RNS No 0016n
CARISBROOKE SHIPPING PLC
21 April 1999
Carisbrooke Shipping PLC
("Carisbrooke" or the "Company")
Results for the year ended 31 December 1998
* Trading profits doubled on prior year despite very difficult market
* Sterling still very strong - trading conditions poor - 1999 will be
difficult
* Ship values affected by poor trading climate
* Inappropriate to pay final dividend following interim 1p
Commenting today Peter Nicholson, Chairman, said:
I opened my report to you last year by stating that 1997 had been the most
challenging year Carisbrooke had yet faced. In August last year, when I wrote
our interim statement and reported satisfactory profits for the first half, I
said that seasonal factors normally made the second half of the year more
profitable for us and that the board was confident that the year as a whole
would be an improvement on 1997.
In the event, Carisbrooke made a substantially better profit on its normal
trading activities, of #347,000. The comparable figure for 1997 was #174,000.
However, the market in which we trade did not improve in the second half of
1998. It became, if anything, more difficult and the first quarter of 1999
has also been one of the most difficult trading periods which the company has
experienced for many years. The pound has strengthened against the euro and
as you will have seen from the published figures, British exports of goods as
opposed to services, have generally continued to fall, with the result that
there have been less cargoes for us to carry and cut-throat competition among
shipping companies for the lower volume of business which has been available.
The fact that we have been able to achieve a reasonable level of profitability
reflects considerable credit on our management team, who have worked extremely
hard and intelligently to maximise the opportunities available to us.
Inevitably the very poor trading conditions have had a fairly dramatic effect
on ship values. It is difficult to value ships when there are virtually no
buyers in the market-place as has been the case recently. In particular our
older ships, most of which we own wholly, are the ones which have been most
affected and whose values have fallen most. The independent year end
valuation has shown a reduction in the value of our ships of #1.6m. A newly
introduced accounting standard, FRS11, requires that this be put through the
profit and loss account. This has resulted in the company showing a loss
before tax for the year of #1.267m which, after a small tax charge, leaves us
with a final loss of #1.294m, as against #1.6m last year. I should emphasise,
however, that the loss this year is an unrealised book loss based on the
valuation of ships we still own. We have suffered no cash loss. If the
market recovers, the value of the ships will go up again, but if things do not
improve, it may make sense to sell off some of our older ships at the current
very low values if they cannot trade profitably.
Shareholders will recall that in the hope of improving prospects and our
strong balance sheet, the directors decided to pay an interim dividend of 1p.
Regrettably the board do not feel able to recommend any final dividend payment
while conditions and future prospects remain so uncertain.
In the light of the continuing very bad market conditions, your Board's
decision made in 1997, to change the strategy of the company has proved to be
absolutely correct and has undoubtedly saved us from a very much worse
situation.
This strategy has been to steadily reduce our investment in wholly owned ships
and concentrate instead on the management of generally new ships, which are
owned either by others, or in partnership with others. In pursuit of this
policy we had, by the end of 1998, four similar 4,600 tonners in the fleet.
These were all owned by Dutch investment companies in which we held less than
20% of the equity, but for which we had management and profit-sharing
contracts. In December 1998, another Dutch investment company was funded,
which will own a ship which is due to be delivered in May this year. This
will be managed on a similar basis.
These ships are very significantly more efficient than older vessels, some of
them carry as much as twice the cargo of their older sisters, but cost no more
and sometimes, less, to operate. Their construction has been financed on a
longer term basis with lower financing costs. They are, therefore, still able
to trade at a modest profit in a market in which virtually no ships can make
money.
Your board is striving to find further opportunities of becoming involved in
the management of ships owned by others, but to do so in such a way that these
vessels can be part of our fleet and managed by us on a day to day basis, so
that they benefit from the experienced and cost effective operational
management we have built up over the years. At the present time we are in
discussion about the possibility of adding further ships to our fleet on this
basis during 1999.
Nevertheless, 1999 will be a very difficult year for Carisbrooke. The
management contracts now under discussion will not be in place at best until
the second half of the year, and although we have set ourselves a target to
improve once again on our profit on ordinary activities, we shall do well to
make more than a small addition to last year's figure.
It is very difficult to forecast an up-turn in our sector of the shipping
industry. For us to become more profitable, European trade must grow or the
number of ships competing for that trade, must reduce. It may be a long slog
but, in the meantime, shareholders can at least take some comfort from the
fact that Carisbrooke should be in a better position than most to survive
through these difficult times.
However, in the near term, your board is highly conscious of the need,
particularly in the current climate, to enhance shareholder value.
Carisbrooke has, and will continue, to review the options available to it as a
smaller AIM listed company.
A copy of the profit & loss account, balance sheet and cash flow statement are
attached.
Enquiries to:
Willem Wester Carisbrooke Shipping PLC 01983 284100
Managing Director
Ron Robson Carisbrooke Shipping PLC 01983 284100
Finance Director
Ian Dighe Singer & Friedlander Ltd 0171 623 3000
Director
Copies of their announcement may be obtained for at least the next 14 days
from the offices of Carisbrooke Shipping PLC at 10 Mill Hill Road, Cowes, Isle
of Wight, PO31 7EA
Carisbrooke Shipping PLC and its Subsidiaries
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 1998
Before Exceptional 1998 1997
Exceptionals Items Total Total
# # # #
Turnover 6,160,260 - 6,160,260 12,184,499
Cost of sales (4,661,378) (1,614,420) (6,275,798) (10,457,034)
Gross profit/(loss) 1,498,882 (1,614,420) (115,538) 1,727,465
Administrative expenses (622,970) - (622,970) (434,593)
Other operating charges (554,821) - (554,821) (387,709)
Other operating income 292,194 - 292,194 164,092
(885,597) - (885,597) (658,210)
Operating profit/(loss) 613,285 (1,614,420) (1,001,135) 1,069,255
Share of results of 76,382 - 76,382 139,082
associate
Exceptional loss on - - - (1,765,921)
disposal of vessels
Interest receivable by 17,449 - 17,449 2,039
the group
Interest payable by the (195,215) - (195,215) (869,275)
group
Share of financing cost (164,944) - (164,944) (167,338)
of associate
Profit/(loss) on ordinary 346,957 (1,614,420) (1,267,463) (1,592,158)
activities before tax
Tax on profit/(loss) on (26,063) (24,060)
ordinary activities
Profit/(loss) for the (1,293,526) (1,616,218)
year after tax
Equity minority interests 8,094 (36,857)
(1,285,432) (1,653,075)
Equity dividends (101,375) (101,375)
Retained profit/(loss) (1,386,807) 1,754,450)
for the year
Basic earnings /(loss) (12.68)p (16.31)p
per share
Fully diluted (12.24)p (15.63)p
earnings/(loss) per share
Carisbrooke Shipping PLC and its Subsidiaries
GROUP BALANCE SHEET
as at 31 December 1998
1998 1998 1997 1997
# # # #
Fixed assets
Tangible assets 3,265,403 6,021,595
Investments 1,813,006 1,211,004
5,078,409 7,232,599
Current assets
Stock 252,996 174,293
Debtors
- due within one year 2,730,049 2,256,776
- due after more than 100,000 100,000
one year
Cash at bank and in hand 1,290,394
1,182,088
4,373,439 3,713,157
Creditors: amounts
falling due
within one year (2,975,747) (2,852,766)
Net current assets 1,397,692 860,391
Total assets less 6,476,101 8,092,990
current liabilities
Creditors: amounts
falling due after
more than one year (1,344,000) (1,642,500)
5,132,101 6,450,490
Capital and reserves
Called up share capital 5,068,775 5,068,775
Share premium account 1,092,322 1,092,322
Revaluation reserve 31,117 31,117
Other reserves 77,512 -
Profit and loss account (1,137,625) 249,182
Equity shareholders' funds 5,132,101
6,441,396
Equity minority interests - 9,094
5,132,101 6,450,490
Carisbrooke Shipping PLC and its Subsidiaries
GROUP CASH FLOW STATEMENT
for the year ended 31 December 1998
1998 1998 1997 1997
# # # #
Net cash inflow from 427,161 1,701,574
operating
activities
Returns on investments
and servicing
of finance
Interest received 17,449 2,039
Interest paid (195,215) (869,275)
(177,766) (867,236)
Taxation (26,063) (87,420)
Capital expenditure and
financial investment
Purchase of tangible (418,329) (1,288,604)
fixed assets
Sale of tangible fixed 1,017,169 12,867,312
assets
Purchase of investments (613,052) (721,739)
Decrease in loans from (14,000)
other entities
(14,212) 10,842,969
Equity dividends paid (101,375) (354,814)
Financing
New bank loans - 527,893
Repayment of bank loans (328,651) (11,086,924)
Repayment of hire - (1,466)
purchase loan
Net proceeds of share - (15,000)
issue
(328,651) (10,575,497)
Increase/(decrease) in (220,906) 659,576
cash
1. Earnings/(loss) per share
1998 1997
Basic earnings/(loss) per share (12.68)p (16.31)p
The calculation of earnings/(loss) per share is based on the loss after
taxation and minority interests for the year of #1,285,432 (1997 loss -
#1,653,075) and an average of 10,137,549 (1997 - 10,137,549) ordinary shares
of 50p each being the weighted average number in issue during the year ended
31 December 1998.
2. Debt and net assets per share
As at 31 December 1998
1998 1997
Net debt #1,022,152 #1,129,897
Gearing (net debt/shareholders' 20% 17%
funds)
Net assets per share 50.6p 63.5p
The calculation of net assets per share is based on the equity shareholders'
funds of the group at the year end and 10,137,549 ordinary shares of 50p each
being the number of ordinary shares of 50p each in issue at the years ended 31
December 1998, 1997.
3. Reconciliation of movements in equity shareholders' funds
1998 1997
# #
Results for the financial year after (1,285,432) (1,653,075)
tax and minority interests
Equity dividends (101,375) (101,375)
Net proceeds of share issue (15,000)
-
Exchange difference on foreign 77,512 -
currency net investments
Net increase/(decrease) in equity (1,309,295) (1,769,450)
shareholders' funds
Equity shareholders' funds at 1 6,441,396 8,210,846
January 1998
Equity shareholders' funds at 31 #5,132,101 #6,441,396
December 1998
4. Statutory Accounts
The financial information set out above does not constitute the group's
statutory financial statements for the years ended 31 December 1997 or 1998
but is derived from those financial statements. Statutory financial
statements for 1997 have been delivered to the Registrar of Companies, whereas
those for 1998 will be delivered following the Annual General Meeting. The
auditors have reported on those financial statements; their reports were
unqualified and did not contain a statement under sections 237(2) or (4) of
the Companies Act 1985.
5. Annual General Meeting
The Annual General Meeting will be held at the Royal Corinthian Yacht Club,
The Parade, Cowes, Isle of Wight on Wednesday 26 May 1999 at 11.00 hours.
END
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