Posted on: 9 March 2021
Braemar, a leading international shipbroker and provider of expert advice in shipping investment, chartering and risk management, has issued a trading and strategic update for the year ended on 28 February 2021. Highlights include:
- Strong trading in the last two months has meant that underlying trading performance for the year ended 28 February 2021 will be above market expectations. Revenue has been higher than expected and cost levels continue to benefit from lower company expenses due to the COVID-19 restrictions. Underlying operating profit is expected to be at least £8.7m (29 February 2020: £9.6m).
- The Shipbroking Division, in particular, traded well in the second half. Market share was maintained in weaker tanker markets and Dry Cargo and Sale and Purchase desks outperformed expectations with stronger performances than in the first half of the year. The forward order book is expected to close at around $43m, compared with $50m last year, which was unusually high due to the strong tanker market in the months running up to 29 February 2020. Further additions have been made since the year end in a strong start to the new financial year.
- The Financial Division, Braemar Naves, earned several transaction-based success fees in the second half of the year and will end the year in line with the previous year. However, its deal flow pipeline is strong and there are multiple current mandates and live transactions that are expected to close in the coming months.
- The Logistics Division, Cory Brothers, traded well and finished slightly ahead of the previous year.
- The Group’s associate, AqualisBraemar LOC, has reported a profit of $1.5m for its year to 31 December 2020 of which Braemar’s share is £0.3m. The Group has received dividends from AqualisBraemar LOC of £0.6m during the year ended 28 February 2021.
- 9.6m shares in AqualisBraemar LOC were sold by the Group in January 2021 for net proceeds of £6.0m which has reduced our ownership from c20% to c10% and significantly reduced our closing net debt.
- Net bank debt is expected to be substantially reduced at around £10m at 28 February 2021 (£21m: 29 February 2020) and total net debt including deferred acquisition consideration around £18m (£30m: 29 February 2020).
- Results for the year ended 28 February 2021 will be announced on 3 June 2021.
Braemar has also announces that its Chairman, Ronald Series, has decided to step down from the Board of the Company. Ron joined the Board as Chairman in April 2019 and stepped up to become Executive Chairman on the retirement of the CEO, James Kidwell, in July 2019, with a strong emphasis on restructuring and refocussing the strategy on Braemar’s shipbroking heritage, and positioning the Company for growth. Both of these objectives have now been achieved, and with the recent appointment of shipbroking head James Gundy as Group Chief Executive Officer driving the new strategy, Ron felt that this was an appropriate time to step down. However, he will stay on as Chairman until a suitable successor has been appointed. A search process is underway and is progressing well.
James Gundy, Group Chief Executive Officer of Braemar commented: “I am looking forward to completing the rationalisation of the historic divisional structure and the continuation of the growth of the Shipbroking business at the heart of Braemar’s future growth strategy. I would also like to pay tribute to all of our employees who have maintained an excellent service to our clients during the unprecedented challenges caused by the COVID-19 pandemic, and I am looking forward to welcoming them back into our offices as soon as it is safe to do so.”
Use this link to view the update in full.
