Braemar Shipping Services (BMS) spent its last financial year building up its financial advisory work and presence in the dry freight futures market in an effort to diversify its business. It did so via the purchases of Atlantic Brokers and NAVES Corporate Finance. So far, performance in this financials division has exceeded management’s expectations. But £6.1m worth of acquisition-related charges wiped out operating profit during the first half, leading to a £3.3m loss. Strip this out and operating profit would have been up 12 per cent on last year to £2.8m.
The group’s largest division is still its shipbroking services, where operating profit was up 11 per cent to £3.9m. Revenue visibility has slightly improved with the forward order book up 5 per cent to $46m (£35.9m). Around $21.7m of this is expected to come through in the second half. Tough trading in the tanker and offshore divisions was offset by dry cargo shipping, which has benefited from positive global trends. The Baltic Dry Index, which measures dry cargo activity, increased from 1,192 points in February to 1,597 in August.
Analysts at Stockdale expect pre-tax profits of £9.5m during the year to February 2019, giving EPS of 25.5p, compared with £7.7m and 21.1p in FY2018.
| BRAEMAR SHIPPING SERVICES (BMS) | ||||
| ORD PRICE: | 225p | MARKET VALUE: | £70.7m | |
| TOUCH: | 220-230p | 12-MONTH HIGH: | 314p | LOW: 219p |
| DIVIDEND YIELD: | 6.7% | PE RATIO: | na | |
| NET ASSET VALUE: | 267p* | NET DEBT: | 11% | |
| Half-year to 31 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 64.5 | 0.49 | 0.2 | 5.0 |
| 2018 | 71.6 | -3.77 | -18.7 | 5.0 |
| % change | +11 | - | - | - |
| Ex-div: | 1 Nov | |||
| Payment: | 14 Dec | |||
| *Includes £92.4m worth of intangible assets, or 294p a share | ||||
