RNS Number : 4187J
ACM Shipping Group PLC
03 December 2008
Press Release 3 December 2008
ACM Shipping Group plc
("ACM" or "the Group")
Interim Results
ACM Shipping Group plc (AIM:ACMG), a leading international tanker broker, today announces its interim results for the half year ended 30
September 2008.
Highlights
* Revenue in US dollars up 76% to US$24.4 million (H1 2007: US$13.8 million)
* Profit before amortisation and tax £3.4 million (H1 2007: £1.7 million)
* Interim dividend increased by 25% to 2.5 pence per share (H1 2007: 2.0
pence per share)
* Adjusted diluted earnings per share increased 93% to 13.7 pence (H1 2007:
7.1 pence)
* Forward order book at record level of US$43.5 million
* Strong cash position with £1.7 million at half year and no debt
* Acquisition of Harris & Dixon Shipbrokers
Commenting on the results, Johnny Plumbe, Chief Executive of ACM Shipping Group plc, said: "I am delighted with the results for the
first half of the year. In line with our strategy all areas of the Group have grown organically. In addition the complementary acquisition
of Harris & Dixon has outperformed management expectations in the first half. Prospects for the Group in the second half are strong, recent
trading has been encouraging and the Group has a good forward book in time charter and sale and purchase in the second half.
"We are in the fortunate position of not having exposure to the dry bulk cargo market at this time. The fundamentals of the world's oil
consumption are somewhat different to the dry bulk market. The current strength of the dollar will boost the sterling equivalent income and
the Board has confidence for the full year."
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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
John Llewellyn-Lloyd Tel: +44 (0) 20 7763 2200
Sam Reynolds www.noblegp.com
Media enquiries:
Abchurch
Charlie Jack / Stephanie Cuthbert Tel: +44 (0) 20 7398 7718
charlie.jack@abchurch-group.com www.abchurch-group.com
Chairman and Chief Executive's statement
Results
The first six months of the current year delivered an excellent profit before amortisation and tax which more than doubled to £3.4
million on the previous year's £1.7 million. The Group's revenue has increased in US dollar terms by 76 per cent. to US$24.4 million (2007:
US$13.8 million).
ACM has grown strongly on the back of both organic growth and through acquisition. On a like for like basis the number of spot fixtures
rose by 22 per cent. over the previous year and time charter business was up by 32 per cent.. Income was also boosted by strong average
freight rates during the period. ACM's forward book continued to expand and is yet again at a record level of US$43.5 million including time
charter of US$ 29.8 million and sale and purchase of US$13.7 million.
The sale and purchase activity of the Group now includes ACM Shipping Services Limited ("ACMSS") which was acquired in December 2007.
Although it was a difficult market during this period due to a decline in the number of vessels changing ownership, revenue was up and more
sale and purchase deals have been contracted which complete in the second half of this year.
The Group acquired the specialist small oil tanker broker, Harris & Dixon Shipbrokers ("Harris & Dixon") in June 2008. Harris & Dixon
further diversifies our service offering. The business has outperformed management's expectations since acquisition and has integrated well
with ACM's other teams.
The Group's new India office, which opened in December 2007, had a very encouraging start in the first six months. The team of brokers
is now well established and has concluded a term contract of affreightment with the main state owned oil company, Indian Oil Company. ACM is
confident of continued successes of this office.
After a slower start than expected, our Singapore office is performing well on the clean petroleum products tanker market and is now
well established to grow further in the region.
ACM's 50 per cent. joint venture with GFI Group, Inc. returned a profit increase of 45 per cent. in the first half of the year and they
are benefiting from more active markets. The tanker freight futures market is being used by many oil companies, oil traders and independent
tanker owners and has a very solid structure to it. We are sure this market will continue to prove positive to ACM'S earning.
Although the US dollar strengthened against the pound towards the end of the period it did not have a significant impact on the first
six months of the year with an average exchange rate of US$1.93 compared to US$2.00 to sterling last year. It is pleasing to report that
adjusted diluted earnings per share at 13.7 pence rose 93 per cent. on the previous period's 7.1 pence.
The Group remains cash generative and ended the period with a strong cash position of £1.7 million and no debt. This was despite paying
£2.5 million for Harris & Dixon and £3.0 million deferred consideration for ACMSS. There is some distortion in the cash position as the
majority of bonuses are paid in the second half of the year.
Dividend
In line with these excellent results, the Group is paying a dividend of 2.5 pence per share for the first six months of the year. This
is a 25 per cent. increase over the previous period and is covered 5.6 times on first half adjusted earnings. This dividend is payable on
27 February 2009 to shareholders on the register as at 23 January 2009.
The Market
ACM is focussed on the wet tanker market. Recently the wet charter rates have experienced a decline mainly due to sentiment. However the
global demand for oil remains strong and trading remains resilient. The world consumption of oil is approximately 86 million barrels a day
and the International Energy Agency estimate growth of 300,000 barrels a day for 2009. The geographical demand for oil is shifting away
from the USA and there has been a significant increase in consumption of imported oil from Far Eastern economies. ACM is in a good position
to maximise on this ongoing opportunity. The oil price has little effect on tanker freight rates; however sustained lower oil prices will
drive global consumption and therefore the volume of oil shipped.
The Group has no exposure to the dry bulk market except some transactions carried out by the sale and purchase team.
Strategy
In line with its strategy to become an international diversified and integrated shipping services broker, the Group continues to expand
its services and global reach, whilst continuing its position as one of the most profitable firms in the wet tanker broker business. ACM's
broking teams around the world have taken on senior brokers during the period who are making a significant contribution to the Group's
ability to generate future business.
Current trading and Outlook
Prospects for the second half are strong. Recent trading has been encouraging and the Group has good fixtures in time charter and sale
and purchase booked for the second half. Recently tanker charter rates have declined; however there is still a strong global demand for oil
and the wet market is standing very firm compared to the dry bulk shipping market. The Group is constantly looking for services that will
broaden its current offering and it is ACM's intention to diversify both organically and through complementary acquisitions.
Given the market, the value of the forward order book and the current strength of the dollar, which will boost the sterling equivalent
income, the Group looks forward to the year ahead with confidence.
Peter Sechiari Johnny Plumbe
Chairman Chief Executive
3 December 2008 3 December 2008
Unaudited consolidated income statement
Half year to Half year to Year to
30 September 30 September 31 March
2008 2007 2008
Note
£000 £000 £000
Revenue 2 12,663 6,896 19,638
Administrative expenses (9,865) (6,118) (15,709)
Amortisation of intangible assets (289) - (664)
2,509 778 3,265
Share of operating profits in
joint ventures
and associates 3 643 802 1,308
Operating profit 3,152 1,580 4,573
Net interest (payable)/ (24) 102 242
receivable
Profit before taxation 3,128 1,682 4,815
Taxation on profit on ordinary 4 907 588 1,744
activities
Profit for the period 2,221 1,094 3,071
All of the activities of the ACM Shipping Group are classed as continuing.
Earnings per share
5
Basic 12.8p 7.1p 19.3p
Fully diluted 12.6p 7.1p 19.2p
Unaudited Group statement of recognised income and expense
Half year to Half year to Year to
30 September 30 September 31 March
2008 2007 2008
£000 £000 £000
Profit for the period 2,221 1,094 3,071
Actuarial (loss)/gain in respect of (1,073) 365 323
defined benefit pension scheme
Deferred tax in respect of defined 300 (110) (118)
benefit pension scheme
Exchange differences on translation of (54) 31 21
foreign operations
Currency reserve (316) 35 1
Deferred tax in respect of currency 88 (10) -
reserve
Total recognised income and expense 1,166 1,405 3,298
Unaudited Group balance sheet
30 September 30 September 31 March
2008 2007 2008
£000 £000 £000
Non-current assets
Property, plant and equipment 553 423 484
Intangible assets 10,951 - 8,702
Investments 1,734 1,975 1,509
Deferred tax asset 672 331 293
13,910 2,729 10,988
Current assets
Trade and other receivables 5,531 3,046 3,979
Cash and cash equivalents 1,665 3,098 3,565
7,196 6,144 7,544
TOTAL ASSETS 21,106 8,873 18,532
Current liabilities
Trade and other payables (8,526)) (4,352) (8,097)
Current tax payable (1,049) (509) (1,131)
Dividends payable (698) (306) -
(10,273) (5,167) (9,228)
Non-current liabilities
Deferred tax liabilities (369) (44) (394)
Pension liability (2,084) (1,103) (1,045)
(2,453) (1,147) (1,439)
TOTAL LIABILITIES (12,726) (6,314) (10,667)
NET ASSETS 8,380 2,559 7,865
Capital and reserves
Share capital 175 153 173
Share premium account 3,730 - 3,730
Merger reserve (135) (135) (135)
Retained earnings 4,783 2,516 4,087
Other reserves (173) 25 10
TOTAL EQUITY 8,380 2,559 7,865
Unaudited Group statement of changes in equity
Share capital Share premium Merger reserve Retained earnings Other reserves Total
£000 £000 £000 £000 £000 £000
Balance at 1 April 2007 153 - (135) 1,442 - 1,460
Profit for the period - - - 1,094 - 1,094
Dividends to equity - - - (306) - (306)
shareholders
Actuarial gain in respect of - - - 365 - 365
defined benefit pension scheme
Deferred tax in respect of - - - (110) - (110)
defined benefit pension scheme
Currency translation - - - 31 - 31
differences
Currency reserve - - - - 35 35
Deferred tax in respect of - - - - (10) (10)
currency reserve
Balance at 30 September 2007 153 - (135) 2,516 25 2,559
Profit for the period 1,977 1,977
Dividends to equity - - - (346) - (346)
shareholders
Actuarial gain in respect of - - - (42) - (42)
defined benefit pension scheme
Deferred tax in respect of - - - (8) - (8)
defined benefit pension scheme
Currency translation - - - (10) - (10)
differences
Currency reserve - - - - (34) (34)
Deferred tax in respect of - - - - 10 10
currency reserve
Issue of shares 20 3,730 - - - 3,750
Fair value of share based - - - - 9 9
payments
Balance at 31 March 2008 173 3,730 (135) 4,087 10 7,865
Profit for the period - - - 2,221 - 2,221
Dividends to equity - - - (698) - (698)
shareholders
Actuarial gain in respect of - - - (1,073) - (1,073)
defined benefit pension scheme
Deferred tax in respect of - - - 300 - 300
defined benefit pension scheme
Currency translation - - - (54) - (54)
differences
Currency reserve - - - - (316) (316)
Deferred tax in respect of - - - - 88 88
currency reserve
Issue of shares 2 - - - - 2
Fair value of share based - - - - 45 45
payments
Balance at 30 September 2008 175 3,730 (135) 4,783 (173) 8,380
Unaudited Group cash flow statement
Half year to Half year to Year to
30 September 30 September 31 March
2008 2007 2008
£000 £000 £000
Profit before taxation 3,128 1,682 4,815
Depreciation 104 78 166
Interest receivable 24 (102) (242)
Shares of operating profits in joint (643) (802) (1,308)
ventures and associates
Amortisation of intangibles 289 - 664
Share-based payments 45 - 9
Operating cash flow before changes in 2,947 856 4,104
working capital and provisions
(Increase) in debtors (1,552) (238) (394)
Increase/(decrease) in creditors 3,069 1,771 1,019
Provision for pension scheme costs 178 87 167
Pension scheme contributions paid (206) (93) (221)
Cash generated from operating 4,436 2,383 4,675
activities
Taxation paid (1,005) (538) (2,063)
Net cash from operating activities 3,431 1,845 2,612
Cash flows from investing activities
Purchase of property and equipment (173) (56) (195)
Acquisitions, net of cash acquired (5,555) - (232)
Dividends received from associates - 240 240
Amounts received from joint ventures 425 461 1,101
Interest (paid)/received (30) 42 125
Net cash used in investing activities (5,333) 687 1,039
Cash flow from financing activities
Dividends paid - - (652)
Issue of new shares 2 - -
Net cash from financing activities 2 - (652)
Net decrease/(increase) in cash and (1,900) 2,532 2,999
cash equivalents
Cash and cash equivalents at the 3,565 566 566
beginning of the period
1,665 3,098
Cash and cash equivalents at the end of 3,565
the period
1. Accounting policies
These statements have been prepared in accordance the Companies Act and those EU endorsed IFRS standards and IFRIC interpretations issued
and effective as at the time of preparing these statements.
All principal accounting policies of the Group are consistent with those set out in the Annual Report and Accounts for 2008 and have been
consistently applied to all periods presented.
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 business 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:
Half year to Half year to Year to
30 September 30 September 31 March
2008 2007 2008
£000 £000 £000
Spot brokerage 7,591 4,128 9,139
Time charter 3,499 2,316 5,212
Demurrage 435 268 565
Saleand purchase 1,138 184 4,722
ooo
Joint ventures 12,663 6,896 19,638
3. Share of operating profits of joint ventures and associates
The Group*s share of operating profits of joint ventures and associates was:
Half year to Half year to Year to
30 September 30 September 31 March
2008 2007 2008
£000 £000 £000
Joint ventures 643 444 865
Associates - 358 443
ooo
Joint ventures 643 802 1,308
4. Taxation on profit on ordinary activities
The tax charge for the half year to 30 September 2008 has been provided at the estimated rate of 29% applicable for the year. The rate is
lower than that in previous periods due to the use of overseas losses in the current period whereas previous periods suffered from
unutilised losses.
5. Earnings per share
Earnings per share (EPS) is calculated by dividing the profit attributable to equity shareholders in the period ended by the weighted
average number of shares in issue during each relevant period.
Half year to Half year to Year to
30 September 30 September 31 March
2008 2007 2008
£000 £000 £000
Earnings
Earnings for the year 2,221 1,094 3,071
Adjust for amortisation of 289 - 664
intangibles
Adjust for taxation impact of (81) - (186)
amortisation of intangibles
Earnings for adjusted EPS 2,429 1,094 3,549
Number of shares Number Number Number
Weighted average number of shares 17,349,756 15,318,511 15,940,665
Dilution effect of share plans 330,577 - 65,665
Diluted weighted average number of 17,680,233 15,318,511 16,006,330
shares
Earnings per share (pence)
Basic 12.8 7.1 19.3
Diluted 12.6 7.1 19.2
Adjusted 14.0 7.1 22.3
Adjusted diluted 13.7 7.1 22.2
6. Dividends
The interim dividend for the half year ended 30 September 2008 is 2.5 pence per share payable on 27 February 2009 to shareholders on the
register on 23 January 2009. An interim dividend of 2 pence was paid in the previous year which together with a final dividend of 4 pence
resulted in a total dividend of 6 pence in respect of the year to 31 March 2008.
7. Share capital
The increase in share capital is due to 180,000 ordinary shares of 1p each being issued under the Group*s Long Term Investment Plan to an
existing employee of the Group.
8. Business combinations
On 23 June 2008 the Group acquired the ship broking business of Harris & Dixon Shipbrokers Limited (*Harris & Dixon*) for a total cash
consideration of £2.5 million plus expenses of £38,000.
The provisional fair value of the assets acquired was:
Bookvalue Fair value adjustments Fairvalue
£*000 £*000 £*000
Intangible assets - 1,005 1,005
Goodwill 1,533
2,538
Consideration:
Cash 2,500
Directly attributable costs 38
2,538
In the period Harris & Dixon contributed £80,000 to the net profit of the Group after amortisation of intangible assets.
Included in the £1,533,000 of goodwill recognised above are certain intangible assets that cannot be individually separated and reliably
measured due to their nature. These items include an assembled workforce and the detailed knowledge and expertise of the specialist
markets.
£1,005,000 of intangible assets were separated from goodwill as part of this business combination and relate to the forward order book and
customer relationships. The fair values of these intangible assets were calculated by an independent valuer using the net present value of
future cashflows.
9. Nature of financial information
The Interim Announcement set out above does not represent statutory accounts for ACM Shipping Group plc or for any of the entities
comprising the ACM Shipping Group.
The Directors
ACM Shipping Group plc
Kinnaird House
1 Pall Mall
London
SW1Y 5AU
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