Braemar Share Discussion Threads

[catabrit] 29/6/2023 10:51

Yeah but hardly any move in the bid at all and that’s what matters!

Assuming the findings are towards the low end of worst case imagination scenarios, I can see this bouncing back to north of 280p quite quickly. It will take a little while for the smell to go but it will.

As a contra, it’s worth reading what la-Barone has written about Braemar over on LSE. It seems like he has some sort of agenda / beef with the company so you’ve got to bake that in, but it’s worth reading nonetheless.

[qs99] 29/6/2023 10:47

NIce to see some uplift...

[qs99] 28/6/2023 13:08

I was in last week on RNS, looks over sold for all reasons you say Catabrit. I'll await it coming back from suspension.

DX Group showed how over zealous auditors can hammer a stock, suspension etc, without anything material actually being wrong in the business!

DYOR

[hpcg] 28/6/2023 12:29

Catabrit - several of the ship building sectors have a shortage, bar containers which is under way to a significant surplus. It is doubtful if many more crude carriers will be built. Sanctions create opportunity, and so does the removal of sanctions. Emissions standards create sales, and simple fleet age does the same.

There is no new AI applicable to ship broking or valuation. The unit counts are tiny and attributes are equally limited. One would have been able deploy AI in this sense for at least 15 year, so I imagine somebody already has. People are acting like AI is new when it is only the very large language models and generative AI that are significantly different from a year ago. In any case ship owning is an area requiring a lot of skill, experience and foresight.

I'm struggling to find a case for the downside here to match the decline in the equity valuation. Like you I can get as far as a fine, but that would be a one off. I can definitely 'endure' a closed liquidity period, seriously which equity investor can't? There isn't going to be anyone trading this.

[catabrit] 28/6/2023 09:07

This is a pretty simple, highly cash generative broking business. We’re now at circa £65m EV or whatever it is vs £20m of underlying cash flow. I get why people are spooked - where there’s smoke, there’s fire etc - and I don’t blame them for wanting to pause or sell at all.

But I also think this is a good buy for those who don’t mind accepting a bit of uncertainty. Even if you deduct the cash as a fine or whatever, it’s still cheap.

I am concerned about the macro and how sensitive the shipping industry is to it just because of past cycles and my ignorance of the sector. I mean pretty much every shipping company I’ve had on my watchlist the last year or so is down meaningfully despite the allure of looking cheap. That always worries me.

I’m also worried about what impact AI has on shipping. I get that broking is very relationship-driven and I think that creates a barrier to entry. But I do wonder.

Either way, it’s now 3 and a bit underlying and even if you cyclically-adjust that, it’s still attractive and I see little downside considering the clean balance sheet and capital light model. If there’s a downturn, they’ll just cut staff so we won’t get screwed on negative operating leverage etc.

I like it. But then I liked it at 300p!

[qs99] 26/6/2023 09:46

Be interesting maybe around lunch time when all these "calls" have gone in from brokers, instis, shareholders etc and whether we see any buying.

The amount just looks too small and historic to be an issue IMO/DYOR etc. Let's see.

[gotabsirius] 26/6/2023 09:19

Was worried that CFO might have been the issue but all this happened before his appointment....what I don't understand is why this wasn't cleared up last year...

Also looks like BDO are getting some bad press so maybe they are tightening their workings...?

Anyone spoke to the company?

[simon gordon] 26/6/2023 09:02

SFO investigation would be the wildcard. Might be worth getting on the phone to the company to find out if that's a real risk. If not, looks a good buy point.

[lindowcross] 26/6/2023 09:01

Is it the phrase "and any related matters" which might turn out to be significant? Fraud or bribery? Or other misdeeds? In any event, I will continue to hold.

[qs99] 26/6/2023 08:59

Looks like a bun fight between auditors and board IMO over what looks an immaterial amount IMO DYOR

[yokelee] 26/6/2023 08:59

Such a small amount though over nos of years, something is not quite right to suspense the shares? avoid from now

[qs99] 26/6/2023 08:23

Makes no sense, I have bought the dip first thing on reading that RNS, let's see, a few days until suspension at least, but for me, its now a timing issue of holding, not a fundamental risk to the business on that RNS, looks like over zealous auditor...IMO and defo DYOR!

PS made some good money on DX recently and that was far, far "smellier" but market reaction just didn't seem right

[qs99] 26/6/2023 08:21

I agree ambiguity not great, but this is an ancient balance no? And a write back not a write off? What am I missing?

[grahamhacker] 26/6/2023 08:16

Sold out @229p. Lost £3k. Don't like ambiguity - always come clean or a smell is left there. If this is a goodwill adjustment (the only significant judgemental value on the balance sheet) then it should have been cleared out years ago by the auditors. CFO going suggests a impropriety smell!

[qs99] 26/6/2023 08:14

OK, re-reading this, it is really ridiculous that a c.£3m near 10 year old liability is causing an investigation no? For a write back, not a write off? DYOR

[spooky] 26/6/2023 07:47

An outlook update would have been helpful.

[albert zog] 26/6/2023 07:43

Very strange RNS. More to this than meets the eye

[qs99] 26/6/2023 07:40

Seems really odd going that far back, why not just write back and be done with it? Unless there was a smell of impropriety around it maybe? DYOR

[gotabsirius] 26/6/2023 07:34

Probably someone sniffing around this company and want historical accounts tidying up before making offer? Only thing that makes sense given its so far back...? Thoughts

[rivaldo] 26/6/2023 07:33

So it appears that not only is the delay only due to a transaction which occurred from 2013-2017, but that the outcome may actually be positive for BMS as it may result in the cancellation of a liabiity!

[grahamhacker] 26/6/2023 07:32

Key words are "underlying trading" - suggesting a possible write down of a balance sheet entry (historic). don't really understand why it takes so long to review!

[cwa1] 26/6/2023 07:16

Publication of FY23 results & investigation into a 2013 transaction

Braemar (LSE: BMS), a provider of expert investment, chartering, and risk management advice to the shipping and energy markets, provides an update on its annual results for the 12 months ended 28 February 2023 ("FY23") together with details of an on-going investigation into a historic transaction.



Trading Update

As announced on 22 March 2023, Braemar is pleased to reconfirm its expectation of reporting record revenue and record profitability for FY23, with revenue for the year of not less than £150m (2022: £101.3m), underlying operating profit of not less than £20m (2022: £10.1m) and net cash of £6.9m at the year end. It remains the board's intention to recommend a final dividend of 8 pence per share (2022: 7 pence) to shareholders for approval at the forthcoming annual general meeting, representing a dividend for the year of 12 pence per share, a 33% increase over the previous year (2022: 9 pence).



Publication of FY23 results & investigation into 2013 transaction

During the past two years, in addition to establishing and developing the Group's growth strategy, the board has focused on ensuring that proper procedures are in place to deliver good practice throughout the business as it scales. As part of this work, the board and the Group's auditors have been carrying out an investigation into a particular transaction of circa $3m, which originated in 2013, and involves payments being made through to 2017.



The board is not presently comfortable with the manner in which the transaction has been historically represented and the remaining liability recorded in the Company's balance sheet. Upon conclusion of the investigation, should this liability be released, it would not affect the underlying trading profit or cash position of the Company for FY23.



The investigation into this transaction and any related matters which may arise, is still ongoing. The board has appointed FRP, an independent specialist firm to assist with the investigation and has established a specific investigation committee, chaired by the Group's non-executive Chairman, to oversee the matter. As a result, the Company's Final results for FY23 will be delayed until this work has completed and will not be published by 30 June 2023.



Under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, the Company is required to publish its audited FY23 results by 30 June 2023. As the Company does not expect to be able to comply with this requirement, the Group will request that trading in the Company's ordinary shares be suspended with effect from 7.30 a.m. on 3 July 2023.



The Company will provide further updates on expected timings for publication of its FY23 results in due course. The Company expects to request a restoration of the listing of its ordinary shares on publication of its FY23 results.

[gotabsirius] 25/6/2023 21:24

Looks like that extension was within the Covid extension