When the likes of Bosch, Michelin and Daimler need spare parts they call on Brammer (BRAM). As Europe' s leading distributor of maintenance, repair and overhaul products, Brammer is in prime position to benefit from a European economic recovery. Unfortunately, that recovery has been shaky so far.
Chief executive Ian Fraser says market conditions were challenging in the first six months of the year and he's "mindful of the recent uncertainties regarding growth rates in our European markets in the second half of 2014".
Brammer's answer to the malaise in its markets is to focus on key customer accounts and to roll out its Insite model, described by the group as like "having a Brammer branch in your plant". These initiatives have helped Brammer report improving growth rates for six consecutive quarters.
Acquisitions are also a key plank of the strategy. Brammer entered the Scandinavian market with the acquisition of Lönne in January and raised £52m in a placing in April to fund further deals. Costs associated with acquisitions and their integration dragged down reported profits, but underlying pre-tax profit rose 15 per cent to £17.5m.
Broker N+1 Singer expects pre-tax profit of £40.5m for the full-year, giving EPS of 23.6p (from £35.4m and 21.9p in 2013).
| BRAMMER (BRAM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 421p | MARKET VALUE: | £544m | |
| TOUCH: | 421p-422p | 12-MONTH HIGH: | 509p | LOW:376p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 135p* | NET DEBT: | 40% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 328 | 14.6 | 9.4 | 3.4 |
| 2014 | 364 | 11.6 | 7.1 | 3.6 |
| % change | +11 | -21 | -24 | +6 |
Ex-div:08 Oct Payment:06 Nov * Includes intangible assets of £152m, or 118p a share | ||||
