Profits plunge at Brammer following “tough” 12 months

Brammer plc, the distributor of industrial maintenance, repair and overhaul products with operations across the North West, saw its takings plunge last year in what bosses are calling a “tough” 12 months.

In the year ending December 31, Brammer’s pre-tax profit plummeted by 21.4% to £27.6m, while its operating profit dropped by 17.7% at £33.9m.

Brammer’s sales earnings, meanwhile, decreased by 0.9% to hit £717.3m.

The firm, which is headquartered in Manchester, launched an improvement programme in Q2 of 2015 and reports that the efforts have so far made “encouraging progress”.

Although Brammer’s revenues from Spain (£53.7m) and a region defined as Eastern Europe & Other (£84.9m) rose last year, by 8.7% and 11.4% respectively, the increases were not enough to offset challenges experienced in the firm’s other key regions.

Ian Fraser, the chief executive at Brammer, 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.”

He added: “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.”

The measures, Mr Fraser explained, include changes to the management team in its UK business and an “accelerated […] implementation of core growth drivers” in its Nordic business to combat declines in the offshore oil and gas business.

Speaking further, Mr Fraser commented: “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.”

He continued: “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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