Interim Results

FROM HUDSON SANDLER FOR

PRESS RELEASE:

28 July 2015

Brammer plc

("Brammer" or the "Group")

2015 INTERIM RESULTS

further market share gains in challenging markets

Brammer, the leading pan-European added value distributor of industrial maintenance, repair and overhaul products, today announces its preliminary results for the six months ended 30 June 2015.

* pre amortisation of acquired intangibles, acquisition related costs and exceptional items

** at constant currency

*** at constant currency including incremental growth of acquisitions

Financial Highlights

· Total Group revenue up 0.4% to £365.6 million (2014: £364.1 million), up 7.5% at constant exchange rates ("CER") (1.8% organic growth including the incremental growth from acquisitions)

· Sales per working day (SPWD) up 7.2% at CER (1.6% organic growth including the incremental growth from acquisitions)

· Gross margin down 80 basis points to 30.5% (2014: 31.3%) due to customer and product mix effects, and competitive market conditions

· Cost reduction programme completed, incurring an exceptional charge of £3.6 million, and expected to save £5 million of costs in the full year

· Adverse translational exchange rate movements reduced Group revenue by £25 million and underlying operating profit by £1 million

· Operating return on sales* down 100 basis points to 4.7% (2014: 5.7%) due to gross margin decline and further investment in growth drivers

· Underlying* operating cash generation of £4.2 million (2014: absorption of £3.6 million), reflects reduction in working capital outflows

· Closing net debt of £90.8 million (full year 2014: £85.3 million) reflects seasonality effect of working capital movements

· Successful re-financing of principal debt facility with a new €120 million committed facility in place for a five year term to April 2020

· Dividend held at 3.6p (2014: 3.6p) reflecting the Board's continuing confidence in the outlook for the business in the medium term

Operational Highlights**

· Brammer delivered £24.3 million (2014: £25.2 million) of customer validated cost savings to our customers

· Six new Key Account contracts won with total potential incremental revenues worth in excess of €32 million per annum

· Insite™ sales of £100.7 million, up 6.8% with a net 31 new locations established

· Continued revenue growth in T&GM products up 20.4% overall and 87.7% in Continental Europe

· 366 vending machines installed in the first half, giving 845 in total covering 13 countries at 317 customer locations. Customer sites with vending machines represented 5.4% of Group sales in the half and grew at 29.9%

Current Trading and Outlook

Ian Fraser, Chief Executive said:

"Our business outside the UK and Nordic regions performed well with overall SPWD growth of 13.7% at CER, and organic SPWD growth of 5.5%, reflecting further market share gains in challenging markets. Our UK business reversed the deterioration seen in the second half of last year with an organic SPWD decline of 0.2% (compared with a decline of 4.1% in the second half of last year). However our Nordic business which is heavily exposed to the Oil and Gas sector saw organic SPWD decline of 15.9%.

Our vending programme (InvendTM), whilst in its infancy, produced excellent results with strong signings and installations. Vending customers now represent 5.4% of revenues and grew 29.9%. We are encouraged by the rate of improvement in vending machine wins and installations.

For the remainder of the year, we expect to see continued improvement in our UK business, and solid growth in our continental businesses, but our Nordic business will continue to suffer from ongoing market headwinds. We have seen evidence of an improving trend in gross margins since the end of the first quarter, and should benefit from the impact of the cost reduction programme, completed in the first half. Whilst mindful of tough market conditions and the impact of continuing weakness in the Euro, we remain on track to meet the Board's expectations for the full year.

More broadly we expect to see limited industrial output growth in Europe over the next two years, and will therefore continue to focus on our growth driver strategy. Our InvendTM, cross-selling and Key Account programmes will enable us to outperform the market. Our vending programme (InvendTM) continues to gain traction and is beginning to deliver attractive returns. We will share more details of this programme at the Capital Markets event later today. This will take place at 15.00 hours and be available on our website at 17.00 hours."

BRAMMER PLC

2015 INTERIM RESULTS 

INTERIM STATEMENT

Trading

Overall, revenue grew by 0.4% with sales for the period totalling £365.6 million. We continue to experience a significant currency headwind reducing revenue growth by 7.1%. At constant exchange rates ("CER"), revenue increased by 7.5%. Organic sales growth (including incremental growth of 2014 acquisitions) was 1.8%. At CER, Key Accounts grew by 7.9% while the Base business (including only incremental growth from 2014 acquisitions) declined by 5.2%.

Sales per working day ("SPWD") growth of 13.7% in Continental Europe (excluding Nordic region) continued the strong momentum from 2014. Organic SPWD growth in Continental Europe was 5.5%. SPWD in our UK segment were broadly flat, compared to a 4.1% reduction in the second half of 2014. A challenging market and the adverse effects on the Oil and Gas sector from the decline in global oil prices has affected trading in the Nordic region resulting in a 3.7% reduction in SPWD in the period (down 15.9% organically).

*Including incremental growth from 2014 acquisitionsGrowth rates are as measured against the equivalent period in the prior yearH1 2015 average number of working days was 123 days (H1 2014: 122.5 days)

Gross margin of 30.5% decreased by 80 basis points compared to the previous period, reflecting the dilutive effect of growth in lower margin Key Account customers and Tools and General Maintenance ("T&GM") products, and also reflecting difficult market conditions especially in our Nordic region. Our margin is now on an improving trend and, as our volume of purchases rises, we expect the margin on T&GM to reach similar levels to the rest of our business.

The table below shows total sales split by high level product group:

We continue to extend the product offering to reflect the full Brammer range in every territory, and

cross-selling contributed strongly to the Group's growth. Consequently the proportion of non-bearings sales grew to 69.5% (2014: 67.9%).

The following table shows the product group split in our Base business and our Key Account business at constant exchange rates.

Revenue by business area and customer type at CER (£'m)

At €1.3:£1

At CER, total bearings sales grew by 3.9% overall, but declined by 2.1% organically, broadly reflecting challenging underlying market conditions and our relatively large market share. However, strong bearings growth of 6.7% in Key Account customers partially offset this decline.

Non-bearing sales increased by 9.2% overall at CER, driven by growth in T&GM (including PPE) of 20.4%, reflecting especially strong growth of 87.7% in Continental Europe. Growth from T&GM is being achieved with all our customer types, with growth of 11.2% in Key Accounts and 7.7% organically in the Base business as we continue to expand this product range.

Underlying operating profit (profit before amortisation of acquired intangibles, acquisition related costs and exceptional items) decreased by 16.5% to £17.2 million (2014: £20.6 million), reflecting the significant foreign exchange headwinds and the effect of the reduction in the gross margin.

Sales, distribution, and administrative costs ("SDA") (before amortisation of acquired intangibles, acquisition related costs and exceptional items) increased by £0.9 million to £94.3 million, including a £6.5 million beneficial foreign exchange impact and a £5.2 million impact from prior year acquisitions. SDA is tightly controlled with any investment focused on our growth drivers, especially T&GM and InvendTM. The resulting underlying operating return on sales of 4.7% is 100 basis points below the previous period. In anticipation of continuing difficult market conditions a cost reduction programme was completed in the first half. This programme is expected to save £4 million in the second half and involved a reduction in headcount of approximately 160 employees across the business. The costs of this restructuring activity of £3.6 million are shown as an exceptional item. Underlying basic earnings per share were down 25.0% to 8.1 pence per share (2014: 10.8 pence per share), which includes some dilutive effect from the 10% share placing during 2014.

Growth Drivers and Capabilities underpinning our performance

Organic growth drivers

Key Accounts

*Acquisitions are reported within Base business as there are no Key Accounts in businesses acquired.

** Includes incremental sales growth from 2014 acquisitions

Key Accounts sales grew at 7.9% at CER, the twelfth consecutive year of growth, and now represent 53.6% of the Group's total sales. Down-trading by one large UK customer reduced Key Account growth by 1.9% in the period. Six additional pan-European contracts were won in the period representing potential annual revenues of up to €32 million. We now have 77 pan-European Key Accounts.

We have already won 11 Key Accounts in Sweden with total potential revenues of €12 million. Most of these were with customers with whom we already have an existing European contract.

Product Range Extension and cross-selling

Tools and General Maintenance

T&GM sales grew 20.4% at CER, but experienced a far higher growth rate of 87.7% in Continental Europe, a result of the focus on this market.

We have extended our capabilities and continue to grow, with 45 people solely dedicated to supporting T&GM business development in Continental Europe.

Our PPE and health and safety brand - Q-Safe has received positive feedback from our customers and the wider market, following the launch in 2014, and sales are growing strongly. Over a fifth of Q-Safe product sales are with InvendTM customers.

Our hand tools, cutting tools and tool storage brand, Roebuck, continues to gain traction in the market, with sales having more than doubled year on year in Continental Europe.

Vending

The InvendTM programme continues to gain momentum. We have built our capacity in UK, Germany, France, Spain, Poland, and the Netherlands and have increasing confidence in the scalability of our processes. We now have 117 employees supporting the InvendTM initiative and, as at the end of June, have 845 machines installed with an order book of 316 machines across 15 countries, growing at an accelerating rate as we improve the efficiency of our business development process.

Investment in our T&GM and InvendTM growth drivers now total £2 million and £6 million per annum (2014: £2 million and £4 million) in SDA costs, which we view as the optimum level to scale up our operations. We do not expect any significant increase in this investment in the short to medium term.

When a vending machine is installed at a customer site, we experience both direct sales growth (i.e. sales of products through the machine) and indirect sales growth (incremental sales across a range of products, not through the machine) which comes about as a result of having a much closer and deeper relationship with the customer. Close to 100% of the direct sales growth, which is, on average, €8,000 per machine within the first year, comes from T&GM/PPE products. The incremental indirect sales per machine equate to, on average, €16,000 and are split 42% T&GM/PPE products and 58% Bearings, Power Transmission, Fluid Power and General Consumables products. Consequently, we expect each machine to deliver incremental sales growth of, on average, €24,000, at overall margins consistent with the wider Group. We also expect a net contribution of 10% return on sales from sales growth derived from vending operations.

Based on a machine cost of approximately €8,000, each machine is capable of delivering a Return on Capital Employed ("ROCE") of approximately 30%. The direct sales and indirect sales volumes continue to increase in the second year of installation and beyond, resulting in a higher ROCE in future years.

We shall be reporting our InvendTM progress by reference to the following performance measures:

Cumulative Number of Vending machines Signed in Agreements

Insites™

On a constant currency basis Insite™ sales grew by 6.8% to £100.7 million, with a further 31 new locations established overall. The Group now operates a total of 458 Insites™ including four in the Nordic region. The value-added services provided by the Insite™ model, inventory optimisation, cost-saving projects and ready access to Brammer's product specialists, continue to be an attractive proposition for our customers.

Market segmentation

Our market share increased in Food and Drink with growth of 10.0%. Automotive sales also grew strongly by 15.4% and the Metals segment grew at 17.7%.

Acquisitions and Synergies

A new regional distribution facility in Gothenburg, Sweden opened in May which will serve our full product range to our customers across the region. The Brammer growth drivers and capabilities are becoming embedded and the resulting post-acquisition synergies starting to be realised. This will fuel growth and enhance profitability in future years despite the challenging market conditions we are currently experiencing in this territory.

The Future

Our business outside the UK and Nordic regions performed well with overall SPWD growth of 13.7% at CER, and organic SPWD growth of 5.5%, reflecting further market share gains in challenging markets. Our UK business reversed the deterioration seen in the second half of last year with an organic SPWD decline of 0.2% (compared with a decline of 4.1% in the second half of last year). However our Nordic business which is heavily exposed to the Oil and Gas sector saw organic SPWD decline of 15.9%.

Our vending programme (InvendTM), whilst in its infancy, produced excellent results with strong signings and installations. Vending customers now represent 5.4% of revenues and grew 29.9%. We are encouraged by the rate of improvement in vending machine wins and installations.

For the remainder of the year, we expect to see continued improvement in our UK business, and solid growth in our continental businesses, but our Nordic business will continue to suffer from ongoing market headwinds. We have seen evidence of an improving trend in gross margins since the end of the first quarter, and should benefit from the impact of the cost reduction programme, completed in the first half. Whilst mindful of tough market conditions and the impact of continuing weakness in the Euro, we remain on track to meet the Board's expectations for the full year.

More broadly we expect to see limited industrial output growth in Europe over the next two years, and will therefore continue to focus on our growth driver strategy. Our InvendTM, cross-selling and Key Account programmes will enable us to outperform the market. Our vending programme (InvendTM) continues to gain traction and is beginning to deliver attractive returns.

Ian Fraser

28 July 2015

Operating segment review

UK

* pre amortisation of acquired intangibles, acquisition related costs and exceptional items

** at constant currency

*** at constant currency, including incremental impact of acquisitions

The UK (including Ireland and Iceland) is our largest operation, contributing 39.3% to total Group revenue. It is the business where the Brammer growth strategy is furthest developed. Sales increased by £1.3 million to £143.5 million, representing SPWD growth of 0.9% compared to the 1.4% decline in the equivalent period in 2014. Organic growth is broadly flat, representing a stabilisation of trading with a small number of large customers and some positive signs of a return to growth.

Overall, Key Account sales increased by 1.9 %, reversing a full year decline of 0.4% last year with new Key Accounts won with Piramal, Nampak and Enthoven, as well as contract extensions agreed with Unilever, Cargill and Kerry Group. Key Accounts now represents 75.9% of revenue, a 0.8% increase. Base business declined by 2.3%, though this represents an improving trend compared to the 8.2% decline in 2014.

Bearing sales grew by 5.9% overall, mainly through Key Accounts customers. Our cross-selling initiatives continued with Fluid Power growing by 4.7%, though T&GM sales remained broadly flat as growth was offset by a limited recovery from a large Buck & Hickman customer where we experienced a significant decline last year.

Operating profit has decreased by 25.6%, to £6.1 million, mainly reflecting gross margin reductions from product and customer mix consistent with the overall Group. Whilst this is reflected in the decline in operating return on sales by 1.5 basis points to 4.3%, cost saving measures undertaken in the first half are expected to support profitability for the rest of the year.

Germany

* pre amortisation of acquired intangibles, acquisition related costs and exceptional items

** at constant currency

*** at constant currency, including incremental impact of acquisitions

Germany, our second largest segment contributed £60.1 million to revenue, 16.4% of the Group total. SPWD increased by 7.0% at CER reflecting continued benefits from our organic growth drivers together with a 2.7% contribution from the bolt-on acquisition made last year.

Bearings sales declined 2.8%, reflecting a challenging market, but our focus on product range extension saw 12.5% growth in non-bearings products driven by continued strong T&GM growth. T&GM achieved 92.8% organic growth and 133% total growth as the strategy successfully delivers market share gains. T&GM products now represent 10.0% of segment revenue and the delivery of an additional 100 training days in 2015 continued to embed the strategy within the business.

Key Accounts grew by 12.3% and now account for 40.1% of turnover. Several new Key Accounts were won during the period including Jacobs Douwe Egberts and Goodyear underpinning future growth. The number of Insite™ locations increased by a net two and there are now 60 Insites™ with sales growth of 11.5%.

Operating profit has decreased by 2.8% at CER, mainly reflecting gross margin reductions from product and customer mix consistent with the overall Group.

France

* pre amortisation of acquired intangibles, acquisition related costs and exceptional items

** at constant currency

*** at constant currency, including incremental impact of acquisitions

France, our third largest segment contributed £42.7 million to revenue, 11.7% of the Group total. SPWD increased by 9.0% at CER reflecting 3.9% organic growth together with a 5.1% contribution from the bolt-on acquisition made last year.

Whilst bearings sales remained broadly flat, growth in non bearing sales was driven by product range extension and cross-selling, particularly in T&GM, which increased 43.3% and now represents 13% of segment revenue.

Key Account growth of 8.8% continued the recent accelerating growth trend supported by several new account wins including Johnson Control and Schneider Electric. The InsiteTM programme now operates at a total of 69 sites, including a net 13 new sites added.

Operating profit has decreased by 12.5% at CER, mainly reflecting gross margin reductions from product and customer mix consistent with the overall Group.

Spain

* pre amortisation of acquired intangibles, acquisition related costs and exceptional items

** at constant currency

*** at constant currency, including incremental impact of acquisitions

SPWD growth accelerated by 9.7 basis points to 22.6% at CER representing continued growth in a weak market as a result of good development of all of our growth drivers, together with a 12.4% contribution from the bolt-on acquisitions made last year.

Key Account revenues grew by 14.3% with new contract wins during the period including Cegelec, Freudenburg and Maier. Insite™ revenue growth remained strong at 22.1% as a further five InsitesTM were established bringing the total number of InsitesTM to 51.

Excellent progress continued in product range extension and revenue from T&GM is now 1.7 times greater than last year from exploiting cross selling opportunities with existing customers as well as benefiting from the acquisitions made in 2014; T&GM is now the second largest product category in the segment.

Operating profit has increased by 13.6% at CER, lower than sales growth mainly reflecting gross margin reductions from product and customer mix consistent with the overall Group.

Benelux

* pre amortisation of acquired intangibles, acquisition related costs and exceptional items

** at constant currency

*** at constant currency, including incremental impact of acquisitions

SPWD in the Benelux countries together increased by 9.3% at CER reflecting growth through product range extension and cross selling with a 3.9% contribution from the bolt-on acquisition made last year. Growth in both T&GM and Fluid Power were supported by activities which included the full launch of the Q-Safe brand along with a rolling program of roadshows to educate our customers about our enhanced product range.

Key Account wins including Colfax and Prodrive in the Netherlands and Henkel and Akzo Nobel in Belgium should underpin continued growth, currently at 7.5%. InsiteTM revenue grew by 5.3% although the number of InsitesTM remained flat with eight in the Netherlands and ten in Belgium.

Operating profit has increased by 30.8% at CER, above sales growth mainly reflecting synergies from the combination of some operational functions across Belgium and Netherlands and the integration of last years acquisition.

Nordic

* pre amortisation of acquired intangibles, acquisition related costs and exceptional items

** at constant currency

*** at constant currency, including incremental impact of acquisitions

The Nordic segment comprises our businesses in Norway, Sweden, Finland and Denmark which contributed £24.2 million to revenue, 6.6% of the Group total. SPWD decreased by 3.7% at CER, which includes a 12.2% contribution from the bolt-on acquisitions made last year. Trading has been adversely affected by the weakness in the Oil and Gas sector from the decline in global oil prices, and recessionary pressure resulting in weaker demand throughout the region.

We are already trading with 11 Key Accounts whilst many others have indicated a strong interest for us to support their Nordic operations in the future, which will help to offset current market weakness. This will be a significant future growth driver and will improve profitability over the coming years. However, in the shorter term, profitability has suffered, reflecting the downturn in trading in the period.

Eastern Europe and Other

* pre amortisation of acquired intangibles, acquisition related costs and exceptional items

** at constant currency

*** at constant currency, including incremental impact of acquisitions

Our Eastern European and other businesses (comprising Poland, the Czech Republic and Slovakia, Hungary, Italy and our InsiteTM in Saudi Arabia) contributed £42.5 million to revenue, 11.6% of the Group total. SPWD increased by 28.5% at CER reflecting 6.5% organic growth together with a significant contribution of 22.0% from the acquisitions made last year.

Key Accounts now represent 46% of total segment revenue, growing by 18.3%. Fourteen new InsitesTM were implemented in 2015 as the Brammer growth drivers gain further traction across all the businesses. There was pleasing growth in all key product areas; T&GM revenue grew by 112%, Power Transmission revenue by 26.0%, Fluid Power revenue by 41.0% and Bearings revenue by 19.6%. This has enabled us to achieve significant gains in our target markets in Eastern Europe and Italy, with pleasing results from our organic growth drivers underpinned by the momentum provided by the acquisitions made last year. Integration of these acquisitions is progressing well and we are beginning to realise synergy benefits, with future growth opportunities.

Operating profit has increased by 27.8% at CER, in line with sales growth.

Operating performance

*before amortisation of acquired intangibles, acquisition related costs and exceptional items

Key Performance Indicators and other measures

**at constant currency

+ including incremental growth from acquisitions

Interest

The net finance expense was £3.1 million (2014: £3.1 million), which included £0.6 million (2014: £0.6 million) interest expense relating to the retirement benefit liability. Underlying operating profit covers interest by 7.5 times (2014: 11.5 times).

Amortisation of acquired intangibles and acquisition related costs

Amortisation of acquired intangibles totalled £2.1 million (2014: £0.6 million). Acquisition related costs in the period were an income of £0.7 million (2014: cost of £1.6 million) following a £1.3 million reduction in the deferred consideration liability relating to the Lönne acquisition.

Exceptional items

A review of the Group's operating cost base resulted in headcount and other restructuring costs of £3.6 million being incurred and recognised as a pre-tax operating exceptional charge. These actions were taken in response to the challenging market conditions in which the Group operated during the six month period.

In 2014, an exceptional charge of £3.7 million was recognised comprising headcount and related restructuring costs arising from the integration of the logistics and administrative functions of the Buck & Hickman business with the legacy Brammer UK business, together with restructuring costs arising as part of the process of integrating acquisitions made in the year.

Dividend

The Board proposes maintain the interim dividend at 3.6p pence per share, reflecting the Board's confidence in Brammer's long term growth prospects. The interim dividend will be paid on 5 November 2015 to shareholders on the register at 9 October 2015.

Return on operating capital employed

The return on operating capital employed, based on underlying operating profit, was 21.5% (2014: 26.6%) mainly reflecting the effect of acquisitions on the Group's operating capital employed.

Operating cash generation and cash flow

Net debt increased by £5.5 million during the period, from £85.3 million to £90.8 million. This increase is after £4.7 million of net capital expenditure as investment in strategic projects continues, and £17.8 million working capital outflow (2014: £27.9 million outflow) primarily due to debtors, reflecting the impact of seasonality and the mix of sales by territory.

At the period end, net debt/EBITDA stood at 1.99:1 times (December 2014: 1.82.1 times).

Net cash outflow from operating activities was £0.5 million (2014: £7.0 million outflow), and is after £0.6 million outflow (2014: £1.6 million) relating to acquisition related costs, and £4.1 million outflow (2014: £1.8 million) from exceptional items. Excluding these items, cash generated from operating activities before exceptional items was £4.2 million (2014: £3.6 million cash outflow).

Whilst cash generation is expected to be stronger in the second half, as the seasonal impact benefits working capital, we expect to see increased capital expenditure on vending machines and also the effects of increasing pressure on payment terms with suppliers and customers as the impact of the European late payment directive is experienced more widely.

Financing

During the period, the Group re-financed its principal debt facility, replacing the previous revolving credit facility which was due to expire on 30 June 2016. The Group is now principally financed by a €120 million (£85.0 million) floating rate revolving credit facility which is committed to 30 April 2020, and has a further uncommitted facility of €20 million. This secures the necessary funding for Brammer for the future on acceptable and reasonable terms, and the company is pleased that the arrangements are in place well ahead of the 2016 expiry date.

In addition the Group is financed by a $175 million (or currency equivalent) private placement shelf facility, which was initially established in 2013 and was extended in 2014. As at December 2014, €85 million ($112.5 million) had been issued. During the period, the Group issued a further €30 million (£22.0 million) of private placement notes under this facility. These private placement notes have a ten year term, are unsecured, bear interest at a fixed rate and mature in January 2025.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors confirm that this consolidated interim financial information has been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R , namely:

§ an indication of important events that have occurred during the first six months of the financial year and their impact on this consolidated interim financial information; and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

§ material related party transactions in the first six months and any material changes in the related party transactions described in the last Annual Report.

The directors of Brammer plc and their respective responsibilities are as listed in the Brammer plc 2014 Annual Report, except for the retirement on 15 May 2015 of Terry Garthwaite as a non-executive director.

On behalf of the Board

Ian Fraser

Chief Executive

Paul Thwaite

Finance Director

28 July 2015

Brammer CONSOLIDATED INCOME STATEMENT

The notes on pages 23 to 32 form an integral part of this consolidated interim financial information.

Brammer CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Items in the statement above are disclosed net of tax.

The notes on pages 23 to 32 form an integral part of this consolidated interim financial information.

Brammer CONSOLIDATED BALANCE SHEET

The notes on pages 23 to 32 form an integral part of this consolidated interim financial information.

Brammer CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

*Ordinarily, the excess of the net proceeds over the nominal value of the share capital issued would be credited to a non-distributable share premium account. However, the placing of shares completed in April 2014 was effected through a structure which resulted in the creation of a reserve of £50.1 million (£4.7 million considered non-distributable) that was credited to retained earnings under section 612 of the Companies Act 2006.

Retained earnings as disclosed in the Balance Sheet on page 20 represent the retained earnings and treasury shares balances above.

The notes on pages 23 to 32 form an integral part of this consolidated interim financial information.

Brammer CONSOLIDATED CASH FLOW STATEMENT

The notes on pages 23 to 32 form an integral part of this consolidated interim financial information.

Brammer NOTES TO THE CONSOLIDATED INTERIM FINANCIAL INFORMATION

1 STATUS OF INTERIM REPORT AND ACCOUNTING POLICIES

General information

Brammer plc is a company incorporated and domiciled in the UK, and listed on the London Stock Exchange.

This consolidated interim financial information was approved for issue by a duly appointed and authorised committee of the Board on 28 July 2015.

This consolidated interim financial information for the six months ended 30 June 2015 does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2014 were approved by the Board on 17 February 2015 and delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under section 498 of the Companies Act 2006.

The consolidated financial statements of the Group for the year ended 31 December 2014 are available from the company's registered office or website (www.brammer.biz).

This consolidated interim financial information is neither audited nor reviewed.

Basis of preparation

This consolidated interim financial information for the six months ended 30 June 2015 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority and with IAS 34, "Interim Financial Reporting" as adopted by the EU. The consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2014 which have been prepared in accordance with IFRS's as adopted by the EU.

The financial information is presented in pounds Sterling and has been prepared on the historical cost basis modified for fair values under IFRS as modified by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

The directors confirm that they have a reasonable expectation that the Group has adequate resources to enable it to continue in existence for the twelve months from the date of approval of this interim financial information and, accordingly, the consolidated interim financial information has been prepared on a going concern basis. In forming its opinion as to going concern, the Board prepares a cashflow forecast based upon its assumptions as to trading and taking into account the banking facilities available to the Group. The Board also models a number of alternative scenarios, taking account of business variables and key risks and uncertainties, and maintains under continuous review the capital structure of the Group and the financing options available to the Group.

Accounting policies

The principal accounting policies adopted in the preparation of this consolidated interim financial information are included in the consolidated financial statements for the year ended 31 December 2014. These policies have been consistently applied to all the periods presented.

No standards have been early adopted by the Group. The implications for the Group of new standards, amendments to standards or interpretations which are mandatory for the first time for the financial year ending 31 December 2015 are summarised below.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

New standards, amendments to standards or interpretations

The Group has adopted the following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning 1 January 2015. None of these standards and interpretations has had any material effect on the Group's results or net assets.

The following standards, amendments and interpretations are not yet effective and have not been adopted early by the Group:

Accounting estimates and judgements

The preparation of consolidated interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of income, expense, assets and liabilities. The significant estimates and judgements made by management were consistent with those applied to the consolidated financial statements for the year ended 31 December 2014.

Risks and uncertainties

The principal strategic level risks and uncertainties affecting the Group, together with the approach to their mitigation, remain as set out in the Strategic Report on pages 24 to 27 in the 2014 Annual Report, which is available on the Group's website (www.brammer.biz). In summary the Group's principal risks and uncertainties are:

The chief executive's statement in this interim report includes comments on the outlook for the remaining six months of the financial year.

Forward-looking statements

This interim report contains forward-looking statements. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements.

The Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

2 SEGMENTAL ANALYSIS

The Board has been identified as the chief operating decision-maker. The Board reviews the Group's internal reporting as the basis for assessing performance and allocating resources. Management has determined the operating segments based on these reports. The Group is primarily controlled on a country by country basis, in line with the legal structure.

The Group's internal reporting is primarily based on performance reports run at 'management' exchange rates - exchange rates which are set at the beginning of each year. For 2015 the management rate used is €1.30 : £1 (2014: €1.25 : £1).

Accordingly the segment information below is shown at the 'management' exchange rates with the exchange effect being a reconciling item between the segment results and the totals reported in the financial statements at actual exchange rates. The management rate applies to income statement, balance sheet and cash flows.

The Board assesses the performance of the operating segments based on their underlying operating profit, which comprises profit before interest and taxation, excluding amortisation of acquired intangibles and non-recurring or exceptional items such as restructuring costs and impairments when the impairment is the result of an isolated, non-recurring event.

Segment assets include property, plant and equipment, other intangibles, inventories, and trade and other receivables. All inter-segmental trading is on an arms-length basis.