TIDMCKN
RNS Number : 5791R
Clarkson PLC
25 August 2010
25 August 2010
Clarkson PLC
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2010
Clarkson PLC ('Clarksons') is the world's leading integrated shipping services
group. Through our 27 offices on five continents we play a vital intermediary
role in the movement of the majority of commodities around the world.
Summary
· Revenue up 14% to GBP101.0m (2009: GBP88.9m) reflecting improved market
conditions in shipping as a result of increased international trade
· Operating profit increased by 62% to GBP18.8m (2009: GBP11.6m)
· Profit before taxation up 49% to GBP16.7m (2009: GBP11.2m)
· Basic earnings per share up 58% to 66.7p (2009: 42.1p)
· 6% increase in interim dividend to 17p per share (2009: 16p per share)
· The successful launch and first trade of the Container Freight Swap
Agreement, an innovative new risk management product developed by Clarkson
Securities
Andi Case, Chief Executive of Clarksons commented:
"Uncertainty remains as to the speed and sustainability of global economic and
trade growth. Nevertheless Clarksons has produced a strong set of results,
ahead of the board's expectations, for the first six months of 2010. These
results reflect the hard work that our team has undertaken."
Enquiries:
+-------------------------------------+-------------------------------------+
| Clarkson PLC | 020 7334 0000 |
+-------------------------------------+-------------------------------------+
| Andi Case, Chief Executive | |
+-------------------------------------+-------------------------------------+
| Jeff Woyda, Finance Director | |
+-------------------------------------+-------------------------------------+
| | |
+-------------------------------------+-------------------------------------+
| Hudson Sandler | 020 7796 4133 |
+-------------------------------------+-------------------------------------+
| Charlie Jack/Kate Hough | |
+-------------------------------------+-------------------------------------+
Chairman's review
Clarksons has delivered a strong performance for the first half of 2010. With
the emerging recovery in global trade, the strength of the Clarksons brand and
breadth of our operations across shipping and its related markets positioned us
well.
These improving trends were particularly evident in the dry bulk markets where
trading was better than anticipated. Across the sale and purchase markets,
whilst the availability of credit remains an obstacle for some, it was also
encouraging to see further signs of a return to buying activity.
The Clarksons team has worked hard during the first half of the year to take
advantage of these opportunities and on behalf of the board, I thank the whole
team for their continued commitment.
Bob Benton
Chairman
25 August 2010
Chief Executive's review
In the first six months of the year Clarksons operated in shipping markets
broadly stronger than that of the corresponding period in 2009. This market
backdrop, combined with increased transaction volumes in the broking division,
led to a first half result ahead of the board's expectations, albeit against
weaker comparatives in 2009. Our strategy of offering integrated global
shipping services, supported by our market leading research and analysis, was
also an important factor in the group's ability to realise revenue opportunities
and deliver a strong set of results.
Chartering markets remained volatile during the first half, but Clarksons'
breadth of offering enabled the group to benefit where freight rates improved.
We are pleased that in these market conditions, the broking teams generated
increased revenues compared to the same period in 2009. Asian demand for
commodities was a continued important feature for the market in the first half
and our growing commitment to the region continued to deliver encouraging
results.
The period also saw increased confidence in the longer term prospects of many
markets, with rising commodity prices and building costs increasing from a level
seen by many as the low point. We have seen an increase in the volume of
newbuilding contracts being placed, as well as rising prices both in newbuilding
and secondhand across most sectors, despite the continued limited availability
of debt financing. In more conventional shipping markets, it would be improved
chartering rates that would result in rising asset values but, as spot rates
have remained volatile, there has been a disconnect between the medium and
longer term period rates available and the increased asset value of vessels, as
a result of which we are experiencing a shift towards more spot and shorter term
period business.
The financial division benefited from both the first trade and the first cleared
trade of the Container Freight Swap Agreement, an innovative new risk management
product developed by Clarkson Securities. The successful launch demonstrates
the group's commitment to providing our clients with market-leading and
innovative products and solutions.
Results
Revenue of GBP101.0m (2009: GBP88.9m) reflects improved shipping markets in the
first half of the year, both in terms of chartering rates and asset values
across broking and financial activities. Administrative expenses, which
increased 6% to GBP77.7m (2009: GBP73.6m), benefited from the one-off release of
a GBP2m remuneration provision relating to business in the USA no longer
required as performance criteria were not met in full. Without this release,
administrative expenses would have risen by 8% reflecting predominantly the
increase in bonuses resulting from the improvement in profits in the first half
of 2010 compared to the same period in 2009. Operating profit increased by 62%
to GBP18.8m (2009: GBP11.6m).
Profit before taxation was GBP16.7m (2009: GBP11.2m). Basic earnings per share
were 66.7p (2009: 42.1p).
Cash and dividends
Cash balances at 30 June 2010 were GBP132.9m (31 December 2009: GBP143.2m). Net
funds, after deduction of borrowings and bonus entitlements, amount to GBP42.1m
(31 December 2009: GBP38.2m).
Reflecting the strength in the business, the board has declared an increased
interim dividend of 17p per share (2009: 16p per share) which will be paid on 1
October 2010 to shareholders on the register at the close of business on 17
September 2010.
Broking
Revenue GBP83.5m (2009: GBP70.7m)
Result GBP20.6m (2009: GBP14.4m)
The broking division has performed well, growing market share, with overall spot
revenues ahead by 51% and increased transaction volumes.
Dry Bulk: China remains the cornerstone of the dry bulk freight market,
although the revival of other economies since the beginning of the year added to
demand.
The dry bulk market was characterised by a significant increase in spot
activity, with the weighted average of spot earnings 91% higher than in the
comparative period in 2009. These levels are similar to those experienced in the
second half of 2009 and reflect a degree of uncertainty over Chinese economic
growth in the remainder of 2010. The smaller bulk carriers (<100,000dwt) have
benefited most from the shift to spot market business.
The dry bulk fleet expanded by 34m dwt or 7.4% during the first half of 2010.
Although new tonnage held back earnings in the capesize sector, strong
international coal trade to China and India mitigated most of the fleet growth
in the smaller dry bulk ships. Port congestion, and the widening imbalance
between rates of industrial growth in Asian and Western economies, added to
fleet inefficiencies and resulted in increased tonne-miles, ship-days and
freight rates.
The dry bulk markets outperformed expectations for most of the period and spot
revenues in Clarksons' dry bulk business were nearly 60% higher on increased
transaction volumes relative to the comparable period last year. The Baltic Dry
Index, having reached its peak for the period in May, has subsequently fallen
significantly. The dry bulk outlook remains uncertain.
Deep Sea: A degree of global economic recovery had a positive effect on tanker
freight earnings. Oil intensive activities, such as transportation and
industry, picked up and this improvement looks set to continue throughout the
remainder of 2010. Spot earnings in the first half improved significantly from
the lows experienced in 2009. During the first half they were between 35% and
94% higher than full year 2009 earnings for all vessel types. In addition, the
use of tankers for storage, and lower than expected deliveries of new vessels,
continued to support freight rates.
Clarksons' spot revenues were up 28% on the comparative period, with increased
transaction volumes accounting for most of this.
Specialised Products: We witnessed a number of 'green shoots' of recovery within
the specialised products marketplace. Global economic conditions improved
faster than expected and robust freight rates have steadied the market with
rates and earnings on the main arterial trade lanes remaining resilient
throughout the half.
Chemical production trends continued to shift, as substantial capacity was added
in the Middle East and China.
Clarksons' revenues and transaction volumes from specialised products once again
increased during the period.
Gas: Pressure on freight levels continued into early 2010, as a result of
reduced volumes and expansion in the fleet. Growth in LPG volumes was
constrained by weaker LNG demand and start up delays for new projects. However,
export volumes started to recover through the course of the second quarter as
new projects in Qatar and Abu Dhabi began to come on stream and as regional
pricing differentials have supported trading opportunities from Western
producers into Asia.
The Very Large Gas Carrier (VLGC), Large Gas Carrier (LGC) and Midsize sectors
all came under pressure from weaker LPG trade combined with a slow start to the
year in the ammonia market. A recovery in ammonia exports from the Former
Soviet Union (FSU) countries, stronger demand in the US and healthy import
volumes in Asia have improved prospects for the LGCs as the first half
progressed. Rates were also supported by a recovery in the fortunes of the VLGC
sector.
Whilst the market was under pressure during the first half, spot revenues were
marginally ahead of the comparative period in 2009.
Sale and Purchase: Confidence started to return to the markets, which resulted
in a firming of values across the sectors as buying activity increased. This
was despite the continued reluctance of traditional shipping banks to undertake
new projects as new sources of finance, principally from private equity and the
US investor market, were willing to step in and replace them.
Spot revenues and overall transaction volumes in both secondhand and offshore
markets together increased by around 150% over the comparable period last year.
Our success was achieved by maintaining relationships with our key clients and
also helping them take advantage of the new sources of funding. However, with
significantly quieter markets since the period-end, it may prove difficult to
repeat this performance in the second half.
Containers: Following 2009, when the container shipping markets came under
severe downward pressure on the back of a substantial contraction in trade and
continued growth in fleet capacity, there was some recovery. Trade volumes
returned to positive year-on-year growth on most routes, most significantly out
of and within Asia, and this created additional demand for containership
capacity resulting in an uplift in the containership charter market.
On average, across a selection of ship sizes, one-year containership charter
rates were up by over 80% across the first half of 2010, from the historical
lows at the end of 2009. Containership secondhand prices also benefited, with
ten-year-old prices up on average by almost 60% in the first half of 2010,
whilst trade growth has also enabled operators to reactivate the majority of the
capacity idled in 2009.
As a result, spot revenues were more than three times greater than in the first
half of 2009 on increased volumes.
Looking ahead, global container trade growth is projected to reach between 9%
and 10% for the full year 2010 with the fundamentals for the sector looking
likely to sustain improvements on last year, although risks to the
sustainability of the recovery do remain, most notably on the demand side from
the potential threat of double dip recession, levels of unemployment in the
advanced economies, and the contagion of financial problems within the European
economies.
Financial
Revenue GBP5.5m (2009: GBP7.4m)
Result GBP1.8m loss (2009: GBP1.0m loss)
Futures Broking: Our profitable derivatives business continues to grow in terms
of market share and the diversity of clients. We have been instrumental in
opening up new markets for our clients and major milestones have included the
execution of both the first bilateral and cleared contracts of the newly
launched Container Freight Swap Agreement. Container Freight Swap Agreements
provide a means of hedging freight exposure for shippers, carriers and retail
companies active in container shipping and have been developed and pioneered by
Clarkson Securities. We also continued to take market share in the iron ore
swaps market.
A significant increase in transaction volumes was partially offset by reduced
average transaction sizes, though spot revenues were up 17% relative to the
first half of 2009.
Investment Services: Clarksons are the only Middle East and North Africa expert
who can provide in-depth sector coverage, global research and investment banking
services in natural resources, shipping and energy services. During the first
half, the team worked on a number of mandates, principally from Dubai with
support from London and Houston, which are expected to generate revenue in the
second half.
Fund Management: Assets under management stabilised, although trading
conditions remain challenging, resulting in a small loss. Lower management fees
have, however, been offset by significantly reduced costs.
Research
Revenue GBP3.4m (2009: GBP3.3m)
Result GBP0.8m (2009: GBP0.8m)
Clarkson Research Services' revenues grew by 3% during the first half, supported
by continued demand for better quality and more detailed market information.
Clarkson Valuations' ship valuation service remains of particular importance to
market participants.
The re-launch of our flagship database, the Shipping Intelligence Network,
during the half has driven a 27% increase in digital data sales, as clients
continue to derive significant benefit from Clarksons' in-depth understanding of
maritime supply and demand. Consulting revenues have more than doubled, as a
result of work undertaken to assist with IPOs and specific client research. We
also published the first edition of the World Fleet Monitor, which has been well
received by our clients.
Support
Revenue GBP10.1m (2009: GBP8.9m)
Result GBP0.7m (2009: GBP0.3m)
Port and agency services continue to operate at record levels. High levels of
grain imports and exports have boosted our stevedoring business in Ipswich.
Agency activities saw increased export grain volumes and offshore activities
which offset reduced movements in other traffic, including coal imports.
Technical services revenues declined overall, though the division is currently
undertaking a major repair contract in the Far East.
The MT Hermien continued to trade under external commercial management. Ship
ownership remains non-core, and the group's intention remains to exit this
activity.
The property services division continues to operate profitably.
Current Trading and Outlook
Whilst improvements in the first half were better than expected, uncertainty
remains as to the speed and sustainability of global economic and trade growth.
Clarksons' revenues continue to be supported by our forward order book and the
US dollar. Furthermore the group remains strongly cash generative with a solid
and strengthening balance sheet.
Whilst the trends in spot business experienced since the beginning of the year
are indicative of market volatility, Clarksons' volumes are growing and the
board looks forward to the future with confidence.
Andi Case
Chief Executive
25 August 2010
Directors' responsibility statement
The directors confirm, to the best of their knowledge, that this set of interim
financial statements has been prepared in accordance with IAS 34 as adopted by
the European Union, and that the Interim Management Report herein includes a
fair review of the information required by Rules 4.2.7 and 4.2.8 of the
Disclosure and Transparency Rules of the United Kingdom's Financial Services
Authority.
The directors are responsible for the maintenance and integrity of the Interim
Report on the website in accordance with UK legislation governing the
preparation and dissemination of financial statements. Access to the website is
available from outside the UK, where comparable legislation may be different.
+------------------+------------------------------+------------------------+
| Bob Benton | Chairman | |
| | | |
+------------------+------------------------------+------------------------+
| Andi Case | Chief Executive | |
| | | |
+------------------+------------------------------+------------------------+
| James Morley | Non-Executive Director | |
| | | |
+------------------+------------------------------+------------------------+
| Martin Stopford | Executive Director | |
| | | |
+------------------+------------------------------+------------------------+
| Ed Warner | Non-Executive Director | |
| | | |
+------------------+------------------------------+------------------------+
| Paul Wogan | Non-Executive Director | |
| | | |
+------------------+------------------------------+------------------------+
| Jeff Woyda | Finance Director | |
| | | |
+------------------+------------------------------+------------------------+
25 August 2010
Independent review report to Clarkson PLC
Introduction
We have been engaged by the company to review the condensed consolidated set of
financial statements in the interim report for the six months ended 30 June
2010, which comprises the consolidated income statement, the consolidated
statement of comprehensive income, the consolidated balance sheet, the
consolidated statement of changes in equity and the consolidated cash flow
statement together with the related notes. We have read the other information
contained in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
consolidated set of financial statements.
Directors' responsibilities
The interim report is the responsibility of, and has been approved by, the
directors. The directors are responsible for preparing the interim report in
accordance with the Disclosure and Transparency Rules of the United Kingdom's
Financial Services Authority.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with IFRSs as adopted by the European Union. The
condensed set of financial statements included in this interim report has been
prepared in accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed
set of financial statements in the interim report based on our review. This
report, including the conclusion, has been prepared for and only for the company
for the purpose of the Disclosure and Transparency Rules of the Financial
Services Authority and for no other purpose. We do not, in producing this
report, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
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 United Kingdom.
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. A review is substantially less
in scope than an audit conducted in accordance with International Standards on
Auditing (UK and Ireland) 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.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed consolidated set of financial statements in the interim
report for the six months ended 30 June 2010 is not prepared, in all material
respects, in accordance with International Accounting Standard 34 as adopted by
the European Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Services Authority.
PricewaterhouseCoopers LLP
Chartered Accountants
London
25 August 2010
Consolidated income statement
For the half year to 30 June
+----------------+--------+--------------------+------------------+
| | Notes | 2010 | 2009 |
| | | GBPm* | GBPm* |
+----------------+--------+--------------------+------------------+
| Revenue | 3 | 101.0 | 88.9 |
+----------------+--------+--------------------+------------------+
| Cost | | (4.5) | (3.7) |
| of | | | |
| sales | | | |
+----------------+--------+--------------------+------------------+
| Trading | | 96.5 | 85.2 |
| profit | | | |
+----------------+--------+--------------------+------------------+
| Administrative | | (77.7) | (73.6) |
| expenses | | | |
+----------------+--------+--------------------+------------------+
| Operating | 3 | 18.8 | 11.6 |
| profit | | | |
+----------------+--------+--------------------+------------------+
| Share | | (0.1) | |
| of | | | - |
| losses | | | |
| of | | | |
| associates | | | |
| and joint | | | |
| ventures | | | |
+----------------+--------+--------------------+------------------+
| Finance | 4 | 0.2 | 0.7 |
| revenue | | | |
+----------------+--------+--------------------+------------------+
| Finance | 4 | (2.3) | (1.1) |
| costs | | | |
+----------------+--------+--------------------+------------------+
| Other | | 0.1 | |
| finance | | | - |
| revenue | | | |
| - | | | |
| pensions | | | |
+----------------+--------+--------------------+------------------+
| Profit | | 16.7 | 11.2 |
| before | | | |
| taxation | | | |
+----------------+--------+--------------------+------------------+
| Taxation | 5 | (4.3) | (3.3) |
+----------------+--------+--------------------+------------------+
| Profit | | 12.4 | 7.9 |
| for | | | |
| the | | | |
| period | | | |
| - | | | |
| continuing | | | |
| operations | | | |
+----------------+--------+--------------------+------------------+
| Attributable | | | |
| to: | | | |
+----------------+--------+--------------------+------------------+
| Equity | | 12.4 | 7.9 |
| holders | | | |
| of the | | | |
| parent | | | |
+----------------+--------+--------------------+------------------+
| Earnings | 6 | | |
| per | | | |
| share | | | |
+----------------+--------+--------------------+------------------+
| Basic | | 66.7p | 42.1p |
+----------------+--------+--------------------+------------------+
| Diluted | | 66.7p | 41.4p |
| | | | |
+----------------+--------+--------------------+------------------+
* Unaudited
Consolidated statement of comprehensive income
For the half year to 30 June
+------------------+--------------------+--------------------+
| | 2010 | 2009 |
| | GBPm* | GBPm* |
+------------------+--------------------+--------------------+
| Profit | 12.4 | 7.9 |
| for | | |
| the | | |
| period | | |
+------------------+--------------------+--------------------+
| Actuarial | (4.5) | (11.1) |
| loss on | | |
| employee | | |
| benefit | | |
| schemes - | | |
| net of | | |
| tax | | |
+------------------+--------------------+--------------------+
| Foreign | 1.8 | (6.0) |
| exchange | | |
| differences | | |
| on | | |
| retranslation | | |
| of foreign | | |
| operations | | |
+------------------+--------------------+--------------------+
| Foreign | (2.0) | 2.1 |
| currency | | |
| hedge - | | |
| net of | | |
| tax | | |
+------------------+--------------------+--------------------+
| Total | 7.7 | (7.1) |
| comprehensive | | |
| income/(expense) | | |
| for the period | | |
+------------------+--------------------+--------------------+
| Total | | |
| comprehensive | | |
| income/(expense) | | |
| attributable | | |
| to: | | |
+------------------+--------------------+--------------------+
| Equity | 7.7 | (7.1) |
| holders | | |
| of the | | |
| parent | | |
+------------------+--------------------+--------------------+
* Unaudited
Consolidated balance sheet
As at 30 June
+------------------+--------+--------+-------------------+----------+
| | Notes | | | 31 |
| | | | | December |
| | | 2010 | 2009 | 2009 |
| | | GBPm* | GBPm* | GBPm+ |
+------------------+--------+--------+-------------------+----------+
| Non-current | | | | |
| assets | | | | |
+------------------+--------+--------+-------------------+----------+
| Property, | | 13.9 | 15.6 | 14.6 |
| plant and | | | | |
| equipment | | | | |
+------------------+--------+--------+-------------------+----------+
| Investment | | 0.4 | 0.4 | 0.4 |
| property | | | | |
+------------------+--------+--------+-------------------+----------+
| Intangible | | 32.6 | 32.1 | 32.5 |
| assets | | | | |
+------------------+--------+--------+-------------------+----------+
| Investments | | - | 0.4 | 0.2 |
| in | | | | |
| associates | | | | |
| and joint | | | | |
| ventures | | | | |
+------------------+--------+--------+-------------------+----------+
| Trade | | 0.6 | 0.8 | 0.6 |
| and | | | | |
| other | | | | |
| receivables | | | | |
+------------------+--------+--------+-------------------+----------+
| Investments | | 14.4 | 14.6 | 14.9 |
+------------------+--------+--------+-------------------+----------+
| Deferred | | 13.5 | 6.9 | 11.6 |
| tax | | | | |
| asset | | | | |
+------------------+--------+--------+-------------------+----------+
| | | 75.4 | 70.8 | 74.8 |
+------------------+--------+--------+-------------------+----------+
| Current | | | | |
| assets | | | | |
+------------------+--------+--------+-------------------+----------+
| Trade | | 37.2 | 33.7 | 29.7 |
| and | | | | |
| other | | | | |
| receivables | | | | |
+------------------+--------+--------+-------------------+----------+
| Income | | 0.5 | 1.1 | 0.9 |
| tax | | | | |
| receivable | | | | |
+------------------+--------+--------+-------------------+----------+
| Cash | 9 | 132.9 | 122.7 | 143.2 |
| and | | | | |
| short-term | | | | |
| deposits | | | | |
+------------------+--------+--------+-------------------+----------+
| | | 170.6 | 157.5 | 173.8 |
+------------------+--------+--------+-------------------+----------+
| Current | | | | |
| liabilities | | | | |
+------------------+--------+--------+-------------------+----------+
| Interest-bearing | | - | (2.4) | - |
| loans and | | | | |
| borrowings | | | | |
+------------------+--------+--------+-------------------+----------+
| Trade | | (71.4) | (72.1) | (86.9) |
| and | | | | |
| other | | | | |
| payables | | | | |
+------------------+--------+--------+-------------------+----------+
| Income | | (5.8) | (3.6) | (3.3) |
| tax | | | | |
| payable | | | | |
+------------------+--------+--------+-------------------+----------+
| Provisions | | (0.3) | (0.3) | (0.3) |
+------------------+--------+--------+-------------------+----------+
| | | (77.5) | (78.4) | (90.5) |
+------------------+--------+--------+-------------------+----------+
| Net | | 93.1 | 79.1 | 83.3 |
| current | | | | |
| assets | | | | |
+------------------+--------+--------+-------------------+----------+
| Non-current | | | | |
| liabilities | | | | |
+------------------+--------+--------+-------------------+----------+
| Interest-bearing | 9 | (49.2) | (47.7) | (48.3) |
| loans and | | | | |
| borrowings | | | | |
+------------------+--------+--------+-------------------+----------+
| Trade | | (1.0) | (1.1) | (1.0) |
| and | | | | |
| other | | | | |
| payables | | | | |
+------------------+--------+--------+-------------------+----------+
| Provisions | | (1.2) | (1.0) | (1.1) |
+------------------+--------+--------+-------------------+----------+
| Employee | 8 | (12.8) | (6.6) | (6.9) |
| benefits | | | | |
+------------------+--------+--------+-------------------+----------+
| Deferred | | (3.3) | (2.0) | (4.0) |
| tax | | | | |
| liability | | | | |
+------------------+--------+--------+-------------------+----------+
| | | (67.5) | (58.4) | (61.3) |
+------------------+--------+--------+-------------------+----------+
| Net | | 101.0 | 91.5 | 96.8 |
| assets | | | | |
+------------------+--------+--------+-------------------+----------+
| | | | | |
+------------------+--------+--------+-------------------+----------+
| Capital | | | | |
| and | | | | |
| reserves | | | | |
+------------------+--------+--------+-------------------+----------+
| Issued | 10 | 4.7 | 4.7 | 4.7 |
| capital | | | | |
+------------------+--------+--------+-------------------+----------+
| Other | | 42.1 | 40.6 | 40.6 |
| reserves | | | | |
+------------------+--------+--------+-------------------+----------+
| Profit | | 54.2 | 46.2 | 51.5 |
| and | | | | |
| loss | | | | |
+------------------+--------+--------+-------------------+----------+
| Clarkson | | 101.0 | 91.5 | 96.8 |
| PLC | | | | |
| group | | | | |
| shareholders' | | | | |
| equity | | | | |
+------------------+--------+--------+-------------------+----------+
* Unaudited
+ Audited
Consolidated statement of changes in equity
+------------------+--------+---------+---------------+----------------+----------------+
| | | Attributable to equity holders of |
| | | the parent |
+------------------+--------+-----------------------------------------------------------+
| | Notes | Share | Other | Profit | Total |
| | | capital | reserves | and | equity |
| | | GBPm* | GBPm* | loss | GBPm* |
| | | | | GBPm* | |
+------------------+--------+---------+---------------+----------------+----------------+
| Balance | | 4.7 | 40.6 | 51.5 | 96.8 |
| at 1 | | | | | |
| January | | | | | |
| 2010 | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| Profit | | - | - | 12.4 | 12.4 |
| for | | | | | |
| the | | | | | |
| period | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| Other | | | | | |
| comprehensive | | | | | |
| income: | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| | | - | - | (4.5) | (4.5) |
| Actuarial | | | | | |
| loss on | | | | | |
| employee | | | | | |
| benefit | | | | | |
| schemes - | | | | | |
| net of | | | | | |
| tax | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| | | - | 1.8 | - | 1.8 |
| Foreign | | | | | |
| exchange | | | | | |
| differences | | | | | |
| on | | | | | |
| retranslation | | | | | |
| of foreign | | | | | |
| operations | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| | | - | (2.0) | - | (2.0) |
| Foreign | | | | | |
| currency | | | | | |
| hedge - | | | | | |
| net of | | | | | |
| tax | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| Total | | - | (0.2) | 7.9 | 7.7 |
| comprehensive | | | | | |
| (expense)/income | | | | | |
| for the period | | | | | |
| ended 30 June | | | | | |
| 2010 | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| Transactions | | | | | |
| with owners: | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| | | - | 1.5 | - | 1.5 |
| ESOP | | | | | |
| shares | | | | | |
| utilised | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| | | - | 0.2 | (0.1) | 0.1 |
| Share-based | | | | | |
| payments | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| | 7 | - | - | (5.1) | (5.1) |
| Dividend | | | | | |
| paid | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
| | | - | 1.7 | (5.2) | (3.5) |
+------------------+--------+---------+---------------+----------------+----------------+
| Balance | | 4.7 | 42.1 | 54.2 | |
| at 30 | | | | | 101.0 |
| June | | | | | |
| 2010 | | | | | |
+------------------+--------+---------+---------------+----------------+----------------+
+---------------+--------+---------+---------------+----------------+----------------+
| | | Attributable to equity holders of |
| | | the parent |
+---------------+--------+-----------------------------------------------------------+
| | Notes | Share | Other | Profit | Total |
| | | capital | reserves | and | equity |
| | | GBPm* | GBPm* | loss | GBPm* |
| | | | | GBPm* | |
+---------------+--------+---------+---------------+----------------+----------------+
| Balance | | 4.7 | 43.7 | 54.0 | |
| at 1 | | | | | 102.4 |
| January | | | | | |
| 2009 | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| Profit | | - | - | 7.9 | 7.9 |
| for | | | | | |
| the | | | | | |
| period | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| Other | | | | | |
| comprehensive | | | | | |
| income: | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | | - | - | (11.1) | (11.1) |
| Actuarial | | | | | |
| loss on | | | | | |
| employee | | | | | |
| benefit | | | | | |
| schemes - | | | | | |
| net of | | | | | |
| tax | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | | - | (6.0) | - | (6.0) |
| Foreign | | | | | |
| exchange | | | | | |
| differences | | | | | |
| on | | | | | |
| retranslation | | | | | |
| of foreign | | | | | |
| operations | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | | - | 2.1 | - | |
| Foreign | | | | | 2.1 |
| currency | | | | | |
| hedge - | | | | | |
| net of | | | | | |
| tax | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| Total | | - | (3.9) | (3.2) | (7.1) |
| comprehensive | | | | | |
| expense for | | | | | |
| the period | | | | | |
| ended 30 June | | | | | |
| 2009 | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| Transactions | | | | | |
| with owners: | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | | - | (5.0) | - | (5.0) |
| ESOP | | | | | |
| shares | | | | | |
| acquired | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | | - | 5.0 | - | |
| ESOP | | | | | 5.0 |
| shares | | | | | |
| utilised | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | | - | - | 0.3 | |
| Profit | | | | | 0.3 |
| on | | | | | |
| ESOP | | | | | |
| shares | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | | - | 0.8 | - | |
| Share-based | | | | | 0.8 |
| payments | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | 7 | - | - | (4.9) | (4.9) |
| Dividend | | | | | |
| paid | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
| | | - | 0.8 | (4.6) | |
| | | | | | (3.8) |
+---------------+--------+---------+---------------+----------------+----------------+
| Balance | | 4.7 | 40.6 | 46.2 | |
| at 30 | | | | | 91.5 |
| June | | | | | |
| 2009 | | | | | |
+---------------+--------+---------+---------------+----------------+----------------+
* Unaudited
Consolidated cash flow statement
For the half year to 30 June
+---------------------+--------+--------+---------+
| | Notes | 2010 | 2009 |
| | | GBPm* | GBPm* |
+---------------------+--------+--------+---------+
| Cash | | | |
| flows | | | |
| from | | | |
| operating | | | |
| activities | | | |
+---------------------+--------+--------+---------+
| Profit | | 16.7 | 11.2 |
| before | | | |
| tax | | | |
+---------------------+--------+--------+---------+
| Adjustments | | | |
| for: | | | |
+---------------------+--------+--------+---------+
| | | (2.3) | 1.3 |
| Foreign | | | |
| exchange | | | |
| differences | | | |
+---------------------+--------+--------+---------+
| | | 1.5 | 1.5 |
| Depreciation | | | |
| and | | | |
| impairment | | | |
| of property, | | | |
| plant and | | | |
| equipment | | | |
+---------------------+--------+--------+---------+
| | | 0.4 | 0.1 |
| Share-based | | | |
| payment | | | |
| expense | | | |
+---------------------+--------+--------+---------+
| | | 0.1 | |
| Share | | | - |
| of | | | |
| losses | | | |
| of | | | |
| associates | | | |
| and joint | | | |
| ventures | | | |
+---------------------+--------+--------+---------+
| | | (0.3) | (0.2) |
| Difference | | | |
| between | | | |
| ordinary | | | |
| pension | | | |
| contributions | | | |
| paid | | | |
| and | | | |
| amount | | | |
| recognised in | | | |
| the income | | | |
| statement | | | |
+---------------------+--------+--------+---------+
| | | (0.2) | (0.7) |
| Finance | | | |
| revenue | | | |
+---------------------+--------+--------+---------+
| | | (0.1) | |
| Other | | | - |
| finance | | | |
| revenue | | | |
| - | | | |
| pensions | | | |
+---------------------+--------+--------+---------+
| | | 2.3 | 1.1 |
| Finance | | | |
| costs | | | |
+---------------------+--------+--------+---------+
| | | (7.8) | 19.5 |
| (Increase)/decrease | | | |
| in trade and other | | | |
| receivables | | | |
+---------------------+--------+--------+---------+
| | | (12.9) | (64.1) |
| Change | | | |
| in | | | |
| bonus | | | |
| accrual | | | |
+---------------------+--------+--------+---------+
| | | (3.6) | (1.2) |
| Decrease | | | |
| in trade | | | |
| and | | | |
| other | | | |
| payables | | | |
+---------------------+--------+--------+---------+
| | | 0.1 | 0.1 |
| Increase | | | |
| in | | | |
| provisions | | | |
+---------------------+--------+--------+---------+
| Cash | | (6.1) | (31.4) |
| utilised | | | |
| from | | | |
| operations | | | |
+---------------------+--------+--------+---------+
| Income | | (1.3) | (8.2) |
| tax | | | |
| paid | | | |
+---------------------+--------+--------+---------+
| Net | | (7.4) | (39.6) |
| cash | | | |
| flow | | | |
| from | | | |
| operating | | | |
| activities | | | |
+---------------------+--------+--------+---------+
| Cash | | | |
| flows | | | |
| from | | | |
| investing | | | |
| activities | | | |
+---------------------+--------+--------+---------+
| Interest | | 0.2 | 0.4 |
| received | | | |
+---------------------+--------+--------+---------+
| Purchase | | (0.4) | (0.5) |
| of | | | |
| property, | | | |
| plant and | | | |
| equipment | | | |
+---------------------+--------+--------+---------+
| Dividends | | 0.1 | - |
| received | | | |
| from | | | |
| associates | | | |
| and joint | | | |
| ventures | | | |
+---------------------+--------+--------+---------+
| Net | | (0.1) | (0.1) |
| cash | | | |
| flow | | | |
| from | | | |
| investing | | | |
| activities | | | |
+---------------------+--------+--------+---------+
| Cash | | | |
| flows | | | |
| from | | | |
| financing | | | |
| activities | | | |
+---------------------+--------+--------+---------+
| Interest | | (0.8) | (1.1) |
| paid | | | |
+---------------------+--------+--------+---------+
| Dividend | 7 | (5.1) | (4.9) |
| paid | | | |
+---------------------+--------+--------+---------+
| Repayments | | - | (1.8) |
| of | | | |
| borrowings | | | |
+---------------------+--------+--------+---------+
| ESOP | | - | (5.0) |
| shares | | | |
| acquired | | | |
+---------------------+--------+--------+---------+
| Net | | (5.9) | (12.8) |
| cash | | | |
| flow | | | |
| from | | | |
| financing | | | |
| activities | | | |
+---------------------+--------+--------+---------+
| Net | | (13.4) | (52.5) |
| decrease | | | |
| in cash | | | |
| and cash | | | |
| equivalents | | | |
+---------------------+--------+--------+---------+
| Cash | | 143.2 | 184.4 |
| and | | | |
| cash | | | |
| equivalents | | | |
| at start of | | | |
| period | | | |
+---------------------+--------+--------+---------+
| Net | | 3.1 | (9.2) |
| foreign | | | |
| exchange | | | |
| differences | | | |
+---------------------+--------+--------+---------+
| Cash | | 132.9 | 122.7 |
| and | | | |
| cash | | | |
| equivalents | | | |
| at end of | | | |
| period | | | |
+---------------------+--------+--------+---------+
* Unaudited
Notes to the interim financial statements
1 Corporate information
The interim consolidated financial statements of the group for the period ended
30 June 2010 were authorised for issue in accordance with a resolution of the
directors on 25 August 2010. Clarkson PLC is a Public Limited Company
registered in England and Wales.
The interim consolidated financial statements do not comprise statutory accounts
within the meaning of Section 434 of the Companies Act 2006, and should be read
in conjunction with the 2009 annual financial statements. The statutory audited
accounts for the year ended 31 December 2009 have been delivered to the
Registrar of Companies in England and Wales. The Auditors' report on those
accounts was unqualified and did not contain statements under Section 498 of the
Companies Act 2006.
Copies of the interim financial statements will be circulated to all
shareholders and will be available from the registered office of the company at
St. Magnus House, 3 Lower Thames Street, London EC3R 6HE and also on
www.clarksons.com.
2 Statement of accounting policies
2.1 Basis of preparation
The interim consolidated financial statements for the period ended 30 June 2010
have been prepared in accordance with the Disclosure and Transparency Rules of
the Financial Services Authority and with IAS 34 Interim Financial Reporting as
adopted by the European Union.
The interim consolidated financial statements do not include all the information
and disclosures required in the annual financial statements, and should be read
in conjunction with the group's annual financial statements for the year ended
31 December 2009, which were prepared in accordance with IFRSs as adopted by the
European Union.
2.2 Accounting policies
The accounting policies adopted in the preparation of the interim consolidated
financial statements are consistent with those followed in the preparation of
the group's annual financial statements for the year ended 31 December 2009.
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1 January 2010.
· IFRS 3 (revised), 'Business combinations', and consequential amendments
to IAS 27, 'Consolidated and separate financial statements', IAS 28,
'Investments in associates', and IAS 31, 'Interests in joint ventures', are
effective prospectively to business combinations for which the acquisition date
is on or after the beginning of the first annual reporting period beginning on
or after 1 July 2009.
IFRS 3 (revised) continues to apply the acquisition
method to business combinations, but with some significant changes. For example,
the change in the treatment of acquisition-related expenses discussed in the
basis of preparation section, and any revisions to contingent cash consideration
in the period following the acquisition will be recorded in the income
statement.
· IAS 27 (revised), 'Consolidated and separate financial statements'
requires the effects of all transactions with non-controlling interests to be
recorded in equity if there is no change in control. Such transactions will no
longer result in either goodwill or in a gain or a loss being recognised. The
standard also specifies the accounting when control is lost. Any remaining
interest in the entity is re-measured to fair value, and a gain or loss is
recognised in the income statement.
The following new standards, amendments to standards and interpretations are
mandatory for the first time for the financial year beginning 1 January 2010,
but are not currently relevant for the group or have not had a material impact
on the group.
· IFRS 1 (amended), 'Additional Exemptions for First-time Adopters'.
· IFRS 2 (amendments), 'Group Cash-settled Share-based payment
transactions'.
· IFRS 5 (amendment), 'Non-current assets Held for Sale and Discontinued
Operations'.
· IAS 38 (amendment), 'Intangible Assets'.
· IAS 39 (amended), 'Financial Instruments: Recognition and Measurement -
Eligible hedged items'.
· IAS 39 (amended), 'Financial Instruments: Recognition and Measurement'.
· IFRIC 9 (amended), 'Reassessment of Embedded Derivatives'.
· IFRIC 17, 'Distributions of non-cash assets to owners'.
· IFRIC 18, 'Transfers of assets from customers'.
· Improvements to International Financial Reporting Standards 2009.
The following new standards, amendments to standards and interpretations have
been issued, but are not effective for the financial year beginning 1 January
2010 and have not been early adopted:
· IFRS 1 (amended), 'Limited Exemption from Comparative IFRS 7 Disclosures
for First-time Adopters'.
· IFRS 9, 'Financial instruments'.
· IAS 24 (revised), 'Related party disclosures'.
· IAS 32 (amendment), 'Financial Instruments: Presentation - Classification
of Rights Issues'.
· IFRIC 14 (amended), 'Prepayments of a Minimum Funding requirement'.
· IFRIC 19, 'Extinguishing Financial Liabilities with Equity Instruments'.
· Improvements to International Financial Reporting Standards 2010.
The group is yet to assess the full impact of IFRS 9, and has not yet decided
when to adopt this standard, which is not mandatory until January 2013. The
directors anticipate that the future adoption of all the other standards,
interpretations and amendments listed above will not have a material impact on
the group's financial statements.
3 Segmental information
For the half year to 30 June
+-----------------+--------+---------+---------+---------+
| | | Revenue | | Results |
+-----------------+--------+---------+---------+---------+
| Continuing | 2010 | 2009 | 2010 | 2009 |
| operations | GBPm | GBPm | GBPm | GBPm |
+-----------------+--------+---------+---------+---------+
| Broking | 83.5 | 70.7 | 20.6 | 14.4 |
+-----------------+--------+---------+---------+---------+
| Financial | 5.5 | 7.4 | (1.8) | (1.0) |
+-----------------+--------+---------+---------+---------+
| Support | 10.1 | 8.9 | 0.7 | 0.3 |
+-----------------+--------+---------+---------+---------+
| Research | 3.4 | 3.3 | 0.8 | 0.8 |
+-----------------+--------+---------+---------+---------+
| | 102.5 | 90.3 | | |
+-----------------+--------+---------+---------+---------+
| Less | (1.5) | (1.4) | | |
| property | | | | |
| services | | | | |
| revenue | | | | |
| arising | | | | |
| within | | | | |
| the | | | | |
| group | | | | |
+-----------------+--------+---------+---------+---------+
| Segment | 101.0 | 88.9 | 20.3 | 14.5 |
| revenue/results | | | | |
+-----------------+--------+---------+---------+---------+
| Head | | | (1.5) | (2.2) |
| office | | | | |
| costs | | | | |
+-----------------+--------+---------+---------+---------+
| Unallocated | | | - | (0.7) |
| foreign | | | | |
| exchange | | | | |
| differences | | | | |
+-----------------+--------+---------+---------+---------+
| Operating | | | 18.8 | 11.6 |
| profit | | | | |
+-----------------+--------+---------+---------+---------+
| Share | | | (0.1) | - |
| of | | | | |
| losses | | | | |
| of | | | | |
| associates | | | | |
| and joint | | | | |
| ventures | | | | |
+-----------------+--------+---------+---------+---------+
| Finance | | | 0.2 | 0.7 |
| revenue | | | | |
+-----------------+--------+---------+---------+---------+
| Finance | | | (2.3) | (1.1) |
| costs | | | | |
+-----------------+--------+---------+---------+---------+
| Other | | | 0.1 | - |
| finance | | | | |
| revenue | | | | |
| - | | | | |
| pensions | | | | |
+-----------------+--------+---------+---------+---------+
| Profit | | | 16.7 | 11.2 |
| before | | | | |
| taxation | | | | |
+-----------------+--------+---------+---------+---------+
| Taxation | | | (4.3) | (3.3) |
+-----------------+--------+---------+---------+---------+
| Profit | | | 12.4 | 7.9 |
| after | | | | |
| taxation | | | | |
+-----------------+--------+---------+---------+---------+
The share of losses of associates and joint ventures is as follows:
+---------+--------+--------+
| | 2010 | 2009 |
| | GBPm | GBPm |
+---------+--------+--------+
| Broking | (0.1) | - |
+---------+--------+--------+
4 Finance revenue and finance costs
For the half year to 30 June
+---------------------------------------------------------+--------+--------+
| | 2010 | 2009 |
| | GBPm | GBPm |
+---------------------------------------------------------+--------+--------+
| Finance revenue | | |
+---------------------------------------------------------+--------+--------+
| Bank interest receivable | 0.2 | 0.4 |
+---------------------------------------------------------+--------+--------+
| Gain on revaluation of fair value through profit or | - | 0.3 |
| loss investment | | |
+---------------------------------------------------------+--------+--------+
| | 0.2 | 0.7 |
+---------------------------------------------------------+--------+--------+
| | | |
+---------------------------------------------------------+--------+--------+
| Finance costs | | |
+---------------------------------------------------------+--------+--------+
| Interest-bearing loans and borrowings | 0.8 | 1.1 |
+---------------------------------------------------------+--------+--------+
| Loss on revaluation of fair value through profit or | 1.5 | - |
| loss investment | | |
+---------------------------------------------------------+--------+--------+
| | 2.3 | 1.1 |
+---------------------------------------------------------+--------+--------+
5 Taxation
Income tax expense is recognised based on management's best estimate of the
weighted average annual income tax rate expected for the full financial year.
The estimated average annual tax rate used for the year to 31 December 2010 is
25.8% (the estimated tax rate for the six months ended 30 June 2009 was 29.5%).
6 Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the
period attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings per share amounts are calculated by dividing the net profit
attributable to ordinary equity holders of the parent by the weighted average
number of ordinary shares in issue during the period, plus the weighted average
number of ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the basic and diluted
earnings per share computations:
+--------------+---------+---------+
| | Half | Half |
| | year | year |
| | to 30 | to 30 |
| | June | June |
| | 2010 | 2009 |
| | GBPm | GBPm |
+--------------+---------+---------+
| Earnings | 12.4 | 7.9 |
| | | |
+--------------+---------+---------+
| | | |
+--------------+---------+---------+
| | Million | Million |
+--------------+---------+---------+
| Weighted | 18.6 | 18.6 |
| average | | |
| number | | |
| of | | |
| ordinary | | |
| shares | | |
+--------------+---------+---------+
| Dilutive | - | 0.3 |
| effect | | |
| of | | |
| shares | | |
| contingently | | |
| payable on | | |
| business | | |
| combinations | | |
+--------------+---------+---------+
| Diluted | 18.6 | 18.9 |
| weighted | | |
| average | | |
| number | | |
| of | | |
| ordinary | | |
| shares | | |
+--------------+---------+---------+
7 Dividends
For the half year to 30 June
+------------+--------+--------+
| | 2010 | 2009 |
| | GBPm | GBPm |
+------------+--------+--------+
| Declared | | |
| and paid | | |
| during | | |
| the | | |
| period: | | |
+------------+--------+--------+
| Final | 5.1 | 4.9 |
| dividend | | |
| for 2009 | | |
| of 27p | | |
| per | | |
| share | | |
| (2008: | | |
| 26p per | | |
| share) | | |
+------------+--------+--------+
| Payable | | |
| (not | | |
| recognised | | |
| as a | | |
| liability | | |
| at period | | |
| end): | | |
+------------+--------+--------+
| Interim | 3.2 | 3.0 |
| dividend | | |
| for 2010 | | |
| of 17p | | |
| per | | |
| share | | |
| (2009: | | |
| 16p per | | |
| share) | | |
+------------+--------+--------+
8 Employee benefits
The group operates two defined benefit pension schemes being the Clarkson PLC
scheme and the Plowrights scheme.
As at 30 June 2010 the Clarkson PLC scheme had a deficit of GBP9.5m (31 December
2009: GBP4.2m deficit). This amount is included in full on the balance sheet as
a non-current liability; the company has recognised deferred tax on this deficit
amounting to GBP2.7m (31 December 2009: GBP1.2m). The market value of the
assets was GBP95.9m (31 December 2009: GBP98.0m) and independent actuaries have
assessed the present value of funded obligations at GBP105.4m (31 December 2009:
GBP102.2m).
Also as at 30 June 2010 the Plowrights scheme had a deficit of GBP3.3m (31
December 2009: GBP2.7m deficit). This amount is included in full on the balance
sheet as a non-current liability; the company has recognised deferred tax on
this deficit amounting to GBP0.9m (31 December 2009: GBP0.7m). The market value
of the assets was GBP23.9m (31 December 2009: GBP23.6m) and independent
actuaries have assessed the present value of funded obligations at GBP27.2m (31
December 2009: GBP26.3m).
The increase in the deficit is due to changes in the actuarial assumptions used
for inflation and the discount rate used in calculating the figures above. This
has been further affected by a decrease in the market value of the plans'
assets.
Triennial valuations for both schemes are being prepared based on the position
as at 31 March 2010.
9 Analysis of net funds
+------------------+----------+--------+-------------+--------+
| | 31 | Cash | Foreign | 30 |
| | December | flow | exchange | June |
| | 2009 | GBPm | differences | 2010 |
| | GBPm | | GBPm | GBPm |
+------------------+----------+--------+-------------+--------+
| Cash | 143.2 | (13.4) | 3.1 | 132.9 |
| and | | | | |
| short-term | | | | |
| deposits | | | | |
+------------------+----------+--------+-------------+--------+
| Non-current | (48.3) | - | (0.9) | (49.2) |
| interest-bearing | | | | |
| loans and | | | | |
| borrowings | | | | |
+------------------+----------+--------+-------------+--------+
| Net | 94.9 | (13.4) | 2.2 | 83.7 |
| funds | | | | |
+------------------+----------+--------+-------------+--------+
Net funds after deduction of bonus entitlements amount to GBP42.1m (31 December
2009: GBP38.2m).
10 Issued share capital
+-----------+---------+---------+----------+--------+--------+----------+
| Allotted, | 30 | 30 | 31 | 30 | 30 | 31 |
| issued | June | June | December | June | June | December |
| and fully | 2010 | 2009 | 2009 | 2010 | 2009 | 2009 |
| paid | Million | Million | Million | GBPm | GBPm | GBPm |
+-----------+---------+---------+----------+--------+--------+----------+
| Ordinary | | | | | | |
| shares | | | | | | |
| of 25 | | | | | | |
| pence | | | | | | |
| each: | | | | | | |
+-----------+---------+---------+----------+--------+--------+----------+
| At | 19.0 | 18.9 | 18.9 | 4.7 | 4.7 | 4.7 |
| start | | | | | | |
| of | | | | | | |
| period | | | | | | |
+-----------+---------+---------+----------+--------+--------+----------+
| Issued | - | - | 0.1 | - | - | - |
| during | | | | | | |
| the | | | | | | |
| period | | | | | | |
+-----------+---------+---------+----------+--------+--------+----------+
| At end | 19.0 | 18.9 | 19.0 | 4.7 | 4.7 | 4.7 |
| of | | | | | | |
| period | | | | | | |
+-----------+---------+---------+----------+--------+--------+----------+
11 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.
Since June 2006, H Clarkson & Company Limited received commissions amounting to
US$15.5m which were the subject of the claims brought against the company by the
Russian companies, Sovcomflot and Novoship. H Clarkson & Company Limited held
those monies in separate designated accounts pending determination as to who was
entitled to receive them. It became clear to the board that these monies were
rightfully payable to the Claimants and thus, as part of the settlement agreed
with the Claimants on 26 June 2008, they were released to their account. There
remain Part 20 Claims from two of the defendants that these monies are
rightfully theirs. In June 2009 a further claim was received from entities
associated with one of the defendants amounting to US$5.2m. The trial of these
claims finished on 31 March 2010 and we are waiting to receive judgment. After
taking extensive legal advice and closely reviewing the evidence the board
believes that none of the claims have any foundation whatsoever and that they
will not succeed.
12 Seasonality
The group's activities are not subject to significant seasonal variation.
13 Principal risks and uncertainties
The directors consider that the nature of the principal risks and uncertainties
which may have a material effect on the group's performance in the second half
of the year is unchanged from those identified in the Risk Management section of
the Annual Report 2009 on page 19. These include credit risk, in the form of
non-payment of invoices; liquidity risk arising from funding requirements;
foreign exchange risk from fluctuations in the US dollar to sterling exchange
rate; exposures to interest rate movements; reputational risk; and operational
risk giving rise to losses from people, systems, external influences or failed
processes.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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