RNS Number:8245T
Braemar Shipping Services PLC
07 May 2008
BRAEMAR SEASCOPE GROUP plc
Results - Year ended 28 February 2007
Braemar Seascope Group plc (the "Group"), a leading provider of shipping
services, today announced full year unaudited results for the year ended 28
February 2007.
HIGHLIGHTS
* Adjusted pre-tax profits #11.0m (2006: #10.3m) *
* Pre-tax profit #10.1m (2006: #10.3m)
* Adjusted EPS 37.64p (2006: 37.03p)*
* Basic EPS 32.83p (2006: 37.03p)
* Forward book at record level with US$30m deliverable this year
* Net cash #14.6m (2006: #13.6m)
* Final dividend 12.25p per share (up 6.5%), full year 19.0p (2006: 18.00p)
up 5.6%
*Adjusted profits and earnings are adjusted to exclude an impairment charge of
#950,000 taken at the half year 2006/7.
Commenting on the results and outlook, Sir Graham Hearne, Chairman, said:
"The Group is performing well and has posted results reflecting another good
year."
"Shipping has experienced large and rapid changes in freight rates and vessel
values over the course of the last five years. This volatility is likely to
remain while the demand for seaborne trade continues to grow and we expect our
broadly-based shipping services business to benefit while these conditions
persist. "
For further information, contact:
Braemar Seascope Group plc
Alan Marsh, Chief Executive Tel 020 7535 2650
James Kidwell, Finance Director Tel 020 7535 2881
Aquila Financial
Peter Reilly Tel 020 7202 2601
Charles Stanley Securities
Philip Davies and Anthony Noakes Tel 020 7149 6457
Notes to editors:
Through its subsidiaries Braemar Seascope Group plc's services comprise:
Braemar Seascope Specialised shipbroking and consultancy services to
international ship owners and charterers in the sale &
purchase, tanker, gas, chemicals, offshore, container and dry
bulk markets.
www.braemarseascope.com
DV Howells Pollution response service primarily in the UK for marine and
rail operations
www.dvhowells.co.uk
Cory Brothers Shipping Agency Port agency, freight forwarding and logistics services within
the UK.
www.cory.co.uk
Wavespec Marine engineering and naval architecture consultants to the
shipping and offshore markets.
www.wavespec.com
PRELIMINARY ANNOUNCEMENT - YEAR ENDED 28 FEBRUARY 2007
CHAIRMAN'S STATEMENT
The Group is performing well and has posted results reflecting another good
year. The adjusted pre-tax profits increased by 7% to #11.0m compared to #10.3m
last year and adjusted earnings per share were 37.64 pence compared to 37.03 in
2006. Reported pre-tax profits were #10.1m (2006: #10.3m) and reported earnings
per share were 32.83 pence. The difference between the adjusted and reported
result was attributable to an impairment charge taken in the first half of
#0.95m.
The Group's shipbroking operations benefited from trading conditions which
remained generally favourable during the year and performed well though the
results were adversely affected by a weaker US dollar. Continued newbuilding
activity and an increase in long-term chartering business saw growth in the
forward order book to a record level which helps to underpin future years'
earnings. We expanded our international footprint through the establishment of
new dry cargo chartering offices in Singapore and Sao Paolo and we also
consolidated our interest in the container market through the acquisition of the
50% minority interest in Braemar Container Shipping and Chartering Limited for
#1.2m.
Our strategy for extending the range of shipping services provided has begun to
bear fruit and our non-broking businesses contributed 17% of the adjusted
operating profits, driven by strong year-on-year income and profit growth from
both Cory Brothers and Wavespec. During the year these services were expanded
with the creation of an environmental services division through the acquisition
of DV Howells in March 2006 and Hi-bar in September 2006 for a maximum combined
consideration of #0.9m. DV Howells provides pollution incident response services
for the oil majors and other transportation companies and we are very proud of
the role they played and their continuing involvement in the environmental
protection of the UK coastline where the container vessel MSC Napoli is beached.
We have also increased our presence in the UK ship agency market through the
purchase of Gorman Cory which will take place over two years. We are pleased
with the progress made in building our non-broking businesses and we expect to
continue to invest in these sectors as attractive opportunities arise.
The Directors are recommending that the name of the company changes to Braemar
Shipping Services PLC. The name Braemar Seascope is identifiable with our
shipbroking business and we do not intend to change the name for our shipbroking
trading companies around the world. However, the Group has now successfully
extended its services beyond shipbroking and will continue to do so. We have
reached a point when we consider it both helpful and appropriate to recognise
the broadening of the business with a change in the name which reflects its
current and future composition.
The Directors are recommending for approval at the Annual General Meeting a
final dividend of 12.25 pence per ordinary share, to be paid on 31 July 2007 to
shareholders on the register at the close of business on 6 July 2007. Together
with the 6.75p interim dividend the Company's dividend for the year is 19.0
pence (2006: 18.0 pence), a rise of 5.6%. The dividend is covered 2.0 times by
adjusted earnings.
These results are a testament to the skill, hard work and commitment of staff
across the Group and on behalf of the Board I thank all concerned for their
contribution to this year.
After many years as an executive director Iain Shaw retired from the Group in
June 2006 and I would like to express our gratitude for his significant
contribution both as a shipbroker and director. I am delighted that Denis
Petropoulos and Quentin Soanes agreed to join the Board in January 2007 as
executive directors. They have both worked for the Group for many years and
their experience will be of great value in the future.
Shipping has experienced large and rapid changes in freight rates and vessel
values over the course of the last five years. This volatility is likely to
remain while the demand for seaborne trade continues to grow and we expect our
broadly-based shipping services business to benefit while these conditions
persist.
Sir Graham Hearne
10 May 2007
CHIEF EXECUTIVE'S REVIEW OF THE BUSINESS
The progress made across the Group over the last year continues to be
encouraging. All of our operations have been performing well and we have grown
the business in line with our strategy of expanding into complementary service
areas and by increasing our geographic presence. We now have more than 400
employees worldwide based at 35 offices, of which eight are overseas and our
shipping services business is more diverse than ever before. With shipping
activity remaining strong, we see no shortage of opportunity to continue our
controlled growth in the same vein. A review of the market and our activities
during the year is set out by segment below.
Shipbroking
Shipbroking activities are undertaken under the name of Braemar Seascope from
offices in London, Shanghai, Beijing, Singapore, Melbourne, Perth and Aberdeen.
Revenues in 2006/7 increased to #40.5m (2006: #39.7m) and adjusted operating
profits were #8.7m (2006: #9.0m). The operating profit margin (before impairment
charge) for the division was 21.6% in 2007 (2006: 22.7%), reflecting a shift
towards lower margin chartering business in the year. There was an average of
205 employees of whom 68% were fee earning and 25% were based overseas (2006 -
189 employees).
In each of the dry market sectors freight rates dipped from the start of our
financial year when the Baltic Dry Index ("BDI") stood at 2,708, reaching a low
in May 2006 (BDI 2,416) before recovering over the remainder of the financial
year (BDI 4,765). The BDI currently stands at 6,585. The capesize market curve
was particularly steep in both directions with the strong recovery driven by
Chinese demand, during which we were able to conclude a number of long-term
period charters at high rates. There has also been a considerable growth in
vessel supply although there is still sufficient market tightness to produce
significant fluctuations in rates from time to time. Currently the market is
affected by load port congestion, especially in the east coast coal ports of
Australia. This has helped reduce the supply of vessels and thereby to
strengthen freight rates. Following our investment in Australia, this year we
opened an office in Singapore and in Sao Paolo, both of which are becoming
increasingly important as shipping centres. In view of the strength of the
market and our investments, we expect our dry activities to become a more
significant part of our business in future.
Deep sea tanker chartering increased both income and transaction volumes over
last year, and the value of longer term period business grew significantly over
the year. At the start of the financial year the Baltic Dirty Tanker Index ("
BDTI") stood at 1,109 falling to a low of 951 in April 2006 but recovering
strongly to reach a 12 month peak of 1,602 in August and closing at 1,101 on 28
February 2007. It currently stands at 1,296. The weakness in tanker freight
rates at the start of the financial year was caused by OPEC cutbacks which led
to reduced refining. However as the oil price rose from $60/barrel to $70/barrel
supply restraints were relaxed and refineries moved quickly to source crude
which became much in demand causing a rapid rise in freight rates. With
increased refining came the increased demand for the carriage of refined
products and although rates did not return to the high levels of the previous
year, they did remain steady for most of the second and third quarters. In
addition the constant Chinese and Indian demand for crude supplied not only from
the Middle East but also from Atlantic producers in West Africa and the
Caribbean maintained a healthy employment of large crude carriers. Delivery of
newbuildings into the tanker markets during the course of 2006 has increased the
deadweight available to carry oil which has meant that after the market weakened
in the fourth quarter, rates did not recover as quickly following the increased
volumes at the start of our new year. However, it is encouraging to note that
despite the steady growth of the fleet during the first quarter of our new year
the spot market was notably active with short-term demand for crude. As the year
progresses we expect to see continuing demand from the major refining centres,
but the growth in the tanker fleet prior to the phasing out of older tonnage
will mean the market is likely to be more volatile.
The coastal tanker market benefited from larger contract volumes and falling
bunker costs towards the end of the year providing a stimulus to activity. Deep
sea chemical parcel tankers had a steady year with an upturn in rates in the
fourth quarter due to a combination of increasing demand and the prospect of the
latest biofuel regulations coming into force. This trend should continue during
2007 through to 2008 and while there will be seasonal fluctuations the market is
expected to remain firm.
The LPG freight market is expected to strengthen over the next twelve months as
new product streams and market participants, such as China, compete in the
market for tonnage.
The LNG transportation market remains at low levels for short-term employment
due to the delivery of new vessels, committed for long-term LNG transportation,
the projects for which have since been delayed by between one and three years.
However, such vessels will be absorbed in the long-term projects that they were
originally intended for and while there are some uncommitted vessels in the
market these will, in time, achieve gainful employment.
Sale and purchase enjoyed another very successful year. There was a shift in the
business with less high value second hand transactions than in 2005/6 but a
record year for newbuildings where the income is received over 2-3 years on
average. The demand for new ships is borne out in the extended shipyard order
books and in a tendency for payment terms to reflect larger up-front contracted
values. The newbuilding forward order book is now at its highest level (both in
terms of the number of ships and commission value) with ship deliveries
stretching out to 2010/11. Over the last six months there has been a very
significant increase in the market value of bulk carriers which is commensurate
with the rise in dry freight rates and we have recently concluded a number of
transactions at historically high values. Demolition business remains a small
part of sale and purchase activity but we expect it to increase in the coming
years in line with the phase-out of single hull tankers.
Offshore had its best ever year driven by high activity levels and charter rates
and the successful conclusion of some good sale and purchase and project
transactions, some of which will benefit the company for many years to come.
Worldwide oil and gas exploration has been very active and continues to be so,
giving confidence for the coming year.
We consolidated our container business midway through the financial year with
the purchase of the remaining 50% interest in August 2006. After a reasonably
strong market in the first half of the year container charter rates fell in the
second half of the year before recovering strongly during the first quarter of
2007. During 2006 global growth in container volume was 10.8% and fleet capacity
grew by 16.5%, and in 2007 the growth is expected to be in the region of 10-11%
for container volumes and 14.5-15% for growth in fleet capacity. The desk
performed well throughout the year in a rapidly changing market and we expect a
similar performance to last year given the forecast growth in capacity,
providing world trade is maintained.
As at 1 March 2007 we had concluded business that should generate revenues in
excess of $30m in the new financial year (1 March 2006 for the next twelve
months: US$26m).
Ship agency, forwarding and logistics
Revenues increased to #23.4m (2006: #15.9m) and operating profits were #0.9m
(2006: #0.6m) and the company's achievements were also recognised by its
customers when in April 2007 Cory was voted number one in the Lloyds Loading
List Customer Service Awards 2006.
The year overall has seen Cory consolidating its acquisitions made late 2005 and
early 2006, and concentrating on organic growth with average staffing increasing
from 120 to 149. Growth was driven primarily by the liner, logistics and
forwarding business, where revenues showed month on month improvements
throughout the financial year.
The increase in liner, logistics and forwarding was driven primarily by
sustained strong demand with in excess of 13,200 forwarding jobs being handled
in the year compared with 9,700 last year. These were mostly on key logistics
contracts supplemented with a number of one-off projects. Whilst most of the
activity is handled out of Felixstowe, we have been developing forwarding
activities from certain existing agency locations, thereby increasing the scope
and capability of Cory as a whole. Planetwide, the forwarding acquisition made
in 2005 performed in line with our growth expectations. During the year it
handled 1,860 of the forwarding jobs and was also able to add new consolidation
routes to the Middle East.
Port agency handled 17% more port calls in 2006/7 maintaining a leading position
in an increasingly competitive market. New income streams commencing in early
2007 should see this growth continue through the remainder of 2007 and into
2008. The acquisition of the business and assets of Gorman Shipping, which
handles over 750 vessels per annum concentrated on the Mersey and the Manchester
Ship Canal, has significantly strengthened our UK agency activities. The
business has been combined with the existing Cory Liverpool office making it one
of the foremost ships' agents in the area. Morrison Tours, a highly seasonal
business linked closely to the cruise industry around the UK has added to its
customer base and improved the take-up of the shore excursions on offer.
With further new pieces of business being won in both in agency and liner,
logistics and forwarding, activity levels should continue to be maintained in
all areas in the coming year.
Technical shipping support - Wavespec
Revenues increased to #6.6m (2006: #5.2m) and operating profits were #0.6m
(2006: #0.3m) in line with the growth in activity levels. Average headcount
during the year was 18 employees (2006: 17 employees) with a further 50
engineers sub-contracted to clients within this segment (2006: 45 consultants).
Currently, the company has site supervision teams at three shipyards for the
construction of up to 48 new LNG vessels in connection with the Qatargas II
project and this is expected to generate a positive contribution for the company
for several years. It is also fulfilling a similar role in connection with LNG
vessel construction for use on the Sakhalin gas project. Wavespec has also
been active in the development of the seaborne transportation of compressed
natural gas, working with Braemar Seascope to provide technical and commercial
assistance for a number of projects.
Environmental Services - DV Howells
DV Howells was acquired in March 2006 and has contributed revenue of #3.2m and
operating profits of #0.2m in the eleven months since it joined the group. The
average headcount during the year was 39 full time employees compared to 34 at
acquisition. The addition of Hi-bar in September 2006 completed the response
coverage across the UK and enhanced the company's training and consultancy
capability. The company has had a busy year and has integrated well into the
Group. Of particular note is the major role the company has played following the
grounding of the mini-bulker Sumni in the Orkney Islands and the container
vessel, MSC Napoli in Devon. Services provided, some of which are still
on-going, include pollution control, beach clearance, decontamination wash-down
facility and the handling of hazardous container cargoes. The company also won
important contracts to provide incident response services in Angola and for the
MOD, both of which illustrate the potential of the business to grow in the UK
and overseas.
Bunker Trading
Revenues increased to #33.4m (2006: #7.7m), representing a full year's
contribution, and operating profits were #62,000 (2006: #30,000).
Bunker sales have been lower than expected due to a combination of the drought
conditions and high oil prices, which has to some extent limited demand in the
Australasian region. Looking forward, the Australian resources and minerals
sector is enjoying significant growth which should be a basis for increased
bunker sales in the future. We are currently in the process of reviewing our
strategic options with regard to this business.
Financial Review
Profits and earnings
Reported pre-tax profits were #10.1m (2006: #10.3m). Adjusted pre-tax profits
(before an impairment charge) increased by 7% to #11.0m on revenues of #107.2m
(2006: #68.5m). As indicated at the half year, given the performance of all
business segments in broadly favourable markets, we expected the operating
profits in the second half of the year to show an improvement over the first
half. Second half operating profits for 2006/7 were #5.8m compared with #4.7m
(before impairment) in the first half and #4.7m in the second half of 2005/6.
The trading improvement shows sustained business growth across all segments.
A reconciliation of reported profits to adjusted profits is set out in the table
below. The impairment charge is not a cash cost and arose because at the half
year, after a relatively weak market, a more prudent view was taken of the
estimated future earnings from the Australian business.
2006/7 2005/6
#000 #000
Adjusted profits before impairment charge and tax 11,026 10,293
Impairment of Braemar Seascope Pty goodwill (950) -
Reported profit before tax 10,076 10,293
Pence Pence
EPS (pre impairment charge) 37.64 37.03
Impairment of goodwill (4.81) -
Basic EPS 32.83 37.03
The weighted average number of shares increased from 19.38m to 19.72m for 2006/
7.
Margins
Operating profits are stated after deducting both cost of sales and operating
costs. Cost of sales comprises bunker payments, freight and haulage and payments
to sub-contractors. The operating profit margin (before impairment) of 9.8% in
2007 compares with 14.4% in 2006. The reduction is mainly due to the increased
relative contributions of the non-broking businesses which generate returns at
lower margins but which are more predictable. The margin in shipbroking was
lower due to an increase in operating costs totalling 3.4% mainly in respect of
staff costs and the establishment of new overseas offices. A summary of the
segment margins is set out below.
Operating margins before impairment
2006/7 2005/6
Shipbroking 21.6% 22.7%
Ship agency, forwarding and logistics 3.9% 3.6%
Technical shipping support 8.3% 5.6%
Environmental services 7.0% 'n/a
14.1% 16.2%
Bunker trading 0.2% 0.4%
Total 9.8% 14.4%
Foreign exchange
The average rate of exchange for conversion of US dollar income during the
financial year, after taking account of hedging, was $1.86/# (2006: $1.80/#) and
at 28 February 2007 the balance sheet rate for conversion was $1.97/# (28
February 2006: $1.75/#). If the 2006/7 US dollar denominated income had been
translated at the 2005/6 average exchange rate, it would have been higher by
approximately #1.2 million. At 28 February 2007 the Group held forward currency
contracts to sell US$6 million at an average rate of $1.95/# and currency
options giving the right to sell US$1.1 million for AU$ at a rate of 0.78.
Taxation
The tax rate on reported profit before tax was 35.8% (2006: 30.3%). The
underlying rate, excluding the share of net profits from joint ventures and the
effect of the impairment charge, was 33.3% (2006: 31.0%).
Cash flow and acquisitions
The cash balance increased over the year by #1.0m to #14.6m (2006: #13.6m).
Operating cash flow generated in the year was #9.7m, from which the major cash
outflows before expenditure on acquisitions were #0.7m for the purchase of fixed
assets, #3.4m on corporation tax and #3.6m for dividend payments.
Net cash expended on acquiring businesses was #2.5m, offset by #0.7m of cash in
the acquired balance sheets, in respect of DV Howells and Hi-bar (#0.6m), 50 per
cent of Braemar Container Shipping and Chartering (#1.2m), 41 per cent of Gorman
Cory (#0.2m) and Planetwide (#0.5m). This does not include further potential
cash consideration of, in aggregate, #1.1m dependent on profitability.
Treasury risk management
The Board sets the Group's treasury policy covering financing decisions and
treasury risk management, the objective of which is to manage the Group's
financial risk exposures in an effective manner. The Finance Director is
responsible for day-to-day treasury risk monitoring and activity which is
reviewed by the Board through regular reporting. The Group uses financial
instruments to hedge underlying exposures and not for speculative purposes.
Liquidity risk: The Group has no net debt and did not have at any time during
the year. An overdraft facility of #3.0m with the Group's principal relationship
bank, the Royal Bank of Scotland plc, is maintained for financial flexibility
and in order to improve treasury efficiency and performance.
Foreign exchange risk: The majority of the Company's shipbroking, technical
services and bunker trading income is US dollar denominated and changes in the
rate of exchange relative to # sterling, and to a lesser extent the Australian
and Singapore dollar, can have an effect on the reported results and net assets.
From time to time the Group enters into forward foreign exchange contracts and
currency options to limit the effect of currency fluctuations.
Interest rate risk: The Group has an exposure to interest rates in relation to
its cash balances, the majority of which are held in the UK. Surplus cash (in #s
or US$s) is deposited at institutions with strong credit ratings and deposits
are short term in nature.
Alan Marsh
10 May 2007
Braemar Seascope Group PLC
Consolidated income statement for the year ended 28 February 2007
Year ended Year ended
28 Feb 2007 28 Feb 2006
Continuing operations Notes #'000 #'000
Revenue 3 107,200 68,497
Cost of sales (53,529) (21,271)
Gross profit 53,671 47,226
Operating costs (44,121) (37,336)
Amortisation of other intangibles (284) (287)
Impairment of goodwill (950) -
Operating costs excluding (42,887) (37,049)
amortisation of other intangibles and
impairment of goodwill
Operating profit 3 9,550 9,890
Finance income 335 162
Finance costs (16) (2)
Share of profit from joint ventures 207 243
and associates
Profit before taxation 10,076 10,293
Taxation (3,604) (3,115)
Profit for the year 6,472 7,178
Attributable to:
Equity holders of the parent 6,367 7,178
Minority interest 105 -
Profit for the year 6,472 7,178
Earnings per ordinary share
Basic - pence 5
32.83 p 37.03 p
Diluted - pence
32.39 p 36.18 p
Braemar Seascope Group PLC
Statement of recognised income and expenses for the year ended 28 February 2007
Year ended Year ended
28 Feb 2007 28 Feb 2006
#'000 #'000
Profit attributable to shareholders 6,472 7,178
Foreign exchange differences on retranslation of foreign (70) 83
operations
Tax on items taken directly to or transferred from equity 260 576
Cash flow hedges:
- Transferred to income statement in year 40 (1,401)
- Losses deferred in equity 17 (40)
Recognised income and expense for the year 6,719 6,396
Attributable to:
Ordinary shareholders 6,614 6,396
Minority interest 105 -
6,719 6,396
Braemar Seascope Group PLC
Consolidated Balance sheet as at 28 February 2007
As at As at
28 Feb 07 28 Feb 06
Assets Notes #'000 #'000
Non-current assets
Goodwill 22,606 22,480
Other intangible assets 1,582 462
Property, plant and equipment 5,478 5,034
Investments 1,538 1,611
Deferred tax assets 642 510
Other receivables 81 58
31,927 30,155
Current assets
Inventories 70 -
Trade and other receivables 21,750 17,717
Derivative financial instruments 27 12
Cash and cash equivalents 14,634 13,567
36,481 31,296
Total assets 68,408 61,451
Liabilities
Current liabilities
Derivative financial instruments - 99
Trade and other payables 29,011 25,490
Current tax payable 2,402 2,224
Finance leases - 11
Provisions 294 288
31,707 28,112
Non-current liabilities
Deferred tax liabilities 283 139
Provisions 169 343
452 482
Total liabilities 32,159 28,594
Total assets less total liabilities 36,249 32,857
Equity
Share capital 2,023 1,988
Capital redemption reserve 396 396
Share premium 8,554 8,046
Merger reserve 21,346 21,346
Other reserves (722) 47
Shares to be issued (1,047) (997)
Retained earnings 5,390 2,031
Group shareholders' equity 7 35,940 32,857
Minority interest 309 -
Total equity 36,249 32,857
Braemar Seascope Group PLC
Consolidated Cash flow statement for the year ended 28 February 2007
Year ended Year ended
28 Feb 07 28 Feb 06
Notes #'000 #'000
Cash flows from operating activities
Cash generated from operations 6 9,668 13,769
Interest received 335 156
Interest paid (16) (1)
Tax paid (3,413) (3,210)
Net cash generated from operating activities 6,574 10,714
Cash flows from investing activities
Dividends received from joint 263 239
ventures
Acquisition of subsidiaries, net of cash acquired (1,844) (521)
Purchase of property, plant and equipment (654) (387)
Proceeds from sale of property, plant and equipment 25 29
Purchase of investments - (36)
Other long term assets (23) 37
Net cash used in investing (2,233) (639)
activities
Cash flows from financing activities
Proceeds from issue of ordinary 569 535
shares
Dividends paid (3,595) (3,194)
Dividends paid to minority interest (100) -
Purchase of own shares (50) (360)
Payment of principal under finance leases (11) (28)
Net cash used in financing (3,187) (3,047)
activities
Increase in cash and cash equivalents 1,154 7,028
Cash and cash equivalents at beginning of the year 13,567 6,539
Foreign exchange differences (87) -
Cash and cash equivalents at end of the year 14,634 13,567
Balance sheet analysis of cash and cash equivalents
Cash and cash equivalents 14,634 13,567
Short term borrowings - -
Cash and cash equivalents at end of the year 14,634 13,567
Braemar Seascope Group PLC
Notes to the financial statements
Note 1 - General Information
The Preliminary Announcement of results for the year ended 28 February 2007 is
an extract from the forthcoming 2007 Annual Report and Accounts and does not
constitute the Group's statutory accounts of 2007 nor 2006. Statutory accounts
for 2006 have been delivered to the Registrar of Companies, and those for 2007
will be delivered following the company's Annual General Meeting. The auditors
have reported on the 2006 accounts; their report was unqualified and did not
contain statements under Sections 237(2) or (3) of the Companies Act 1985.
Note 2 - Accounting policies
Whilst the financial information included in this preliminary announcement has
been prepared in accordance with International Financial Reporting Standards
(IFRSs) adopted for use in the European Union, this announcement does not itself
contain sufficient information to comply with IFRSs. The company expects to
distribute full accounts that comply with IFRSs on 25 May 2007.
Note 3 - Segmental results
Revenue Profit for the year
2007 2006 2007 2006
#'000 #'000 #'000 #'000
Shipbroking 40,530 39,745 8,749 9,003
Ship agency, forwarding & logistics 23,449 15,851 911 568
Technical shipping support 6,623 5,202 553 289
Environmental services 3,229 - 225 -
Revenue / operating profit excluding bunker 73,831 60,798 10,438 9,860
trading and impairment
Bunker trading 33,369 7,699 62 30
Revenue / operating profit excluding 107,200 68,497 10,500 9,890
impairment
Impairment - shipbroking - - (950) -
Revenue / operating profit 107,200 68,497 9,550 9,890
Finance income/ (cost)- net 319 160
Share of profit from joint ventures and associates 207 243
Profit before taxation 10,076 10,293
Taxation (3,604) (3,115)
Profit for the year (before deducting minority interest) 6,472 7,178
Note 4 - Dividend
The proposed final dividend of 12.25 pence per share (2006: final 11.5 pence)
takes the total dividend for the year to 19.0 pence (2006: 18.0 pence). The cost
of the final dividend will be #2.4m (2006: #2.2m) based on 19,899,846 shares
(being the total in issue less shares held in the ESOP for which the dividend
has been waived) and will be charged to equity in the 2007/8 financial year.
Note 5 - Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year, excluding 331,495 ordinary shares held by the
employee share trust (2006:321,495) which are treated as cancelled.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive ordinary shares. The
Group has one class of potential dilutive ordinary shares being those granted to
employees where the exercise price is less than the average market price of the
Company's ordinary shares during the year.
2007 2007 2007 2006 2006 2006
From continuing operations Earnings Weighted Per share Earnings Weighted Per share
#'000s average amount #'000s average amount
number of pence number of pence
shares shares
Profit for the year attributable 6,472 19,715,846 32.83 7,178 19,385,615 37.03
to shareholders
Effect of dilutive share options - 264,693 (0.44) - 452,339 (0.85)
Fully diluted earnings per share 6,472 19,980,539 32.39 7,178 19,837,954 36.18
2007 2007 2007 2006 2006 2006
From continuing operations Earnings Weighted Per share Earnings Weighted Per
#'000s average amount #'000s average share
number of pence number of amount
shares shares pence
Basic earnings from above 6,472 19,715,846 32.83 7,178 19,385,615 37.03
Impairment of goodwill 950 - 4.81 - - -
Adjusted earnings per share 7,422 19,715,846 37.64 7,178 19,385,615 37.03
Note 6 - Reconciliation of operating profit to net cash flow from operating
activities
2007 2006
#'000 #'000
Profit for the year attributable to shareholders 6,472 7,178
Adjustments for:
Taxation 3,604 3,115
Depreciation 518 339
Profit on sale of property, plant and equipment (12) (17)
Impairment of goodwill 950 -
Amortisation of intangibles 284 287
Share based payments 309 244
Finance income (335) (162)
Finance costs 16 2
Share of profit from joint ventures and associates (207) (243)
Changes in working capital (excluding effects of acquisitions
of subsidiaries)
Decrease in stocks 7 -
(Increase)/decrease in trade and other receivables (3,874) (129)
Increase/(decrease) in trade and other payables 2,098 2,913
Increase/(decrease) in provisions (162) 242
Cash generated from operations 9,668 13,769
Note 7 - Statement of changes in total equity
Group Share Capital Shares Other Retained Total Minority Total
capital redemption earnings interest equity
reserve to be reserves
issued
#'000 #'000 #'000 #'000 #'000 #'000
At 1March 2005 1,945 396 (637) 29,824 (2,362) 29,166 - 29,166
Recognised income and expense for - - - (926) 7,322 6,396 - 6,396
the year
Dividends paid - - - - (3,173) (3,173) - (3,173)
Issue of shares 43 - - 541 - 584 - 584
Purchase of shares to be issued - - (360) - - (360) - (360)
Credit in respect of share option - - - - 244 244 - 244
schemes
At 28 February 2006 1,988 396 (997) 29,439 2,031 32,857 - 32,857
Recognised income and expense for - - - (31) 6,645 6,614 105 6,719
the year
Acquisition - - - - - - 304 304
Dividends paid - - - - (3,595) (3,595) (100) (3,695)
Issue of shares 35 - - 508 - 543 - 543
Deferred share consideration - - - (738) - (738) - (738)
Purchase of shares to be issued - - (50) - - (50) - (50)
Credit in respect of share option - - - - 309 309 - 309
schemes
At 28 February 2007 2,023 396 (1,047) 29,178 5,390 35,940 309 36,249
This information is provided by RNS
The company news service from the London Stock Exchange
END
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