Investor's Champion Blog
Provides refreshingly forthright, independent comment on predominantly small cap companies and specialist investment funds. Informed opinion, based on first-hand research, but pulls no punches in exposing management weaknesses.

ACM SHIPPING GROUP - great numbers and please forget about the currency issues-this is a shipping broker!

Forget about currency translation issues, the group came out with great numbers. Furthermore, who on earth invests in a ship brokerage business if they are worried about US$ currency issues!

ACM Shipping Group recently reported full year results for the period to 31/3/07. At the earnings per share level they were 10% below the house broker’s expectations, however, the difference is fully explained by the weaker US$. The currency impact is purely translational and nothing to do with the strength in the underlying business with a strong performance from all divisions.

Some have spoken about the group’s need to hedge its currency exposure but will this alter its rating or perception in the City-I think not! After all, surely you shouldn’t contemplate investing in a ship broking business whose whole business is US$ based if you are in the slightest worried about US$ exposure.

The currency issue is transitory. ACM earns revenues in US$ but its costs are in GBP. There is clearly a downside to earnings as US$ weakens but the opposite occurs when it strengthens. The impact is purely translational not transactional so there is no loss of competitiveness.

US currency issues aside ACM hasn’t really put a foot wrong since coming to AIM. Furthermore, it’s a joy to behold the ACM presentation team at work. In one corner you have die hard, passionate, shipping broker CEO John Plumbe, in the other smooth City operator Chairman Peter Sechiari, ably supported in the wings by new boy FD John Hartley who probably welcomes the change after nursing Mayborn through its sale.

John’s, tell as it is, free speaking approach at analyst meetings is certainly a breath of fresh air in the stuffy old City!


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