Braemar Shipping Services PLC Trading Update (7730U)
23 January 2017 - 6:00PM
UK Regulatory
TIDMBMS
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 GBP3.0 million to
GBP3.5 million. This excludes a one off gain before tax from
disposal of its interest in The Baltic Exchange of GBP1.7 million
and one off costs associated with restructuring of approximately
GBP2.7 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 GBP6 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 GBP1.7 million (compared to net
debt of GBP1.6 million at 31 December 2015) against an unused Group
debt facility of GBP30 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 +44 (0) 20 3142
4100
Louise Evans, Finance Director Tel +44 (0) 20 3142
4100
Stockdale Securities
Robert Finlay / Antonio Tel +44 (0) 20 7601
Bossi / Henry Willcocks 6100
Buchanan
Charles Ryland / Vicky Watkins Tel +44 (0) 20 7466
/ Stephanie Watson 5000
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
This information is provided by RNS
The company news service from the London Stock Exchange
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January 23, 2017 02:00 ET (07:00 GMT)