Braemar sees profit rise, exceeding market expectations

Braemar

Braemar Shipping Services plc (LSE: BMS), a leading provider of expert advice in shipping investment, chartering and risk management, announced preliminary results for the year ended 28 February 2021.

Financial Highlights

• Underlying financial performance ahead of market consensus* and management’s Covid-19 adjusted expectations:

• Revenue of £111.8 million (‘m’) (2020: £117.6 m)

• Underlying operating profit from continuing operations £8.9m (2020: £11.0m)

• Reported continuing profit before tax of £9.5m (2020: £6.3m), reflecting the profit on the sale of shares held in AqualisBraemar of £2.2m

• Balance sheet substantially strengthened:

• Net bank debt reduced by 56% to £8.9m (2020: £20.0m)

• Sale of approximately half of the shares held in AqualisBraemar for net proceeds of £6.0m

• Reinstatement of dividend payments:

• Intention to declare a dividend of 5p per share for the year

• Progressive dividend policy to include interim and final payments in future years

Operational Highlights

• Strong progress on management objectives:

• Refocused strategy on core Shipbroking business

• Board appointments made to strengthen the Group’s experience relative to its shipbroking-focused growth strategy

• Joint venture for the Logistics Division between Cory Brothers & Vertom UCS Holdings BV being explored

• Investment in Zuma Labs technology to improve workflow and client interaction

• Led by the Group COO and Finance Director, a new committee formed to lead Braemar’s ESG and diversity improvement initiatives within the business

Post period end Highlights

• New strategy continuing to drive re-energised growth

• Areas of specific interest are growing presence in the US market, developing offices in continental Europe and growing the derivatives coverage

• Disposal of Wavespec Engineering Division on 31 March 2021 (results treated as discontinued operations)

• Appointment of Nigel Payne as non-executive Chairman as of 1 May 2021

• Sale of remaining AqualisBraemar shares on 20 May 2021 for net proceeds of £7.2m, further strengthening the Group’s balance sheet and realising a profit on sale of £3.9m

• Agreement reached to reschedule certain liabilities connected with the Braemar Naves acquisition to improve short term liquidity

• Encouraging start to current year:

• Trading has been strong in the first few months

• Forward order book up to $50.5m from $43.3m at the year end and $42m at half year.

James Gundy, Group Chief Executive Officer of Braemar, commented:

“I am delighted with the performance of Braemar this year where, in such a challenging period, we have not only exceeded market and indeed our own expectations for financial performance, but we have re-aligned many aspects of the business towards our new growth-oriented shipbroking strategy. We have also simplified the business, reduced net debt to manageable levels, improved our management structure and put ourselves in an ideal position to capitalise on the global recovery that is now underway, driving global trade and shipping markets which are showing indicators of future strength as a result. Our trading at the start of the new year has been strong and we are delighted to show our confidence in the business by reinstating a dividend of 5p per share to shareholders.”

The outlook for Braemar for the next few years is positive. With a clear focus on growth, particularly in Shipbroking, our streamlined business is well positioned to take advantage of favourable market conditions.”

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