Interim Results

Seascope Shipping Holdings PLC 28 September 2000 Difficult trading conditions in spring 2000 impact on interim figures Outlook for full year remains positive Seascope Shipping Holdings PLC, providers of specialised broking and consultancy services to the international shipowning, shipbuilding and oil industries, today announced interim results for the year ended 30 June 2000. Production cuts by OPEC in the first quarter affected all sectors of the Company's business leading to losses being reported for the first half. In view of the subsequent OPEC action, resulting in the current buoyant trading conditions, the Board remains positive about its outlook for the full year and is therefore recommending an unchanged interim dividend of 5.0p HIGHLIGHTS * Substantial improvement in trading conditions as a result of OPEC action in March/April 2000 came too late to assist first six months results. * As a result turnover down 13.2% at £4.582 million and the Company made a loss for the six months before taxation of £0.245 million (1999: profit £1.320 million). * Interim dividend held at 5.0p per share (1999: 5.0p per share). * Outlook for current and future trading very positive with tanker rates very strong. * Company announced on 6 September 2000 merger talks with Braemar Shipbrokers Limited. Tom Young, Chairman, said: 'The results for the first six months are a direct reflection of the poor trading conditions experienced in our market sector during OPEC's self-imposed production cuts which covered the period to spring 2000. This situation continued to affect all sectors of the Company's business for the majority of the period covered by this report. The results for the period under review also reflect the full year costs associated with the purchase of GFL (UK) Limited in November 1999. 'Current trading conditions have substantially improved and are expected to remain buoyant for the foreseeable future with tanker tonnage and demand in dynamic balance. It is against this background that the Directors have decided to pay an unchanged interim dividend of 5.0p per share.' For further information, contact: Tom Young, Chairman and Chief Executive Seascope Shipping Holdings plc 0207 903 2600 Clare Abbot/Kirsty Black Grandfield 0207 417 4170 SEASCOPE SHIPPING HOLDINGS PLC Interim Results for the six months ended 30 June 2000 FINANCIAL HIGHLIGHTS * Substantial improvement in trading conditions as a result of OPEC action in March/April 2000 came too late to assist first six months results. * As a result turnover was down 13.2% at £4.582 million and the Company made a loss for the six months before taxation of £0.245 million (1999: profit £1.320 million). * Interim dividend held at 5.0p per share (1999: 5.0p per share). * Outlook for current and future trading very positive with tanker rates very strong. * Merger talks with Braemar Shipbrokers Limited, announced on 6th September 2000 are continuing. Detailed merger terms are expected to be announced during November 2000. CHAIRMAN'S REVIEW INTRODUCTION The results for the first six months are a direct reflection of the poor trading conditions experienced in our market sector during OPEC's self-imposed production cuts which covered the period to spring 2000. The conditions prevailing during this time had a double effect: the low oil price led to a slowdown of activities by oil companies operating in the North Sea: and the production cuts led to poor freight rates for ship owners worldwide due to a surplus of tonnage relative to the low production at that time. This situation continued to affect all sectors of the Company's business for the majority of the period covered by this report. The results for the period under review also reflect the full year costs associated with the purchase of GFL (UK) Limited in November 1999. Current trading conditions have substantially improved and are expected to remain buoyant for the foreseeable future with tanker tonnage and demand in dynamic balance. It is against this background that the Directors have decided to pay an unchanged interim dividend of 5.0p per share. REVIEW OF ACTIVITIES The Offshore market continued to suffer weak trading conditions during the majority of the period under review as exploration budgets of the multinational oil companies remained restricted due to the former weak oil price. These conditions have resulted in a lower number of support vessel movements, weak freight rates and little newbuilding activity. Market activity is now increasing and expected to show further improvement for the remainder of this year and during 2001 as the oil companies increase their North Sea investment programmes. The Sale & Purchase sector, post the OPEC production increase earlier this year, has seen activity increase as tanker owners have achieved improvement in values based on the current expected balance in supply and demand. The Company has shared in this increased activity as well as continuing to be successful in the dry cargo market, but predicting the timing of completion of sale and purchase deals is always difficult, with the large majority of them being due for delivery in the July to December period. A disappointing factor in the current year has been the relative inactivity of our client base in the newbuilding market that has made it difficult for the department to maintain the success levels of recent years. Our Chartering department was the first to benefit from the OPEC decisions, with increased vessel fixing and higher freight rates being noticeable as early as April 2000. However, the lag between fixing and revenue realisation is approximately two months and therefore, again, the full effects will not be seen in the Company's accounts until the second six months of the year. It is true to say that the OPEC action, taken at a time when the industrialised nations' crude oil reserves had become severely depleted, has created heavy tanker demand and has forced freight rates up to levels not seen for nearly 30 years. Additionally the major oil spill by the 'ERIKA' (an aged single hull fuel oil carrier) in NW France late last year has encouraged the major oil companies to place their chartering emphasis on modern and/or double hull vessels. The integration of our enlarged Capital Services department, which offers confidential advice on traditional bank debt, structured finance and corporate finance advice, has continued during the period and should provide a contribution to second half-year profitability. The continuing interaction between the broking activities of the group and Wavespec, our marine technical services consultancy, has assisted Wavespec in obtaining long term projects which should assist the contribution they make to group profitability. INTERIM DIVIDEND In recognition of the change in trading conditions between the first and second six months of the current year it is the Directors' intention to pay an unchanged interim dividend of 5.0p per share. The dividend will be paid on 10th November 2000 to shareholders on the register on 13th October 2000. FINANCIAL The net loss before taxation for the period of £0.245 million (1999: profit £1.320 million) as explained above reflects market conditions during the period. No provision has been made for a performance-linked bonus as a payment only becomes due in the event that earnings per share exceed those of the previous year. The increase in administrative expenses at £4.818 million (1999: £4.006 million) was exaggerated by a full period charge associated with Capital Services and Wavespec. The loss per share, fully diluted for the six months amounted to (2.40p) per share (1999: (profit) 11.96 per share) PROSPECTS The optimism expressed in the last review about our prospects for the current year appears to be justified. It is a long time since tanker owners have enjoyed such buoyant trading conditions. A significant part of the World fleet is aged and the number of newbuildings due to deliver in the next two years doesn't appear excessive - so the outlook is most encouraging for owners and brokers alike. Next year we also expect to see an improvement in the offshore market, sustained by relatively high oil prices. Our Sale and Purchase market volume continues to increase, as do values. The consolidation of both Capital Services and Wavespec into the Company should ensure an increasing contribution from these functions to group profitability. We have a well-rounded and experienced team of brokers operating in all sections of our business whose abilities should allow the Company to take full advantage of the strong market conditions that we expect to prevail during the remainder of this year and next. GROUP STRATEGY With this buoyant outlook to the markets in which we provide services, it is particularly pleasing to have announced earlier this month our intention to merge our activities with Braemar Shipbrokers Limited. The merger is anticipated to be earnings enhancing for existing shareholders, and the enlarged group will provide a wider service for the benefit of our customers. The due diligence process is continuing and it is expected that the definitive merger terms will be announced during November 2000. T.D.H. Young Chairman SEASCOPE SHIPPING HOLDINGS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 JUNE 2000 2000 1999 1999 6 months 6 months 12 months to 30 June to 30 June to 31 Dec Unaudited Unaudited Audited £'000 £'000 £'000 Turnover 4,582 5,284 10,388 Administrative expenses (4,818) (4,006) (8,452) ------------------------------ Operating (loss)/profit (236) 1,278 1,936 Interest receivable and similar income 19 54 89 Interest payable and similar charges (28) (12) (22) --------- ----------- -------- (Loss)/profit on ordinary activities before taxation (245) 1,320 2,003 Taxation on (loss)/profit on ordinary activities 83 (454) (666) --------- ----------- --------- (Loss)/profit on ordinary activities after taxation (162) 866 1,337 Dividends (including dividends in respect of Non-equity shares) (337) (320) (995) -------------------- -------- Retained (loss)/profit for the period (499) 546 342 Accumulated loss brought forward (1,270) (1,612) (1,612) ------------------------------ Retained loss carried forward (1,769) (1,066) (1,270) -------- --------- --------- (Loss)/earnings per ordinary share Basic (2.40p) 13.54p 21.03p (Loss)/earnings per ordinary share Fully Diluted (2.40p) 11.96p 18.16p SEASCOPE SHIPPING HOLDINGS PLC CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2000 2000 1999 1999 6 months 6 months 12 months to 30 June to 30 June to 31 Dec Unaudited Unaudited Audited £'000 £'000 £'000 Fixed Assets Goodwill 2,104 180 2,159 Tangible assets 1,090 539 919 Investments 734 620 734 --------- --------- -------- 3,928 1,339 3,812 Current Assets Debtors 2,504 2,502 1,652 Cash at bank and in hand 623 2,995 1,416 ---------- ---------- -------- 3,127 5,497 3,068 Creditors: amounts falling due within one year (1,994) (2,711) (2,194) ---------- ---------- -------- Net current assets 1,133 2,786 874 ---------- ---------- -------- Total assets less current liabilities 5,061 4,125 4,686 Creditors: amounts falling due after more than one year (1,024) (135) (150) ---------- ----------- --------- Net Assets 4,037 3,990 4,536 -------- --------- --------- Capital and Reserves Called up share capital 682 647 682 Capital redemption reserve 396 396 396 Share premium 4,728 4,013 4,728 Profit and loss account (1,769) (1,066) (1,270) --------- ---------- --------- Total equity shareholders' funds 4,037 3,990 4,536 -------- --------- --------- SEASCOPE SHIPPING HOLDINGS PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2000 2000 1999 1999 6 months 6 months 12 months to 30 June to 30 June to 31 Dec Unaudited Unaudited Audited £'000 £'000 £'000 Net cash (outflow)/inflow from operating activities (680) 1,226 2,857 Returns on investments and servicing of finance Interest received 22 56 91 Interest paid (14) (1) (2) Interest element of finance lease rental payments (9) (11) (16) --------- --------- --------- Net cash (outflow)/inflow from returns on investments and servicing of finance (1) 44 73 Taxation UK Corporation tax paid (140) (77) (1,298) Capital expenditure and financial investment Payments to acquire tangible fixed assets (145) (115) (732) Payment to acquire fixed asset investment - - (113) -------- -------- --------- Net cash (outflow) from investing activities (145) (115) (845) Acquisitions and disposals Purchase of subsidiary - (279) (1,349) Cash acquired with subsidiary - 17 184 Deferred consideration (75) - - -------- -------- -------- Net cash (outflow) for acquisitions (75) (262) (1,165) Equity dividends paid (675) (620) (940) -------- -------- --------- Cash (outflow)/inflow before financing (1,716) 196 (1,318) Financing New loan 1,000 - - Payment of principal under finance lease (77) (62) (127) ------- ------- --------- 923 (62) (127) ------- ------- --------- (Decrease)/increase in cash (793) 134 (1,445) ------- ------- --------- NOTES TO THE ACCOUNTS FOR THE SIX MONTHS ENDED 30 JUNE 2000 1. Accounting policies There have been no changes to the accounting policies set out in the 1999 Report and Accounts. 2. Financial Information The financial information for the half years ended 30 June 1999 and 30 June 2000 is unaudited. The financial information for the year ended 31 December 1999 does not constitute full accounts but is an extract from the Company's accounts for the year which have been delivered to the Registrar of Companies and on which the auditors gave an unqualified report. The results for the six months 30 June 2000 were approved by the Board on 28 September 2000.

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