Braemar Share Discussion Threads

[greybroath] 21/11/2023 10:08

It's back!

[dan_the_epic] 21/11/2023 10:08

don't worry about me. I am merely a watcher

[pireric] 21/11/2023 09:20

Agree broadly, although we know they won't kitchen sink FY24 given they are already over halfway through and is underpinning that consensus eps for 36p this year. Its not the sort of business model where you can kitchen sink, e.g. because you have fixed price contracts or some other flexibility that allows you to do so.

Re the minimum £18m of EBIT from next year (£17m ex costs). They finally have the balance sheet and core focus on shupbroking again to hopefully execute. As they point out, it's a very fragmented market. If they can reliably become a towards 40p EPS business, then it seems logical to think this could trade above £4 and potentially towards £5 a share given this is a capex light business model. The group generated £18m of free cash flow last year. £5 would be a Clarkson multiple today. Clarkson should trade at a premium to Braemar but Clarkson itself has tended to be more of a high teens P/E business over time

In terms of shipping markets, a lot of the energy and related markets are in a good position. Containerships (BMS is underweight here IIRC) has normalised after all of the pandemic rally, and dry cargo is at the bottom of the cycle and probably improves from here.

Certainly at £2.65, the balance of upsides against downsides feels very attractive.

Eric

[rimau1] 21/11/2023 08:38

Indeed Pireric BMS is very cheap on every metric (price/book, xearnings, cash adjusted etc). For balance my bear case points are (1) with my CEO hat on I would kitchen sink y/e Mar'24 and focus on hitting FY25 expectations - which i have personally priced in (2) external markets / shipping downturn. Thats all i have.Dan the epic - i just re-read your recent posts/views on BMS, hope you were not on the wrong side of the trade.

[pireric] 21/11/2023 08:29

I see this settling out much closer to £3 over the coming weeks.

At 265p it's a roughly £87m market cap, with £7m net cash, and a forward P/E of 7.4x. Which feels pretty punitive and again I can see investors willing to credit a decently higher multiple here. I would also argue that FRP having run their slide rule over the accounts means this deserves a higher multiple than before

Consensus 2024 forecast 36p.

Clarkson (better outfit) trades closer to 12x.

Eric

[rimau1] 21/11/2023 08:26

Not true, bought in 3 x £3k blocks between 8am and 8.01am. Highest paid £2.43. But who cares Dan?! Good luck all.

[hyden] 21/11/2023 08:23

Well, it's a smaller initial bounce than I'd hoped for but it's a start. Let's see what the coming days bring. Good luck all.

[dan_the_epic] 21/11/2023 08:07

you only doubled up at 237 if your holding is like 500 shares or something otherwise there was no liquidity

[rimau1] 21/11/2023 08:04

Well i doubled up at £2.37 on the bell. I'm a long term fan. if anything else we missed a 10% market move over the past week based on Clarkson and my model suggests BMS should be at least £2.94 to trade in line with forward net assets (even in a difficult 2024 market)

[hyden] 21/11/2023 07:59

For any interested persons, I've found the actual text of the ruling:



It relates to historical activity between Jan and Mar 2022. The ruling was issued in August 2023 so I am not sure why this has only surfaced now. It is not, imo, a widespread compliance issue but rather a failure of a small number of individuals, possibly two or three. It is embarrassing and looks poor but I don't consider it a problem.

[cwa1] 21/11/2023 07:41

Indeed...eyes down...

[hpcg] 21/11/2023 07:33

Restored to trading.

[cwa1] 21/11/2023 07:30

From the above:-

The charges follow an NFA review of Braemar’s FFA desk activity for the first three months of 2022.
The regulator has accepted a settlement offer submitted by Braemar Securities, which is categorised by the regulator as an introducing broker for freight forward agreements (FFAs). The firm has neither admitted nor denied the allegations but agreed to pay the fine. TradeWinds has contacted the company for further comment.

Fine was $140,000

[hpcg] 20/11/2023 09:47

Report now published so if not today I would think tomorrow. Tomorrow makes more sense than mid session IMO.

[hyden] 20/11/2023 08:15

No, the shares will relist once the annual reports and accounts are filed with Companies House. The uncertainty is around the historical unsettled commissions payable, for which a £2m provision has been made. The actual payment(s), if and when due, could ultimately be lower, maybe zero, or even a lot higher. The figure of £2m is simply a 'best guess' but will have been signed off by the auditors so we should at least take comfort from that.
I am a little disgruntled that the shares have not been relisted today - there is no excuse imo - but I will just have to be patient a little while longer.

[typo56] 20/11/2023 07:27

After c£2.5m of costs regarding the investigation they still say,

"As the ultimate potential obligations and outcomes in relation to the transactions subject to the internal independent investigation are uncertain, there remains a risk that the final outcomes could materially impact the recognised balance. It is impracticable to provide sensitivity estimates of potential downside variances at this time."

Perhaps the shares have to remain suspended until such time they have a better grip on the final outcome? Apparently, c£2.5m of costs regarding the investigation are insufficient to buy such clarity.

[hpcg] 18/11/2023 00:52

redwing - agree. These are audited accounts where the files for the CT600 should be ready to go. We can all check on companies house of course (no, they haven't been filed yet). In any case investors are starting to look through a period of economic weakness ongoing and for the next 6 months with smaller caps being bid in the US and here.

[redwing1] 17/11/2023 16:23

No, I think the resumption of share trading will likely be some time early next week, Graham. I think the filing can be made faster in circumstances like these.

[grahamburn] 17/11/2023 15:25

It's fairly clear and straightforward from this paragraph in the RNS on 14 November:

"The Group will seek a restoration of trading in its ordinary shares on the London Stock Exchange following the publication of the FY23 results and filing of the 2023 Annual Report and Accounts."

Filing usually occurs a couple of weeks or so after the announcement of the results.

So.....early/mid December, depending on:

- when filing occurs
- when the company seeks a restoration
- how long the LSE takes to respond

[hpcg] 17/11/2023 12:56

Yes indeed. They request a resumption from the listing authority, they can't just name a date themselves.

[warranty] 17/11/2023 11:10

Are you sure hpcg? I would have thought the company would have to request a date for trading to resume and usually they have very good idea of when that will be? They requested the suspension so surely it’s for them to request a resumption seeing as the issue has been resolved?

[hpcg] 17/11/2023 01:10

directly - The company isn't in control of when trading restarts so it can't give a time line. It will either be today or Monday so it really doesn't make much difference.

[drectly] 16/11/2023 18:00

Hyden, that makes perfect sense, but why does the company not include in it's statement a simple outline of what it is doing and anticipated timelines. A board telling shareholders what they have too, rather than treating them as company owners and telling them what they can, (which I know none do regards small holders, they just brief plus nod and a wink to the major holders).
Anyway, a day or two and it should be back to normal trading.

[hyden] 16/11/2023 17:51

I expect the company's accounts will have been filed with Companies House today, which means they can now apply to have the suspension lifted. The shares will potentially resume trading from 8.00am tomorrow, or Monday latest. I will otherwise be surprised as there is no reason for the shares to remain suspended. The company has already said as much:

"The Group will seek a restoration of trading in its ordinary shares on the London Stock Exchange following the publication of the FY23 results and filing of the 2023 Annual Report and Accounts."

I rather think the outlook is bright and I shall continue to hold. The dividend yield on my purchase is now just over 5.25% and that is good enough for me.