17th May 2005 07:00
Braemar Seascope Group PLC17 May 2005 For immediate release 17 May 2005 Results - Year ended 28 February 2005 Braemar Seascope Group plc (the "Group"), a leading provider of shippingservices, today announced full year results for the year ended 28 February 2005. HIGHLIGHTS • Turnover including joint ventures up to £46.3m (2004: £30.8m) • Pre-tax profit before goodwill and exceptionals up 73% to £9.0m (2004: £5.2m) • Pre-tax profit up 73% to £7.1m (2004: £4.1m) • Adjusted EPS before goodwill and exceptionals up 60% to 32.31p (2004: 20.16p) • Basic EPS up 70% to 23.67p (2004: 13.96p) • Operating cash flow up 88% to £11.0m (2004: £5.9m) • Final dividend 10.0p per share, full year 16.0p (2004: 13.00p) up 23% • Seawise Australia acquired and performing well Commenting on the results and outlook, Sir Graham Hearne, Chairman, said: "I am delighted to report a year of record profits for the group. The shippingmarket was exceptionally strong for much of 2004 and our shipbroking businesshas prospered. Activity levels, ship values and freight rates have all beenboosted by the worldwide increase in seaborne trade." "The shipping market has continued strongly during our first fiscal quarter. Itis undoubtedly the case that the benefit to shipping over the last year or morehas been driven by industrial growth in Asia supported by a healthy trade withmany countries. The outlook for shipbroking remains positive while thesefavourable market conditions persist." For further information, contact: Braemar Seascope Group plcAlan Marsh Tel 020 7535 2650James Kidwell Tel 020 7535 2881Aquila FinancialPatrick d'Ancona Tel 020 7849 3326Peter Reilly Tel 020 7849 3319Charles Stanley & Company LimitedPhilip Davies Tel 020 7953 2000 Notes to editors: Through its subsidiaries Braemar Seascope Group plc's services providedcomprise: Braemar Seascope Specialised shipbroking and consultancy services toLimited international ship owners and charterers in the sale & purchase, tanker, offshore, container and dry bulk markets. www.braemarseascope.com Seawise Australia Specialised shipbroking and consultancy services for ownersPty Limited and charterers particularly in dry bulk markets in Australia. www.seawise.com.au Cory Brothers Liner and port ship agency services within the UK.Shipping Agency www.cory.co.ukLimited Wavespec Marine engineering and naval architecture consultants to theLimited shipping and offshore markets. www.wavespec.com PRELIMINARY ANNOUNCEMENT - YEAR ENDED 28 FEBRUARY 2005 CHAIRMAN'S STATEMENT I am delighted to report a year of record profits for the group. The shippingmarket was exceptionally strong for much of 2004 and our shipbroking businesshas prospered. Activity levels, ship values and freight rates have all beenboosted by the worldwide increase in seaborne trade. Continuing demand for thelong-range transportation of raw materials, oil and consumer products hassustained the major shipping markets (dry bulk, tanker and container) athistorically high levels. Interest in the sector has risen, attracting newinvestors and stimulating activity across all types and sizes of ship. Through the acquisition of Seawise Australia Pty Limited ("Seawise") on 21February 2005, the group has extended both its presence in the Pacific Basin andits dry cargo broking business. The Australian economy is enjoying the growth inAsian industrial production and Seawise is well-placed to benefit from thesecircumstances. In the three months since Seawise was acquired we have beendeveloping our enlarged dry cargo operation, and trading to date has beenpleasing. The acquisition was financed by a mixture of cash and the issue of newshares to the vendor broking team; we view this as a sensible way to build thegroup business where opportunities in shipping services arise. Since the mergers of Seascope with Braemar Shipbrokers and with Braemar Tankersin 2001 we have set up wholly or part owned offices in Shanghai, Beijing, Delhi,Bombay and Singapore and significantly expanded our container, dry cargo andresearch teams. We have also acquired Seawise and entered the ship agency marketthrough the purchase of Cory. Over the last three years the size and scope ofoperations have increased, and this is reflected in the results on which we arenow reporting. Revenue for the year was £46.3m (2004: £30.8m) and profit before tax (beforegoodwill amortisation and exceptional items) was £9.0m compared with £5.2m inthe prior year. Profit before tax was £7.1m (2004: £4.1m). Adjusted earnings pershare (before exceptionals and goodwill) were 32.31 pence (2004: 20.16 pence)and basic earnings per share were 23.67 pence (13.96 pence). Net cash inflowfrom operations before financing increased to £11.0m (2004: £5.9m) contributingto the improvement in net funds which ended the year at £6.5m (2004: £2.0m). The Board is recommending a final dividend of 10.0 pence per ordinary share,which together with the 6 pence interim dividend takes the total dividend forthe year to 16.0 pence (2004: 13.0 pence), a rise of 23%. These results would not have been possible without the hard work, dedication andskill shown by the staff within the group and on behalf of the Board I wouldlike to express my thanks for their performance during the year. The performancewas also recognised in March 2005 when the company was given the award"Shipbroker of the Year" as chosen by a Lloyd's List panel. Outlook The shipping market has continued strongly during our first fiscal quarter. Itis undoubtedly the case that the benefit to shipping over the last year or morehas been driven by industrial growth in Asia supported by a healthy trade withmany countries. The outlook for shipbroking remains positive while thesefavourable market conditions persist, though the weak US dollar will offset someof the overall benefit. Income in the first half of 2005/6 will include asignificant level of business concluded in the final quarter of 2004/5 fordelivery in the current year - particularly in sale and purchase. CHIEF EXECUTIVE'S OPERATIONAL AND FINANCIAL REVIEW The results for both Chartering and Sale and Purchase showed a significantincrease over last year reflecting a rise in average commissions and also thenumbers of transactions in which the company has been involved. The widergeographic spread of our operations has increased the breadth of our clientservice, and it is pleasing that all our overseas operations are making apositive contribution to the results so soon after being established. We havealso added significantly to our forward order book during the year, particularlyin newbuilding, and won major new supervisory business at Wavespec. During theyear we established a new LNG project team combining our skills in shipbroking,research and technical support to develop newbuilding and consulting businessmuch of which will benefit future years. Shipbroking - Chartering During the second half of the year, tanker freight rates reached record highlevels, which resulted in earnings for VLCCs ("Very Large Crude Carriers") overthe year as a whole averaging around 75 per cent higher than the previous year.This improvement in revenue was broadly reflected across the ship sizecategories. In spite of high oil prices, consumer demand was undiminished, andthe tanker tonnage supply and demand balance tipped in owners' favour. A greaterdiversity of trading routes enabled ship owners to improve the laden/ballastratio, which added significantly to net earnings. There have inevitably beensome fluctuations in freight levels, but even the low points have beencomfortably above break even. During this past year, VLCCs have earned onaverage around $105,000 per day, compared with close to $60,000 per day theprevious year. Oil prices look set to remain high for the foreseeable future, and OPEC hasindicated a willingness to supply more oil as the year progresses, implyingcontinued strong demand for tanker transportation. The phase-out of single hulltankers is now under way and, with shipyard capacity full for several years tocome, the supply of new tonnage can spring no surprises. We expect firm tradingconditions to persist for the current financial year. Our Small products, Chemicals and Gas departments have seen an upturn in theirmarkets over the last year. Most of their business is conducted under long termcontracts on agreed pricing structures, giving them more security of businessand less exposure to the volatility of the market. Their major contracts havebeen renewed during the course of the year. Subsequent to the year-end the Groupand its US partner, Quincannon, have increased their respective stakes in SBQPte Ltd from 40 per cent to 50 per cent. SBQ is a Singapore-based gas andchemicals shipbroker and has now been renamed Braemar Quincannon Pte Ltd. The dry cargo market surged ahead in the second half of 2004, peaking in thebeginning of December when the BDI ("Baltic Dry Index"), the dry cargochartering yardstick, stood at 8,911 with average time-charter rates for modernCapesize vessels in excess of $100,000 per day (2003/4 average $51,200 per day).Since that time the market has cooled considerably and by the end of February2005 the BDI had fallen to 4,726. The department's performance has increasedsignificantly over the prior year due to a combination of the improvement in themarket, the addition of new team members and increased market share. The globaldemand for raw materials remains strong and dry bulk shipping would normallyfollow this demand. Seawise, purchased in February this year, has offices located in Melbourne,Perth and Sydney with a total of 38 staff concentrating on the dry cargo marketespecially for local mining companies and shipowners. We are actively working ondeveloping the synergies with these offices. Shipbroking - Sale and Purchase The sale and purchase department had another extremely successful yearbenefiting from increases in both ship values and transaction volumes. Activitycovered all types and sizes of ship - tankers, bulkers, container and LNGvessels - reflecting the unrivalled breadth and depth of skills in thedepartment and the ability to develop business by harnessing the knowledge andskills in other areas of the group. In particular, both Wavespec and Cory havecontributed to sale and purchase business that has been concluded. The strength of the shipping market and the investment opportunities it offershas attracted new types of investor helping to maintain values and deal flow.The new financial year has begun with a substantial number of ship sales alreadycontracted at favourable prices. Newbuilding income, which is recognised in line with the contractual phasing ofpayments by the ship owner to the shipyard, and therefore mainly reflects theactivity of previous years, increased substantially over the previous year. Therise in newbuilding prices has reflected the increased demand for most vessels,the limitations on yard capacity and the rise in the price of steel. Our forwardorder book of contracted income grew strongly in the year with the benefit toearnings coming mainly over the next four years as the ships are constructed anddelivered. Worldwide shipyard capacity is now almost fully contracted for thenext four years offering opportunities for resale business but could limitnewbuilding business. Recently the major yards have preferred to take orders tobuild higher value LNG and container carriers, which has meant that capacitymade available for tankers and dry bulkers has diminished. This trend supports aview that wet and dry freight rates could remain at higher than average levelsfor some time. Demolition income remained broadly level, with an increase in the price of steeloffsetting fewer ships being scrapped. Shipbroking - Containers (50 per cent owned) Over the 2004 calendar year the increase in container charter rates continuedwith the market rising by almost 70 per cent. These rates enabled charterers tocommit ships into their liner services at unprecedented levels and forever-longer periods, giving owners across the whole spectrum of containershipsizes some extremely healthy returns. A surge in both newbuilding orders andsecond-hand prices has mirrored activity in the charter market, and confidencein the future remains positive. Despite the large order book for new shipsstretching well into 2008, the appetites of many investors remain undiminished.Lack of development of port infrastructure in Europe and the US threatens tohamper growth, but throughput at Far Eastern (and particularly Chinese)terminals is still increasing. Shipbroking - Offshore During the early part of the year the Offshore market was weak, but in the finalfiscal quarter term rates in the North Sea improved strongly as explorationactivity increased. Rates continue to be firm and are expected to remain so forthe foreseeable future. The department has already concluded some significantproject business in the first quarter of the current year. Ship agency - Cory Cory's results were affected by lower volumes in their ship agency business andset up costs to support new income streams in forwarding and logistics, abusiness which has been developed since Cory was acquired, now trading as CoryLogistics. Market conditions in UK ship agency remain tough. Whilst Cory is verywell-positioned to take advantage of either a recovery or further consolidationin the agency sector there are no immediate prospects of a significantturnaround in this part of the business and therefore a provision has been madefor the impairment of purchased goodwill. However, Cory Logistics has continuedto build its customer base, in particular through the securing of majortelecommunications forwarding contracts. This new business will addsubstantially to the level of activity and should result in a significantimprovement in Cory's earnings for the coming year. With their enthusiasticsupport of the Group, Cory has also been able to introduce new business leadsfor both our chartering and sale and purchase teams. Technical shipping support - Wavespec Wavespec's profits were lower than expected due to delays in two major projectsboth of which commenced later in the financial year. However it was successfulin winning new business as charterer's representative on the QatarGas II projectfor all LNG Carriers to be built for Qatari trade and also as charterer'srepresentative for the Sakhalin Energy Investment Company for Ice Class LNGcarriers. These projects have established Wavespec as the leading technicalexpert on LNG vessel design and will underpin its income stream for at least thenext three years. Financial We consider the most appropriate comparison of the Group's profit performance ismade by adjusting pre-tax profits to exclude goodwill charges and exceptionalitems. Adjusted pre-tax profits have increased by 73% to £9.0m and reportedpre-tax profit rose by 73% to £7.1m. Set out in the table below is areconciliation of adjusted pre-tax profit to reported pre-tax profit: £'000 Year to Year to 28 Feb 2005 28 Feb 2004Adjusted pre-tax profit 8,978 5,187Less: Goodwill amortisation (1,094) (1,065)Less: Exceptional goodwill impairment charge (887) -Add: Exceptional profit on sale of investments 123 - --------- ----------Reported pre-tax profit 7,120 4,122 --------- ---------- Operating profits before exceptional items and goodwill rose from £5.5m in 2004to £8.5m, with an operating margin of 19.5% in 2005 compared with 18.0% in 2004,reflecting the growth in shipbroking turnover and margins offset by the new, butless volatile, ship agency business. The majority of the Company's broking andtechnical services income is US dollar denominated and the average rate ofexchange for conversion of US dollar income in the year was $1.82/£ (2004: $1.64/£) and at the year ended 28 February 2005 the rate was $1.93/£. The exposure tothe US dollar has been mitigated by the use of forward foreign exchangecontracts partially reducing the effect of the weaker US currency. Theyear-on-year impact of the weaker US dollar relative to £ sterling isresponsible for a turnover reduction of approximately £3m on a comparable basis.Cory's income is predominantly in £ sterling and therefore serves to reduce theimpact of foreign exchange movements. Seawise has a predominantly US$ income andAus$ cost base. Exceptional items relate to a provision for the impairment of Cory's goodwill(which is tax deductible) and a profit on disposal of the 16.7% investment inLone Star, the US-based tanker chartering broker (which is non-taxable). The tax rate on profits before exceptional items and goodwill amortisation (mostof which is non-deductible) was 33.7% (2004: 33.2%). The tax rate is higher thanthe standard UK tax rate of 30% because of the effect of non-deductible tradingexpenses. After exceptional items and goodwill the tax rate was 39% (2004: 42%). As at 28 February 2005 net cash had improved by £4.5m to £6.5m (2004: £2.0m).This excludes £4.4m of restricted cash, which the group was holding as escrowagent for certain clients pending completion of transactions in which the groupacted as broker. Operating cash flow was £11.0m (2004: £5.9m), calculated beforetax and dividend payments. On 21 February 2005 the group acquired Seawise Australia Pty Limited for a totalconsideration of £4.7m, comprising the issue of 833,898 new shares to thevendors totalling £3.1m and cash of £1.6m including costs. Net assets acquiredwere £0.5m with goodwill arising of £4.2m. The impact of Seawise's trading wasnot significant during the group's week of ownership in the financial year ended28 February 2005. The proposed final dividend of 10.0 pence per ordinary share, at a cost of£1.9m, will be paid on 28 July 2005 to shareholders on the register at the closeof business on 1 July 2005 (the ex-dividend date will be 29 June 2005). Togetherwith the 6p interim dividend the Company's dividend for the year is 16.0 pence(2004: 13.0 pence) at a cost of £3.1m. The dividend is covered 2.0 times byearnings per share before goodwill and exceptional items. The Group is adopting International Financial Reporting Standards ("IFRS") witheffect from the 1 March 2005. The 2005/6 interim and annual reports will beprepared under IFRS and will include restated comparative figures andreconciliations of changes made. The principal accounting changes following IFRSadoption relate to accounting for share options, goodwill amortisation,derivative currency contracts and the proposed final dividend. BRAEMAR SEASCOPE GROUP plc CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 28 FEBRUARY 2005 Year ended Year ended 28-02-2005 28-02-2004 £000 £000 Turnover including share of joint ventures 46,263 30,794Less: share of joint ventures (1,206) (452) ----------- -----------Group turnover (note 2) 45,057 30,342Administrative expenses before exceptionalitems and goodwill amortisation (36,526) (24,812)Goodwill amortisation (1,078) (1,065)Exceptional goodwill impairment (note 3) (887) -Total administrative expenses (38,491) (25,877) ----------- -----------Group operating profit 6,566 4,465Share of joint ventures' and associated undertaking's operating profit 456 13 ----------- -----------Operating profit including joint venturesand associated undertakings (note 2) 7,022 4,478 Exceptional profit on sale of investment (note 3) 123 - Net interest payable and similar charges (25) (356) ----------- -----------Profit on ordinary activities before taxation 7,120 4,122Taxation on profit on ordinary activities (note 4) (2,762) (1,723) ----------- -----------Profit on ordinary activities after taxation 4,358 2,399Dividends (note 5) (3,057) (2,347) ----------- -----------Retained profit for the period 1,301 52 =========== ===========Earnings per ordinary share - pence (note 6) -Basic 23.67p 13.96p -Adjusted EPS excl. amortisation and exceptionals 32.31p 20.16p -Diluted 22.94p 13.63p BRAEMAR SEASCOPE GROUP plc CONSOLIDATED BALANCE SHEET AS AT 28 FEBRUARY 2005 28 Feb 28 Feb 2005 2004 £000 £000 RestatedFixed assets Intangible fixed assets: goodwill 20,768 18,534 Tangible assets 4,960 4,963Investments: Investment in joint ventures: Share of gross assets 868 209 Share of gross liabilities (485) (180) ----------- ----------- 383 29Investment in associated undertaking 373 373Other investments 783 1,028 ----------- -----------Investments 1,539 1,430 ----------- ----------- 27,267 24,927 ----------- -----------Current assets Debtors 12,045 9,775 Restricted cash 4,434 - Cash at bank and in hand 9,606 4,071 ----------- ----------- 26,085 13,846Creditors: amounts falling due within one year (note 7) (28,181) (17,279) ----------- -----------Net current liabilities (2,096) (3,433) ----------- -----------Total assets less current liabilities 25,171 21,494 Creditors: amounts falling due aftermore than one year (8) -Provisions for liabilities and charges (151) (330) ----------- -----------Net assets 25,012 21,164 =========== ===========Capital and reserves Called up share capital 1,945 1,862 Capital redemption reserve 396 396 Share premium 7,505 7,505 Shares to be issued (637) (65) Merger reserve 21,346 18,302 Profit and loss account (note 13) (5,543) (6,836) ----------- -----------Total equity shareholders' funds (note 8) 25,012 21,164 =========== =========== BRAEMAR SEASCOPE GROUP plc CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 28 FEBRUARY 2005 Year ended Year ended 28 Feb 2005 to 28 Feb 2004 £000 £000 Net cash inflow from operating activities (note 10) 11,052 5,872Returns on investments and servicing of finance Interest received 26 21 Interest paid (52) (464) Interest element of finance lease rental payments - (3) ----------- -----------Net cash outflow from returns oninvestments and servicing of finance (26) (446) Taxation UK Corporation tax paid (2,448) (1,511) Capital expenditure and financial investment Payments to acquire tangible fixed assets (175) (230) Disposal of tangible fixed assets 11 - Purchase of investments (21) (110) Sale of investments 386 - ----------- -----------Net cash outflow from investing activities 201 (340) Acquisitions and disposals Purchase of subsidiaries including expenses (1,613) (1,658) Cash acquired with subsidiaries 587 1,597 Deferred consideration paid - (225) ----------- -----------Net cash outflow for acquisitions (1,026) (286) Equity dividends paid (2,597) (2,062) ----------- -----------Net cash inflow before financing 5,156 1,227Financing Restricted cash received as escrow agent 4,434 - Increase in escrow client monies (4,434) - Share issues 1 - Purchase of own shares (572) - Loan repayment - (2,500) Payment of principal under finance leases (2) (24) ----------- -----------Net cash outflow from financing (573) (2,524)Increase/(decrease) in cash (note 11) 4,583 (1,297) =========== ===========Note 1 - Accounting policies The accounting policies applied in the preparation of these financial statementsare consistent with those used and set out in the 2004 Annual Report andAccounts, with the exception of the adoption of UITF Abstract 38 "Accounting forESOP Trusts" and FRS 20 "Share Based Payments". The Abstract is effective foraccounting periods ending on or after 22 June 2004 and it has therefore beenapplied in the accounts for the year ended 28 February 2005. The Abstractrequires own shares held through an ESOP trust to be deducted in arriving atshareholders' funds and recommends the creation of a separate negative reserve.The Abstract requires this change to be retrospective and therefore comparativeshave been restated. The effect has been to reduce net assets as at 28 February2004 by £65,000. FRS 20 is applicable for accounting periods beginning on orafter 1 January 2005 and the Group has adopted the standard early. The effect ofadopting FRS 20 is to increase profits and net assets by £171,000 in the year to28 February 2005 (28 February 2004 - Nil). Note 2 - Segmental results Year to Year to 28 Feb 2005 28 Feb 2004Turnover £'000 £'000 Shipbroking 32,274 22,523Technical shipping support 4,322 5,127Ship agency, forwarding and logistics 8,461 2,692 ----------- ----------- 45,057 30,342Share of joint ventures - Shipbroking 1,206 452 ----------- ----------- 46,263 30,794 =========== =========== Operating profit £'000 £'000Shipbroking 8,673 5,210Technical shipping support 140 294Ship agency, forwarding and logistics (282) 26 ----------- ----------- 8,531 5,530Share of joint ventures & associates -shipbroking 456 13 ----------- ----------- 8,987 5,543Goodwill amortisation (1,078) (1,065)Exceptional goodwill impairment charge- Ship agency, forwarding and logistics (887) - ----------- ----------- 7,022 4,478 =========== ===========Note 3 - Exceptional items Year to Year to 28 Feb 2005 28 Feb 2004 £'000 £'000 Impairment of Cory goodwill (887) -Profit on disposal of Lone Star 123 - ----------- -----------Net loss before tax (764) - =========== =========== Tax relief at 30% is applicable to the goodwill impairment charge. There is notax due on the sale of the 18% trade investment in Lone Star. Note 4 - Taxation The rate of taxation applicable to the company's profits before goodwillamortisation and exceptional items is 33.7% (2004: 33.2%). Note 5 - Dividend The proposed final dividend of the year is 10.0 pence per share (2004: final 8.0pence) taking the total dividend charged for the year to 16.0 pence (2004: 13.0pence). The cost is based on 19,230,816 shares being the total in issue less222,500 shares held in the ESOP for which the dividend has been waived. Note 6 - Earnings per share Reconciliation of basic earnings per share to adjusted earnings per share: 2005 2004Earnings Year to Year to 28 Feb 28 Feb £'000 £'000 Profit after taxation 4,358 2,399Goodwill amortisation (incl. associated company-£16,000) 1,094 1,065Exceptional items before tax (note 2) 764 -Related tax credit (266) - ----------- -----------Adjusted profit after tax 5,950 3,464 ----------- -----------Weighted average number of shares 18,412,881 17,181,600Basic EPS (pence) 23.67 13.96Adjusted EPS (pence) 32.31 20.16 Note 6 - Earnings per share (continued)Diluted EPS 2005 2004 £'000 £'000 Profit after taxation 4,358 2,399Interest on convertible £3m loan notes - 124 ----------- -----------Diluted earnings 4,358 2,523 ----------- -----------Weighted average number of shares 18,412,881 17,181,600Conversion of £3m loan notes - 1,236,301Share options 585,077 97,653 ----------- -----------Diluted average number of shares 18,997,958 18,515,554 ----------- -----------Diluted EPS (pence) 22.94 13.63 Note 7 - Creditors falling due within one year 2005 2004 £'000 £'000Bank overdrafts 3,067 2,113Trade creditors 7,673 8,530Corporation tax 1,556 954Dividends payable 1,944 1,484Accruals and deferred income 7,767 3,277Obligations under finance lease 31 -Other taxation and social security 1,611 721Other creditors 98 200Client monies held as escrow agent 4,434 - ----------- ----------- 28,181 17,279 ----------- ----------- At 28 February 2005 the Group was holding cash balances totaling £4.4 million asescrow agent for certain clients, pending completion of transactions in whichthe Group acted as the broker. The amounts are held in designated accounts andany interest earned is due to the clients. Note 8 - Reconciliation of movement in shareholders' funds 2005 2004 £'000 £'000Opening shareholders' funds as previously reported 21,164 17,800Prior year adjustment - shares to be issued - 65 ----------- -----------Opening shareholders' funds as restated 21,164 17,735Profit on ordinary activities after tax 4,358 2,399Dividends (3,057) (2,347)Issue of shares 3,127 3,377Purchase of shares to be issued (572) -Exchange differences (8) - ----------- -----------Net increase in shareholders' funds 3,848 3,429 ----------- -----------Closing shareholders' funds 25,012 21,164 =========== =========== Note 9 - Consolidated statement of total recognised gains and losses 2005 2004 £000 £000Profit on ordinary activities after taxation 4,358 2,399Foreign exchange differences (8) - ----------- -----------Total recognised gains relating to the year 4,350 2,399 =========== =========== Note 10 - Reconciliation of operating profit to net cash flow from operating activities 2005 2004 £000 £000Operating profit 6,566 4,465Depreciation charge 297 282Goodwill amortisation 1,078 1,065Impairment of goodwill 887 -Loss on disposal of fixed assets - 28Write down on investments - 77(Increase) in debtors (1,262) (3,836)Increase in creditors 3,715 4,287Decrease in provisions (229) (496) ----------- -----------Net cash flow from operating activities 11,052 5,872 =========== =========== Note 11 - Reconciliation of net cash flow to movement in net funds 2005 2004 £000 £000 Increase/(decrease) in cash 4,583 (1,297)Finance leases acquired (41) -Decrease in finance leases - 24Decrease in bank loan - 2,500 ----------- -----------Movement in net funds 4,542 1,227Net debt at beginning of period 1,958 (2,456)Repayment of loan notes - 187Conversion of loan stock to ordinary shares - 3,000 ----------- -----------Net funds at end of period 6,500 1,958 =========== =========== Note 12 - Acquisition of Seawise Australia Pty Ltd. On 21 February 2005 the Group acquired Seawise Australia Pty Ltd for aconsideration totalling £4.7m. The provisional fair value of the net assetsacquired and goodwill arising on the transaction are set out below: £'000 £'000Cash consideration 1,448Transaction costs 165 ----------- 1,613New share capital issued to vendors 3,127 -----------Total consideration 4,740Fixed assets acquired 129Debtors 797Creditors (972)Cash 587 -----------Net tangible assets acquired 541 -----------Goodwill 4,199 =========== Fair value adjustments totaling £43k in respect of employee entitlements havebeen made within the book values above. Note 13 - Profit and loss account The negative cumulative profit and loss account balance is the result of agoodwill write-off, in the amount of £5,599,794, which took place in thefinancial year to 31 December 1998 upon the Company's adoption of FRS10. The financial information set out above does not constitute the Company'sstatutory accounts for the year ended 28 February 2005 and the year endedFebruary 2004. The financial information in respect of the year ended 28February 2005 has been extracted from the audited accounts. The audited accountswill be posted to shareholders shortly. Statutory accounts for the year ended 28February 2004 on which the auditors have given an unqualified report pursuant tosection 235 of the Companies Act 1985, have been filed with the Registrar ofCompanies. -------------------------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Braemar Shipping