Braemar Shipping Services

LN: BMS

Market Cap£91m

Last Close 281p

Braemar Shipping Services is the second largest shipbroker in the world, providing broking services to the dry cargo, deep sea tanker, specialised tanker and sale and purchase markets. It also addresses the fast-growing areas of offshore and renewables, securities and financial markets.

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Investment summary

Braemar recently completed a corporate transformation that will see it move away from being a widely spread shipping services company, to grow into a clearly focused shipbroking operation. Allied to the transformation is the company’s growth strategy, supported by growing global trade, and shipping’s status as the most energy-efficient and lowest carbon method of freight transport, that has management focused on doubling the business inside four years. We value the shares at 400p, a significant premium to the current price, but see greater upside as evidence of success is delivered over the next two to three years.

Y/E Feb
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (fd) (p)
P/E (x)
P/CF (x)
2021A 83.7 11.4 6.7 13.43 20.9 N/A
2022A 101.3 13.5 8.9 18.79 15.0 N/A
2023E 130.6 23.6 19.1 38.15 7.4 N/A
2024E 112.5 19.9 15.9 30.41 9.2 N/A
Industry outlook

The global deep sea shipping fleet has been steadily expanding. A key driver has been growing international trade, which is likely to continue and should have a direct benefit on the shipbroking industry. While some charter rates are currently very high, for example container ship charter rates, others like the Baltic Dry Index are broadly within a historical average range and other indicators such as fleet age and low new vessel order books for certain key trades point to greater future demand, thus balancing risks and growth.

Last updated on 28/09/2022
Content on Braemar Shipping Services
Braemar Shipping Services – Steaming purposefully into clear waters
Industrials | research Update | 30 August 2022
Aerial front view of a cargo tanker traveling over calm sea
Braemar Shipping Services – Ambition to double size in four years
Industrials | research Initiation | 23 May 2022
Aerial front view of a cargo tanker traveling over calm sea
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Share price graph
Balance sheet
Forecast net cash (£m) 5.9
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (2.3) 8.9 14.7
Relative* 4.3 15.0 21.2
52-week high/low 340.0p/201.0p
*% relative to local index
Key management
Nigel Payne Chairman
James Gundy CEO
Nick Stone CFO
Nick Arthur Head of Corporate Affairs