Braemar Shipping Services (LON:BMS) 24/10 interim results notes, held at Buchanan.

The 1H results presentation was very well attended for a £72m market cap stock.

Braemar has no CEO, due to the past ones recent retirement but the new and logistically experienced Chair, Ron Series is to fulfill the CEO duties in the meantime. The numbers were presented by the 6 month into the job FD, Nick Stone and the very experienced head of ACM Shipbroking, James Grundy whom also giving his divisional commentary on current business trends. All three are members of the Braemar Executive committee along with the other three divisional heads. The past CEO joined BMS in 2002, as FD then became CEO in 2012. The recent divestment of the majority of the technical division to Aqualis (a Norwegian quoted shipping consolidator), the recent purchases of Atlantic Brokers and Naves, a Hamburg based shipping corporate finance boutique showed new direction by the now retired CEO. The past FD has also moved on. James Grundy mentioned that junior staff members are been promoted as the client facing age profile is managed. The future direction of Braemar is being evaluated and I guess Ron will be exec Chair for a while as any potential CEO will want to know the job spec / shape of Braemar before signing.

The shares has a run up ahead of the results and the 1H dividend kept at 5p. Shipbroking is good both in the 1H and Q3. 1H revenues were up 4% to £59m and underlying operating profits remained at £3.7m with underlying eps at 9.4p ( previously reported a loss of 4.4p). The 5p dividend costs £1.5m. The 1H net debt was at £18.8m, up from £9.3m with £17m ish for the FY the FD’s indication. The 2018/19 FY dividend was 15p and this is not written in stone for this FY year as a result of the debt level.

The divisions are doing well, especially shipbroking ( ‘big positives’) which is benefiting from having Naves financial skills with meetings / contacts being shared and a one stop shipping shop offered. The earn-out obligations due to the past owners of Naves is part of the BMS balance sheet issue. The tanker market is strong but very volatile. The January 2020 implementation of the IMO rules on dirty fuel usage is perverting tanker…

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