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    BMS   GB0000600931

BRAEMAR SHIPPING SERVICES PLC

(BMS)
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Braemar Shipping Services : Annual Report and Accounts 2021

08/03/2021 | 12:13pm EDT

Braemar Shipping Services Plc

Annual Report and Accounts 2021

2021

Braemar Shipping Services Plc Annual Report and Accounts 2021

Strategic Report

Corporate Governance Report

Financial Statements

01

Highlights

41

Chairman's introduction

64

Independent Auditor's Report

02

Chairman's Statement

42

Board of Directors

70

Consolidated Income Statement

04

Strategic direction

44

Corporate Governance Report

71

Consolidated Statement of

06

Business model

47

Report of the Audit Committee

72

Comprehensive Income

08

Chief Executive's Q&A

50

Report of the Nomination

Balance Sheets

10

Chief Executive's Statement

Committee

73

Consolidated Cash Flow

12

Investment case

52

Directors' Remuneration Report

Statement

74

Statements of Changes in

14

Strategy in action - Zuma Labs

61

Directors' Report

Total Equity

16

Key performance indicators

75

Notes to the Financial Statements

17

Review of operations

123

Five-year financial summary

23

Section 172(1) statement

125

(unaudited)

24

Sustainability report

Contact information

28 Non-Financial Information Statement

  1. Financial review
  1. Principal risks and uncertainties
Operational highlights
- 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
Post period end highlights
- Disposal of Wavespec Engineering Division
- Appointment of Nigel Payne as non-executiveChairman
- Sale of remaining AqualisBraemar shares
- Agreement reached to reschedule certain liabilities connected with the Braemar NAVES acquisition

Braemar Shipping Services Plc Annual Report and Accounts 2021

We are a leading provider of expert advice in shipping investment, chartering and risk management.

Highlights

Financial highlights

- Underlying financial performance ahead of management's expectations:

• Revenue of £111.8 million ("m") (2020: £117.7m)

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

• Reported continuing profit before tax of £9.4m (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

Q&ASee pages 30-33

James Gundy, new CEO answers some frequently asked questions on where he sees the business in years to come.

01

REPORT STRATEGIC

GOVERNANCE CORPORATE

STATEMENTS FINANCIAL

See pages 08-09

02

Braemar Shipping Services Plc Annual Report and Accounts 2021

Chairman's Statement

Delivering long-term value

I am looking forward to helping develop the business and taking further steps in our growth strategy as the year progresses.

Nigel Payne

Chairman

I am delighted to have been appointed as the Chairman of Braemar at an exciting time for the business and to present my first Chairman's statement

to shareholders.

In common with many other businesses, the past financial year has been a disruptive and challenging year for the Group. At the same time as maintaining a priority focus on the health and safety of our employees and their families, the business has had to navigate its way through a plethora of COVID-19 ("COVID") related operating restrictions. Notwithstanding this, however, the breadth and depth of the Group's service lines and the resilience of the Braemar business model have shone through, enabling the business to continue to service its clients to the high standards that they expect from Braemar as well as delivering strong results for the benefit of all stakeholders. Indeed, the Group's underlying financial performance from continuing operations for the year is ahead of management's expectations that were set at the beginning of

the pandemic.

I would like to pay tribute to the management and employees of the Group for their hard work and unstinting dedication to the business and its customers, achieved under such difficult circumstances. The financial results for the year reflect well on both the strength and robustness of the Braemar brand as well as on the professionalism and dedication of the Group's management and employees.

The outlook for the current year is encouraging and with a renewed focus on growth, the business is well positioned to take advantage of favourable market conditions.

Results for the year

Revenue from continuing operations for the year was £111.8m compared with £117.7m in 2019/20. Underlying operating profit from continuing operations was £8.9m compared with £11.0m in 2019/20 and underlying earnings per share were 19.4 pence ("p") compared to 29.5p in the prior year.

03

Braemar Shipping Services Plc Annual Report and Accounts 2021

Key strategic priorities

01. Grow Shipbroking breadth and market share

  1. Technology-driveninnovation
  2. Grow Cory with the potential Vertom Cory Joint Venture

These figures exclude the Wavespec Engineering Division ("Wavespec") that was held for sale at the balance sheet date. Wavespec was sold after the year-end on 31 March 2021 and its results for the year are treated as discontinued operations.

Reported profit for the year from continuing operations before tax was £9.4m (2020: £6.3m) after taking into account a profit relating to the Group's holding of AqualisBraemar LOC ASA ("AqualisBraemar") of £3.1m, which included a profit on the sale of part of the holding of £2.2m. This measure is also after charging certain acquisition and disposal-related expenditures, which totalled £1.2m (2020: £2.4m) and interest charges.

The Group's cash flow has been strong and the year-end balance sheet is much stronger as a result, with net bank debt reducing by 56% from £20.0m as at 29 February 2020 to £8.9m as at 28 February 2021. The sale of the remaining holding of AqualisBraemar shares after the year-end in May 2021 generated an additional £7.2m of proceeds and further strengthened the balance sheet.

See pages 30-33

Board changes

The Board has carried out a number of composition changes during the year, designed to align and strengthen the Board's experience relative to its shipbroking-focused growth strategy.

James Gundy was appointed Group Chief Executive Officer on 1 January 2021 and joined the Board on that date, having successfully led the highly profitable Shipbroking Division since 2014. Nick Stone was appointed as the Group's Chief Operating Officer in June 2020, alongside the Group Finance Director role that he has held since April 2019.

Ronald Series was the Executive Chairman of the Group until

31 December 2020, a role that he took on an interim basis in July 2019. Upon James' appointment, Ronald reverted to non-executive Chairman and stepped down from the Board on

30 April 2021 when I was appointed to succeed him as Chairman. On behalf of everyone at Braemar, I would like to thank Ronald for his role in steering Braemar through the last couple of years and look forward to working with James, Nick and the rest of the Board to develop the exciting next phase of growth for Braemar.

See pages 42-43

Strategy

During the last two years, the Board has carried out a number of structural changes to the Group, disposing of the Technical Services Division, developing a potential joint venture for the Logistics Division and reducing net debt. The rescheduling of payments made for the 2017 acquisition of Braemar Naves and the planned integration of the Financial Division into the Shipbroking Division now underway will complete this reorganisation and we expect these latter two steps to be completed during the first half of the current financial year.

Braemar will then be a far more streamlined business, concentrated on providing expert advice in shipping investment, chartering and risk management. The Board will then focus on a product and geographically oriented growth strategy, supported by a far stronger balance sheet and an investment proposition that is more streamlined and also one that will become easier to understand and support.

See pages 04-05

Dividend

In the Group's trading update on

9 March 2021, the Board stated that it had set a target of achieving a net debt to EBITDA ratio sustainably below

1.5 times on average over the seasonal working capital cycle. I am pleased to report that excellent progress has been made towards this goal with the ratio falling to 2.14 for the year, down from 2.77 for the prior year. With the second sale of AqualisBraemar shares completed since the year-end, the Board anticipates reducing the net debt to EBITDA ratio substantially further in the current financial year to a level well below the 1.5 times average.

Accordingly, the Board has decided to supplement its growth strategy with a progressive dividend policy involving the payment of dividends to shareholders each year, subject to financial performance. In reaching this decision, the Directors were mindful of their duties under Section 172 of the Companies Act 2006, including the importance of balancing the potentially competing interests of

its shareholders seeking a dividend with the need to continue to reward, incentivise and retain staff and the stated target of strengthening the Group's balance sheet for

future growth.

With regard to the year to 28 February 2021, the Directors are recommending for approval at the AGM on 20 July 2021 a dividend of 5p per share. This dividend will be paid on 30 July 2021 to all ordinary shareholders on the register at the close of business on 25 June 2021, with a corresponding ex-dividend date of 24 June 2021. The last date for Dividend Reinvestment Plan ("DRIP") elections will be 9 July 2021. For subsequent years, the Board intends, subject to financial performance, to declare an interim and a final dividend each year,

on a progressive basis.

Outlook

All areas of the business have started the year well and initial signs are encouraging with respect to financial results to date and the prospects for the rest of the year. Whilst the Board remains mindful of the uncertainty arising from the impact of new variants of COVID and, as the majority of the Group's revenues are in dollars, the impact of sterling/dollar movements in any unhedged income, we believe that the Group is well positioned and look forward to the current year with confidence. There is sufficient strength and demand returning to shipping markets to support the Board's expectations for a stronger year

as global trading patterns return to pre-COVID levels.

I am looking forward to helping develop the business and taking further steps in our growth strategy as the year progresses.

Nigel Payne

Chairman

2 June 2021

REPORT STRATEGIC

GOVERNANCE CORPORATE

STATEMENTS FINANCIAL

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Braemar Shipping Services plc published this content on 03 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2021 16:12:32 UTC.


ę Publicnow 2021
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Financials
Sales 2022 122 M 168 M 168 M
Net income 2022 10,0 M 13,7 M 13,7 M
Net cash 2022 5,10 M 7,01 M 7,01 M
P/E ratio 2022 10,0x
Yield 2022 2,18%
Capitalization 82,9 M 114 M 114 M
EV / Sales 2022 0,64x
EV / Sales 2023 0,66x
Nbr of Employees 521
Free-Float 52,3%
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Last Close Price 262,00 GBX
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Spread / Average Target 69,5%
EPS Revisions
Managers and Directors
James Christopher Ducher Gundy Group Chief Executive Officer
Nicholas Philip Stone Chief Financial Officer & Executive Director
Nigel Terrence Payne Non-Executive Chairman
Tristram Simmonds Chief Operating Officer
Lesley S. Watkins Senior Independent Non-Executive Director
Sector and Competitors