Final Results

RNS Number : 5815L

Braemar Shipping Services PLC

10 May 2010

 



BRAEMAR SHIPPING SERVICES PLC

10 May 2010

Unaudited preliminary results for the year ended 28 February 2010

Braemar Shipping Services plc ("Braemar" or the "Group"), a leading international provider of broking, consultancy, technical and other services to the shipping and energy industries, today announces full year unaudited results for the year ended 28 February 2010.

FINANCIAL HIGHLIGHTS

·     Pre-tax profit before amortisation £15.0m (2009: £17.3m)

·     Pre-tax profit £13.5m (2009: £16.2m)

·     Basic EPS from continuing operations 47.93p (2009: 56.70p)

·     Cash generated from operating activities £15.3m (2009: £21.0m)

·     Cash at 28 February 2010: £27.9m (28 Feb 2009: £25.2m)

·     Final dividend 16.25p per share (up 5%), full year 25.00p (2009: 24.00p) up 4%

OPERATIONAL HIGHLIGHTS

·     Demand in shipping markets is recovering with values and rates stabilising

·     Group services to the energy sector growing

·     Positive outlook for the year ahead

·     Estimated forward order book deliverable in 2010/11 - £28m [US$42m] (2009/10 - £29m [US$42m])

·     Non-broking businesses contributed 25% of group operating profits*

*before amortisation and central costs

Commenting on the results and outlook, Sir Graham Hearne, Chairman of Braemar Shipping Services PLC, said:

"These results are good, and ahead of our expectations at the beginning of the year. After the exceptional years of boom conditions in shipping through 2007 and most of 2008, the 2009/10 profits are the third highest in the Group's history."

"Demand in most shipping sectors is recovering steadily in line with the improving economic outlook. We go into the new financial year with a healthy forward book and we are positive on the outlook for the year ahead."

"We have invested in our Technical division this year by establishing two new businesses. The first is a marine cargo loss adjusting business based in the US, UK and Singapore under the name Braemar Marine. The second is the expansion of Wavespec's activity by the opening of an operation in Houston under the name Braemar Wavespec Inc."

"The Logistics and Environmental divisions, which operate predominantly in the UK, both performed well despite economic recession. They both benefit from a strong reputation and a diverse client base which sustains activity levels."

ENDS

For further information, contact:

Braemar Shipping Services plc
Alan Marsh	Tel [phone]
James Kidwell	Tel [phone]
Pelham Bell Pottinger
Damian Beeley Zoe Pocock	Tel [phone] Tel [phone]
Elaborate Communications
Sean Moloney	Tel [phone]
Charles Stanley Securities
Mark Taylor	Tel [phone]

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. Braemar is listed on the Official List of the London Stock Exchange in the Industrial Transportation sector. The Group is divided into four businesses: Shipbroking, Technical, Logistics, and Environmental.

Shipbroking

Braemar Seascope provides specialised shipbroking and consultancy services to international clients. The services include: chartering tankers (including gas, chemicals and LNG), dry cargo, containers, offshore vessels, secondhand sale and purchase, newbuilding, demolition, and research. It has offices in the UK, China, Australia, India, Singapore and Italy.

www.braemarseascope.com

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 operates from offices in London, Houston, Singapore, Calgary, Mexico City, Miami, Quito, Puerto Rico and Rio de Janeiro. In 2009 Braemar Marine was established as a cargo loss adjusting business in the US, UK and Singapore.

www.braemarsteege.com

Braemar Falconer provides specialised surveying and engineering services to the marine and offshore sectors. It has offices at the following locations: Australia, China, India, Indonesia, Malaysia, Singapore, Vietnam and the UK.

www.braemarfalconer.com

Wavespec provides marine engineering, newbuilding supervision and naval architecture services on a consultancy basis to the shipping and offshore markets. It has offices in London and Houston and site offices in most of the major yards in Korea, Japan and China.

www.wavespec.com

Logistics

Cory Brothers Shipping Agency provides port agency, freight forwarding and logistics services within the UK and Singapore.

www.cory.co.uk

Environmental

Braemar Howells provides pollution response and advisory services, primarily in the UK for marine, tank storage and rail operations and is now developing an international presence, particularly in Africa.

www.braemarhowells.com

PRELIMINARY ANNOUNCEMENT - YEAR ENDED 28 FEBRUARY 2010

CHAIRMAN'S STATEMENT

After the exceptional years of boom conditions in shipping through 2007 and most of 2008, revenue and profit fell back in 2009/10 as the world economy and shipping markets went into recession. However, the Group performed well in these difficult markets and the profits are the third highest in the Group's history. Group revenue in 2009/10 was £119.0m (2008/9: £127.1m), profit before tax from continuing operations was £13.5m (2008/9: £16.2m) and earnings per share from continuing operations were 47.93 pence compared with 56.70 pence in 2008/9.  The Group remains financially strong, with no debt and cash balances of £27.9m at 28 February 2010 (28 Feb 2009: £25.2m). These results are good, and ahead of our expectations at the beginning of the year.

We have invested in our Technical division this year by establishing two new businesses. The first is a marine cargo loss adjusting business based in the US, UK and Singapore under the name Braemar Marine. The second is the expansion of Wavespec's activity by the opening of an operation in Houston under the name Braemar Wavespec Inc. Both of these are expected to contribute positively next year. Our marine engineering and surveying businesses should benefit from the anticipated growth of the world ship fleet over the coming years.

The Logistics and Environmental divisions, which operate predominantly in the UK, both performed well despite economic recession. They both benefit from a strong reputation and a diverse client base which sustains activity levels.

Our Shipbroking division delivered strong results despite the global downturn. This is a testament to the diversity of our client relationships across the full range of our activities, departments and offices.  Sustained growth in the demand for oil and raw materials from the Far East has underpinned the tanker market and stimulated a number of healthy rallies in dry bulk, although the container market suffered from weak demand and excess tonnage. Over the last year, shipping has seen the greater involvement of major commodity and trading companies seeking to manage their transportation costs and the return of long established ship owners who are attracted by value. We are pleased that our shipbroking teams have played a part in helping them execute their chosen strategies.

Demand in most shipping sectors is recovering steadily in line with the improving economic outlook. The delivery of substantial new tonnage in many vessel categories is a key factor in determining the equilibrium price for freight. This offers us more opportunity to do business, albeit at rates which have adjusted to new market conditions. We go into the new financial year with a healthy forward book - our estimate of the shipbroking forward order book deliverable over the course of the financial year 2010/11 stands at £28 million (US$42 million) compared with the forward book at 1 March 2009 of £29 million (US$42 million). We are positive on the outlook for the year ahead.

The Directors are recommending for approval at the Annual General Meeting a final dividend of 16.25 pence per ordinary share, to be paid on 28 July 2010 to shareholders on the register at the close of business on 2 July 2010. Together with the 8.75p interim dividend, the Company's dividend for the year will be 25.0 pence (2009: 24.0 pence), a rise of 4%. The dividend is covered 1.92 times by earnings.

On behalf of the Board, I would like to express our thanks to Alan Marsh, his executive team and the whole of the Braemar staff for their contribution in delivering these results. They can be justly proud of their efforts which we recognise with gratitude.

Sir Graham Hearne

7 May 2010

 CHIEF EXECUTIVE'S REVIEW OF THE BUSINESS

Strategy

The Group's strategy is to maintain and grow its international marine and energy services businesses. To do this we are building our shipbroking presence overseas with a combination of local and UK trained staff. The extent of services provided overseas depends on the size and scope of local markets, but increasingly, we see the growing importance of shipping centres such as Singapore and Shanghai, and these will be a vital ingredient to the Group's composition in the future. We also have sizeable shipbroking offices in Beijing, Melbourne, Perth, Delhi and Mumbai. Shipbroking represents 75% of the Group's operating profits before amortisation and central costs.

At the same time we are investing in and developing businesses which serve the marine engineering and surveying requirements of the shipping and energy industries. Our Technical division, which has offices around the world, is particularly well represented in the Far East. Within Logistics, ship agency and freight forwarding operate in the UK and Singapore. Pollution response and environmental consultancies operate in the UK and Africa.  The common customer base in these divisions enables us to extend the range of services we offer to our clients. In addition, these businesses generally derive their income from fees or one-off projects. This differs from shipbroking where income is mainly derived from commission earned on the successful conclusion of business. Our non-broking interests are complementary to shipbroking and now represent 25% of the Group's operating profits before amortisation and central costs.

Part of our strategy for the development of the Group over the last few years has been achieved through acquisitions and we continue to look at attractive opportunities as they arise. To date acquisitions have been funded from cash flow with only an occasional use of new equity for a management team joining the Group.

Performance

The performance of the Group has been better than we had expected at the beginning of 2009. Our businesses have performed well during a testing period. There are signs now that confidence is being restored and fragile shipping markets are regaining their composure. While there are no reliable measures of global market share for our international businesses, we are confident, based on our transaction volumes, that our market performance has improved.

A divisional review of business performance and the markets in which we operate is set out below.

Shipbroking - Braemar Seascope

Dry Bulk

Dry bulk is the largest shipping market and over the past few years we have been developing our office network which now extends across London, Melbourne, Perth, Delhi, Mumbai, Beijing and Singapore making it a more significant part of the Group's business.

On 2 March 2009 the Baltic Dry Index stood at 2,014 and by the end of our financial year it was 2,738 having reached a high of 4,661 on 19 November 2009 and a low of 1,463 on 8 April 2009. The average for that period was 2,874 and on 7 May 2010 it stood at 3,468. In the wake of the global financial crisis and the state-initiated stimulus spending, Chinese demand recovered quickly which led the dry bulk freight market out of the doldrums. This helped stimulate regional economies with Japanese steel makers enjoying better times driven by China's demand for finished steel. The cape sector was a particular beneficiary of this resurgence but freight rates have been suppressed by a steady influx of new ships. The panamax sector enjoyed strong demand for coal and grain and this has carried into the new fiscal year, with rates temporarily higher than those in the cape market. The handymax and handy sectors have also seen rates hold up, benefitting from a deferral of newbuildings.  The demand outlook is solid but the effect of the overhang of new tonnage threatens rate stability. The expectations for the freight market for the financial year ahead are less bearish than 12 months ago owing to renegotiated deliveries and yard slippage pushing back the increase in vessel supply towards late 2010/early 2011. The forecast for oversupply is more prominent in the cape market than for the smaller ships.

Tankers

The deep sea tanker markets remained soft for most of the year with only a small increase in demand for energy. However, towards the end of the year, significant volumes of tonnage had been employed for storing the excess production of crude oil and this had a firming effect on the transportation rates of which we were able to take advantage. Subsequently, there have been encouraging signs of an improvement in the global economy, with demand for energy increasing. The Baltic Dirty Tanker Index started the financial year on 2 March 2009 at 626 and averaged 642 during our financial year, closing at 897. On 7 May 2010 it stood at 988 which is a good start to our new financial year. We are pleased that our transaction volumes are continuing to grow and that our various contracts of affreightment are performing well. It is also pleasing to see that the busier markets have ensured that our time charters were all performing with many being extended into our new financial year.

The wet FFA desk is also performing according to our expectations and continually growing their client base. 

In combination with the harsh winter conditions, the volume of CPP (clean petroleum product) distribution has increased and more business has been concluded in this sector. Although the delivery of newbuilding tanker tonnage in the product sectors is affecting the spot market, the increase in our transactions has offset the lower rates. We are pleased to have won new customers in these markets through the year, as well as growing our time charter portfolio on all product sizes.

The strong presence of our specialised chemical and petrochemical gas divisions has resulted in the conclusion of new contracts with a large oil company. The LPG markets were busier in the second half of the year and our expansion into the VLGC (Very Large Gas Carrier) market is now showing the anticipated results. Our LPG product broking division has also had a successful end to the year with several notable cargo deals in which we also brokered the transportation. In addition we have won several LNG shipping consultancy appointments, some of which are for new market participants who are looking at this developing market.

Containers

The container shipping market remained depressed for most of the year but in the first quarter of 2010 showed signs of a modest recovery. The container lines are now seeing increased cargo volumes but this will only slowly filter through to the freight market since there remains a significant number of laid up ships and as well as newbuildings still to deliver. Despite the low market our chartering and sale and purchase desks had an active year and after a recent restructuring have started this year in a similar vein.

Offshore

We have offshore offices in London, Aberdeen, Singapore and Perth, Australia which has helped to generate more international business. Despite a generally weak offshore chartering market our desk had a strong year due to the increased volume of international activity and some good sale and purchase/project business. The rising oil price should stimulate drilling activity which ordinarily would lead to better vessel utilisation and increasing day rates.

Sale and Purchase

The sale and purchase department achieved a record number of transactions during the year. There was a sizeable downwards adjustment in vessel prices over the past year, partly due to the contraction in available ship finance, but despite difficult market conditions our team concluded a high level of secondhand business.  Buyers have been attracted by investment opportunities at lower prices and in many cases are not reliant on external sources of finance. We have also been particularly active in demolition business which has increased over the past year especially for older container ships and bulk carriers. We expect this business to remain strong over the next year as the phase out of single hull tankers gathers pace.  Against the market trend, our newbuilding departments concluded substantial new business, most of which was quite specialist in nature, demonstrating the diversity of our client base. We have seen some newbuilding contract renegotiation and a limited cancellation, but we believe this is lower than the industry average and overall our forward order book remains in a healthy state.

Technical - Braemar Falconer, Braemar Steege, Braemar Marine and Wavespec

Braemar Falconer's revenue and profits for the past financial year were lower than the previous year due to reduced rig movement and drilling activity. There was also a small decrease in engineering consultancy work caused by fewer long-term projects being commenced in the aftermath of the financial crisis, and the completion of projects being worked on during the year. However, revenue from damage surveys, particularly in Vietnam, improved with a steady stream of work from major insurance companies.

Braemar Steege maintained its position as one of the leading international players in the energy loss adjusting market. In addition to core oil and gas energy claims, other business streams continue to be developed covering power, infrastructure and pollution insurance claims, particularly in Latin America. With no significant hurricane in the Gulf of Mexico during 2009, the workload of the Houston office has reduced, but this has been offset by continued growth of the Singapore office due to high demand for energy loss adjusting services in Asia, Australia and in London where expert technical assistance to lawyers dealing with non-insurance disputes has also provided further growth.

Braemar Marine was launched in August 2009 to provide marine surveying and adjusting services to the hull, cargo and protection & indemnity (P&I) insurance market.  With a head office in Atlanta, a surveying network has already been established with personnel based in London, Los Angeles, Seattle, Miami, Houston, Puerto Rico and Rio de Janeiro. The severe earthquake in Haiti provided Braemar Marine with its first catastrophe response work; they were the first marine surveyors on scene and carried out a large proportion of the work generated by the earthquake. In April 2010, a Braemar Marine presence was established in Singapore and their business in Asia is expected to develop quickly, utilising the existing network of Braemar Falconer surveyors in place throughout the region. The net costs before tax incurred during the year in starting this business were £0.7m, and we expect to achieve a profitable business in the next financial year.

Wavespec's profits were lower in 2009/10 due to £0.2m of net set up costs of establishing a new office in Houston which provides consulting services to LNG terminal operators; this office is expected to be profitable in the coming financial year. The core LNG business remains strong with the continuation of the Qatargas project and the Company is now assisting shipyards to develop gas management strategies for LNG Carriers.

Logistics - Cory Brothers

Revenues decreased primarily as a result of the impact of one-off projects within Logistics in 2008 which were not repeated.  However, operating profits before amortisation were up slightly at £1.4m (2009: £1.1m) as overall margins improved and a significant project which spanned both years was concluded.  2009 saw the first full year of the combined operations of Cory Logistics and Fred. Olsen Freight. Forwarding and one-off projects continue to be the mainstay of the performance to date although the growth in a number of liner operations is promising for the coming year.  Despite a depressed UK market, Port Agency maintained its leading position, handling approximately 10,000 port calls annually (including hub managed calls) with some significant new activity especially within ship-to-ship operations on behalf of oil majors which is expected to continue into the coming year.

Environmental - Braemar Howells

Braemar Howells enjoyed a successful year due to an improved performance from the incident response division. In addition, the industrial services division has handled a large contaminated cargo incident which is ongoing and has contributed to a good start to the new financial year.

Recently the Company has successfully renewed its main multi-year retainer contracts with the Maritime Coastguard Agency and Network Rail and won important new spill response business for new drilling in West Africa. This is in addition to the international contract the company has with the Ministry of Defence.

Staff

I would like to thank all of our staff across the Group for their hard work and team spirit which have contributed to making this another successful year for the company.

Alan Marsh

7 May 2010

Financial Review

Key divisional statistics

	2010	2009	2008			2010	2009	2008
Shipbroking	£'000	£'000	£'000		Technical	£'000	£'000	£'000
Revenue	57,362	60,409	52,794		Revenue	22,697	21,193	9,467
Operating profit before amortisation and central costs	13,324	14,990	13,093		Operating profit before amortisation and central costs	2,325	4,156	844
Operating profit margin	23.2%	24.8%	24.8%		Operating profit margin	10.2%	19.6%	8.9%
Employee numbers	247	218	211		Employee numbers	202	178	82
Logistics					Environmental
Revenue	31,899	40,797	27,874		Revenue	7,066	4,745	10,829
Operating profit before amortisation and central costs	1,434	1,130	1,153		Operating profit /(loss) before amortisation and central costs	614	(165)	1,871
Operating profit margin	4.5%	2.8%	4.1%		Operating profit margin	8.7%	(3.5%)	17.3%
Employee numbers	235	232	176		Employee numbers	62	60	65

Operating margins were lower in the Technical division mainly due to £0.9m of net costs incurred in connection with the start-up of new Technical businesses (Braemar Marine and Wavespec's office in Houston), all of which were fully expensed. These were offset by an improvement in the Environmental division which benefited from an increase in incident response activity and project work.

Staff numbers increased across the Group mainly through the addition of new shipbroking trainees and staff in our Far East offices, and the new business investments made within the Technical division. Operating costs excluding amortisation of intangible assets increased by 1.6% compared with last year mainly due to the investment in new staff. Despite the economic climate, we consciously maintained our commitment to recruiting and developing staff during the past year. Stripping out the effect of new businesses, operating costs fell by 1.2%.

Foreign exchange

The average rate of exchange for the US dollar-denominated shipbroking earnings was $1.55/£ (2009: $1.85/£) and at 28 February 2010 the balance sheet rate for conversion was $1.52/£ (28 February 2009: $1.43/£). At 28 February 2010 the Group held a variable forward window agreement to sell US$1.0 million per month with upper and lower limits of $1.4885 - $1.6510 for the months March 2010 to February 2012. The balance sheet includes an unamortised foreign exchange gain of £0.7m in respect of the hedging of 2010/11 expected cash flows which will be recognised within profit during the coming year. 

Taxation

The effective rate of tax for the Group was 28.2% (2009: 29.0%) - this includes the effect of disallowable expenditure and the net profit from joint ventures which is included net of corporation tax. The improvement in the rate relative to the prior year is due to the mix of overseas profits, lower UK disallowed expenditure and a tax refund in Australia.

Goodwill & intangible assets

Goodwill totals £28.7m at 28 February 2010, 75% of which relates to our shipbroking business. New goodwill and intangible assets totalling £2.4m were recognised during the year in respect acquisitions for cash of Cagnoil - a forward order book of time charters, Freight Action within Logistics and shipbroking interests in India.

Cash flow

The Group generated £11.0m (2009: £15.0m) of cash from operating activities during the year, after tax payments. This was primarily expended on acquisitions totalling £2.8m - most of which was for the purchase of Cagnoil and a deferred consideration payment for Braemar Steege, capital expenditure of £1.4m and dividend payments of £4.9m. Cash balances totalled £27.9m at the end of the year (28 Feb 2009: £25.2m) and there was no debt.

The balance sheet includes an accrual for deferred consideration totalling £1.9m most of which will be paid in cash during 2010/11.

James Kidwell

7 May 2010

Braemar Shipping Services PLC

Unaudited Consolidated Income statement for the year ended 28 February 2010

					Year ended		Year ended
					28 Feb 2010		28 Feb 2009
Continuing operations	Notes				£'000		£'000
Revenue	3				119,024		127,144
Cost of sales					(28,094)		(35,038)
					90,930		92,106
Operating costs
Operating costs excluding amortisation					(76,550)		(75,345)
Amortisation of intangible assets					(1,480)		(1,074)
					(78,030)		(76,419)
Operating profit	3				12,900		15,687
Finance income					193		309
Finance costs					(2)		(18)
Share of profit from joint ventures					400		246
Profit before taxation					13,491		16,224
Taxation					(3,806)		(4,704)
Profit for the year					9,685		11,520
Attributable to:
Ordinary shareholders					9,655		11,463
Minority interest					30		57
Profit for the year					9,685		11,520
Earnings per ordinary share	5
Basic - profit for the year					47.93p		56.70p
Diluted - profit for the year					47.26p		55.72p

Unaudited Consolidated Statement of comprehensive income

				Year ended		Year ended
				28 Feb 2010		28 Feb 2009
				£'000		£'000
Profit for the period				9,685		11,520
Other comprehensive income / (expense)
Foreign exchange differences on retranslation of foreign operations				(164)		3,612
Cash flow hedges - net of tax				703		(429)
Total comprehensive income for the period				10,224		14,703
Attributable to:
Equity holders of the parent				10,194		14,646
Minority interest				30		57
Profit for the period				10,224		14,703

Braemar Shipping Services PLC

Unaudited Consolidated Balance sheet as at 28 February 2010

			As at		As at
			28 Feb 10		28 Feb 09
Assets			£'000		£'000
Non-current assets
Goodwill			28,740		28,137
Other intangible assets			4,247		3,921
Property, plant and equipment			6,510		6,189
Investments			1,485		2,344
Deferred tax assets			1,208		810
Other long-term receivables			169		176
			42,359		41,577
Current assets
Trade and other receivables			36,918		38,055
Derivative financial instruments			-		160
Restricted cash			5,521		-
Cash and cash equivalents			27,930		25,194
			70,369		63,409
Total assets			112,728		104,986
Liabilities
Current liabilities
Derivative financial instruments			571		649
Trade and other payables			41,706		46,221
Current tax payable			3,346		2,689
Provisions			288		88
Client monies held as escrow agent			5,521		-
			51,432		49,647
Non-current liabilities
Deferred tax liabilities			2,001		2,255
Provisions			168		137
			2,169		2,392
Total liabilities			53,601		52,039
Total assets less total liabilities			59,127		52,947
Equity
Share capital			2,108		2,104
Share premium			11,014		10,920
Shares to be issued			(3,198)		(3,479)
Other reserves			25,525		25,020
Retained earnings			23,534		18,268
Group shareholders' equity			58,983		52,833
Minority interest			144		114
Total equity			59,127		52,947

Braemar Shipping Services PLC

Unaudited Consolidated Cash flow statement for the year ended 28 February 2010

		Year ended		Year ended
		28 Feb 2010		28 Feb 2009
	Notes	£'000		£'000
Cash flows from operating activities
Cash generated from operations	6	15,278		20,959
Interest received		193		309
Interest paid		(2)		(18)
Tax paid		(4,421)		(6,245)
Net cash generated from operating activities		11,048		15,005
Cash flows from investing activities
Dividends from joint ventures		406		-
Acquisition of subsidiaries, net of cash acquired		(2,793)		(5,137)
Purchase of property, plant and equipment		(1,394)		(1,189)
Proceeds from sale of property, plant and equipment		59		6
Purchase of investments		-		(9)
Other long term assets		7		(21)
Net cash used in investing activities		(3,715)		(6,350)
Cash flows from financing activities
Proceeds from issue of ordinary shares		98		324
Dividends paid		(4,888)		(4,868)
Dividends paid to minority interest		-		(45)
Purchase of own shares		(72)		(1,134)
Net cash used in financing activities		(4,862)		(5,723)
Increase/(decrease) in cash and cash equivalents		2,471		2,932
Cash and cash equivalents at beginning of the period		25,194		21,635
Foreign exchange differences		265		627
Cash and cash equivalents at end of the period		27,930		25,194

Braemar Shipping Services PLC

Unaudited Consolidated Statement of Changes in Total Equity for the year ended 28 February 2010

	Share capital	Share premium	Shares to be issued	Other reserves	Retained earnings	Total	Minority interest	Total equity
Group	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 March 2008	2,061	9,261	(2,527)	20,687	11,717	41,199	328	41,527
Cash flow hedges
- Transfer to net profit	-	-	-	3,034	-	3,034	-	3,034
- Fair value losses in the period	-	-	-	(3,629)	-	(3,629)	-	(3,629)
Exchange differences	-	-	-	3,597	-	3,597	15	3,612
Net income recognised directly in equity	-	-	-	3,002	-	3,002	15	3,017
Profit for the year	-	-	-	-	11,463	11,463	57	11,520
Total recognised income in the year	-	-	-	3,002	11,463	14,465	72	14,537
Acquisition	-	-		-	-	-	19	19
Dividends paid	-	-		-	(4,868)	(4,868)	(45)	(4,913)
Issue of shares	43	1,659	-	-	-	1,702	-	1,702
Purchase of shares	-	-	(1,134)	-	-	(1,134)	-	(1,134)
Consideration paid	-	-	-	900	-	900	(260)	640
Consideration to be paid	-	-	-	265	-	265	-	265
ESOP shares allocated	-	-	182	-	(182)	-	-	-
Credit in respect of share option schemes	-	-	-	-	299	299	-	299
Deferred tax on items taken to equity	-	-	-	166	(161)	5	-	5
At 28 February 2009	2,104	10,920	(3,479)	25,020	18,268	52,833	114	52,947
Cash flow hedges
- Transfer to net profit	-	-	-	643	-	643	-	643
- Fair value losses in the period	-	-	-	333	-	333	-	333
Exchange differences	-	-	-	(164)	-	(164)	-	(164)
Net income recognised directly in equity	-	-	-	812	-	812	-	812
Profit for the year	-	-	-	-	9,655	9,655	30	9,685
Total recognised income in the year	-	-	-	812	9,655	10,467	30	10,497
Dividends paid	-	-	-	-	(4,888)	(4,888)	-	(4,888)
Issue of shares	4	94	-	-	-	98	-	98
Purchase of shares	-	-	(72)	-	-	(72)	-	(72)
Consideration to be paid	-	-	-	(34)	-	(34)	-	(34)
ESOP shares allocated	-	-	353	-	(353)	-	-	-
Credit in respect of share option schemes	-	-	-	-	591	591	-	591
Deferred tax on items taken to equity	-	-	-	(273)	261	(12)	-	(12)
At 28 February 2010	2,108	11,014	(3,198)	25,525	23,534	58,983	144	59,127

Braemar Shipping Services PLC

Notes to the financial statements   

Note 1 - General Information

The Preliminary Announcement of unaudited results for the year ended 28 February 2010 is an extract from the forthcoming 2010 Annual Report and Accounts and does not constitute the Group's statutory accounts of 2010 nor 2009.  Statutory accounts for 2009 have been delivered to the Registrar of Companies, and those for 2010 will be delivered following the company's Annual General Meeting.  The auditors have reported on the 2009 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 as adopted by the EU on 25 May 2010.

Note 3 - Segmental results

	Shipbroking			Technical			Logistics		Environmental		Total
2010	£'000			£'000			£'000		£'000		£'000
Revenue	57,362			22,697			31,899		7,066		119,024
Segment result before amortisation of intangible assets	13,324			2,325			1,434		614		17,697
Amortisation of intangible assets	(481)			(644)			(319)		(36)		(1,480)
Segment result	12,843			1,681			1,115		578		16,217
Unallocated other costs											(3,317)
Operating profit											12,900
Finance income/(cost)- net											191
Share of profit from joint ventures											400
Profit before taxation											13,491
Taxation											(3,806)
Profit for the period attributable to shareholders from continuing operations											9,685
2009
Revenue	60,409				21,193		40,797		4,745		127,144
Segment result before amortisation of intangible assets	14,990				4,156		1,130		(165)		20,111
Amortisation of intangible assets	(100)				(644)		(292)		(38)		(1,074)
Segment result	14,890				3,512		838		(203)		19,037
Unallocated other costs											(3,350)
Operating profit											15,687
Finance income/(cost)- net											291
Share of profit from joint ventures											246
Profit before taxation											16,224
Taxation											(4,704)
Profit for the period attributable to shareholders from continuing operations											11,520

Note 4 - Dividend

The proposed final dividend of 16.25 pence per share (2009: final 15.5 pence) takes the total dividend for the year to 25.0 pence (2009: 24.0 pence). The cost of the final dividend will be £3.3m (2009: £3.1m) based on 20.2m shares (which excludes shares held in the ESOP for which the dividend has been waived.

Braemar Shipping Services PLC

Notes to the financial statements   

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 871,760 ordinary shares held by the employee share trust (2009: 962,914) 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.

			2010		2009
			£'000		£'000
Profit for the period attributable to shareholders			9,655		11,463
			pence		pence
Basic earnings per share			47.93		56.70
Effect of dilutive share options			(0.67)		(0.98)
Diluted earnings per share			47.26		55.72
			Shares		Shares
Weighted average number of ordinary shares			20,143,909		20,215,801
Effect of dilutive share options			287,780		356,495
Diluted weighted average number of ordinary shares			20,431,689		20,572,296

Note 6 - Reconciliation of operating profit to net cash flow from operating activities

	2010		2009
	£'000		£'000
Profit before tax for the year from continuing operations	13,491		16,224
Adjustments for:
- Depreciation	1,064		956
- Amortisation	1,480		1,074
- Goodwill impairment charge	-		56
- (Profit) / loss on sale of property plant and equipment	(5)		15
- Profit on increase to investment in subsidiary	-		(15)
- Finance income	(193)		(309)
- Finance expense	2		18
- Share of profit of joint ventures	(400)		(246)
- Share based payments and related insurance charges	591		453
Changes in working capital:
- Trade and other receivables	1,745		1,246
- Trade and other payables	(3,417)		1,437
- Provisions	234		50
- Financial instruments	686		-
Cash generated from operations	15,278		20,959

 

 

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