Braemar Plc · LSE:BMS
Braemar — Braemar Shipping Services — FY2020 Earnings Presentation
28 slides from Braemar's earnings presentation, June 2020
Slide 1: Preliminary Results Presentation, Year ended 29 February 2020
Braemar Shipping Services plc Preliminary Results Presentation Year ended 29 February 2020 June 2020 Ronald Series, Chairman E: [email protected] T: +44 (0) 20 3142 4100 Nick Stone, Group Finance Director E: [email protected] T: +44 (0) 20 3142 4100
Slide 2: Overview
OVERVIEW “Shipbroking leads stronger performance” • Group Revenue growth of 2.5% underpinned by strong Shipbroking market • Underlying Operating Profit increased to £9.6m (2019: £9.1m) • Successful disposal of majority of Technical Services businesses • Interim dividend of 5p paid but no final divid
Slide 3: Summary Results
Summary Results FY 2019/20 FY 2018/19 £m £m Revenue 120.8 2.5 % 117.9 Underlying Operating Profit 9.6 6% 9.1 Underlying Profit before tax 8.0 (10)% 8.9 Reported Profit/(loss) before tax 7.8 n/a (4.7) Underlying EPS 24.94p 6.9% 23.32p Dividend per share 5.0p 15.0p Operating cash flow 10.3 6.1 Reven
Slide 4: Braemar at a glance
Braemar at a glance Four wholly owned divisions and one associate • Chartering • Transactions advisory • Sale & purchase • Financing advisory & capital raising • Freight derivatives • Restructuring & insolvency advisory • Valuations • Asset & loan management • Research One Braemar • Port agency • Sp
Slide 5: Segmental Results (underlying)
Segmental Results (underlying) FY 19/20 FY 18/19 Revenue Rev. Profit Profit Margin Revenue Profit Margin £m Growth £m Growth % £m £m % Shipbroking 82.4 8.9% 11.7 25.8% 14.0% 75.7 9.3 12.3% Financial 5.9 (15.7)% 1.1 (47.6)% 18.6% 7.0 2.1 30.0% Logistics 29.4 (8.4)% 1.0 25% 3.4% 32.1 0.8 2.5% Engineer
Slide 6: Shipping Market Commentary
Shipping Market Commentary Baltic Dirty Tanker Index All sectors impacted by IMO fuel quality changes Supply of vessels reduced by refit activity Push for cleaner fuels presents new opportunities for fleet investment Strong tanker market US Sanctions and other geopolitical factors cause strong
Slide 7: Shipbroking Division
Shipbroking Division “Our expertise and market intelligence provide charterers, shipowners and lenders a comprehensive service to manage their risk, across the globe’’ FY 2019/20 FY2018/19 Revenue £82.4m £75.7m Underlying operating profit £11.8m £9.3m Margin 14.2% 12.3% Forward order book $50m $43m
Slide 8: Shipbroking – Revenue Analysis
Shipbroking – Revenue Analysis ‘’Our expertise and market intelligence provide charterers, shipowners and lenders a comprehensive service to manage their risk, across the globe’’ Revenue £82.4m Revenue FY 2019/20 £70.7m FY2015/16 Revenue & Revenue Per Securities, 8% Offshore, 6% Securities, 3% Head
Slide 9: Shipbroking Division
Shipbroking Division ‘’Our expertise and market intelligence provide charterers, shipowners and lenders a comprehensive service to manage their risk, across the globe’’ Successful diversification of broking desks Cross desk trading Technology platform investment Benefit of IT resilience seen
Slide 10: Financial Division
Financial Division “Developing a tailored One Braemar experience for our clients” FY 2019/20 FY 2018/19 Revenue £5.9m £7.0m Underlying Operating Profit £1.1m £2.1m Operating Margin 18.6% 30.0% May 20 May 19 Retainer only 5 10 • Higher volume of mandates but lower completed Retainer + success 12 11 t
Slide 11: Financial Division
Financial Division “Developing a tailored One Braemar experience for our clients” Key part of One Braemar offering Synergies with sale and purchase desk in shipbroking Expertise in restructuring and distressed debt management Potential beneficiary from volatility in shipping investment Suc
Slide 12: Logistics Division
Logistics Division “Cory Brothers has extensive experience and a worldwide reputation for delivering on customer requirements” Port Agency FY 2019/20 FY 2018/19 Revenue £8.4m £8.2m Underlying operating profit £0.8m £0.7m Margin 9.5% 8.5% Freight Forwarding FY 2019/20 FY 2018/19 Revenue £21.0m £23.9m
Slide 13: Logistics Division
Logistics Division “Cory Brothers has extensive experience and a worldwide reputation for delivering on customer requirements” Strong and resilient industry brand stretching back to 1842 Completion of strategic review – division to be developed Low levels of capital employed Investment in cl
Slide 14: Engineering Division
Engineering Division “Founded in 1993 Braemar Wavespec provides expertise, engineering, and solutions to the gas processing, liquefied gas, and marine industries” FY 2019/20 FY 2018/19 Revenue £3.1m £3.1m Underlying Operating Profit / (loss) £(1.4m) £(0.3m) Strong reputation in LNG market for Wave
Slide 15: AqualisBraemar
AqualisBraemar “High end consultancy services to the global energy, shipping and insurance industries” FY 2019 FY 2018 Revenue $54.8m $36.2m EBIT $(0.3m) $2.7m Operating Margin (0.5)% 7.5% Braemar has 27% ownership – warrants potentially moving this up to 33% December year end accounted for on a
Slide 16: Strategic Direction
Strategic Direction Customer centric ‘One Braemar’ CUSTOMER CENTRIC We invest the time to understand our clients’ needs and create smarter solutions for the benefit of focus all parties involved. Develop and maintain long term RELATIONSHIPS We have established strong, long term relationships with ou
Slide 17: Summary and Outlook
Summary and Outlook Summary • COVID-19 disruption minimised by swift move to home working and IT resilience • Strong performance in Shipbroking • Financial revenue timing variable but background in distressed debt financing an advantage • Good year for Logistics with benefits of costs savings eviden
Slide 18: Ronald Series, Chairman; Nick Stone, Group Finance Director
Ronald Series, Chairman E: [email protected] T: +44 (0) 20 3142 4100 Nick Stone, Group Finance Director E: [email protected] T: +44 (0) 20 3142 4100 18
Slide 19: Group Management
GROUP MANAGEMENT Ron Series Nick Stone Chairman Group Finance Director Chairman of Braemar Shipping Services plc. Ron has held Group Finance Director of Braemar Shipping Services executive and non-executive positions at a number of plc. Nick was most recently CFO of the Appointments companies with i
Slide 20: Group Specific Items
Group Specific Items FY 2019/20 FY 2018/19 £m £m Amortisation Restructuring Costs (1.2) (1.0) Gain of revaluation of investment - 0.5 - Share of associate profit 0.7 - Acquistion related items: • Braemar ACM (0.2) (0.1) • Braemar Naves (1.2) (8.0) • Atlantic (1.1) (2.5) • Attributed Interest (0.5) (
Slide 21: Discontinued Operations
Discontinued Operations Disposal of Braemar Technical Services FY 2019/20 FY 2018/19 £m £m Post Tax trading (loss)/profit (0.8) (1.6) Restructuring cost & interest (0.1) (0.6) Write down of intangible assets (6.1) Estimated impairment (13.0) Profit on disposal of BTS Braemar Response (1.4) Total rep
Slide 22: Group Balance Sheet
Group Balance Sheet FY 2019/20 FY 2018/19 £m £m Goodwill and other intangibles 86.2 86.0 Non-Current Assets* 21.2 5.7 Investment in AqualisBraemar 7.3 - Current assets* 39.5 37.1 Current liabilities* (50.1) (46.4) Convertible loan notes and deferred (10.3) (16.9) consideration Net Assets held for sa
Slide 23: Financial Impact of Application of IFRS 16
Financial Impact of Application of IFRS 16 29 February 2020 Non-current assets Property, plant & equipment £9.5m Current assets Finance lease receivable £3.2m Current liabilities Short term borrowings £(3.9)m Non-current liabilities Long term borrowings £(10.9)m Net Impact of IFRS 16 on net assets £
Slide 24: Group cash flow
Group cash flow FY2019/20 FY 2018/19 £m £m Opening Cash 28.0 10.4 Cashflow from continuing trading operations 13.1 8.9 Discontinued operations & specifics (2.5) (0.8) Movement on borrowings and liabilities 4.0 22.9 Net interest payment (1.5) (0.9) Net capital expenditure (1.7) (2.8) Tax paid 1.2 (1.
Slide 25: AqualisBraemar
AqualisBraemar “High end consultancy services to the global energy, shipping and insurance industries” Offshore Marine Adjusting Renewables Specialist offshore Worldwide emergency Serving the international Independent services to the engineering and consultancy casualty, accident or incident insuran
Slide 26: Shipbroking – how we make our money
Shipbroking – how we make our money Chartering Single voyage (spot) charter - commission from shipowner on gross freight ($/tonne) - revenue increases as voyage costs rise thanks to voyage delays, higher bunker bills, stronger market Term (time-charter) - commission from shipowner on $/day chart
Slide 27: NAVES consideration breakdown
NAVES consideration breakdown TRANCHE DATE €'000 €'000 COLLATERAL Management sellers Initial consideration 26-Sep-2017 7,400 cash represented 69.9% of the 26-Sep-2017 7,400 convertible loan notes (all sellers) 26-Sep-2017 total sellers (non- 1,505 shares (non-management sellers) 16,305 management =
Slide 28: Disclaimer
Disclaimer This presentation (this "presentation") is for general information only and is the property of Braemar Shipping Services Plc ("Braemar"). Making this presentation available in no circumstances whatsoever implies the existence of a commitment or contract by or with Braemar, or any of its a
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