Brammer slumps on ￡100mln rights issue and dividend cut
Demand for parts has slowed
Brammer PLC (LON:BRAM) warned it needs a ￡100mln equity injection to shore up its finances after another difficult trading quarter.
The engineering parts distributor will also axe its final dividend after lower sales and supplier rebates mean an operating loss in the three months to September and no profit for the year overall.
Bearings and power transmission product sales fell by 6% during the period and despite a 30% reduction in stock levels Brammer is in danger of breaching loan covenants.
New chief executive Meinie Oldersma, who joined in August, has instigated an review of the whole business and will part of a new business plan to be published in November.
Investec will underwrite the right issue, which is expected to be launched by the time the final results are published in the first quarter of 2017.
Shares crashed 28% to 91p.
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