Braemar Shipping Regulatory News (BMS)

28 Oct 2008 07:00

BRAEMAR SHIPPING SERVICES PLC

("Braemar" or "the Group")

Interim results for the six months ended 31 August, 2008

28 October, 2008

Braemar Shipping Services plc (the "Group"), an international provider of shipping and marine services, today announces unaudited half-year results for the six months ended 31 August, 2008. 

FINANCIAL HIGHLIGHTS

Revenue from continuing operations £69.1m (2007: £46.7m), a rise of 48% (23% excluding acquisitions)

Pre-tax profit from continuing operations £9.8m (2007: £7.1m), up 38% (18% excluding acquisitions)

Basic EPS from total operations 33.51p (2007: 23.66p), up 42%

Increased interim dividend of 8.5p per share (2007: 8.00p)

Strong balance sheet with cash of £11.1m and no debt

OPERATIONAL HIGHLIGHTS 

Wide mix of shipping operations offsets downturns in particular markets

Non-broking activities now make up 20% of operating profits before central costs

Strong performance driven by development in technical services (marine services, marine engineering services, loss adjusting), and energy-based activities

Braemar Steege (specialist loss adjuster) acquired in March, 2008 and performing well

MARKET OVERVIEW

Recent turmoil presents opportunities to build business further 

Probable slowdown in ordering of new ships and possibility of some cancelled orders

Demand for iron ore in Far East likely to see some recovery after the recent slow down

Energy related activity businesses seeing continued market strength

Commenting on the results and outlook, Sir Graham Hearne, Chairman, said: "Our strategy remains to position the Group as a leading player in a selective range of marine and shipping services. We believe this will provide the Group with a resilience to weather adverse conditions and a platform from which we can take advantage of suitable opportunities. Unprecedented economic events have introduced uncertainty but we remain cautiously optimistic about the future."

Alan Marsh, Chief Executive, said "Despite the market this is a set of record results for Braemar which gives us confidence that our expectations for the full year out-turn will be met. Careful operational and financial management has resulted in a strong cash position with no debt and an increased dividend payment to shareholders."

ENDS

For further information, contact:

Braemar Shipping Services plc
Alan Marsh	Tel +44 (0) 20 7535 2650
James Kidwell	Tel +44 (0) 20 7535 2881
Pelham Public Relations
Zoë Pocock	Tel +44 (0) 20 3178 8023
Damian Beeley	Tel +44 (0) 20 3178 2253
Elaborate Communications
Sean Moloney	Tel +44 (0) 1296 682356
Charles Stanley Securities
Philip Davies/Ben Johnston	Tel +44 (0) 20 7149 6457

  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 divided into the following business segments: Shipbroking, Logistics, Technical services and Environmental services. This growth has been through a mixture of organic and acquisition-led growth. 

Shipbroking services include: chartering tankers (including gas, chemicals and LNG), dry cargo, containers, offshore vessels, second hand sale and purchase, newbuilding, demolition, and sector research.

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

Recent Acquisitions

2006 - Braemar Howells, a pollution response service primarily in the UK for marine and rail operations.

2007 - Braemar Falconer, provides specialised marine and offshore services.

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

Principal businesses:

Shipbroking

Braemar Seascope provides specialised shipbroking and consultancy services to international ship owners and charterers in the sale & purchase, tanker, gas, chemicals, offshore, container and dry bulk markets.

www.braemarseascope.com

Logistics

Cory Brothers Shipping Agency provides port agency, freight forwarding and logistics services within the UK and Singapore.

www.cory.co.uk

Technical 

Braemar Steege provides specialist loss adjusting and other expert services to the energy (oil and gas), marine, power and other related industrial sectors. It has offices in London, Houston, Singapore, Calgary and Mexico City.

www.steegekingston.com

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

www.falconer-bryan.com 

Wavespec provides consultant marine engineering and naval architecture services to the shipping and offshore markets.

www.wavespec.com

Environmental 

Braemar Howells provides pollution response and advisory services primarily in the UK for marine and rail operations, and is now developing an international presence.

www.dvhowells.co.uk

INTERIM ANNOUNCEMENT - SIX MONTHS ENDED 31 AUGUST 2008

CHAIRMAN'S STATEMENT

The trading performance of the Group during the first half of the year was strong with organic growth in shipbroking coupled with expansion in our technical services division being the principal drivers. Group revenues grew by 48% from £46.7m to £69.1m, pre-tax profits increased by 38% from £7.1m to £9.8m and basic earnings per share were up 42% to 33.51p from 23.66p. The underlying growth in revenue and pre-tax profits excluding the contributions from acquired businesses is 23% and 18% respectively.

The unprecedented events occurring in the international financial and commodity markets over the last month have introduced a much greater degree of uncertainty in shipping. Freight rates for the dry bulk and container markets have experienced significant falls though tanker rates remain firm. Vessel values have come under pressure because of the contraction of available finance and perceived falls in the demand for bulk commodities. This has resulted in reduced sale and purchase activity which is likely to remain low until confidence returns. 

There is a strong likelihood that some of the newbuilding orders reported in the market will be cancelled. However, we believe that the majority of our forward order book is secure because the prices at which most orders were placed are below the historic peaks and because of the relative strength of the yards, the owners of the vessels and the charterers. Some reduction of newbuilding deliveries is likely and will be welcome by serving to reduce the potential for excess shipping capacity. Similarly, an acceleration in the scrapping of old ships is beginning to occur which will also moderate the supply of tonnage - demolition shipbroking being an area where we have great expertise.

Our strategy over the past few years has been to invest in related marine services businesses. This has expanded our geographical presence, activity skill-sets and customer base giving the Group greater resilience in changing markets. We have invested in building the non-broking aspect of our business and on 3 March 2008 the Company purchased Steege Kingston for a consideration which is expected to total approximately £8.1m. The business is an international loss-adjuster specialising in the energy market and has now been renamed Braemar Steege. Together the non-broking businesses contributed £2.7m (representing approximately 20%) of the Group's operating profit before amortisation in the first half, including £0.8m from Braemar Steege. Activity levels were high during the period and have remained so since, particularly at Braemar Falconer whose marine engineering and surveying business in the Far East has benefited greatly from the increase in oil and gas exploration. 

The Group is financially strong with net tangible assets of £15.2m including cash of £11.1m and no debt. In the current financial turmoil, with global recession imminent, it is difficult to predict what impact it will have on our businesses. However, there is a broad base to our operations and this, coupled with the strength of our forward order book and of the US$ relative to Sterling gives us confidence that our expectations for the full year out-turn will be met.

The Board has declared an interim dividend of 8.5 pence, an increase of 6% over 2007/8. The interim dividend will be paid on 11 December 2008 to shareholders on the register at the close of business on 14 November 2008, with an ex-dividend date of 12 November 2008.

Sir Graham Hearne

Chairman

27 October 2008

CHIEF EXECUTIVE'S REVIEW OF ACTIVITIES

Our Group has delivered a strong performance in nearly all sectors of activity. We have enjoyed a strong shipping market for much of the last six months but more importantly we have increased our market share across most shipbroking disciplines which will serve us well in weaker markets.

I would like to record the Board's thanks to all staff across our divisions for the energy, enthusiasm and commitment they have given to ensure that more and more companies within the maritime and shipping industries are developing a business relationship with Braemar.

Shipbroking

The average Baltic Dry Index for the six months ended 31 August 2008 was 8,968 (H1 2007: 6,146). The BDI currently stands at 1,102 having fallen sharply during the recent financial crisis. From the start of our financial year the dry cargo market gradually improved until it peaked in the last half of May and remained high for about one month before gradually sliding back down towards the end of August, a pattern that was generally followed by all sectors of the dry cargo market. The volume of transactions concluded was higher this half than last, with a considerable improvement in the value of freights and hence commission earned. China has dominated our activities and we have increased our presence in Beijing as well as taking on several junior brokers in London, Australia and Singapore. The dry bulk freight market in the Far East has dropped considerably over the last month with the demand for bulk commodities from China slowing since the Olympic Games. While we see some potential for an increase in volumes in the near future, this recovery is not expected to reach previous levels. In addition to market turmoil a more direct effect has been an impasse between Vale of Brazil, the world's largest iron ore supplier, and the Chinese steel mills, over Vale's attempt to increase the price of iron ore. The Chinese steel mills, who have been suffering from a downturn in the price of steel, have vigorously opposed this increase and, with a large stockpile of ore in Chinese ports, do not need to import much in the short term.

The deep sea tanker chartering rates have remained relatively firm throughout the first half and our volumes transacted have increased. The Baltic Dirty Tanker Index averaged 1,731 during the first half (H1 2007: 1,331) and now stands at 1,390. Crude oil prices have dropped significantly since the highs of the summer, but both China and India are continuing to import crude oil in line with their predictions, and we expect to benefit from this continuous anticipated requirement. The newbuilding crude tonnage deliveries during the period have so far been absorbed by market demand but as we move into next year there is a general expectation that the deliveries will exceed market requirement and rates may start to recede. The wider distribution of products from refineries continues to be the major contribution to the tonne mile requirement and in the near term we expect the volume of trade in all refined products, simple and sophisticated, to grow in line with the delivery of new product tonnage. 

In August 2008 we entered the FFA (Forward Freight Agreement) broking market through a joint arrangement with Tullett Prebon. This new desk, which is based in our London office, currently transacts over the counter wet freight trades with a view to expanding into the dry FFA market in due course.

The LNG sector is now becoming a crucial element to the global power requirement and the projects that have been previously delayed to date are now nearing completion. The transportation of this clean and available energy will grow over the ensuing year and we are well placed to service the new demand.

Sale and purchase activity in the first half remained strong with a good level of highly priced transactions in both second hand and newbuilding. This was maintained into July but has since steadily dried up with the unfolding of the financial market crisis. The present stagnation in the sale and purchase and newbuilding markets is a combination of lack of liquidity in the financing market and a wholesale drop in dry freight rates. Despite this current climate we have been able to conclude significant newbuilding business. Demolition volumes have picked up and we expect this activity to increase in the last quarter of 2008 and early 2009.

Our container desk performed well in the first half against the backdrop of a market which has deteriorated in recent months on the back of declining consumer confidence. Sale and purchase activity is low at present as potential sellers are holding on to their tonnage rather than selling. There is however a significant probability that some owners will be forced into selling and we remain well placed for this business as we do on chartering when vessels seek new employment.  

The offshore desk has had a very strong first six months with high charter rates in the North Sea driven by high exploration activity. Rates have remained at these levels although it would be surprising if they were unaffected by the fall in the oil price in the future.

Technical services - Braemar Falconer, Wavespec and Braemar Steege

Braemar Falconer's revenue and profits for the first half year grew substantially. A significant portion of the growth was attributable to increased involvement with rig moves, either as a warranty surveyor or as advisor to oil companies. A substantial increase was also recorded for engineering consultancy work, where we earn higher rates. We opened a third branch office in China, which has secured three contracts in quick succession. All of the offices in the Far East are busy with day-to-day survey work and the marine engineering department in Singapore is carrying out significant engineering warranty work. 

Wavespec continued to perform steadily with the majority of its business represented by LNG construction supervisory work under the Qatargas contract which has at least another two years to run. The company is continuing to broaden its work to include offshore, dynamic positioning and failure mode and effect analysis. 

Braemar Steege has performed in line with our expectations and since acquisition in March 2008 it has established a new office in Venezuela and a regional office in Miami. All offices have received a steady flow of new instructions through the first half of the year and more recently the Houston and London offices have benefited from over 30 instructions arising from Hurricanes Gustav and Ike, including two of the four largest energy claims known to have hit the energy insurance market as a result of Hurricane Ike.

Logistics - Cory Brothers 

The growth in Cory's revenue was derived from more project forwarding work and the addition of 80% of Fred. Olsen Freight which was purchased on 24 December 2007. The integration of Fred. Olsen Freight is proceeding well and will culminate in the bringing together of 90 Cory and Fred Olsen staff in new leasehold premises in Felixstowe in early 2009. Ship agency continued to perform steadily with an increase in volumes following key contract additions. We also established our first overseas ship agency office in Singapore in July 2008. This office has eight employees providing a full range of port, liner agency and logistics services. The cruise business also saw a promising increase in port calls and passenger take-up during this summer season. 

Environmental services - Braemar Howells

As expected, following the completion of the clean-up activity on the "MSC Napoli", the first half revenues and profits are lower than last year. However, the effect has been to some extent ameliorated by an increase in retainer contracts with significant new clients and international business, particularly in West and Central Africa. 

  Acquisitions

The contributions of acquired businesses to the half year results are as follows:

	First half 2008/9		First half 2007/8
Revenue	£000		£000
Braemar Falconer	4,143		647
Braemar Steege	3,298		-
Fred Olsen Freight Limited	4,873		-
	12,314		647
Operating profit	£000		£000
Braemar Falconer	1,133		65
Braemar Steege	777		-
Fred Olsen Freight Limited	86		-
Operating profit before amortisation	1,996		65
Amortisation	(366)		(29)
Impact on Group operating profit	1,630		36

The consideration paid for Braemar Steege was £5.8m satisfied by the issue of shares (£1.3m) and cash of £4.5m. Further cash consideration of £2.3m is expected to be paid based on performance. Net tangible assets acquired were £4.6m, including debtors of £2.5m and cash of £1.2m resulting in the recognition of goodwill and intangible assets (net of applicable deferred tax) of £3.5m.

During the half the Group also expended cash of £0.9m on the purchase of 59% of Gorman Cory and £0.7m on the final settlement of the consideration for 80% of Fred Olsen Freight.

Treasury

The majority of the Group's income is US$ denominated and the average rate of exchange for conversion of US$ income in the six months to 31 August 2008 was $1.90/£ (Interim 2007/8: $2.02/£, Full Year 2007/8: $1.99/£). In broad terms a 10 cent swing in the US$/£ rate approximates to a £3m change in shipbroking revenues over a full year. The rate of translation as at 31 August 2008 was $1.82/£. 

Cash

Cash balances were £11.1m at 31 August 2008 compared with cash of £21.6m as at 29 February 2008. The Group normally generates most of its annual cash flow in the second half of the year and the reduction in cash principally reflects the payment of the annual broking bonus, acquisitions (see above) and the full year dividend relating to the prior year. 

Alan Marsh

Chief Executive

27 October 2008

Statement of Directors' responsibilities

The Directors confirm, to the best of their knowledge, that this set of financial statements has been prepared in accordance with IAS34 as adopted by the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 of the Disclosure and Transparency rules of the United Kingdom's Financial Securities Authority.

The Directors of Braemar Shipping Services PLC are listed in the Braemar Shipping Services PLC Annual Report for 29 February 2008.

By order of the Board

A R. W. Marsh, Chief Executive

J. R. V. Kidwell, Finance Director

  Braemar Shipping Services PLC 

Consolidated Income Statement

		Unaudited		Unaudited		Audited
		Six months to		Six months to		Year ended
		31 Aug 2008		31 Aug 2007		29 Feb 2008
Continuing operations	Notes	£'000		£'000		£'000
Revenue	4	69,106		46,670		100,964
Cost of sales		(19,770)		(13,793)		(28,267)
Gross profit		49,336		32,877		72,697
Operating costs		(39,803)		(26,110)		(58,729)
Operating profit	4	9,533		6,767		13,968
Finance income		108		234		391
Finance costs		-		(8)		(11)
Share of profit after tax from joint ventures		144		100		370
Profit before taxation - continuing operations		9,785		7,093		14,718
Taxation	5	(2,959)		(2,323)		(4,797)
Profit for the period - continuing operations		6,826		4,770		9,921
Profit / (loss) for the period from discontinued operations		-		23		(3)
Profit for the period		6,826		4,793		9,918
Attributable to:
Equity holders of the parent		6,795		4,713		9,772
Minority interest		31		80		146
		6,826		4,793		9,918
Earnings per ordinary share	7
Basic - pence		33.51 p		23.66 p		48.97 p
Diluted - pence		33.30 p		23.48 p		48.68 p

  Braemar Shipping Services PLC 

Consolidated Balance Sheet

			Unaudited		Unaudited		Audited
			As at		As at		As at
			31 Aug 08		31 Aug 07		29 Feb 08
Assets	Notes		£'000		£'000		£'000
Non-current assets
Goodwill	8		28,235		24,218		25,826
Other intangible assets	8		4,145		2,254		2,315
Property, plant and equipment	8		6,175		5,771		5,820
Investments			2,087		1,535		1,890
Deferred tax assets			987		644		754
Other receivables			144		60		155
			41,773		34,482		36,760
Current assets
Inventories			92		70		91
Trade and other receivables			42,721		28,394		26,784
Derivative financial instruments			-		77		107
Restricted cash			-		-		3,952
Cash and cash equivalents			11,052		11,122		21,635
			53,865		39,663		52,569
Total assets			95,638		74,145		89,329
Liabilities
Current liabilities
Derivative financial instruments			1,168		-		49
Trade and other payables			41,016		32,264		39,540
Current tax payable			3,438		3,099		3,017
Provisions			57		277		48
Client monies held as escrow agent			-		-		3,952
			45,679		35,640		46,606
Non-current liabilities
Deferred tax liabilities			2,301		287		681
Trade and other payables			-		-		434
Provisions			107		40		81
			2,408		327		1,196
Total liabilities			48,087		35,967		47,802
Net assets			47,551		38,178		41,527
Equity
Share capital	9		2,102		2,049		2,061
Share premium	9		10,876		9,001		9,261
Shares to be issued			(2,798)		(1,844)		(2,527)
Other reserves	10		21,770		20,806		20,687
Retained earnings			15,434		7,842		11,717
Total shareholders' equity			47,384		37,854		41,199
Minority interest			167		324		328
Total equity			47,551		38,178		41,527

  Braemar Shipping Services PLC 

Consolidated Cash Flow Statement

			Unaudited		Unaudited		Audited
			Six months		Six months		Year ended
			31 Aug 08		31 Aug 07		29 Feb 08
	Notes		£'000		£'000		£'000
Profit before tax for the period from continuing operations			9,785		7,093		14,718
Profit before tax for the period from discontinued operations			-		23		(3)
Adjustments for:
-Depreciation			423		312		687
-Amortisation			528		189		452
-Goodwill impairment charge			-		-		114
-Profit on sale of investments			-		(93)		(89)
-Profit / (loss) on sale of property, plant and equipment			-		-		57
-Finance income			(108)		(234)		(391)
-Finance expense			-		8		11
-Share of pre-tax profit of joint ventures			(144)		(100)		(370)
-Share based payments			234		190		554
Changes in working capital
-Inventory			(1)		-		(21)
-Trade and other receivables			(8,527)		(4,166)		143
-Trade and other payables			(1,470)		(747)		5,630
-Provisions			(116)		(145)		(334)
Cash generated from operations			604		2,330		21,158
Interest received			108		234		391
Interest paid			-		(8)		(11)
Tax paid			(3,230)		(1,904)		(4,587)
Net cash generated from / (used in) operating activities			(2,518)		652		16,951
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired	11		(4,887)		(931)		(4,270)
Purchase of property, plant and equipment	8		(654)		(561)		(1,032)
Proceeds from sale of property, plant and equipment			-		7		57
Purchase of investments			(8)		-		(38)
Proceeds from sale of investments			-		191		200
Other long-term receivables			11		21		(74)
Net cash used in investing activities			(5,538)		(1,273)		(5,157)
Cash flows from financing activities
Proceeds from issue of ordinary shares			133		473		745
Dividends paid	6		(3,147)		(2,451)		(4,053)
Dividends paid to minority			-		(65)		(143)
Purchase of own shares			(406)		(797)		(1,480)
Net cash used in financing activities			(3,420)		(2,840)		(4,931)
(Decrease)/increase in cash and cash equivalents			(11,476)		(3,461)		6,863
Cash and cash equivalents at beginning of the period			21,635		14,634		14,634
Foreign exchange differences			893		(51)		138
Cash and cash equivalents at end of the period			11,052		11,122		21,635

  Braemar Shipping Services PLC 

Condensed consolidated half-yearly statement of changes in equity (unaudited)

			Share capital	Share premium	Shares to be issued	Other reserves	Retained earnings	Total	Minority interest	Total equity
	Notes		£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 28 February 2007			2,023	8,554	(1,047)	21,020	5,390	35,940	309	36,249
Cash flow hedges			-	-	-	43	-	43	-	43
Exchange differences			-	-	-	(36)	-	(36)	-	(36)
Net income recognised
directly in equity			-	-	-	7	-	7	-	7
Profit for the period			-	-	-	-	4,713	4,713	80	4,793
Total recognised income
for the half year			-	-	-	7	4,713	4,720	80	4,800
Dividends paid	6		-	-	-	-	(2,451)	(2,451)	(65)	(2,516)
Issue of shares			26	447	-	-	-	473	-	473
Purchase of shares			-	-	(797)	-	-	(797)	-	(797)
Consideration to be paid			-	-	-	(221)	-	(221)	-	(221)
Credit in respect of
share option schemes			-	-	-	-	190	190	-	190
Balance at 31 August 2007			2,049	9,001	(1,844)	20,806	7,842	37,854	324	38,178
At 29 February 2008			2,061	9,261	(2,527)	20,687	11,717	41,199	328	41,527
Cash flow hedges			-	-	-	(730)	-	(730)	-	(730)
Exchange differences			-	-	-	913	-	913	6	919
Net income recognised
directly in equity			-	-	-	183	-	183	6	189
Profit for the period			-	-	-	-	6,795	6,795	31	6,826
Total recognised income
for the half year			-	-	-	183	6,795	6,978	37	7,015
Acquisition	11		31	1,317	-	-	-	1,348	18	1,366
Dividends paid	6		-	-	-	-	(3,147)	(3,147)	-	(3,147)
Issue of shares	9		10	298	-	-	-	308	-	308
Purchase of shares	9		-	-	(406)	-	-	(406)	-	(406)
Consideration paid	11		-	-	-	900	-	900	(216)	684
ESOP shares allocated	9		-	-	135	-	(165)	(30)	-	(30)
Credit in respect of
share option schemes			-	-	-	-	234	234	-	234
At 31 August 2008			2,102	10,876	(2,798)	21,770	15,434	47,384	167	47,551

  BRAEMAR SHIPPING SERVICES PLC

UNAUDITED NOTES TO THE FINANCIAL INFORMATION

FOR THE SIX MONTHS ENDED 31 AUGUST 2008

1. General Information

The interim consolidated financial statements of the Group for the period ended 31 August 2008 were authorised for issue in accordance with a resolution of the directors on 28 October 2008. Braemar Shipping Services plc is a Public Limited Company incorporated and domiciled in England and Wales.

The term 'Company' refers to Braemar Shipping Services plc and 'Group' refers to the Company and all its subsidiary undertakings and the employee share ownership trust. The address of its registered office is 35 Cosway Street, London NW1 5BT.

These interim consolidated financial statements do not compromise statutory accounts within the meaning of Section 240(5) of the Companies Act 1985. The audited statutory accounts for the year ended 29 February 2008 have been delivered to the Registrar of Companies in England and Wales. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 237 of the Companies Act 1985.

2. Accounting policies

Basis of preparation

This condensed consolidated half-yearly financial information for the half-year ended 31 August 2008 has been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and with IAS34, 'Interim financial reporting' as adopted by the European Union. The half-yearly condensed consolidated financial report should be read in conjunction with the annual financial statements for the year ended 29 February 2008, which have been prepared in accordance with IFRSs as adopted by the European Union.

Forward-looking statements

Certain statements in this half-yearly report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. Because these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

3. Accounting Policies

The accounting policies adopted in the preparation of these interim consolidated financial statements are consistent with those of the annual financial statements for the year ended 29 February 2008, as described in those annual financial statements.

  4. Segmental information

Revenue	Six months to		Six months to		Year ended
	31 Aug 2008		31 Aug 2007		29 Feb 2008
	£'000		£'000		£'000
Shipbroking	34,446		23,879		52,794
Logistics	21,583		12,013		27,874
Technical - other	7,085		3,774		9,467
Technical - energy loss adjusting	3,298		-		-
Environmental	2,694		7,004		10,829
	69,106		46,670		100,964
Profit for the period
Shipbroking	8,945		6,064		12,993
Logistics	213		432		953
Technical - other	1,349		316		728
Technical - energy loss adjusting	542		-		-
Environmental	159		1,226		1,836
Segment result	11,208		8,038		16,510
Unallocated common costs	(1,675)		(1,271)		(2,542)
Operating profit	9,533		6,767		13,968
Finance income / (cost) - net	108		226		380
Share of profit after tax from joint ventures	144		100		370
Profit before taxation	9,785		7,093		14,718
Taxation	(2,959)		(2,323)		(4,797)
Profit for the period from continuing operations	6,826		4,770		9,921

5. Taxation

The taxation charge for the half-year is calculated using the estimated effective tax rate for the full year applied to the pre-tax profits at the half year. 

6. Dividends 

The following dividends were paid by the Group:

	Six months to		Six months to		Year ended
	31 Aug 2008		31 Aug 2007		29 Feb 2008
	£'000		£'000		£'000
Ordinary shares of 10 pence each
Interim of 8.00 pence per share paid	-		-		1,602
Final of 15.0 pence per share (2007: 12.25 pence per share)	3,147		2,451		2,451
	3,147		2,451		4,053

The Directors have declared an interim dividend of 8.5 pence per ordinary share, payable on 11 December 2008 to shareholders on the register on 14 November 2008.

  7. Earnings per share

	Six months to		Six months to		Year ended
	31 Aug 2008		31 Aug 2007		29 Feb 2008
	£'000		£'000		£'000
Profit for the period from continuing operations	6,795		4,690		9,775
Profit / (loss) for the period from discontinued operations	-		23		(3)
Profit for the period attributable to shareholders	6,795		4,713		9,772
	Shares		Shares		Shares
Weighted average number of ordinary shares	20,275,565		19,922,544		19,953,231
Dilutive effect of share options	131,683		153,532		122,061
Diluted weighted average number of ordinary shares	20,407,248		20,076,076		20,075,292
Continuing operations	pence		pence		pence
Basic earnings per share - pence	33.51		23.54		48.99
Effect of dilutive share options - pence	(0.21)		(0.18)		(0.30)
Diluted earnings per share - pence	33.30		23.36		48.69
Total operations	pence		pence		pence
Basic earnings per share - pence	33.51		23.66		48.97
Effect of dilutive share options - pence	(0.21)		(0.18)		(0.29)
Diluted earnings per share - pence	33.30		23.48		48.68

8. Capital expenditure

							Goodwill, tangible and intangible assets
Six months ended 31 August 2007:							£000
Opening net book amount at 1 March 2007							29,666
Acquisition of a subsidiary							2,524
Additions							561
Disposals							(7)
Depreciation and amortisation							(501)
Closing net book amount at 31 August 2007							32,243
Six months ended 31 August 2008:
Opening net book amount at 1 March 2008							33,961
Acquisition of subsidiaries (see note 11)							4,877
Additions							654
Depreciation and amortisation							(951)
Exchange movements							14
Closing net book amount at 31 August 2008							38,555

9. Share capital

		Number of		Ordinary		Share
		shares		Shares		Premium		Total
		(thousands)		£000		£000		£000
At 1 March 2007		20,231		2,023		8,554		10,577
Issues - share option schemes		263		26		447		473
At 31 August 2007		20,494		2,049		9,001		11,050
At 1 March 2008		20,607		2,061		9,261		11,322
Acquisitions - see note 11		307		31		1,317		1,348
Shares issued and fully paid		56		5		128		133
Shares issued and unpaid		51		5		170		175
At 31 August 2008		21,021		2,102		10,876		12,978

The Group's ESOP trust acquired 87,600 of the company's shares, including 76,800 through purchases on the London Stock Exchange, at dates between 17 May 2008 and 28 August 2008 at prices ranging between 467 and 500 pence. The total amount paid to acquire the shares was £406,000 and has been deducted from shareholders' equity. 

During the six months ended 31 August 2008, 414,211 shares were issued at prices ranging between 137.5 pence and 439.75 pence. Of these, 51,471 shares were paid subsequent to the balance sheet date. In addition, of the 414,211 shares issued, 306,513 shares were issued as part of the consideration to acquire Steege Kingston Partnership Limited (see note 11).

In addition, 48,000 shares at a value of £135,000 that were awarded to employees in May 2005 as part of the Deferred Bonus Plan (the Plan) were delivered to them in May 2008 following the three year vesting period. Details of the Plan are disclosed in the annual financial statements for the year ended 29 February 2008.

10. Other reserves

Group	Capital redemption reserve	Merger reserve	Deferred consideration reserve	Translation reserve	Hedging reserve		Total other reserves
	£'000	£'000	£'000	£'000	£'000		£'000
Balance at 28 February 2007	396	21,346	(738)	5	11		21,020
Cash flow hedges
-Transfer to net profit	-	-	-	-	(16)		(16)
-Fair value losses in the period	-	-	-	-	77		77
Foreign exchange differences	-	-	-	(36)	-		(36)
Consideration to be paid	-	-	(221)	-	-		(221)
Deferred tax on items taken to equity	-	-	-	-	(18)		(18)
As at 31 August 2007	396	21,346	(959)	(31)	54		20,806
Balance at 29 February 2008	396	21,346	(1,520)	388	77		20,687
Cash flow hedges
-Transfer to net profit	-	-	-	-	(107)		(107)
-Fair value losses in the period	-	-	-	-	(907)		(907)
Foreign exchange differences	-	-	-	913	-		913
Consideration paid	-	-	900	-	-		900
Deferred tax on items taken to equity	-	-	-	-	284		284
As at 31 August 2008	396	21,346	(620)	1,301	(653)		21,770

11. Acquisitions

On 3 March 2008 the Company acquired 100% of the share capital of Steege Kingston Partnership Limited for an estimated consideration of £8.1m. The deferred consideration is based on a multiple of the earnings before interest and tax in each of the two years post completion and these amounts will be settled wholly in cash.

The acquired business contributed revenues of £3,298k and a net profit before amortisation of £777k to the group for the period from acquisition to 31 August 2008 (see note 4).

Details of provisional net assets acquired and goodwill are set out below. The goodwill is attributable to Steege Kingston's skilled loss adjusting staff. The group has yet to finalise the amount of the fair value of the identifiable assets acquired.

Purchase consideration			£'000
- cash paid			4,203
- shares issued			1,348
- deferred consideration			2,320
- acquisition expenses			187
Total purchase consideration			8,058
- fair value of identifiable assets acquired (see below)			(6,287)
Goodwill			1,771
	Acquiree's		Provisional
	carrying		Fair
	amount		value
	£'000		£'000
Cash and cash equivalents	1,161		1,161
Property, plant and equipment	110		110
Intangible assets	0		2,350
Work in progress	4,280		4,280
Receivables	2,503		2,503
Payables	(1,745)		(1,745)
Current tax liability	(407)		(407)
Deferred tax liabilities	(1,149)		(1,807)
Provisions	(140)		(140)
Net identifiable assets acquired	4,613		6,305
Minority interest			(18)
Net assets acquired by the group			6,287
Outflow of cash to acquire the business, net of cash acquired:
- cash consideration			4,203
- cash and cash equivalents in subsidiary acquired			(1,161)
- acquisition expenses			187
Cash outflow on acquisition			3,229

In addition, on 29 July 2008, the Group paid £28,000 to acquire the assets of Sealion Shipping (S) Pte Limited situated in Singapore generating goodwill of £23,000.

In respect of previous acquisitions, on 5 March 2008, the Group acquired the 59% minority interest in Gorman Cory Limited for a consideration of £900,000 which generated additional goodwill of £686,000 and, on 2 July 2008, paid £730,000 as settlement of the 80% acquisition in Fred. Olsen Freight Limited resulting in a reduction to the provisional goodwill disclosed at 29 February 2008 of £71,000.

  Independent review report to Braemar Shipping Services plc

Introduction

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 31 August 2008, which comprises the consolidated income statement, consolidated balance sheet, condensed consolidated half-yearly statement of changes in equity, consolidated cash flow statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

As disclosed in note 2, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the Disclosure and Transparency Rules of the Financial Services Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 August 2008 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Services Authority.

PricewaterhouseCoopers LLP Chartered Accountants West London

28 October 2008

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