04/12/2008
With CEO Johnny Plumbe at the tiller, international tanker broker ACM sailed in with strong interim results to September, reflecting both organic growth and beneficial acquisitions.
ACM, the only quoted shipbroker focused solely on the ‘wet’ tanker market (rather than the challenged dry cargo market), delivered 76% growth in revenues to US$24.4m, with two thirds of the growth organic. Helped by favourable US$ movements, profits more than doubled to £3.4m and from a 93% earnings increase to 13.7p, the dividend was upped 25% to 2.5p.
Highlights included 22% growth in the number of ‘spot’ fixtures, with time charter business growing by 32% and income also boosted by strong average freight rates. Although wet charter rates have recently declined, global demand for oil remains strong and consumption is forecast to increase, underpinning long-term growth.
Moreover, lower oil prices will only drive demand and the volume of oil shipped, playing into the hands of ACM, which steered Harris & Dixon, the specialist small oil tanker broker acquired for £2.5m in June, to an excellent maiden performance. Debt-free and cash-generative ACM unveiled growth in its order book to a record $43.5m, further underpinning prospects.
Nevertheless, ACM has been hit by the shipping sector sell-off. Based on upgraded numbers in the market for the full year, pointing to a rise in pre-tax profits to £6.5m (£5.5m) and earnings of 24.3p, it trades on a paltry prospective p/e of 6.2. Moreover, based on a forecast dividend of 7.5p, the shares offer an appetising yield of 5%. A rerating looks overdue.
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James Crux
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