Braemar — Diversification underpins resilience

Braemar (LSE: BMS)

Last close As at 19/07/2024

GBP3.09

−2.50 (−0.80%)

Market capitalisation

GBP102m

More on this equity

Research: Industrials

Braemar — Diversification underpins resilience

Braemar’s FY24 results were in line with expectations with revenues flat, but operating profits down, having been hit by one-off costs and strong comparatives. The underlying operations continue to expand and diversify, which drove an 8% increase in FY24 fixtures, and the company remains well-positioned to drive its future growth strategy. The trading outlook for FY25 is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our underlying revenue and operating profit estimates for FY25 and FY26, but rolled over the base year for the valuation, which results in a modest increase in the valuation from 500p to 535p per share, offering c 70% upside.

Andy Murphy

Written by

Andy Murphy

Director, Financials & Industrials

Industrials

Braemar

Diversification underpins resilience

FY24 results

General industrials

31 May 2024

Price

310p

Market cap

£102m

US$1.26/£

Net cash (£m) at 29 February 2024

1.0

Shares in issue

32.9m

Free float

85%

Code

BMS

Primary exchange

LSE

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

3.6

8.1

0.9

Rel (local)

2.1

0.1

(7.9)

52-week high/low

310p

224p

Business description

Braemar 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.

Next events

AGM

July

H1 trading update

August

Analyst

Andy Murphy

+44 (0)20 3077 5700

Braemar is a research client of Edison Investment Research Limited

Braemar’s FY24 results were in line with expectations with revenues flat, but operating profits down, having been hit by one-off costs and strong comparatives. The underlying operations continue to expand and diversify, which drove an 8% increase in FY24 fixtures, and the company remains well-positioned to drive its future growth strategy. The trading outlook for FY25 is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our underlying revenue and operating profit estimates for FY25 and FY26, but rolled over the base year for the valuation, which results in a modest increase in the valuation from 500p to 535p per share, offering c 70% upside.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

02/23

152.9

18.0

45.5

12.0

6.8

3.9

02/24

152.8

14.6

39.6

13.0

7.8

4.2

02/25e

152.5

15.3

42.8

14.0

7.2

4.5

02/26e

152.5

16.0

46.9

16.0

6.6

5.2

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

FY24 results better than the headline figures

Braemar’s FY24 results were in line with market expectations, with revenue flat at £152.8m and reported underlying operating profit of £16.5m, down from £20.1m in FY23. Excluding £1.5m of acquisition-related expenditure, underlying operating profit would have been £18.1m, down £2.0m. However, excluding a £2.6m swing in FX, underlying operating profit was up modestly year-on-year. Continuing, diluted EPS was down 14.6% at 32.4p, from which Braemar anticipates paying a total dividend of 13p, up 8.3% on last year. Year-end net cash fell from £6.9m to £1.0m, largely due to one-offs.

FY25 target achieved for second year in a row

Braemar has again, or for the second year in a row, achieved its medium-term target of achieving a sustainable doubling of the FY21 underlying operating profit of £8.9m by FY25, thus highlighting the robustness of earnings. We remain confident that the company can grow further from here, given the growth strategy, ungeared balance sheet and fragmented markets. The acquisitions of Southport Maritime and the Madrid tanker desk are good examples of expansion as well as the new desks opened in South Korea and Singapore, with others set to follow.

Valuation: Lifted from 500p/share to 535p

Braemar enters FY25 with an orderbook that is up 47% y-o-y to $82.6m and strong fundamentals, with tanker rates remaining robust and depressed dry cargo rates set to recover. Furthermore, the global fleet continues to grow, while at the same time the existing fleet continues to age, implying pent up renewal demand that will need to be addressed within the foreseeable future. Our forecasts are largely unchanged but we have rolled over the base year for our dividend discount model (DDM) valuation, which leads to an increase from 500p to 535p/share.

FY24 results underpin long-term growth

Braemar’s FY24 results were in line with expectations, but down year-on-year due to the exceptional FX boost to the performance in FY23. Stripping away the noise, we believe these FY24 results were confirmation that Braemar’s growth strategy is working well and is likely to see continued investment in organic growth and new desks, potential M&A in a fragmented global market and higher dividend payouts for shareholders. Braemar trades on a P/E of just 7.2x to FY25e and yields 4.5% on a well-covered dividend. Furthermore, we have raised our DDM valuation from 500p to 535p/share.

Robust result against exceptional FY23 comparative

Braemar’s FY24 results were in line with market expectations, with revenue flat year-on-year at £152.8m and reported underlying operating profit of £16.5m, down from £20.1m in FY23. Excluding £1.5m of acquisition-related expenditure, underlying operating profit was £18.1m, down £2.0m. However, excluding a £2.6m swing in FX (FY23 included a £1.5m FX gain, FY24 included a £1.1m FY loss), underlying operating profit was up year-on-year. Continuing, diluted EPS was down 14.6% at 32.4p, from which Braemar anticipates paying a total dividend of 13p, up 8.3% on last year.

Year-end net cash fell from £6.9m to £1.0m, largely due to £1.0m of tax paid on account, the £2.6m cost of the internal independent investigation and a £2.0m cash bonus paid before year end. The currency headwind also reduced the value of cash by c £1.4m.

Exhibit 1: FY22 to FY24 results summary

£m

FY22

FY23

% chg

FY24

% chg

Chartering

63.0

99.2

57.3%

103.9

4.8%

Investment advisory

26.3

36.8

39.8%

25.7

-30.1%

Risk advisory

12.0

17.0

41.7%

23.1

36.0%

Revenue

101.3

152.9

50.9%

152.8

-0.1%

Chartering

6.2

15.6

149.4%

13.6

-12.5%

Investment advisory

6.4

7.7

21.7%

3.9

-50.0%

Risk advisory

1.6

3.0

84.0%

4.1

37.5%

Underlying operating profit ex-central costs

14.2

26.3

84.9%

21.6

-17.9%

Central costs

(4.2)

(6.2)

49.4%

(5.0)

-18.9%

Reported underlying operating profit

10.1

20.1

99.6%

16.5

-17.6%

Chartering

9.9%

15.7%

-

13.1%

-

Investment advisory

24.2%

21.1%

-

15.1%

-

Risk advisory

13.5%

17.5%

-

17.7%

-

Underlying operating margin

9.9%

13.1%

-

10.8%

-

PBT (reported)

8.5

9.5

10.6%

7.5

-20.4%

EPS normalised, diluted (p)

18.8

37.9

101.7%

32.4

-14.6%

DPS (p)

9.0

12.0

33.3%

13.0

8.3%

Net (debt)/cash

(9.3)

6.9

-174.1%

1.0

-85.8%

Source: Braemar, Edison Investment Research

Chartering revenue increased 4.8% to £103.9m driven by the net effect of a much-improved contribution from Tankers (up £13.1m), reflecting the acquisitions, better results from Specialised Tankers (+£3.0m) and from Offshore (up £2.4m), offset by Dry Cargo, which reported revenue down £13.7m due to significantly lower charter rates (down 35% y-o-y). Tankers accounted for 36% (FY23: 27%) of group revenue, while Dry cargo accounted for 14% (FY23: 23%). Overall, charter fixture volumes increased 8% driven by the acquisitions in Tankers and growth in the offshore business.

Investment Advisory revenue declined c £11.0m to £25.7m, as Sale and Purchase (S&P) business contracted by £8.5m, and Corporate Finance revenue fell £2.5m. The remaining £23.1m of revenue was driven by the Risk Advisory business, which rose £6.1m y-o-y, benefiting from the inclusion of the new Natural Gas desk, demonstrating the benefit of Braemar’s diversified growth strategy.

The movement in underlying operating profit before central costs, down from £26.3m to £21.6m, largely reflects a reversal of an FX gain last year, of £1.5m, to an FX headwind of £1.1m this year, the inclusion of c £1.5m of acquisition costs relating to the Madrid office and an increased staff headcount and other operational costs.

Pre-tax profit and EPS were both down, reflecting the issues mentioned above, but the DPS was increased 8% to 13p reflecting the underlying strength of the business. It is also worth noting that the dividend is c 2.5x covered and that the company ended the year with net cash of £1.0m, despite the payment of £1.0m of tax on account, the costs associated with the internal independent investigation (£2.6m) and the payment of some bonuses totalling £2.0m before the year end.

Simplify, refocus, grow

In 2021, the current CEO, James Gundy, set about simplifying the business to focus on shipbroking and securities, and to dispose of unrelated operations that did not produce the required returns and were a drag on management capacity. Looking at Exhibit 2, it is clear to see why this was the case as the total business was shrinking, but the underlying broking and securities businesses, Exhibit 3, were in fact growing steadily and this growth was hidden from view.

Exhibit 2: Headline revenue (£m), FY13–24

Exhibit 3: Underlying revenue (£m), FY13–24

Source: Braemar, Edison Investment Research

Source: Braemar, Edison Investment Research

Exhibit 2: Headline revenue (£m), FY13–24

Source: Braemar, Edison Investment Research

Exhibit 3: Underlying revenue (£m), FY13–24

Source: Braemar, Edison Investment Research

Since that time, underlying revenue has nearly doubled as Braemar has invested in broking desks in geographies and lines where it was underrepresented, and made acquisitions. To this end, it acquired Southport Maritime in December 2022, which gave it access to the tanker market in the US, acquired a tanker desk in Madrid and hired a Natural Gas Securities team to address this rapidly growing market.

We are confident that Braemar will continue to seek to expand its offering in the future, growing organically and via acquisition. Furthermore, Braemar is not financially constrained. It ended the period with net cash of £1.0m. It has access to a £30m revolving credit facility and a further £10m via an accordion facility, giving it more than £40m of investment capacity, though at the year-end it had drawn £27.8m of the RCF.

Exhibit 4 below offers an indication of the potential opportunity. Shipbroking is a fragmented market populated by numerous, often ‘boutique’, operators. Furthermore, the market is slowly becoming increasingly regulated, implying increasing costs of compliance, something that we believe Braemar can navigate. The chart also highlights two new offices, in Singapore and Korea, that should help fill ‘holes’ in several broking activities and in securities. The chart also highlights two new Organised Trading Facility (OTF) desks that are planned to be established in the UK and Europe. We believe these are modest examples of management action to organically grow the overall business.

Exhibit 4: Braemar growth opportunities

Source: Braemar. Note: 1 Organised Trading Facility.

From a shareholder’s point of view, the benefits are clear. The strategy to grow is producing improving earnings as demonstrated in the chart below. This in turn is being reflected in the increasing dividend payments, which were flat at 5p/share between FY19 and FY21. However, the dividend had more than doubled by FY23 and grew further in FY24. Given the growth strategy, the unencumbered balance sheet and the strong dividend cover, we believe that the dividend is likely to grow further in the future, hence we value the company on a DDM basis.

Exhibit 5: EPS and DPS, FY19 to FY25e

Source: Braemar, Edison Investment Research

Valuation pushed up to 535p, from 500p

Shipbroking can be a volatile market, as evidenced by fluctuations in tanker charter rates, for example, over the last four years. However, Braemar is a diversified broker covering numerous markets and therefore, although individual income streams can fluctuate, the collective income stream is generally more robust. We value Braemar on a DDM basis.

Rolling over our base year dividend to the FY25 estimate of 14p/share and applying our estimate of the cost of capital and dividend growth rates of 7.6% (up from 7.4%) and 5.0% (unchanged), respectively, we arrive at a valuation of 535p/share, materially above the current share price of around 300p, and up from our previous valuation of 500p/share. With many market participants expecting interest rates to fall in future months, a lower cost of capital and/or a higher dividend growth rate assumption could be possible, lifting the potential valuation.

Exhibit 6: Implied valuations (p/share) from a range of inputs

Dividend growth rate (%)

3.0%

4.0%

5.0%

6.0%

7.0%

Cost of capital

8.5%

254.5

311.1

400.0

560.0

933.3

7.8%

294.7

373.3

509.1

800.0

1,866.7

7.6%

303.5

387.5

535.0

867.9

2,283.8

7.3%

329.4

430.8

622.2

1,120.0

5,600.0

7.0%

350.0

466.7

700.0

1,400.0

N/A

Source: Edison Investment Research


Exhibit 7: Financial summary

£'m

2019

2020

2021

2022

2023

2024

2025e

2026e

2027e

28-February

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

117.9

117.7

83.7

101.3

152.9

152.8

152.5

152.5

152.5

EBITDA

 

 

10.4

14.4

11.4

13.5

23.4

20.4

20.8

21.2

21.0

Normalised operating profit

 

 

9.1

11.0

7.7

10.1

20.1

16.5

17.0

17.4

17.2

Amortisation of acquired intangibles

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

(12.5)

(3.8)

(1.5)

(0.3)

(2.5)

(7.2)

(1.3)

0.0

0.0

Impairment

0.0

0.0

0.0

0.0

(9.1)

0.0

0.0

0.0

0.0

Other

0.5

0.7

0.0

0.0

3.0

0.1

0.0

0.0

0.0

Reported operating profit

(2.9)

7.9

6.2

9.7

11.5

9.4

15.7

17.4

17.2

Net Interest

(0.2)

(1.4)

(1.1)

(1.2)

(2.0)

(2.0)

(1.7)

(1.4)

(0.9)

Joint ventures & associates (post tax)

0.0

(0.3)

0.0

(0.0)

(0.0)

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

8.9

9.4

6.7

8.9

18.0

14.6

15.3

16.0

16.2

Profit Before Tax (reported)

 

 

(3.1)

6.3

5.1

8.5

9.5

7.5

14.0

16.0

16.2

Reported tax

(1.5)

0.0

(1.6)

(1.8)

(4.9)

(2.9)

(3.5)

(4.0)

(4.1)

Profit After Tax (norm)

7.3

9.4

5.1

7.0

13.2

11.7

11.8

12.0

12.2

Profit After Tax (reported)

(4.7)

6.3

3.6

6.7

4.6

4.6

10.5

12.0

12.2

Discontinued operations

(22.7)

(2.3)

1.0

7.2

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

7.3

9.4

5.1

7.0

13.2

11.7

11.8

12.0

12.2

Net income (reported)

(27.4)

4.0

4.5

13.9

4.6

4.6

10.5

12.0

12.2

Basic average number of shares outstanding (m)

31

31

31

31

29

30

28

26

24

EPS - basic normalised (p)

 

 

23.78

30.19

16.23

23.06

45.48

39.63

42.78

46.90

51.50

EPS - diluted normalised (p)

 

 

21.79

27.28

13.43

18.79

37.85

32.42

34.31

37.06

39.98

EPS - basic reported (p)

 

 

(88.63)

12.88

14.45

45.56

15.85

15.65

37.97

46.90

51.50

Dividend (p)

5.00

5.00

5.00

9.00

12.00

13.00

14.00

16.00

18.00

Revenue growth (%)

14.4

(-0.2)

(-28.9)

21.0

50.9

(-0.1)

0.0

0.0

0.0

EBITDA Margin (%)

8.8

12.3

13.6

13.4

15.3

13.3

13.7

13.9

13.7

Normalised Operating Margin

7.7

9.4

9.2

9.9

13.1

10.8

11.2

11.4

11.3

BALANCE SHEET

Fixed Assets

 

 

91.7

114.7

106.6

99.8

97.7

91.7

88.9

86.1

83.3

Intangible Assets

86.0

86.2

86.1

80.9

75.4

74.5

74.5

74.5

74.5

Tangible Assets

2.0

11.9

9.8

7.1

5.3

5.6

2.8

(0.0)

(2.8)

Investments & other

3.7

16.5

10.7

11.9

17.0

11.6

11.6

11.6

11.6

Current Assets

 

 

71.9

68.3

50.3

49.8

80.3

69.9

72.2

77.6

80.9

Debtors

37.1

39.5

33.4

35.8

43.3

37.7

38.1

38.1

38.1

Cash & cash equivalents

24.1

28.7

16.4

14.0

36.0

29.2

31.1

36.6

39.8

Other

10.6

0.0

0.4

0.0

1.0

2.9

2.9

2.9

2.9

Current Liabilities

 

 

92.0

78.9

54.0

43.4

65.8

49.1

48.7

49.1

49.0

Creditors

44.9

47.6

47.8

39.9

58.4

43.8

44.4

44.4

44.4

Tax and social security

1.4

1.3

1.3

1.6

4.1

1.6

0.7

1.2

1.3

Short term borrowings

35.8

25.1

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

9.8

4.8

4.9

1.9

3.3

3.7

3.6

3.4

3.3

Long Term Liabilities

 

 

13.2

44.9

39.9

34.8

35.4

32.8

32.8

32.8

32.8

Long term borrowings

4.6

2.6

2.7

2.8

2.9

2.3

2.3

2.3

2.3

Other long term liabilities

8.6

42.2

37.3

32.0

32.6

30.5

30.5

30.5

30.5

Shareholders' equity

 

 

58.4

59.2

62.9

71.5

76.7

79.6

79.5

81.8

82.4

CASH FLOW

Op Cash Flow before WC and tax

(1.8)

9.7

8.8

12.0

12.8

11.3

17.8

19.8

20.0

Working capital

4.6

(0.4)

4.1

5.2

4.1

(6.0)

0.1

(0.1)

(0.1)

Exceptional & other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Tax

(1.1)

1.2

(0.8)

(2.2)

(4.4)

(6.5)

(4.4)

(3.5)

(4.0)

Other

6.1

1.4

1.8

6.2

11.4

8.5

5.3

4.9

4.4

Net operating cash flow

 

 

7.8

11.8

13.9

21.3

23.9

7.4

18.7

21.1

20.3

Capex

(2.4)

(1.7)

(1.1)

(1.2)

(0.8)

(0.5)

(1.6)

(1.6)

(1.6)

Acquisitions/disposals

(1.7)

(6.3)

3.7

(8.1)

5.4

0.8

1.3

1.3

0.0

Net interest

(0.9)

(1.5)

(1.2)

(0.8)

(1.8)

(2.2)

(1.7)

(1.4)

(0.9)

Equity financing

23.0

3.9

(28.9)

(2.5)

1.4

(3.1)

(3.1)

(3.1)

(3.1)

Dividends

(4.6)

(4.6)

0.6

(2.1)

(3.2)

(2.4)

(5.5)

(4.6)

(5.3)

Other

(2.4)

0.0

(0.9)

(7.0)

(6.8)

(5.3)

(6.1)

(6.1)

(6.1)

Net Cash Flow

18.7

1.6

(13.9)

(0.5)

18.1

(5.4)

1.9

5.5

3.3

Opening net debt/(cash)

 

 

2.4

11.7

20.0

8.8

9.3

(6.9)

(1.0)

(2.9)

(8.3)

FX

(1.1)

(0.8)

(0.7)

0.3

2.6

(1.4)

0.0

0.0

0.0

Other non-cash movements

(26.9)

(9.0)

25.8

(0.3)

(4.5)

0.8

0.0

0.0

0.0

Closing net debt/(cash)

 

 

11.7

20.0

8.8

9.3

(6.9)

(1.0)

(2.9)

(8.3)

(11.6)

Source: Braemar accounts, Edison Investment Research


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Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

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20 Red Lion Street

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London │ New York │ Frankfurt

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London, WC1R 4PS

United Kingdom

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Copyright: Copyright 2024 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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