Final Results

RNS Number : 0683S

Braemar Shipping Services PLC

12 May 2009

 



BRAEMAR SHIPPING SERVICES PLC

12 May 2009

Unaudited preliminary results for the year ended 28 February 2009

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 2009.

FINANCIAL HIGHLIGHTS

• Pre-tax profit before amortisation up 14% to £17.3m (2008: £15.2m).

• Pre-tax profit up 10% to £16.2m (2008: £14.7m).

• Basic EPS from continuing operations up 16% to 56.70p (2008: 48.99p).

• Cash generated from operating activities £21.0m (2008: £21.2m).

• Cash at 28 February 2009: £25.2m (29 Feb 2008: £21.6m).

• Final dividend 15.5p per share (up 3%), full year 24.0p (2008: 23.00p) up 4%.

OPERATIONAL HIGHLIGHTS

• Strongest results in Braemar's history.

• Increased diversification of marine services.

• Estimated forward order book deliverable in 2009/10 - £29m (US$42m) (2008:£27m, US$53m).

• Non-broking businesses now 25% of group operating profits.*

*before amortisation and central costs

Commenting on the results and outlook, Sir Graham Hearne, chairman of Braemar, said:

'2008/9 was an excellent year for the Group and these results are the best that Braemar has reported.'

'Shipping has enjoyed an unprecedented boom over the past three years. Since August 2008, with the contraction of credit and weaker economies, freight rates and vessel values have reverted to pre-boom levels. Our activity is higher than we might have expected with transaction volumes remaining steady and the strength of the US dollar has a positive effect on our results. Our non-broking businesses have begun the new financial year strongly and demand for their services remains good. Overall the prospects for the year are positive.'

ENDS

For further information, contact:

Braemar Shipping Services plc  Alan Marsh  James Kidwell	Tel [phone]  Tel [phone]
Pelham Public Relations  Damian Beeley Zoe Pocock	Tel [phone] Tel [phone]
Elaborate Communications  Sean Moloney	Tel [phone]
Charles Stanley Securities  Philip Davies	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. 

Recent Acquisitions

2008 - Braemar Steege, a specialist loss adjuster to the oil and gas industry. 

2007 - Braemar Falconer, provides specialised marine and offshore services. Fred. Olsen Freight, freight forwarding and liner agency.

Principal businesses:

The Group is divided into four businesses: Shipbroking, Technical, Logistics, and Environmental. This growth has been both organic and by acquisition.

Shipbroking

Braemar Seascope provides specialized shipbroking and consultancy services to international clients. The services include: chartering tankers (including gas, chemicals and LNG), dry cargo, containers, offshore vessels, second hand 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 has offices in London, Houston, Miami, Singapore, Calgary and Mexico City.

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.

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.

www.braemarhowells.com

PRELIMINARY ANNOUNCEMENT - YEAR ENDED 28 FEBRUARY 2009

CHAIRMAN'S STATEMENT

2008/9 was an excellent year for the Group and these results are the best that Braemar has reported. Revenue increased by 26% from £101.0m to £127.1m, profit before tax from continuing operations increased by 10% from £14.7m to £16.2m and earnings per share from continuing operations rose by 16% to 56.70 pence from 48.99 pence in 2007/8.  The Group is financially strong, with cash balances increasing over the year from £21.6m to £25.2m at 28 February 2009. 

Shipping has enjoyed an unprecedented boom over the past three years. Since August, with the contraction of credit and weaker economies, freight rates and vessel values have reverted to pre-boom levels. Our activity is higher than we might have expected with transaction volumes remaining steady and the strength of the US dollar has a positive effect on our results. Our non-broking businesses have begun the new financial year strongly and demand for their services remains good. Overall the prospects for the year are positive. 

Shipbroking enjoyed a very strong first half in buoyant markets which rapidly changed from August 2008 with the onset of the credit crisis and global recession. Global trade experienced a significant slowdown in the final calendar quarter of 2008, since when there has been a stabilisation in shipping rates at pre-boom levels. The dry bulk and container markets, which are driven by the demand for raw materials and consumer goods, both suffered large falls and more recently the reduction in oil demand has led to a fall in the demand for tankers. While we are seeing renegotiations and cancellations of some charters and newbuildings in the wider market place, to date our forward order book has not suffered significantly. We anticipate expanding our shipbroking office network overseas.

The performance of our Technical division has been particularly pleasing following the investments made in acquiring Braemar Falconer in July 2007 and Braemar Steege in March 2008, both of which were rebranded to include the Braemar name during the year. Together with Wavespec, these businesses have contributed annual operating profits before amortisation of £4.2m and have significantly expanded the Group's global reach and skill sets within the marine services sector.

The Logistics division - Cory Brothers - had a busy year in both forwarding and ship agency and successfully amalgamated the forwarding businesses in one building in Felixstowe following the purchase of Fred. Olsen Freight in December 2007. 

The Environmental division - Braemar Howells - recorded a small loss following the exceptionally strong year in 2007/8 as a result of weak activity levels in its incident response business, which offset good performances in the industrial and international services sections of the business.

The Directors are recommending for approval at the Annual General Meeting a final dividend of 15.5 pence per ordinary share, to be paid on 28 July 2009 to shareholders on the register at the close of business on 1 July 2009. Together with the 8.5p interim dividend the Company's dividend for the year is 24.0 pence (2008: 23.0 pence), a rise of 4%. The dividend is covered 2.4 times by earnings.

On behalf of the Board I would like to thank all of our staff around the world for their combined hard work and skill. In a year of such economic change their experience and commitment has been and will continue to be invaluable.

Sir Graham Hearne

11 May 2009

   CHIEF EXECUTIVE'S REVIEW OF THE BUSINESS

Strategy

The strategy for the Group over the past few years has been to extend the range of services offered beyond pure shipbroking into other related marine services. These services contributed 25% of the Group's operating profits before amortisation and central costs in 2008/9 and have created a broader base to the Group. This investment has been financed predominantly from operating cash flow without placing undue strain on the balance sheet. The Group has remained debt-free throughout the past five years.

Performance

One might characterise this as a year of two halves given the huge changes in the prices of almost every asset, commodity and currency since the summer of 2008. Shipping has been severely affected with reductions in both rates and vessel values, but I believe that throughout this period we have maintained, and in many areas increased our market share and that we are well-structured to perform positively in the current climate. Our estimate of the shipbroking forward order book deliverable over the course of the financial year 2009/10 stands at £29 million (US$42 million) as at 1 March 2009 (2008: £27 million, US$53 million), with the appreciation of the dollar offsetting an underlying reduction.

In challenging conditions, our non-broking businesses have performed well, especially in Technical Services, and increasingly found ways to work together. Their assimilation into the Group has been assisted by them taking on the Braemar brand where appropriate.  I am encouraged by the overall performance in 2008/9 and by the good start to the new financial year.

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

Shipbroking - Braemar Seascope

Revenues increased by 14% to £60.4m (2008: £52.8m) and operating profits before amortisation were 14% higher at £15.0m (2008: £13.1m) which was an excellent performance in a year of great upheaval in the market, but with no significant changes in either staff numbers or the office network during the year. The network is headquartered in London which is a multi-disciplinary office with branch offices in Aberdeen for offshore chartering, Shanghai for sale & purchase and newbuilding and Beijing and Italy for dry bulk chartering. We also conduct dry bulk chartering from Melbourne, Perth and Singapore which also serves as a base for further container and offshore activities. There are joint venture offices in Delhi and Mumbai specialising in wet and dry chartering, and in Singapore for gas and chemicals chartering. With this network we are able to provide international coverage and a flexible, quality service for our clients based on the sharing of market information and research. 

At 1 March 2008 the Baltic Dry Index stood at 7,613 and by the end of our financial year it was 1,986 having reached at high of 11,793 on 20 May 2008 and a low of 663 on 5 Dec 2008. After the unprecedented mid-year high, the dry cargo market started a rapid decline in September 2008 with the onset of the global credit crunch and plunging commodity prices. Chinese demand for dry bulk commodities fell quickly bringing the freight market down with it. For a time during November and December, all dry cargo earnings were below operating costs,  which  was  a  clear over-reaction as evidenced by the recovery in January 2009. The rapid change in freight and commodity values resulted in a series of well publicised defaults on both physical and derivative contracts. The freight market has picked up since, driven by increased grain and ore movements in the Atlantic, which has stimulated the Pacific and Indian Ocean markets. The volatility of commodity prices has shifted the emphasis in the market towards spot fixing. 

While economic forecasts for the balance of 2009 remain gloomy there is an expectation that the freight market will be assisted by large government-sponsored infrastructure projects especially in China and India. However,  the  substantial order book of new shipping due for delivery in the next two years will only be partially offset by the scrapping of older ships and the growth in the fleet is likely to stifle the benefit of any growth in demand.

There is growth potential for spot fixtures brought about by an increase in Capesize demand due to iron ore import substitution for China which is the world's largest consumer of iron ore for steel production. A significant drop in the annual benchmark price for iron ore is forecast for 2009/10, and this, coupled with a low freight market, will result in the delivered price of iron ore from Brazil and Australia being much less than the production cost of large volumes of domestically produced iron ore. Almost a third of China's domestic output is vulnerable to import substitution as steel mills continue to reduce overall costs.

The deep sea tanker chartering department continued to grow their market share over the past 12 months and in combination with the strong freight rates of 2008, the department produced a significant increase in revenue over the financial year. However, since the beginning of our year the rates in all sectors have fallen quite dramatically due to lower demand for crude oil and its products as a result of the global economic downturn. The Baltic Dirty Tanker Index started the financial year at 1,164 and averaged 1,415 during the financial year closing at 601. To indicate the volatility of the markets the highest reached was 2,347 in July 2008 and lowest point was 573 early February 2009; currently it stands at 480. The delivery of new building tonnage will exceed market requirements in the short to medium-term and this combined with reduced crude volumes, have lowered the returns for owners. However,  at these current rate levels both owners and charterers are considering longer-term period cover with a view to managing earnings and costs over a period of time and our team of project brokers are involved in these strategic discussions and well placed to execute further deals albeit at lower levels. We also entered the FFA (forward freight agreement) broking market with a team based at our London headquarters, which has added another tool in freight management service provided for our clients.

In the LNG sector our reputation as leading market information providers has helped us secure additional consultancy contracts as well as an increase in broking short-term period and spot shipments. As in the other tanker markets the overall volumes transported have reduced but we do anticipate utilisation of surplus LNG tonnage as and when the larger projects are completed over the next 24 months. 

The specialised tanker sections continue to grow their fixing volumes and we are now operating significant tonnage on the spot markets and under significant oil company contracts throughout northwest and continental Europe. Petrochemical gas and Liquid Petroleum Gas (LPG) transportation rates remained consistent during the past year but the excess tonnage in relation to the requirement has diminished the returns for the owners and operators alike.

LPG is also a bi-product of LNG production and we have taken a further step to expand our market position in the VLGC markets by establishing Braemar LPG Connect as a gas product broking business. Together with our dedicated VLGC brokers we expect our volumes to grow in this segment.  

The sale and purchase department had a successful year across all aspects of business - second hand, newbuilding including resale, and more recently in demolition, achieving a good, diverse mix across the ship categories. Having reached very high levels in the summer of 2008, vessel values and transaction volumes fell substantially in the final calendar quarter in response to the contraction of credit and the falling freight markets. Against the overall trend, our newbuilding department has continued to conclude new business. Some contract cancellation and/or renegotiation is taking place, although our own business has been affected less than the overall market. With the reduction in ship prices, we are already seeing many of our clients who have not recently been active in the sale and purchase market, looking at opportunities and we are therefore optimistic that sale and purchase activity will be good over the coming year.

Our commitment to maintaining a ship recycling and demolition department through the boom years when demolition activity was low is now being repaid with the significant levels of activity. Many international clients are now seeking our expertise in this area. 

The container market suffered a steep decline during 2008 brought about by excess capacity and the deteriorating  international economies. These conditions are not necessarily adverse for our broking team which has concluded good chartering and sale and purchase business throughout the year, with the number of period charters we have broked now at a record level. In addition to London the team now has a presence in Singapore and Shanghai and is well-placed to gain market share.

The offshore desk enjoyed another fine year of chartering and project activity driven by high worldwide  exploration.  The demand for supply and anchor handling vessels meant that rates reached an all-time high during 2008 and substantial additions to our forward order book were achieved. In the first calendar quarter of 2009 rates have softened and look like remaining at these levels for the immediate future.

Technical - Wavespec, Braemar Falconer and Braemar Steege

Revenues increased from £9.5m to £21.2m and operating profits before amortisation were up from £0.8m to £4.2m.  The inclusion of Braemar Steege, which was acquired on 3 March 2008, added £6.8m to revenue and £1.3m to operating profit before amortisation.

Braemar Falconer's revenue and profits for the past financial year grew substantially on the back of strong activity across their offices in Southeast Asia. Generally there has been little change in either work or revenue as a result of the financial crisis. Within marine warranty surveying ship construction remains active but rig movements  have reduced since the beginning of the year with lower drilling activity resulting in some clients' rigs  being  'stacked'. The company's engineering consultancy arm was very active through the year although chargeable rates have stabilised. Much of our consulting and design work is part of large oil companies' long term projects. The new financial year has begun well and all of the offices are busy with no reduction in workload.

Wavespec's revenue and operating profits grew with the addition of a number of offshore projects to supplement their core LNG business where the continuation of the Qatargas project has delivered a steady return. More recently they have been appointed technical consultants for the shipping aspects of a major LNG Project. There are two phases to the project, the first phase was to develop the optimum vessel size, propulsion system and containment system. The second phase is to develop the vessel's specification for the vessel acquisition programme. It is planned to establish an office in Houston during 2009.

Braemar Steege is one of the leading international players in the energy loss adjusting market and its client base covers insurance underwriters, captive insurance companies and the legal community. At acquisition it operated from offices in London, Houston, Singapore, Calgary, and Mexico City and since then it has established a new office in Miami from which it has expanded into South America with additional offices in Caracas, Lima and Rio de Janeiro to develop additional business streams in infrastructure and pollution insurance claims to complement their core energy-related business. In particular, a number of cases have been handled using the resources available through Braemar Howells. It has on-going business from loss adjusting instructions on claims caused by hurricanes Gustav and Ike in 2008 and it has also seen an increase in the provision of expert technical assistance to lawyers dealing with non-insurance disputes - a development which could increase as the current economic climate generates more commercial disputes. They have also benefited from a steady flow of instructions throughout the Southeast Asia region, aided by the presence of Braemar Falconer's offices in a number of key locations such as China, Vietnam and Australia.

Logistics - Cory Brothers

Revenues increased by 46% to £40.8m (2008: £27.9m) and operating profits before amortisation were down slightly at £1.1m (2008: £1.2m). The results would have been significantly better had it not been for the need to recognise a contract dispute which we remain confident we can see resolved in our favour. The integration of Cory Logistics and Fred. Olsen Freight culminated in the bringing together of 90 Cory and Fred. Olsen staff in new leasehold premises in Felixstowe in March 2009. Export forwarding and one-off projects continue to be the mainstay of the performance to date. However, the addition of the Fred. Olsen import business has increased the services offered to customers. We further expanded our service with the addition of Freight Action Limited in October 2008 - this being a niche logistics and project forwarder of outsize equipment for a predominantly UK client base. 

Port agency has maintained its leading position having successfully won a major European hub contract within the competitive UK market handling in excess of 10,000 port calls annually (including hub managed calls - 2008:  7,642)  with some significant new activity especially within LNG. In July 2008 we established our first overseas agency office in Singapore following the acquisition of the business of Sealion Shipping Pte Ltd. With eight employees it provides the full range of port, liner agency and logistics services and to date the performance has been above expectations. Morrison Tours, the seasonal excursion business linked closely to the cruise industry added to its customer base and performed above expectations. 

Environmental - Braemar Howells 

Braemar Howells' revenues decreased to £4.7m from £10.8m in the previous year and operating profits before amortisation decreased from a profit of £1.9m to a small loss of £0.2m. The reduction in revenue and profit was mainly attributable to the conclusion of the single incident work related to the MSC Napoli container ship which contributed significantly in 2007/8. During the year under review a new response base was established in Liverpool. 

The company has retained its ISO 9001 Quality standard accreditation and its ISO 14001 Environmental accreditation whilst gaining an International Safety Award for the third year running as a class leading company, on its way to achieving OHSAS 18001 Safety standard.

Staff

The blend of skills we have is unique and I am very pleased by the way that new staff have whole-heartedly embraced the opportunity to work with other group colleagues on new projects. We are fortunate to have teams with great ability and experience and I am grateful for their hard work and application which will continue to stand us in good stead for the future.

Alan Marsh

11 May 2009  

Financial Review

Revenue

Revenue from continuing operations increased 26% from £101.0m to £127.1m with three out of four of the Group's segments reporting growth from last year. In particular, Shipbroking revenue has increased by 14% reflecting a strong market in the first half of the year and revenue from Logistics has increased by 46%, benefitting from a full year's income from Fred. Olsen Freight which was acquired in December 2007. Technical has increased 124% with the inclusion of a full year's results and strong organic growth from Braemar Falconer which was acquired in July 2007 and Braemar Steege which was acquired in March 2008. The acquisitions of these businesses have broadened the services that the Group provides and support the strategy of investing in closely related businesses. The expected decrease in revenue in the Environmental segment followed the conclusion of the business's involvement in the clean-up of the MSC Napoli, the work being carried out in 2007/8.

Costs

Cost of sales includes amounts which are directly attributable to revenue, in particular the cost of freight and haulage associated with the Logistics business, amounts paid for the use of external contractors in the Technical and Environmental segments and the costs of materials used for work carried out by the Environmental business. The increase in operating costs of £17.7 million is largely due to the inclusion of a full year's results for Braemar Falconer and Fred. Olsen Freight Limited, the first year of including Braemar Steege, higher bad debt provisions and higher incentive payments made to staff.

Financial performance by division

	2009	2008	2007			2009	2008	2007
Shipbroking	£'000	£'000	£'000		Technical	£'000	£'000	£'000
Revenue	60,409	52,794	40,530		Revenue	21,193	9,467	6,623
Operating  profit before amortisation  and central  costs	14,990	13,093	10,656		Operating  profit before amortisation  and central  costs	4,156	844	553
Operating  profit margin	24.8%	24.8%	26.3%		Operating  profit margin	19.6%	8.9%	8.3%
Employee numbers	218	211	205		Employee  numbers	144	82	18
Logistics					Environmental
Revenue	40,797	27,874	23,449		Revenue	4,745	10,829	3,229
Operating profit before amortisation and central costs	1,130	1,153	1,099		Operating  (loss)/profit before amortisation and central costs	(165)	1,871	259
Operating profit margin	2.8%	4.1%	4.7%		Operating profit margin	(3.5%)	17.3%	8.0%
Employee numbers	232	176	149		Employee  numbers	60	65	39

Foreign exchange

The average rate of exchange for the US dollar denominated shipbroking earnings was $1.85/£ (2008: $1.99/£) and at 28 February 2009 the balance sheet rate for conversion was $1.43/£ (29 February 2008: $1.99/£). At 28 February 2009 the Group held forward currency contracts to sell US$22.0 million at an average rate of $1.49/£ and a variable forward window agreement to sell US$1.0 million per month with upper and lower limits of $1.2975 - $1.4895 for the months March 2009 to February 2011.

Taxation

The effective rate of tax on continuing operations is 29.0% (2008: 32.6%). The overall tax rate for the Group is higher than the standard UK tax rate primarily due to the effect of disallowable trading expenses. Excluding the share of net profits from joint ventures, the underlying rate was 29.4% (2008: 33.4%) and has benefitted from the reduction to the standard UK tax rate from 30.0% to 28.0% in April 2008.

Balance Sheet

Goodwill & intangible assets

Goodwill and intangible assets have increased by £3.9m during the year as a result of acquisitions made, principally Steege Kingston Partnership Limited. This acquisition increased goodwill and intangible assets by £4.1m prior to amortisation charges of £0.5m in line with the accounting policy to spread the cost of these assets over their useful life.

Goodwill totals £28.1m, of which £21.2m relates to the shipbroking businesses, £3.8m relates to the acquisition of businesses included in the Technical segment (£3.6m arising from the acquisitions of Braemar Falconer in 2007 and Braemar Steege in 2008); and £3.1m arising in respect of acquisitions in the Logistics segment.

Current assets

Trade and other receivables have increased significantly during the year mainly due to the inclusion of amounts relating to Braemar Steege (£6.7m), a business which by its nature has high levels of trade receivables and accrued income. In addition, the value of trade receivables has increased due to the marked appreciation of the US dollar against sterling.

Cash

Cash balances have increased by £3.6m to £25.2m at the end of the year. This balance includes amounts that will be used to pay the final dividend to shareholders and the bonuses which have been awarded to staff, the latter of which has been provided for in the balance sheet at the end of the year.

Acquisitions

During the year the Group has made one significant acquisition as well as two smaller acquisitions. The principal acquisition has been that of Steege Kingston Partnership Limited on 3 March 2008 for a consideration of £8.1 million. This business has added £6.8 million of revenue and £1.3 million of operating profit (before amortisation of £0.5 million) to the results of the Group's Technical segment in the current year.

During the year the Group included a full year of results for the businesses acquired in 2007, in particular Braemar Falconer Pte Limited in the Technical segment and Fred. Olsen Freight Limited in the Logistics segment.

James Kidwell

11 May 2009

  Braemar Shipping Services PLC

Unaudited Consolidated Income statement for the year ended 28 February 2009

					Year ended		Year ended
					28 Feb 2009		29 Feb 2008
Continuing operations	Notes				£'000		£'000
Revenue	3				127,144		100,964
Cost of sales					(35,038)		(28,267)
					92,106		72,697
Operating costs					(76,419)		(58,729)
Operating costs excluding amortisation					(75,345)		(58,277)
Amortisation of intangible assets					(1,074)		(452)
Operating profit	3				15,687		13,968
Finance income					309		391
Finance costs					(18)		(11)
Share of profit from joint ventures					246		370
Profit before taxation - continuing operations					16,224		14,718
Taxation					(4,704)		(4,797)
Profit for the year - continuing operations					11,520		9,921
Loss for the period from discontinued operations					-		(3)
Profit for the year					11,520		9,918
Attributable to:
Ordinary shareholders					11,463		9,772
Minority interest					57		146
Profit for the year					11,520		9,918
Earnings per ordinary share	5
Basic - continuing operations					56.70p		48.99p
Diluted - continuing operations					55.72p		48.69p
Basic - profit for the year					56.70p		48.97p
Diluted - profit for the year					55.72p		48.68p

  Braemar Shipping Services PLC

Unaudited Consolidated Balance sheet as at 28 February 2009

			As at		As at
			28 Feb 2009		29 Feb 2008
Assets			£'000		£'000
Non current assets
Goodwill			28,137		25,826
Other intangible assets			3,921		2,315
Property, plant and equipment			6,189		5,820
Investments			2,344		1,890
Deferred tax assets			810		754
Other receivables			176		155
			41,577		36,760
Current assets
Trade and other receivables			38,055		26,875
Derivative financial instruments			160		107
Restricted cash			-		3,952
Cash and cash equivalents			25,194		21,635
			63,409		52,569
Total assets			104,986		89,329
Liabilities
Current liabilities
Derivative financial instruments			649		49
Trade and other payables			46,221		39,540
Current tax payable			2,689		3,017
Provisions			88		48
Client monies held as escrow agent			-		3,952
			49,647		46,606
Non-current liabilities
Deferred tax liabilities			2,255		681
Trade and other payables			-		434
Provisions			137		81
			2,392		1,196
Total liabilities			52,039		47,802
Total assets less total liabilities			52,947		41,527
Equity
Share capital			2,104		2,061
Share premium			10,920		9,261
Shares to be issued			(3,479)		(2,527)
Other reserves			25,020		20,687
Retained earnings			18,268		11,717
Group shareholders' equity			52,833		41,199
Minority interest			114		328
Total equity			52,947		41,527

  Braemar Shipping Services PLC

Unaudited Consolidated Cash flow statement for the year ended 28 February 2009

		Year ended		Year ended
		28 Feb 2009		29 Feb 2008
	Notes	£'000		£'000
Cash flows from operating activities
Cash generated from operations	6	20,959		21,158
Interest received		309		391
Interest paid		(18)		(11)
Tax paid		(6,245)		(4,587)
Net cash generated from operating activities		15,005		16,951
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired		(5,137)		(4,270)
Purchase of property, plant and equipment		(1,189)		(1,032)
Proceeds from sale of property, plant and equipment		6		57
Purchase of investments		(9)		(38)
Proceeds from sale of investments		-		200
Other long term assets		(21)		(74)
Net cash used in investing activities		(6,350)		(5,157)
Cash flows from financing activities
Proceeds from issue of ordinary shares		324		745
Dividends paid		(4,868)		(4,053)
Dividends paid to minority interest		(45)		(143)
Purchase of own shares		(1,134)		(1,480)
Net cash used in financing activities		(5,723)		(4,931)
Increase in cash and cash equivalents		2,932		6,863
Cash and cash equivalents at beginning of the period		21,635		14,634
Foreign exchange differences		627		138
Cash and cash equivalents at end of the period		25,194		21,635

  Braemar Shipping Services PLC

Unaudited Consolidated Statement of Changes in Total Equity for the year ended 28 February 2009

	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 2007	2,023	8,554	(1,047)	21,020	5,390	35,940	309	36,249
Cash flow hedges
- Transfer to net profit	-	-	-	(16)	-	(16)	-	(16)
- Fair value losses in the period	-	-	-	107	-	107	-	107
Exchange differences	-	-	-	383	-	383	-	383
Net income recognised directly in equity	-	-	-	474	-	474	-	474
Profit for the year	-	-	-	-	9,772	9,772	146	9,918
Total recognised income in the year	-	-	-	474	9,772	10,246	146	10,392
Acquisition	-	-		-	-	-	16	16
Dividends paid	-	-		-	(4,053)	(4,053)	(143)	(4,196)
Issue of shares	38	707	-	-	-	745	-	745
Purchase of shares	-	-	(1,480)	-	-	(1,480)	-	(1,480)
Consideration to be paid	-	-	-	(782)	-	(782)	-	(782)
Credit in respect of share option schemes	-	-	-	-	554	554	-	554
Deferred tax on items taken to equity	-	-	-	(25)	54	29	-	29
At 29 February 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
Deferred 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

  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 2009 is an extract from the forthcoming 2009 Annual Report and Accounts and does not constitute the Group's statutory accounts of 2009 nor 2008. Statutory accounts for 2008 have been delivered to the Registrar of Companies, and those for 2009 will be delivered following the company's Annual General Meeting. The auditors have reported on the 2008 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 26 May 2009. 

Note 3 - Segmental results

	Shipbroking		Technical		Logistics		Environmental		Total
2009	£'000		£'000		£'000		£'000		£'000
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 - 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
2008
Revenue	52,794		9,467		27,874		10,829		100,964
Segment result before amortisation of intangible assets	13,093		844		1,153		1,871		16,961
Amortisation of intangible assets	(100)		(116)		(200)		(35)		(451)
Segment result	12,993		728		953		1,836		16,510
Unallocated other costs									(2,542)
Operating profit									13,968
Finance income- net									380
Share of profit from joint ventures									370
Profit before taxation									14,718
Taxation									(4,797)
Profit for the period attributable to shareholders from continuing operations									9,921

Note 4 - Dividend

The proposed final dividend of 15.5 pence per share (2008: final 15.00 pence) takes the total dividend for the year to 24.0 pence (2008: 23.0 pence). The cost of the final dividend will be £3.1m (2008: £3.0m) based on 20.0m 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 962,914 ordinary shares held by the employee share trust (2008: 685,014) 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.

	2009		2009		2009		2008		2008		2008
Continuing operations	Earnings £'000s		Weighted average number of shares		Per share amount pence		Earnings £'000s		Weighted average number of shares		Per share amount pence
Profit for the period attributable to shareholders	11,463		20,215,801		56.70		9,775		19,953,231		48.99
Effect of dilutive share options	-		356,495		(0.98)		-		122,061		(0.30)
Fully diluted earnings per share	11,463		20,572,296		55.72		9,775		20,075,292		48.69
Total operations
Profit for the period attributable to shareholders	11,463		20,215,801		56.70		9,772		19,953,231		48.97
Effect of dilutive share options	-		356,495		(0.98)		-		122,061		(0.29)
Fully diluted earnings per share	11,463		20,572,296		55.72		9,772		20,075,292		48.68

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

	2009		2008
	£'000		£'000
Profit before tax for the year from continuing operations	16,224		14,718
Profit before tax for the year from discontinued operations	-		(3)
Adjustments for:
- Depreciation	956		687
- Amortisation	1,074		452
- Goodwill impairment charge	56		114
- Loss / (profit) on sale of property plant and equipment	15		57
- Negative goodwill credited to income statement	(15)		(89)
- Interest income	(309)		(391)
- Interest expense	18		11
- Share of profit of joint ventures	(246)		(370)
- Share based payments	453		554
Changes in working capital:
- Trade and other receivables	1,246		122
- Trade and other payables	1,437		5,630
- Provisions	50		(334)
Cash generated from operations	20,959		21,158

Note 7 - Post balance sheet event

On 2 March 2009 the Group acquired 100% of the share capital of Cagnoil Limited. The initial consideration was £0.7 million satisfied by cash from existing resources and a further £0.2 million is due over the next 4 years. The total consideration represents the fair value of the net assets of the business and predominantly relates to the value of the forward order book which has an expected life of 4 years.

 

END

 

 

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