Trading Update

RNS Number : 7730U

Braemar Shipping Services PLC

23 January 2017

 

 

BRAEMAR SHIPPING SERVICES PLC

("Braemar", the "Company" or the "Group")

23 January 2017

Trading Update

Braemar Shipping Services plc (LSE: BMS), a leading international provider of broking, consultancy, technical and other services to the shipping, marine, energy, offshore and insurance industries, issues its trading update that covers the period from 25 October 2016 to 23 January 2017.

The Group's underlying operating profit before interest, acquisition related costs and tax for the year ended 28 February 2017 is now expected to be within the range of £3.0 million to £3.5 million.  This excludes a one off gain before tax from disposal of its interest in The Baltic Exchange of £1.7 million and one off costs associated with restructuring of approximately £2.7 million. This lower forecast is largely attributable to the Technical division and, to a much lesser extent, the freight forwarding element of our Logistics business.

The Shipbroking division, which is the largest part of the Group generating over 40% of expected Group revenue, has traded well, met its objectives and is on track to meet expectations for the year.  

However, the Technical division has continued to underperform.  The previously outlined weakness in the oil and gas sectors has worsened further than the Board originally anticipated, impacting the division in several ways not least a marked deterioration in replacement work.  Accordingly, we have significantly expanded the management actions originally announced in August 2016 to realign the business.  This wide ranging restructuring programme to significantly change the management and operating structure of the division is now substantially complete and has resulted in significant reductions in its ongoing cost base.  It is expected that the annualised cost savings will be in excess of £6 million for the next financial year.

Within the smaller Logistics division, the port agency business continued to perform strongly, although the freight forwarding business was affected by a reduction in market activity.  Overall, the Logistics division's performance has fallen but this will only have a small impact on the overall Group results.

The Board's intention for the medium and longer term is to pay a dividend appropriately covered by earnings from underlying operations.  It expects to recommend a final dividend for the current financial year of 5p which, together with the interim dividend of 9p paid in December 2016, will make a total for the year of 14p. 

The Group has a strong balance sheet, including a net cash position at 31 December 2016 of £1.7 million (compared to net debt of £1.6 million at 31 December 2015) against an unused Group debt facility of £30 million.

Braemar remains committed to the ongoing development of a diversified portfolio of broking and advisory businesses within its market sectors.   The Group believes that despite an extremely challenging year the decisive actions taken during recent times, in particular in the Technical Division, will ensure that it is efficiently structured and well positioned for the future.

For further information, contact:

Braemar Shipping Services
James Kidwell, Chief Executive	Tel [phone]
Louise Evans, Finance Director	Tel [phone]
Stockdale Securities
Robert Finlay / Antonio Bossi / Henry Willcocks	Tel [phone]
Buchanan
Charles Ryland / Vicky Watkins / Stephanie Watson	Tel [phone]

Notes to Editors:

About Braemar Shipping Services plc

Braemar Shipping Services plc is a leading international provider of knowledge and skill-based services to the shipping, marine, energy, offshore and insurance industries. Founded in 1972, Braemar employs approximately 850 people in more than 70 locations worldwide across its Shipbroking, Technical and Logistics divisions.  

Braemar joined the Official List of the London Stock Exchange in November 1997 and trades under the symbol BMS.

For more information, including our investor presentation, visit www.braemar.com

 

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