Strong growth in orders and a 2p dividend following a profits surge from £500,000 to £3.7m for the year to March should alert the uninitiated to ACM, the ship-broking business floated on AIM with an oversubscribed funding in December.

Finance director Ian Hartley flagged up continued growth for ACM, one of the most profitable firms in the tanker broker business, though he conceded ‘we were hurt by the dollar’, pointing to a drop in turnover from £16.5m to £15.6m on translation from the depleted greenback. Significantly, however, core revenues from ship broking rose 8.4% in dollar terms to US$25.6m and income would have been £1.5m higher at 2005/06 exchange rates.

A record number of ships were ‘fixed’ last year and forward income from time charters at year-end was 78% higher than the previous year at $19m, auguring well for future profits. ‘Spot brokerage’ business, involving the hire of a vessel for a single voyage, made up 62% of annual income while time charter, entailing the long-term hire of tankers and a high-quality earnings stream, made up 28% of ACM income. Significantly, ACM recently became a member of the London Tanker Broker Panel (LTBP), which distributes freight rate data throughout the shipping industry. Membership, says Hartley, will give ACM greater credibility in the market and a nice income stream.

ACM remains modestly valued with good earnings prospects and progressive income appeal underpinned by a very cash generative business model. Buy.