Braemar Shipping Regulatory News (BMS)

7 May 2008 07:37

Braemar Shipping Services PLC07 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 ofbroking, consultancy, technical and other services to the shipping and energyindustries, today announced full year unaudited results for the year ended 29February 2008. HIGHLIGHTS •Pre-tax profit up 47% to £14.7m (2007: £10.0m). On an adjusted basis this represents an increase of 34%*. •Basic EPS from continuing operations up 53% to 48.99p (2007: 32.08p). On an adjusted basis this represents an increase of 33%*. •Net cash generated from operating activities £17.0m (2007: £6.6m) •Net cash at 29 February 2008: £21.6m (28 Feb 2007: £14.6m) •Final dividend 15.00p per share (up 22%), full year 23.00p (2007:19.00p) up 21% •Strategy of broadening the business into shipping and energy services is developing well. *Adjusted profits exclude an impairment charge of £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 andbuoyant. The demand for oil and raw materials has continued unabated attractingfurther new investment in shipping." "Our other shipping services businesses have also made good progress, the mostnotable performance coming from our Environmental business, DV Howells. We havecontinued to invest part of our operating cash flows in these businesses." "Market conditions remain favourable for our businesses and the financial yearhas 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 ourservices, all of which bodes well for the new year." For further information, contact: Braemar Shipping Services plcAlan Marsh Tel +44 (0) 20 7535 2650James Kidwell Tel +44 (0) 20 7535 2881 Aquila FinancialPeter Reilly Tel +44 (0) 118 979 4100 Elaborate CommunicationsSean Moloney Tel +44 (0)1296 682356 Charles Stanley SecuritiesPhilip 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 ownersand 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 officesat 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 tothe energy (oil and gas), marine, power and other related industrial sectors. Ithas 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 andoffshore 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 amdelighted to announce another successful year of growth for the Group. Thefinancial highlights are that revenue increased by 37% from £73.8m to £101.0m,profit before tax from continuing operations increased by 47% from £10.0m to£14.7m and earnings per share from continuing operations rose by 53% to 48.99pence from 32.08 pence in 2006/7. A more representative comparison of theGroup's performance is made by adjusting for an exceptional charge of £950,000made last year, in which case adjusted pre-tax profits grew by 34% and earningsper share by 33%. Our staff across the World have performed well and we are grateful for theireffort and commitment which has brought about this success. Shipbroking has thrived in shipping markets which have been both volatile andbuoyant. The demand for oil and raw materials has continued unabated attractingfurther new investment in shipping. In particular this year we have benefitedfrom strong activity and rates in newbuilding, dry bulk and offshore charteringthough all shipbroking sections have performed well. Our forward order book hasgrown again and stands at a record level. Our Environmental division had an outstanding year, largely due to theirinvolvement in the clearance of the stricken container vessel off the southcoast of England, and both Cory Brothers and Wavespec performed well over theyear. We have continued to invest part of our operating cash flows in thesebusinesses. In pursuing this strategy we are creating a broader and more diversegroup which can offer a wider range of services for clients. We have investedsignificantly in our Technical division through the purchase of Falconer Bryanin July 2007 for a cash consideration of £5.9m and Steege Kingston in March 2008for a consideration which is expected to be in the range £8.0 - £8.5m dependenton its financial performance. Falconer Bryan offers a range of engineering andsurveying services from offices across the Far East, and Steege Kingston is aninternational loss-adjuster specialising in the energy market. These businessesoperate in markets that will grow and they also complement our existingoperations to create new opportunities. We have also added to our Logisticsdivision with the acquisition of 80 per cent of Fred. Olsen Freight Limited for£2.0m in December 2007 and the remaining interest in Gorman Cory for £0.9m inMarch 2008. The Directors are recommending for approval at the Annual General Meeting afinal dividend of 15.00 pence per ordinary share, to be paid on 25 July 2008 toshareholders on the register at the close of business on 27 June 2008. Togetherwith the 8.00p interim dividend the Company's dividend for the year is 23.0pence (2007: 19.0 pence), a rise of 21%. The dividend is covered 2.1 times byearnings from continuing operations. Market conditions remain favourable for our businesses and the financial yearhas 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 ourservices, all of which bodes well for the new year. Sir Graham Hearne6 May 2008 CHIEF EXECUTIVE'S REVIEW OF THE BUSINESS Strategy Our strategy has been, and remains, to extend the Group's activities beyond pureshipbroking to cover other shipping related service areas where we can add valuenot only for shareholders but also for our clients. To reflect the growth thathas occurred thus far, and to let clients and others more easily identify withour overall offering, we have reorganised the Group into distinct operatingdivisions: Shipbroking, Technical, Logistics and Environmental. Operations This year our shipbroking business has improved its financial performancesignificantly at a time when the core office, departmental structure and headcount has not fundamentally changed. Some of this can be attributed to higherfreight rates but in many areas we are showing good growth in transactionvolumes which is a testament to the effectiveness of our teams. The newfinancial year has started extremely well - as at 1 March 2008 we had alreadyconcluded shipbroking business totalling in excess of US$53m deliverable overthe course of the year which is some 77% higher than the equivalent position at1 March 2007. Our Technical, Logistics and Environmental businesses have all been busy overthe last year and have raised their international profile considerably due totheir success in handling and winning important business. Each of thesebusinesses possesses specialist skills for which we expect there to be a growingdemand as the world fleet grows and both the appetite for energy and explorationactivity remain high. We have added to our skill base through selectiveacquisitions and organic growth which will bring further opportunities toincrease our presence in these areas. A review of the market and our activities during the year is set out by segmentbelow. Shipbroking - Braemar Seascope Revenues increased by 30% to £52.8m (2007: £40.5m) and operating profits were23% higher at £13.0m (2007: £10.6m). Shipbroking activities are undertaken under the name of Braemar Seascope fromoffices in London, Aberdeen, Shanghai, Beijing, Singapore, Melbourne, Perth, andSarzanna, 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 of4,818 before making steady gains until mid November when it reached its peak of11,039, falling back to 5,615 by the end of January 2008 and finishing thefinancial year at 7,613. It currently stands at 9,581. Volatility was especiallya feature of the Capesize market, which is devoted to the transportation of rawmaterials particularly coal for power and steel, and iron ore for steel and isindicative of a relatively even balance of supply and demand. In suchcircumstances news or rumours of port closures, congestion or stem curtailmentscan cause significant short-term fluctuations. Our dry cargo department finishedthe year with record invoiced revenues, with the overseas offices all makinggood contributions. We have also been active in the period charter market andour forward book has grown substantially. In our next financial year we expectvolatility to continue and, although there will be a considerable number ofadditions to the fleet, we expect the market to remain healthy, underpinned bythe burgeoning demands particularly in China and India. Our deep sea tanker chartering department increased their involvement in boththe number of spot and time charter transactions, resulting in an increase inrevenue over last year. The Baltic Dirty Tanker Index ("BDTI") started thefinancial year at 1,094 and closed at 1,151, averaging 1,122 over the year. Itcurrently stands at 1,701. However, on the 7 December 2007 a large single hullcrude tanker was holed by a barge whilst at anchor off South Korea resulting inmajor pollution affecting the coastal environment. Charterers immediately lookedto secure only double hull tonnage putting pressure on the market. VLCC tankerrates spiked achieving earnings as high as $300,000 per day despite the highbunker prices. These rates filtered down to the Suezmax and Aframax sectors andalthough there was a significant correction in the first quarter of 2008, therates remained higher than at any time in the previous year barring the peak inDecember 2007 when the BDTI reached 2,279. The demand for double hull tonnagehas also accelerated various conversion programs that single hull tanker ownershad been planning for dry bulk or FPSO work. We expect that the balance betweendemand, new crude carriers entering the market and conversions/scrapping tobroadly equate over the coming year. In the smaller tanker sectors the impact of newbuildings entering the marketdepressed rates. However the increase in refining and the subsequentdistribution of products in the coastal markets is expected to result in thevolume of transactions rising significantly over the next year. Volumes in thespecialist chemical markets (including petrochemical gases) have increasedresulting in charterers securing medium term contracts for 12 to 24 months.Newbuilding tonnage delivering to this sector has accommodated the increase inmovements and rates are expected to remain steady. LPG markets remained fairly static over the year with a surplus of large tonnagekeeping the rates at low levels although the main producers are now pricing theproduct for expected increased sales from the end of 2008. LNG markets have alsostayed quiet with a number of delivered LNG carriers waiting for their plannedproject work to commence. These projects had been delayed for technical andcommercial reasons and this has affected the critical supply of LNG. For anumber of these projects, transportation is now expected to commence within twoyears. Once underway the surplus tonnage in both LNG and LPG sectors should bequickly absorbed. The performance of the sale and purchase department improved again with notablesuccess in placing newbuilding orders across a wide variety of high qualityshipyards. Secondhand transaction deal flow was steady and quite evenly balancedbetween tankers and bulk carriers. Transaction values have been strongreflecting the historically high prices achieved in the principal shipcategories. Another major feature was the amount of resale activity, this beingbusiness where we are involved in transacting the onward sale of a newbuildingcontract already placed and for which our commission is generally earned ondelivery of the vessel from the yard. Demolition business is currently a lessactive part of sale and purchase but we expect it to increase in the comingyears in line with the phase-out of single hull tankers, and as we enter the newfinancial year we are seeing more evidence of this. Container charter rates and vessel values remained quite firm over the year andour container desk performed well in both the sale and purchase and charteringmarkets. The arrival of substantial newbuilding tonnage will be a source of newopportunities although charter rates and second hand prices could be lower inthe medium term if demand slows. However continuing globalisation, of which thecontainer market is a corner stone, underpins future prospects. The offshore desk enjoyed a record year of growth and activity driven by thehigh level of oil exploration activity. Supply vessels have been much in demandand day rates rose to historic highs which look likely to be sustained by thehigh price of oil. The increase in earnings has encouraged investment in theindustry and our team were also involved in concluding good sale and purchaseand newbuilding business. Technical - Wavespec, Falconer Bryan and Steege Kingston Revenues increased by 43% to £9.5m (2007: £6.6m) and operating profits were upby 32% at £0.7m (2007: £0.5m). Falconer Bryan contributed revenues of £3.4m andoperating profits before amortisation of £0.5m in the eight months since it wasacquired. The business is headquartered in Singapore and employs 90 full timestaff from seven offices, most of which are based in the Far East. All of itsoffices have been busy throughout the period working on a broad range of marinewarranty surveys, towage approvals and consulting engineering work, and thisactivity shows every sign of continuing in the same vein. We are pleased withthe progress it has made as part of the Group during which a new office inLondon has been established to access the insurance market. Wavespec's revenue and operating contribution was slightly lower mainly due to aweaker dollar, less higher margin project work and an office move to new leasedpremises in Malden. However it has extended its Qatargas business to 2011 andrecently won new business for the design of new coal carrying vessels. Steege Kingston was acquired on 3 March 2008 and has therefore not beenconsolidated in the year we are now reporting on. It provides specialist lossadjusting and other expert services to the energy (oil and gas), marine, powerand other related industrial sectors and is one of the leading internationalplayers in the energy adjusting market, with a particularly strong reputationand presence in the offshore/upstream sector. Its client base covers insuranceunderwriters, insurance brokers as well as the insured parties in the oil andgas 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 December2007 it recorded consolidated revenues of £7.0 million and pre-tax profits of£1.7 million and as at 31 December 2007 gross assets were £7.2 million and netassets were £4.9 million including cash of £0.2 million. The Technical division is now substantially larger as a result of the newbusiness additions. The combination of international offices, client bases andskills will be a powerful business base from which to grow. The division now has170 full time employees plus a further 70 consultant engineers acting assupervisors in shipyards. Logistics - Cory Brothers Revenues increased by 19% to £27.9m (2007: £23.4m) and operating profits were up5% at £1.0m (2007: £0.9m). Revenue growth arose primarily from liner, logisticsand forwarding business driven by sustained strong demand. In excess of 19,500forwarding jobs were handled in the year compared with 13,200 last year.Logistics and one-off projects continue to be the mainstay of sustainable growthand profitability, and we are proud that Cory Logistics' success in this areahas been recognised by the industry with the awards of Lloyd's List FreightForwarder 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 keystrategic addition and a natural fit with Cory Logistics. It provides a range offreight forwarding and liner agency services for a predominantly UK client basecomplementing the services currently offered by Cory Logistics. It has 50employees located mostly in Ipswich and close to the Cory Logistics offices ofFelixstowe. Port agency is maintaining a leading position in an increasingly competitive UKmarket, 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 prestigiousBP hub agency business for the European region. Morrison Tours, a seasonal business linked closely to the cruise industry aroundthe UK has added to its customer base and improved the take-up of the shoreexcursions on offer with improved prospects for the coming year. Environmental - DV Howells DV Howells increased revenues to £10.8m from £3.2m in the previous year andoperating profits grew from £0.2m to £1.8m. Much of the growth was due to thecompany's salvage support and environmental protection for the strickencontainer ship off the South coast of England which had an incremental income ofover £7.9 million in the year. This work resulted in a significant increase inman hours worked on the protection and clean up of the beaches together with thespecialist handling of the recovered containers from the ship. The IndustrialServices section of the company, which handled much of this work, also deployedits specialist tank cleaning technology on a number of oil storage tank farms. The 24/7 Incident Response section continued steadily performing specialistenvironmental clean up including the handling of hazardous substances and spillsfor ports, rail and roads from its nine bases in the UK. It also attended anumber of call outs for the Maritime and Coastguard Agency ("MCA") as part ofthe contract to operate the MCA national counter pollution stockpiles. The company's International and Specialist Services section acted as consultantadvisors in the review of various UK ports' oil spill contingency plans, as wellas assisting the Irish Coastal Authority with their emergency response andincident management plans. The company has grown its international involvement through a variety ofcontracts including specialist consulting assignments for the InternationalMaritime Organisation, UK Ministry of Defence and major oil and shippingcompanies, plus offshore drilling support, spill response and training, inAfrica, Europe and the Far East. Financial Review Income statement Revenue and operating profits grew in all divisions - the segmental results areshown in note 3 in this statement. Gross margins (calculated after chargingcosts that are directly related to revenue) were stable at 72% and operatingmargins 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 tablebelow. 2007/8 2006/7 % £000 £000Adjusted profits from continuing operations beforeimpairment charge and tax +34% 14,718 10,964Impairment of Braemar Seascope Pty goodwill - (950) -------- ------Reported profit before tax from continuing operations +47% 14,718 10,014 -------- ------ Pence PenceEPS from continuing operations (pre impairment charge) +33% 48.99 36.90Impairment 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 thefinancial year, after taking account of hedging, was $1.99/£ (2007: $1.86/£) andat 29 February 2008 the balance sheet rate for conversion was $1.99/£ (28February 2007: $1.97/£). If the 2007/8 shipbroking income had been translated atthe 2006/7 average exchange rate, it would have been higher by approximately£3.7 million. Discontinued operations In September 2007 the bunker trading operations based in Australia ceased andthe historic net result of this activity is now shown on a single discontinuedoperations line in the income statement. Taxation The tax rate on reported profit before tax was 32.6% (2007: 35.8%). Theunderlying rate, excluding the share of net profits from joint ventures and theeffect of the impairment charge, was 33.4% (2007: 33.3%). Next year the tax ratewill 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 £7.0m to £21.6m (2007: £14.6m). TheGroup generated operating cash flows (after tax) of £17.0m up from £6.5m in theprior year mainly due to the increase in operating profits and an improvement inworking capital management. Out of this, £1.0m was spent on fixed assets, £4.3mon acquisitions and £4.1m for dividend payments. Cash expended on acquiring businesses was £7.4m, offset by £3.1m of cash in theacquired balance sheets, in respect of Falconer Bryan (£5.9m), Fred. OlsenFreight Limited (£1.3m) and deferred consideration (£0.2m). Subsequent to theyear end the Group paid £4.2m in respect of the purchase of Steege Kingston and£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 staffwhose hard work and commitment which has contributed to our performance thisyear, and with such dedicated colleagues I am confident for the continuingsuccess of the Group. Alan Marsh6 May 2008 Braemar Shipping Services PLCUnaudited Consolidated Income statement for the year ended 29 February 2008 Year ended Year ended 29 Feb 2008 28 Feb 2007Continuing operations Notes £'000 £'000 Revenue 3 100,964 73,831Cost of sales (28,267) (20,658) ---------- ---------- 72,697 53,173 Operating costs (58,729) (43,685) ---------- ----------Impairment of goodwill - (950)Operating costs excluding impairment ofgoodwill (58,729) (42,735) ---------- ---------- ---------- ----------Operating profit 3 13,968 9,488 Finance income 391 335Finance costs (11) (16)Share of profit from joint ventures' andassociates 370 207 ---------- ----------Profit before taxation - continuing operations 14,718 10,014Taxation (4,797) (3,585) ---------- ----------Profit for the year - continuing operations 9,921 6,429 Profit / (loss) for the period fromdiscontinued operations (3) 43 ---------- ----------Profit for the year 9,918 6,472 ---------- ---------- Attributable to:Ordinary shareholders 9,772 6,367Minority interest 146 105 ---------- ----------Profit for the year 9,918 6,472 ---------- ---------- Earnings per ordinary share 5Basic - continuing operations 48.99 p 32.08 pDiluted - continuing operations 48.69 p 31.65 p Basic - profit for the year 48.97 p 32.29 pDiluted - 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 07Assets £'000 £'000Non current assetsGoodwill 25,826 22,606Other intangible assets 2,315 1,582Property, plant and equipment 5,820 5,478Investments 1,890 1,538Deferred tax assets 754 642Other receivables 155 81 -------- -------- 36,760 31,927Current assetsInventories 91 70Trade and other receivables 26,784 21,750Derivative financial instruments 107 27Restricted cash 3,952 -Cash and cash equivalents 21,635 14,634 -------- -------- 52,569 36,481 -------- --------Total assets 89,329 68,408 -------- -------- LiabilitiesCurrent liabilitiesDerivative financial instruments 49 -Trade and other payables 39,540 29,011Current tax payable 3,017 2,402Provisions 48 294Client monies held as escrow agent 3,952 - -------- -------- 46,606 31,707 Non-current liabilitiesDeferred tax liabilities 681 283Trade 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 -------- -------- EquityShare capital 2,061 2,023Share premium 9,261 8,554Shares to be issued (2,527) (1,047)Other reserves 20,687 21,020Retained earnings 11,717 5,390 -------- --------Group shareholders' equity 41,199 35,940Minority 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 £'000 £'000Cash flows from operating activitiesCash generated from operations 6 21,158 9,668Interest received 391 335Interest paid (11) (16)Tax paid (4,587) (3,413) ------- -------Net cash generated from operating activities 16,951 6,574 ------- ------- Cash flows from investing activitiesDividends received from joint ventures - 263Acquisition 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 25Purchase 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 activitiesProceeds from issue of ordinary shares 745 569Dividends 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 1,154Cash and cash equivalents at beginning of theperiod 14,634 13,567Foreign exchange differences 138 (87) ------- -------Cash and cash equivalents at end of the period 21,635 14,634 ------- ------- Balance sheet analysis of cash and cash equivalentsCash and cash equivalents 21,635 14,634Short 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 ended29 February 2008 Share capital Share premium Shares to be Other reserves Retained Total Minority Total equity issued earnings interest £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 ------ ------ ------ ------ ------ ------ ------ ------GroupAs at 1 March2006 1,988 8,046 (997) 21,789 2,031 32,857 - 32,857Cash flowhedges- Transfer to net profit - - - 40 - 40 - 40 - Fair valuelosses in the period - - - 17 - 17 - 17Exchangedifferences - - - (70) - (70) - (70) ------ ------ ------ ------ ------ ------ ------ ------Net incomerecogniseddirectly inequity - - - (13) - (13) - (13)Profit forthe - - - - 6,367 6,367 105 6,472year ------ ------ ------ ------ ------ ------ ------ ------Totalrecognisedincome in theyear - - - (13) 6,367 6,354 105 6,459 ------ ------ ------ ------ ------ ------ ------ ------Acquisition - - - - - 304 304Dividends - - - (3,595) (3,595) (100) (3,695)paidIssue of 35 508 - - - 543 - 543sharesPurchase ofshares - - (50) - - (50) - (50)Considerationto be paid - - - (738) - (738) - (738)Credit inrespect ofshare optionschemes - - - - 309 309 - 309Deferred taxon itemstaken - - - (18) 278 260 - 260to equityTransfer to - - - - - - - -retained ------ ------ ------ ------ ------ ------ ------ ------profitrelating toexercisedshare optionsBalance at 28February 2007 2,023 8,554 (1,047) 21,020 5,390 35,940 309 36,249Cash flowhedges- Transfer to net profit - - - (16) - (16) - (16) - Fair valuelosses in the period - - - 107 - 107 - 107Exchangedifferences - - - 383 - 383 - 383 ------ ------ ------ ------ ------ ------ ------ ------Net incomerecogniseddirectly inequity - - - 474 - 474 - 474Profit forthe - - - - 9,772 9,772 146 9,918year ------ ------ ------ ------ ------ ------ ------ ------Totalrecognisedincome in theyear - - - 474 9,772 10,246 146 10,392 ------ ------ ------ ------ ------ ------ ------ ------Acquisition - - - - - 16 16Dividends - - - (4,053) (4,053) (143) (4,196)paidIssue of 38 707 - - - 745 - 745sharesPurchase ofshares - - (1,480) - - (1,480) - (1,480)Considerationto be paid - - - (782) - (782) - (782)Credit inrespect ofshare optionschemes - - - - 554 554 - 554Deferred taxon itemstaken - - - (25) 54 29 - 29to equityTransfer to - - - - - - - -retained ------ ------ ------ ------ ------ ------ ------ ------profitrelating toexercisedshare optionsBalance at 29February 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 February2008 is an extract from the forthcoming 2008 Annual Report and Accounts and doesnot constitute the Group's statutory accounts of 2008 nor 2007. Statutoryaccounts for 2007 have been delivered to the Registrar of Companies, and thosefor 2008 will be delivered following the company's Annual General Meeting. Theauditors have reported on the 2007 accounts; their report was unqualified anddid not contain statements under Sections 237(2) or (3) of the Companies Act1985. Note 2 - Accounting policies Whilst the financial information included in this preliminary announcement hasbeen prepared in accordance with International Financial Reporting Standards(IFRSs) adopted for use in the European Union, this announcement does not itselfcontain sufficient information to comply with IFRSs. The company expects todistribute full accounts that comply with IFRSs on 23 May 2008. Note 3 - Segmental results Revenue Profit for the period 2008 2007 2008 2007 £'000 £'000 £'000 £'000Shipbroking 52,794 40,530 12,993 10,593Logistics 27,874 23,449 953 911Technical services 9,467 6,623 728 553Environmental services 10,829 3,229 1,836 225 -------- -------- -------- --------Segment revenue/ operatingprofit from continuingoperations excluding 100,964 73,831 16,510 12,282impairmentImpairment - Shipbroking - - - (950) -------- -------- -------- --------Segment revenue/operatingprofit 100,964 73,831 16,510 11,332after impairment -------- --------Unallocated other costs (2,542) (1,844)Finance income (cost)- net 380 319Share of profit from jointventures' and associates 370 207 -------- --------Profit before taxation 14,718 10,014Taxation (4,797) (3,585) -------- --------Profit for the periodattributable to shareholdersfrom 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). Thecost of the final dividend will be £3.0m (2007: £2.4m) based on 20.2m shares(which excludes shares held in the ESOP for which the dividend has been waivedand includes shares issued for Steege Kingston - see note 7) and will be chargedto 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 toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the year, excluding 685,014 ordinary shares held by theemployee share trust (2007:331,495) which are treated as cancelled. For dilutedearnings per share, the weighted average number of ordinary shares in issue isadjusted to assume conversion of all dilutive ordinary shares. The Group has oneclass of potential dilutive ordinary shares being those granted to employeeswhere the exercise price is less than the average market price of the Company'sordinary shares during the year. 2008 2008 2008 2007 2007 2007Continuing operations Earnings £'000s Weighted Per share Earnings £'000s Weighted Per share average number amount pence average number amount pence of shares of sharesAdjustedearnings pershare 9,775 19,953,231 48.99 7,274 19,715,846 36.90Impairment ofgoodwill - - - (950) - (4.82) ------ -------- ------ ------ -------- ------Profit for theperiodattributabletoshareholders 9,775 19,953,231 48.99 6,324 19,715,846 32.08Effect ofdilutive shareoptions - 122,061 (0.30) - 264,693 (0.43) ------ -------- ------ ------ -------- ------Fully dilutedearnings pershare 9,775 20,075,292 48.69 6,324 19,980,539 31.65 ------ -------- ------ ------ -------- ------ Total operationsProfit for theperiodattributabletoshareholders 9,772 19,953,231 48.97 6,367 19,715,846 32.29Effect ofdilutive shareoptions - 122,061 (0.29) - 264,693 (0.42) ------ -------- ------ ------ -------- ------Fully dilutedearnings pershare 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 operatingactivities 2008 2007 £'000 £'000Profit before tax for the year from continuingoperations 14,718 10,014Profit before tax for the year from discontinuedoperations (3) 62Adjustments 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 309Changes 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 KingstonPartnership Limited. The initial consideration was £5.5 million satisfied bycash from existing resources of £4.2 million and the issue of 306,513 newordinary shares in Braemar Shipping Services plc. Further consideration is duebased on a multiple of the earnings before interest and tax in each of the twoyears post completion and these amounts will be settled wholly in cash. Totalconsideration is expected to be in the range £8.0 million - £8.5 million and themaximum consideration payable is capped at £12.0 million. This information is provided by RNS The company news service from the London Stock Exchange