Final Results

Braemar Shipping Services PLC 07 May 2008 BRAEMAR SEASCOPE GROUP plc Results - Year ended 28 February 2007 Braemar Seascope Group plc (the 'Group'), a leading provider of shipping services, today announced full year unaudited results for the year ended 28 February 2007. HIGHLIGHTS • Adjusted pre-tax profits £11.0m (2006: £10.3m) * • Pre-tax profit £10.1m (2006: £10.3m) • Adjusted EPS 37.64p (2006: 37.03p)* • Basic EPS 32.83p (2006: 37.03p) • Forward book at record level with US$30m deliverable this year • Net cash £14.6m (2006: £13.6m) • Final dividend 12.25p per share (up 6.5%), full year 19.0p (2006: 18.00p) up 5.6% *Adjusted profits and earnings are adjusted to exclude an impairment charge of £950,000 taken at the half year 2006/7. Commenting on the results and outlook, Sir Graham Hearne, Chairman, said: 'The Group is performing well and has posted results reflecting another good year.' 'Shipping has experienced large and rapid changes in freight rates and vessel values over the course of the last five years. This volatility is likely to remain while the demand for seaborne trade continues to grow and we expect our broadly-based shipping services business to benefit while these conditions persist. ' For further information, contact: Braemar Seascope Group plc Alan Marsh, Chief Executive Tel 020 7535 2650 James Kidwell, Finance Director Tel 020 7535 2881 Aquila Financial Peter Reilly Tel 020 7202 2601 Charles Stanley Securities Philip Davies and Anthony Noakes Tel 020 7149 6457 Notes to editors: Through its subsidiaries Braemar Seascope Group plc's services comprise: Braemar Seascope Specialised shipbroking and consultancy services to international ship owners and charterers in the sale & purchase, tanker, gas, chemicals, offshore, container and dry bulk markets. www.braemarseascope.com DV Howells Pollution response service primarily in the UK for marine and rail operations www.dvhowells.co.uk Cory Brothers Shipping Agency Port agency, freight forwarding and logistics services within the UK. www.cory.co.uk Wavespec Marine engineering and naval architecture consultants to the shipping and offshore markets. www.wavespec.com PRELIMINARY ANNOUNCEMENT - YEAR ENDED 28 FEBRUARY 2007 CHAIRMAN'S STATEMENT The Group is performing well and has posted results reflecting another good year. The adjusted pre-tax profits increased by 7% to £11.0m compared to £10.3m last year and adjusted earnings per share were 37.64 pence compared to 37.03 in 2006. Reported pre-tax profits were £10.1m (2006: £10.3m) and reported earnings per share were 32.83 pence. The difference between the adjusted and reported result was attributable to an impairment charge taken in the first half of £0.95m. The Group's shipbroking operations benefited from trading conditions which remained generally favourable during the year and performed well though the results were adversely affected by a weaker US dollar. Continued newbuilding activity and an increase in long-term chartering business saw growth in the forward order book to a record level which helps to underpin future years' earnings. We expanded our international footprint through the establishment of new dry cargo chartering offices in Singapore and Sao Paolo and we also consolidated our interest in the container market through the acquisition of the 50% minority interest in Braemar Container Shipping and Chartering Limited for £1.2m. Our strategy for extending the range of shipping services provided has begun to bear fruit and our non-broking businesses contributed 17% of the adjusted operating profits, driven by strong year-on-year income and profit growth from both Cory Brothers and Wavespec. During the year these services were expanded with the creation of an environmental services division through the acquisition of DV Howells in March 2006 and Hi-bar in September 2006 for a maximum combined consideration of £0.9m. DV Howells provides pollution incident response services for the oil majors and other transportation companies and we are very proud of the role they played and their continuing involvement in the environmental protection of the UK coastline where the container vessel MSC Napoli is beached. We have also increased our presence in the UK ship agency market through the purchase of Gorman Cory which will take place over two years. We are pleased with the progress made in building our non-broking businesses and we expect to continue to invest in these sectors as attractive opportunities arise. The Directors are recommending that the name of the company changes to Braemar Shipping Services PLC. The name Braemar Seascope is identifiable with our shipbroking business and we do not intend to change the name for our shipbroking trading companies around the world. However, the Group has now successfully extended its services beyond shipbroking and will continue to do so. We have reached a point when we consider it both helpful and appropriate to recognise the broadening of the business with a change in the name which reflects its current and future composition. The Directors are recommending for approval at the Annual General Meeting a final dividend of 12.25 pence per ordinary share, to be paid on 31 July 2007 to shareholders on the register at the close of business on 6 July 2007. Together with the 6.75p interim dividend the Company's dividend for the year is 19.0 pence (2006: 18.0 pence), a rise of 5.6%. The dividend is covered 2.0 times by adjusted earnings. These results are a testament to the skill, hard work and commitment of staff across the Group and on behalf of the Board I thank all concerned for their contribution to this year. After many years as an executive director Iain Shaw retired from the Group in June 2006 and I would like to express our gratitude for his significant contribution both as a shipbroker and director. I am delighted that Denis Petropoulos and Quentin Soanes agreed to join the Board in January 2007 as executive directors. They have both worked for the Group for many years and their experience will be of great value in the future. Shipping has experienced large and rapid changes in freight rates and vessel values over the course of the last five years. This volatility is likely to remain while the demand for seaborne trade continues to grow and we expect our broadly-based shipping services business to benefit while these conditions persist. Sir Graham Hearne 10 May 2007 CHIEF EXECUTIVE'S REVIEW OF THE BUSINESS The progress made across the Group over the last year continues to be encouraging. All of our operations have been performing well and we have grown the business in line with our strategy of expanding into complementary service areas and by increasing our geographic presence. We now have more than 400 employees worldwide based at 35 offices, of which eight are overseas and our shipping services business is more diverse than ever before. With shipping activity remaining strong, we see no shortage of opportunity to continue our controlled growth in the same vein. A review of the market and our activities during the year is set out by segment below. Shipbroking Shipbroking activities are undertaken under the name of Braemar Seascope from offices in London, Shanghai, Beijing, Singapore, Melbourne, Perth and Aberdeen. Revenues in 2006/7 increased to £40.5m (2006: £39.7m) and adjusted operating profits were £8.7m (2006: £9.0m). The operating profit margin (before impairment charge) for the division was 21.6% in 2007 (2006: 22.7%), reflecting a shift towards lower margin chartering business in the year. There was an average of 205 employees of whom 68% were fee earning and 25% were based overseas (2006 - 189 employees). In each of the dry market sectors freight rates dipped from the start of our financial year when the Baltic Dry Index ('BDI') stood at 2,708, reaching a low in May 2006 (BDI 2,416) before recovering over the remainder of the financial year (BDI 4,765). The BDI currently stands at 6,585. The capesize market curve was particularly steep in both directions with the strong recovery driven by Chinese demand, during which we were able to conclude a number of long-term period charters at high rates. There has also been a considerable growth in vessel supply although there is still sufficient market tightness to produce significant fluctuations in rates from time to time. Currently the market is affected by load port congestion, especially in the east coast coal ports of Australia. This has helped reduce the supply of vessels and thereby to strengthen freight rates. Following our investment in Australia, this year we opened an office in Singapore and in Sao Paolo, both of which are becoming increasingly important as shipping centres. In view of the strength of the market and our investments, we expect our dry activities to become a more significant part of our business in future. Deep sea tanker chartering increased both income and transaction volumes over last year, and the value of longer term period business grew significantly over the year. At the start of the financial year the Baltic Dirty Tanker Index (' BDTI') stood at 1,109 falling to a low of 951 in April 2006 but recovering strongly to reach a 12 month peak of 1,602 in August and closing at 1,101 on 28 February 2007. It currently stands at 1,296. The weakness in tanker freight rates at the start of the financial year was caused by OPEC cutbacks which led to reduced refining. However as the oil price rose from $60/barrel to $70/barrel supply restraints were relaxed and refineries moved quickly to source crude which became much in demand causing a rapid rise in freight rates. With increased refining came the increased demand for the carriage of refined products and although rates did not return to the high levels of the previous year, they did remain steady for most of the second and third quarters. In addition the constant Chinese and Indian demand for crude supplied not only from the Middle East but also from Atlantic producers in West Africa and the Caribbean maintained a healthy employment of large crude carriers. Delivery of newbuildings into the tanker markets during the course of 2006 has increased the deadweight available to carry oil which has meant that after the market weakened in the fourth quarter, rates did not recover as quickly following the increased volumes at the start of our new year. However, it is encouraging to note that despite the steady growth of the fleet during the first quarter of our new year the spot market was notably active with short-term demand for crude. As the year progresses we expect to see continuing demand from the major refining centres, but the growth in the tanker fleet prior to the phasing out of older tonnage will mean the market is likely to be more volatile. The coastal tanker market benefited from larger contract volumes and falling bunker costs towards the end of the year providing a stimulus to activity. Deep sea chemical parcel tankers had a steady year with an upturn in rates in the fourth quarter due to a combination of increasing demand and the prospect of the latest biofuel regulations coming into force. This trend should continue during 2007 through to 2008 and while there will be seasonal fluctuations the market is expected to remain firm. The LPG freight market is expected to strengthen over the next twelve months as new product streams and market participants, such as China, compete in the market for tonnage. The LNG transportation market remains at low levels for short-term employment due to the delivery of new vessels, committed for long-term LNG transportation, the projects for which have since been delayed by between one and three years. However, such vessels will be absorbed in the long-term projects that they were originally intended for and while there are some uncommitted vessels in the market these will, in time, achieve gainful employment. Sale and purchase enjoyed another very successful year. There was a shift in the business with less high value second hand transactions than in 2005/6 but a record year for newbuildings where the income is received over 2-3 years on average. The demand for new ships is borne out in the extended shipyard order books and in a tendency for payment terms to reflect larger up-front contracted values. The newbuilding forward order book is now at its highest level (both in terms of the number of ships and commission value) with ship deliveries stretching out to 2010/11. Over the last six months there has been a very significant increase in the market value of bulk carriers which is commensurate with the rise in dry freight rates and we have recently concluded a number of transactions at historically high values. Demolition business remains a small part of sale and purchase activity but we expect it to increase in the coming years in line with the phase-out of single hull tankers. Offshore had its best ever year driven by high activity levels and charter rates and the successful conclusion of some good sale and purchase and project transactions, some of which will benefit the company for many years to come. Worldwide oil and gas exploration has been very active and continues to be so, giving confidence for the coming year. We consolidated our container business midway through the financial year with the purchase of the remaining 50% interest in August 2006. After a reasonably strong market in the first half of the year container charter rates fell in the second half of the year before recovering strongly during the first quarter of 2007. During 2006 global growth in container volume was 10.8% and fleet capacity grew by 16.5%, and in 2007 the growth is expected to be in the region of 10-11% for container volumes and 14.5-15% for growth in fleet capacity. The desk performed well throughout the year in a rapidly changing market and we expect a similar performance to last year given the forecast growth in capacity, providing world trade is maintained. As at 1 March 2007 we had concluded business that should generate revenues in excess of $30m in the new financial year (1 March 2006 for the next twelve months: US$26m). Ship agency, forwarding and logistics Revenues increased to £23.4m (2006: £15.9m) and operating profits were £0.9m (2006: £0.6m) and the company's achievements were also recognised by its customers when in April 2007 Cory was voted number one in the Lloyds Loading List Customer Service Awards 2006. The year overall has seen Cory consolidating its acquisitions made late 2005 and early 2006, and concentrating on organic growth with average staffing increasing from 120 to 149. Growth was driven primarily by the liner, logistics and forwarding business, where revenues showed month on month improvements throughout the financial year. The increase in liner, logistics and forwarding was driven primarily by sustained strong demand with in excess of 13,200 forwarding jobs being handled in the year compared with 9,700 last year. These were mostly on key logistics contracts supplemented with a number of one-off projects. Whilst most of the activity is handled out of Felixstowe, we have been developing forwarding activities from certain existing agency locations, thereby increasing the scope and capability of Cory as a whole. Planetwide, the forwarding acquisition made in 2005 performed in line with our growth expectations. During the year it handled 1,860 of the forwarding jobs and was also able to add new consolidation routes to the Middle East. Port agency handled 17% more port calls in 2006/7 maintaining a leading position in an increasingly competitive market. New income streams commencing in early 2007 should see this growth continue through the remainder of 2007 and into 2008. The acquisition of the business and assets of Gorman Shipping, which handles over 750 vessels per annum concentrated on the Mersey and the Manchester Ship Canal, has significantly strengthened our UK agency activities. The business has been combined with the existing Cory Liverpool office making it one of the foremost ships' agents in the area. Morrison Tours, a highly seasonal business linked closely to the cruise industry around the UK has added to its customer base and improved the take-up of the shore excursions on offer. With further new pieces of business being won in both in agency and liner, logistics and forwarding, activity levels should continue to be maintained in all areas in the coming year. Technical shipping support - Wavespec Revenues increased to £6.6m (2006: £5.2m) and operating profits were £0.6m (2006: £0.3m) in line with the growth in activity levels. Average headcount during the year was 18 employees (2006: 17 employees) with a further 50 engineers sub-contracted to clients within this segment (2006: 45 consultants). Currently, the company has site supervision teams at three shipyards for the construction of up to 48 new LNG vessels in connection with the Qatargas II project and this is expected to generate a positive contribution for the company for several years. It is also fulfilling a similar role in connection with LNG vessel construction for use on the Sakhalin gas project. Wavespec has also been active in the development of the seaborne transportation of compressed natural gas, working with Braemar Seascope to provide technical and commercial assistance for a number of projects. Environmental Services - DV Howells DV Howells was acquired in March 2006 and has contributed revenue of £3.2m and operating profits of £0.2m in the eleven months since it joined the group. The average headcount during the year was 39 full time employees compared to 34 at acquisition. The addition of Hi-bar in September 2006 completed the response coverage across the UK and enhanced the company's training and consultancy capability. The company has had a busy year and has integrated well into the Group. Of particular note is the major role the company has played following the grounding of the mini-bulker Sumni in the Orkney Islands and the container vessel, MSC Napoli in Devon. Services provided, some of which are still on-going, include pollution control, beach clearance, decontamination wash-down facility and the handling of hazardous container cargoes. The company also won important contracts to provide incident response services in Angola and for the MOD, both of which illustrate the potential of the business to grow in the UK and overseas. Bunker Trading Revenues increased to £33.4m (2006: £7.7m), representing a full year's contribution, and operating profits were £62,000 (2006: £30,000). Bunker sales have been lower than expected due to a combination of the drought conditions and high oil prices, which has to some extent limited demand in the Australasian region. Looking forward, the Australian resources and minerals sector is enjoying significant growth which should be a basis for increased bunker sales in the future. We are currently in the process of reviewing our strategic options with regard to this business. Financial Review Profits and earnings Reported pre-tax profits were £10.1m (2006: £10.3m). Adjusted pre-tax profits (before an impairment charge) increased by 7% to £11.0m on revenues of £107.2m (2006: £68.5m). As indicated at the half year, given the performance of all business segments in broadly favourable markets, we expected the operating profits in the second half of the year to show an improvement over the first half. Second half operating profits for 2006/7 were £5.8m compared with £4.7m (before impairment) in the first half and £4.7m in the second half of 2005/6. The trading improvement shows sustained business growth across all segments. A reconciliation of reported profits to adjusted profits is set out in the table below. The impairment charge is not a cash cost and arose because at the half year, after a relatively weak market, a more prudent view was taken of the estimated future earnings from the Australian business. 2006/7 2005/6 £000 £000 Adjusted profits before impairment charge and tax 11,026 10,293 Impairment of Braemar Seascope Pty goodwill (950) - Reported profit before tax 10,076 10,293 Pence Pence EPS (pre impairment charge) 37.64 37.03 Impairment of goodwill (4.81) - Basic EPS 32.83 37.03 The weighted average number of shares increased from 19.38m to 19.72m for 2006/ 7. Margins Operating profits are stated after deducting both cost of sales and operating costs. Cost of sales comprises bunker payments, freight and haulage and payments to sub-contractors. The operating profit margin (before impairment) of 9.8% in 2007 compares with 14.4% in 2006. The reduction is mainly due to the increased relative contributions of the non-broking businesses which generate returns at lower margins but which are more predictable. The margin in shipbroking was lower due to an increase in operating costs totalling 3.4% mainly in respect of staff costs and the establishment of new overseas offices. A summary of the segment margins is set out below. Operating margins before impairment 2006/7 2005/6 Shipbroking 21.6% 22.7% Ship agency, forwarding and logistics 3.9% 3.6% Technical shipping support 8.3% 5.6% Environmental services 7.0% 'n/a 14.1% 16.2% Bunker trading 0.2% 0.4% Total 9.8% 14.4% Foreign exchange The average rate of exchange for conversion of US dollar income during the financial year, after taking account of hedging, was $1.86/£ (2006: $1.80/£) and at 28 February 2007 the balance sheet rate for conversion was $1.97/£ (28 February 2006: $1.75/£). If the 2006/7 US dollar denominated income had been translated at the 2005/6 average exchange rate, it would have been higher by approximately £1.2 million. At 28 February 2007 the Group held forward currency contracts to sell US$6 million at an average rate of $1.95/£ and currency options giving the right to sell US$1.1 million for AU$ at a rate of 0.78. Taxation The tax rate on reported profit before tax was 35.8% (2006: 30.3%). The underlying rate, excluding the share of net profits from joint ventures and the effect of the impairment charge, was 33.3% (2006: 31.0%). Cash flow and acquisitions The cash balance increased over the year by £1.0m to £14.6m (2006: £13.6m). Operating cash flow generated in the year was £9.7m, from which the major cash outflows before expenditure on acquisitions were £0.7m for the purchase of fixed assets, £3.4m on corporation tax and £3.6m for dividend payments. Net cash expended on acquiring businesses was £2.5m, offset by £0.7m of cash in the acquired balance sheets, in respect of DV Howells and Hi-bar (£0.6m), 50 per cent of Braemar Container Shipping and Chartering (£1.2m), 41 per cent of Gorman Cory (£0.2m) and Planetwide (£0.5m). This does not include further potential cash consideration of, in aggregate, £1.1m dependent on profitability. Treasury risk management The Board sets the Group's treasury policy covering financing decisions and treasury risk management, the objective of which is to manage the Group's financial risk exposures in an effective manner. The Finance Director is responsible for day-to-day treasury risk monitoring and activity which is reviewed by the Board through regular reporting. The Group uses financial instruments to hedge underlying exposures and not for speculative purposes. Liquidity risk: The Group has no net debt and did not have at any time during the year. An overdraft facility of £3.0m with the Group's principal relationship bank, the Royal Bank of Scotland plc, is maintained for financial flexibility and in order to improve treasury efficiency and performance. Foreign exchange risk: The majority of the Company's shipbroking, technical services and bunker trading income is US dollar denominated and changes in the rate of exchange relative to £ sterling, and to a lesser extent the Australian and Singapore dollar, can have an effect on the reported results and net assets. From time to time the Group enters into forward foreign exchange contracts and currency options to limit the effect of currency fluctuations. Interest rate risk: The Group has an exposure to interest rates in relation to its cash balances, the majority of which are held in the UK. Surplus cash (in £s or US$s) is deposited at institutions with strong credit ratings and deposits are short term in nature. Alan Marsh 10 May 2007 Braemar Seascope Group PLC Consolidated income statement for the year ended 28 February 2007 Year ended Year ended 28 Feb 2007 28 Feb 2006 Continuing operations Notes £'000 £'000 Revenue 3 107,200 68,497 Cost of sales (53,529) (21,271) Gross profit 53,671 47,226 Operating costs (44,121) (37,336) Amortisation of other intangibles (284) (287) Impairment of goodwill (950) - Operating costs excluding (42,887) (37,049) amortisation of other intangibles and impairment of goodwill Operating profit 3 9,550 9,890 Finance income 335 162 Finance costs (16) (2) Share of profit from joint ventures 207 243 and associates Profit before taxation 10,076 10,293 Taxation (3,604) (3,115) Profit for the year 6,472 7,178 Attributable to: Equity holders of the parent 6,367 7,178 Minority interest 105 - Profit for the year 6,472 7,178 Earnings per ordinary share Basic - pence 5 32.83 p 37.03 p Diluted - pence 32.39 p 36.18 p Braemar Seascope Group PLC Statement of recognised income and expenses for the year ended 28 February 2007 Year ended Year ended 28 Feb 2007 28 Feb 2006 £'000 £'000 Profit attributable to shareholders 6,472 7,178 Foreign exchange differences on retranslation of foreign (70) 83 operations Tax on items taken directly to or transferred from equity 260 576 Cash flow hedges: - Transferred to income statement in year 40 (1,401) - Losses deferred in equity 17 (40) Recognised income and expense for the year 6,719 6,396 Attributable to: Ordinary shareholders 6,614 6,396 Minority interest 105 - 6,719 6,396 Braemar Seascope Group PLC Consolidated Balance sheet as at 28 February 2007 As at As at 28 Feb 07 28 Feb 06 Assets Notes £'000 £'000 Non-current assets Goodwill 22,606 22,480 Other intangible assets 1,582 462 Property, plant and equipment 5,478 5,034 Investments 1,538 1,611 Deferred tax assets 642 510 Other receivables 81 58 31,927 30,155 Current assets Inventories 70 - Trade and other receivables 21,750 17,717 Derivative financial instruments 27 12 Cash and cash equivalents 14,634 13,567 36,481 31,296 Total assets 68,408 61,451 Liabilities Current liabilities Derivative financial instruments - 99 Trade and other payables 29,011 25,490 Current tax payable 2,402 2,224 Finance leases - 11 Provisions 294 288 31,707 28,112 Non-current liabilities Deferred tax liabilities 283 139 Provisions 169 343 452 482 Total liabilities 32,159 28,594 Total assets less total liabilities 36,249 32,857 Equity Share capital 2,023 1,988 Capital redemption reserve 396 396 Share premium 8,554 8,046 Merger reserve 21,346 21,346 Other reserves (722) 47 Shares to be issued (1,047) (997) Retained earnings 5,390 2,031 Group shareholders' equity 7 35,940 32,857 Minority interest 309 - Total equity 36,249 32,857 Braemar Seascope Group PLC Consolidated Cash flow statement for the year ended 28 February 2007 Year ended Year ended 28 Feb 07 28 Feb 06 Notes £'000 £'000 Cash flows from operating activities Cash generated from operations 6 9,668 13,769 Interest received 335 156 Interest paid (16) (1) Tax paid (3,413) (3,210) Net cash generated from operating activities 6,574 10,714 Cash flows from investing activities Dividends received from joint 263 239 ventures Acquisition of subsidiaries, net of cash acquired (1,844) (521) Purchase of property, plant and equipment (654) (387) Proceeds from sale of property, plant and equipment 25 29 Purchase of investments - (36) Other long term assets (23) 37 Net cash used in investing (2,233) (639) activities Cash flows from financing activities Proceeds from issue of ordinary 569 535 shares Dividends paid (3,595) (3,194) Dividends paid to minority interest (100) - Purchase of own shares (50) (360) Payment of principal under finance leases (11) (28) Net cash used in financing (3,187) (3,047) activities Increase in cash and cash equivalents 1,154 7,028 Cash and cash equivalents at beginning of the year 13,567 6,539 Foreign exchange differences (87) - Cash and cash equivalents at end of the year 14,634 13,567 Balance sheet analysis of cash and cash equivalents Cash and cash equivalents 14,634 13,567 Short term borrowings - - Cash and cash equivalents at end of the year 14,634 13,567 Braemar Seascope Group PLC Notes to the financial statements Note 1 - General Information The Preliminary Announcement of results for the year ended 28 February 2007 is an extract from the forthcoming 2007 Annual Report and Accounts and does not constitute the Group's statutory accounts of 2007 nor 2006. Statutory accounts for 2006 have been delivered to the Registrar of Companies, and those for 2007 will be delivered following the company's Annual General Meeting. The auditors have reported on the 2006 accounts; their report was unqualified and did not contain statements under Sections 237(2) or (3) of the Companies Act 1985. Note 2 - Accounting policies Whilst the financial information included in this preliminary announcement has been prepared in accordance with International Financial Reporting Standards (IFRSs) adopted for use in the European Union, this announcement does not itself contain sufficient information to comply with IFRSs. The company expects to distribute full accounts that comply with IFRSs on 25 May 2007. Note 3 - Segmental results Revenue Profit for the year 2007 2006 2007 2006 £'000 £'000 £'000 £'000 Shipbroking 40,530 39,745 8,749 9,003 Ship agency, forwarding & logistics 23,449 15,851 911 568 Technical shipping support 6,623 5,202 553 289 Environmental services 3,229 - 225 - Revenue / operating profit excluding bunker 73,831 60,798 10,438 9,860 trading and impairment Bunker trading 33,369 7,699 62 30 Revenue / operating profit excluding 107,200 68,497 10,500 9,890 impairment Impairment - shipbroking - - (950) - Revenue / operating profit 107,200 68,497 9,550 9,890 Finance income/ (cost)- net 319 160 Share of profit from joint ventures and associates 207 243 Profit before taxation 10,076 10,293 Taxation (3,604) (3,115) Profit for the year (before deducting minority interest) 6,472 7,178 Note 4 - Dividend The proposed final dividend of 12.25 pence per share (2006: final 11.5 pence) takes the total dividend for the year to 19.0 pence (2006: 18.0 pence). The cost of the final dividend will be £2.4m (2006: £2.2m) based on 19,899,846 shares (being the total in issue less shares held in the ESOP for which the dividend has been waived) and will be charged to equity in the 2007/8 financial year. Note 5 - Earnings per share Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, excluding 331,495 ordinary shares held by the employee share trust (2006:321,495) which are treated as cancelled. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive ordinary shares. The Group has one class of potential dilutive ordinary shares being those granted to employees where the exercise price is less than the average market price of the Company's ordinary shares during the year. 2007 2007 2007 2006 2006 2006 From continuing operations Earnings Weighted Per share Earnings Weighted Per share £'000s average amount £'000s average amount number of pence number of pence shares shares Profit for the year attributable 6,472 19,715,846 32.83 7,178 19,385,615 37.03 to shareholders Effect of dilutive share options - 264,693 (0.44) - 452,339 (0.85) Fully diluted earnings per share 6,472 19,980,539 32.39 7,178 19,837,954 36.18 2007 2007 2007 2006 2006 2006 From continuing operations Earnings Weighted Per share Earnings Weighted Per £'000s average amount £'000s average share number of pence number of amount shares shares pence Basic earnings from above 6,472 19,715,846 32.83 7,178 19,385,615 37.03 Impairment of goodwill 950 - 4.81 - - - Adjusted earnings per share 7,422 19,715,846 37.64 7,178 19,385,615 37.03 Note 6 - Reconciliation of operating profit to net cash flow from operating activities 2007 2006 £'000 £'000 Profit for the year attributable to shareholders 6,472 7,178 Adjustments for: Taxation 3,604 3,115 Depreciation 518 339 Profit on sale of property, plant and equipment (12) (17) Impairment of goodwill 950 - Amortisation of intangibles 284 287 Share based payments 309 244 Finance income (335) (162) Finance costs 16 2 Share of profit from joint ventures and associates (207) (243) Changes in working capital (excluding effects of acquisitions of subsidiaries) Decrease in stocks 7 - (Increase)/decrease in trade and other receivables (3,874) (129) Increase/(decrease) in trade and other payables 2,098 2,913 Increase/(decrease) in provisions (162) 242 Cash generated from operations 9,668 13,769 Note 7 - Statement of changes in total equity Group Share Capital Shares Other Retained Total Minority Total capital redemption earnings interest equity reserve to be reserves issued £'000 £'000 £'000 £'000 £'000 £'000 At 1March 2005 1,945 396 (637) 29,824 (2,362) 29,166 - 29,166 Recognised income and expense for - - - (926) 7,322 6,396 - 6,396 the year Dividends paid - - - - (3,173) (3,173) - (3,173) Issue of shares 43 - - 541 - 584 - 584 Purchase of shares to be issued - - (360) - - (360) - (360) Credit in respect of share option - - - - 244 244 - 244 schemes At 28 February 2006 1,988 396 (997) 29,439 2,031 32,857 - 32,857 Recognised income and expense for - - - (31) 6,645 6,614 105 6,719 the year Acquisition - - - - - - 304 304 Dividends paid - - - - (3,595) (3,595) (100) (3,695) Issue of shares 35 - - 508 - 543 - 543 Deferred share consideration - - - (738) - (738) - (738) Purchase of shares to be issued - - (50) - - (50) - (50) Credit in respect of share option - - - - 309 309 - 309 schemes At 28 February 2007 2,023 396 (1,047) 29,178 5,390 35,940 309 36,249 This information is provided by RNS The company news service from the London Stock Exchange

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