Companies: BRAM ��

‘We try and surprise quietly on the upside,’ remarked Ian Fraser, chief executive of Brammer, as he announced strong numbers ahead of upgraded forecasts for calendar 2006.

Improved performances at home and abroad enabled the supplier of bearings, belts, gearboxes and mechanical power transmissions to deliver 19% growth in adjusted pre-tax profits to �12m last year as sales rose more than 9% to �314.3m. Operating margins edged up to 4.8% (4.4%).

Brammer managed to take market share in all its European operations last year, aided by growth within key accounts and work won with the likes of Associated British Foods and British Nuclear Group. Sales and profits in the UK and Spain recovered as planned and strong profits growth was achieved in Germany, although profits in the French business declined, mainly affected by difficulties in the automotive sector.

Scale and European coverage, as well as its focus on bearings, power transmission and fluid power products, are all helping Brammer beat off rivals in a fragmented �20bn market. ‘We’re the leader and yet have less than 2.5% of that market, and we’ve only scratched the surface on cross-selling,’ insists Fraser, who says customers increasingly want one product supplier.

He remains on the hunt for bolt-on acquisitions, having recently acquired Ramaekers in Belgium and Fin in Poland. ‘Targets must be profitable as we don’t do turnarounds,’ he assures.

Bears might point to gearing, with net debt having increased for the first time in recent years from �50.6m to �54.2m. However, Fraser was comfortable with those levels, flagging up healthy levels of interest cover. Investors were also treated to a final dividend hike to 4.2p (3.65p), increasing the year’s total payout by more than 13% to 6p. Trading on a historic p/e of 15 with a decent yield, Growth Company Investor argues shares in this consolidation and growth tale are well worth holding, despite a strong recent run.

Brammer	LSE	�145.29m	303.00p	-8.00p
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