RNS Number : 2494X
ACM Shipping Group PLC
23 June 2008
Press Release 23 June 2008
ACM Shipping Group plc
("ACM" or "the Group")
Preliminary Results
ACM Shipping Group plc (AIM:ACMG), a leading international tanker broker, today announces
its Preliminary Results for the year ended 31
March 2008.
Highlights
* Total revenue up 54% on 2007 to US$39.3 million (2007: US$25.6 million)
* Like for like revenue up 22% on 2007
* Profit before amortisation and taxation up 49% to £5.5 million (2007: £3.7
million)
* Final dividend of 4 pence per share
* 12% increase in the number of spot fixtures contracted during the period
* Time charter forward order book at record level of US$24.7 million, up 27%
on 2007
* Acquisition of ACM Shipping Services in December 2007 for £9.6 million
* Sale and purchase forward order book at US$7.5 million
* Basic EPS up 30%, diluted EPS up 29% while adjusted diluted EPS is up 49%
* New office formally opened in India
Subsequent Highlights
* Acquisition of Harris & Dixon Shipbrokers for a total cash consideration
of £2.5 million
Commenting on the results, Johnny Plumbe, Chief Executive of ACM Shipping Group plc, said:
"ACM has now been listed on AIM for 18
months and we are very pleased with our progress. As well as having made two important
strategic acquisitions we have increased our revenue
from organic growth. Our global presence is growing and we are confident that this base will
give us a successful future."
For further information, please contact:
ACM Shipping Group plc
Johnny Plumbe, Chief Executive Tel: +44 (0) 20 7930 7555
Ian Hartley, Finance Director
jplumbe@acmshipping.co.uk www.acmshippinggroup.com
ihartley@acmshipping.co.uk
Noble & Company Limited
Matthew Hall Tel: +44 (0) 20 7763 2200
matthew.hall@noblegp.com www.noblegp.com
Media enquiries:
Abchurch
Henry Harrison-Topham / Stephanie Cuthbert Tel: +44 (0) 20 7398 7718
stephanie.cuthbert@abchurch-group.com www.abchurch-group.com
Chairman's Statement
This is our first full reporting year following ACM's flotation on AIM in December 2006.
I am delighted to report that the Group has
had an extremely successful year growing substantially both organically and through
acquisition. In December 2007, we further increased our
global presence by opening an office in India, which complements our Singapore and Chinese
offices.
Results
Our revenue from ship broking increased in US dollar terms by 54% to US$39.3 million
(2007: US$25.6 million). Excluding the effect of
the acquisition of ACM Shipping Services Limited ("ACMSS"), like for like revenue in dollars
increased by 22% on 2007. We fixed a record
number of ships and our forward income from time charters as at 31 March 2008 is at
US$24.7million up 27% on last year. Sale and purchase
had an exceptional year and the current forward order book is valued at US$7.5million. The
weakness of the US dollar continued to have an
adverse effect on our sterling equivalent revenues. Notwithstanding this weakness profit
before amortisation and taxation was up 49% to
£5.5 million (2007: £3.7 million) with adjusted diluted earnings per share (at 22.2 pence)
up 49% on the preceding year. The business has
remained extremely cash generative. The acquisition cost of ACMSS was £9.6 million paid by a
mix of shares and cash.
Dividend
ACM is committed to a progressive dividend policy. The Directors are recommending a final
dividend of 4 pence per share in respect of
the year to 31 March 2008, making a total of 6 pence per share for the year. The dividend is
payable on 9 October 2008 to shareholders on
the register as at 12 September 2008.
Employees
Since our inception 26 years ago, the Group has developed a very successful business with
an extensive and loyal list of clients. It
has been particularly encouraging that we have been able to expand our teams with a number of
well known senior brokers in the industry. We
look forward to continuing to build on this strong platform. It is appropriate to extend our
thanks to all members of our staff for their
wholehearted commitment to our continued success.
Strategy
ACM's strategy is to expand into an international diversified and integrated shipping
services provider, whilst maintaining its position
as one of the most profitable firms in the tanker broking business. Our aim is to gain market
share by continuing to build an expert team of
brokers to penetrate new regional markets and other shipping sectors in order to grow the
business with existing and new clients.
Current trading
The start to the current year has been encouraging. Freight rates have been firm and the
number of spot deals contracted has continued
to rise. Despite the world economic problems, the prospect for the tanker freight market in
the near term is good as global demand for
transporting oil continues to be positive. Given the strength of our forward order book and
the new areas ACM are moving into, the Board
looks to the future with confidence.
Peter Sechiari
Chairman
23 June 2008 Chief Executive's Review
We are extremely pleased with the progress the Group has made during the year, both in
terms of results for the year and investment in
our future. Our US dollar income, including four months of our new acquisition, ACMSS, was up
54% on the previous year. Excluding this
acquisition our dollar income grew 22%. This follows an 8% increase in the previous year. We
have also continued to invest for organic
growth in terms of brokers both in the UK and overseas.
Spot brokerage
The core of ACM's business is spot brokerage, which involves the hire of a vessel for a
single voyage. The number of spot deals fixed
during the year is an important performance indicator of the business. This grew 12% year on
year following a 15% increase the previous
year. Total spot income in US dollars showed a 14% uplift. Our average freight income per
deal increased slightly during the year. This
was due to a significant increase in rates in the last few months of the year following a
period of relatively subdued rates in the previous
months.
Time charter
Our time charter business, which involves the long term hire of tankers, had an excellent
year. Income in US dollars for the year
showed a 45% increase over the previous year. An important benefit of having a strong time
charter ethos is that it gives the Group a
forward order book. At the year end, ACM's forward order book stood at over US$24.7 million
and showed an increase of 27% on the previous
year. This income includes certain contracts which run to 2018, but US$9 million of this will
be invoiced in the 2008/9 financial year.
Sale and purchase
Our sale and purchase business was considerably strengthened during the year by our
acquisition of ACMSS in December 2007. ACMSS
business had an exceptional period of trading following the acquisition. Although we do not
expect this level of performance to continue,
we believe it continues to be a sound investment and was an important strategic move for the
Group which will strengthen ACM globally.
Overseas operations and new markets
We have continued to expand our business globally. Our Indian office, which formally
opened for business in December 2007, has already
started to show very encouraging signs of its ability to increase our global market share of
the tanker business. This follows a year of
becoming established and training our employees. Our Singapore office continued to support
our UK office and also increased its own direct
business. In China we are in process of changing our operation from a joint venture to a
wholly owned and controlled operation. We believe
that this approach will increase our opportunities to do business in the new building arena in
this important market.
In early 2007 we started to become involved in the gas shipping market. This business is
now showing signs of genuine progress and we
are confident about a successful future for ACM in this market.
Joint venture
Our joint venture with GFI Group, Inc. to conduct derivative brokerage had another good
year although the contribution to profit was
slightly below last year at £0.9 million.
Acquisition of Harris & Dixon Shipbrokers
Today we have separately announced the acquisition of the ship broking business of Harris
& Dixon Shipbrokers Limited. This acquisition
is an excellent strategic step for ACM as they specialise in the one area of tanker broking
that ACM is not currently involved in.
Furthermore the deal will quickly become earnings enhancing. Harris & Dixon have an extremely
experienced broking team who are committed to
the company for the long term; they bring with them a solid forward book and the combined
customer bases will provide further exciting
trading opportunities for the Group.
Outlook
This has been an exciting period for ACM, both organically and through acquisition. Our
international footprint is growing and we are
confident that this base along with synergies gained through acquisition will help drive
profitability throughout the organisation.
Johnny Plumbe
Chief Executive
23 June 2008
Financial review
Profit and earnings
Profit before taxation for the year was £4.8 million (2007: £3.7 million). After adding
back amortisation of £0.7 million on intangible
assets arising out of the acquisition during the year, adjusted profit before tax and
amortisation was £5.5 million. This represents an
increase of 49% over the previous year.
Earnings per share increased from 14.9 pence in 2007 to 19.3 pence basic, 19.2 pence
diluted, 22.3 p adjusted and 22.2 pence on an
adjusted diluted basis.
Foreign exchange
The bulk of the Group's income is denominated in US dollars. The US dollar further
weakened during the year. The average effective
exchange rate for the year was US$2.00 compared with US$1.94 for the previous year, while the
rate at 31 March 2008 was US$1.99 compared
with US$1.96 for the previous year. The Group's revenue would have been higher by
approximately £0.5 million if the 2007/8 US dollar income
had been translated at 2006/7 exchange rates.
Dividends
The Directors are recommending a final dividend of 4 pence per share in respect of the
year to 31 March 2008 at a total value of
£691,000. Together with an interim dividend of 2 pence paid during the year, the total
dividend in respect of the year would be 6 pence at
a total value of £1,037,000.
Cash flow
One of the key attributes of the Group is its cash generative nature. Cash generated from
operating activities was £4.7 million (2007:
inflow £0.3 million, low due to settlement of pre IPO bonuses). This inflow excludes a
further £1.3 million (2007: £1.4 million) received
from joint ventures and associates. The cash balance at the year end was £3.6 million (2007:
£0.6 million). However it should be noted
that deferred consideration on the acquisition of ACMSS of £2.9 million was paid on 3 April
2008. The cash outflow for this acquisition
during the year was £0.2 million, being £2.8 million cash consideration less £2.6 million
cash acquired.
Balance Sheet
Included within non-current assets is £8.7 million for intangible assets which resulted
from the acquisition of ACMSS.
Share capital has increased as 1,963,003 shares were issued as part consideration for the
acquisition of ACMSS. A share premium account
of £3.7million has been set up as a result of this acquisition, being the difference in value
between the nominal value of the shares and
the market value at the date of the acquisition.
The pension deficit for the defined benefit scheme has reduced to £1.0 million from £1.5
million. A deferred tax asset of £0.3 million
(2007: £0.5 million) exists as a result of this liability. This scheme is closed to new
members.
The value of net assets at the balance sheet date was £7.9 million (2007: £1.5
million).
Risk management
The Board seeks to identify and monitor risks facing the business.
Foreign exchange risk; the majority of the Group's income is denominated in US dollars and
the rate of exchange relative to sterling can
have an effect on the performance of the Group. The Group uses foreign exchange instruments
to manage this risk. At March 31 2008 the
Group had forward foreign exchange contracts in place to sell US$6.4 million (2007: nil) into
sterling. The Board has introduced a policy
to continually have some forward cover in place to help manage this risk.
Liquidity risk; at 31 March the Group did not hold any net debt but had overdraft
facilities with its bank to allow flexibility in its
cash management and also to meet the Group's commitments to pay deferred consideration in
respect of the acquisition.
Interest rate risk; the Group has exposure to movements in interest rates in respect of
its deposits and also in respect of the
overdraft when utilised. All deposits are made with reputable banks.
International Accounting Standards
These financial statements are the first annual statements compiled in accordance with
International Financial Reporting Standards. The
2007 accounts have been restated to comply with these. However this adoption did not result
in substantial changes. A full explanation of
the changes, together with appropriate reconciliations, were provided in the Interim Statement
issued on 6 December 2007.
Ian Hartley
Finance Director
23 June 2008
Consolidated income statement
Year ended 31 March 2008
2008 2007
Note
(restated)
£'000 £'000
Revenue 2 19,638 13,502
Administrative expenses (15,709) (11,521)
Amortisation of intangible assets 4 (664) -
3,265 1,981
Share of operating profits in joint ventures
and associates 3 1,308 1,480
Operating profit 4,573 3,461
Net interest receivable 242 215
Profit before taxation 4,815 3,676
Taxation 1,744 1,432
Profit for the year 3,071 2,244
All of the activities of the ACM Shipping Group are classed as continuing.
Earnings per share 5
Basic 19.3p 14.9p
Fully Diluted 19.2p 14.9p
Group statement of recognised income and expense
Year ended 31 March 2008
2008 2007
(restated)
£'000 £'000
Profit for the year 3,071 2,244
Actuarial gain in respect of defined benefit pension 323 297
scheme
Deferred tax in respect of defined benefit pension scheme (118) (89)
Exchange differences on translation of foreign operations 21 17
Currency reserve - 5
Deferred tax in respect of currency reserve - -
Total recognised income and expense 3,297 2,474
Consolidated balance sheet
As at 31 March 2008
Note 2008 2007
(restated)
£'000 £'000
Non-current assets
Property and equipment 484 445
Intangible assets 4 8,702 -
Investments 1,509 1,981
Deferred tax asset 293 457
10,988 2,883
Current assets
Trade and other receivables 3,979 2,807
Cash and cash equivalents 3,565 566
7,544 3,373
TOTAL ASSETS 18,532 6,256
Current liabilities
Trade and other payables (8,097) (2,669)
Current tax payable (1,131) (571)
(9,228) (3,240)
Non-current liabilities
Deferred tax liabilities (394) (34)
Pension liability (1,045) (1,522)
(1,439) (1,556)
TOTAL LIABILITIES (10,667) (4,796)
NET ASSETS 7,865 1,460
Capital and reserves
Share capital 173 153
Share premium account 3,730 -
Merger reserve (135) (135)
Retained earnings 4,087 1,442
Other reserves 10 -
TOTAL EQUITY 7,865 1,460
Group cash flow statement
Year ended 31 March 2008
2008 2007
(restated)
£'000 £'000
Profit before taxation 4,815 3,676
Depreciation 166 143
Interest receivable (242) (215)
Shares of operating profits in joint ventures and (1,308) (1,480)
associates
Amortisation of intangibles 664 -
Share based payments 9 -
Operating cash flow before changes in working capital 4,104 2,124
and provisions
(Increase) in debtors (394) (376)
Increase/(decrease) in creditors 1,019 (1,400)
Provision for pension scheme costs 167 188
Pension scheme contributions paid (221) (253)
Cash generated from operating activities 4,675 283
Taxation paid (2,063) (1,007)
Net cash from operating activities 2,612 (724)
Cash flows from investing activities
Purchase of property and equipment (195) (64)
Investment - (1,006)
Acquisition of subsidiary, net of cash acquired (232) -
Dividends received from associates 240 502
Amounts received from joint ventures 1,101 919
Interest received 125 110
Net cash used in investing activities 1,039 461
Cash flows from financing activities
Dividends paid (652) (500)
Issue of new shares, less share issue costs - 3
Net cash used in financing activities (652) (497)
Net increase/(decrease) in cash and cash equivalents 2,999 (760)
Cash and cash equivalents at the beginning of the year 566 1,326
Cash and cash equivalents at the end of the year 3,565 566
1. Accounting policies
Basis of consolidation
The consolidated financial statements are for the year ended 31 March 2008. They have been
prepared under the historical cost convention
and in accordance with current International Financial Reporting Standards (IFRSs), and are
covered by IFRS 1, "First-time Adoption of
International Financial Reporting Standards.
The policies set our below have been consistently applied to all the periods presented.The Group has made use of the exemption
available under IFRS 1 where cumulative translation differences for all foreign operations are
deemed to be zero at the date of transition. Additionally, as permitted by IFRS 1, the Group has adopted IAS 32 "Financial instruments:
presentation" and IAS 39 "Financial instruments:
recognition and measurement", prospectively from 1 April 2006.
The Group's consolidated financial statements were prepared in accordance with United
Kingdom Generally Accepted Accounting Principles
(UK GAAP) until 31 March 2007. UK GAAP differs in some areas from IFRS. In preparing the 2007
consolidated interim financial statements,
management has amended certain accounting and valuation methods applied in the UK GAAP
financial statements to comply with IFRS. The
comparative figures in respect of prior periods were restated to reflect these adjustments as
disclosed in the reconciliations and
descriptions of the effect of the transition from UK GAAP to IFRS on the Group's equity and
its net income and cash flows were shown in the
Interim Announcement on 6 December 2007.
The financial information has been prepared on the basis of the recognition and
measurement requirements of IFRS in issue that either
are endorsed by the EU and effective (or available for early adoption) at 31 March 2008 or are
expected to be endorsed and effective (or
available for early adoption) at 31 March 2008, the Group's first annual reporting date at
which it is required to use adopted IFRSs.
The comparative figures for the year ended 31 March 2007, prior to the adjustments
required on transition to IFRS as described below and
in the Interim Announcement on 6 December 2007, have been extracted from the Group's financial
statements, a copy of which has been
delivered to the Registrar of Companies. The auditors' report on those statements was
unqualified and did not include a statement under
Section 237(2) or (3) of the Companies Act 1985. The interim financial information does not
constitute statutory accounts as defined under
Section 240 of the Companies Act 1985.
The adoption of the above IFRS did not result in substantial changes to the Group's
accounting policies under UK GAAP and as set out in
the Group's financial statements for the year ended 31 March 2007.
2. Segmental analysis
The Group has taken early adoption of IFRS8 "Operating Segments". The Group operates in
one business sector and does not report
internally any segmental information other than revenue streams. As a result no additional
business sector information is provided.Business is the Group's primary reporting segment. Geographical information is not produced
and is not readily available. In view of
management the cost of developing this information would be excessive.
Analysis of Group's revenue;
2008 2007
£*000 £*000
Spot brokerage 9,139 8,357
Time charter 5,212 3,825
Demurrage 565 571
Saleand purchase 4,722 749
Joint ventures 19,638 13,502
3. Share of operating profits of joint ventures and associates
The Group's share of operating profits of joint ventures and associates was:
2008 2007
£*000 £*000
Joint ventures 865 919
Associates 443 561
Joint ventures 1,308 1,480
4. Acquisition
During the year the Group acquired Alchemy Trading Company Limited, which owned the
remaining 70% interest in ACM Shipping Services
Limited that the Group did not already own for a total consideration of £9.6m. The
consideration included 1,963,003 new ordinary shares,
initial cash consideration of £2.8m and £3.0m of deferred cash consideration payable after
the year end.
Included within the assets acquired were goodwill of £7.4m and other intangible assets of
£2.0m.
Amortisation on intangible assets of £664,000 has been charged to the Profit and Loss
Account in the year to 31 March 2008 together with
a deferred taxation credit of £186,000.
5. Earnings per share
Earnings per share ("EPS") is calculated by dividing the profit attributable to equity
shareholders by the weighted average number of
shares in issue in the year.
2008 2007
£'000 £'000
Earnings
Earnings for the year 3,071 2,244
Adjust for amortisation of intangibles 664 -
Adjust for deferred taxation impact of amortisation (186) -
of intangibles
Earnings for adjusted EPS 3,549 2,244
Number of shares Number Number
Weighted average number of shares 15,940,665 15,100,353
Dilution effect of share plans 65,665 -
Diluted weighted average number of shares 16,006,330 15,100,353
Earnings per share (pence)
Basic 19.3 14.9
Diluted 19.2 14.9
Adjusted 22.3 14.9
Adjusted diluted 22.2 14.9
6. Dividend
The Directors are recommending a final dividend of 4 pence per share in respect of the
year to 31 March 2008 at a total value of
£691,000. This dividend is payable, subject to approval at the Company's AGM, on 9 October
2008 to shareholders on the register at 12
September 2008. Together with the interim dividend of 2 pence per share paid in February 2008
the total dividends payable in respect of the
year to 31 March 2008 is 6 pence per share at a total cost of £1,037,000.
A final dividend of 2 pence per share in respect of the period from 6 December 2006 (ACM's
IPO date) to 31 March 2007 at a total value
of £306,000 was paid in October 2007. The directors of ACM Shipping Limited approved the
payment of a dividend to holders of shares in ACM
Shipping Limited in respect of the six months ended 30 September 2006 prior to Admission to
AIM at a cost of £500,000.
7. Nature of financial information
The Preliminary Announcement set out above is an extract from the forthcoming Annual
Report and Accounts and does not represent
statutory accounts for ACM Shipping Group plc or for any of the entities comprising the ACM
Shipping Group. The statutory accounts of ACM
Shipping Group plc in respect of the period ending 31 March 2008 will be delivered to the
Registrars of Companies following the Company's
Annual General Meeting.
It is anticipated that the Annual Report and Accounts will be circulated to shareholders
of ACM Shipping Group plc before the end of
July.
The Directors
ACM Shipping Group plc
Kinnaird House
1 Pall Mall
London
SW1Y 5AU
- Ends -
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