REG - Braemar Shipping - Interim Results <Origin Href="QuoteRef">BRMS.L</Origin> - Part 2
23/10/2017 07:01
- Part 2: For the preceding part double click ID:nRSW2456Ua
of trade receivables (5,270) (5,424) (5,826)
34,717 39,073 39,294
Other receivables 4,859 6,166 5,964
Accrued income 10,665 11,911 9,790
Prepayments 3,352 3,409 2,151
53,593 60,559 57,199
The Directors consider that the carrying amounts of trade receivables
approximate to their fair value.
10. Share capital
Number of Ordinary Share
shares Shares Premium Total
(thousands) £'000 £'000 £'000
At 1 March 2017 30,173 3,018 52,510 55,528
At 31 August 2017 30,173 3,018 52,510 55,528
At 1 March 2016 30,114 3,011 52,314 55,325
Shares issued and fully paid 47 5 153 158
At 31 August 2016 30,161 3,016 52,467 55,483
11. Other reserves
Capital redemption reserve Merger reserve Translation reserve Hedging reserve Total other reserves
£'000 £'000 £'000 £'000 £'000
At 1 March 2017 396 21,346 7,891 (682) 28,951
Cash flow hedges
- Fair value gains in the period - - - 621 621
Foreign exchange differences - - (2,668) - (2,668)
At 31 August 2017 396 21,346 5,223 (61) 26,904
Capital redemption reserve Merger reserve Translation reserve Hedging reserve Total other reserves
£'000 £'000 £'000 £'000 £'000
At 1 March 2016 396 21,346 5,719 (987) 26,474
Cash flow hedges
- Transfer to net profit - - - 1,233 1,233
- Fair value gains in the period - - - (1,122) (1,122)
Foreign exchange differences - - 1,539 - 1,539
Deferred tax on items taken to equity - - - (22) (22)
At 31 August 2016 396 21,346 7,258 (898) 28,102
All other reserves are attributable to the equity holders of the parent
company.
12. Contingencies
From time to time the Group may be engaged in litigation in the ordinary
course of business. The Group carries professional indemnity insurance. There
are currently no liabilities expected to have a material adverse financial
impact on the Group's consolidated results or net assets.
13. Related parties
The Group's related parties are unchanged from 28 February 2017 and there have
been no significant related party transactions in the six months ended 31
August 2017. Additional related parties derived from the acquisition of NAVES
will be disclosed in the Annual Report for the year ending 28 February 2018.
For further information about the Group's related parties, please refer to the
Group's Annual Report 2017 for the year ended 28 February 2017.
14. Events after the reporting date
On 26 September 2017, the Group acquired the entire share capital of NAVES
Corporate Finance GmbH ("NAVES"). NAVES is an established and successful
business, headquartered in Hamburg, Germany, which advises national and
international clients on corporate finance related to the maritime industry
including restructuring advisory, corporate finance advisory, M&A, asset
brokerage, interim/pre-insolvency management, and financial asset management
including loan servicing.
The deal aligns with the Group's strategy of diversifying business operations
through acquisitive development. The acquisition of NAVES provides the Group
with multiple benefits, with the main drivers being entry to the valuable
maritime financial advisory market; continued growth opportunities;
complementary services and skills that broaden and enhance the Group's
offering to clients; opportunities for collaboration between divisions;
geographic expansion; and an additional source of revenue with added earnings
strength.
The acquisition agreement provides for a minimum consideration of E24 million
(subject to a customary working capital adjustment) and a maximum
consideration of E35 million. Management Sellers represent Mark Kuchenbecker
and Axel Siepmann, the managing partners of NAVES, and Non-management Sellers
represent other investors.
The initial consideration payable at completion is:
- E14.8 million (subject to a customary working capital adjustment), 50%
of which was paid in cash, and 50% satisfied by the issue of Convertible Loan
Notes; and
- E1.5 million, to be satisfied by the issue of 458,166 Ordinary Shares
to Non-management Sellers only (representing a price of 300.2 pence per
Ordinary Share (being the Reference Price)).
Three annual instalments of E1.4 million will be payable to the Sellers, 50%
in cash and 50% satisfied by the issue of Convertible Loan Notes. Interest at
a rate of 3% per annum will accrue on each of these tranches from the date of
issue until the date of payment of the relevant tranche.
Five annual instalments of E0.7 million will be payable to Management Sellers
only to be satisfied by the issue of Convertible Loan Notes.
An additional aggregate amount of up to E11.0 million (being the balance of
the maximum Consideration) may be payable over the three years following
completion in accordance with the terms and conditions in the acquisition
agreement which provide as follows:
- payable to the Management Sellers only and satisfied wholly by the
issue of Convertible Loan Notes;
- payable annually in tranches of E3.7 million (in each case within 30
days of the determination of NAVES' EBIT for the relevant period); and
- requires NAVES to deliver EBIT in excess of E2.0 million in each period
to trigger payment with the maximum consideration payable in each year if EBIT
of E4.4 million is delivered (subject, in each case, to certain agreed
adjustments).
Leaver provisions provide that if either of Mark Kuchenbecker or Axel Siepmann
resigns or is dismissed for cause, then each Management Seller shall have its
entitlements to receive further payments of the deferred consideration and
earn-out consideration reduced by an amount equal to the relevant individual's
percentage ownership interest in each relevant Management Seller.
NAVES generated revenue and underlying operating profit for the year ended 31
December 2016 of E7.5 million and E3.0 million respectively.
Costs of £0.9 million associated with the acquisition were incurred during the
period ending 31 August 2017 and have been classified as acquisition-related
expenditure in the condensed consolidated income statement.
The acquisition-date fair value accounting exercise had not been completed on
the date of signing of the interim financial statements.
15. Principal risks
The directors consider that the principal risks and uncertainties that could
have a material effect on the Group's performance are unchanged from those
identified on pages 26 to 29 of the Annual Report 2017. These include risks
associated with our staff and cost structure arising from reliance on key
people and our ability to retain our most important and high quality staff;
risks arising from commercial, worldwide and external forces such as downturn
in market conditions and the risk of increased competition across our various
businesses; financial risks including currency exposure, particularly in
relation to the value of the US dollar, and liquidity risk associated with the
control of our working capital; professional conduct risks such as
reputational damage to the Braemar corporate brand or professional error
resulting in loss of value of client assets; and IT and communications risk
including loss of IT service and cyber crime.
The Group holds professional indemnity insurance to an amount considered
adequate for its size and potential exposure.
16. Reconciliation of operating profit to net cash flow from operating
activities
Unaudited Unaudited Audited
Six months to Six months to Year ended
31 Aug 2017 31 Aug 2016 28 Feb 2017
£'000 £'000 £'000
Profit/(loss) before tax for the period/year 282 150 (637)
Adjustments for:
- Depreciation of property, plant and equipment 585 356 1,083
- Amortisation of computer software 323 264 549
Specific items:
- Restructuring costs - 1,453 3,008
- Gain on disposal of investment - - (1,664)
- Amortisation of other intangible assets 92 188 501
- Other specific items 1,683 878 1,984
Finance income (20) (13) (61)
Finance expense 213 152 364
Share based payments (excluding restricted share plan) 621 605 1,315
Net foreign exchange gains/(losses) & financial instruments 163 311 (307)
Changes in working capital:
- Trade and other receivables 3,607 (2,424) 254
- Trade and other payables (3,622) (1,323) 3,062
Contribution to defined benefit pension scheme (283) (225) (450)
Expenditure on restructuring - (1,453) (2,152)
Provisions (183) (316) (219)
Cash generated from/(used in) operations 3,461 (1,397) 6,630
Statement of Directors' responsibilities
The directors confirm, to the best of their knowledge, that the consolidated
interim financial information has been prepared in accordance with IAS34 as
adopted by the European Union, and that the interim management report herein
includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8
of the Disclosure and Transparency rules of the United Kingdom's Financial
Conduct Authority.
The directors of Braemar Shipping Services plc are listed below.
By order of the board
David Moorhouse CBE, Chairman
Jürgen Breuer, Non-Executive DirectorAlastair Farley, Non-Executive DirectorMark Tracey, Non-Executive DirectorLesley Watkins, Non-Executive Director James Kidwell, Chief Executive
Louise Evans, Finance Director
Peter Mason, Company Secretary
INDEPENDENT REVIEW REPORT TO BRAEMAR SHIPPING SERVICES PLC
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 31
August 2017 which comprises the condensed consolidated income statement,
condensed consolidated statement of comprehensive income, condensed
consolidated balance sheet, condensed consolidated statement of changes in
equity, and condensed consolidated statement of cash flows and the related
explanatory notes.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 31 August 2017 is not prepared, in
all material respects, in accordance with IAS 34 Interim Financial Reporting
as adopted by the EU and the Disclosure Guidance and Transparency Rules ("the
DTR") of the UK's Financial Conduct Authority ("the UK FCA").
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410 Review of Interim Financial Information
Performed by the Independent Auditor of the Entity issued by the Auditing
Practices Board for use in the UK. A review of interim financial information
consists of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review procedures.
We read the other information contained in the half-yearly financial report
and consider whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and consequently does not enable
us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit
opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors. The directors are responsible for preparing the
half-yearly financial report in accordance with the DTR of the UK FCA.
The annual financial statements of the group are prepared in accordance with
International Financial Reporting Standards as adopted by the EU. The
directors are responsible for preparing the condensed set of financial
statements included in the half-yearly financial report in accordance with IAS
34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
The purpose of our review work and to whom we owe our responsibilities
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the DTR of the
UK FCA. Our review has been undertaken so that we might state to the company
those matters we are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company for our review work, for this
report, or for the conclusions we have reached.
Jonathan Downer
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London
E14 5GL
20 October 2017
This information is provided by RNS
The company news service from the London Stock ExchangeRecent news on Braemar
See all newsREG - Braemar PLC - Total Voting Rights
AnnouncementREG - Braemar PLC - FY24 Trading Update
AnnouncementREG - Braemar PLC - Total Voting Rights
AnnouncementREG - Braemar PLC - Holding(s) in Company
AnnouncementREG - Braemar PLC - Block listing Interim Review
Announcement