Last close As at 05/08/2026
GBP2.28
— 0.00 (0.00%)
Market capitalisation
GBP76m
Research: Industrials
Government changes to National Insurance (NI) arrangements have added to Braemar’s costs, implying lower profitability. However, underlying operations continue to expand and diversify, and Braemar remains well-positioned to drive its future growth strategy. The trading outlook is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our revenue estimates but trimmed our operating profit forecasts to reflect the additional NI charges. However, we maintain our dividend discount model-based valuation of 535p.
Braemar |
Robust trading, but UK budget adds to costs |
Estimate changes |
General industrials |
4 November 2024 |
Share price performance
Business description
Next events
Analyst
Braemar is a research client of Edison Investment Research Limited |
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Government changes to National Insurance (NI) arrangements have added to Braemar’s costs, implying lower profitability. However, underlying operations continue to expand and diversify, and Braemar remains well-positioned to drive its future growth strategy. The trading outlook is promising and Braemar should be able to leverage its strong balance sheet in pursuit of strategic growth. We have maintained our revenue estimates but trimmed our operating profit forecasts to reflect the additional NI charges. However, we maintain our dividend discount model-based valuation of 535p.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
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 |
14.7 |
44.4 |
14.0 |
5.6 |
5.7 |
02/26e |
152.5 |
14.6 |
47.7 |
16.0 |
5.2 |
6.5 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
UK budget changes imply additional costs
The UK budget materially increased employers’ NI contributions by raising the rate from 13.8% to 15% and reducing the starting threshold by nearly 50%. We estimate that bonuses accrued in the current financial year (to February 2025), which will be paid in the following financial year, will attract an additional accrual charge (65% of which is for UK-based employees) of c £300k. There will also be a charge of c £150k against deferred bonus shares. This totals c £450k of additional expenses for the current year, which will rise to c £850k for a full year based on our existing estimates.
Strong fundamentals remain in place
Despite the government-induced headwinds, we remain confident the company can grow further from here, given the growth strategy, ungeared balance sheet and fragmented markets. Braemar entered FY25 with a rapidly growing order book and strong fundamentals. 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
Valuation unchanged, NI charges reduce estimates
Previous FY25 company guidance indicated an operating profit of £18.1m, which when adjusted for an ‘exceptional’ above-the-line M&A-related charge of £1.1m implied an operating profit of £17.0m, in line with our previous FY25 operating profit estimate. With the additional charge of c £450k discussed above, headline company guidance in theory falls from £18.1m to £17.7m, which when adjusted for the exceptional implies an operating profit for the period of c £16.6m. Our revised FY25 operating profit is in line with this implied guidance. Our FY26 operating profit estimate declines from £17.4m to £16.5m, reflecting the additional NI charges in that year. Furthermore, our net cash position estimates at the end of FY25 and FY26 decline from £2.9m and £8.3m, respectively, to net debt of £0.4m and net cash of £1.5m. Our 535p/share valuation is based on an unchanged dividend discount model and remains unchanged.
Exhibit 1: 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 |
20.4 |
20.3 |
20.1 |
Normalised operating profit |
|
|
9.1 |
11.0 |
7.7 |
10.1 |
20.1 |
16.5 |
16.6 |
16.5 |
16.3 |
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) |
(4.0) |
(3.0) |
0.0 |
||
Share-based payments |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
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 |
12.6 |
13.5 |
16.3 |
||
Net Interest |
(0.2) |
(1.4) |
(1.1) |
(1.2) |
(2.0) |
(2.0) |
(1.9) |
(1.9) |
(1.6) |
||
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 |
14.7 |
14.6 |
14.7 |
Profit Before Tax (reported) |
|
|
(3.1) |
6.3 |
5.1 |
8.5 |
9.5 |
7.5 |
10.7 |
11.6 |
14.7 |
Reported tax |
(1.5) |
0.0 |
(1.6) |
(1.8) |
(4.9) |
(2.9) |
(2.7) |
(2.9) |
(3.7) |
||
Profit After Tax (norm) |
7.3 |
9.4 |
5.1 |
7.0 |
13.2 |
11.7 |
12.0 |
11.7 |
11.0 |
||
Profit After Tax (reported) |
(4.7) |
6.3 |
3.6 |
6.7 |
4.6 |
4.6 |
8.0 |
8.7 |
11.0 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
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 |
12.0 |
11.7 |
11.0 |
||
Net income (reported) |
(27.4) |
4.0 |
4.5 |
13.9 |
4.6 |
4.6 |
8.0 |
8.7 |
11.0 |
||
Basic average number of shares outstanding (m) |
31 |
31 |
31 |
31 |
29 |
30 |
27 |
25 |
22 |
||
EPS - basic normalised (p) |
|
|
23.78 |
30.19 |
16.23 |
23.06 |
45.48 |
39.63 |
44.38 |
47.67 |
49.74 |
EPS - diluted normalised (p) |
|
|
21.79 |
27.28 |
13.43 |
18.79 |
37.85 |
32.42 |
35.47 |
37.35 |
38.04 |
EPS - basic reported (p) |
|
|
(88.63) |
12.88 |
14.45 |
45.56 |
15.85 |
15.65 |
29.60 |
35.47 |
49.74 |
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 |
13.4 |
13.3 |
13.2 |
||
Normalised Operating Margin |
7.7 |
9.4 |
9.2 |
9.9 |
13.1 |
10.8 |
10.9 |
10.8 |
10.7 |
||
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 |
68.9 |
70.8 |
73.6 |
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 |
27.8 |
29.8 |
32.6 |
||
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 |
47.9 |
48.0 |
48.6 |
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 |
(0.1) |
0.1 |
0.9 |
||
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 |
||
Net Assets |
|
|
58.4 |
59.2 |
62.9 |
71.5 |
76.7 |
79.6 |
77.1 |
76.1 |
75.5 |
Shareholders' equity |
|
|
58.4 |
59.2 |
62.9 |
71.5 |
76.7 |
79.6 |
77.1 |
76.1 |
75.5 |
CASH FLOW |
|||||||||||
Op Cash Flow before WC and tax |
(1.8) |
9.7 |
8.8 |
12.0 |
12.8 |
11.3 |
14.5 |
15.4 |
18.5 |
||
Working capital |
4.6 |
(0.4) |
4.1 |
5.2 |
4.1 |
(6.0) |
0.1 |
(0.1) |
(0.1) |
||
Tax |
(1.1) |
1.2 |
(0.8) |
(2.2) |
(4.4) |
(6.5) |
(4.4) |
(2.7) |
(2.9) |
||
Other |
6.1 |
1.4 |
1.8 |
6.2 |
11.4 |
8.5 |
5.4 |
5.4 |
5.2 |
||
Net operating cash flow |
|
|
7.8 |
11.8 |
13.9 |
21.3 |
23.9 |
7.4 |
15.6 |
18.0 |
20.6 |
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) |
(1.9) |
(1.9) |
(1.6) |
||
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) |
(1.4) |
1.9 |
2.8 |
||
Opening net debt/(cash) |
|
|
2.4 |
11.7 |
20.0 |
8.8 |
9.3 |
(6.9) |
(1.0) |
0.4 |
(1.5) |
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) |
0.4 |
(1.5) |
(4.3) |
Source: Braemar and Edison Investment Research
|
|
Research: Healthcare
AFT Pharmaceuticals has released a trading update ahead of its H125 results, expecting to report a c NZ$2m operating loss for the period ending September 2024, driven by one-off factors affecting the top line, as well as increased investments in expanding its international footprint. While the domestic Australian and New Zealand (ANZ) market continued to perform well (double-digit growth), stocking rationalisation by certain international customers, a doctors strike in South Korea (a key market for Maxigesic IV, which drove 57% y-o-y revenue growth in Asia in FY24) and higher sales and marketing expenses weighed on margins. Management expects the sales momentum to pick up in H2, a traditionally stronger period for AFT, although previous FY25 guidance (operating profit of NZ$22–25m) is likely to be revised, reflecting the H1 results. We await the full results on 21 November, before updating our estimates.