Brammer on the road to recovery

INDUSTRIAL parts supplier Brammer said today trading in its key markets has stabilised as it revealed the results of its rights issue.

The group – dubbed the RAC of Industry – said more than 97% of shareholders had backed the move which raised £53.3m.

Chief executive Ian Fraser said the cash ensures that the group has a strong balance sheet, will trade within its banking covenants and is well placed to advantage of opportunities that emerge.

It has been a tough year for Brammer, and while the group said trading over the last few months has shown signs of stabilisation or improvement in all territories, underlying sales per working day were down 19.1%.

However, gross profit margins were maintained at similar levels to last year and the cost reduction continued as planned.

Mr Fraser said key accounts grew by 7% and now represented 36 of total revenues, and the group’s  strategy of focusing on this area as well as cross-selling in Europe and tight control of costs will ensure that Brammer emerges “stronger and better” when the economic environment recovers.

He said: “There are some signs of modest improvement in our markets. However, the board intends to continue to focus on cost control, cash flow and driving greater efficiencies from the business.

“We expect trading performance of the group for the full year ended 31 December 2009 will be in line with management expectations.”