on ordinary activities before tax for the twelve months to 31 December2004 was £3.6 million compared to a loss of £29.2 million last year which wasadversely affected by the disposal of our Livingston businesses. The profitbefore goodwill and exceptional items was £9.5 million compared to £7.0 millionlast year. The figures include part-year contributions from the Livingstonbusinesses which were disposed of at the end of March. For the three monthperiod in 2004 prior to disposal the profit for Livingston before goodwill,exceptional items and interest was £1.6 million compared to a full twelve monthscontribution in 2003 of £0.8 million. Basic earnings per share were 1.9p compared to a loss of 75.9p in 2003. Earningsper share before goodwill and exceptional items amounted to 13.8p against 11.8plast year. Exceptional costs in both years were largely associated with therestructuring and, ultimately, the sale of the Livingston businesses. Net debtfell from £79.7 million to £57.0 million benefiting from the proceeds of thesale of Livingston and good operational cash flow from the continuingoperations. Strategy As previously stated we shall concentrate on the development of the continuingoperations where we see many opportunities for profitable growth. The Europeanspread of our business provides an excellent platform to service largeinternational customers in particular those who are seeking to partner withsuppliers who are capable of delivering their needs across a wide product andgeographic spectrum. As described in the chief executive's review our keyaccounts business has enjoyed excellent growth in 2004 and this was clearlyevidenced in the second half year where we saw increasing sales in each of ourgeographic locations. We have put a number of initiatives in place in the second half which willenhance our service to our customers. We now have a settled and first classmanagement team with clear strategic objectives. We have established a 'oneBrammer' approach which all management have accepted and are implementing acrossEurope. This includes branding, systems, and logistics. Our strategy has beenformulated across the headings of growth, costs, synergies and capability withclear performance benchmarks over specific timescales. We have set out short andlonger term objectives with an overall time horizon of some five years. Dividend The board is recommending a final dividend of 3.3p (2003 3.0p). This makes atotal for the year of 4.8p (2003 4.5p) which is covered 2.4x by profit after taxbut before goodwill and exceptional items in respect of the continuingoperations (3.0x if Livingston's profit contribution is included). The finaldividend will be payable on 4 July 2005 to shareholders on the register at theclose of business on 10 June 2005. People I referred in the interim report to the board changes made earlier in the yearand I again state our gratitude to David Hollywood and Jean-Marie Fink who bothretired following many years of service to the group. Terry Garthwaite joined usas a new independent non-executive director and we are already benefiting fromhis considerable experience. The board recently reviewed the results of an employee survey conducted acrossthe continuing operations and we were most encouraged by the improvements andattitudes evident at all levels of the business. There is still much we can doto improve further but I would like to express the board's appreciation to allof our employees for their contribution and efforts throughout 2004. The future As this report indicates I believe the future for Brammer is bright afterseveral difficult years. Our performance in the second half of 2004 was on animproving trend and the evidence to date in 2005 leads us to believe we shall beable to demonstrate further good progress this year. Chief executive's review Overview During 2004 we continued to strengthen the leading position of Brammer in theEuropean market. Following the disposal of the Livingston businesses at the endof the first quarter of 2004 we have been able to concentrate on the excitingopportunities available to us, supported by a stronger balance sheet andenhanced management focus. Continuing operations Formerly known as Brammer Industrial Services, and now branded "Brammer" acrossEurope, our operating business is the leading European supplier of technicalcomponents and related services to the maintenance, repair and operations ("MRO") markets. During 2004, revenues in our continuing business increased by 3% to£270.8 million, whilst underlying profit (operating profit before goodwill,exceptional items and interest) increased by 9% to £10.5 million. Profitsimproved significantly on the continent but declined in the UK where, after apoor first half, we are now seeing welcome improvement with second half growthin revenues of 4% on a sales per working day ("SPWD") basis. Cash inflow fromcontinuing operating activities in 2004 was £12.7 million. Net operating assetsemployed (excluding goodwill and deferred consideration) reduced by £4.1 millionto £48.2 million as we continued our planned reduction in working capital,largely through an improvement in inventory turn. We expect to be able tocontinue to generate more operating cash flow than operating profit for the nextseveral years as we improve inventory turn through managing our inventory on aEuropean basis. Operating margins increased despite price pressure in the market, andsignificant increases in input costs due to price increases in steel and energy.At the end of the year headcount in continuing operations was 1,845, which was54 higher than at the same time last year, having welcomed 13 new stafffollowing the acquisition of our Hungarian operation. Revenues per headincreased by 2% to £149,000 for the full year, following a 16% improvement lastyear. In the UK, although SPWD revenues declined by 3% for the year as a whole, asweaker market conditions continued through the first half, management actionsstabilised the business with like-for-like turnover increasing steadily throughthe balance of the year. Capital employed reduced by £2.6 million (15%) due toimprovements in inventory efficiency and the provision of service stock bysuppliers. We executed plans to improve the profitability of the Insites and, asa result, the total contribution from Insites increased by 14%. Several newcontracts were won with customers such as Severn Trent Water, Lafarge, Smurfit,Cegelec, Dalkia and Peugeot. Despite a difficult economic climate, Germany's SPWD grew by 6% with animproving trend throughout the year. Careful control of the cost base helpedincrease operating profit by 24% compared with last year. Good progress wasmade on key accounts, with revenues in this segment up 25%. We won asignificant pneumatics contract with Volkswagen across six locations andadditional contracts with Harry Brot, TRW, Smurfit and GKN. We continued tobroaden our product range across the whole customer base with mechanical powertransmission products growing by 24% and linear motion by 31%. Furtherheadcount reductions of 17 to 388 resulted in productivity improvement of 12% asmeasured by sales per head. In France, SPWD increased by 4% as the investment made last year in new productintroduction and Insites began to take effect. Key accounts grew by 9%,contract wins with GKN, Smurfit, Fromageries Bel, Nestle and Lactalis making asignificant contribution. Fluid power continued to contribute to our growth,being 37% up on 2003. This growth, together with the effect of cost reductionmeasures taken in 2003, helped increase operating profit by 27%. We increasedour Insites from 10 to 13 and revenues through Insites increased by 17% comparedwith 2003. In Spain, despite the planned shedding of low margin original equipmentmanufacturers ("OEM") business, SPWD grew 4%, again with an improvement in therate of growth throughout the year. We continued to increase our sales to theMRO market (up 6%) reducing further our exposure to the more cyclical OEMmarketplace (down 0.2%). New contracts were won with Coagro, Robert Bosch,Cervezas Damm, GKN and Smurfit. Sales of the seals product group grew by 31%and, at the year end, we reinforced the pneumatics range, as a development ofour first pan-European supply contract with SMC the Japanese pneumaticsmanufacturer. In the Netherlands SPWD were up 2%, with good growth in MRO sales contributingto a 4 percentage point improvement in the gross profit margin. Several newcontracts were won including Smurfit, Kamp's bakery, SEW, Corus and the DutchRailway. We introduced pneumatics along with a number of other smaller productranges. A new branch was opened at Spankeren. Strategy We have established a strategic plan and detailed objectives for the next 24months under the following headings Growth • Our first priority is growth to build on our strong market position - we have twice the revenues of our nearest competitor. We believe we have a 10% share of the €2 billion Western European MRO aftermarket for bearings. By contrast, we have a little over 1% of the €18 billion aftermarket represented by the rest of our product range. In total, we believe that this translates to around 2% market share of our chosen market place, and represents an attractive cross-selling opportunity to broaden the range of products supplied to our major bearing customers. In addition we are the only company which can offer a "one stop shop" European supply position to both our customers and suppliers. • We seek to build customer relationships with the increasing number of major European groups which are focusing on supplier rationalisation to establish a single source of supply across Europe. Revenues through our contracted European accounts grew 21%. In addition the two new contracts with Smurfit and GKN produced additional revenues in the second half, with significant further growth available through to 2006. We strengthened our key account business development team in the centre as well as within each country. • We have now built teams in each country to develop the Insites strategy and provide added value opportunities for our customers. • We continue to refine our marketing approach as the national and European expert in each of the most attractive market segments in our industry. • We continue to seek attractive acquisition candidates which will bolt on to our existing operations. Costs • Our new European purchasing director has continued to build strong relationships with our suppliers. We are concentrating our purchases with a smaller number of suppliers, thereby gaining price improvements as well as enhanced supplier marketing support in the field. • We established our first pan-European partnership agreement with SMC, the Japanese pneumatics manufacturer. Total pneumatics sales grew 23%. This relatively new product range now accounts for 5% of revenues. • We are now sourcing basic ironware products direct from China for distribution throughout Europe. • We have set up a cross functional team to identify and roll out best practice in all of our operations, continuing our quest to improve productivity and reduce costs as a percentage of revenues. Synergies • We have embarked on a programme to standardise our approach at each location in Europe in all areas from product range, through sales and customer service skills, to branding and marketing. Each of our businesses will associate the Brammer brand with the local name during 2005 and, during 2006, businesses in each country will be renamed Brammer. • We continue to evolve our system of key performance indicators which will lead to best practice being introduced in each branch, and a more homogeneous level of service in each territory, with resultant productivity improvements and quality of service assurance. • Our Master Data Management team, led by our European IT director, has begun the process of establishing one common European unique part number for each of over two million part numbers in our range, further enhancing our ability to manage, sell and distribute our inventory on a European basis. This work will provide the foundation for one integrated European IT and supply chain system. • The value of "Brammer Inline", our system which allows product matching, stock visibility and internal procurement was demonstrated by over 20,000 internal transactions being made from a matched database of over 150,000 products, saving on both procurement costs and purchase price and ultimately reducing inventory levels. Capability • All of our people have access to a purpose built e-learning programme which • Informs them of the strategy and priorities of the business • Introduces all the businesses across the group • Introduces them to key customers and suppliers • Provides a basic knowledge of all of our products and services Already over 50% of our staff have started this programme, which we expect tohelp significantly improve our technical and selling skills. • Our key account toolkit covering strategy, processes, customer management tools, relationship management and user accreditation is now being used in all territories to win new business and add value to existing customer relationships, and is about to be introduced as an e-learning module. • Our annual opinion survey carried out in November registered significant improvements in the areas of Job Satisfaction and Leadership and Communication following the implementation of intensive action plans derived from the results of the 2003 survey. The future We continue to build on our strong presence within Europe and anticipate furthergains in market share in an otherwise fragmented market place. Growth inEuropean wide key accounts and new product launches should ensure we continue togrow at a faster rate than the market. In addition, we expect our cash flow tocontinue to exceed our operating profit, providing the ability to take advantageof the acquisition opportunities available to us as we lead the marketconsolidation. Financial review Overview Having completed the restructuring of the group through the disposal of theLivingston businesses our clear focus is on the development of the Brammerdistribution business. Our continuing operations have improved further on theencouraging results reported on at the half year. Disposal of businesses On 31 March 2004 the group completed the disposal of the European LivingstonCalibration business to Air Liquide for a consideration of €31.0 million(£20,653,000) after adjustments for debt and cash. Also on 31 March 2004 the group completed the disposal of Livingston Rental foran initial cash consideration of £6.9 million, deferred cash payments of £3.0million receivable 13 months after completion and £2.5 million receivable 18months after completion, and a further amount (up to £2.8 million) depending onthe proceeds of sale of impaired assets. The group also retained a 25% stake inLivingston Rental, which the buyer has a right to redeem at between £0.5 millionand £2.0 million depending on the date of the actual repayment of the £2.5million deferred cash payment. The group took exceptional charges in 2003 for asset write-downs in respect ofthese disposals and there are further charges in 2004 primarily for deal feesand restructuring the residual business. Turnover Our turnover decreased by 17% in the year due to the disposal of the Livingstonbusinesses. Turnover of the continuing operations increased by 3% of whichcontinental Europe accounted for a 7% increase and the UK a 2% fall. Atconstant exchange rates our continuing business turnover increased by 4%. Profit The result for the year was a profit on ordinary activities after tax of £0.9million (2003 £36.3 million loss). Group profit before goodwill, exceptionalitems and after interest was up 36% in the year at £9.5 million (2003 £7.0million). Exceptional charges This year's accounts include an exceptional charge of £3.7 million as shownbelow. £'mRestructuring - continuing operations 0.9Disposal costs / loss on disposal - Livingston 2.8Total exceptional 3.7 The restructuring of £0.9 million results from action to re-size overheads,particularly for central functions, to reflect a simplified group structurefollowing the sale of Livingston. Goodwill Goodwill in the balance sheet stands at £35.2 million at the end of the year(2003 £49.6 million). In 2004, goodwill increased by £1.1 million in respect ofacquisitions, reduced by £2.3 million of amortisation, £12.9 million in respectof disposals and a further £0.3 million of exchange. Trading during the year Group turnover decreased by 17% during the year. Group profit before goodwill,exceptional items, interest and tax ("underlying profit") was £12.1 million(2003 £10.5 million), of which £6.7 million was delivered in the first half and£5.4 million in the second half (see below). Continuing operations Livingston First Second Full First Second Full half half year half half year £'m £'m £'m £'m £'m £'m2004Turnover 136.9 133.9 270.8 19.3 0.0 19.3Underlying profit 5.1 5.4 10.5 1.6 0.0 1.6 2003Turnover 133.9 128.6 262.5 44.9 42.1 87.0Underlying profit 5.3 4.4 9.7 (0.9) 1.7 0.8 In 2004 all the on-going costs incurred by the central functions have beenallocated to continuing operations as this reflects the future structure of thegroup. The comparatives for 2003 have been revised accordingly. Continuing operations turnover was up 3% on 2003 and underlying profit was up 9%in the year. For the second half continuing operations turnover was up 4% witha 23% increase in underlying profit. Interest The interest charge for the year of £2.6 million (2003 £3.5 million) representsan effective interest rate on average net borrowings of 4.2% (2003 4.7%). Ourprofit before goodwill, exceptional items and tax cover of interest is 4.6xcompared to 3.0x in 2003. Tax The tax charge for the year is £2.7 million. The tax effect of expenses notallowable for tax purposes amounted to £2.1 million and resulted principallyfrom goodwill and fees incurred in the disposal of the Livingston businesses. Cash flow 2004 2003 £'m £'mNet cash inflow from operating activities 18.7 29.4Net capital expenditure (purchases net of disposals) (6.2) (8.9)Operational cash generation 12.5 20.5Acquisitions (0.1) (0.4)Deferred consideration (4.1) (20.7)Disposals 18.6 0.4Exchange (2.4) (6.7)Interest, tax, dividends and other (1.8) (10.0)Movement in net debt 22.7 (16.9) Net debt decreased by £22.7 million from £79.7 million to £57.0 million, asshown above. Net cash inflow from operating activities of £18.7 million (including a workingcapital reduction of £3.3 million) was reduced by £6.2 million of net purchasesof tangible fixed assets (2003 £8.9 million), increased by the receipt of a net£18.7 million from the disposal of Livingston and reduced by a payout of £4.1million for deferred consideration, primarily for KNS, and £0.2 million forother acquisitions. Average net borrowings in 2004 were £62.7 million comparedto £74.6 million in 2003. Treasury The group does not enter into speculative currency transactions but from time totime will use derivative financial instruments to hedge particular transactionsback into operating companies' domestic currencies. The companies in the group mostly trade within their domestic markets in theirlocal currency. Where companies trade into export markets, this is generally atthe behest of domestic customers who trade globally. Group companies account intheir local currency, principally either sterling or euros, and at 31 December2004 £8.3 million (11%) of the group's tangible operating assets were held insterling and £65.1 million (89%) in euros. Net operating assets and financing by currency at 31 December 2004 were asillustrated below. Currency Net operating assets Financing Net assets employed £'m £'m £'mSterling 8.3 0.0 8.3Euro 65.1 (57.1) 8.0 73.4 (57.1) 16.3 The consolidated net trading profit before goodwill, exceptional items andinterest covers the interest payable 4.6x and net worth is £16.3 million (2003£20.2 million). The directors consider the group to have adequate resources to continueoperations for the foreseeable future and therefore continue to use the goingconcern basis in the preparation of the financial statements. We will continue to focus on generating cash to enable us to expand operationsin Europe, organically and by acquisition. Earnings per share Earnings per share before goodwill, amortisation and exceptional items rose from11.8p in 2003 to 13.8p in 2004. Basic earnings per share were 1.9p (2003 75.9ploss). International Financial Reporting Standards ("IFRS") All European Union listed companies are required to prepare their consolidatedfinancial statements in accordance with IFRS for accounting periods beginning onor after 1 January 2005. The group will therefore adopt IFRS for the financialyear ended 31 December 2005 including the 2005 interim accounts. The areas of greatest impact on the group have been identified as thenon-amortisation of goodwill, pensions, share based payments and the treatmentof accrued dividends. The group has conducted training, assigned resources andhas a procedure in place to ensure full compliance with IFRS. Brammer Preliminary results announcement Unaudited consolidated profit and loss account for the year ended 31 December2004 2004 2004 2004 2003 2003 2003 Continuing Discontinued Total Continuing Discontinued Total Businesses Businesses Businesses Businesses £'000 £'000 £'000 £'000 £'000 £'000Turnover 270,786 19,305 290,091 262,512 86,960 349,472 Cost of sales (189,337) (11,710) (201,047) (182,040) (55,088) (237,128)Exceptional items - - - - (25,178) (25,178)Total cost of sales (189,337) (11,710) (201,047) (182,040) (80,266) (262,306) Gross profit 81,449 7,595 89,044 80,472 6,694 87,166 Distribution costs (56,700) (626) (57,326) (55,200) (12,864) (68,064)Exceptional items - - - - (1,147) (1,147)Total distribution costs (56,700) (626) (57,326) (55,200) (14,011) (69,211) Administrative expensesbefore amortisation of goodwill (14,147) (5,331) (19,478) (15,758) (18,191) (33,949)Exceptional items (850) - (850) (2,235) (4,720) (6,955) (14,997) (5,331) (20,328) (17,993) (22,911) (40,904)Amortisation of goodwill (2,089) (201) (2,290) (2,046) (904) (2,950)Total administrative expenses (17,086) (5,532) (22,618) (20,039) (23,815) (43,854) Net operating expenses (73,786) (6,158) (79,944) (75,239) (37,826) (113,065) Operating profit / (loss) 7,663 1,437 9,100 5,233 (31,132) (25,899)Loss on disposal of discontinued operations (2,833) -Share of associates' operating (loss) / profit (92) 149Amortisation of goodwill in associates (2) (10)Profit / (loss) on ordinary activities before interest 6,173 (25,760)Net interest payable (2,621) (3,471)Profit on ordinary activities before goodwill, 12,148 10,480exceptional items and interestInterest (2,621) (3,471) 9,527 7,009Goodwill (2,292) (2,960)Exceptional items (3,683) (33,280)Profit / (loss) on ordinary activities before tax 3,552 (29,231)Tax charge on profit / (loss) on ordinary activities (2,660) (7,086)Profit / (loss) on ordinary activities after tax 892 (36,317)Dividends (2,261) (2,117)Retained loss for the financial year (1,369) (38,434) Earnings per shareBasic 1.9p (75.9)pDiluted 1.9p (75.9)pBasic before goodwill amortisation and exceptional items 13.8p 11.8pDividend per share 4.8p 4.5p Brammer Unaudited statement of group total recognised gains and losses for the yearended 31 December 2004 2004 2003 £'000 £'000Profit / (loss) on ordinary activities after tax 892 (36,317)Exchange differences on foreign currency net investments (2,421) 7Total recognised losses for the year (1,529) (36,310)Prior year adjustment - 1,579Total losses recognised since last annual report (1,529) (34,731) Unaudited consolidated balance sheet at 31 December 2004 2004 2003 £'000 £'000Fixed assetsIntangible assets 35,216 49,569Tangible assets 11,924 23,783Investment in associates - 478 47,140 73,830Current assetsStock 45,862 51,018Debtors 57,069 70,961Cash and deposits 8,320 12,740 111,251 134,719Creditors - due within one year (86,623) (118,465)Net current assets 24,628 16,254Total assets less current liabilities 71,768 90,084Creditors - due after more than one year (51,996) (64,224)Provisions for liabilities and charges (3,427) (5,707)Net assets employed 16,345 20,153 Capital and reservesCalled up share capital 9,573 9,573Share premium account 3,552 3,552Profit and loss account 3,220 7,028Equity shareholders' funds 16,345 20,153 Brammer Unaudited consolidated cash flow statement for the year ended 31 December 2004 2004 2003 £'000 £'000Profit / (loss) on ordinary activities before interest 6,173 (25,760)Accrued element of exceptional items - 2,474Depreciation and impairment of tangible fixed assets 2,806 45,450Amortisation of goodwill 2,292 2,960Charge in respect of own shares 169 193 11,440 25,317Share of associates' operating (loss) / profit 92 (149)Loss on sale of investment 2,833 -Loss / (profit) on sale of fixed assets 1,040 (1,422) 15,405 23,746Movement in working capital 3,302 5,631Net cash inflow from operating activities 18,707 29,377Returns on investments and servicing of financeInterest received 336 126Interest paid (2,843) (3,479) (2,507) (3,353)Tax received / (paid) 2,795 (567)Capital expenditurePurchase of tangible fixed assets (8,760) (23,758)Sale of tangible fixed assets 2,564 14,848 (6,196) (8,910)Acquisitions and disposalsPurchase of subsidiaries and businesses (58) (59)Net cash acquired (86) 213 (144) 154Investment in associated undertaking - (520)Deferred consideration paid (4,061) (20,729) (4,205) (21,095)Disposal of interest in associated undertaking - 377Disposal of interest in subsidiaries 25,431 -Net cash sold (6,781) (37) 14,445 (20,755)Equity dividends paid (2,117) (2,117)Net cash inflow / (outflow) before management of liquid resources and financing 25,127 (6,325)Management of liquid resourcesDeposits 111 (2,091)Financing(Repayment of loans) / new loans taken out (24,803) 5,607Capital element of finance leases (533) (158)Purchase of own shares (187) (771)Net cash (outflow) / inflow from financing (25,523) 4,678Decrease in cash (285) (3,738)Cash movement from increase / (decrease) in debt and lease financing and liquid resources 25,225 (3,358) 24,940 (7,096)New finance leases (144) (87)Loans sold / (acquired) 271 (3,074)Exchange movements (2,389) (6,712)Movement in net debt 22,678 (16,969)Net debt at 31 December 2003 (79,719) (62,750)Net debt at 31 December 2004 (57,041) (79,719) Notes to the accounts 1 Segmental analysis Continuing operations Livingston Total 2004 2003 2004 2003 2004 2003 Restated Restated Restated £'000 £'000 £'000 £'000 £'000 £'000Turnover 270,786 262,512 19,305 86,960 290,091 349,472 Profit before goodwill, exceptional 10,510 9,663 1,638 817 12,148 10,480items and interestGoodwill (2,091) (2,056) (201) (904) (2,292) (2,960)Exceptional items (850) (2,235) (2,833) (31,045) (3,683) (33,280)Profit / (loss) before interest 7,569 5,372 (1,396) (31,132) 6,173 (25,760)Interest (2,621) (3,471)Profit / (loss) before tax 3,552 (29,231) Net operating assets excluding goodwill 48,197 52,326 - 11,054 48,197 63,380and deferred considerationCapitalised goodwill 35,216 36,065 - 13,504 35,216 49,569Deferred consideration (2,961) (7,166) - - (2,961) (7,166)Net operating assets 80,452 81,225 - 24,558 80,452 105,783Net debt (57,041) (79,719)Dividends (1,580) (1,436)Net tax (5,486) (4,475)Net assets employed 16,345 20,153 In 2004 all the on-going costs incurred by the central functions have beenallocated to continuing operations as this reflects the future structure of thegroup. The comparatives for 2003 have been revised accordingly. 2 Exceptional items The items treated as exceptional items (£3,683,000) relate to the loss on thesale of the Livingston businesses (£2,833,000) and restructuring (£850,000)resulting from action to re-size overheads, particularly for central functions,to reflect a simplified group structure following the sale of Livingston. 3 Earnings per share 2004 2003 Earnings Weighted Earnings / Earnings Weighted Earnings / average (losses) per average (losses) per number of share number of share shares shares £'000 '000 Pence £'000 '000 PenceProfit for the financial year before 6,616 5,632exceptional items and amortisation ofgoodwillAverage number of shares in issue 47,865 13.8 47,865 11.8Exceptional items (3,683) (7.6) (33,280) (69.6)Taxation adjustment on exceptional 251 0.5 (5,709) (11.9)itemsAmortisation of goodwill (2,290) (4.8) (2,950) (6.2)Amortisation of goodwill - associates (2) - (10) -Profit / (loss) for the financial 892 1.9 (36,317) (75.9)year Average number of shares in issue 47,865 1.9 47,865 (75.9)Dilutive effect of options 66 - 47,931 1.9 47,865 (75.9) Supplementary basic earnings per share figures have been calculated to excludethe effect of exceptional items and goodwill amortisation. The adjusted numbershave been provided in order that the effects of exceptional items and goodwillamortisation on reported earnings can be fully appreciated. 4 Preliminary announcement A copy of the preliminary announcement is available for inspection at theregistered office of the company, Claverton Court, Claverton Road, Wythenshawe,Manchester, M23 9NE and the offices of Citigate Dewe Rogerson Ltd, 3 London WallBuildings, London Wall, London, EC2M 5SY. It will also be available on thecompany's web site, www.brammer.biz, from 7 March 2005. 5 Final dividend Relevant dates concerning the payment of the final dividend are Annual general meeting 18 May 2005 Record date 10 June 2005 Payment date 4 July 2005 6 Statutory accounts This unaudited preliminary announcement is not the statutory accounts. Thestatutory accounts for the year ended 31 December 2004 will be finalised on thebasis of the financial information presented by the directors in thispreliminary announcement and will be delivered to the Registrar of Companiesfollowing the company's annual general meeting. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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