Management changes hoped to produce turnaround at tooling group

TOUGH trading conditions in the UK and the Nordic region is continuing to affect Brammer, the supplier to industry of key parts and tools.

The group, which has a large operation in Wolverhampton, is reporting a 15% dip in underlying profits at constant exchange rates (CER) to £27.6m (2014: £35.1m) in its preliminary results for the year ended December 31.

However, total group revenue was up 5.3% at CER to £717.3m, down 0.9% at reported rates. Underlying earnings per share reduced 27.1% to 15.1p (2014: 20.7p).

Meanwhile, Brammer’s cost reduction and restructuring programme was completed, saving £5m, but incurred an exceptional charge of £11.1m.

Chief executive Ian Fraser said: “Financial year 2015 was tough for Brammer with particularly weak market conditions in the UK and Nordic regions exacerbated by execution problems in our UK business. 

“2016 has started in similar vein to the final quarter of 2015, with good performance on the continent being offset by continuing difficulties in the UK and Nordic regions.
 
“In response to these challenges we initiated a number of actions during 2015, which should lead to improved performance over the course of the current year.

“We have made management changes in our UK business and expect to see a turnaround during 2016.”

Brammer has simultaneously announced two senior appointments. Steve Ashmore has become regional managing director with responsibility for the company’s operations in the UK, Ireland and Iceland from April 4 and Duncan Magrath will become group finance director, succeeding Paul Thwaite when he departs on March 31.

Mr Fraser added: “In our Nordic business we have accelerated the implementation of core growth drivers to help offset the declines in the offshore oil and gas business.
 
“Our margin improvement programme is proceeding well, with the underlying margin on an upward trend.

“Our stock reduction programme has progressed well with a reduction of £6.5m in the first two months. Whilst we expect to make progress in each of these initiatives in the current year, the positive effect of these on the group’s earnings will be offset by the one-off impact of the focus on inventory reduction.”

 

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