Final Results

RNS Number : 1667G

Braemar Shipping Services PLC

09 May 2011

 



BRAEMAR SHIPPING SERVICES PLC

9 May 2011

Preliminary results for the year ended 28 February 2011

Braemar Shipping Services plc ("Braemar", "the Company" or "the Group"), a leading international provider of broking, consultancy, technical and other services to the shipping and energy industries, today announces full year results for the year ended 28 February 2011.

FINANCIAL HIGHLIGHTS

·    Revenue £126.1m (2010: £119.0m)

·    Pre-tax profit before amortisation £14.8m (2010: £15.0m)

·    EPS before amortisation 53.84p (2010: 53.22p)

·    Cash at 28 February 2011: £25.6m (28 Feb 2010: £27.9m)

·    Final dividend 17.0p per share (up 5%), full year 26.0p (2010: 25.0p) up 4%

·    8^th successive year that the Company has increased its dividend

OPERATIONAL HIGHLIGHTS

·    Purchase of the business and certain assets of BMT Marine and Offshore Surveys Limited

·    Shipbroking profits 7% ahead

·    Successful consolidation and relocation of our businesses in Singapore

·    Integration and re-branding of our technical services businesses with an improved outlook for the year ahead

·    Estimated forward order book deliverable in 2011/12 - £23m [US$36m] (2010/11 - £28m [US$42m])

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

"Our markets in shipping and oil and gas services have had a turbulent year and against this backdrop the performance of the Group has been robust.

Braemar, across all divisions, is a first-class company and among the leaders in its various markets; it is this that underlies my confidence that Braemar will continue to play a leading role in the markets in which it operates."

ENDS

For further information, contact:

Braemar Shipping Services Alan Marsh James Kidwell	Tel [phone] Tel [phone]
Pelham Bell Pottinger Damian Beeley Zoe Pocock	Tel [phone] Tel [phone]
Elaborate Communications Sean Moloney	Tel [phone]
Arbuthnot Securities Limited Nick Tulloch Henry Willcocks	Tel [phone] 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. The business is organised into the following segments:  Shipbroking, Technical, Logistics and Environmental.

It is listed on the Official List of the London Stock Exchange in the Industrial Transport sector.

Principal businesses:

Shipbroking

Braemar Seascope provides chartering, sale and purchase and consulting shipbroking services to international ship owners, charterers and financial institutions operating in the tanker, gas, chemicals, offshore, container and dry bulk markets. There are shipbroking offices in the UK, China, Australia, Singapore, India, Italy and Monaco.

www.braemarseascope.com

Technical

Braemar's Technical division provides a range of specialist marine services to the maritime sector and includes:

Braemar Steege: 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, Lima, Mexico City and Miami.

www.braemarsteege.com

Braemar Falconer: specialised marine and offshore services. It has offices in the UK, Australia, China, India, Indonesia, Malaysia, Singapore and Vietnam.

www.braemarfalconer.com

Wavespec: consultant marine engineering and naval architecture services to the shipping and offshore markets. A new office in Houston was opened in 2009.

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 and Africa and is continuing to develop an international presence.

www.braemarhowells.com

PRELIMINARY ANNOUNCEMENT - YEAR ENDED 28 FEBRUARY 2011

CHAIRMAN'S STATEMENT

Overview

Our markets in shipping and oil and gas services have had a turbulent year and against this backdrop the overall performance of the Group has been robust. This is testament to the quality of our employees, their experience, and their ability to respond in a challenging environment. Group revenues grew 6% to £126.1m; pre-tax profits before amortisation were £14.8m compared with £15.0m in 2009/10 and pre-tax profits after amortisation were £13.2m compared with £13.5m in 2009/10. Basic earnings per share (EPS) were 48.41p (2010: 47.93p) and EPS excluding amortisation were also similar to last year at 53.84p (2010: 53.22p).

We saw the continuation of the global economic recovery during the financial year and this was particularly strong in Asia. Alongside that shipping continues to enjoy a growth in demand for raw materials which has provided good support to the dry bulk sector, despite the delivery of new tonnage. Similarly the tanker market is being sustained by growing oil demand from the East at a time when the economies in the United States and Europe remain sluggish.

Asia

For some years we have been building our presence in Asia which has become the world's most important region for international shipping. This year we successfully consolidated all our businesses in Singapore which now employs 110 staff in a single office. From this base we are expanding in the region, particularly in shipbroking where we have opened new tanker chartering and sale & purchase broking desks. One of our executive directors, Denis Petropoulos, has relocated to Singapore to lead this important development.

Operations

Over the past few years we have acquired a number of complementary technical businesses. We are announcing today the integration and re-branding of these businesses under a common name, Braemar Technical Services, with a geographic management structure. This will support the marketing of our marine surveying, engineering, energy loss-adjusting and consulting disciplines to our international client base and consequently reinforces the leading market position we have in this division.

We are also pleased to announce today the purchase of the business and certain assets of BMT Marine and Offshore Surveys Limited for a cash consideration of £2.4m. The businessprovides hull and machinery, P&I and Marine Warranty survey services around the globe; clients operate primarily in the insurance, shipping and offshore industries. In its last financial year it reported normalised EBITDA of £0.9 million. This acquisition enables our Technical division to deliver a truly global service to our clients.

Dividend

I am pleased to announce that the Directors are recommending for approval at the Annual General Meeting a final dividend of 17.0 pence per ordinary share (an increase of 5%), to be paid on 27 July 2011 to shareholders on the register at the close of business on 1 July 2011. Together with the 9.0p interim dividend, the Company's dividend for the year will be 26.0 pence (2010: 25.0 pence), a rise of 4%. The dividend is covered 1.86 times by earnings. This is the eighth year in succession that the Company has increased its dividend.

Board changes

During the year, Alastair Farley was appointed to the Board, bringing with him a wealth of experience in the shipping industry.

Richard Agutter will retire from the Board later this year having completed over nine years of service. I would like to thank him for his outstanding contribution over the years.

Outlook

While economists and politicians continue to debate the speed and extent of the recovery, both in the UK and globally, we are well placed in our major markets and enter the new financial year with a healthy pipeline of business. Our estimate of the shipbroking forward order book deliverable over the course of the financial year 2011/12 stands at £23 million (US$36 million) compared with £28 million (US$42 million) at 1 March 2010. We also expect to see an improvement in the performance of our Technical division in the coming year.

Braemar, across all divisions, is a first-class company and among the leaders in its various markets. On behalf of the Board, I would like to express our thanks to all our staff throughout the world for their commitment over the past year; it is this that underlies my confidence that Braemar will continue to play a leading role in the markets in which it operates.

Sir Graham Hearne

9 May 2011

 CHIEF EXECUTIVE'S REVIEW OF THE BUSINESS

Overview

The Group's strategy is to maintain and grow its international marine and energy services businesses.

Braemar is a people business built on the quality and professionalism of its staff and the strength of its client relationships. We have always made a substantial commitment to recruitment and training. I am delighted that many of our recruits have developed into skilled professionals and we are able to send them to parts of the world that do not have the same pool of available talent, where they can put their high level of professionalism to effective use.

Our global network of offices provides a strong platform from which to serve our clients. Over the past 12 months all over the world we have all seen incidents or sudden changes in circumstances, not least the BP Macondo incident, the earthquake and tsunami in Japan and the recent political turmoil sweeping North Africa and the Middle East. It is our job to help our clients respond to such events, which we do with shipbroking as well as with bespoke shipping research, marine surveying, loss-adjusting and engineering consulting.

Divisional review

1.   Shipbroking - Braemar Seascope

Shipbroking profits (before amortisation and tax) were up 7% in a year when global freight rates have been turbulent.

On 1 March 2010 the Baltic Dry Index stood at 2,760 and by the end of our financial year (28 Feb 2011) it was 1,251 having reached a high of 4,209 on 26 May 2010 and a low of 1,043 on 4 Feb 2011. The average for that period was 2,497 and on 6 May 2011 it stood at 1,314.

Freight rates in the cape market were constrained by the continuous additions to the fleet and in our final quarter the high volume of coal shipments from Queensland, Australia was significantly disrupted by high cyclonic rainfall which damaged the mines and rail infrastructure to the ports. Supramax and handysize markets were remarkably resilient and steady, with little volatility in either the Atlantic or the Pacific basin. Underlying cargo demand remains strong but freight rates are being suppressed by the effect of new tonnage, and freight futures indicate that the market will remain soft. Our Dry Cargo teams in Australia and India have had a strong year with good support from the offices in London, Beijing and Singapore.

The influx of new tanker tonnage to the fleet continues to have an adverse effect on chartering rates. Commissions are being impacted by lower freight rates but we are pleased to see an increase in our volume of transactions, largely offsetting the lower rates. Our strategy of developing business with China and India has been beneficial and we have concluded significant VLCC business with both countries.

The refined-products shipping markets are also suffering from an over-supply of tonnage but volumes remain good. Since the terrible events in Japan, product distribution has grown, particularly in the larger sizes, and the added tonne miles have resulted in greater activity both for our London and Singapore offices.

The crude oil price has risen sharply as both Chinese and Indian demand continues to grow. The unrest in Libya and other recent tension in the Middle East, combined with the increase in demand, have made both crude and refined oils the currency of speculators, with traders anticipating further price spikes. This has had a direct impact on the cost of fuel oil used as bunkers, which is now some US$200 per tonne higher than last year, putting pressure on owners' returns. This, in turn, means the repayment of the capital cost of the asset comes under strain, placing further pressure on owners to consider their strategy. Our dedicated projects section is often involved in assisting clients in those strategic discussions and as a result our period charter book continues to remain strong.

Our specialist chartering teams both in chemicals and liquid petroleum gas (LPG) have extended and added further contracts with large clients resulting in both desks ending this year ahead of the one before. It is also encouraging that the LPG physical product broking section has grown its client base and continues to be a valuable addition to the division.

The liquid natural gas (LNG) market is maturing and many power projects have now been completed or are nearing completion, and the vessels delivered ahead of the completion of these projects have been absorbed. This has meant that freight rates are now at a level which returns a profit, although many owners have some way to go to make up for earlier losses suffered in previous thin markets. We have been active in this sector during the year particularly in the provision of consulting services.

The market for offshore supply vessels was relatively subdued in 2010, but the rising oil price is stimulating drilling activity and investment, which we expect will lead to higher demand and better vessel use. Our offshore team, based in London, Aberdeen and Singapore has had a good year both for chartering and project business.

The process of inventory re-stocking during 2010 by many businesses fuelled a resurgence in demand for container tonnage in a quest for market share and further gains on profitable routes. The competition for market share caused a rapid increase in charter rates although the subsequent additional tonnage being pushed into the market ultimately put more pressure on freight rates, which have been steadily falling over the past quarter. Our chartering team has succeeded in transacting a good level of longer term business during this period.

The container sale and purchase market remains extremely tight, with sales candidates limited and prices very firm, due to the number of competing buyers. As a result we have seen increasing newbuilding activity and it seems likely this will remain a focus for the main players in the coming months.

Over the past year second-hand vessel values and newbuilding prices have been generally stable in most ship categories and our team has conducted a good level of business both in the wet and dry sectors.

The worldwide volume of demolition business has been lower than expected, partly due to the closure of yards in Bangladesh for some of the year, but our share remains high and demolition is an important aspect of the full service we provide.

Our newbuilding activity has been surprisingly resilient particularly with Chinese and South Korean yards which for the most part have order books covering the next three years. During the year we established new sale and purchase desks in Singapore and Monaco which allows us to serve an extended client base.

2.   Technical

We are reorganising the companies in our Technical division to operate as a single unit, which will give a greater ability to market all of the technical services we offer to our clients across the world. This will be rolled out over the coming quarter and as part of the process we are re-establishing the business along geographical lines with two regional sub-divisions in the Far East and the West.

The financial results for the Technical division did not meet our full expectations due to lower than anticipated activity in the new ventures of cargo loss adjusting and Wavespec's consulting business in Houston, both of which have yet to achieve profitability. However, the division has begun the new financial year well and we expect a better overall performance for the year.

Our marine engineering and marine surveying business (Braemar Falconer) posted higher revenue compared to the previous year with the offices in Singapore, Malaysia, Vietnam and Indonesia all performing well. Regional rig move and drilling activity in the Far East picked up during the year and this trend is expected to continue in 2011. Marine warranty surveys, the main revenue stream of the group, also grew by 20%. Revenue from China operations lagged behind during the year although the second half showed an improvement. The outlook for 2011 for the group is good and so far the year has begun well with opportunities for growth in geotechnical services and work from deep water drilling activity.

Our energy loss adjusting business (Braemar Steege) performed in line with expectations. Claims activity in the energy sector was below average throughout the year as most oil and gas exploration and production areas were not affected by natural disasters. Activity levels in the Gulf of Mexico dropped significantly following the BP Macondo incident and it will be some time before projects start moving again. Despite the magnitude of this incident, the impact on the insurance industry has been less than expected because of lower insurance cover. Activity in other deep water areas such as West Africa and Brazil has increased as investment has been transferred from the Gulf of Mexico. Braemar Steege has responded by establishing a new office in Rio do Janeiro and making greater use of the group's connections in Nigeria. The Singapore office continues to grow from strong regional activity in Asia and Australia, where access to group resources throughout the region is also supporting development. Instructions on expert witness cases remain steady and provide a good source of income while new energy claims are low.

The financial year was challenging for the marine engineering and naval architecture consulting business (Wavespec). They are pre-eminent in LNG supervisory and consulting work, but over the last two years very few LNG carriers have been ordered. In Houston this was compounded by the discontinuance of several projects that the office was advising on and by the reaction to the BP Macondo incident in April 2010 which stopped all work in the Gulf of Mexico. Looking forward to 2011-12 we are starting to see a recovery in LNG carrier construction both in terms of orders placed and expressions of interest. In addition, the burgeoning activity for Floating Storage and Re-gasification Units (FSRUs) and improvements in the offshore sector point to increased demand for the skill-sets in both the UK and US offices.

The economic environment in the US slowed the growth of our new cargo claims arm (Braemar Marine) which also has a presence in the UK and the Far East. As a consequence the division was absorbed into Braemar Falconer and has been restructured subsequent to this re-branding. In recent months a better base has been established from which to build.

3.   Logistics - Cory Brothers

Cory Brothers returned to Cardiff this year by opening a new office for its Agency and Logistics businesses just a short distance from where the company was founded in 1842 and subsequently earned the right to use the Welsh Dragon as its logo.

Revenues in the Logistics division grew by 10% with forwarding, one-off projects and liner all contributing. Prospects are promising for the new financial year with an expected increase in activity from several major clients and projects on the back of business won in this year.

Port Agency continues to maintain its leading position within a depressed UK market, handling approximately 8,500 port calls annually (including hub managed calls). As anticipated, ship-to-ship operations activity continued throughout the year and are expected at least to maintain their volume in the current year. During 2010, Agency entered into agreements with a number of customers for the use of its highly-respected operational system "ShipTrak".

Overseas activity increased with the Singapore office performing well with increased volume. The establishment of new partnerships in Brazil and Gibraltar will serve to develop the global Cory brand.

4.   Environmental - Braemar Howells

The weak UK economy and Government spending cuts constrained activity in the domestic market. However, in the latter part of the year the industrial services arm successfully undertook two large tank cleaning contracts and was also involved in a clean-up response for an oil spill. Looking ahead, the International division is gaining more enquiries and three new international projects are due to commence in the first quarter of the new financial year. These will be serviced by the company's versatile and multi-skilled workforce.

Colleagues

Everyone across the Group has worked very hard throughout the year, with skill and commitment second to none, and I wish to thank them all sincerely for their contribution.

Alan Marsh

6 May 2011

Financial Review

Key divisional statistics

	2011	2010	2009			2011	2010	2009
Shipbroking	£'000	£'000	£'000		Technical	£'000	£'000	£'000
Revenue	61,646	57,362	60,409		Revenue	22,621	22,697	21,193
Operating profit before amortisation and central costs	14,309	13,324	14,990		Operating profit before amortisation and central costs	1,319	2,325	4,156
Operating profit margin	23.2%	23.2%	24.8%		Operating profit margin	5.8%	10.2%	19.6%
Employee numbers	288	272	218		Employee numbers	222	202	178
Logistics					Environmental
Revenue	35,119	31,899	40,797		Revenue	6,749	7,066	4,745
Operating profit before amortisation and central costs	1,230	1,434	1,130		Operating profit /(loss) before amortisation and central costs	271	614	(165)
Operating profit margin	3.5%	4.5%	2.8%		Operating profit margin	4.0%	8.7%	(3.5%)
Employee numbers	232	235	232		Employee numbers	60	62	60

Group revenue increased by 6% with a similar gross margin of 76.3% and an operating margin before amortisation of 11.5% (2010: 12.1%). Operating profits in Technical were lower, principally due to the new cargo loss adjusting activities and Wavespec's consulting arm in Houston which have not yet reached profitability.

Operating costs (excluding amortisation) increased by 6.8% mainly due to an increase in staff numbers, a full year of activity from new and acquired businesses along with the effect of foreign exchange on the translation of overseas costs and office relocation costs in Singapore. We have continued to invest in our staff, and have continued to recruit and headcount has increased to 802 of which 305 are based overseas.

Foreign exchange

Over the year the US dollar weakened against most G20 currencies and the average rate of exchange for US dollar-denominated shipbroking earnings was $1.57/£ (2010: $1.55/£). At 28 February 2011 the balance sheet rate for conversion was $1.63/£ (28 February 2010: $1.52/£) and the Group held forward currency contracts to sell $13.0 million at an average rate of $1.57/£ and a variable forward window agreement to sell US$1.0 million per month with upper and lower limits of $1.4885 - $1.6510 between the months March 2011 and February 2012. During the year ended 28 February 2011, the Group recognised in the income statement a foreign exchange gain of £0.7 million that had been deferred at 28 February 2010. 

Taxation

The effective rate of tax for the Group was 25.6% (2010: 28.2%). The improvement in the rate relative to the prior year is due to the mix of overseas profits, prior year over provisions and lower non-deductible expenditure. The provision for deferred tax is calculated using the reduced UK corporation tax rate of 27%. The further reductions from 27% to 26% together with the three further annual 1% cuts to 23% by April 2014 that were announced on 23^rd March 2011are expected to reduce the rate in future years.

Balance sheet

Net assets at 28 February 2011 amounted to £64.8 million (2010: £59.1 million). Goodwill of £30.0 million mostly relates to our shipbroking business. Net current assets were £23.0 million within which the staff bonus represents the most significant liability and the majority of this was paid subsequent to the end of the company's financial year. There were no acquisitions during the year and there is a deferred consideration of £0.4 million (2010: £1.9 million) relating to acquisitions in previous years, most of which will be paid in cash during 2011/12.

Cash flow

The Group generated £7.3 million (2010: £11.0 million) of cash from operating activities during the year, after tax payments. This was used to make deferred consideration payments relating to previous acquisitions amounting to £1.3 million, capital expenditure of £1.5 million and dividend payments of £5.1 million. Capital expenditure includes costs associated with fitting out the new office in Singapore. Cash balances were £25.6 million at the end of the year (28 February 2010: £27.9 million) and there was no debt.

James Kidwell

6 May 2011

Braemar Shipping Services PLC

Audited Consolidated Income statement for the year ended 28 February 2011

					28 Feb 2011	28 Feb 2010
Continuing operations	Notes				£'000	£'000
Revenue	3				126,135	119,024
Cost of sales					(29,897)	(28,094)
					96,238	90,930
Operating costs
Operating costs excluding amortisation					(81,744)	(76,550)
Amortisation of intangible assets					(1,565)	(1,480)
					(83,309)	(78,030)
Operating profit	3				12,929	12,900
Finance income					177	193
Finance costs					(14)	(2)
Share of profit from joint ventures					103	400
Profit before taxation					13,195	13,491
Taxation					(3,378)	(3,806)
Profit for the year					9,817	9,685
Attributable to:
Ordinary shareholders					9,802	9,655
Non-controlling interest					15	30
Profit for the year					9,817	9,685
Earnings per ordinary share	5
Basic - profit for the year					48.41p	47.93p
Diluted - profit for the year					47.43p	47.26p

Audited Consolidated Statement of comprehensive income

				28 Feb 2011	28 Feb 2010
				£'000	£'000
Profit for the year				9,817	9,685
Other comprehensive income / (expense)
Foreign exchange differences on retranslation of foreign operations				977	(164)
Cash flow hedges - net of tax				(179)	703
Total comprehensive income for the year				10,615	10,224
Attributable to:
Equity holders of the parent				10,600	10,194
Non-controlling interest				15	30
Total comprehensive income for the year				10,615	10,224

Braemar Shipping Services PLC

Audited Consolidated Balance sheet as at 28 February 2011

		As at	As at
		28 Feb 11	28 Feb 10
Assets		£'000	£'000
Non-current assets
Goodwill		30,006	28,740
Other intangible assets		2,777	4,247
Property, plant and equipment		6,813	6,510
Investments		1,694	1,485
Deferred tax assets		1,797	1,208
Other long-term receivables		238	169
		43,325	42,359
Current assets
Trade and other receivables		40,741	36,918
Derivative financial instruments		314	-
Restricted cash		-	5,521
Cash and cash equivalents		25,634	27,930
		66,689	70,369
Total assets		110,014	112,728
Liabilities
Current liabilities
Derivative financial instruments		-	571
Trade and other payables		41,062	41,706
Current tax payable		2,379	3,346
Provisions		267	288
Client monies held as escrow agent		-	5,521
		43,708	51,432
Non-current liabilities
Deferred tax liabilities		1,271	2,001
Provisions		217	168
		1,488	2,169
Total liabilities		45,196	53,601
Total assets less total liabilities		64,818	59,127
Equity
Share capital		2,110	2,108
Share premium		11,077	11,014
Shares to be issued		(3,275)	(3,198)
Other reserves		26,323	25,525
Retained earnings		28,424	23,534
Group shareholders' equity		64,659	58,983
Non-controlling interest		159	144
Total equity		64,818	59,127

Braemar Shipping Services PLC

Audited Consolidated Cash flow statement for the year ended 28 February 2011

		28 Feb 2011	28 Feb 2010
	Notes	£'000	£'000
Cash flows from operating activities
Cash generated from operations	6	12,280	15,278
Interest received		177	193
Interest paid		(14)	(2)
Tax paid		(5,164)	(4,421)
Net cash generated from operating activities		7,279	11,048
Cash flows from investing activities
Dividends from joint ventures		-	406
Acquisition of subsidiaries, net of cash acquired		(1,293)	(2,793)
Purchase of property, plant and equipment		(1,549)	(1,394)
Proceeds from sale of property, plant and equipment		43	59
Purchase of investments		(94)	-
Other long term assets		(69)	7
Net cash used in investing activities		(2,962)	(3,715)
Cash flows from financing activities
Proceeds from issue of ordinary shares		65	98
Dividends paid		(5,110)	(4,888)
Purchase of own shares		(916)	(72)
Net cash used in financing activities		(5,961)	(4,862)
(Decrease) / increase in cash and cash equivalents		(1,644)	2,471
Cash and cash equivalents at beginning of the period		27,930	25,194
Foreign exchange differences		(652)	265
Cash and cash equivalents at end of the period		25,634	27,930

Braemar Shipping Services PLC

Audited Consolidated Statement of Changes in Total Equity for the year ended 28 February 2011

	Share capital	Share premium	Shares to be issued	Other reserves	Retained earnings	Total	Non controlling interest	Total equity
Group	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 1 March 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 gains 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
Cash flow hedges
- Transfer to net profit	-	-	-	(488)	-	(488)	-	(488)
- Fair value gains in the period	-	-	-	236	-	236	-	236
Exchange differences	-	-	-	977	-	977	-	977
Net income recognised directly in equity	-	-	-	725	-	725	-	725
Profit for the year	-	-	-	-	9,802	9,802	15	9,817
Total recognised income in the year	-	-	-	725	9,802	10,527	15	10,542
Dividends paid	-	-	-	-	(5,110)	(5,110)	-	(5,110)
Issue of shares	2	63	-	-	-	65	-	65
Purchase of shares	-	-	(916)	-	-	(916)	-	(916)
ESOP shares allocated	-	-	839	-	(839)	-	-	-
Credit in respect of share option schemes	-	-	-	-	829	829	-	829
Deferred tax on items taken to equity	-	-	-	73	208	281	-	281
At 28 February 2011	2,110	11,077	(3,275)	26,323	28,424	64,659	159	64,818

Braemar Shipping Services PLC

Notes to the financial statements   

Note 1 - General Information

The financial information set out above does not constitute the company's statutory accounts for the years ended 28 February 2011 or 2010 but is derived from those accounts. Statutory accounts for 2010 have been delivered to the registrar of companies, and those for 2011 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

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 2011.

Note 3 - Segmental results

	Shipbroking	Technical	Logistics	Environmental	Total
2011	£'000	£'000	£'000	£'000	£'000
Revenue	61,646	22,621	35,119	6,749	126,135
Segment result before amortisation of intangible assets	14,309	1,319	1,230	271	17,129
Amortisation of intangible assets	(586)	(644)	(299)	(36)	(1,565)
Segment result	13,723	675	931	235	15,564
Unallocated other costs					(2,635)
Operating profit					12,929
Finance income/(cost)- net					163
Share of profit from joint ventures					103
Profit before taxation					13,195
Taxation					(3,378)
Profit for the year attributable to shareholders from continuing operations					9,817
2010
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 year attributable to shareholders from continuing operations					9,685

Braemar Shipping Services PLC

Notes to the financial statements   

Note 4 - Dividend

The proposed final dividend of 17.0 pence per share (2010: final 16.25 pence) takes the total dividend for the year to 26.0 pence (2010: 25.0 pence). The cost of the final dividend will be £3.4m (2010: £3.3m) based on 20.3m shares (which excludes shares held in the ESOP for which the dividend has been waived).

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 817,242 ordinary shares held by the employee share trust (2010: 871,760) 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.

		2011	2010
		£'000	£'000
Profit for the year attributable to shareholders		9,802	9,655
		pence	pence
Basic earnings per share		48.41	47.93
Effect of dilutive share options		(0.98)	(0.67)
Diluted earnings per share		47.43	47.26
Profit for the year attributable to shareholders before amortisation		10,901	10,721
		pence	pence
Basic earnings per share		53.84	53.22
Effect of dilutive share options		(1.10)	(0.75)
Diluted earnings per share		52.74	52.47
		Shares	Shares
Weighted average number of ordinary shares		20,248,456	20,143,909
Effect of dilutive share options		419,543	287,780
Diluted weighted average number of ordinary shares		20,667,999	20,431,689

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

	2011	2010
	£'000	£'000
Profit before tax for the year from continuing operations	13,195	13,491
Adjustments for:
- Depreciation	1,202	1,064
- Amortisation	1,565	1,480
- (Profit) / loss on sale of property plant and equipment	(20)	(5)
- Finance income	(177)	(193)
- Finance expense	14	2
- Share of profit of joint ventures	(103)	(400)
- Share based payments	829	591
- Net foreign exchange gains and financial instruments	(714)	686
Changes in working capital:
- Trade and other receivables	(4,395)	1,745
- Trade and other payables	854	(3,417)
- Provisions	30	234
Cash generated from operations	12,280	15,278

 

 

END

 

 

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