5 June 2024
BRAEMAR PLC
(the
"Company")
Notice of 2024 Annual General
Meeting
Braemar Plc (LSE: BMS), a leading
provider of expert investment, chartering, and risk management
advice to the shipping and energy markets, announces
that it has published notice of the Company's 2024
Annual General Meeting ("AGM").
The AGM will be held at 10:00 a.m.
on Wednesday, 3 July 2024 at the Company's offices at One Strand,
Trafalgar Square, London, WC2N 5HR. The AGM notice will be
available on the Company's website (www.braemar.com)
and, together with the Form of Proxy for the AGM, will be submitted
to the National Storage Mechanism and will shortly be available for
inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism. Copies
of these documents along with the 2024 Annual Report and Accounts
(published on 23 May 2024) have also been posted today to
shareholders that have elected to continue to receive hard
copies.
The Annual Report is available on
the Company's website (www.braemar.com),
and will shortly be submitted to, and available for inspection on,
the National Storage Mechanism at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
FY24 Final Dividend
Subject to shareholder approval at
the AGM, the FY24 final dividend will be
paid on 9 September 2024 to shareholders who are on the register at
the close of business on 2 August 2024, with a corresponding
ex-dividend date of 1 August 2024. The last date for Dividend
Reinvestment Plan elections will be 16 August 2024.
Principal Risks and Uncertainties for the year ended 29
February 2024
The appendix sets out the
disclosures that the Company is required to make to comply with
Disclosure and Transparency Rule (DTR) 6.3.5R, namely: the
principal risks and uncertainties facing the Company; the
directors' responsibility statement made in respect of certain
sections of the Annual Report; and a statement regarding related
party transactions. This information has been extracted from the
Annual Report in unedited text and is not a substitute for reading
the full Annual Report.
Page references and note references
below refer to page numbers and numbers of notes to the accounts in
the 2024 Annual Report and Accounts.
Legal Entity Identifier:
213800EV6IKTTHJ83C19
For
further information, contact:
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Braemar Plc
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James Gundy, Group Chief Executive
Officer
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Tel +44 (0) 20 3142 4100
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Grant Foley, Group Chief Financial
Officer
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Rebecca-Joy Wekwete, Company
Secretary
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Buchanan
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Charles Ryland / Stephanie
Whitmore
Jack Devoy / Abby
Gilchrist
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Tel +44 (0) 20 7466 5000
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Investec Bank plc
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Gary Clarence / Alice
King
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Tel +44 (0) 20 7597 5970
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Cavendish Securities PLC
Ben Jeynes / Matt Lewis (Corporate
Finance)
Leif Powis / Dale Bellis / Charlie
Combe (Sales & ECM)
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Tel +44 (0) 20 7220 0500
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Notes to Editors:
About Braemar Plc
Braemar provides expert investment,
chartering, and risk management advice that enable its clients to
secure sustainable returns and mitigate risk in the volatile world
of shipping and energy. Our experienced brokers work in tandem with
specialist professionals to form teams tailored to our customers'
needs, and provide an integrated service supported by a
collaborative culture.
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 and
follow Braemar on LinkedIn.
Appendix
Principal Risks and Uncertainties for the year ended 29
February 2024
Risk Management
Effective risk management forms an
integral part of how we operate. It is essential for delivering our
strategic objectives as well as protecting our relationships and
reputation.
The
Group's Risk Management Framework
Risk awareness is a key element of
Braemar's organisational culture at all levels and is key in
managing risks to our business, helping to ensure the process of
risk identification, assessment and response is embedded within
daily operational and functional activities across the
Group.
The board is responsible for
managing the Group's risk, overseeing the internal control
framework, and determining the nature and extent of the principal
risks the Group is willing to take to achieve its long-term
objectives. The Group's risk management and internal control
frameworks are continually monitored and reviewed by the board and
the Audit &Risk Committee, with support
from the Risk Committee. The board is committed to maintaining the
highest standards of conduct in all aspects of its business, but in
considering the other matters set out in Section 172 of the
Companies Act 2006, the directors are mindful that the approach
must be balanced with both employee interests and the Group's need
to foster business relationships. Group policies and procedures
have been designed to ensure that the level of risk to which the
Group is exposed is consistent with the Group's risk appetite and
aligned with the Group's long-term strategy.
Reporting to the Chair of the Audit
and Risk Committee and administratively to the Chief Financial
Officer, the Head of Internal Audit and Risk Service outsourced to
a third party leads the Internal Audit and
Risk management function.
Risk Management Process
The Group's risk management approach
or framework incorporates both bottom-up and top-down
identification, evaluation, and management of risks. Within our
framework:
· Senior
management has initial responsibility for identifying, monitoring,
and updating business risks, while
· The
management teams of Group IT, HR, Legal, Compliance and
Finance assess their respective functions for operational and
functional risks not identified by senior management.
The Group's risk management
framework is managed via an online system which is accessible to
the senior management team and operational and functional
management teams globally. The system's functionality has allowed
for enhanced monitoring and reporting automation. The system allows
for:
· Group-wide real-time updating,
· Distribution and completion of periodic internal control
self-assessment surveys,
· Ongoing monitoring of risks and mitigation activities at
Group, Operational, and Functional levels, and
· Risk
Management reporting at Group, Regional, and company location
levels.
The Group's risk management
framework considers both the likelihood and the impact of
identified risks materialising. Risks are mitigated, where
possible, by the implementation of control activities, which are
evaluated as part of the risk-based internal audit plan to
determine their effectiveness in mitigating or reducing risk to
acceptable levels.
All identified risks are aggregated
and reviewed to assess their impact on the Group's strategic
objectives and identify the resources
required to manage them effectively. Principal risks are aggregated
together with associated issues or areas of uncertainty. Inherent
risks can be significant, but our control processes and management
actions reduce the risk level.
The risk management process
evaluates the timescale over which new or emerging risks may occur.
The risk management process also considers the potential impact and
likelihood of risks, as well as the timescale over which risks may
occur. The outcome of this process is then reviewed with further
consideration and assessment provided by the Risk Committee, the
Audit & Risk Committee, and the board.
Oversight and evaluation of the
effectiveness of Braemar's risk management framework is led by the
Group Chief Financial Officer, supported by the Risk Committee
whose membership includes the Chief Operating Officer, Company
Secretary, Head of Internal Audit and Risk and Head of Compliance,
and representatives of other functions and locations of the
business. The Risk Committee monitors risks regularly, taking into
consideration the appetite, tolerance, and potential impact for
specific risks on the Group.
Principal Risks
The principal risks which may impact
the Group's ability to execute its strategic objectives have
changed since 2023. In FY24, one new emerging risk has been added.
The risks that follow, while not exhaustive, are those principal
risks which we believe could have the greatest impact on our
business and have been discussed at meetings of the board, the Risk
Committee and the Audit & Risk Committee. The board reviews
these risks in the knowledge that currently unknown, non-existent
or immaterial risks could turn out to be significant in the future
and confirms that a robust assessment has been performed. The Audit
& Risk Committee review and approve the principal risks and any
related mitigation plans.
Competition risk and market consolidation (New principal
risk)
Competition in the shipping industry
is becoming increasingly intense, and there is a growing trend
towards market consolidation, as companies seek to gain scale and
reduce costs.
Other changes
One principal risk disclosed in the
2023 Annual Report has had its title changed from 'Loss of key
personnel and weak organisation culture' to 'People and Culture'.
While no change in the overall risk level has been observed, the
new title better captures the nature of the related
risk.
Risk Mitigation
As part of our risk management
process, the Group takes various measures to mitigate risk,
throughout the year these measures included:
· Ongoing periodic review and updating of policies and
procedures, including AML and KYC, to enhance/strengthen the
Group's governance framework, with ongoing monitoring of employee
training completion rates.
· A
signature authorisation and delegation of authority policy,
complemented by independent assurance activities.
· Usage
of common finance, HR and operations systems across the Group
supported by our IT team.
· Succession planning and strategic recruitment supported by the
Group HR team.
· Establishment of board-approved Group budgets with ongoing
performance monitoring against budgets/reforecasts and
investigation of significant variances.
· Regular reporting of treasury management activity to the board
by the Group Chief Financial Officer.
· Ongoing monitoring of contractual risk by the Group legal
team.
· Operation of the Group's whistleblowing procedure.
· Maintenance of appropriate insurance cover.
Group Risk Governance
Principal Risks
The directors have carried out an
assessment of the principal and emerging risks facing the Group .
The most significant risks to which the board considers the Group
is exposed, based on the evaluation process described in the
Group's risk management framework are set out below.
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Risk
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Summary of impact
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Mitigating control and management
actions
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Net risk change
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Competition risk and market consolidation
Competition in the shipping industry
is becoming increasingly intense, and there is a growing trend
towards market consolidation, and hiring established brokers as
companies seek to gain scale and reduce costs.
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Loss of established brokers could
impact revenues. Increasing consolidation could impact the Group's
M&A strategy for growth.
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· Regular
horizon-scanning exercises are conducted by the leadership team
which aim to identify areas of the business that could be targeted
by competitors.
· Leadership
team monitors transactions in the industry looking for
trends.
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New Risk
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Cybercrime / data security
Cybercrime could result in loss of
business assets or disruption to the Group's IT systems and its
business. Lack of appropriate data security could result in loss of
data.
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Loss of service and associated loss
of revenue. Reputational damage. Potential for material losses due
to fraud or phishing.
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· To address
the persistent threat of cyber-attacks, and to enhance security
measures already in place, Braemar has embarked on a global Cyber
Security programme. This programme includes the implementation of
the NIST Cyber Security Framework and ISO 27001 as Braemar's
controls catalogue. Our Security Operations Centre is fully
operational with 24/7 monitoring and coverage.
· Our IT
processes prioritize cybersecurity through regular penetration
testing, anti-virus and firewall deployment, use of a trusted
third-party software-defined wide area networking (SD-WAN)
solution, regular vulnerability scans, frequent complex password
changes, email authentication protocols, and strict access control
procedures.
· The
security operations centre (SOC) supports the wider cybersecurity
control environment by providing continuous monitoring and analysis
of networks, systems, and applications to detect potential threats,
as well as enabling rapid incident response through leveraging
threat intelligence, skilled security analysts, and established
processes for investigation, containment, and eradication of
identified attacks or breaches.
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Increased
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Geopolitical and macroeconomic
Braemar's businesses is reliant on
global trade flows and, as such, may be negatively impacted by
geopolitical and/or macroeconomic issues, such as changes in crude
oil price, restrictions in global trade due to pandemics,
sanctions, and changes in supply and demand.
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A downturn in the world economy
could affect transaction volumes, resulting in reduced
revenue.
Changes in shipping rates and/or
changes in the demand or pricing of commodities could affect supply
activity.
Note: The continued conflict between
Russia and Ukraine and related global sanctions has increased the
potential impact of risks associated with both geopolitical and/or
macroeconomic issues and compliance with relevant laws and
regulations.
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· Regular
horizon-scanning exercises are conducted by the leadership team
which aim to identify emerging trends and disruptive forces in this
area while monitoring the competitive landscape.
· Diversification on a sector and geographic basis reduces
dependency on individual business areas.
· Ongoing
monitoring to ensure the Group is appropriately resourced across
its activities and geographies.
· Ongoing
management of costs based on current and reasonably foreseeable
market conditions.
· Enhanced
KYC procedures and ongoing monitoring of compliance with governance
policies, sanctions, and other legal / regulatory requirements
across the Group to help ensure laws and regulations are not
breached.
· Braemar's
diverse service offering, led by experts in their fields, means the
Group are in the best position to find new opportunities in
volatile market conditions and able to take advantage of market
turnarounds.
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Increased
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Compliance with laws and regulations
Braemar generates revenues from a
global business that exposes the Group to risks associated with
legal and regulatory requirements.
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Legal and regulatory breaches could
result in fines, sanctions being imposed on our business, and the
loss of Braemar's ability to continue operating.
Failure to meet all reporting
obligations could lead to reputational damage which could then lead
to loss of revenue and staff.
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Group-wide training program to help
ensure employee awareness of, and compliance with, all relevant
legal and regulatory obligations:
· Braemar
Corporate Governance Framework;
· Braemar
Risk Management methodology;
· Compliance
with our policies, including our AML/KYC policies' (enhanced)
customer due diligence requirements; and
· Compliance
with relevant laws & regulations, including Anti-bribery and
Corruption regulations.
· Enhanced
KYC procedures and ongoing monitoring of compliance with governance
policies and legal / regulatory requirements across the Group to
help ensure requirements are not breached.
· Ongoing
monitoring to ensure insurance cover is maintained at adequate
levels.
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Decreased
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Currency fluctuations
The Group is exposed to foreign
exchange risk because a large proportion of its revenue is
generated in US dollars while its cost base is in multiple
currencies.
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A change in exchange rates could
result in a financial gain or loss.
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· The board
sets the Treasury Policy which details the level of exposure the
board is comfortable with and the Group hedges to the level
stipulated in the Treasury policy. Forward currency (US $)
contracts are entered into to mitigate the risk of adverse currency
movements.
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No change
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Disruptive technology
Shipbroking is still largely a
business that is transacted via personal relationships dependent on
quality service. Hence the risk of technological change,
disintermediation and increased customer demands for enhanced
technological offerings could render aspects of our current
services obsolete, potentially resulting in loss of
customers.
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Relationships could be devalued and
replaced by disruptive technology platforms, resulting in increased
competition, consequent price reductions, and loss of
revenue.
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· Investment
in technology through partnering with best-in-class providers, such
as Zuma Labs, has effectively differentiated Braemar.
· Ongoing
modernisation of our infrastructure to allow for focus on
innovation and strategic direction.
· Regular
horizon-scanning exercises are conducted by the leadership team
which aim to identify emerging trends and disruptive forces in this
area while monitoring the competitive landscape.
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No change
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Environment and climate change
Seaborne transportation is estimated
to create approximately 3% of the world's carbon emissions and
there will be increased pressure to reduce that in the
future. Failure to monitor and address the risks associated with
that reduction process could result in loss of revenue for Braemar
and its customers and counterparties
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The Group's P&L and liquidity
could be negatively impacted if customers are lost as a result of
our not keeping pace with our peers and industry best
practice.
Non-compliance with regulations or
disclosure requirements could result in
fines or penalties.
Failure to appropriately monitor and
mitigate these risks could lead to Braemar suffering serious
reputational damage.
Note:
Management does not expect
climate-related risks to have a material impact on the Group's
short-term financial performance.
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· Investment
in the offshore renewables market and technology to allow the Group
and its clients to offset carbon emissions.
· Ongoing
development and EPSG strategy which allows the Group to monitor and
report on environmental and climate-related risks.
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No change
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Integration risk
Braemar's shipbroking-focused growth
strategy makes use of strategic hires and acquisitions to increase
the size of the business.
Integrating and aligning any new
acquisition with the Group poses various challenges from an
operational and financial perspective.
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Inefficiencies and/or reduced
expected synergies realised after integrating new acquisitions into
the group and aligning them with the respective group
strategies.
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· Performance of new business is monitored through regular
dialogue with relevant business leaders.
· Compliance
and legal mechanisms in place to ensure the purchase meets any
relevant regulatory requirements and the target company aligns
appropriately with the relevant Group values.
· Prioritisation of identified growth opportunities to ensure
resources are appropriately allocated to opportunities with the
best potential return on investment.
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No change
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People and culture
Braemar is a people-based business
and people are vital to its success.
Inadequate policies and reward
structures could incentivise negative behaviours, create internal
conflict, lead to reputational damage, and contribute to failure in
attracting and /or retaining skilled personnel.
Failure to adapt to, or align with,
market expectations, including the offering of flexible or hybrid
working arrangements, could result in the inability to attract and
retain skilled personnel.
Lack of appropriate consideration of
environmental and wider social issues could also contribute to the
inability to attract and retain skilled personnel.
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Employee relations claims /
litigation / tribunals attributed to negative behaviours or
actions, increases the potential for reputational damage because of
negative publicity in the public domain.
Loss of key staff could result in
reduced revenue if former staff attempt to take contacts and
business with them.
Strategic growth objectives may not
be achieved if Braemar fails to attract and retain skilled
personnel.
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· Ongoing
review of policies, including Conflict of Interest, Code of
Conduct, and the Employee Handbook, to ensure behavioural
expectations and employment practices for managers and employees
are clearly defined.
· Organisational structure changes included the creation of
associate director roles to identify key employees and more clearly
show progression opportunities.
· Ongoing
development of a culture of engagement and professional
development, including implementation of performance management
objectives, clearly defined pathways for career progression, and
succession planning at senior management levels.
· Annual
review of compensation with external benchmarking helps to ensure
remuneration packages continue to be appropriate and
competitive.
· Ongoing
consideration of roles potentially suitable for hybrid and flexible
working arrangements.
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No change
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Sanctions and trade restrictions
Braemar operates in a global
landscape of international and financial sanctions with a variety
of associated compliance requirements.
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Conducting business with sanctioned
entities, through sanctioned regions and facilitating transport of
sanctioned goods will lead to non-compliance with sanctioned
regimes, resulting in financial penalties/fines and reputational
damage.
Note:
Increased scrutiny from regulatory
bodies and rising geopolitical and macroeconomic issues, including
the continued Russia/Ukraine and conflict, has increased the
potential impact of risks associated with breaches of sanctions and
trade restriction requirements.
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· KYC
procedures performed by the Group Compliance teams with support
from the Legal team.
· Through
strategic and targeted recruitment, increasing our in-house KYC and
sanctions-monitoring capabilities enhances our ability to navigate
the intricate landscape of sanctions regulations and mitigate
associated risks within our business operations.
· Technology
solutions used to optimise the efficiency of sanction screening
performed.
· External
assurance providers performing internal audit reviews over the
sanctions process and validating the implementation of
recommendations previously raised to management.
· External
sanctions horizon scanning support provided by a legal advisory
panel.
· Targeted
training program aimed at Management and senior desk heads to
further raise awareness of, and compliance with, all relevant legal
and regulatory obligations.
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No change
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Directors' responsibilities pursuant to
DTR4:
The directors confirm that to the
best of their knowledge:
· the
Group Financial Statements have been prepared in accordance with
the applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Group; and
· the
Annual Report includes a fair review of the development and
performance of the business and the financial position of the Group
and Company, together with a description of the principal risks and
uncertainties that they face.
The directors confirm that they
consider this Annual Report, taken as a whole, is fair, balanced
and understandable and provides the information necessary for the
Company's shareholders to assess the Group's position, performance,
business model and strategy.
Related party transactions
During the period the Group entered
into the following transactions with joint ventures and
investments:
Transactions with wholly owned subsidiaries
Transactions between the Company and
its subsidiaries, which are related parties, have been eliminated
on consolidation and are not disclosed in this Note.
A list of the Group's subsidiary
undertakings is included in the following table. Unless otherwise
indicated, all shareholdings owned directly or indirectly by the
Company represent 100% of the issued share capital of the
subsidiary and the share capital comprises ordinary shares. All
entities primarily operate in their country of
incorporation.
Key
management compensation
The remuneration of key management,
which the Group considers to be the directors, is set out below.
Further information about the remuneration of individual directors
is provided in the Directors' Remuneration Report on pages
62-78.
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2024
£'000
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2023
£'000
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Salaries, short-term employee
benefits and fees
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4,954
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5,879
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Other pension costs
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85
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52
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Termination benefits
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131
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-
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Share-based payments
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548
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1,226
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Total
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5,718
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7,157
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Pension costs relate to
contributions made to a defined contribution pension scheme on
behalf of four (2023: three) members of key management.