Last year's merger with ACM Shipping and an increase in the amount of oil transported across the globe saw underlying pre-tax profit at Braemar Shipping Services (BMS) almost double to £7m. Investors responded by sending shares in the ship broker up 4 per cent.
Boss James Kidwell noted the immediate beneficial impact of the ACM deal, which boosted the group's scale and exposure to the recovering tanker market. Despite the well-documented oil price plunge, he says oil supplies still need to cover huge distances from source countries to the main consumer market in China. The strong oil business offset tepid trading in dry bulk and offshore markets, so that adjusted operating profit in Braemar's core shipbroking division more than trebled to £4.6m.
A cutback in exploration activity, triggered by the flagging oil price, did affect trading in the technical division, but again there was compensating growth elsewhere, notably in engineering consultancy for liquefied natural gas vessels. Overall, the division's underlying profit surged 37 per cent to £3.1m.
Broker Westhouse Securities expects pre-tax profit of £13.6m in the year to February 2016, giving EPS of 35.3p (from £11m and 31.3p in FY2015).
| BRAEMAR SHIPPING SERVICES (BMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 450p | MARKET VALUE: | £135m | |
| TOUCH: | 441-460p | 12-MONTH HIGH: | 514p | LOW: 390p |
| DIVIDEND YIELD: | 5.8% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 343p* | NET DEBT: | 3% | |
| Half-year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 64.5 | 0.2 | -0.7 | 9.0 |
| 2014 | 79.6 | 5.2 | 13.3 | 9.0 |
| % change | +23 | - | - | - |
Ex-div: 19 Nov Payment: 18 Dec *Includes intangible assets of £78.7m, or 261p a share | ||||
