For followers of Braemar Shipping Services (BMS), it will come as no surprise to see the marine broker and oil services provider struggle in the year to February 2017. A lack of spending on oil exploration and other projects significantly impacted the group's technical division and pushed Braemar into an overall operating loss of £334,000 for the year, down from a £10.3m profit in the prior period. Still, underlying operating profit at the larger shipbroking division only dipped from £9.7m to £7.9m, and volumes on most desks increased.
Returns were also buffeted by costs related to both the restructuring of the technical division and a share plan related to the acquisition of ACM Shipping Group back in July 2014. The good news is that the cost of the restructuring was fully realised in the year, so the benefits should begin to come through soon enough. On a separate note, Braemar will also realise £6m of cost savings in FY2018.
Pressure from the tough trading environment forced the group to cut its full-year dividend. Braemar plans to move towards underlying earnings cover of 1.5 times the payout in the medium to long term.
Analysts at Stockdale forecast pre-tax profit of £7.9m for the year to February 2018, giving adjusted EPS of 21.7p (from £3.2m and 8.8p in FY2017).
| BRAEMAR SHIPPING SERVICES (BMS) | ||||
|---|---|---|---|---|
| ORD PRICE: | 308p | MARKET VALUE: | £93m | |
| TOUCH: | 308-310p | 12-MONTH HIGH: | 460p | LOW: 220p |
| DIVIDEND YIELD: | 4.5% | PE RATIO: | na | |
| NET ASSET VALUE: | 332p* | NET CASH: | £7.1m | |
| Year to 28 Feb | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 144 | 9.3 | 32.8 | 26.0 |
| 2014 | 126 | 9.0 | 21.4 | 26.0 |
| 2015 | 146 | 5.1 | 10.0 | 26.0 |
| 2016 | 159 | 10.0 | 23.2 | 26.0 |
| 2017 | 140 | -0.6 | -1.7 | 14.0 |
| % change | -12 | -106 | -107 | -46 |
Ex-div: 29 Jun Payment: 28 Jul *Includes intangible assets of £80m, or 265p a share | ||||
