Braemar Shipping Regulatory News (BMS)

BRAEMAR SHIPPING SERVICES PLC

8 May 2012

Preliminary results for the year ended 29 February 2012

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 29 February 2012.

·; Revenue £133.5m (2011: £126.1m)

·; Pre-tax profit £9.8m (2011: £13.2m)

·; Basic EPS of 33.84p (2011: 48.41p)

·; Cash at 29 February 2012: £17.5m (28 Feb 2011: £25.6m)

·; Maintained final dividend 17.0p per share, full year 26.0p (2011: 26.0p), covered 1.5 times by earnings before acquisition amortisation and non-recurring items

·; Revenues from the Technical, Logistics and Environmental divisions increased by £19.2m to £83.7m and now represent 63% of total Group revenues (2011: 51%)

OPERATIONAL HIGHLIGHTS

·; Increase in shipbroking chartering transactions and robust sale and purchase performance in a challenging market

·; Expansion of Braemar Technical Services with the purchase of Casbarian Engineering in addition to The Salvage Association

·; Significant role played by the Environmental division in handling the containers from the stricken RENA in New Zealand

·; Growing contribution from Technical, Logistics and Environmental divisions, supporting the strategy of diversification

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

"This has been a challenging year for shipping with a significant surplus of tonnage in many sectors. While activity remained strong, chartering rates and vessel values suffered and shipbroking income fell as a result. However, the Technical, Logistics and Environmental divisions all performed well.

Braemar is well-equipped to trade in the competitive and challenging markets in which the Group operates."

ENDS

For further information, contact:

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. The business operates under the brand name Braemar Technical Services and the activities of the division are as follows:

- Braemar Adjusting 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 Rio de Janeiro.

- Braemar Offshore provides specialised marine and offshore services mainly performing pre-risk marine warranty surveys. It has offices in the UK, Australia, China, India, Indonesia, Malaysia, Singapore and Vietnam.

- Braemar incorporating The Salvage Association ("Braemar SA") provides marine consultancy and surveying services to the shipping, energy, offshore and insurance industries. The Salvage Association was acquired on 9 May 2011 and it has a network of offices in Asia, Europe and the US that undertake marine damage surveys for the insurance industry.

- Braemar Engineering provides consultant marine engineering and naval architecture services to the shipping and offshore markets from offices throughout the Far East and London. Braemar Engineering was expanded with the acquisition of Braemar Casbarian in July 2011 which provides consulting engineering services mainly to the offshore industry in the Gulf of Mexico from offices in New Orleans, Houston and Trinidad.

www.braemar.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. It has earned an international reputation for its work for the insurance industry in handling the containers from stricken vessels - the MSC Napoli in 2007 and the RENA which is on-going in New Zealand.

www.braemarhowells.com

PRELIMINARY ANNOUNCEMENT - YEAR ENDED 29 FEBRUARY 2012

CHAIRMAN'S STATEMENT

Overview

This has been a challenging year for shipping with a significant surplus of tonnage in many sectors. While shipbroking activity remained strong, charter rates and vessel values suffered and income fell as a result. However, the Technical, Logistics and Environmental divisions all performed well and offset some of the reduction. Their success was largely the result of the more positive oil and gas services market, increased levels of activity and the Group's on-going response work in support of the stricken container ship RENA in New Zealand. The growing contribution from these divisions is an important factor in the development and growth of the Group.

Results

Group revenues grew 6% to £133.5 million; pre-tax profits before amortisation of acquisition related intangibles and non-recurring items were £11.2 million compared with £14.8 million in 2010/11 and pre-tax profits were £9.8 million compared with £13.2 million in 2010/11. Basic earnings per share (EPS) were 33.84p (2011: 48.41p) and EPS excluding amortisation of acquisition related intangibles and non-recurring items were 39.05p (2011: 53.84p).

Acquisitions

We continue to make progress with our strategy of diversifying our marine interests into areas which are less geared to the shipping market cycle. In May 2011 we acquired the business and certain assets of BMT Marine and Offshore Surveys Limited from the administrator for £2.4 million in cash. The business trades under the name Braemar incorporating The Salvage Association, providing hull and machinery, protection & indemnity (P&I) and marine warranty survey services around the globe.

In July we acquired the business and certain assets of Casbarian Engineering which provides specialist engineering services primarily to the offshore industry in the Gulf of Mexico. Both of these businesses have been integrated within the Technical division.

Dividend

The Directors are recommending for approval, at the Annual General Meeting on 20 June 2012, an unchanged final dividend of 17 pence per ordinary share, to be paid on 25 July 2012 to shareholders on the register at the close of business on 22 June 2012. Together with the 9 pence interim dividend, the Company's dividend for the year will be 26 pence (2011: 26 pence). The dividend is covered 1.5 times by earnings before amortisation of acquisition related intangibles and non-recurring items.

Outlook

The shipping markets are likely to feel the effects of the tonnage surplus for a few years to come. The principal forces working to re-balance the fleet are the continuing growth in demand from Asia for energy and raw materials and the scrapping of older ships. However, the pace of correction is difficult to assess because of the uncertain macroeconomic picture. In this environment shipbroking activity is likely to remain high but with continuing pressure on margins.

The Technical division should benefit from the more active oil and gas industry and a full year's contribution from acquired businesses.

After a strong performance last year, the Logistics division has begun the new year in the same vein and the prospects for the coming year are good.

The Environmental division expects to commit a similar level of resource to the RENA for most of the coming year although the commitment in the second half may reduce as the project nears completion. Braemar Howells' pre-eminence in this type of work has established them as a leader in this field.

Braemar is well-equipped to trade in the competitive and challenging markets in which the Group operates. The skills, experience and commitment of the Group's staff around the world deserves much praise and I offer them my thanks on behalf of the Board.

Sir Graham Hearne

4 May 2012 CHIEF EXECUTIVE'S REVIEW OF THE BUSINESS

Overview

Our strategy is to grow our international shipbroking and marine and energy services businesses. We advise and execute transactions for the principals who operate in these markets. We have built a group that derives its income from a mixture of transaction-related commission and time-based or project-based fee income. Our staff of nearly 1,000, possess a unique blend of complementary skills in shipbroking, marine engineering and surveying, energy loss adjusting, ship agency and logistics and environmental response. We have representation in all of the main geographies and shipping cities.

Shipping facilitates world trade and is greatly influenced by the demand for bulk commodities (particularly iron ore, coal and grain), energy (oil, gas, refined products and exploration) and exported consumer products via container. Each is subject to its own market forces but there are a number of common features which affect shipping which include:

·; Fleet growth and current imbalance

·; The dominating influence of Asia in most aspects of shipping

·; A significant reduction in most vessel values in the past few years

·; A shortage of available bank finance

In anticipation of the growth in the fleet much of our recent investment has been in marine surveying and engineering and similar support services which stand to benefit from a greater requirement for their skills. We have also been building our presence in Asia to ensure we participate fully in the region. The rapid emergence of the "southern silk route" of trade between Africa, South America and Asia will be an important factor in the future development of the Group.

Our estimate of the shipbroking forward order book (which includes newbuildings yet to be delivered and period charters) deliverable over the course of the financial year 2012/13 stands at £19 million (US$30 million), compared with £25 million (US$39 million) at 1 March 2011. Newbuilding business has been scarce and we have seen a noticeable shift away from long-term period business in favour of spot business, where numbers of transactions are continuing to increase. This is unsurprising when there is little incentive for owners to commit their ships at an unattractive return.

Divisional review

Key divisional statistics

Divisional operating profit is defined as operating profit before amortisation of acquisition related intangibles, non-recurring items and central costs and is referred to consistently throughout the divisional reviews.

1. Shipbroking - Braemar Seascope

Shipbroking revenues were £49.8 million compared to £61.6 million in the previous year and divisional operating profits were £7.1 million compared to £14.3 million last year. The fall in the divisional operating profit margin reflects market weakness and a lower order book.

Dry bulk

On 1 March 2011 the Baltic Dry Index stood at 1,251 and by the end of our financial year (29 February 2012) it had fallen to 750 although it reached a high of 2,173 on 14 October 2011 and a low of 647 on 3 February 2012. The average for that period was 1,476 and on 4 May 2012 it stood at 1,157.

The growth in the dry bulk fleet is dominating the market and the sustained over supply is likely to continue. While 2011 was a record year for bulker scrapping, with around 25 million dwt removed from the fleet, new deliveries were in the region of 95 million dwt representing a net addition to the fleet of 13%. The Cape market was very weak at the beginning and end of the year but saw a noticeable recovery during the second half as Chinese buyers took advantage of lower iron ore prices to enhance their inventories. While most volatility has been in the Cape market, smaller ships showed more resilience throughout the year often achieving higher daily rates than Capes. Our offices in India and the Far East performed well in this challenging market, with most growing their level of business involvement.

Deep Sea tankers

For the majority of the year tanker rates remained low, giving returns to owners at below break-even and at times even below daily operating costs. Oil prices remain high and as a consequence the price of fuel oil for a vessel's bunkers has also been at an historically high price, pushing up owners' operating costs. In a low chartering market owners need to manage their assets carefully which they have done by strategic slow steaming in ballast to improve returns. Although both crude and products are being moved in increasing volumes, the influx of new tonnage continues to stifle any improvement in rates which affects our commission. In the past financial year we have been able to maintain our crude fixture volumes with all of our key clients as well as adding lucrative business with some substantial newcomers to both the Western and Eastern markets. In the product chartering markets we have also performed better than the previous year especially with new Asian clients and we are confident that we will remain as active for the coming year.

As anticipated we have concluded further time charters in the latter stages of the year with more owners looking at managing their returns, as well as charterers looking to take advantage of low rates for their refinery transportation programs. Oil traders are also beginning to look for advantageous freight and we hope to be able to report on more activity in this segment during the year.

We closed our unprofitable tanker freight futures desk during the year. While the sector remains of long-term interest to us, it is hard to see there being significant returns in today's freight market.

Specialised tankers

In the specialised tanker sectors we have extended existing contracts, added further contracts of affreightment and gained significant new chartering accounts. LNG shipping became more significant last year as previously delayed projects finally absorbed the spot tonnage leaving a sudden tonnage shortage and a subsequent freight spike. This led to a run of ordering of new tonnage hoping to benefit from the anticipated lucrative charters in order to meet the expected increase in requirements. We now have LNG tonnage on period charter and are working with exclusive charterers both in the West and in the East to secure tonnage for their transportation requirements as well as being appointed to act for new owners in this field.

Our LPG physical product broking division has been active in increasing its client base into new areas and together with our existing clients has shown an improvement over the year.

Offshore

The North Sea 2011/12 winter market for offshore vessels was much stronger than the previous three years with higher vessel demand and utilisation. This continued into the 2012 Spring and our team concluded a number of term chartering contracts as well as some excellent project business. The high oil price has led to increased exploration activity especially in the North Sea with owners seeing better utilisation and vessel returns. Success has also been forthcoming in the Offshore Renewables sector which is expected to be a growing source of income. The Offshore Singapore team is increasing both its market presence and share in a very active area for Exploration & Production. Overall, the outlook for the offshore market is positive and we expect our team to continue making a significant contribution.

Containers

The container market suffered from excess supply in 2011/12 and a market share battle ensued during which freight rates and charter rates have fallen. This was brought about by the recovery in 2010/11 which encouraged some Lines to invest further and extend their commitments. There has been some recent respite for the Lines as they have increased freight rates. Sale and purchase activity has remained tight, with only older and less competitive vessels being sold as owners prepare to receive their newbuildings. Despite the market conditions the Container desk worked hard to book a healthy level of business last year.

Sale and Purchase

The second-hand sale and purchase market for bulk carriers and tankers was less active this year. Serious buyers and sellers were often apart on price, partly because there were fewer market transactions to benchmark against. The limited availability of bank finance has also been a constraint for some owners. Over the year vessel values have dropped quite considerably in many sectors and at these lower levels the market will interest some owners who hope to benefit from a cyclical upturn in the market. Despite this our transaction numbers remained robust.

Not surprisingly the demolition market has been extremely active and we have played a significant role in bringing older tonnage to the recycling yards, especially large tankers and bulk carriers. Based on age profiles in most sectors, the high price of steel and an increasing propensity to scrap younger vessels, we expect this market to remain active in the coming year and to be a significant part of sale and purchase business.

Newbuilding orders have been limited in the past few years and yard order books have shortened. Our newbuilding deliveries have mostly taken place as expected but there has been a market-related decline in replacement business in our forward order book.

2. Technical - Braemar Technical Services

During the year the process of bringing the Technical businesses closer together operationally continued. To complement our existing businesses and to expand our service offering, the Group acquired the businesses and certain assets of BMT (incorporating The Salvage Association) on 9 May 2011 (now trading as Braemar incorporating the Salvage Association - "Braemar SA") and Casbarian Engineering Associates Inc on 1 July 2011, which now trades as Braemar Casbarian. Braemar Casbarian was acquired for US$75,000 plus a two-year profit related earn-out which we expect will be approximately £0.4 million.

We also completed a rebranding to emphasise the core service lines within the division, which now trade as Braemar Offshore, Braemar Adjusting, Braemar Engineering, Braemar SA and Braemar Casbarian. From this platform we are now able to provide technical solutions worldwide, which is a good basis from which to deepen and strengthen relationships with existing multinational clients.

Revenue in the Technical division was £32.0 million in 2011-12 compared to £22.6 million last year. This included £10.5 million in respect of acquisitions from the dates of purchase. Divisional operating profits were £1.8 million, inclusive of a net contribution of £0.3 million from acquired businesses, compared to £1.3 million last year.

Braemar Offshore enjoyed a higher level of activity and grew its revenue by 8% compared with last year. Its offices in the Far East have performed well and the increased demand for energy together with the sustained high oil prices have led to more marine warranty survey contracts from the oil majors. We are optimistic for the coming year based on the on-going offshore oil and gas projects and those we are aware of in the pipeline.

Braemar Adjusting specialises in the low-frequency high value energy and marine claims market. In February 2012 the Group sold the non-traditional adjusting assets in Mexico, Venezuela and Ecuador to a management lead team. The core energy and marine business in these locations has been retained and is now run from our Houston office. Despite the continued low industry activity, the Houston and Calgary offices have performed well, partly as a result of business gained in the oil sands and power generation sectors. Singapore maintains its position as a dominant market leader in the Asia Pacific region despite increased competition. We are also continuing our development plans in Brazil and the Middle East which are areas we expect to see growth in demand for adjusting.

Braemar SA's principal activities include the provision of hull & machinery damage surveys, marine warranty surveys, loss prevention services and expert marine consultancy on behalf of underwriters, owners, P&I Clubs and marine lawyers. Originally established in 1856 The Salvage Association remains an internationally recognised name within the marine insurance and shipping industries. Braemar SA operates from a global network of offices strategically located in the main shipping centres around the world. It has performed in line with our expectations and new instructions in the period have exceeded those experienced over the same period in prior years. It also benefitted from working jointly with the Environmental division.

Braemar Engineering's main area of expertise - design, plan approval and site supervision for LNG newbuildings - has been in limited demand over the past couple of years partly because existing LNG carrier owners are not always open to input from independent consultancies. However, towards the end of the financial year Braemar Engineering was appointed for plan approval and site supervision work on several new LNG projects which should see improved results in 2012-13.

Braemar Casbarian has a team of highly-skilled engineers who provide original design, modification, and engineering compliance, certification and verification services to the offshore industry. It operates primarily in the Gulf of Mexico from offices in New Orleans, Houston and Trinidad. At the time of purchase project work was low but the offshore oil and gas industry was beginning to see the resumption in activity following the United States government actions to restrict offshore activity in the aftermath of Macondo. Since then new compliance verification regulations have brought about a pick-up in assignments. In addition, the company has recently become involved with work involving the decommissioning and removal of inactive platforms for which the regulations have been revised and accelerated. We expect to see a flow of similar work for several years to come.

3. Logistics - Cory Brothers

The Logistics division reported an increase in revenue of 7% to £37.6 million and divisional operating profit increased to £1.9 million from £1.2 million, a rise of 53%.

The forwarding and logistics arm was responsible for the majority of this revenue growth, particularly from an increase in forwarding and turnkey project logistics. One large project we handled was the transfer of a redundant Sheffield Steel Mill to India which involved 180 container loads and over 10,000 tonnes of break bulk cargo. To tackle the task, Cory Logistics put together a dedicated team of transport and freight staff to oversee movement of components which were 12 metres in length, 5 metres wide and weighing more than 30 tonnes. Prospects for the new financial year continue to be promising in Logistics especially with certain key customers consolidating their forwarding requirements with Cory.

Port Agency maintained its steady progress in a competitive and somewhat depressed UK market. The operation handled approximately 8,500 port calls during the year, compared with a similar number the year before. Although ship-to-ship transfer operations were lower than the previous year, this was compensated for by strong performances in the majority of port offices. The Singapore office also performed well, with the recent high levels of shipping activity in the region expected to continue next year. This year our cruise ship agency business on the river Thames stands to benefit from the London Olympics.

We are proud that this year is the 170th anniversary of Cory Brothers original founding in South Wales where it handled the export of coal by sea.

4. Environmental - Braemar Howells

The Environmental division more than doubled its revenue to £14.5 million resulting in a divisional operating profit of £1.9 million (2010-11: £0.3 million). Their incident response skills and environmental resources were utilised to their full extent in the call out to attend the RENA grounded off the North Island of New Zealand in October 2011. The company is involved in the location and recovery of all of the 1,368 containers on board and, once ashore, the safe handling of the good cargo and disposal of the distressed cargo and damaged containers. To date approximately 769 containers have been recovered with a further 599 still to be brought ashore, and of these 201 remain in the forward end of the wreck, such that the work there is unlikely to finish before October 2012. Our work on the project demonstrates the Group's capability to offer a 24/7 global problem solving service drawing on the wider skills within the Group, particularly from Braemar Technical Services.

The Company's routine incident response, industrial services, rail trackside work, accredited training and environmental consulting work remain the underlying foundations of the Company. However, the development of overseas activities in the past two years is proving to be successful. The West and Central African operations are steadily increasing and we have also undertaken work in Indonesia which has opened up a new market. In addition we have begun work for a UK based multinational in the treatment and recycling of their oily waste water which has brought in a new revenue stream.

Colleagues

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

Alan Marsh

4 May 2012

Financial Review

Overview

The Technical, Logistics and Environmental divisions each grew significantly, partly offsetting shipbroking which represented 56% (2010-11: 84%) of the divisional operating profit. Market weakness and a lower order book caused average commissions and shipbroking returns to fall in 2011-12. Operating returns in both Logistics and Environmental benefitted from the extra revenue generated by their expanded customer bases and from longer term project work. Technical revenues grew with the aid of the acquisitions of Braemar SA and Braemar Casbarian although margins were constrained mostly by low activity in the Gulf of Mexico. Corporate costs have been reduced by £0.7m due to lower board remuneration.

Foreign exchange

Over the year the US dollar exchange rate relative to sterling was comparatively benign and the average rate of exchange for US dollar-denominated shipbroking earnings was $1.60/£ (2011: $1.57/£). At 29 February 2012 the balance sheet rate for conversion was $1.60/£ (28 February 2011: $1.63/£) and the Group held forward currency contracts to sell $6.0 million at an average rate of $1.55/£ and variable forward window agreements to sell US$1.0 million per month with upper and lower limits of $1.531 - $1.70 between March 2012 and February 2013 and to sell US$1.0 million at limits of $1.511 - $1.60 between March 2012 and August 2012.

Non-recurring items

The Group recognised the following non-recurring items during the year:

- a gain of £0.9 million representing the amount by which the fair value of the assets acquired with the Braemar SA business were over the purchase price net of the costs of purchase.

- acquisition costs associated with the purchase of Braemar Casbarian of £0.1 million.

- a net loss on sale of £0.3 million (including the write off of £0.1 million of goodwill) in respect of the disposal of the Mexican office of Braemar Adjusting.

- the cost of closure of Braemar Futures totalling £0.4 million.

Taxation

The effective rate of tax for the Group was 29.5% (2011: 25.6%). The increase in the rate is mainly due to a higher proportion of non-deductible expenditure in shipbroking. The provision for deferred tax is calculated using the reduced UK corporation tax rate of 25%. The further reductions from 25% to 24% together with the two further annual 1% cuts to 22% by April 2014that were announced on 23 March 2012are expected to reduce the rate in future years.

Cash flow

At 29 February 2012 the Group had cash of £17.5 million and no debt (28 February 2011: £25.6 million). Working capital levels have been quite varied across the Group and through the year. Receivables in shipbroking have generally reduced in line with revenue. The Technical division debtors have increased mainly due to the effect of the acquired businesses with underlying receivables marginally down. Both the Logistics and Environmental divisions have managed working capital well with a large rise in the year end debtor position commensurate with the increase in work on the RENA.

Cash expenditure on acquisitions of £3.1 million during the year comprised £2.6 million for Braemar SA (including costs) and £0.5 million of deferred consideration from prior purchases. Capital expenditure of £1.0 million was mainly the cyclic replacement of IT and office equipment and £1.2 million was spent on purchasing the company's own shares for use with employee share schemes.

James Kidwell

4 May 2012

Braemar Shipping Services PLC

Audited Consolidated Income statement for the year ended 29 February 2012

Audited Consolidated Statement of comprehensive income

Braemar Shipping Services PLC

Audited Consolidated Balance sheet as at 29 February 2012

Braemar Shipping Services PLC

Audited Consolidated Cash flow statement for the year ended 29 February 2012

Braemar Shipping Services PLC

Audited Consolidated Statement of Changes in Total Equity for the year ended 29 February 2012

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 29 February 2012 or 28 February 2011 but is derived from those accounts. Statutory accounts for 2011 have been delivered to the registrar of companies, and those for 2012 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 2012.

Braemar Shipping Services PLC

Notes to the financial statements

Note 4 - Non-recurring income and expenses

During the year ended 29 February 2012, the Group incurred the following non-recurring income and expenses resulting in a total of £69,000 credited to the income statement.

a) Acquisition of BMT Marine and Offshore Services Limited ("BMTMOS")

In May 2011, the Group acquired certain trade and assets BMTMOS. The acquisition of this business resulted in a non-recurring gain after accounting for acquisition costs of £856,000 (see note 8).

b) Braemar Futures Limited

After the end of the first half of the year, the unprofitable freight futures broking desk was closed. The cost of closing down the business this year was £354,000 before tax.

c) Braemar Steege de Mexico

On 16 February 2012, the Group disposed of the subsidiary undertaking, Braemar Steege de Mexico. The loss falling in this year in connection with the disposal was £325,000 before tax.

d) Braemar Casbarian Inc

Transaction costs of £108,000 associated with the acquisition of the business and certain assets of Braemar Casbarian were incurred.

Note 5 - Dividend

The proposed final dividend of 17.0 pence per share (2011: final 17.0 pence) takes the total dividend for the year to 26.0 pence (2011: 26.0 pence). The cost of the final dividend will be £3.5m (2011: £3.4m) based on 20.7m shares (which excludes shares held in the ESOP for which the dividend has been waived).

Note 6 - 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 877,709 ordinary shares held by the employee share trust (2011: 817,242) 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.

Braemar Shipping Services PLC

Notes to the financial statements

Note 7 - Reconciliation of operating profit to net cash flow from operating activities

Note 8 - Acquisitions

On 9 May 2011 the Group acquired the business and certain assets of BMT Marine and Offshore Surveys Limited ('BMTMOS') from the Administrator, Deloitte for a cash consideration of £2.4 million.

The fair value of the assets acquired was:

The acquired business contributed revenues of £8.5 million and a profit before amortisation of other intangibles and non-recurring items of £0.5 million to the group for the period from acquisition to 29 February 2012.

On 15 July 2011, the Group acquired the business and certain assets of Casbarian Engineering Associates Inc for US$75,000 (£47,000) which was paid on completion and an earn-out. The earn-out will be assessed on a multiple of the earnings before interest and tax in each of the two years post completion and is capped at US$3.5 million. Management has assessed that the fair value of the net assets acquired was £206,000 and has estimated the deferred consideration payable at £400,000 which is expected to be paid in the year ended 28 February 2014. The acquired business contributed revenues of £2.0 million and a loss before amortisation of other intangibles and non-recurring items of £0.2 million to the group for the period from acquisition to 29 February 2012.

Final stage payments were made during the year in respect of the acquisitions of LPG Connect (£42,000) and Sealion Shipping (S) Pte Limited (£115,000) together with a further stage payment made in respect Cagnoil Limited (£47,000).