Latest Results
Interim Results
ACM Shipping Group plc (AIM:ACMG), a leading international shipbroker, today announces its interim results for the half year ended 30 September 2011.
DownloadThe Full Results are available to download in PDF format |
Overview
- Revenue decreased by 9% to £13.2 million (H1 2010: £14.5 million) mainly due to adverse currency movements, with revenue in US$ only down by 3% to US$21.4 million (H1 2010: US$22.0 million)
- Profit before amortisation, impairment and taxation adjusted for minority interest of £2.3 million (H1 2010: £3.2 million)
- Adjusted earnings per share of 8.5 pence (H1 2010: 12.5 pence) (adjusted for non-cash impacts of amortisation and impairment of intangible assets)
- Interim dividend increased to 3.15 pence per share (H1 2010: 3 pence per share)
- Strong cash position of £4.9 million at 30 September 2011 and no debt (£5.0 million as at 31 March 2011)
- Progress continues on global expansion plans
- Successful move to new offices in London to allow for further expansion
Commenting on the results, Johnny Plumbe, Chief Executive of ACM Shipping Group plc, said: "The Group has continued to perform steadily and the Board remains confident of the medium and longer-term prospects for ACM, despite the current weak freight rates. The Group's global network and structure are well positioned to capitalise on current markets and on the upturn in the market when it occurs. Although the period under review has presented some challenges, the Board believes that the Group has the right strategy and team in place for long term growth."
Chairman and Chief Executive's Statement
During the period, the Group has continued to make progress, and ACM's strategy remains firmly on track. ACM has produced decent results despite the ongoing challenges of the markets and has positioned itself to take advantage of strengthening shipping markets when they occur.
Results
The Group's overall revenue for the period decreased by 9% to £13.2 million (H1 2010: £14.5 million), mainly due to adverse currency movements with revenue in US$ at US$21.4 million (H1 2010: US$22.0 million), a decrease of just 3%. Profit before amortisation, impairment and taxation adjusting for minority interest was £2.3 million as per note 2(c) (H1 2010: £3.2 million). Earnings per share were 8.5 pence on an adjusted basis (adjusted for the non-cash impact of amortisation and impairment of intangible assets) (H1 2010: 12.5 pence).
The tanker spot business performed well in a subdued market, with US$ income level year-on-year. The small tanker part of the business performed extremely well and continued to grow its volume, although freight rates have continued to show weakness for most of the period.
The Group's revenue from time charter business decreased by 19% compared to the same period last year, as it continues to prove difficult to conclude new long term deals with ship owners reluctant to commit at current low market rates.
As announced on 6 October 2011, the sale and purchase business was impacted during the period by a number of personnel departures, and as a result revenue declined by 50% on H1 2010. The Group is making a one-off £6.85 million write-down of intangible assets (a non-cash item) capitalised in relation to the acquisition of ACM Shipping Services Limited in 2007.
During the period, the dry cargo division achieved revenue of US$2.8 million, compared to US$1.4 million for the same period last year. ACM's dry cargo desk globally is now gaining momentum in a very challenging market, and the number of deals is increasing significantly.
The Group's cash position remains strong at £4.9 million as at 30 September 2011 (£5.0 million as at 31 March 2011), with no debt. The Company moved into new London offices in August 2011. This move involved spending £1 million on fitting out the offices and new computer equipment. This project was completed successfully and there will be no further significant expenditure.
Interim dividend
Given the Board's longer term confidence in the business, the interim dividend is to be increased to 3.15 pence per share (H1 2010: 3 pence). This dividend is well covered by the Group's normalised earnings and reflects the strong longer term prospects for the Group. The dividend will be paid on 24 February 2012 to those shareholders on the register at 20 January 2012.
The total dividend paid in respect of the year to 31 March 2011 was 10 pence per share.
The Market
Freight rates in all sectors of the market have continued to see volatility and have been at historically low levels.
Global oil demand has continued to grow during the period. Industry forecasts for 2012 expect this growth to accelerate and to be above previous years. This, combined with historically low oil stocks, offers an increase in trading volumes for oil. However, there are still a number of ship new builds to be delivered that will have to be absorbed by the increase in shipping volumes.
In the dry cargo sector of the market, industry forecasts expect an increase in the volume of iron ore and coal to be shipped. This is a positive indicator for shipbroking but there are also a number of vessels on order in this market.
Strategy
The Group continues to make good strategic progress and the Board is confident that ACM is well positioned to take advantage of the market upturn when it occurs. Despite the challenges of the current shipping environment, the Board believes that the fundamentals of the business remain robust.
The Board is restructuring and recruiting in the sale and purchase division, ensuring that this is in line with the Group's global network, and is confident that ACM will maintain its position in this market.
The Board believes that the dry cargo division will continue to make progress, although at a slower rate than originally anticipated due to the global economic conditions.
Overall, the structure of the Group is robust and the global offices are working together well. The key strategic objectives continue to be met across the divisions, and when freight rates improve the Group is well positioned to capitalise on this.
Outlook
Despite the challenges that the whole sector has faced during the period, ACM's overall strategy remains on track and has led to a robust cash generating business incorporating highly motivated people.
The Board remains optimistic about the medium and longer-term prospects for the Group, as validated by the progressive dividend policy. Whilst freight rates remain low at present, ACM has the right global structure and team in place to capitalise on current markets and strengthening markets.
| Peter Sechiari | Johnny Plumbe |
| Chairman | Chief Executive |
| 29 November 2011 | 29 November 2011 |
Unaudited consolidated income statement
| Half year to | Half year to | Year to | ||
| 30 September | 30 September | 31 March | ||
| Note | 2011 | 2010 | 2011 | |
| £000 | £000 | £000 | ||
| Revenue | 2 | 13,218 | 14,475 | 29,257 |
| Administrative expenses | (11,848) | (12,111) | (24,469) | |
| Amortisation of intangible assets | (199) | (312) | (800) | |
| Impairment of intangible assets | (6,850) | - | - | |
| (5,679) | 2,052 | 3,988 | ||
| Share of operating profit in joint venture | ||||
| 573 | 645 | 1,174 | ||
| Operating (loss) /profit | (5,106) | 2,697 | 5,162 | |
| Net interest | 144 | 65 | 138 | |
| (Loss)/Profit before taxation | 2 | (4,962) | 2,762 | 5,300 |
| Taxation | 3 | (548) | (829) | (1,558) |
| (Loss)/Profit for the period | (5,510) | 1,933 | 3,742 | |
| Minority interest | 138 | 109 | 287 | |
| (Loss)/Profit attributable to equity shareholders | (5,372) | 2,042 | 4,029 |
All of the activities are classed as continuing.
| (Loss)/Earnings per share | 4 | |||
| Basic | (28.3p) | 11.3p | 21.7p | |
| Fully diluted | (28.2)p | 11.2p | 21.6p |
Unaudited consolidated statement of comprehensive income
| Half year to | Half year to | Year to | |
| 30 September | 30 September | 31 March | |
| 2011 | 2010 | 2011 | |
| £000 | £000 | £000 | |
| (Loss)/Profit attributable to equity shareholders | (5,372) | 2,042 | 4,029 |
| Actuarial (loss)/profit in respect of defined benefit pension scheme | (1,598) | (437) | 1,337 |
| Deferred tax in respect of defined benefit pension scheme | 415 | 99 | (374) |
| Exchange differences on translation of foreign operations | (172) | 189 | 454 |
| Currency reserve | (104) | 200 | 159 |
| Deferred tax in respect of currency reserve | 27 | (56) | (45) |
| Total comprehensive income attributable to equity shareholders | (6,804) | 2,037 | 5,560 |
Unaudited consolidated balance sheet
| 30 September | 30 September | 31 March | ||
| 2011 | 2010 | 2011 | ||
| £000 | £000 | £000 | ||
| Non-current assets | ||||
| Property, plant and equipment | 1,353 | 405 | 450 | |
| Intangible assets | 8,564 | 15,892 | 15,805 | |
| Investments | 1,050 | 1,050 | 1,050 | |
| Deferred tax asset | 828 | 766 | 373 | |
| 11,795 | 18,113 | 17,678 | ||
| Current assets | ||||
| Trade and other receivables | 6,046 | 6,317 | 5,291 | |
| Cash and cash equivalents | 4,906 | 5,834 | 4,955 | |
| 10,952 | 12,151 | 10,246 | ||
| TOTAL ASSETS | 22,747 | 30,264 | 27,924 | |
| Current liabilities | ||||
| Trade and other payables | (6,879) | (7,992) | (6,321) | |
| Current tax payable | (645) | (1,023) | (750) | |
| Dividend payable | (1,331) | (1,283) | - | |
| (8,855) | (10,298) | (7,071) | ||
| Non-current liabilities | ||||
| Deferred tax liabilities | (623) | (414) | (649) | |
| Pension liability | (1,629) | (2,301) | (319) | |
| (2,252) | (2,715) | (968) | ||
| TOTAL LIABILITIES | (11,107) | (13,013) | (8,039) | |
| NET ASSETS | 11,640 | 17,251 | 19,885 | |
| Capital and reserves | ||||
| Share capital | 196 | 195 | 196 | |
| Share premium account | 6,823 | 6,760 | 6,823 | |
| Retained earnings | 5,662 | 10,735 | 13,720 | |
| Other reserves | (1,041) | (439) | (854) | |
| TOTAL EQUITY | 11,640 | 17,251 | 19,885 |
Unaudited Group cash flow statement
| Half year to | Half year to | Year to | |
| 30 September | 30 September | 31 March | |
| 2011 | 2010 | 2011 | |
| £000 | £000 | £000 | |
| (Loss)/Profit before taxation | (4,962) | 2,762 | 5,300 |
| Depreciation | 161 | 105 | 233 |
| Net interest | (144) | (64) | (138) |
| Share of operating profit in joint venture | (573) | (645) | (1,174) |
| Amortisation of intangible assets | 199 | 312 | 800 |
| Impairment of intangible assets | 6,850 | - | - |
| Share-based payments | 145 | 209 | 267 |
| Operating cash flow before changes in working capital and provisions | 1,676 | 2,679 | 5,288 |
| (Increase)/decrease in debtors | (755) | (467) | 559 |
| Increase/(decrease) in creditors | 464 | 2,126 | 409 |
| Provision for pension scheme costs | 79 | 77 | 162 |
| Pension scheme contributions paid | (249) | (245) | (476) |
| Cash generated from operating activities | 1,215 | 4,170 | 5,942 |
| Taxation paid | (729) | (900) | (1,922) |
| Net cash from operating activities | 486 | 3,270 | 4,020 |
| Cash flows from investing activities | |||
| Purchase of property and equipment | (1,066) | (43) | (219) |
| Acquisition of business | - | (2,342) | (2,342) |
| Amounts received from joint ventures | 601 | 670 | 1,256 |
| Interest received | 26 | 7 | 19 |
| Net cash from investing activities | (439) | (1,708) | (1,286) |
| Cash flow from financing activities | |||
| Dividends paid | - | - | (1,851) |
| Shares acquired for ESOP | (96) | - | (264) |
| Shares acquired for treasury | - | (1) | (1) |
| Issue of new shares | - | 7 | 71 |
| Net cash from financing activities | (96) | 6 | (2,045) |
| Net (decrease)/increase in cash and cash equivalents | (49) | 1,568 | 689 |
| Cash and cash equivalents at the beginning of the period | 4,955 | 4,266 | 4,266 |
| Cash and cash equivalents at the end of the period | 4,906 | 5,834 | 4,955 |
Notes
The notes to the financial statement are available in the PDF download.
Page last updated: 29 November 2011