Seven months of trading from recently acquired ACM Shipping boosted Braemar Shipping's (BMS) shipbroking business nicely last year. The deal involved £6.2m in exceptional costs - which explains the drop-off in pre-tax profits - but operating profits in the shipbroking division soared 27 per cent in the second half. Chief executive James Kidwell says it's "hard to judge" whether a 5 per cent improvement in the forward order book can also be attributed to the merger. But he's adamant "there's more to come" from the newly combined businesses.
Last year's oil price squeeze left operating profits 13 per cent lower in the group's technical division. Mr Kidwell says the outlook remains challenging for the offshore department, but he points out that oil price volatility "works both ways" for diversified businesses such as Braemar. Bumper oil production - a main driver of the low oil price - has also left tanker freight rates at an eight-year high.
Overall, analysts at Westhouse Securities reckon cash profits from the technical division this year will grow marginally to £6.1m (£6m for 2015). The brokerage expects group pre-tax profits of £13.6m, giving EPS of 35.3p, up from 31.3p last year.
| BRAEMAR SHIPPING SERVICES (BMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 485p | MARKET VALUE: | £146m | |
| TOUCH: | 475-495p | 12-MONTH HIGH: | 545p | LOW: 390p |
| DIVIDEND YIELD: | 5.4% | PE RATIO: | 49 | |
| NET ASSET VALUE: | 348p* | NET CASH: | £7.2m | |
| Year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 126 | 13.2 | 48.4 | 26 |
| 2012 | 133 | 9.8 | 33.8 | 26 |
| 2013 | 144 | 9.3 | 32.8 | 26 |
| 2014 | 126 | 9.0 | 21.4 | 26 |
| 2015 | 146 | 4.8 | 10.0 | 26 |
| % change | +16 | -47 | -53 | - |
Ex-div: 2 Jul Payment: 31 Jul *Includes intangible assets of £79.4m, or 265p a share | ||||
