Final Results

Seascope Shipping Holdings PLC 7 March 2001 Seascope Shipping Holdings plc ------------------------------------------------------------------------------- Press Release For immediate release 7th March 2001 Results - year ended 31 December 2000 Seascope Shipping Holdings PLC, one of the UK's leading providers of shipbroking services, today announced preliminary results for the year ended 31 December 2000. The Directors consider the results for the year to be acceptable when viewed against trading conditions of the market in which the Group was operating for the majority of the first six months of the year. The Board is recommending a final dividend of 10.00p (1999:10.00p) per ordinary share, payable on 31 May to shareholders on the register at 4 May 2001, making a total for the year of 15.00p (1999: 15.00p). HIGHLIGHTS * Merger agreement with Braemar Shipbrokers Limited * Turnover up 16.2% to £12.068m (1999: £10.388m) * Pretax profit £1.817m (1999: £2.003m) * Final dividend maintained at 10.00p (1999: 10.00p) Commenting on outlook, Sir Peter Cazalet, Chairman, said: 'The Group has entered the New Year with strong market conditions applying in all its key markets, although spot tanker freight rates have eased somewhat from their peak in November. 'The Board is asking shareholders to approve the merger with Braemar Shipbrokers Limited at the EGM on 7 March. The Directors continue to believe that the merger is in the best interests of shareholders and that the enlarged Group will be well placed to benefit from the current positive shipping market, the economic fundamentals of which, in terms of supply and demand, we expect to remain favourable through 2001 and into 2002.' For further information, contact: Seascope Shipping Holdings PLC Iain Shaw Tel 020 7903 2600 Derek Walter Grandfield Clare Abbot Tel 020 7417 4170 PRELIMINARY ANNOUNCEMENT - YEAR ENDED 31 DECEMBER 2000 CHAIRMAN'S STATEMENT I was delighted to have been able to announce on Monday 12 February 2001 that, subject to shareholders' approval at the extraordinary general meeting (EGM) to be held on 7 March 2001, agreement has now been reached to acquire the whole of the share capital of Braemar Shipbrokers Limited. Full details of the merger terms have been provided to shareholders in the formal merger document posted to shareholders on 12 February 2001. I believe that the merger of the two groups is one of the most significant corporate events to take place in shipbroking in the UK in the last 30 years. The enlarged group will be well placed to provide to clients a global service across a full range of sectors. Your Board believes the merger to be in the interest of the enlarged group's staff, shareholders and clients. The results for the year ended 31 December 2000 show a net profit before taxation of £1.817 million (1999: £2.003 million) on increased turnover of £ 12.068 million (1999: £10.388 million). The increase in turnover relates mainly to increased activities in Wavespec Limited, our technical services subsidiary. The results did not meet market expectations but the Directors consider them to be acceptable when viewed against the trading conditions of the market in which the Group was operating for the majority of the first six months of the year. Shareholders will recall the Group reported a loss before taxation for the first six months of the year 2000 of £245,000. The recovery in market conditions in the second six months has allowed the Group to report a profit before taxation for that period of £2.062 million. The increase in net operating expenses relates mainly to increased third party consultancy costs incurred by Wavespec Limited. Earnings per share fully diluted were 15.96p (1999: 19.38p) and cash balances at 31 December 2000 amounted to £1.189 million (1999: £1.416 million). In view of the recovery of the Group in the second six months of the year and the general outlook for the year 2001 the Directors are pleased to recommend an unchanged final dividend of 10.00p (1999: 10.00p) per ordinary share payable on 31 May 2001 to shareholders on the register at 4 May 2001. This final dividend added to the interim dividend will make a total of 15.00p per share, unchanged from year 1999. Operational Review of Year 2000 Chartering Trading conditions in the early months of the year remained poor as we continued to suffer from the weak freight rates experienced during the second half of 1999. It was not until late May/early June that the Company started to benefit from the improvement in both activity and freight rates that followed OPEC's decision to increase oil exports. These better trading conditions were further helped by the tightening of standards demanded by charterers and receiving countries as a reaction to the ERIKA oil spill of December 1999. This combination of circumstances produced a strong freight market, which lasted throughout the balance of the year 2000. These improved trading conditions were a major factor in the Group's profit recovery in the second six months of the year. Sale and Purchase In spite of a quiet start, the Sale and Purchase markets were generally busy during the year, and we were able to increase the number of deals completed, across the board. However, the department had a somewhat disappointing result with a number of significant projects, particularly newbuildings, taking too long to develop. Offshore The department suffered from the disappointing trading conditions of the early months of the year 2000, brought about by depressed oil prices and the Oil Producers cutting back exploration in the third and fourth quarters of the year 1999. By the third quarter of 2000, higher oil prices had led to an increase/restart by the Oil Producers of their exploration and development drilling which in turn has led to increased activity and better chartering rates. The year-end found underlying market conditions stable with the expectation of higher charter rates during year 2001. Wavespec During the year, the company succeeded in being awarded a number of consultancy contracts for work that will extend through the year 2000/2001. This increase in longer-term business will provide a sound base for future profitable expansion. Capital Services The integration of the GFL team, which joined the Group in late 1999, has achieved the desired objective of raising both the profile and the profitability of the activity. We believe that both this activity and Wavespec will benefit substantially from the recently announced merger with Braemar Shipbrokers Limited. Outlook 2001 The Group has entered the New Year with strong market conditions applying in all the key markets, although spot tanker freight rates have eased somewhat from their peak in November. Conditional on shareholders approving the merger, the enlarged Group will hold a significant market share of the following areas of operation: Second Hand Sale and Purchase (Seascope and Braemar) New building (Seascope and Braemar) Demolitions (Braemar) Dry Cargo Chartering (Braemar) Offshore Sector (Seascope) Tanker Chartering (Seascope) Structured Finance (Seascope) More details of the services of the enlarged Group are given in the prospectus posted to shareholders on 12 February 2001. I believe the enlarged Group is well placed to benefit from the current positive shipping market, the economic fundamentals of which in terms of supply and demand we expect to remain favourable through 2001 and into 2002. Change of Financial Year The Directors' experience in recent years has been that Seascope's choice of financial year end, 31 December, has made forecasting the outcome for any specific financial year difficult. Braemar's financial year-end is 28 February and the Board intends that the Enlarged Group should adopt this accounting reference date with a view to improving the predictability of its financial results. Accordingly, the current financial period will be an extended fourteen month period ending on 28 February 2002. Interim results will be presented in respect of the six months ended 30 June 2001. Management Changes Mr. Tom Young was sadly forced into resigning through ill health on 30 November. He played a very major role in the development of the group and I wish to thank him for his strong leadership over the many years he contributed to the group. I also wish to thank Mr Vincent Ward and Mr Julian Bolland for their services to the Company and wish them both a happy retirement following their departure from the Board on 30 November 2000. I have pleasure in welcoming Mr Derek Walter to the Board on his appointment as Financial Director from 30 November 2000. Sir Peter Cazalet Chairman 7 March 2001 SEASCOPE SHIPPING HOLDINGS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2000 2000 1999 12 months 12 months to 31 Dec to 31 Dec £'000 £'000 Turnover 12,068 10,388 Net operating expenses (10,211) (8,452) ----------- --------- Operating profit 1,857 1,936 Interest receivable and similar income 35 89 Interest payable and similar charges (75) (22) ---------- -------- Profit on ordinary activities before taxation 1,817 2,003 Taxation on profit on ordinary activities (662) (666) ----------- -------- Profit on ordinary activities after taxation 1,155 1,337 Dividends (1,012) (995) ---------- -------- Retained profit for the year 143 342 ==== ==== Earnings per ordinary share - Basic 17.12p 21.03p Earnings per ordinary share - Fully diluted 15.96p 19.38p The Group has no recognised gains and losses other than those included in the consolidated profit and loss account above and therefore no separate statement of total recognised gains and losses has been presented. There is no material difference between the profit on ordinary activities before taxation and the retained profit for the year and their historical cost equivalents. SEASCOPE SHIPPING HOLDINGS PLC CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2000 1999 31 Dec 31 Dec £'000 £'000 Fixed assets Intangible fixed assets: goodwill 2,801 2,159 Tangible assets 1,005 919 Investments 734 734 ---------- -------- 4,540 3,812 Current assets Debtors 2,949 1,652 Cash at bank and in hand 1,189 1,416 ----------- -------- 4,138 3,068 Creditors: amounts falling due within one year (3,111) (2,194) ---------- -------- Net current assets 1,027 874 ---------- -------- Total assets less current liabilities 5,567 4,686 Creditors: amounts falling due after more than one year (888) (150) ---------- --------- Net assets 4,679 4,536 ==== ==== Capital and reserves Called up share capital 682 682 Capital redemption reserve 396 396 Share premium 4,728 4,728 Profit and loss account (1,127) (1,270) ---------- --------- Total equity shareholders' funds 4,679 4,536 ==== ==== SEASCOPE SHIPPING HOLDINGS PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2000 2000 1999 12 12 months months to 31 to 31 Dec Dec £'000 £'000 Net cash inflow from operating activities 850 2,857 Returns on investments and servicing of finance Interest received 36 91 Interest paid (52) (2) Interest element of finance lease rental payments (18) (16) --------- ------ Net cash (outflow)/inflow from returns on investments and (34) 73 servicing of finance Taxation UK Corporation tax paid (590) (1,298) Capital expenditure and financial investment Payments to acquire tangible fixed assets (162) (732) Payment to acquire fixed asset investment - (113) -------- ------- Net cash (outflow) from investing activities (162) (845) Acquisition and disposals Purchase of subsidiaries (2) (1,349) Cash acquired with subsidiaries - 184 Deferred consideration (75) - -------- ------- Net cash (outflow) for acquisitions (77) (1,165) Equity dividends paid (1,012) (940) -------- ------- Net cash (outflow) before financing (1,025) (1,318) Financing New loan 1,000 - New loan repayment (50) - Payment of principal under finance lease (152) (127) ------- -------- Net cash inflow/(outflow) from financing 798 (127) --------- ------ (Decrease) in cash (227) (1,445) ==== ==== Reconciliation of movement in shareholders' funds Dec 2000 Dec 1999 £'000 £'000 Retained profit for the year 143 342 Issue of ordinary share capital including premium - 912 -------- -------- Increase in shareholders' funds 143 1,254 Opening shareholders' funds 4,536 3,282 -------- -------- Closing shareholders' funds 4,679 4,536 ==== ==== Analysis of net funds Dec 2000 Dec 1999 £'000 £'000 Cash at hand and at bank 1,189 1,416 Bank loan (950) - Finance leases (148) (171) -------- -------- Net funds 91 1,245 ==== ==== NOTES 1. The financial information set out above does not constitute the Company's statutory accounts for the years ended 31st December 2000 and 1999. The financial information in respect of 2000 is unaudited. Statutory accounts for the year ended 31 December 1999 on which the auditors have given an unqualified report pursuant to section 235 of the Companies Act 1985, have been filed with the Registrar of Companies. 2. The annual report and accounts together with the auditors report will be posted during the week beginning 12th March. 3. The 2000 basic earnings per share is based on post tax profits of £ 1,155,000 (1999: £1,337,000) and on the weighted average number of shares in the year of 6,748,463 (1999: 6,356,098). The fully diluted earnings per share is based on the weighted average number of shares, after taking into account the share options issued but remaining unexercised during the period, of 7,238,499 (1999: 6,899,772). 4. The accounting policies are consistent with the 1999 statutory accounts in all material respects.

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