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REG - Braemar Shipping - Trading Update

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RNS Number : 5334A  Braemar Shipping Services PLC  03 February 2022

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 BRAEMAR SHIPPING SERVICES PLC

("Braemar", the "Company" or the "Group")

3 February 2022

Trading update, proposed board changes, change in employee reward structure
and update with respect to Cory disposal

 

Braemar Shipping Services Plc (LSE: BMS), a leading international Shipbroker
and provider of expert advice in shipping investment, chartering, risk
management and logistics services, is pleased to give the following update to
the market on trading and other matters.

Trading update

The strong trading seen in the first half of the financial year has continued
throughout the second half to date. Revenues* for the year ended 28 February
2022 are now expected to be not less than £101m (2021: £84m).

This strong performance reflects favourable market conditions and, more
importantly, the investments we have made in increasing the breadth, focus and
depth of the Group's shipbroking activities. Of note, a volatile Dry Cargo
market has helped us increase both revenue and market share on the physical
and securities desks. The Sale and Purchase desk has concluded a significantly
higher number of transactions, largely due to the strong Dry Cargo market, but
also due to the synergies gained from closer collaboration with the Financial
Division on containers. Tanker market rates have remained low, impacted by
pandemic related weakness in oil demand. However, Tanker transaction volumes
have increased by more than 25% compared to the previous year, aided by
strategic hires, including the previously announced Clean Products hires in
Geneva.

The Group's employee reward arrangements are also being changed in respect of
the current and future years, as described below, with the consequence that an
additional cash bonus of £2.8m will be charged to profits in the current
year. The proposed changes should however positively impact reported
profitability in future years as the charge to profitability of the deferred
equity is similarly reduced. The Group expects underlying operating profit*
for the year to 28 February 2022 to be circa £9.8m (28 February 2021:
£7.7m).

Proposed changes to employee reward arrangements

In order to better align shareholder and employee interests and support the
Group's successful growth agenda, the Board has concluded that it should
reduce the overall amount of deferred equity issued annually as part of
employee remuneration arrangements.

Under the current scheme, deferred shares have been awarded and issued to
employed recipients over a three-year vesting period and generally settled by
shares purchased in the market. Whilst this scheme will remain unchanged, the
amount paid in such deferred shares will be halved with an increase in cash
bonuses paid of the same amount. This will also apply in future years and will
involve claw back arrangements on the additional cash payments in order to
encourage employees to remain in Braemar's employment.

Disposal of Cory Brothers

Good progress is being made on the disposal of Cory Brothers, the Group's
non-core Logistics Division, which is expected to be concluded over the next
few weeks. The disposal, however, is no longer expected to be by way of a
joint venture but rather an outright disposal for a combination of upfront
cash and deferred payments based on a three year earn out.

The financial performance of Cory Brothers remains in line with previous
guidance but is not included in the above numbers. Moreover, Cory Brothers'
trading for the year will be included in the Company's full year results as
'discontinued operations' due to the planned disposal of the business.

Proposed Board change

Braemar announces that Lesley Watkins, Audit Committee Chair, will resign from
the board with effect from 31 March 2022 in order to be able to take on
another non-executive role.

Braemar is pleased to announce that Joanne Lake will succeed Lesley.  Joanne
will be appointed to the board as a non-executive director with effect from 1
March 2022 and will become Audit Committee Chair with effect from 1 April
2022.  Joanne will also join the Remuneration and Nomination Committees from
1 March 2022. Elizabeth Gooch will succeed Lesley in the role of senior
independent director from 1 April 2022.

Nigel Payne, Braemar's Chairman commented: "Lesley was appointed a
non-executive director in June 2017 and became Audit Committee Chair later
that year.  We are very grateful for Lesley's significant contribution to the
group. We have particularly valued her governance, risk, and regulatory
knowledge and experience of working with listed companies. We wish her the
very best for the future."

"We are delighted to welcome Joanne to the board. Joanne is a chartered
accountant with a strong financial and City background and brings a wealth of
experience to the board and will be a tremendous asset to the Group as we
further our growth agenda."

Joanne presently holds the following roles in publicly quoted companies: the
non-executive Chairman of AIM-quoted Made Tech Group plc, a leading provider
of digital, data and technology services; the non-executive deputy chairman of
Main Market-listed land promotion, property development and investment, and
construction group, Henry Boot plc; a non-executive director of Gateley
(Holdings) Plc, the AIM-listed legal and professional services group; a
non-executive director of AIM-quoted consumer finance provider, Morses Club
Plc; and a non-executive director of Honeycomb Investment Trust plc, the Main
Market-listed specialist lender and investor in credit assets.  Joanne is
also non-executive Chairman of AIM-quoted wealth and investment management
group, Mattioli Woods plc, where she has been a director since July 2012, but
is due to step down from the board imminently once regulatory approval has
been received for her successor.  Joanne was previously also a non-executive
director of AIM-listed Accrol Group Holdings plc until October 2018.

There is nothing further to disclose pursuant to Listing Rule 9.6.13 in
respect of Joanne Lake.

 

*Revenue and underlying operating profit excludes specific acquisition and
disposal related items and the results of Cory Brothers which will be included
in the full year results as 'discontinued operations' due to the planned
disposal.

 

 

For further information, contact:

 Braemar Shipping Services
 James Gundy, Group Chief Executive Officer                              Tel +44 (0) 20 3142 4100
 Nick Stone, Chief Financial Officer

 Investec Bank plc
 Chris Treneman / Gary Clarence / Alex Penney / Alice King               Tel +44 (0) 20 7597 5970

 Buchanan
 Charles Ryland / Victoria Hayns / Stephanie Whitmore / Matilda Abraham  Tel +44 (0) 20 7466 5000

 

Notes to Editors:

 

About Braemar Shipping Services Plc

Braemar is a leading international Shipbroker and provider of expert advice in
shipping investment, chartering and risk management. Braemar employs
approximately 520 people in 30 offices worldwide across its Shipbroking,
Financial and Logistics divisions.

Braemar joined the Official List of the London Stock Exchange in November 1997
and trades under the symbol BMS.

For more information, including our investor presentation,
visit www.braemar.com (http://www.braemar.com/)

 

 

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