Latest Results
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 2009.
DownloadThe Full Results are available to download in PDF format |
Highlights
- Revenue declined by 1% to £12.5 million (2008: £12.7 million)
- Revenue in US$ declined by 19% to US$19.8 million (2008:US$24.4 million)
- Profit before amortisation and tax of £3.3 million (2008: £3.4 million)
- Interim dividend increased by 10% to 2.75p per share (2008: 2.5 p per share)
- Adjusted earnings per share 13.1p (H1 2008: 14.0p)
- Forward order book US$31.0million: Time charter US$23.6 million plus S&P US$7.4 million
- Strong cash position of £6.4 million at half year and no debt (£4.9 million as at 31 March 2009)
- New international offices opened during the period in Moscow and Beijing to add to the existing offices in London, Singapore, Mumbai and Shanghai.
Commenting on the results, Johnny Plumbe, Chief Executive of ACM Shipping Group plc, said: "ACM continues to be one of the most profitable firms in the wet tanker broking business. The Group has had a good start to the year, despite freight levels falling from the exceptional high levels in the previous period. Although revenue from the spot desk was down due to the lower freight rates, we have continued to gain market share and the number of fixtures ACM made was up 11%. The other divisions of the business have continued to experience growth. We are confident that we will meet our expectations for the full year."
Chairman and Chief Executive's statement
Results
The Group delivered a profit before tax and amortisation of £3.3 million (2008: £3.4 million) for the first six months on revenue of US$19.8 million (2008: US$24.4 million). The Board is encouraged by this start to the year, particularly following the expected significant decline in freight rates, and we are confident that we will meet the Group's expectations for the full year.
The fall in revenue solely arose from the spot desk. Following an exceptionally good period, freight rates have fallen and the Group's average freight rate per fixture fell by 64%. However, ACM continues to increase its share of the spot market and the number of spot fixtures was up by 11% compared to the same period in 2008. This has put the Group in a strong position to benefit when freight rates recover.
The other divisions of the Group have continued to see growth. Revenue from time charter fixtures, which provides ACM with a forward order book and visibility on its future earnings, was up 6% to US$7.1 million (2008: US$6.7 million). The Group's time charter forward order book currently stands at US$23.6 million compared to US$25.3 million at the year end, 31 March 2009. This decline is due to a number of ship owners not wishing to fix their ships for long periods of time whilst freight rates are at a low level. ACM expects to quickly build this back up when rates improve.
Revenue from the sale and purchase desk continues to deliver being up 56% to US$3.4 million (2008:$US2.2 million) as the Group maintained a steady rate of contracts for the period.
The Group's joint venture with GFI Group, Inc. to conduct derivative brokerage performed strongly during the period. It increased its customer base and there was a significant rise in the volume of deals and the contribution to profit was up 28%. This venture continues to add significant value to ACM.
The Group benefitted from the strengthening of the US dollar during the period. In pound sterling terms revenue was down just 1% compared to 19% in US$ terms. The average rate for the period was US$1.59 compared to US$1.93 last year. This in effect added £2.2 million to the Group's top line and £0.9 million to profit before taxation.
The success of ACM is dependent on its team of high quality brokers. To ensure the Group is well positioned for the future it has invested in its people both in the UK and overseas. During the period ACM opened offices in Moscow and Beijing. These steps increased administration costs in line with the strategic objective of delivering rewards in the future.
The Group remains cash generative and ended the period with a strong cash position of £6.4 million and no debt.
The pension deficit for the defined benefit scheme has increased to £2.5 million from £1.2 million. This is mainly due to corporate bond yields falling. On the back of a full actuarial valuation as at 31 March 2008 the Group agreed to make additional contributions of £300,000 per annum to the pension scheme. The calculation of the deficit as at 30 September 2009 does not affect the funding plan or the charge to the income statement.
Dividend
ACM continues to maintain a progressive dividend policy. The Group is paying an interim dividend of 2.75 pence per share for the first six months of the year. This is a 10% increase over the previous period and is covered 4.8 times on first half adjusted earnings. This dividend is payable on 26 February 2010 to shareholders on the register as at 22 January 2010. The full year dividend to 31 March 2009 was 8.5 pence per share.
The Market
During the period ACM continued to focus on the wet tanker market. There is still strong global demand for oil and the situation is becoming more optimistic as the world economy recovers, this recovery is likely to assist the strengthening of freight rates. Medium and long term forecasts show a continuing increase in the world demand for oil, particularly in the Far East. ACM is not currently involved in the dry bulk market but continues to review opportunities to enter into this market in a controlled and measured way.
Strategy
ACM continues to be a growing and profitable wet tanker broker. The Group has built a solid structure for future growth. In line with its strategy to become an international diversified and integrated shipping services broker, ACM continues to expand its services and global reach. Since the Group floated in December 2006 it has opened offices in India, Shanghai, Beijing and Moscow as well as having made two strategic and complementary acquisitions. ACM has expanded its teams both in the UK and in Singapore and has also started a gas desk. All of these developments are key to the Group's future growth. The Group is continuously looking for opportunities for growth and continues to consider expanding into new shipping sectors including the dry cargo market. Whilst expansion in these areas remains a key consideration, the Group maintains a prudent view to growing its service offering and will not make changes that could jeopardise the underlying profitable and growing business.
Outlook
Despite the decline in freight rates, ACM had an encouraging start to the financial year, the volume of trades held up and the Group has continued to increase its market share. Based on current trading conditions the Group expects the full year performance to be in line with the Board's expectations. The Group's strategy has proven to be highly successful and has laid the foundations for future growth. The Board is confident that in continuing to execute its strategy of expanding its offering through the addition of new services and offices in new locations, particularly in the Far East, that it should enhance shareholder returns over the medium and longer term future.
| Peter Sechiari | Johnny Plumbe |
| Chairman | Chief Executive |
| 3 December 2009 | 3 December 2009 |
Unaudited consolidated income statement
| Half year to | Half year to | Year to | ||
| 30 September | 30 September | 31 March | ||
| Note | 2009 | 2008 | 2009 | |
| £000 | £000 | £000 | ||
| Revenue | 2 | 12,509 | 12,663 | 30,143 |
| Administrative expenses | (10,012) | (9,865) | (22,907) | |
| Amortisation of intangible assets | (218) | (289) | (606) | |
| 2,279 | 2,509 | 6,630 | ||
| Share of operating profit in joint venture | ||||
| 823 | 643 | 1,490 | ||
| Operating profit | 3,102 | 3,152 | 8,120 | |
| Net interest payable | (18) | (24) | (5) | |
| Profit before taxation | 3,084 | 3,128 | 8,115 | |
| Taxation | 3 | 925 | 907 | 2,275 |
| Profit for the period | 2,159 | 2,221 | 5,840 |
All of the activities are classed as continuing.
Earnings per share
| 4 | ||||
| Basic | 12.2p | 12.8p | 33.4p | |
| Fully diluted |
12.2p | 12.6p | 33.2p |
Unaudited consolidated statement of recognised income and expense
| Half year to | Half year to | Year to | |
| 30 September | 30 September | 31 March | |
| 2009 | 2008 | 2009 | |
| £000 | £000 | £000 | |
| Profit for the period | 2,159 | 2,221 | 5,840 |
| Actuarial loss in respect of defined benefit pension scheme | (1,495) | (1,073) | (652) |
| Deferred tax in respect of defined benefit pension scheme | 419 | 300 | 183 |
| Exchange differences on translation of foreign operations | 15 | (54) | (100) |
| Currency reserve | (94) | (316) | 9 |
| Deferred tax in respect of currency reserve | 24 | 88 | - |
| Total recognised income and expense | 1,028 | 1,166 | 5,280 |
Unaudited consolidated balance sheet
| 30 September | 30 September | 31 March | ||
| 2009 | 2008 | 2008 | ||
| £000 | £000 | £000 | ||
| Non-current assets | ||||
| Property, plant and equipment | 471 | 553 | 550 | |
| Intangible assets | 10,401 | 10,951 | 10,619 | |
| Investments | 1,440 | 1,734 | 1,493 | |
| Deferred tax asset | 697 | 672 | 338 | |
| 13,009 | 13,910 | 13,000 | ||
| Current assets | ||||
| Trade and other receivables | 5,130 | 5,531 | 5,997 | |
| Cash and cash equivalents | 6,391 | 1,665 | 4,935 | |
| 11,521 | 7,196 | 10,932 | ||
| TOTAL ASSETS | 24,530 | 21,106 | 23,932 | |
| Current liabilities | ||||
| Trade and other payables | (7,544) | (8,526) | (9,014) | |
| Current tax payable | (1,014) | (1,049) | (1,317) | |
| Dividends payable | (1,059) | (698) | - | |
| (9,617) | (10,273) | (10,331) | ||
| Non-current liabilities | ||||
| Deferred tax liabilities | (77) | (369) | (208) | |
| Pension liability | (2,488) | (2,084) | (1,206) | |
| (2,565) | (2,453) | (1,414) | ||
| TOTAL LIABILITIES | (12,182) | (12,726) | (11,745) | |
| NET ASSETS | 12,348 | 8,380 | 12,187 | |
| Capital and reserves | ||||
| Share capital | 176 | 175 | 176 | |
| Share premium account | 3,730 | 3,730 | 3,730 | |
| Merger reserve | (135) | (135) | (135) | |
| Retained earnings | 8,258 | 4,783 | 8,219 | |
| Other reserves | 319 | (173) | 197 | |
TOTAL EQUITY |
12,348 |
8,380 |
12,187 |
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 2008 | 173 | 3,730 | (135) | 4,087 | 10 | 7,865 |
| Profit for the period | - | - | - | 2,221 | - | 2,221 |
| Dividends to equity shareholders | - | - | - | (698) | - | (698) |
| Actuarial loss in respect of defined benefit pension scheme | - | - | - | (1,073) | - | (1,073) |
| Deferred tax in respect of defined benefit pension scheme | - | - | - | 300 | - | 300 |
| Currency translation differences | - | - | - | (54) | - | (54) |
| Currency reserve | - | - | - | - | (316) | (316) |
| Deferred tax in respect of currency reserve | - | - | - | - | 88 | 88 |
| Fair value of share based payments | - | - | - | - | 45 | 45 |
| Issue of shares | 2 | - | - | - | - | 2 |
| Balance at 30 September 2008 | 175 | 3,730 | (135) | 4,783 | (173) | 8,380 |
| Profit for the period | - | - | - | 3,619 | - | 3,619 |
| Dividends to equity shareholders | - | - | - | (441) | - | (441) |
| Actuarial gain in respect of defined benefit pension scheme | - | - | - | 421 | - | 421 |
| Deferred tax in respect of defined benefit pension scheme | - | - | - | (117) | - | (117) |
| Currency translation differences | - | - | - | (46) | - | (46) |
| Currency reserve | - | - | - | - | 325 | 325 |
| Deferred tax in respect of currency reserve | - | - | - | - | (88) | (88) |
| Issue of shares | 1 | - | - | - | - | 1 |
| Fair value of share based payments | - | - | - | - | 133 | 133 |
| Balance at 31 March 2009 | 176 | 3,730 | (135) | 8,219 | 197 | 12,187 |
| Profit for the period | - | - | - | 2,159 | - | 2,159 |
| Dividends to equity shareholders | - | - | - | (1,059) | - | (1,059) |
| Actuarial loss in respect of defined benefit pension scheme | - | - | - | (1,495) | - | (1,495) |
| Deferred tax in respect of defined benefit pension scheme | - | - | - | 419 | - | 419 |
| Currency translation differences | - | - | - | 15 | - | 15 |
| Currency reserve | - | - | - | - | (94) | (94) |
| Deferred tax in respect of currency reserve | - | - | - | - | 24 | 24 |
| Fair value of share based payments | - | - | - | - | 192 | 192 |
| Balance at 30 September 2009 | 176 | 3,730 | (135) | 8,258 | 319 | 12,348 |
Unaudited Group cash flow statement
| Half year to | Half year to | Year to | |
| 30 September | 30 September | 31 March | |
| 2009 | 2008 | 2009 | |
| £000 | £000 | £000 | |
| Profit before taxation | 3,084 | 3,128 | 8,115 |
| Depreciation | 113 | 104 | 228 |
| Net interest | 18 | 24 | 5 |
| Share of operating profit in joint venture | (823) | (643) | (1,490) |
| Amortisation of intangibles | 218 | 289 | 606 |
| Share-based payments | 192 | 45 | 178 |
| Operating cash flow before changes in working capital and provisions | 2,802 | 2,947 | 7,642 |
| Decrease/(increase) in debtors | 866 | (1,552) | (2,018) |
| (Decrease)/increase in creditors | (1,542) | 3,069 | 3,831 |
| Provision for pension scheme costs | 38 | 178 | 228 |
| Pension scheme contributions paid | (280) | (206) | (695) |
| Cash generated from operating activities | 1,884 | 4,436 | 8,988 |
| Taxation paid | (1,275) | (1,005) | (2,137) |
| Net cash from operating activities | 609 | 3,431 | 6,851 |
| Cash flows from investing activities | |||
| Purchase of property and equipment | (40) | (173) | (267) |
| Investment | - | - | (44) |
| Acquisition of subsidiary, net of cash required | - | (3,017) | (3,017) |
| Acquisition of business | (2,538) | (2,538) | |
| Dividends received from associates | - | - | 78 |
| Amounts received from joint ventures | 876 | 425 | 1,472 |
| Interest received/(paid) | 11 | (30) | (29) |
| Net cash from investing activities | 847 | (5,333) | (4,345) |
| Cash flow from financing activities | |||
| Dividends paid | - | - | (1,139) |
| Issue of new shares | - | 2 | 3 |
| Net cash from financing activities | - | 2 | (1,136) |
| Net decrease/(increase) in cash and cash equivalents | 1,456 | (1,900) | 1,370 |
| Cash and cash equivalents at the beginning of the period | 4,935 | 3,565 | 3,565 |
| Cash and cash equivalents at the end of the period | 6,391 | 1,665 | 4,935 |
Notes
The notes to the financial statement are available in the PDF download.
Page last updated: 3 December 2009