RNS Number : 7977G
Braemar Shipping Services PLC
28 October 2008
BRAEMAR SHIPPING SERVICES PLC
("Braemar" or "the Group")
Interim results for the six months ended 31 August, 2008
28 October, 2008
Braemar Shipping Services plc (the "Group"), an international provider of shipping and marine services, today announces unaudited
half-year results for the six months ended 31 August, 2008.
FINANCIAL HIGHLIGHTS
* Revenue from continuing operations �69.1m (2007: �46.7m), a rise of 48% (23% excluding acquisitions)
* Pre-tax profit from continuing operations �9.8m (2007: �7.1m), up 38% (18% excluding acquisitions)
* Basic EPS from total operations 33.51p (2007: 23.66p), up 42%
* Increased interim dividend of 8.5p per share (2007: 8.00p)
* Strong balance sheet with cash of �11.1m and no debt
OPERATIONAL HIGHLIGHTS
* Wide mix of shipping operations offsets downturns in particular markets
* Non-broking activities now make up 20% of operating profits before central costs
* Strong performance driven by development in technical services (marine services, marine engineering services, loss adjusting), and
energy-based activities
* Braemar Steege (specialist loss adjuster) acquired in March, 2008 and performing well
MARKET OVERVIEW
* Recent turmoil presents opportunities to build business further
* Probable slowdown in ordering of new ships and possibility of some cancelled orders
* Demand for iron ore in Far East likely to see some recovery after the recent slow down
* Energy related activity businesses seeing continued market strength
Commenting on the results and outlook, Sir Graham Hearne, Chairman, said: "Our strategy remains to position the Group as a leading
player in a selective range of marine and shipping services. We believe this will provide the Group with a resilience to weather adverse
conditions and a platform from which we can take advantage of suitable opportunities. Unprecedented economic events have introduced
uncertainty but we remain cautiously optimistic about the future."
Alan Marsh, Chief Executive, said "Despite the market this is a set of record results for Braemar which gives us confidence that our
expectations for the full year out-turn will be met. Careful operational and financial management has resulted in a strong cash position
with no debt and an increased dividend payment to shareholders."
ENDS
For further information, contact:
Braemar Shipping Services plc
Alan Marsh Tel +44 (0) 20 7535 2650
James Kidwell Tel +44 (0) 20 7535 2881
Pelham Public Relations
Zo?ocock Tel +44 (0) 20 3178 8023
Damian Beeley Tel +44 (0) 20 3178 2253
Elaborate Communications
Sean Moloney Tel +44 (0) 1296 682356
Charles Stanley Securities
Philip Davies/Ben Johnston Tel +44 (0) 20 7149 6457
Notes to Editors
Braemar Shipping Services plc is a leading international provider of broking, consultancy, technical and other services to the shipping,
marine and energy industries.
The business is divided into the following business segments: Shipbroking, Logistics, Technical services and Environmental services.
This growth has been through a mixture of organic and acquisition-led growth.
Shipbroking services include: chartering tankers (including gas, chemicals and LNG), dry cargo, containers, offshore vessels, second
hand sale and purchase, newbuilding, demolition, and sector research.
It is listed on the Official List of the London Stock Exchange in the transport sector.
Recent Acquisitions
2006 - Braemar Howells, a pollution response service primarily in the UK for marine and rail operations.
2007 - Braemar Falconer, provides specialised marine and offshore services.
2008 - Braemar Steege, a specialist loss adjuster to the oil and gas industry.
Principal businesses:
Shipbroking
Braemar Seascope provides 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
Logistics
Cory Brothers Shipping Agency provides port agency, freight forwarding and logistics services within the UK and Singapore.
www.cory.co.uk
Technical
Braemar Steege provides specialist loss adjusting and other expert services to the energy (oil and gas), marine, power and other related
industrial sectors. It has offices in London, Houston, Singapore, Calgary and Mexico City.
www.steegekingston.com
Braemar Falconer provides specialised marine and offshore services. It has offices at the following locations: Australia, China, India,
Indonesia, Malaysia, Singapore, Vietnam, and the UK.
www.falconer-bryan.com
Wavespec provides consultant marine engineering and naval architecture services to the shipping and offshore markets.
www.wavespec.com
Environmental
Braemar Howells provides pollution response and advisory services primarily in the UK for marine and rail operations, and is now
developing an international presence.
www.dvhowells.co.uk
INTERIM ANNOUNCEMENT - SIX MONTHS ENDED 31 AUGUST 2008
CHAIRMAN'S STATEMENT
The trading performance of the Group during the first half of the year was strong with organic growth in shipbroking coupled with
expansion in our technical services division being the principal drivers. Group revenues grew by 48% from �46.7m to �69.1m, pre-tax profits
increased by 38% from �7.1m to �9.8m and basic earnings per share were up 42% to 33.51p from 23.66p. The underlying growth in revenue and
pre-tax profits excluding the contributions from acquired businesses is 23% and 18% respectively.
The unprecedented events occurring in the international financial and commodity markets over the last month have introduced a much
greater degree of uncertainty in shipping. Freight rates for the dry bulk and container markets have experienced significant falls though
tanker rates remain firm. Vessel values have come under pressure because of the contraction of available finance and perceived falls in the
demand for bulk commodities. This has resulted in reduced sale and purchase activity which is likely to remain low until confidence returns.
There is a strong likelihood that some of the newbuilding orders reported in the market will be cancelled. However, we believe that the
majority of our forward order book is secure because the prices at which most orders were placed are below the historic peaks and because of
the relative strength of the yards, the owners of the vessels and the charterers. Some reduction of newbuilding deliveries is likely and
will be welcome by serving to reduce the potential for excess shipping capacity. Similarly, an acceleration in the scrapping of old ships is
beginning to occur which will also moderate the supply of tonnage - demolition shipbroking being an area where we have great expertise.
Our strategy over the past few years has been to invest in related marine services businesses. This has expanded our geographical
presence, activity skill-sets and customer base giving the Group greater resilience in changing markets. We have invested in building the
non-broking aspect of our business and on 3 March 2008 the Company purchased Steege Kingston for a consideration which is expected to total
approximately �8.1m. The business is an international loss-adjuster specialising in the energy market and has now been renamed Braemar
Steege. Together the non-broking businesses contributed �2.7m (representing approximately 20%) of the Group's operating profit before
amortisation in the first half, including �0.8m from Braemar Steege. Activity levels were high during the period and have remained so since,
particularly at Braemar Falconer whose marine engineering and surveying business in the Far East has benefited greatly from the increase in
oil and gas exploration.
The Group is financially strong with net tangible assets of �15.2m including cash of �11.1m and no debt. In the current financial
turmoil, with global recession imminent, it is difficult to predict what impact it will have on our businesses. However, there is a broad
base to our operations and this, coupled with the strength of our forward order book and of the US$ relative to Sterling gives us confidence
that our expectations for the full year out-turn will be met.
The Board has declared an interim dividend of 8.5 pence, an increase of 6% over 2007/8. The interim dividend will be paid on 11 December
2008 to shareholders on the register at the close of business on 14 November 2008, with an ex-dividend date of 12 November 2008.
Sir Graham Hearne
Chairman
27 October 2008
CHIEF EXECUTIVE'S REVIEW OF ACTIVITIES
Our Group has delivered a strong performance in nearly all sectors of activity. We have enjoyed a strong shipping market for much of the
last six months but more importantly we have increased our market share across most shipbroking disciplines which will serve us well in
weaker markets.
I would like to record the Board's thanks to all staff across our divisions for the energy, enthusiasm and commitment they have given to
ensure that more and more companies within the maritime and shipping industries are developing a business relationship with Braemar.
Shipbroking
The average Baltic Dry Index for the six months ended 31 August 2008 was 8,968 (H1 2007: 6,146). The BDI currently stands at 1,102
having fallen sharply during the recent financial crisis. From the start of our financial year the dry cargo market gradually improved until
it peaked in the last half of May and remained high for about one month before gradually sliding back down towards the end of August, a
pattern that was generally followed by all sectors of the dry cargo market. The volume of transactions concluded was higher this half than
last, with a considerable improvement in the value of freights and hence commission earned. China has dominated our activities and we have
increased our presence in Beijing as well as taking on several junior brokers in London, Australia and Singapore. The dry bulk freight
market in the Far East has dropped considerably over the last month with the demand for bulk commodities from China slowing since the
Olympic Games. While we see some potential for an increase in volumes in the near future, this recovery is not expected to reach previous levels. In addition to market turmoil a more direct effect has
been an impasse between Vale of Brazil, the world's largest iron ore supplier, and the Chinese steel mills, over Vale's attempt to increase
the price of iron ore. The Chinese steel mills, who have been suffering from a downturn in the price of steel, have vigorously opposed this
increase and, with a large stockpile of ore in Chinese ports, do not need to import much in the short term.
The deep sea tanker chartering rates have remained relatively firm throughout the first half and our volumes transacted have increased.
The Baltic Dirty Tanker Index averaged 1,731 during the first half (H1 2007: 1,331) and now stands at 1,390. Crude oil prices have dropped
significantly since the highs of the summer, but both China and India are continuing to import crude oil in line with their predictions, and
we expect to benefit from this continuous anticipated requirement. The newbuilding crude tonnage deliveries during the period have so far
been absorbed by market demand but as we move into next year there is a general expectation that the deliveries will exceed market
requirement and rates may start to recede. The wider distribution of products from refineries continues to be the major contribution to the
tonne mile requirement and in the near term we expect the volume of trade in all refined products, simple and sophisticated, to grow in line
with the delivery of new product tonnage.
In August 2008 we entered the FFA (Forward Freight Agreement) broking market through a joint arrangement with Tullett Prebon. This new
desk, which is based in our London office, currently transacts over the counter wet freight trades with a view to expanding into the dry FFA
market in due course.
The LNG sector is now becoming a crucial element to the global power requirement and the projects that have been previously delayed to
date are now nearing completion. The transportation of this clean and available energy will grow over the ensuing year and we are well
placed to service the new demand.
Sale and purchase activity in the first half remained strong with a good level of highly priced transactions in both second hand and
newbuilding. This was maintained into July but has since steadily dried up with the unfolding of the financial market crisis. The present
stagnation in the sale and purchase and newbuilding markets is a combination of lack of liquidity in the financing market and a wholesale
drop in dry freight rates. Despite this current climate we have been able to conclude significant newbuilding business. Demolition volumes
have picked up and we expect this activity to increase in the last quarter of 2008 and early 2009.
Our container desk performed well in the first half against the backdrop of a market which has deteriorated in recent months on the back
of declining consumer confidence. Sale and purchase activity is low at present as potential sellers are holding on to their tonnage rather
than selling. There is however a significant probability that some owners will be forced into selling and we remain well placed for this
business as we do on chartering when vessels seek new employment.
The offshore desk has had a very strong first six months with high charter rates in the North Sea driven by high exploration activity.
Rates have remained at these levels although it would be surprising if they were unaffected by the fall in the oil price in the future.
Technical services - Braemar Falconer, Wavespec and Braemar Steege
Braemar Falconer's revenue and profits for the first half year grew substantially. A significant portion of the growth was attributable
to increased involvement with rig moves, either as a warranty surveyor or as advisor to oil companies. A substantial increase was also
recorded for engineering consultancy work, where we earn higher rates. We opened a third branch office in China, which has secured three
contracts in quick succession. All of the offices in the Far East are busy with day-to-day survey work and the marine engineering department
in Singapore is carrying out significant engineering warranty work.
Wavespec continued to perform steadily with the majority of its business represented by LNG construction supervisory work under the
Qatargas contract which has at least another two years to run. The company is continuing to broaden its work to include offshore, dynamic
positioning and failure mode and effect analysis.
Braemar Steege has performed in line with our expectations and since acquisition in March 2008 it has established a new office in Venezuela
and a regional office in Miami. All offices have received a steady flow of new instructions through the first half of the year and more
recently the Houston and London offices have benefited from over 30 instructions arising from Hurricanes Gustav and Ike, including two of
the four largest energy claims known to have hit the energy insurance market as a result of Hurricane Ike.
Logistics - Cory Brothers
The growth in Cory's revenue was derived from more project forwarding work and the addition of 80% of Fred. Olsen Freight which was
purchased on 24 December 2007. The integration of Fred. Olsen Freight is proceeding well and will culminate in the bringing together of 90
Cory and Fred Olsen staff in new leasehold premises in Felixstowe in early 2009. Ship agency continued to perform steadily with an
increase in volumes following key contract additions. We also established our first overseas ship agency office in Singapore in July 2008.
This office has eight employees providing a full range of port, liner agency and logistics services. The cruise business also saw a
promising increase in port calls and passenger take-up during this summer season.
Environmental services - Braemar Howells
As expected, following the completion of the clean-up activity on the "MSC Napoli", the first half revenues and profits are lower than
last year. However, the effect has been to some extent ameliorated by an increase in retainer contracts with significant new clients and
international business, particularly in West and Central Africa.
Acquisitions
The contributions of acquired businesses to the half year results are as follows:
First half 2008/9 First half 2007/8
Revenue �000 �000
Braemar Falconer 4,143 647
Braemar Steege 3,298 -
Fred Olsen Freight Limited 4,873 -
12,314 647
Operating profit �000 �000
Braemar Falconer 1,133 65
Braemar Steege 777 -
Fred Olsen Freight Limited 86 -
Operating profit before 1,996 65
amortisation
Amortisation (366) (29)
Impact on Group operating profit 1,630 36
The consideration paid for Braemar Steege was �5.8m satisfied by the issue of shares (�1.3m) and cash of �4.5m. Further cash
consideration of �2.3m is expected to be paid based on performance. Net tangible assets acquired were �4.6m, including debtors of �2.5m and
cash of �1.2m resulting in the recognition of goodwill and intangible assets (net of applicable deferred tax) of �3.5m.
During the half the Group also expended cash of �0.9m on the purchase of 59% of Gorman Cory and �0.7m on the final settlement of the
consideration for 80% of Fred Olsen Freight.
Treasury
The majority of the Group's income is US$ denominated and the average rate of exchange for conversion of US$ income in the six months to
31 August 2008 was $1.90/� (Interim 2007/8: $2.02/�, Full Year 2007/8: $1.99/�). In broad terms a 10 cent swing in the US$/� rate
approximates to a �3m change in shipbroking revenues over a full year. The rate of translation as at 31 August 2008 was $1.82/�.
Cash
Cash balances were �11.1m at 31 August 2008 compared with cash of �21.6m as at 29 February 2008. The Group normally generates most of
its annual cash flow in the second half of the year and the reduction in cash principally reflects the payment of the annual broking bonus,
acquisitions (see above) and the full year dividend relating to the prior year.
Alan Marsh
Chief Executive
27 October 2008
Statement of Directors' responsibilities
The Directors confirm, to the best of their knowledge, that this set of financial statements has been prepared in accordance with IAS34
as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR
4.2.7 and DTR 4.2.8 of the Disclosure and Transparency rules of the United Kingdom's Financial Securities Authority.
The Directors of Braemar Shipping Services PLC are listed in the Braemar Shipping Services PLC Annual Report for 29 February 2008.
By order of the Board
A R. W. Marsh, Chief Executive J. R. V. Kidwell, Finance Director
Braemar Shipping Services PLC
Consolidated Income Statement
Unaudited Unaudited Audited
Six months to Six months to Year ended
31 Aug 2008 31 Aug 2007 29 Feb 2008
Continuing operations Notes �'000 �'000 �'000
Revenue 4 69,106 46,670 100,964
Cost of sales (19,770) (13,793) (28,267)
Gross profit 49,336 32,877 72,697
Operating costs (39,803) (26,110) (58,729)
Operating profit 4 9,533 6,767 13,968
Finance income 108 234 391
Finance costs - (8) (11)
Share of profit after tax from 144 100 370
joint ventures
Profit before taxation - 9,785 7,093 14,718
continuing operations
Taxation 5 (2,959) (2,323) (4,797)
Profit for the period - 6,826 4,770 9,921
continuing operations
Profit / (loss) for the period from discontinued - 23 (3)
operations
Profit for the period 6,826 4,793 9,918
Attributable to:
Equity holders of the parent 6,795 4,713 9,772
Minority interest 31 80 146
6,826 4,793 9,918
Earnings per ordinary share 7
Basic - pence 33.51 p 23.66 p 48.97 p
Diluted - pence 33.30 p 23.48 p 48.68 p
Braemar Shipping Services PLC
Consolidated Balance Sheet
Unaudited Unaudited Audited
As at As at As at
31 Aug 08 31 Aug 07 29 Feb 08
Assets Notes �'000 �'000 �'000
Non-current assets
Goodwill 8 28,235 24,218 25,826
Other intangible assets 8 4,145 2,254 2,315
Property, plant and equipment 8 6,175 5,771 5,820
Investments 2,087 1,535 1,890
Deferred tax assets 987 644 754
Other receivables 144 60 155
41,773 34,482 36,760
Current assets
Inventories 92 70 91
Trade and other receivables 42,721 28,394 26,784
Derivative financial - 77 107
instruments
Restricted cash - - 3,952
Cash and cash equivalents 11,052 11,122 21,635
53,865 39,663 52,569
Total assets 95,638 74,145 89,329
Liabilities
Current liabilities
Derivative financial 1,168 - 49
instruments
Trade and other payables 41,016 32,264 39,540
Current tax payable 3,438 3,099 3,017
Provisions 57 277 48
Client monies held as escrow - - 3,952
agent
45,679 35,640 46,606
Non-current liabilities
Deferred tax liabilities 2,301 287 681
Trade and other payables - - 434
Provisions 107 40 81
2,408 327 1,196
Total liabilities 48,087 35,967 47,802
Net assets 47,551 38,178 41,527
Equity
Share capital 9 2,102 2,049 2,061
Share premium 9 10,876 9,001 9,261
Shares to be issued (2,798) (1,844) (2,527)
Other reserves 10 21,770 20,806 20,687
Retained earnings 15,434 7,842 11,717
Total shareholders' equity 47,384 37,854 41,199
Minority interest 167 324 328
Total equity 47,551 38,178 41,527
Braemar Shipping Services PLC
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
Six months Six months Year ended
31 Aug 08 31 Aug 07 29 Feb 08
Notes �'000 �'000 �'000
Profit before tax for the 9,785 7,093 14,718
period from continuing
operations
Profit before tax for the - 23 (3)
period from discontinued
operations
Adjustments for:
-Depreciation 423 312 687
-Amortisation 528 189 452
-Goodwill impairment charge - - 114
-Profit on sale of investments - (93) (89)
-Profit / (loss) on sale of - - 57
property, plant and equipment
-Finance income (108) (234) (391)
-Finance expense - 8 11
-Share of pre-tax profit of (144) (100) (370)
joint ventures
-Share based payments 234 190 554
Changes in working capital
-Inventory (1) - (21)
-Trade and other receivables (8,527) (4,166) 143
-Trade and other payables (1,470) (747) 5,630
-Provisions (116) (145) (334)
Cash generated from operations 604 2,330 21,158
Interest received 108 234 391
Interest paid - (8) (11)
Tax paid (3,230) (1,904) (4,587)
Net cash generated from / (2,518) 652 16,951
(used in) operating activities
Cash flows from investing
activities
Acquisition of subsidiaries, 11 (4,887) (931) (4,270)
net of cash acquired
Purchase of property, plant 8 (654) (561) (1,032)
and equipment
Proceeds from sale of - 7 57
property, plant and equipment
Purchase of investments (8) - (38)
Proceeds from sale of - 191 200
investments
Other long-term receivables 11 21 (74)
Net cash used in investing (5,538) (1,273) (5,157)
activities
Cash flows from financing
activities
Proceeds from issue of 133 473 745
ordinary shares
Dividends paid 6 (3,147) (2,451) (4,053)
Dividends paid to minority - (65) (143)
Purchase of own shares (406) (797) (1,480)
Net cash used in financing (3,420) (2,840) (4,931)
activities
(Decrease)/increase in cash (11,476) (3,461) 6,863
and cash equivalents
Cash and cash equivalents at 21,635 14,634 14,634
beginning of the period
Foreign exchange differences 893 (51) 138
Cash and cash equivalents at 11,052 11,122 21,635
end of the period
Braemar Shipping Services PLC
Condensed consolidated half-yearly statement of changes in equity (unaudited)
Share capital Share premium Shares to be issued Other reserves Retained earnings Total Minority
interest Total equity
Notes �'000 �'000 �'000 �'000 �'000 �'000
�'000 �'000
At 28 February 2007 2,023 8,554 (1,047) 21,020 5,390 35,940
309 36,249
Cash flow hedges - - - 43 - 43
- 43
Exchange differences - - - (36) - (36)
- (36)
Net income recognised
directly in equity - - - 7 - 7
- 7
Profit for the period - - - - 4,713 4,713
80 4,793
Total recognised income
for the half year - - - 7 4,713 4,720
80 4,800
Dividends paid 6 - - - - (2,451) (2,451)
(65) (2,516)
Issue of shares 26 447 - - - 473
- 473
Purchase of shares - - (797) - - (797)
- (797)
Consideration to be paid - - - (221) - (221)
- (221)
Credit in respect of
share option schemes - - - - 190 190
- 190
Balance at 31 August 2007 2,049 9,001 (1,844) 20,806 7,842 37,854
324 38,178
At 29 February 2008 2,061 9,261 (2,527) 20,687 11,717 41,199
328 41,527
Cash flow hedges - - - (730) - (730)
- (730)
Exchange differences - - - 913 - 913
6 919
Net income recognised
directly in equity - - - 183 - 183
6 189
Profit for the period - - - - 6,795 6,795
31 6,826
Total recognised income
for the half year - - - 183 6,795 6,978
37 7,015
Acquisition 11 31 1,317 - - - 1,348
18 1,366
Dividends paid 6 - - - - (3,147) (3,147)
- (3,147)
Issue of shares 9 10 298 - - - 308
- 308
Purchase of shares 9 - - (406) - - (406)
- (406)
Consideration paid 11 - - - 900 - 900
(216) 684
ESOP shares allocated 9 - - 135 - (165) (30)
- (30)
Credit in respect of
share option schemes - - - - 234 234
- 234
At 31 August 2008 2,102 10,876 (2,798) 21,770 15,434 47,384
167 47,551
BRAEMAR SHIPPING SERVICES PLC
UNAUDITED NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 AUGUST 2008
1. General Information
The interim consolidated financial statements of the Group for the period ended 31 August 2008 were authorised for issue in accordance
with a resolution of the directors on 28 October 2008. Braemar Shipping Services plc is a Public Limited Company incorporated and domiciled
in England and Wales.
The term 'Company' refers to Braemar Shipping Services plc and 'Group' refers to the Company and all its subsidiary undertakings and the
employee share ownership trust. The address of its registered office is 35 Cosway Street, London NW1 5BT.
These interim consolidated financial statements do not compromise statutory accounts within the meaning of Section 240(5) of the
Companies Act 1985. The audited statutory accounts for the year ended 29 February 2008 have been delivered to the Registrar of Companies in
England and Wales. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not
contain any statement under Section 237 of the Companies Act 1985.
2. Accounting policies
Basis of preparation
This condensed consolidated half-yearly financial information for the half-year ended 31 August 2008 has been prepared in accordance
with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS34, 'Interim financial reporting' as adopted by
the European Union. The half-yearly condensed consolidated financial report should be read in conjunction with the annual financial
statements for the year ended 29 February 2008, which have been prepared in accordance with IFRSs as adopted by the European Union.
Forward-looking statements
Certain statements in this half-yearly report are forward-looking. Although the Group believes that the expectations reflected in these
forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these
statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking
statements. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or
otherwise.
3. Accounting Policies
The accounting policies adopted in the preparation of these interim consolidated financial statements are consistent with those of the
annual financial statements for the year ended 29 February 2008, as described in those annual financial statements.
4. Segmental information
Revenue Six months to Six months to Year ended
31 Aug 2008 31 Aug 2007 29 Feb 2008
�'000 �'000 �'000
Shipbroking 34,446 23,879 52,794
Logistics 21,583 12,013 27,874
Technical - other 7,085 3,774 9,467
Technical - energy loss 3,298 - -
adjusting
Environmental 2,694 7,004 10,829
69,106 46,670 100,964
Profit for the period
Shipbroking 8,945 6,064 12,993
Logistics 213 432 953
Technical - other 1,349 316 728
Technical - energy loss 542 - -
adjusting
Environmental 159 1,226 1,836
Segment result 11,208 8,038 16,510
Unallocated common costs (1,675) (1,271) (2,542)
Operating profit 9,533 6,767 13,968
Finance income / (cost) - net 108 226 380
Share of profit after tax from 144 100 370
joint ventures
Profit before taxation 9,785 7,093 14,718
Taxation (2,959) (2,323) (4,797)
Profit for the period from 6,826 4,770 9,921
continuing operations
5. Taxation
The taxation charge for the half-year is calculated using the estimated effective tax rate for the full year applied to the pre-tax
profits at the half year.
6. Dividends
The following dividends were paid by the Group:
Six months to Six months to Year ended
31 Aug 2008 31 Aug 2007 29 Feb 2008
�'000 �'000 �'000
Ordinary shares of 10 pence
each
Interim of 8.00 pence per - - 1,602
share paid
Final of 15.0 pence per share 3,147 2,451 2,451
(2007: 12.25 pence per share)
3,147 2,451 4,053
The Directors have declared an interim dividend of 8.5 pence per ordinary share, payable on 11 December 2008 to shareholders on the
register on 14 November 2008.
7. Earnings per share
Six months to Six months to Year ended
31 Aug 2008 31 Aug 2007 29 Feb 2008
�'000 �'000 �'000
Profit for the period from 6,795 4,690 9,775
continuing operations
Profit / (loss) for the period - 23 (3)
from discontinued operations
Profit for the period 6,795 4,713 9,772
attributable to shareholders
Shares Shares Shares
Weighted average number of 20,275,565 19,922,544 19,953,231
ordinary shares
Dilutive effect of share 131,683 153,532 122,061
options
Diluted weighted average 20,407,248 20,076,076 20,075,292
number of ordinary shares
Continuing operations pence pence pence
Basic earnings per share - 33.51 23.54 48.99
pence
Effect of dilutive share (0.21) (0.18) (0.30)
options - pence
Diluted earnings per share - 33.30 23.36 48.69
pence
Total operations pence pence pence
Basic earnings per share - 33.51 23.66 48.97
pence
Effect of dilutive share (0.21) (0.18) (0.29)
options - pence
Diluted earnings per share - 33.30 23.48 48.68
pence
8. Capital expenditure
Goodwill, tangible and
intangible assets
Six months ended 31 August 2007: �000
Opening net book amount at 1 March 2007 29,666
Acquisition of a subsidiary 2,524
Additions 561
Disposals (7)
Depreciation and amortisation (501)
Closing net book amount at 31 August 2007 32,243
Six months ended 31 August 2008:
Opening net book amount at 1 March 2008 33,961
Acquisition of subsidiaries (see note 11) 4,877
Additions 654
Depreciation and amortisation (951)
Exchange movements 14
Closing net book amount at 31 August 2008 38,555
9. Share capital
Number of Ordinary Share
shares Shares Premium Total
(thousands) �000 �000 �000
At 1 March 2007 20,231 2,023 8,554 10,577
Issues - share option schemes 263 26 447 473
At 31 August 2007 20,494 2,049 9,001 11,050
At 1 March 2008 20,607 2,061 9,261 11,322
Acquisitions - see note 11 307 31 1,317 1,348
Shares issued and fully paid 56 5 128 133
Shares issued and unpaid 51 5 170 175
At 31 August 2008 21,021 2,102 10,876 12,978
The Group's ESOP trust acquired 87,600 of the company's shares, including 76,800 through purchases on the London Stock Exchange, at
dates between 17 May 2008 and 28 August 2008 at prices ranging between 467 and 500 pence. The total amount paid to acquire the shares was
�406,000 and has been deducted from shareholders' equity.
During the six months ended 31 August 2008, 414,211 shares were issued at prices ranging between 137.5 pence and 439.75 pence. Of these,
51,471 shares were paid subsequent to the balance sheet date. In addition, of the 414,211 shares issued, 306,513 shares were issued as part
of the consideration to acquire Steege Kingston Partnership Limited (see note 11).
In addition, 48,000 shares at a value of �135,000 that were awarded to employees in May 2005 as part of the Deferred Bonus Plan (the
Plan) were delivered to them in May 2008 following the three year vesting period. Details of the Plan are disclosed in the annual financial
statements for the year ended 29 February 2008.
10. Other reserves
Group Capital redemption Merger reserve Deferred Translation reserve Hedging reserve Total
other reserves
reserve consideration
reserve
�'000 �'000 �'000 �'000 �'000
�'000
Balance at 28 February 2007 396 21,346 (738) 5 11
21,020
Cash flow hedges
-Transfer to net profit - - - - (16)
(16)
-Fair value losses in the - - - - 77
77
period
Foreign exchange differences - - - (36) -
(36)
Consideration to be paid - - (221) - -
(221)
Deferred tax on items taken to - - - - (18)
(18)
equity
As at 31 August 2007 396 21,346 (959) (31) 54
20,806
Balance at 29 February 2008 396 21,346 (1,520) 388 77
20,687
Cash flow hedges
-Transfer to net profit - - - - (107)
(107)
-Fair value losses in the - - - - (907)
(907)
period
Foreign exchange differences - - - 913 -
913
Consideration paid - - 900 - -
900
Deferred tax on items taken to - - - - 284
284
equity
As at 31 August 2008 396 21,346 (620) 1,301 (653)
21,770
11. Acquisitions
On 3 March 2008 the Company acquired 100% of the share capital of Steege Kingston Partnership Limited for an estimated consideration of
�8.1m. The deferred consideration is based on a multiple of the earnings before interest and tax in each of the two years post completion
and these amounts will be settled wholly in cash.
The acquired business contributed revenues of �3,298k and a net profit before amortisation of �777k to the group for the period from
acquisition to 31 August 2008 (see note 4).
Details of provisional net assets acquired and goodwill are set out below. The goodwill is attributable to Steege Kingston's skilled
loss adjusting staff. The group has yet to finalise the amount of the fair value of the identifiable assets acquired.
Purchase consideration �'000
- cash paid 4,203
- shares issued 1,348
- deferred consideration 2,320
- acquisition expenses 187
Total purchase consideration 8,058
- fair value of identifiable assets acquired (see (6,287)
below)
Goodwill 1,771
Acquiree's Provisional
carrying Fair
amount value
�'000 �'000
Cash and cash equivalents 1,161 1,161
Property, plant and equipment 110 110
Intangible assets 0 2,350
Work in progress 4,280 4,280
Receivables 2,503 2,503
Payables (1,745) (1,745)
Current tax liability (407) (407)
Deferred tax liabilities (1,149) (1,807)
Provisions (140) (140)
Net identifiable assets acquired 4,613 6,305
Minority interest (18)
Net assets acquired by the group 6,287
Outflow of cash to acquire the business, net of
cash acquired:
- cash consideration 4,203
- cash and cash equivalents in subsidiary (1,161)
acquired
- acquisition expenses 187
Cash outflow on acquisition 3,229
In addition, on 29 July 2008, the Group paid �28,000 to acquire the assets of Sealion Shipping (S) Pte Limited situated in Singapore
generating goodwill of �23,000.
In respect of previous acquisitions, on 5 March 2008, the Group acquired the 59% minority interest in Gorman Cory Limited for a
consideration of �900,000 which generated additional goodwill of �686,000 and, on 2 July 2008, paid �730,000 as settlement of the 80%
acquisition in Fred. Olsen Freight Limited resulting in a reduction to the provisional goodwill disclosed at 29 February 2008 of �71,000.
Independent review report to Braemar Shipping Services plc
Introduction
We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six
months ended 31 August 2008, which comprises the consolidated income statement, consolidated balance sheet, condensed consolidated
half-yearly statement of changes in equity, consolidated cash flow statement and related notes. We have read the other information contained
in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for
preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial
Services Authority.
As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European
Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with
International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial
report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the
Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept
or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United
Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the
half-yearly financial report for the six months ended 31 August 2008 is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
West London
28 October 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UBVNRWWRRUAA
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