Leading European distributor of maintenance, repair and overhaul products, Brammer (BRAM), has suffered a prolonged downturn on the continent. In response, it has retooled its strategy to focus on key customer accounts, installing industrial tool vending machines and rolling out its Insite model.
Those self-help measures helped the group secure 14 contracts worth more than €60m (£44.6m) a year and post an 11 per cent increase in revenues. Management's acquisition drive has also helped to drive growth. Hailed by chief executive Ian Fraser for their cross-selling abilities, the group's 15 new arrivals bring exposure to Scandinavia and £98m of annualised revenues. However, Mr Fraser has ruled out any further acquisitions this year as he seeks to reduce the group's swollen net debt.
But rising costs and acquisition charges drove a 36 per cent slump in operating profit to about £24m. The steep pre-tax profit decline, meanwhile, was exacerbated by an exceptional charge of around £13m. That stemmed from the closure of a key distribution centre in Coventry and the merger of supply chain operations in the UK.
Broker N+1 Singer expects adjusted pre-tax profit of £40m in 2015, giving EPS of 22.7p (from £35m and 20.3p in 2014).
| BRAMMER (BRAM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 345p | MARKET VALUE: | £446m | |
| TOUCH: | 345-346p | 12-MONTH HIGH: | 509p | LOW: 265p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 38 | |
| NET ASSET VALUE: | 120p* | NET DEBT: | 55% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 468 | 19.3 | 13.0 | 6.6 |
| 2011 | 572 | 24.5 | 16.8 | 8.4 |
| 2012 | 640 | 26.2 | 16.6 | 9.4 |
| 2013 | 652 | 32.9 | 20.5 | 10.2 |
| 2014 | 724 | 17.7 | 9.2 | 10.7 |
| % change | +11 | -46 | -55 | +5 |
Ex-div: 4 Jun Payment: 2 Jul *Includes intangible assets of £159m, or 122p a share | ||||
