Final Results - Replacement

Braemar Shipping Services PLC 07 May 2008 This announcement replaces in its entirety the incorrect announcement posted at 7.00am today under RNS number 8245T. BRAEMAR SHIPPING SERVICES PLC PRESS RELEASE For immediate release 7 May 2008 Unaudited Results - Year ended 29 February 2008 Braemar Shipping Services plc (the 'Group'), a leading international provider of broking, consultancy, technical and other services to the shipping and energy industries, today announced full year unaudited results for the year ended 29 February 2008. HIGHLIGHTS â€¢Pre-tax profit up 47% to Â£14.7m (2007: Â£10.0m). On an adjusted basis this represents an increase of 34%*. â€¢Basic EPS from continuing operations up 53% to 48.99p (2007: 32.08p). On an adjusted basis this represents an increase of 33%*. â€¢Net cash generated from operating activities Â£17.0m (2007: Â£6.6m) â€¢Net cash at 29 February 2008: Â£21.6m (28 Feb 2007: Â£14.6m) â€¢Final dividend 15.00p per share (up 22%), full year 23.00p (2007:19.00p) up 21% â€¢Strategy of broadening the business into shipping and energy services is developing well. *Adjusted profits exclude an impairment charge of Â£950,000 taken in 2006/7, representing an adjustment to earnings per share of 4.82p. Commenting on the results and outlook, Sir Graham Hearne, Chairman, said: 'Shipbroking has thrived in shipping markets which have been both volatile and buoyant. The demand for oil and raw materials has continued unabated attracting further new investment in shipping.' 'Our other shipping services businesses have also made good progress, the most notable performance coming from our Environmental business, DV Howells. We have continued to invest part of our operating cash flows in these businesses.' 'Market conditions remain favourable for our businesses and the financial year has begun well, so far with no adverse effect from the global credit squeeze. Freight rates and vessel values are both firm and there is strong demand for our services, all of which bodes well for the new year.' For further information, contact: Braemar Shipping Services plc Alan Marsh Tel +44 (0) 20 7535 2650 James Kidwell Tel +44 (0) 20 7535 2881 Aquila Financial Peter Reilly Tel +44 (0) 118 979 4100 Elaborate Communications Sean Moloney Tel +44 (0)1296 682356 Charles Stanley Securities Philip Davies Tel +44 (0) 20 7149 6457 Notes Braemar Shipping Services plc is a leading international provider of broking, consultancy, technical and other services to the shipping and energy industries. Its principal businesses are as follows: Braemar Seascope Specialised shipbroking and consultancy services to international ship owners and charterers in the sale & purchase, tanker, gas, chemicals, offshore, container and dry bulk markets. www.braemarseascope.com Falconer Bryan Falconer Bryan provides specialised marine and offshore services. It has offices at the following locations: Australia, China, India, Indonesia, Malaysia, Singapore, Vietnam, United Kingdom www.falconer-bryan.com Steege Kingston Steege Kingston 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 Cory Brothers Shipping Agency Port agency, freight forwarding and logistics services within the UK. www.cory.co.uk Wavespec Marine engineering and naval architecture consultants to the shipping and offshore markets. www.wavespec.com DV Howells Pollution response service primarily in the UK for marine and rail operations. www.dvhowells.co.uk PRELIMINARY ANNOUNCEMENT - YEAR ENDED 29 February 2008 CHAIRMAN'S STATEMENT This is my sixth report to Shareholders as Chairman and once again I am delighted to announce another successful year of growth for the Group. The financial highlights are that revenue increased by 37% from Â£73.8m to Â£101.0m, profit before tax from continuing operations increased by 47% from Â£10.0m to Â£14.7m and earnings per share from continuing operations rose by 53% to 48.99 pence from 32.08 pence in 2006/7. A more representative comparison of the Group's performance is made by adjusting for an exceptional charge of Â£950,000 made last year, in which case adjusted pre-tax profits grew by 34% and earnings per share by 33%. Our staff across the World have performed well and we are grateful for their effort and commitment which has brought about this success. Shipbroking has thrived in shipping markets which have been both volatile and buoyant. The demand for oil and raw materials has continued unabated attracting further new investment in shipping. In particular this year we have benefited from strong activity and rates in newbuilding, dry bulk and offshore chartering though all shipbroking sections have performed well. Our forward order book has grown again and stands at a record level. Our Environmental division had an outstanding year, largely due to their involvement in the clearance of the stricken container vessel off the south coast of England, and both Cory Brothers and Wavespec performed well over the year. We have continued to invest part of our operating cash flows in these businesses. In pursuing this strategy we are creating a broader and more diverse group which can offer a wider range of services for clients. We have invested significantly in our Technical division through the purchase of Falconer Bryan in July 2007 for a cash consideration of Â£5.9m and Steege Kingston in March 2008 for a consideration which is expected to be in the range Â£8.0 - Â£8.5m dependent on its financial performance. Falconer Bryan offers a range of engineering and surveying services from offices across the Far East, and Steege Kingston is an international loss-adjuster specialising in the energy market. These businesses operate in markets that will grow and they also complement our existing operations to create new opportunities. We have also added to our Logistics division with the acquisition of 80 per cent of Fred. Olsen Freight Limited for Â£2.0m in December 2007 and the remaining interest in Gorman Cory for Â£0.9m in March 2008. The Directors are recommending for approval at the Annual General Meeting a final dividend of 15.00 pence per ordinary share, to be paid on 25 July 2008 to shareholders on the register at the close of business on 27 June 2008. Together with the 8.00p interim dividend the Company's dividend for the year is 23.0 pence (2007: 19.0 pence), a rise of 21%. The dividend is covered 2.1 times by earnings from continuing operations. Market conditions remain favourable for our businesses and the financial year has begun well, so far with no adverse effect from the global credit squeeze. Freight rates and vessel values are both firm and there is strong demand for our services, all of which bodes well for the new year. Sir Graham Hearne 6 May 2008 CHIEF EXECUTIVE'S REVIEW OF THE BUSINESS Strategy Our strategy has been, and remains, to extend the Group's activities beyond pure shipbroking to cover other shipping related service areas where we can add value not only for shareholders but also for our clients. To reflect the growth that has occurred thus far, and to let clients and others more easily identify with our overall offering, we have reorganised the Group into distinct operating divisions: Shipbroking, Technical, Logistics and Environmental. Operations This year our shipbroking business has improved its financial performance significantly at a time when the core office, departmental structure and head count has not fundamentally changed. Some of this can be attributed to higher freight rates but in many areas we are showing good growth in transaction volumes which is a testament to the effectiveness of our teams. The new financial year has started extremely well - as at 1 March 2008 we had already concluded shipbroking business totalling in excess of US$53m deliverable over the course of the year which is some 77% higher than the equivalent position at 1 March 2007. Our Technical, Logistics and Environmental businesses have all been busy over the last year and have raised their international profile considerably due to their success in handling and winning important business. Each of these businesses possesses specialist skills for which we expect there to be a growing demand as the world fleet grows and both the appetite for energy and exploration activity remain high. We have added to our skill base through selective acquisitions and organic growth which will bring further opportunities to increase our presence in these areas. A review of the market and our activities during the year is set out by segment below. Shipbroking - Braemar Seascope Revenues increased by 30% to Â£52.8m (2007: Â£40.5m) and operating profits were 23% higher at Â£13.0m (2007: Â£10.6m). Shipbroking activities are undertaken under the name of Braemar Seascope from offices in London, Aberdeen, Shanghai, Beijing, Singapore, Melbourne, Perth, and Sarzanna, Italy, with further joint venture offices in Delhi and Mumbai. At the beginning of our financial year - 1 March 2007 - the Baltic Dry Index, the barometer for the dry bulk market, stood at the relatively low level of 4,818 before making steady gains until mid November when it reached its peak of 11,039, falling back to 5,615 by the end of January 2008 and finishing the financial year at 7,613. It currently stands at 9,581. Volatility was especially a feature of the Capesize market, which is devoted to the transportation of raw materials particularly coal for power and steel, and iron ore for steel and is indicative of a relatively even balance of supply and demand. In such circumstances news or rumours of port closures, congestion or stem curtailments can cause significant short-term fluctuations. Our dry cargo department finished the year with record invoiced revenues, with the overseas offices all making good contributions. We have also been active in the period charter market and our forward book has grown substantially. In our next financial year we expect volatility to continue and, although there will be a considerable number of additions to the fleet, we expect the market to remain healthy, underpinned by the burgeoning demands particularly in China and India. Our deep sea tanker chartering department increased their involvement in both the number of spot and time charter transactions, resulting in an increase in revenue over last year. The Baltic Dirty Tanker Index ('BDTI') started the financial year at 1,094 and closed at 1,151, averaging 1,122 over the year. It currently stands at 1,701. However, on the 7 December 2007 a large single hull crude tanker was holed by a barge whilst at anchor off South Korea resulting in major pollution affecting the coastal environment. Charterers immediately looked to secure only double hull tonnage putting pressure on the market. VLCC tanker rates spiked achieving earnings as high as $300,000 per day despite the high bunker prices. These rates filtered down to the Suezmax and Aframax sectors and although there was a significant correction in the first quarter of 2008, the rates remained higher than at any time in the previous year barring the peak in December 2007 when the BDTI reached 2,279. The demand for double hull tonnage has also accelerated various conversion programs that single hull tanker owners had been planning for dry bulk or FPSO work. We expect that the balance between demand, new crude carriers entering the market and conversions/scrapping to broadly equate over the coming year. In the smaller tanker sectors the impact of newbuildings entering the market depressed rates. However the increase in refining and the subsequent distribution of products in the coastal markets is expected to result in the volume of transactions rising significantly over the next year. Volumes in the specialist chemical markets (including petrochemical gases) have increased resulting in charterers securing medium term contracts for 12 to 24 months. Newbuilding tonnage delivering to this sector has accommodated the increase in movements and rates are expected to remain steady. LPG markets remained fairly static over the year with a surplus of large tonnage keeping the rates at low levels although the main producers are now pricing the product for expected increased sales from the end of 2008. LNG markets have also stayed quiet with a number of delivered LNG carriers waiting for their planned project work to commence. These projects had been delayed for technical and commercial reasons and this has affected the critical supply of LNG. For a number of these projects, transportation is now expected to commence within two years. Once underway the surplus tonnage in both LNG and LPG sectors should be quickly absorbed. The performance of the sale and purchase department improved again with notable success in placing newbuilding orders across a wide variety of high quality shipyards. Secondhand transaction deal flow was steady and quite evenly balanced between tankers and bulk carriers. Transaction values have been strong reflecting the historically high prices achieved in the principal ship categories. Another major feature was the amount of resale activity, this being business where we are involved in transacting the onward sale of a newbuilding contract already placed and for which our commission is generally earned on delivery of the vessel from the yard. Demolition business is currently a less active part of sale and purchase but we expect it to increase in the coming years in line with the phase-out of single hull tankers, and as we enter the new financial year we are seeing more evidence of this. Container charter rates and vessel values remained quite firm over the year and our container desk performed well in both the sale and purchase and chartering markets. The arrival of substantial newbuilding tonnage will be a source of new opportunities although charter rates and second hand prices could be lower in the medium term if demand slows. However continuing globalisation, of which the container market is a corner stone, underpins future prospects. The offshore desk enjoyed a record year of growth and activity driven by the high level of oil exploration activity. Supply vessels have been much in demand and day rates rose to historic highs which look likely to be sustained by the high price of oil. The increase in earnings has encouraged investment in the industry and our team were also involved in concluding good sale and purchase and newbuilding business. Technical - Wavespec, Falconer Bryan and Steege Kingston Revenues increased by 43% to Â£9.5m (2007: Â£6.6m) and operating profits were up by 32% at Â£0.7m (2007: Â£0.5m). Falconer Bryan contributed revenues of Â£3.4m and operating profits before amortisation of Â£0.5m in the eight months since it was acquired. The business is headquartered in Singapore and employs 90 full time staff from seven offices, most of which are based in the Far East. All of its offices have been busy throughout the period working on a broad range of marine warranty surveys, towage approvals and consulting engineering work, and this activity shows every sign of continuing in the same vein. We are pleased with the progress it has made as part of the Group during which a new office in London has been established to access the insurance market. Wavespec's revenue and operating contribution was slightly lower mainly due to a weaker dollar, less higher margin project work and an office move to new leased premises in Malden. However it has extended its Qatargas business to 2011 and recently won new business for the design of new coal carrying vessels. Steege Kingston was acquired on 3 March 2008 and has therefore not been consolidated in the year we are now reporting on. It provides specialist loss adjusting and other expert services to the energy (oil and gas), marine, power and other related industrial sectors and is one of the leading international players in the energy adjusting market, with a particularly strong reputation and presence in the offshore/upstream sector. Its client base covers insurance underwriters, insurance brokers as well as the insured parties in the oil and gas industry itself. It operates from offices in London, Houston, Singapore, Calgary and Mexico City with a total of 62 employees. In the year to 31 December 2007 it recorded consolidated revenues of Â£7.0 million and pre-tax profits of Â£1.7 million and as at 31 December 2007 gross assets were Â£7.2 million and net assets were Â£4.9 million including cash of Â£0.2 million. The Technical division is now substantially larger as a result of the new business additions. The combination of international offices, client bases and skills will be a powerful business base from which to grow. The division now has 170 full time employees plus a further 70 consultant engineers acting as supervisors in shipyards. Logistics - Cory Brothers Revenues increased by 19% to Â£27.9m (2007: Â£23.4m) and operating profits were up 5% at Â£1.0m (2007: Â£0.9m). Revenue growth arose primarily from liner, logistics and forwarding business driven by sustained strong demand. In excess of 19,500 forwarding jobs were handled in the year compared with 13,200 last year. Logistics and one-off projects continue to be the mainstay of sustainable growth and profitability, and we are proud that Cory Logistics' success in this area has been recognised by the industry with the awards of Lloyd's List Freight Forwarder of the Year and Heavylift/ Project Specialist of the year for 2007. The acquisition of 80% of Fred. Olsen Freight on 24 December 2007 is a key strategic addition and a natural fit with Cory Logistics. It provides a range of freight forwarding and liner agency services for a predominantly UK client base complementing the services currently offered by Cory Logistics. It has 50 employees located mostly in Ipswich and close to the Cory Logistics offices of Felixstowe. Port agency is maintaining a leading position in an increasingly competitive UK market, handling in excess of 6,000 port calls in 2007/8, an increase of 23% over the prior year and. In April 2008 Cory was awarded the highly prestigious BP hub agency business for the European region. Morrison Tours, a seasonal business linked closely to the cruise industry around the UK has added to its customer base and improved the take-up of the shore excursions on offer with improved prospects for the coming year. Environmental - DV Howells DV Howells increased revenues to Â£10.8m from Â£3.2m in the previous year and operating profits grew from Â£0.2m to Â£1.8m. Much of the growth was due to the company's salvage support and environmental protection for the stricken container ship off the South coast of England which had an incremental income of over Â£7.9 million in the year. This work resulted in a significant increase in man hours worked on the protection and clean up of the beaches together with the specialist handling of the recovered containers from the ship. The Industrial Services section of the company, which handled much of this work, also deployed its specialist tank cleaning technology on a number of oil storage tank farms. The 24/7 Incident Response section continued steadily performing specialist environmental clean up including the handling of hazardous substances and spills for ports, rail and roads from its nine bases in the UK. It also attended a number of call outs for the Maritime and Coastguard Agency ('MCA') as part of the contract to operate the MCA national counter pollution stockpiles. The company's International and Specialist Services section acted as consultant advisors in the review of various UK ports' oil spill contingency plans, as well as assisting the Irish Coastal Authority with their emergency response and incident management plans. The company has grown its international involvement through a variety of contracts including specialist consulting assignments for the International Maritime Organisation, UK Ministry of Defence and major oil and shipping companies, plus offshore drilling support, spill response and training, in Africa, Europe and the Far East. Financial Review Income statement Revenue and operating profits grew in all divisions - the segmental results are shown in note 3 in this statement. Gross margins (calculated after charging costs that are directly related to revenue) were stable at 72% and operating margins after all operating expenses (excluding an exceptional charge in 2007) also remained unchanged at 14%. A reconciliation of reported profits to adjusted profits is set out in the table below. 2007/8 2006/7 % Â£000 Â£000 Adjusted profits from continuing operations before impairment charge and tax +34% 14,718 10,964 Impairment of Braemar Seascope Pty goodwill - (950) -------- ------ Reported profit before tax from continuing operations +47% 14,718 10,014 -------- ------ Pence Pence EPS from continuing operations (pre impairment charge) +33% 48.99 36.90 Impairment of goodwill - (4.82) -------- ------ Basic EPS from continuing operations +53% 48.99 32.08 -------- ------ The average rate of exchange for conversion of US dollar income during the financial year, after taking account of hedging, was $1.99/Â£ (2007: $1.86/Â£) and at 29 February 2008 the balance sheet rate for conversion was $1.99/Â£ (28 February 2007: $1.97/Â£). If the 2007/8 shipbroking income had been translated at the 2006/7 average exchange rate, it would have been higher by approximately Â£3.7 million. Discontinued operations In September 2007 the bunker trading operations based in Australia ceased and the historic net result of this activity is now shown on a single discontinued operations line in the income statement. Taxation The tax rate on reported profit before tax was 32.6% (2007: 35.8%). The underlying rate, excluding the share of net profits from joint ventures and the effect of the impairment charge, was 33.4% (2007: 33.3%). Next year the tax rate will benefit from the reduction in the rate of UK corporation tax to 28%. Cash flow and acquisitions The cash balance increased over the year by Â£7.0m to Â£21.6m (2007: Â£14.6m). The Group generated operating cash flows (after tax) of Â£17.0m up from Â£6.5m in the prior year mainly due to the increase in operating profits and an improvement in working capital management. Out of this, Â£1.0m was spent on fixed assets, Â£4.3m on acquisitions and Â£4.1m for dividend payments. Cash expended on acquiring businesses was Â£7.4m, offset by Â£3.1m of cash in the acquired balance sheets, in respect of Falconer Bryan (Â£5.9m), Fred. Olsen Freight Limited (Â£1.3m) and deferred consideration (Â£0.2m). Subsequent to the year end the Group paid Â£4.2m in respect of the purchase of Steege Kingston and Â£0.9m to purchase the 59% of Gorman Cory such that it is now wholly-owned. I would like to express my personal thanks and appreciation to all the staff whose hard work and commitment which has contributed to our performance this year, and with such dedicated colleagues I am confident for the continuing success of the Group. Alan Marsh 6 May 2008 Braemar Shipping Services PLC Unaudited Consolidated Income statement for the year ended 29 February 2008 Year ended Year ended 29 Feb 2008 28 Feb 2007 Continuing operations Notes Â£'000 Â£'000 Revenue 3 100,964 73,831 Cost of sales (28,267) (20,658) ---------- ---------- 72,697 53,173 Operating costs (58,729) (43,685) ---------- ---------- Impairment of goodwill - (950) Operating costs excluding impairment of goodwill (58,729) (42,735) ---------- ---------- ---------- ---------- Operating profit 3 13,968 9,488 Finance income 391 335 Finance costs (11) (16) Share of profit from joint ventures' and associates 370 207 ---------- ---------- Profit before taxation - continuing operations 14,718 10,014 Taxation (4,797) (3,585) ---------- ---------- Profit for the year - continuing operations 9,921 6,429 Profit / (loss) for the period from discontinued operations (3) 43 ---------- ---------- Profit for the year 9,918 6,472 ---------- ---------- Attributable to: Ordinary shareholders 9,772 6,367 Minority interest 146 105 ---------- ---------- Profit for the year 9,918 6,472 ---------- ---------- Earnings per ordinary share 5 Basic - continuing operations 48.99 p 32.08 p Diluted - continuing operations 48.69 p 31.65 p Basic - profit for the year 48.97 p 32.29 p Diluted - profit for the year 48.68 p 31.87 p Braemar Shipping Services PLC Unaudited Consolidated Balance sheet as at 29 February 2008 As at As at 29 Feb 08 28 Feb 07 Assets Â£'000 Â£'000 Non current assets Goodwill 25,826 22,606 Other intangible assets 2,315 1,582 Property, plant and equipment 5,820 5,478 Investments 1,890 1,538 Deferred tax assets 754 642 Other receivables 155 81 -------- -------- 36,760 31,927 Current assets Inventories 91 70 Trade and other receivables 26,784 21,750 Derivative financial instruments 107 27 Restricted cash 3,952 - Cash and cash equivalents 21,635 14,634 -------- -------- 52,569 36,481 -------- -------- Total assets 89,329 68,408 -------- -------- Liabilities Current liabilities Derivative financial instruments 49 - Trade and other payables 39,540 29,011 Current tax payable 3,017 2,402 Provisions 48 294 Client monies held as escrow agent 3,952 - -------- -------- 46,606 31,707 Non-current liabilities Deferred tax liabilities 681 283 Trade and other payables 434 - Provisions 81 169 -------- -------- 1,196 452 -------- -------- Total liabilities 47,802 32,159 -------- -------- Total assets less total liabilities 41,527 36,249 -------- -------- Equity Share capital 2,061 2,023 Share premium 9,261 8,554 Shares to be issued (2,527) (1,047) Other reserves 20,687 21,020 Retained earnings 11,717 5,390 -------- -------- Group shareholders' equity 41,199 35,940 Minority interest 328 309 -------- -------- Total equity 41,527 36,249 -------- -------- Braemar Shipping Services PLC Unaudited Consolidated Cash flow statement for the year ended 29 February 2008 Year ended Year ended 29 Feb 08 28 Feb 07 Notes Â£'000 Â£'000 Cash flows from operating activities Cash generated from operations 6 21,158 9,668 Interest received 391 335 Interest paid (11) (16) Tax paid (4,587) (3,413) ------- ------- Net cash generated from operating activities 16,951 6,574 ------- ------- Cash flows from investing activities Dividends received from joint ventures - 263 Acquisition of subsidiaries, net of cash acquired (4,270) (1,844) Purchase of property, plant and equipment (1,032) (654) Proceeds from sale of property, plant and equipment 57 25 Purchase of investments (38) - Proceeds from sale of investments 200 - Other long term assets (74) (23) ------- ------- Net cash used in investing activities (5,157) (2,233) ------- ------- Cash flows from financing activities Proceeds from issue of ordinary shares 745 569 Dividends paid (4,053) (3,595) Dividends paid to minority interest (143) (100) Purchase of own shares (1,480) (50) Payment of principal under finance leases - (11) ------- ------- Net cash used in financing activities (4,931) (3,187) ------- ------- Increase/(decrease) in cash and cash equivalents 6,863 1,154 Cash and cash equivalents at beginning of the period 14,634 13,567 Foreign exchange differences 138 (87) ------- ------- Cash and cash equivalents at end of the period 21,635 14,634 ------- ------- Balance sheet analysis of cash and cash equivalents Cash and cash equivalents 21,635 14,634 Short term borrowings - - ------- ------- Cash and cash equivalents at end of the period 21,635 14,634 ------- ------- Braemar Shipping Services PLC Unaudited Consolidated Statement of Changes in Total Equity for the year ended 29 February 2008 Share capital Share premium Shares to be Other reserves Retained Total Minority Total equity issued earnings interest Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 Â£'000 ------ ------ ------ ------ ------ ------ ------ ------ Group As at 1 March 2006 1,988 8,046 (997) 21,789 2,031 32,857 - 32,857 Cash flow hedges - Transfer to net profit - - - 40 - 40 - 40 - Fair value losses in the period - - - 17 - 17 - 17 Exchange differences - - - (70) - (70) - (70) ------ ------ ------ ------ ------ ------ ------ ------ Net income recognised directly in equity - - - (13) - (13) - (13) Profit for the - - - - 6,367 6,367 105 6,472 year ------ ------ ------ ------ ------ ------ ------ ------ Total recognised income in the year - - - (13) 6,367 6,354 105 6,459 ------ ------ ------ ------ ------ ------ ------ ------ Acquisition - - - - - 304 304 Dividends - - - (3,595) (3,595) (100) (3,695) paid Issue of 35 508 - - - 543 - 543 shares Purchase of shares - - (50) - - (50) - (50) Consideration to be paid - - - (738) - (738) - (738) Credit in respect of share option schemes - - - - 309 309 - 309 Deferred tax on items taken - - - (18) 278 260 - 260 to equity Transfer to - - - - - - - - retained ------ ------ ------ ------ ------ ------ ------ ------ profit relating to exercised share options Balance at 28 February 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 - - - - 9,772 9,772 146 9,918 year ------ ------ ------ ------ ------ ------ ------ ------ Total recognised income in the year - - - 474 9,772 10,246 146 10,392 ------ ------ ------ ------ ------ ------ ------ ------ Acquisition - - - - - 16 16 Dividends - - - (4,053) (4,053) (143) (4,196) paid Issue of 38 707 - - - 745 - 745 shares 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 - - - (25) 54 29 - 29 to equity Transfer to - - - - - - - - retained ------ ------ ------ ------ ------ ------ ------ ------ profit relating to exercised share options Balance at 29 February 2008 2,061 9,261 (2,527) 20,687 11,717 41,199 328 41,527 ------ ------ ------ ------ ------ ------ ------ ------ Braemar Shipping Services PLC Notes to the financial statements Note 1 - General Information The Preliminary Announcement of unaudited results for the year ended 29 February 2008 is an extract from the forthcoming 2008 Annual Report and Accounts and does not constitute the Group's statutory accounts of 2008 nor 2007. Statutory accounts for 2007 have been delivered to the Registrar of Companies, and those for 2008 will be delivered following the company's Annual General Meeting. The auditors have reported on the 2007 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 23 May 2008. Note 3 - Segmental results Revenue Profit for the period 2008 2007 2008 2007 Â£'000 Â£'000 Â£'000 Â£'000 Shipbroking 52,794 40,530 12,993 10,593 Logistics 27,874 23,449 953 911 Technical services 9,467 6,623 728 553 Environmental services 10,829 3,229 1,836 225 -------- -------- -------- -------- Segment revenue/ operating profit from continuing operations excluding 100,964 73,831 16,510 12,282 impairment Impairment - Shipbroking - - - (950) -------- -------- -------- -------- Segment revenue/operating profit 100,964 73,831 16,510 11,332 after impairment -------- -------- Unallocated other costs (2,542) (1,844) Finance income (cost)- net 380 319 Share of profit from joint ventures' and associates 370 207 -------- -------- Profit before taxation 14,718 10,014 Taxation (4,797) (3,585) -------- -------- Profit for the period attributable to shareholders from continuing operations 9,921 6,429 -------- -------- Note 4 - Dividend The proposed final dividend of 15.00 pence per share (2007: final 12.25 pence) takes the total dividend for the year to 23.00 pence (2007: 19.0 pence). The cost of the final dividend will be Â£3.0m (2007: Â£2.4m) based on 20.2m shares (which excludes shares held in the ESOP for which the dividend has been waived and includes shares issued for Steege Kingston - see note 7) and will be charged to equity in the 2008/9 financial year. 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 685,014 ordinary shares held by the employee share trust (2007:331,495) which are treated as cancelled. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive ordinary shares. The Group has one class of potential dilutive ordinary shares being those granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year. 2008 2008 2008 2007 2007 2007 Continuing operations Earnings Â£'000s Weighted Per share Earnings Â£'000s Weighted Per share average number amount pence average number amount pence of shares of shares Adjusted earnings per share 9,775 19,953,231 48.99 7,274 19,715,846 36.90 Impairment of goodwill - - - (950) - (4.82) ------ -------- ------ ------ -------- ------ Profit for the period attributable to shareholders 9,775 19,953,231 48.99 6,324 19,715,846 32.08 Effect of dilutive share options - 122,061 (0.30) - 264,693 (0.43) ------ -------- ------ ------ -------- ------ Fully diluted earnings per share 9,775 20,075,292 48.69 6,324 19,980,539 31.65 ------ -------- ------ ------ -------- ------ Total operations Profit for the period attributable to shareholders 9,772 19,953,231 48.97 6,367 19,715,846 32.29 Effect of dilutive share options - 122,061 (0.29) - 264,693 (0.42) ------ -------- ------ ------ -------- ------ Fully diluted earnings per share 9,772 20,075,292 48.68 6,367 19,980,539 31.87 ------ -------- ------ ------ -------- ------ Note 6 - Reconciliation of operating profit to net cash flow from operating activities 2008 2007 Â£'000 Â£'000 Profit before tax for the year from continuing operations 14,718 10,014 Profit before tax for the year from discontinued operations (3) 62 Adjustments for: - Depreciation 687 518 - Amortisation 452 284 - Goodwill impairment charge 114 950 - Loss / (profit) on sale of property plant and equipment 57 (12) - Profit on sale of investment (89) - - Interest income (391) (335) - Interest expense 11 16 - Share of profit of joint ventures (370) (207) - Share based payments 554 309 Changes in working capital: - Stocks (21) 7 - Trade and other receivables 143 (3,874) - Trade and other payables 5,630 2,098 - Provisions (334) (162) -------- -------- Cash generated from operations 21,158 9,668 -------- -------- Note 7 - Post balance sheet event On 3 March 2008 the Company acquired all of the share capital of Steege Kingston Partnership Limited. The initial consideration was Â£5.5 million satisfied by cash from existing resources of Â£4.2 million and the issue of 306,513 new ordinary shares in Braemar Shipping Services plc. Further consideration is due 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. Total consideration is expected to be in the range Â£8.0 million - Â£8.5 million and the maximum consideration payable is capped at Â£12.0 million. This information is provided by RNS The company news service from the London Stock Exchange

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