Braemar Share Discussion Threads

[tudes100] 06/11/2018 01:15

Big volume day last Friday (Nov 2nd), biggest since end of June

[speedsgh] 05/11/2018 13:49

Small £23k NED purchase...

Director/PDMR Shareholding -

2/11/18 Jürgen Breuer (NED) bought 10,300 @ 227p = £23,381

[mount teide] 02/11/2018 15:57

speed - an interesting and well balanced assessment - as alluded to previously, think the latest results when considered along with the shipping market fundamentals, strongly point to BMS now being at/close to a long term bottom.

[gargoyle2] 02/11/2018 15:52

Thanks for that, speedsgh.

[speedsgh] 02/11/2018 15:39

Downing Strategic Micro-Cap Investment Trust (DSM), which has BMS as a core holding in its portfolio, released their Interim Results today & gave the following overview of the performance of their BMS holding...

Half-year Report -

Braemar Shipping Services PLC (Braemar) (5.2% of net assets)

Cost: £2.86m. Value as at 31 August 2018, £2.52m.

• Operating profit and underlying basic EPS increased over 90%
• Overall trading performance in line with expectations
• Board changes - interim CFO appointed, NED stands down, chairman to retire
• Disposal of Braemar Response

Progress against investment case

Braemar's underlying performance for 2017/18 showed a marked improvement on the previous year due to the actions taken in the technical division to re-scale the business for the market environment. It generated £8.17m of operating profit and underlying basic EPS of 21.1p per share, while net debt was higher following its entry into new markets through the acquisitions of Braemar-NAVES and Braemar Atlantic. We believe that having a strong presence in the maritime financial advisory, dry freight and commodity derivatives markets is important for the long-term strategy and growth of the group.

The outlook is relatively positive for the current financial year, and although tanker freight rates are likely to remain lower for longer in this part of the business, it is offset by the relative strength in the financial, technical and logistics divisions. In October, the group announced the disposal of its incident response business, Braemar Response, for a total consideration of £0.77m. The disposal allows Braemar to focus on delivering its strategy for its core consultancy and professional services divisions.

It terms of the investment case, the marine services business restructuring has happened successfully and the long term upward trend for seaborne trade continues. Equally, ship broker margins are improving albeit not as fast as we would like. The chair change on the board was required to help better focus the group on shareholder value, such as investing in high margin businesses and selling off the low margin areas.

[psync] 26/10/2018 14:20

Looks like they had a reasonably positive write up in the IC today which is benefiting the price, basically saying the shares look cheap and provide a decent yield.

[psync] 25/10/2018 17:07

Well, it wasn't my biggest stinker on the day so I'll take that as a positive.

[edmundshaw] 25/10/2018 15:35

Good questions too, MT. Lets hope management changes will also help spped up reaction times.

[edmundshaw] 25/10/2018 14:57

Longer term, with oil (and eventually gas) being phased out as a fuel of choice, tanker volumes are likely to reduce; so it is good to see Braemar shifting strategy: recruiting in the dry bulk market and putting more emphasis on financial services (albeit rather later in the day than the competition).

[edmundshaw] 25/10/2018 14:49

Still having to wait and see on BMS. And as MT points out, they have left some room to disappoint in H2 due to timing of finance projects. But I feel pretty confident they will be north of £3 in a couple of years' time, as the tanker market normalises a bit.

The comparison of the BDI with BMS is a bit unfair too, as I am sure MT knows; but it has to be admitted that BMS has disappointed in the last two years. Still waiting for the strategy here to work out - an extended wait...

[mount teide] 25/10/2018 10:10

H1/2018 results - the over-riding impression is that while mildly encouraging, they are being presented with a rich gloss.

Additionally, to flag up a heavy reliance "on the timing of certain large shipping finance projects concluding during the period, as currently planned" in order to meet full year expectations suggests there are probably better places to be invested in the sector over at least the next 6-9 months.

This performance comparison since the BDI bottomed in early 2016 is very illuminating:

+ 520% - BDI
+ 41% - Clarksons s/p
- 51% - BMS s/p

[mount teide] 22/10/2018 10:53

The delivery of 66 VLCC new buildings into the global fleet in 2018 has largely pegged rates below $20,000 a day for much of there year. Although, the threat of Iranian sanctions together with a much lower order book /newbuilding delivery profile over the next three years has recently started to push rates up out of the sideways trend.

With Braemar heavily overweight on the tanker sector 2019 looks to offer much better prospects than 2018, particularly since they are also heavily exposed to the oil service sector which is now showing clear signs of recovery, albeit from a very low level.

As mentioned before, i like to see NoN Execs in these type of companies with strong shipping/ports backgrounds - Clarkson's over the years has greatly benefitted from having such people on the Board. I believe BMS is vastly underweight in this respect and if their business performance in 2018 does disappoint, its probably as much to do with the current Board lacking the technical and operational talent/skills required to successfully operate in the sector.

The shipping/ports sector is a highly specialised niche market where a board with strong sector management experience is essential in my opinion - BMS continue to look lightweight in this connection.

[pireric] 19/10/2018 18:49

Management here, in my opinion, have demonstrated that they aren't doing a very good job. And sadly, I do believe that weak management performance can outshine the underlying quality of any business

[psync] 19/10/2018 17:22

The start of this latest sell off is roughly aligned with the FTSE taking a nose dive so it might just be attributable to stop losses kicking in. Either way I'm certainly not expecting fireworks. Minor profit warnings or even just lacklustre results seem to be getting punished harshly, at least among the UK small caps in my portfolio.

[pvee] 19/10/2018 15:22

I tend to agree and there were also Director share buys at much higher prices (albeit fairly modest numbers) after the last update.
Fingers crossed

[edmundshaw] 19/10/2018 15:00

Can see no fundamental reason for this fall. I hope very much it is not as cs44 is fearing, but shipping rates are getting better and tanker markets are showing signs of recovery too. Meantime, the oil price is remaining robust enough.

I guess we shall eat the pudding next Thursday, to discover the proof in it...

[cs44] 17/10/2018 09:08

It would appear that the interim results, due next week, have leaked and they are not going to make good reading. I hope that my supposition is incorrect. The stock held up quite well during the buy back period but has been weak since.

[warranty] 09/9/2018 21:03

Well BMS has held up well given the lousy last couple of months we've had so maybe this is the bottom and time to add?

[boonkoh] 25/8/2018 00:12

I'm so frustrated with BMS. Oh well.

[warranty] 24/8/2018 17:26

You were saying boonkoh??? ;-)

[boonkoh] 13/8/2018 15:11

I wouldn't be surprised to see BMS start testing the 300p mark soon.

[mount teide] 13/8/2018 12:22

As expected, with the Baltic Dry Index rising close to 50% since Q1/2018, the world's largest shipbroker Clarkson's has experienced a stronger Q2/2018 across most of its main shipbroking and sale&purchase markets.

The oil tanker market although still the exception is now seeing green shoots, moving up strongly off multi year lows; vessel charter rates have increased by over 100% since the start of Q3/2018 which should bode well for H2/2018 and 2019.

Likewise the oil services sector, has recently made a bottom and entered a new cyclical recovery phase following a brutal 5 year recession which brought the industry to its knees.

Clarkson's highly expensive takeover of Platou some 3 years ago - a specialist oil tanker and oil services sector shipbroker - could not have been more badly judged/timed but, following an awful post acquisition period should now start to generate better news and results going forward. Oil tanker rates dropped over 10 fold peak to trough following Clarkson's takeover of Platou and the oil services sector completely collapsed, with large sections of many major fleets put into long term lay-up.

With many sectors of the shipping markets forecast to be at/close to a demand/supply balance for the first time in a nearly a decade in 2019, the shipping markets should now continue to strengthen into this new shipping /commodity cycle recovery stage, which like all previous recovery stages will come with the high stomach churning volatility these markets are renown for.

The shipping and commodity markets may not be for the fainthearted, widows or orphans perhaps - but for those with the constitution to withstand the volatility, with careful stock selection the once in every 15-20 year recovery/boom stage of these long term, highly cyclical markets offer investors the opportunity of tremendous multi year outperformance compared to the wider market indexes.