23rd Oct 2007 07:01
Braemar Shipping Services PLC23 October 2007 BRAEMAR SHIPPING SERVICES PLC PRESS RELEASE For immediate release 23 October 2007 Interim Results - 6 months ended 31 August 2007 Braemar Shipping Services plc (the "Group"), an international provider ofshipping services, today announced unaudited half-year results for the sixmonths ended 31 August 2007. HIGHLIGHTS • Revenue £68.7m (2006: £50.5m), a rise of 36% • Pre-tax profit £7.1m (2006: £4.1m), up 75% (up 42% if the impairment charge in 2006 is excluded) • Basic EPS 23.66p (2006: 12.03p), up 97% (up 40% if the impairment charge in 2006 is excluded) • Increased interim dividend declared 8.00p per share (2006: 6.75p) • Net cash £11.1m (31 August 2006: £8.1m, February 2007: £14.6m) • Falconer Bryan acquired and performing well Commenting on the results and outlook, Sir Graham Hearne, Chairman, said: "Shipbroking has gone from strength to strength with more charteringtransactions concluded and more long-term business placed particularly fornewbuilding contracts and period charters. Our forward order book of business isat a record level and significantly higher than at the beginning of the year." "Our non-broking businesses are now contributing approximately one quarter ofthe Group's profits." "The outlook for the second half of the year remains favourable. The level ofbusiness already concluded this year means that we can be confident that thefull year out-turn should see good growth over last year." For further information, contact: Braemar Shipping Services plc Alan Marsh Tel +44 (0) 20 7535 2650 James Kidwell Tel +44 (0) 20 7535 2881Aquila Financial Peter Reilly Tel +44 (0) 20 7202 2601Elaborate Communications Sean Moloney Tel +44 (0) 1296 682356Charles Stanley Securities Philip Davies Tel +44 (0) 20 7149 6457 Notes to Editors Braemar Shipping Services plc (previously known as Braemar Seascope Group plc)is a leading integrated provider of broking and consultancy services to theshipping industry. The Group includes the following businesses: Braemar SeascopeSpecialised shipbroking and consultancy services to international ship ownersand charterers in the sale & purchase, tanker, gas, chemicals, offshore,container and dry bulk markets with offices in UK, Australia, India, China,Brazil and Singapore. www.braemarseascope.com Cory Brothers Shipping AgencyPort agency, freight forwarding and logistics services within the UK. www.cory.co.uk WavespecMarine engineering and naval architecture consultants to the shipping andoffshore markets. www.wavespec.com Falconer BryanSurvey, engineering and loss adjusting services to the marine and energyindustries. Headquartered in Singapore it operates throughout the Far East fromoffices in Indonesia, Malaysia, Vietnam, China, India and Australia. www.falconer-bryan.com DV HowellsPollution response service primarily in the UK for marine and rail operations. www.dvhowells.co.uk INTERIM ANNOUNCEMENT - SIX MONTHS ENDED 31 AUGUST 2007 CHAIRMAN'S STATEMENT The Group has performed well in the first half with strong contributions fromall business segments. The results reflect this excellent performance, with a36% increase in revenue to £68.7m, a 75% increase in profit before tax to £7.1mand a 97% increase in earnings per share to 23.66 pence. If these results wereadjusted to exclude the impairment charge in the prior half, pre-tax profitswould have increased by 42% and earnings per share by 40% on last year. Shipbroking has gone from strength to strength with more chartering transactionsconcluded and increased long-term business placed, in both newbuilding contractsand period charters. Our forward order book of business is at a record level andsignificantly higher than at the beginning of the year. The Dry Bulk market hasseen record freight rates in recent months and these look set to remain high forsome time to come. Tanker rates have been lower this year than last, but ourvolumes have grown offsetting the rate effect. Both the Container and Offshoremarkets have also seen conditions which have enabled our teams to thrive. Our recently established environmental services arm - DV Howells - has beeninstrumental in providing incident response services to the stricken containervessel off the coast of Devon and we are proud of the role it has played inhelping to minimise the environmental consequences of this incident. Itsbusiness is incident-driven and therefore likely to be variable though there aremany opportunities to develop its activities. Cory Brothers and Wavespec bothperformed steadily over the half. The non-broking businesses of Cory Brothers, Wavespec and DV Howells contributedapproximately a quarter of the Group's profits. This proportion is likely togrow as we continue to pursue a strategy of broadening the Group's range ofservices. Most recently, in July 2007 the Group added to its technical servicesdivision through the acquisition of Falconer Bryan Pte for a cash considerationof £5.9m. Falconer Bryan is headquartered in Singapore and employs 90 full timestaff. It has a network of offices throughout the Far East from which itprovides a range of survey, engineering and loss adjusting services to themarine and energy industries. At the end of the last financial year we stated that we were reviewing optionsfor the bunker business and as a result we have ceased activity in Bunkertrading in September 2007 although these results include the activity for thewhole of the period. The outlook for the second half of the year remains favourable. The level ofbusiness already concluded this year means that we can be confident that thefull year out-turn should see good growth over last year. The Board has declared an interim dividend of 8.00 pence, an increase of 19%over 2006/7. The interim dividend will be paid on 11 December 2007 toshareholders on the register at the close of business on 9 November 2007, withan ex-dividend date of 7 November 2007. Sir Graham HearneChairman22 October 2007 CHIEF EXECUTIVE'S REVIEW OF ACTIVITIES Shipbroking The average Baltic Dry Index for the six months ended 31 August 2007 was 6,146(first half of 2006/7: 2,837) with all market sectors considerably up on lastyear. The BDI currently stands at 10,798 which is a record high, driven by highdemand for tonnage, particularly for the transportation of iron ore to China.The volume of business transacted by our dry cargo offices has improvedmarkedly. Moreover a significant number of long-term time charters have beenconcluded such that the dry cargo chartering element of the forward book is nowat its highest ever level. We continue to increase our presence in Singaporewhich has become a major centre for shipowning and a significant hub for cargointerests in Asia. Prospects for the remainder of the financial year remainpositive as demand will continue to be strong in the foreseeable future. Our deep-sea tanker chartering desk has increased the number of transactionsconcluded though rates have generally softened over the course of the half asnewbuildings have been delivered into the market. The continuing rise in oildemand by China and India is maintaining crude oil shipments to the region andwith western inventories still relatively low an increase in oil shipments isexpected. The steady rise of crude oil prices since the beginning of the yearhas adversely affected refining margins and in turn the product trades and thiscombined with new tonnage coming on stream has served to reduce the productcarrier rates. Activity levels in the specialised chemical chartering market were quitevariable during the first quarter of the year as the market came to terms withnew regulations, but since then rates have stabilised. Freight rates,particularly for the more sophisticated vessels, have been relatively strong andthis is not expected to change significantly over the forthcoming months, butthe introduction of new tonnage means that an increase in volumes will berequired to maintain current rates. Rates in the LPG chartering market have been strengthening since the beginningof the year due to increasing volumes being moved. Ethylene carried in LPGvessels from the Middle East to South East Asia for the production of plasticshas been particularly active. LNG chartering has increased recently and voyage rates have risen from the lowlevels seen at the beginning of the year. The winter months may create furtherdemand and again improve trading conditions. Looking ahead, many of the delayedLNG facilities projects are now under construction and completion dates arebecoming more visible which should absorb the newbuilding tonnage delivering onschedule. We are building a dedicated presence in LNG based on our belief thatLNG will be a major energy market in the future. Vessel values have remained very firm particularly for bulk carriers whererecord prices have been set reflecting the ship's earning capability. Sale andpurchase activity has generally favoured newbuildings where we have beeninvolved in placing our highest ever number of orders, a significant proportionof which will be for the benefit of future years' earnings. Second hand anddemolition activity has seen a reasonable deal flow though at similarly highprices. Our container desk has enjoyed a period of strong activity for both sale andpurchase and chartering business with freight rates and vessel values remainingrelatively firm so far in 2007. The rise in container newbuilding tonnage cominginto the market should offer plenty of opportunities though conceivably at lowerrates if demand growth slows. The offshore desk has continued to perform well benefiting from the high levelof oil exploration activity. Day rates for the hire of supply vessels have beenat historically high levels and these look set to continue while the price ofoil remains high. The rise in earnings in the industry has also provided astimulus to sale and purchase activity and investment in newbuildings. Technical services - Wavespec and Falconer Bryan Revenue and profits for the half year grew steadily mainly in respect of work onthe Qatargas LNG supervision contract which has now been extended until 2010.While LNG carrier construction remains strong we are currently making strenuousefforts to increase our activities in the areas of offshore, dynamic positioningand failure mode and effect analysis where there is potential for long-termgrowth. We have recently been successful in winning three further projects inthese areas. We significantly increased our presence in this market through the acquisitionof Falconer Bryan on 7 July 2007. Services provided to the marine and energyindustries include loss prevention surveys such as, towage and transportapprovals, location approvals and location moves for mobile offshore drillingunits and associated naval architectural/structural engineering support andenergy loss adjusting investigation services resulting from an insurableincident. The group operates from offices in Singapore, Indonesia, Malaysia,Vietnam, China, India and Australia with a skilled work force, the majority ofwhom are either class 1 mariners/engineers, structural engineers, navalarchitects or loss adjusters. The skill sets are similar to those at Wavespecwhich should prove advantageous as the business develops within the Group. During its first few months as part of the Group, Falconer Bryan's trading hasbeen in line with expectations and we are encouraged by the new opportunities weare seeing for the development of its business. Logistics - Cory Brothers Cory's forwarding business increased both revenue and profits through increasedproject work and growth at Planetwide which was acquired at the end of 2005.Ship agency has performed steadily although the recent change of ownership of arefinery saw some reduction in activity in the period. This is expected toimprove in the second half due to the opening of a new office at Immingham andthe full benefit of new contract business comes through. Environmental services - DV Howells DV Howells has had a very busy period with a significant increase in man hoursworked. In addition to its regular business performing specialist environmentalclean up and consulting services, mainly in respect of ports, rail and roads inthe UK, it has been closely involved with the stricken container ship off thecoast of Devon and in particular the protection and clean up of the beaches andof the containers. Most of this work has now been concluded. Bunker trading Bunker trading activities, which were based in Australia, ceased in September2007. There will be a small revenue contribution in the second half for thefinal month's trading but thereafter the activity is discontinued. Financial A comparison of the Group's reported profits and earnings and a more meaningfullike-for-like comparison is shown in the table below: First half First half 2007/8 2006/7 Change % £000 £000Profit before impairment charge and tax 7,116 5,023 +42%Impairment charge - (950)Reported profit before tax 7,116 4,073 +75% Pence penceBasic EPS (pre impairment charge) 23.66 16.88 +40%Impairment charge - (4.85)Basic EPS 23.66 12.03 +97% The majority of the Group's income is US$ denominated and the average rate ofexchange for conversion of US$ income in the six months to August 2007 was $2.02/£ (Interim 2006/7: $1.81/£, Full Year 2006/7: $1.86/£). The rate oftranslation at 31 August 2007 was $2.02/£. Net cash was £11.1m at 31 August 2007 compared with net cash of £14.6m as at 28February 2007. Cash balances increased by £1.7m in respect of amounts heldwithin Falconer Bryan at acquisition. In September 2007, the Group paid £3.4m,being the balance of consideration due to the Falconer Bryan vendors in respectof cash and working capital acquired with the business. The Group normallygenerates most of its annual cash flow in the second half of the year and thereduction in cash principally reflects the payment of the annual broking bonusand full year dividend relating to the prior year. Alan MarshChief Executive22 October 2007 Braemar Shipping Services PLCConsolidated Income Statement (unaudited) Six months to Six months to Year ended 31 Aug 2007 31 Aug 2006 28 Feb 2007Continuing operations Notes £'000 £'000 £'000 Revenue 4 68,686 50,512 107,200Cost of sales (35,719) (27,194) (53,529)Gross profit 32,967 23,318 53,671 Operating costs (26,188) (19,531) (44,121)Impairment of goodwill - (950) (950)Operating costs excluding impairment of (26,188) (18,581) (43,171)goodwill Operating profit 4 6,779 3,787 9,550 Finance income 245 148 335Finance costs (8) (4) (16)Share of post-tax profit from joint ventures 100 142 207 Profit before taxation 7,116 4,073 10,076Taxation 5 (2,323) (1,657) (3,604)Profit for the period 4,793 2,416 6,472 Attributable to:Equity holders of the parent 4,713 2,357 6,367Minority interest 80 59 105 4,793 2,416 6,472 Earnings per ordinary share 7 Basic - pence 23.66p 12.03p 32.29pDiluted - pence 23.48p 11.84p 31.87p Braemar Shipping Services PLCConsolidated Balance Sheet (unaudited) As at As at As at 31 Aug 07 31 Aug 06 28 Feb 07Assets Notes £'000 £'000 £'000Non-current assetsGoodwill 24,218 22,259 22,606Other intangible assets 2,254 1,462 1,582Property, plant and equipment 5,771 5,349 5,478Investments 1,535 1,481 1,538Deferred tax assets 644 566 642Other receivables 60 76 81 34,482 31,193 31,927Current assetsInventories 70 - 70Trade and other receivables 28,394 18,732 21,750Financial assets- Derivative financial instruments 77 473 27Restricted cash - 4,946 -Cash and cash equivalents 11,122 8,134 14,634 39,663 32,285 36,481 Total assets 74,145 63,478 68,408 LiabilitiesCurrent liabilitiesTrade and other payables 32,264 21,831 29,011Current tax payable 3,099 2,362 2,402Provisions 9 277 210 294Client monies held as escrow agent - 4,946 - 35,640 29,349 31,707Non-current liabilitiesDeferred tax liabilities 287 239 283Provisions 9 40 433 169 327 672 452 Total liabilities 35,967 30,021 32,159 Net assets 38,178 33,457 36,249 EquityShare capital 10 2,049 2,014 2,023Capital redemption reserve 396 396 396Share premium 10 9,001 8,434 8,554Merger reserve 21,346 21,346 21,346Shares to be issued (1,844) (997) (1,047)Other reserves (936) (344) (722)Retained earnings 7,842 2,278 5,390Total shareholders' equity 37,854 33,127 35,940Minority interest 324 330 309Total Equity 38,178 33,457 36,249 Braemar Shipping Services PLCConsolidated Cash Flow Statement(unaudited) Six months Six months Year ended 31 Aug 07 31 Aug 06 28 Feb 07 Notes £'000 £'000 £'000Profit before tax for the period 7,116 4,073 10,076Adjustments for:-Depreciation 312 232 518-Amortisation 189 62 284-Goodwill impairment charge - 950 950-Profit on sale of investments (93) - --Profit on sale of property, plant and equipment - - (12)-Finance income (245) (148) (335)-Finance expense 8 4 16-Share of post-tax profit of joint ventures (100) (142) (207)-Share based payments 190 145 309Changes in working capital-Inventory - - 7-Trade and other receivables (4,166) (625) (3,874)-Trade and other payables (747) (5,336) 2,098-Provisions (145) 14 (162)Cash generated from operations 2,319 (771) 9,668Interest received 245 148 335Interest paid (8) (4) (16)Tax paid (1,904) (1,670) (3,413)Net cash generated from / (used in) operating 652 (2,297) 6,574activities Cash flows from investing activitiesDividends received from joint ventures - 145 263Acquisition of subsidiaries, net of cash 11 (931) (1,132) (1,844)acquiredPurchase of property, plant and 8 (561) (246) (654)equipmentProceeds from sale of property, plant and equipment 7 - 25Sale of investments 191 - -Other long-term receivables 21 (18) (23)Net cash used in investing activities (1,273) (1,251) (2,233) Cash flows from financing activitiesProceeds from issue of ordinary shares 473 414 569Dividends paid 6 (2,451) (2,255) (3,595)Dividends paid to minority (65) - (100)Purchase of own shares (797) - (50)Payment of principal under finance leases - (11) (11)Net cash used in financing activities (2,840) (1,852) (3,187) (Decrease)/increase in cash and cash equivalents (3,461) (5,400) 1,154 Cash and cash equivalents at beginning of the period 14,634 13,567 13,567Foreign exchange differences (51) (33) (87)Cash and cash equivalents at end of the period 11,122 8,134 14,634 Braemar Shipping Services PLCCondensed consolidated half-yearly statement of changes in equity(unaudited) Share capital, Merger share premium reserve, and capital shares to be redemption issued and Retained Total Minority Total reserve other reserves earnings interest equity Notes £'000 £'000 £'000 £'000 £'000 £'000 At 28 February 2006 10,430 20,396 2,031 32,857 - 32,857Cash flow hedges - 364 - 364 - 364Exchange differences - (17) - (17) - (17)Net income recognised directly in equity - 347 - 347 - 347Profit for the period - - 2,357 2,357 59 2,416Total recognised income for the half year - 347 2,357 2,704 59 2,763Acquisition - - - - 271 271Dividends paid 6 - - (2,255) (2,255) - (2,255)Issue of shares 414 - - 414 - 414Consideration to be - (738) - (738) - (738)paidCredit in respect of share option schemes - - 145 145 - 145At 31 August 2006 10,844 20,005 2,278 33,127 330 33,457 At 28 February 2007 10,973 19,577 5,390 35,940 309 36,249Cash flow hedges - 43 - 43 - 43Exchange differences - (36) - (36) - (36)Net income recognised directly in equity - 7 - 7 - 7Profit for the period - - 4,713 4,713 80 4,793Total recognised income for the half year - 7 4,713 4,720 80 4,800Dividends paid 6 - - (2,451) (2,451) (65) (2,516)Issue of shares 473 - - 473 - 473Purchase of shares - (797) - (797) - (797)Consideration to be - (221) - (221) - (221)paidCredit in respect of share option schemes - - 190 190 - 190At 31 August 2007 11,446 18,566 7,842 37,854 324 38,178 BRAEMAR SHIPPING SERVICES PLCUNAUDITED NOTES TO THE FINANCIAL INFORMATIONFOR THE SIX MONTHS ENDED 31 AUGUST 2007 1. General Information The Company is a limited liability company incorporated and domiciled in the UKand listed on the London Stock Exchange. The address of its registered officeis 35 Cosway Street, London NW1 5BT. The condensed consolidated half-yearly financial information was approved on 22October 2007 for issue on 23 October 2007. These interim financial results do not compromise statutory accounts within themeaning of Section 240 of the Companies Act 1985. Statutory accounts for theyear ended 28 February 2007 were approved by the Board of Directors on 10 May2007 and delivered to the Registrar of Companies. The report of the auditors onthose accounts was unqualified, did not contain an emphasis of matter paragraphand did not contain any statement under Section 237 of the Companies Act 1985. 2. Basis of preparation This condensed consolidated half-yearly financial information for the half-yearended 31 August 2007 has been prepared in accordance with the Disclosure andTransparency Rules of the Financial Services Authority and with IAS34, 'Interimfinancial reporting ' as adopted by the European Union. The half-yearlycondensed consolidated financial report should be read in conjunction with theannual financial statements for the year ended 28 February 2007, which have beenprepared in accordance with IFRSs as adopted by the European Union. 3. Accounting Policies The accounting policies are consistent with those of the annual financialstatements for the year ended 28 February 2007, as described in those annualfinancial statements. The following new standards, amendments to standards or interpretations aremandatory for the first time for the financial year ending 29 February 2008. • IFRIC 8, 'Scope of IFRS 2', effective for annual periods beginning on or after 1 May 2006. This interpretation has not had any impact on the recognition of share-based payments in the group. • IFRIC 9, 'Reassessment of embedded derivatives', effective for annual periods beginning on or after 1 June 2006. This interpretation has not had a significant impact on the reassessment of embedded derivatives as the group already assessed if embedded derivatives should be separated using principles consistent with IFRIC 9. • IFRIC 10, 'Interims and impairment', effective for annual periods beginning on or after 1 November 2006. This interpretation has not had any impact on the timing or recognition of impairment losses as the group already accounted for such amounts using principles consistent with IFRIC 10. • IFRS 7, 'Financial instruments: Disclosures', effective for annual periods beginning on or after 1 January 2007. IAS 1, 'Amendments to capital disclosures', effective for annual periods beginning on or after 1 January 2007. IFRS 4, 'Insurance contracts', revised implementation guidance, effective when an entity adopts IFRS7. As this interim report only contains condensed financial statements, and as there are no material financial instrument related transactions in the period, full IFRS 7 disclosures are not required at this stage. The full IFRS 7 disclosures, including the sensitivity analysis to market risk and capital disclosures required by the amendment of IAS 1, will be given in the annual financial statements. • IFRIC 11, 'IFRS 2 - Group and treasury share transactions', effective for annual periods beginning on or after 1 March 2007. Management do not expect this interpretation to be relevant for the group. The following new standards, amendments to standards and interpretations havebeen issued, but are not effective for the financial year ending 29 February2008 and have not been early adopted: • IFRS 8, 'Operating segments', effective for annual periods beginning on or after 1 January 2009, subject to EU endorsement. Management are currently gathering information to make a revision to the group's geographical segments. Management do not currently foresee any changes to the group's business segments. • IAS1 (Revised) - 'Presentation of Financial Statements', effective for annual periods beginning on or after 1 January 2009. • IAS23 (Revised) - 'Borrowing costs', effective for annual periods beginning on or after 1 January 2009. • IFRIC 12, 'Service concession arrangements', effective for annual periods beginning on or after 1 January 2008. Management do not expect this interpretation to be relevant for the group. • IFRIC 13, 'Customer loyalty programmes', effective for annual periods beginning on or after 1 July 2008. • IFRIC 14, 'IAS19 - The limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction', effective for annual periods beginning on or after 1 January 2008. None of the above standards are expected to have any impact on the group. 4. Segmental information Revenue Six months to Six months to Year ended 31 Aug 2007 31 Aug 2006 28 Feb 2007 £'000 £'000 £'000Shipbroking 23,879 17,348 40,530Logistics 12,013 10,904 23,449Technical services (1) 3,774 3,191 6,623Environmental services 7,004 1,121 3,229 46,670 32,564 73,831Bunker trading 22,016 17,948 33,369 68,686 50,512 107,200 Operating profitShipbroking 4,793 3,828 8,749Goodwill impairment charge - shipbroking - (950) (950) 4,793 2,878 7,799Logistics 432 588 911Technical services (1) 316 245 553Environmental services 1,226 68 225Bunker trading 12 8 62 6,779 3,787 9,550 (1) The results for Falconer Bryan Pte Limited for the period from the date ofacquisition to 31 August 2007 are included in Technical Services (see Note 11). 5. Taxation The taxation charge for the half-year is calculated using the estimatedeffective tax rate for the full year applied to the pre-tax profits at the halfyear. 6. Dividends The following dividends were paid by the Group: Six months to Six months to Year ended 31 Aug 2007 31 Aug 2006 28 Feb 2007 £000 £000 £000Interim dividend 6.75 pence per share - - 1,340Final dividend 12.25 pence (2006: 11.5 pence) per 2,451 2,255 2,255share 2,451 2,255 3,595 The Directors have declared an interim dividend of 8.00 pence per ordinaryshare, payable on 11 December 2007 to shareholders on the register on 9 November2007. 7. Earnings per share Six months to Six months to Year ended 31 Aug 2007 31 Aug 2006 28 Feb 2007 £'000 £'000 £'000Earnings - continuing operations 4,713 2,357 6,367Goodwill impairment charge - 950 950Earnings before goodwill impairment charge 4,713 3,307 7,317 pence Pence PenceEarnings per share 23.66 12.03 32.29Goodwill impairment - 4.85 4.82Earnings before goodwill impairment charge 23.66 16.88 37.11 Shares Shares SharesWeighted average number of ordinary shares 19,922,544 19,586,694 19,715,846Dilutive effect of share options 153,532 326,503 264,693Diluted weighted average number of ordinary shares 20,076,076 19,913,197 19,980,539 8. Capital expenditure Goodwill, tangible and intangible AssetsSix months ended 31 August 2006 £000Opening net book amount at 1 March 2006 27,976Acquisition of a subsidiary 2,103Additions 246Depreciation, amortisation, impairment and other movements (1,255)Closing net book amount at 31 August 2006 29,070 Six months ended 31 August 2007Opening net book amount at 1 March 2007 29,666Acquisition of a subsidiary (see note 11) 2,524Additions 561Disposals (7)Depreciation, amortisation, impairment and other movements (501)Closing net book amount at 31 August 2007 32,243 In addition to the movements disclosed above, in the six months ended 31 August2007, the Group reduced its interest in London Tankers Brokers Panel to 16.7%following the sale of 200 shares for consideration of £200,000. 9. Provisions Onerous Employee lease entitlements Total £'000 £'000 £'000At 1 March 2006 577 54 631Foreign exchange - (3) (3)Charged in the year 36 - 36Utilised in the year (21) - (21)At 31 August 2006 592 51 643 Onerous Employee lease entitlements Total £'000 £'000 £'000At 1 March 2007 418 45 463Foreign exchange - (4) (4)Released in the year (86) (25) (111)Utilised in the year (132) - (132)Reclassification from accruals - 101 101At 31 August 2007 200 117 317 Provisions have been analysed between current and non-current as follows: 31 Aug 2007 31 Aug 2006 28 Feb 2007 £'000 £'000 £'000Current 277 210 294Non-current 40 433 169 317 643 463 10. Share capital Number of Ordinary Share shares Shares Premium Total (thousands) £000 £000 £000At 1 March 2006 19,877 1,988 8,046 10,034Issues - share option schemes 275 26 388 414At 31 August 2006 20,152 2,014 8,434 10,448 At 1 March 2007 20,231 2,023 8,554 10,577Issues - share option schemes 263 26 447 473At 31 August 2007 20,494 2,049 9,001 11,050 The Group's ESOP trust acquired 197,900 of the company's shares throughpurchases on the London Stock Exchange at dates between 15 May 2007 and 27 July2007 at prices ranging between 383 and 417 pence. The total amount paid toacquire the shares was £797,000 and has been deducted from shareholders' equity. During the six months ended 31 August 2007, 262,916 shares were issued at pricesranging between 137.5 pence and 314 pence between 9 March 2007 and 31 August2007 for aggregate proceeds of £473,000. 11. Acquisitions On 7 July 2007 the Company acquired 100% of the share capital of Falconer BryanPte Limited for a cash consideration of £5.9m. The acquired business contributed revenues of £647k and a net profit beforeamortisation of £66k to the group for the period from acquisition to 31 August2007. The results of operations as if the acquisition had been made at thebeginning of the year would have been revenues of £2,507k and profit before taxof £335k. Details of net assets acquired and goodwill are set out below. The goodwill isattributable to Falconer Bryan's skilled engineering staff. The group has yetto finalise the amount of the fair value of the identifiable assets acquired. Purchase consideration £'000 - cash paid 2,443 - cash payable 3,370 - acquisition expenses 96Total purchase consideration 5,909 - fair value of identifiable assets acquired (see below) 4,296Goodwill 1,613 Acquiree's Provisional Carrying Fair Amount value £'000 £'000Cash and cash equivalents 1,732 1,732Property, plant and equipment 50 50Customer relationships - 861Receivables 2,538 2,538Payables (900) (900)Net deferred tax 15 15assets Net identifiable assets acquired 3,435 4,296 Outflow of cash to acquire the business, net of cash acquired: - cash consideration 2,443 - cash and cash equivalents in subsidiary acquired (1,732) - acquisition expenses 96Cash outflow on acquisition 806 In addition, £125,000 was paid in respect of deferred cash consideration onprevious acquisitions. On 28 September 2007, the Group paid £3.4m, being the balance of considerationdue to the Falconer Bryan vendors in respect of cash and working capitalacquired with the business. In respect of the businesses acquired by the Group in the year ended 28 February2007, the only adjustment since the publication of the accounts for that year isto adjust the Gorman Cory deferred contingent consideration to £959,000 (2007:£738,000). 12. Related party transactions Key management compensation amounted to £0.7m for the six months ended 31 August2007 (31 August 2006 - £0.5m). 31 Aug 2007 31 Aug 2006 £000 £000Salaries and other short term benefits 603 424Social security costs 66 49Pension contributions 27 26Share-based payments 27 7 723 506 The above table does not include any bonus awards as they have not beenindividually determined. Statement of Directors' responsibilities The Directors confirm that this set of financial statements has been prepared inaccordance with IAS34 as adopted by the European Union, and that the interimmanagement report herein includes a fair review of the information required byDTR 4.2.7 and DTR 4.2.8. The Directors of Braemar Shipping Services PLC are listed in the BraemarShipping Services PLC Annual Report for 28 February 2007. By order of the Board A R. W. Marsh, Chief Executive J. R.V. Kidwell, Finance Director Independent review report to Braemar Shipping Services plc Introduction We have been instructed by the company to review the financial information forthe six months ended 31 August 2007 which comprises the consolidated balancesheet as at 31 August 2007 and the related consolidated income statement,consolidated cash flow statement and condensed consolidated half-yearlystatement of changes in equity for the six months then ended and related notes.We have read the other information contained in the half-yearly report andconsidered whether it contains any apparent misstatements or materialinconsistencies with the financial information. Directors' responsibilities The half-yearly report is the responsibility of, and has been approved by, thedirectors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the Disclosure and Transparency Rules of theUnited Kingdom's Financial Services Authority. As disclosed in note 1, the annual financial statements of Braemar ShippingServices plc are prepared in accordance with IFRSs as adopted by the EuropeanUnion. The financial information included in this half-yearly financial reporthas been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting," as adopted by the European Union. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the disclosed accounting policies havebeen applied. A review excludes audit procedures such as tests of controls andverification of assets, liabilities and transactions. It is substantially lessin scope than an audit and therefore provides a lower level of assurance.Accordingly we do not express an audit opinion on the financial information.This report, including the conclusion, has been prepared for and only for thecompany for the purpose of the Disclosure and Transparency Rules of theFinancial Services Authority and for no other purpose. We do not, in producingthis report, accept or assume responsibility for any other purpose or to anyother person to whom this report is shown or into whose hands it may come savewhere expressly agreed by our prior consent in writing. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 August 2007. PricewaterhouseCoopers LLPChartered AccountantsWest London22 October 2007 1 The maintenance and integrity of the Braemar Shipping Services plc web site isthe responsibility of the directors; the work carried out by the auditors doesnot involve consideration of these matters and, accordingly, the auditors acceptno responsibility for any changes that may have occurred to the financialstatements since they were initially presented on the website. 2 Legislation in the United Kingdom governing the preparation and disseminationof financial statements may differ from legislation in other jurisdictions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Braemar Shipping