Preliminary Results

Preliminary Results for the year ended 28 February 2021
Strong Performance; New Strategy; Dividend Reinstated

Braemar Shipping Services plc (LSE: BMS), a leading provider of expert advice in shipping investment, chartering and risk management, today announces preliminary results for the year ended 28 February 2021.

Financial Highlights

  • Underlying financial performance ahead of market consensus* and management’s Covid-19 adjusted expectations:
  • Revenue of £111.8 million (‘m’) (2020: £117.6 m)
  • Underlying operating profit from continuing operations £8.9m (2020: £11.0m)
  • Reported continuing profit before tax of £9.5m (2020: £6.3m), reflecting the profit on the sale of shares held in AqualisBraemar of £2.2m
  • Balance sheet substantially strengthened:
  • Net bank debt reduced by 56% to £8.9m (2020: £20.0m)
  • Sale of approximately half of the shares held in AqualisBraemar for net proceeds of £6.0m
  • Reinstatement of dividend payments:
  • Intention to declare a dividend of 5p per share for the year
  • Progressive dividend policy to include interim and final payments in future years

Operational Highlights

– Strong progress on management objectives:

  • Refocused strategy on core Shipbroking business
  • Board appointments made to strengthen the Group’s experience relative to its shipbroking-focused growth strategy
  • Joint venture for the Logistics Division between Cory Brothers & Vertom UCS Holdings BV being explored
  • Investment in Zuma Labs technology to improve workflow and client interaction

– Led by the Group COO and Finance Director, a new committee formed to lead Braemar’s ESG and diversity improvement initiatives within the business

Post Period End Highlights

  •  New strategy continuing to drive re-energised growth
  • Areas of specific interest are growing presence in the US market, developing offices in continental Europe and growing the derivatives coverage
  • Disposal of Wavespec Engineering Division on 31 March 2021 (results treated as discontinued operations)
  • Appointment of Nigel Payne as non-executive Chairman as of 1 May 2021
  • Sale of remaining AqualisBraemar shares on 20 May 2021 for net proceeds of £7.2m, further strengthening the Group’s balance sheet and realising a profit on sale of £3.9m
  • Agreement reached to reschedule certain liabilities connected with the Braemar Naves acquisition to improve short term liquidity

– Encouraging start to current year:

  • Trading has been strong in the first few months
  • Forward order book up to $50.5m from $43.3m at the year end and $42m at half year


Braemar - Summary financial results

* Underlying operating profit of at least £8.7m

** Underlying profit measures above are before non-recurring specific items, including acquisition-related charges and loss from discontinued operations.

*** Reported results are from continuing operations, comparatives have been re-presented in relation to discontinued operations.

Braemar - Specific items

James Gundy, Group Chief Executive Officer of Braemar, commenting on the performance and the outlook said:

I am delighted with the performance of Braemar this year where, in such a challenging period, we have not only exceeded market and indeed our own expectations for financial performance, but we have re-aligned many aspects of the business towards our new growth-oriented shipbroking strategy. We have also simplified the business, reduced net debt to manageable levels, improved our management structure and put ourselves in an ideal position to capitalise on the global recovery that is now underway, driving global trade and shipping markets which are showing indicators of future strength as a result. Our trading at the start of the new year has been strong and we are delighted to show our confidence in the business by reinstating a dividend of 5p per share to shareholders.

The outlook for Braemar for the next few years is positive. With a clear focus on growth, particularly in Shipbroking, our streamlined business is well positioned to take advantage of favourable market conditions.

A presentation for analysts will be hosted via conference call at 10.00am today. If you would like to join, please contact Buchanan at [email protected] to request dial in details.

For further information contact:

Braemar Shipping Services
James Gundy, Group Chief Executive Officer | Tel +44 (0) 20 3142 4100
Nick Stone, Group Chief Operating Officer and Finance Director | Tel +44 (0) 20 3142 4100

Matt Goode/ James Thompson/ Kate Washington | Tel +44 (0) 20 7220 0500

Charles Ryland / Stephanie Watson / Matilda Abraham | Tel +44 (0) 20 7466 5000

Notes to Editors:

About Braemar

Braemar is a leading international Shipbroker and provider of expert advice in shipping investment, chartering and risk management.   Braemar employs approximately 520 people in 30 offices worldwide across its Shipbroking, Financial and Logistics divisions.

Braemar joined the Official List of the London Stock Exchange in November 1997 and trades under the symbol BMS. For more information, including our investor presentation, visit


This document contains forward-looking statements, including statements regarding the intentions, beliefs or current expectations of our Directors, officers and employees concerning, among other things, the Group’s results of operations, financial condition, liquidity, prospects, growth, strategies and the business. These statements are based on current expectations and assumptions and only relate to the date on which they are made. They should be treated with caution due to the inherent risks, uncertainties and assumptions underlying any such forward-looking information. The Group cautions investors that a number of factors, including matters referred to in this document, could cause actual results to differ materially from those expressed or implied in any forward-looking statement, including general business and economic conditions globally, industry trends, competition, changes in government and other regulation and policy, interest rates and currency fluctuations, and political and economic uncertainty (including as a result of global pandemics).  Neither the Group, nor any of the Directors, officers or employees, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this document will actually occur. Undue reliance should not be placed on these forward-looking statements. Other than in accordance with our legal and regulatory obligations, the Group undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.


Chairman’s Statement

I am delighted to have been appointed as the Chairman of Braemar at an exciting time for the business and to present my first Chairman’s statement to shareholders.

In common with many other businesses, the past financial year has been a disruptive and challenging year for the Group. At the same time as maintaining a priority focus on the health and safety of our employees and their families, the business has had to navigate its way through a plethora of COVID-19 (‘COVID’) related operating restrictions. Notwithstanding this, however, the breadth and depth of the Group’s service lines and the resilience of the Braemar business model have shone through, enabling the business to continue to service its clients to the high standards that they expect from Braemar as well as delivering strong results for the benefit of all stakeholders. Indeed, the Group’s underlying financial performance from continuing operations for the year is ahead of management’s expectations that were set at the beginning of the pandemic.

I would like to pay tribute to the management and employees of the Group for their hard work and unstinting dedication to the business and its customers, achieved under such difficult circumstances. The financial results for the year reflect well on both the strength and robustness of the Braemar brand as well as on the professionalism and dedication of the Group’s management and employees.

The outlook for the current year is encouraging and with a renewed focus on growth, the business is well positioned to take advantage of favourable market conditions.  

Results for the year

Revenue from continuing operations for the year was £111.8 million (‘m’) compared with £117.7m in 2019/20. Underlying operating profit from continuing operations was £8.9m compared with £11.0m in 2019/20 and underlying earnings per share were 19.4 pence (‘p’) compared to 29.5p in the prior year.

These figures exclude the Wavespec Engineering Division (‘Wavespec’) that was held for sale at the balance sheet date. Wavespec was sold after the year-end on 31 March 2021 and its results for the year are treated as discontinued operations. 

Reported profit for the year from continuing operations before tax was £9.4m (2020: £6.3m) after taking into account a profit relating to the Group’s holding of AqualisBraemar LOC ASA (‘AqualisBraemar’) of £3.1m, which included a profit on the sale of part of the holding of £2.2m. This measure is also after charging certain acquisition and disposal related expenditures, which totalled £1.2m (2020: £2.4m) and interest charges.

The Group’s cash flow has been strong and the year-end balance sheet is much stronger as a result, with net bank debt reducing by 56% from £20.0m as at 29 February 2020 to £8.9m as at 28 February 2021. The sale of the remaining holding of AqualisBraemar shares after the year-end in May 2021 generated an additional £7.2m of proceeds and further strengthened the balance sheet.

Board changes

The Board has carried out a number of composition changes during the year, designed to align and strengthen the Board’s experience relative to its shipbroking-focused growth strategy. 

James Gundy was appointed Group Chief Executive Officer on 1 January 2021 and joined the Board on that date, having successfully led the highly profitable Shipbroking Division since 2014. Nick Stone was appointed as the Group’s Chief Operating Officer in June 2020, alongside the Group Finance Director role that he has held since April 2019.

Ronald Series was the Executive Chairman of the Group until 31 December 2020, a role that he took on an interim basis in July 2019. Upon James’ appointment, Ronald reverted to non-executive Chairman and stepped down from the Board on 30 April 2021 when I was appointed to succeed him as Chairman. On behalf of everyone at Braemar, I would like to thank Ronald for his role in steering Braemar through the last couple of years and look forward to working with James, Nick and the rest of the Board to develop the exciting next phase of growth for Braemar.


During the last two years, the Board has carried out a number of structural changes to the Group, disposing of the Technical Services Division, developing a potential joint venture for the Logistics Division and reducing net debt. The rescheduling of payments made for the 2017 acquisition of Braemar Naves and the planned integration of the Financial Division into the Shipbroking Division now underway will complete this reorganisation and we expect these latter two steps to be completed during the first half of the current financial year.

Braemar will then be a far more streamlined business, concentrated on providing expert advice in shipping investment, chartering and risk management. The Board will then focus on a product and geographically oriented growth strategy, supported by a far stronger balance sheet and an investment proposition that is more streamlined and also one that will become easier to understand and support.


In the Group’s trading update on 9 March 2021, the Board stated that it had set a target of achieving a net debt to EBITDA ratio sustainably below 1.5 times on average over the seasonal working capital cycle. I am pleased to report that excellent progress has been made towards this goal with the ratio falling to 2.14 for the year, down from 2.77 for the prior year. With the second sale of AqualisBraemar shares completed since the year-end, the Board anticipates reducing the net debt to EBITDA ratio substantially further in the current financial year to a level well below the 1.5 times average.

Accordingly, the Board has decided to supplement its growth strategy with a progressive dividend policy involving the payment of dividends to shareholders each year, subject to financial performance.  In reaching this decision, the Directors were mindful of their duties under Section 172 of the Companies Act 2006, including the importance of balancing the potentially competing interests of its shareholders seeking a dividend with the need to continue to reward, incentivise and retain staff and the stated target of strengthening the Group’s balance sheet for future growth.

With regard to the year to 28 February 2021, the Directors are recommending for approval at the AGM on 20 July 2021 a dividend of 5p per share.  This dividend will be paid on 30 July 2021 to all ordinary shareholders on the register at the close of business on 25 June 2021, with a corresponding ex-dividend date of 24 June 2021.  The last date for Dividend Reinvestment Plan (“DRIP”) elections will be 9 July 2021.  For subsequent years, the Board intends, subject to financial performance, to declare an interim and a final dividend each year, on a progressive basis.  


All areas of the business have started the year well and initial signs are encouraging with respect to financial results to date and the prospects for the rest of the year. Whilst the Board remains mindful of the uncertainty arising from the impact of new variants of COVID and, as the majority of the Group’s revenues are in dollars, the impact of sterling/dollar movements in any unhedged income, we believe that the Group is well positioned and look forward to the current year with confidence. There is sufficient strength and demand returning to shipping markets to support the Board’s expectations for a stronger year as global trading patterns return to pre-COVID levels.

I am looking forward to helping develop the business and taking further steps in our growth strategy as the year progresses.

Nigel Payne


2 June 2021

Review of Operations

The year started with significant uncertainty and volatility in the shipping markets, coupled with the challenges of operating under restrictions imposed by COVID. The trading results for the year are an improvement on our expectations set in that environment and contain some strong performances. Despite a strong start to the year, the Tanker markets were weak in the second half and revenues fell as a result, in what is the Group’s single biggest revenue class, although not as much as we initially feared. Dry Cargo revenues also fell, due to the sharp slowdown seen in Chinese imports at the start of the pandemic, but recovered strongly toward the end of the year. These falls were partially offset by stronger performances in Sale and Purchase and Securities, especially in the final months of the year.

Revenues in Braemar Naves, the Financial Division, were in line with the previous year, but operating profits were impacted by increased bad debt provisions. Revenues in Cory Brothers, the Logistics Division, fell marginally due to a slowdown in import/export activities early in the year, but operating profits showed an increase due to the mix of revenue, cost savings and an increase in Brexit-related new business. 


Braemar - Shipbroking Divison

The Shipbroking Division had a strong year in the circumstances and achieved a full-year performance ahead of expectations set at the beginning of the pandemic, although revenue was £77.7m, down from £82.4m the year before. Employees adjusted well to home working for long periods and there has been a positive effect on our inter-office communication now that a full return to offices is in prospect. Underlying operating profits were £10.1m, down from £11.8m the previous year. Lower travel and entertaining expenditure helped reduce the impact of the decline in revenue although there were higher costs of an investment nature and the deferred share charge was also increased.

Those costs of an investment nature include the sign-on costs for the new clean fuels team in Geneva and other costs related to the establishment the new office there. The costs are charged to the income statement, but are excluded from the profits used for calculation of broker bonuses. They also include the sign-on costs of new broker teams in Dry Cargo, Securities and other desks in recent years where sign-on bonuses are subject to claw backs were those brokers to leave and are spread over the period of the claw back. The total was £1.7m (2020: £1m).

The majority of revenue is earned in US Dollars and on constant currency basis compared to the prior year, revenue would have been circa £79m with a marginally improved underlying operating profit. The forward order book of revenue that has been contracted but not yet recognised at 1 March 2021 was $43.3m (2020: $49.7m), a decline resulting from the very strong shipping market at the end of the previous year which wasn’t replicated. The order book has increased since the year-end to $50.5m at the end of May 2021.


The Tankers desk is the single biggest desk within Braemar’s operations, mainly dealing with chartering of deep-sea tankers for the transportation of crude oil and refined products. It was the driver of the strong revenue growth in the prior year, but experienced a slow second half this year when the northern hemisphere winter didn’t lead to the usual higher seasonal demand. As a result, revenues fell by 16%.

The financial year started with unusual strength and volatility in the tanker market caused by the sharp COVID-related decline in oil and refined product demand. This had eased off by the end of April as the strong contango in forward oil prices evaporated. By June, the 80+ strong fleet of oil tankers tied up storing unwanted oil began to redeliver into the spot market. That coincided with the lowest levels of OPEC oil production seen in many years as the burgeoning global oil stocks dampened efforts to shore up oil prices. The combination of low oil exports and fleet growth set the tanker market on a downward spiral that meant earnings from chartering for the vessel owners declined markedly by August 2020. The small seasonal recovery in the fourth quarter of 2020 was short-lived and demand for the largest crude oil tankers, the VLCCs, quickly descended into one of the weakest markets for many years. The market has largely remained that way with successive waves of COVID-related lockdowns keeping a tight lid on oil production in the Middle East and Russia, and weak oil prices discouraging shale production in the USA. Smaller tanker classes, Suezmaxes and Aframaxes, fared marginally better, regaining some strength during the first quarter of 2021 before easing back in April. Product tankers were also offered some protection from the exceptionally weak oil demand in early 2021 as oil refinery closures, notably in OECD countries, triggered import substitution.

The addition of a new clean fuels team in Geneva during the year has strengthened the reach across that market and has augmented the resources already in London and Dubai and enabled further expansion in Singapore. Geneva is home to many of the largest commodity traders and the new office located there will enable further investment and expansion of coverage.

Specialised Tankers and Gas

The Specialised desk covers the Chemicals, small product tankers, US Flag vessels and barges, Petrochemical Gas, LPG and LNG markets. This desk has seen significant investment and revenue growth in recent years. However, it was subject to similar COVID-related impact to the main Tankers desk, although not on the same scale, and therefore revenue fell by 6%.

After a strong first half, the combined effect of significantly reduced European petroleum demand and patchy chemical volumes made for a year of two halves for the desk.  The year saw consolidation of ownership of the Chemical fleet into pools and through acquisition and as a consequence the desk worked on growing market share and developing new markets.

There has been an investment in the Houston office with additional analytical resource for the US Flag and Barges market where there are opportunities to grow further. This has allowed expansion into the US asphalt market and created opportunities to promote sale and purchase capability on top of existing chartering activity as well as strengthening client relationships.

The LPG transportation market showed extreme volatility with rates being impacted by product price arbitrage between the US Gulf and the Far East and tight vessel availability due to heavy drydocking schedules. Confidence in the future market for LPG transportation is high with demand for new Dual Fuel large carriers as the owners and traders look to the new cleaner propulsion technology. Consolidation of ownership has also been seen in the Petrochemical Gas market, in a year that saw production challenges and high unpredictability.

LNG carrier rates also saw historical highs over the 2020/21 winter for short term charters in what is becoming a better supplied and more liquid market. The year also saw delivery of a second new build vessel allied to a long-term multi-year charter as well as some second-hand sale and purchase transactions, in what is being seen as a more buoyant market.

Dry Cargo

The Dry Cargo market was one of the first hit by the COVID pandemic and although there was a recovery later in the year, revenues fell for the year as a whole by 14%. The financial year began amid disruption from the pandemic, which caused a temporary slowdown in cargo volumes and slump in freight rates, mainly due to significant falls in Chinese imports. However, China’s economy recovered from the pandemic quickly, underpinned by raw material-intensive stimulus measures. Industrial activity in China bounced back to pre-pandemic levels by mid-2020, pushing market rates back to the five-year highs seen the previous year as heightened demand for iron ore coincided with easing of supply bottlenecks from Brazil.

More recently, as the global economic recovery has gathered pace, dry bulk volumes have continued to grow, pushing rates to their highest levels in ten years. This boost has been seen across the majority of dry bulk cargoes, with all vessel sizes enjoying a surge in demand, which has continued unabated since the year-end with the Baltic Dry Index seeing new ten-year highs during April 2021.

Additions to the Dry Cargo teams have been made in London and Singapore, and as part of the opening of a new office in Geneva, despite the challenging landscape of the pandemic. Focus on growth of market share and diversification into new markets continues and the benefit of the strength of the Braemar securities operation in this market supports this drive.

Sale and Purchase and Projects

The Sale and Purchase desk had another successful year with increased activity in all sectors, especially with respect to new building in the tankers sector. Revenues grew by 26%. The year saw multiple new building contracts for the largest class of tanker, VLCCs, at the largest shipyard in the world, which added to the forward order book. Revenues in this area also increased during the year due to long-term charters connected to the new build projects and were well ahead of our expectations despite lower levels of market activity.

There was also significant success in selling second-hand tankers at higher price levels at the beginning of the year due to the rise in spot charter rates in the second half of 2019 and first half of 2020. The subsequent slow-down in the tanker market in the second half of the year saw the sale and purchase activity decline as well. However, the year-end was marked with the well-publicised increase in both dry cargo and container freight rates, which stimulated the second-hand market for bulkers and container vessels across the board. On the back of this, the desk had a strong finish to the year with much higher transaction volumes.


Despite the obvious disruptions of last year and perhaps because of the market volatility that was caused, the year was a good one for the Securities desk and saw growth of 16% in revenue. All desks were fully operational throughout lockdown and were able to provide the services needed to their clients.  Strategic hires and a strong market in Dry Cargo Freight Forward Agreements (‘FFA’) saw revenue double in that market. The strategic technology investment with Zuma Labs has delivered a very well-received platform for price discovery and execution, initially in the Dry FFA market, which contributed to the strong revenue growth. The technology is now being rolled out across various other products within the Group. The long-standing partnership with the GFI Group on Wet Tanker FFAs continues to deliver strong and consistent profits. The current year will see new products added and plans to build market share as a result. 


The Offshore desk had a difficult year on the back of the fall in oil demand and offshore exploration and production activity and revenue fell by 35% as a consequence. The recruitment of new personnel in Singapore with the capability to focus on subsea and renewables, as well as oil and gas, has started to gain some traction, but the main source of historic revenues has been the North Sea where activity levels saw significant declines. The restructuring and refocus of the desk away from the North Sea and oil and gas and onto renewables has been accelerated as a result into what is expected to be a strong growth area in the future.


Braemar - Financial Division

The Financial Division, Braemar Naves, is headquartered in Hamburg with a smaller presence in London and Singapore and provides advisory corporate finance services to investors and lenders in the shipping industry. Revenue for the year was £6m, a small increase from the previous year, but underlying operating profit was marginally lower due to an increase in bad debt provisions. Thanks to its broad spectrum of advisory services, the Division demonstrated its resilience to adverse market circumstances by effectively repeating last year’s results, despite business travel being very difficult throughout the entire year.

At the beginning of the financial year, the business suffered from a few European financing projects evaporating in the beginning of the COVID pandemic, whereas the Singaporean office managed to conclude the acquisition financing of second-hand vessels by bringing in Japanese lease capital. The shortfall of European financing mandates was replaced by an unexpected increased restructuring activity in the summer of 2020 where two restructurings were concluded in Greece. Later in the year, refinancing activity came back into focus and a large restructuring-related refinancing project was concluded, which had been under way for more than 18 months. Several clients also bought back and refinanced their loans with German banks, international lenders and PE Funds with the advisory support of Braemar Naves.

In the second half of the year, the scope of our business was diversified further by commencing M&A mandates in transhipment, heavy lift and ultra-high-power batteries for the maritime and aerospace sector. At the very end of the financial year, Braemar Naves managed to take advantage of the boom in container shipping by successfully selling container ships for clients with whom they had previously been involved in the loan restructuring.  Braemar Naves also started supporting a long-standing client entering the container box leasing market with a large acquisition, which was successfully concluded in the current financial year.


Braemar - Aqualis Braemar

The Logistics Division, Cory Brothers has extensive industry experience and a worldwide reputation for delivering on customers’ requirements. The business provides a high-quality service that is carried out by experienced staff based in the UK and overseas. Revenue was slightly down from the previous year at £28.1m (2020: £29.3m); however, underlying operating profit showed a 16% increase to £1.2m as a result of a lower cost base and reduced travel and entertaining expenditure.

 Port and Hub Agency

The Port Agency business services UK ports, the port of Singapore, and ports in North America and the Netherlands and has joint arrangements with a number of worldwide agency partners via the Group’s UK-based hub management business.

The majority of the Port Agency business arises from activity in UK ports where Cory Brothers has a strong presence with a total of 11 port-based offices, together with its global hub activity, which is coordinated out of the UK.  The hub business saw growth across all key clients in the financial year, in total up 8% versus the prior year.  However, the UK Port Agency operation declined by 10%, which was driven by a reduction in demand for aviation fuel and other reduced import / export volumes.

There was growth of 24% in revenues versus the prior year in the overseas operations, which at operating profit level now deliver close to half of the total for the Agency business. The strongest overseas region was in the USA, which benefitted from additional business from new customers and an increase in LPG shipments.

Liner Agency and Freight Forwarding

The liner and freight forwarding gross profit was slightly lower than prior year. However, this was entirely driven by the impact of COVID in the first half of the financial year with import activity being hit following the lockdowns in China and the reduced domestic demand in certain sectors. The Division chose not to furlough any staff and thereby maintained the service level its customers expect throughout the pandemic as well as allowing for new business development activity. As a result, the second half of the financial year saw a strong recovery, with gross profit up 10% compared to the first half as demand recovered. Momentum continued to build in the last couple of months of the financial year with Brexit driving additional business from the existing client base, as well as attracting new customers. This momentum has continued into the new financial year.

Freight rates for containers bound into Europe from Asia increased significantly as the COVID lockdowns eased and supply and demand strengthened and remained high as the new financial year began. This did initially impact some customers’ bookings, but with little sign of rates softening bookings have now recovered, the impact of which will inevitably feed through to consumer price inflation.



The financial year saw AqualisBraemar complete the acquisition of LOC Group to form AqualisBraemarLOC, an energy and marine consulting business with nearly twice the number of consultants over 39 countries. The acquisition was partially funded by a rights issue that saw the equity interest held by Braemar fall from 27.3% to 20.8%. Revenues and operating profits grew on the back of this acquisition and good progress on the development of the original group that was formed by the merger of Aqualis ASA and the Braemar Technical Services Division in June 2019.

The Board took the opportunity to sell 9.6m shares (around one half of its interest) in AqualisBraemar in January 2021 to satisfy strong demand for the shares on the back of the acquisition in order to reduce net bank debt. The remaining shares were then sold after the balance sheet date generating net receipts of £7.3m to further reduce bank debt. The Group’s interest in AqualisBraemar following the sale of these shares is limited to 1m warrants that are expected to vest in June 2021.

Financial Review

Resilient performance in the face of difficult trading conditions

A strong year for the Shipbroking Division in the circumstances and significantly improved margins in the Logistics Division are evident in the increased underlying operating profit from continuing operations delivered during the year.

Braemar - Summary Income Statement 2021


Statutory operating results improved, with operating profit increasing to £10.5m from £7.7m as a result of the sale of AqualisBraemar shares and reduced acquisition-related and restructuring costs. The underlying measure fell to £8.9m from £11m as a result of lower Shipbroking revenues, higher central and investment type costs. The net impact of acquisition-related items are separately identified as specific items and have decreased from £2.4m to £1.2m. There was an overall non-trading profit related to the holding of AqualisBraemar shares of £3.1m compared to £0.4m in the prior year as shown in Note 8. Losses from discontinued operations were £2.5m (2020: £2.3m) of which £1.7m related to trading losses in the Engineering Division, Wavespec. Reported profits for the year were £5.1m compared to £4.0m in the previous year.

Direct and operating costs

Cost of sales mainly comprise freight and haulage costs incurred in the Logistics Division where margins have remained fairly constant over the year. Operating costs reduced due to lower levels of travel and entertaining expenditure and employee bonuses in the Shipbroking Division being partially offset by increases in the costs of new broker teams, IT and central costs. Staff costs have also been reduced temporarily in Singapore and Australia by certain government grants totalling £0.9m as described in Note 3.

Specific items

We have separately identified certain items that we do not consider to be part of the ongoing trade of the Group. These significant items are material in both size and/or nature and we believe may distort understanding of the underlying performance of the business. These are summarised below:

Acquisition and disposal related expenditure

We have accounted for £1.2m (2020: £2.4m) acquisition-related charges during the year, for the acquisitions of NAVES Corporate Finance GmbH and Atlantic Brokers Holdings Limited. Of these acquisition-related specific items, £1.9m was paid during the period in cash.

Of the total charge of £1.2m, the Group incurred £0.8m of costs which are directly linked to the acquisition of Braemar Naves (2020: £1.2m). These include £0.9m of post-acquisition consideration payable to certain sellers under the terms of the acquisition agreement. The acquisition agreement included substantial payments to the working vendors, conditional on their continuing employment, some of which were related to the profitability of the Financial Division during the first three years of ownership.

Costs incurred on the Braemar Atlantic acquisition were £0.3m (2020: £1.1m) of post-acquisition consideration payable to certain sellers under the terms of the acquisition agreement.

There are also several non-trading specific items relating to the holding of AqualisBraemar shares and warrants totalling a net profit of £3.1m. In the prior year accounts, there was a credit of £0.4m relating to an increase in the carrying value of the warrants, which reversed in the year as a result of COVID-related deteriorating forecasts in their business. During the year, AqualisBraemar acquired the LOC Group to form AqualisBraemarLOC as described in Note 18. As a result of the associated rights issue, the Group’s shareholding was diluted to 20.8% of the enlarged Group, but the transaction also resulted in a gain of £0.8m in the book value of that holding following the completion of the acquisition. In January 2021, the Group sold 9.6m shares representing around 10.4% of the AqualisBraemarLOC share capital resulting in a gain of £2.2m. These items are described in more detail in Note 8.

Discontinued operations

A decision was taken in August 2020 to dispose of the Group’s Engineering Division, Wavespec, and therefore it has been treated as a discontinued operation. Consequently, the Wavespec results do not form part of the Group’s underlying performance. Comparative periods have been restated to reflect consistent reporting between periods. In the prior year, the results of the three business units of the former Braemar Technical Services Division that were sold in June 2019 were also classified in this way.

The discontinued operations made a total post-tax loss of £2.5m during the period of ownership in the year of which £1.7m relates to trading losses and the balance to certain specific sale-related items as described in Note 9. In the prior year, a loss of £2.3m was reported, of which £1.4m relates to the trading losses made by Wavespec and £0.9m relates to the disposal of the Technical Services Division business units.

Other specific items

In the prior year, there was an aggregate charge of £1.3m relating to the one-off costs of a restructuring program in the Logistics Division and to Board changes during the year.

Share of associate profit for the period

The reported share of associate profit for the period relates to the ownership of shares in AqualisBraemar and comprises the Group’s share of trading profits of £0.3m (2020: (£0.3)m) and the movement in fair value of contingent consideration of £0.1m (2020: £0.7m), which is treated as a specific item and not part of underlying profits. Dividends of £0.6m (2020: £nil) were paid by AqualisBraemar during the year.

Finance costs

The net finance cost for the year of £1.5m (2020: £1.9m) reflects the cost of working capital associated with the revolving credit facility held with HSBC, the convertible loan notes associated with the acquisition of Braemar Naves and the interest charge associated with right of use assets under IFRS 16. £1.1m has been attributed to underlying operations (2020: £1.4m), including £0.4m for the IFRS 16 charge (2020: £0.4m), and £0.4m to the funding of the Braemar Naves acquisition (2020 £0.5m).

Capital expenditure

Total capital expenditure was £2.4m (2020: £3.9m). The most significant item of capital expenditure relates to the treatment of office leases under IFRS 16 whereby the lease is treated as an asset addition. These lease additions totalled £1.2m in the year (2020: £2.2m) and do not relate to cash payments in the year. The balance relates to capitalised expenditure on computer software of £0.6m (2020: £0.6m) and other expenditure on fixtures and fittings and leasehold improvements of £0.5m (2020: £1.1m).

Balance sheet

Net assets at 28 February 2021 were £63.6m (2020: £57.5m). The year saw a reduction in gross trade receivables to £27.3m from £31.9m at the previous year-end after strong cash collections. The proportion of trade receivables provided against was broadly in line with the previous year.

Borrowings and cash

At the balance sheet date, the Group had a revolving credit facility available to it of £35.0m with HSBC. The Group also has access to a global cash pooling facility in the UK, Germany and Singapore which allows efficient management of liquidity between our main regional hubs. The Group operates a pooling arrangement for cash management purposes and at the end of the year the Group had net debt across those pools of £8.9m (2020: £20m).

The HSBC facility was extended in May 2021 from its original termination date of September 2022 by one year to September 2023. The facility available within the extended facility was reduced to £30m with amended covenant ratios in the light of the reduced requirements following the sale of AqualisBraemar shares both before and after the year-end.

Retirement benefits

The Group has a defined benefit pension scheme which was closed to new members during the 2015/16 financial year. The scheme has a net liability of £3.8m (2020: £3.7m), which is recorded on the balance sheet at 28 February 2021. The agreed annual scheme-specific funding since the triennial valuation as at March 2014 was a cash contribution of £0.5m. The latest triennial funding valuation as at March 2020 was carried out during the year and the result was an unchanged annual employer cash contribution of £0.5m, which was agreed with the trustees and is being paid in monthly instalments.

Convertible loan notes and deferred consideration

In total, the Group has committed to the issue of up to €24.0m convertible loan note instruments in respect of the acquisition of Braemar Naves. These convertible loan note instruments are unsecured, unlisted and non-transferable. The notes are Euro denominated and carry a 3% per annum coupon. Each tranche is redeemable on or after two years from the date of issue, by the Group or by the individual holder. The conversion prices were fixed at 390.3p for management sellers and 450.3p for non-management sellers.

The fair value of convertible instruments and deferred consideration as at 28 February 2021 was £10.4m (2020: £10.5m). Of the total €24m, a total of only €18.3m will now be issued after the measurement of the final earn out in September 2020 as described in Note 14. Agreement has been reached with the holders of the loan notes that the earliest redemption dates of the outstanding balance (including amounts to be satisfied by the issue of new shares) will be as follows:











The documents for this agreement are in agreed form and will be executed immediately following the announcement of the preliminary results for the year and the parties are free from the close period restrictions.

Foreign exchange

The US dollar exchange rate has moved from US$1.28/£1 at the start of the year to US$1.39/£1 at the end of the year. A significant proportion of the Group’s revenue is earned in US dollars. In order to protect the future sterling value of those revenues, at 28 February 2021, the Group held forward currency contracts to sell US$49m at an average rate of US$1.33/£1.


The Group’s underlying effective tax rate in relation to continuing operations in 2020/21 was a charge of 19.2% (2020: credit of 1.0%), which is broadly in line with the current UK tax rate. The prior year credit arose as a result of overprovisions in earlier years and deferred tax credits arising on the creation of IFRS 16 lease assets.

Alternative profit measures (‘APMs’)

Braemar uses APMs as key financial indicators to assess the underlying performance of the Group. Management considers the APMs used by the Group to better reflect business performance and provide useful information to investors and other interested parties. In particular, we have separated the impact of individually material capital transactions, such as acquisitions and disposals, from ongoing trading activity to allow a focus on ongoing operational performance.

Our APMs include underlying operating profit and underlying earnings per share. Our prior year APMs have been restated to reflect the reclassification of discontinued operations noted above.

 Capital management

The Group manages its capital structure and adjusts it in response to changes in economic conditions and its capital needs. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares and debt instruments. The Group has a policy of maintaining positive cash balances whenever possible, which can be supported by short-term use of its revolving credit facility. This is drawn down as required to provide cover against the peaks and troughs in our working capital requirements.

ESOP Trust

During the previous year the Company requested that SG Kleinwort Hambros Trust Company (CI) Ltd, as Trustee of the Company’s ESOP Trust, purchase shares in Braemar Shipping Services Plc. During the year a total of 540,000 shares in the Company were purchased by the Trustee; as a result at 28 February 2021 the ESOP held 525,837 shares (2020: 348,400 shares).


The Directors are recommending for approval at the AGM on 20 July 2021 a final dividend of 5p. No interim dividend was paid, nor was a final dividend paid for the previous year due to the uncertainties created by the COVID pandemic. This total dividend of 5p for the year is covered 3.9 times by the underlying earnings per share of 19.4p.

Going concern

Particular care has been taken in preparing these accounts to the going concern review and viability statement due to the ongoing COVID impact on global trade. However, the strong cash flows exhibited during the year and the sale of shares in AqualisBraemar have meant that the Group is in a much stronger position than at the previous year-end. This balance sheet strength has been increased further since year-end with a further sale of the remaining AqualisBraemar shares. Nevertheless, careful and frequent monitoring of cash forecasts and client payments will be maintained to ensure this situation continues.

Nick Stone

Group Operating Officer and Finance Director

2 June 2021


The year ended 29 February 2020 has been restated for the presentation of Engineering as discontinued operations.

The accompanying notes form an integral part of this financial information.


*The recycling of foreign exchange reserve relates to the dilution and partial disposal of the Group’s investment in AqualisBraemar LOC ASA. See Note 9. 

The accompanying notes form an integral part of this financial information.


Braemar Balance sheet

Braemar Balance sheet Equity

The accompanying notes form an integral part of this financial information.


Cash flows from financing activities Braemar

The year ended 29 February 2020 has been restated for the presentation of Engineering as discontinued operations.

The accompanying notes form an integral part of this financial information.


The accompanying notes form an integral part of this financial information.


Note 1 – General information

The Group and Company financial statements of Braemar Shipping Services Plc for the year ended 28 February 2021 were authorised for issue in accordance with a resolution of the Directors on 2 June 2021. Braemar Shipping Services Plc is a public limited company incorporated in England and Wales.

The term “Company” refers to Braemar Shipping Services Plc and “Group” refers to the Company and all its subsidiary undertakings and the Employee Share Ownership Plan trust.

The financial information set out above does not constitute the Group’s statutory accounts for the years ended 28 February 2021 or 29 February 2020 but is derived from those accounts.  Statutory accounts for 2020 have been delivered to the registrar of companies, and those for 2021 will be delivered in due course.  The auditor has reported on those accounts; their reports were (i) unqualified; (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report; and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Note 2 – Basis of preparation and forward-looking statements

Whilst the financial information included in this preliminary announcement has been prepared in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union (“IFRSs”).  The Group expects to distribute full accounts that comply with IFRSs as adopted by the European Union and in accordance with the Companies Act 2006.

The financial information has been prepared under the historic cost convention except for items measured at fair value as set out in the accounting policies below.

Certain statements in the Annual Report are forward-looking. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, we can give no assurance that these expectations will prove to have been correct. These statements involve risks and uncertainties, so actual results may differ materially from those expressed or implied by these forward-looking statements. We undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

The Group financial information is presented in pounds sterling and all values are rounded to the nearest thousand pounds (£’000) except where otherwise indicated.

The Group and Company Financial Statements have been prepared on a going concern basis. In reaching this conclusion regarding the going concern assumption, the Directors considered cash flow forecasts for a period of greater than twelve months from the date of signing of these Financial Statements.

The cash flow forecasts have been prepared by the Directors having considered the impact of the COVID pandemic. Although the Group has faced considerable operational challenges as a result of the pandemic, the Group’s underlying financial performance from continuing operations for the year is ahead of management’s expectations that were set at the beginning of the pandemic. Therefore, the Directors have concluded that COVID is unlikely to have a significantly adverse impact on the Group’s future cashflows.

As at 28 February 2021 the Group’s net debt1 was £8.9 million with available headroom in the £35.0 million revolving credit facility (“RCF”) of £12.0 million. As at 31 May 2021 net debt had decreased by £2.9 million to £6.0 million with available headroom in the extended and amended £30.0 million RCF of £11.0 million and cash balances of £9.8 million.

During the year the Group disposed of 9,600,000 shares in AqualisBraemar LOC ASA for net cash proceeds of £6.0 million which significantly reduced net debt at 28 February 2021. On 19 May 2021 the Group disposed of its remaining 9,640,621 shares for net cash proceeds of £7.2 million which significantly offset the annual bonus payments made in May. The Group’s interest in AqualisBraemar LOC ASA is now limited to its holding of 6,523,977 performance-based warrants, of which one million are expected to vest shortly.

AqualisBraemar LOC ASA net cash

The RCF has a number of financial covenant tests that must be adhered to. During the year the financial covenant relating to debt to twelve months’ rolling EBITDA was relaxed. The ratio was increased from 3x to 4x until May 2021, reducing to 3.5x until May 2022 and returning to 3x until the facility expires in September 2022. At 31 May 2021 and for the year ended 28 February 2021 the Group met all financial covenant tests.

On 25 May 2021 the Group completed an extension and amendment to the RCF. The RCF facility limit was reduced from £35.0 million to £30.0 million while the accordion limit was increased from £5.0 million to £10.0 million. Drawdown of the accordion facility is subject to additional credit approval. The EBITDA covenant is set at 3.0x until January 2022, and 2.5x until the facility expires in September 2023. At 31 May 2021 and for the year ended 28 February 2021 the Group met all financial covenant tests.

The cash flow forecasts assessed the ability of the Group to operate both within the revised covenants and the facility headroom, and included a number of downside sensitivities, including a reverse stress test scenario. The reverse stress test performed ascertained the point at which the covenants would be breached in respect of the key assumption of forecast revenue decline. The Directors considered from a review of the forecast assumptions and principal risks that revenue was the most sensitive assumption in the models. The reverse stress test indicated that the business, alongside certain mitigating actions which are fully in control of the Directors, would be capable of withstanding approximately a 29% reduction in budgeted revenue in the base case assumptions from June 2021 through to June 2022. In light of current trading, forecasts and the Group’s performance since the COVID pandemic begun in March 2020, the Directors having assessed this downturn in revenue and concluded the likelihood of such a reduction to be remote, such that it does not impact the basis of preparation of the Financial Statements and there is no material uncertainty in this regard.

In reaching this conclusion, the Directors have considered forward-looking market data in respect of the shipping market, the forward order book within the Shipbroking Division, the resilience within the Logistics Division owing to the flexible cost model and the nature of the clients supplying essential goods and the potential within the Financial Division, should a global recession become apparent.

The Directors consider revenue as the key assumption in the Group’s forecasts as there is a low level of cost of sales, other than in the Freight Forwarding business within its Logistics Division, which generates a low gross margin. The remaining costs are largely fixed or made up of discretionary bonuses, predominately within the Shipbroking Division and which are directly linked to profitability. Should the need arise, further mitigating actions would be available to reduce the size of the workforce or defer bonus payments to reflect the downturn in revenue.

Over the course of COVID pandemic the Group has faced unprecedented challenges and has operated successfully despite the various lockdown restrictions. The Group has the benefit of this experience when assessing how COVID may impact future trading but some uncertainty remains over the outlook, and revisions to trade projections are possible. The Directors are, however, comfortable that under the reverse stress test scenarios we have run, the Group could withstand a decline in revenue and continue to operate within the available banking facilities. Accordingly, the Group and the Company continues to adopt the going concern basis in preparing the Financial Statements.

Note 3 – Operating profit

Operating profit represents the results from operations before finance income and costs, share of profit/(loss) in associate, taxation and discontinued operations.

This is stated after charging/(crediting):

Braemar - operating profit

A total of £0.9 million (2020: £nil) has been netted against other operating costs. £0.5 million relates to a grant from the Singaporean government for retaining all Singaporean locals during the COVID pandemic. £0.4 million relates to a grant from the Australian government for maintaining the wages of Australian employees above a certain threshold during the COVID pandemic. All criteria for the retention of both grants has been satisfied and therefore the full amount has been recognised in the Income Statement.

Note 4 – Segmental information and revenue

Management has determined the operating segments for the Group based on the reports reviewed by the Chief Operating Decision Maker to make strategic decisions. The Chief Operating Decision Maker is the Group’s Board of Directors.

The Board considers the business from both service line and geographic perspectives.

The Group was previously organised into four operating divisions: Shipbroking, Financial, Logistics and Engineering. Following the decision to dispose of the Engineering business the Group’s continuing operations are organised into three operating divisions: Shipbroking, Financial and Logistics while the results of the Engineering business are presented as discontinued operations.

Central costs relate to Board costs and other costs associated with the Group’s listing on the London Stock Exchange. All segments meet the quantitative thresholds required by IFRS 8 as reportable segments.

Underlying operating profit is defined as operating profit for continuing activities before restructuring costs, gain on disposal of investment and acquisition and disposal-related items.

Sales between and within business segments are carried out on an arm’s-length basis.

Capital expenditure comprises additions to property, plant and equipment, goodwill and other intangibles including additions resulting from business acquisitions.

Segment assets consist primarily of intangible assets (including goodwill), property, plant and equipment, receivables and other assets. Receivables for taxes, cash and cash equivalents and investments have been excluded. Segment liabilities relate to the operating activities and exclude liabilities for taxes and borrowings.

Corporate assets consist primarily of property, plant and equipment and receivables. Corporate liabilities relate to deferred consideration and lease liabilities.

The segmental information provided to the Board for reportable segments for the year ended 28 February 2021 is as follows:

Braemar - reportable segments for the year ended 28 February 2021

b) Geographical segment – by origin

The Group manages its business segments on a global basis. The operation’s main geographical area and also the home country of the Company is the United Kingdom.

Geographical information determined by location of customers is set out below:

c) Revenue analysis

The Group disaggregates revenue into Shipbroking, Financial and Logistics in line with the segmental information presented above. All revenue arises from the rendering of services. There is no single customer that contributes greater than 10% of the Group’s revenue.

Remaining performance obligations

The Group enters into some contracts, primarily in the Shipbroking Division, which are for a duration longer than twelve months and where the Group has outstanding performance obligations on which revenue has not yet been recognised. The amount of revenue that will be recognised in future periods on these contracts when those remaining performance obligations will be satisfied is set out below:

Forward order book

Braemar - Forward order book

Note 5 – Specific items

The following is a summary of specific items incurred. Each item has a material impact on the reported results for the year and is not expected to be incurred on an ongoing basis and, as such, will not form part of the underlying profit in future years.

Braemar - Other operating costs

Other operating costs

In the current year a loss of £0.3m has been recognised in other operating costs. £0.2 million is an impairment to a right-of-use asset in respect of a London office which will be vacated by AqualisBraemar LOC ASA and £52,000 is a loss on disposal in respect of the Group subletting a portion of its Singapore office space to AqualisBraemar LOC ASA. In the prior year £0.5 million of costs were incurred in relation to the former Chief Executive left the Board in July 2019 and a profit on disposal of £22,000 was recognised in the prior year in respect off the sub-let of certain office space.

Acquisition and disposal related items

The Group received total income of £1.9 million (2020: expenditure of £2.0 million) in respect of acquisition related items.

£0.1 million (2020: £0.2 million) was incurred in relation to the restricted share plan implemented to retain key staff following the merger between Braemar Shipping Services Plc and ACM Shipping plc. This restricted share plan expired in July 2020.

Expenditure of £0.9 million (2020: £1.2 million) is directly linked to the acquisition of NAVES Corporate Finance GmbH. This includes charges of £0.1 million related to foreign exchange translation of euro liabilities plus charges of £0.3 million in respect of interest and £0.6 million of post-acquisition remuneration payable to certain vendors under the terms of the acquisition agreement. This agreement has a three-year earn-out period which ended on 31 August 2020, over which the contingent costs of the acquisition will be charged to the Income Statement depending on the earnings of the Financial Division during that period. A credit of £0.1 million is included in respect of a reimbursement from the sellers of certain expenses incurred by the Financial division prior to acquisition.

Expenditure of £0.3 million (2020: £1.1 million) is directly linked to the acquisition of Atlantic Brokers Holdings Limited in respect of incentive payments to working sellers. The cash payment was made in the year to 28 February 2018 but is subject to clawback provisions if the working sellers were to leave employment of the Group before 28 February 2021 and, as such, the costs are charged to the Income Statement over that clawback period.

The Group recognised a loss of £0.4 million on the fair value movement of warrants.

The Group recognised a gain of £0.8 million on a rights issue of AqualisBraemar LOC ASA as well as a gain of £2.2 million on the disposal of 9,600,000 shares in AqualisBraemar LOC ASA. A further gain of £0.5 million was recognised in respect of amounts recycled from other comprehensive income and foreign currency translation reserves both at the date of dilution and the date of disposal. See Note 9.

Other specific items

In the current year the Group did not incur any restructuring costs. In the prior year costs of £0.9 million were incurred in the Logistics Division as a result of a restructuring programme.

The Group recognised specific income of £0.1 million (2020: £0.7 million) in relation to its investment in AqualisBraemar LOC ASA. This is the Group’s share of the fair value movement of contingent consideration due from AqualisBraemar LOC ASA. The recognition of this investment is a one-off event and is therefore treated as a specific item. In the prior year a gain of £0.8 million was recognised in relation to the gain on bargain purchase on initial recognition of the investment.

£0.4 million (2020: £0.5 million) of interest charges related to the Group’s revolving credit facility have been included in finance costs. These charges relate to interest payable on tranches of the revolving credit facility that were used to fund the acquisition of NAVES Corporate Finance GmbH.

A tax credit of £0.2 million (2020: £0.2 million) has been recognised in respect of specific items which are allowable for UK corporation tax purposes.

The Group recognised a further £1.0 million (2020: £0.9 million) in relation to discontinued operations. See Note 6.

Note 6 – Discontinued operations

In August 2020 the Board announced its intention to dispose of Wavespec, the Group’s Engineering Division and engaged a corporate finance advisor to conduct a sale process. Following the Group’s decision to dispose of the Engineering Division, the results of the current and comparative periods have been re-presented to include the results of the Engineering Division as discontinued operations. Previously losses from discontinued operations comprised the results of the Offshore, Adjusting and Marine product lines which were divested to Aqualis ASA on 21 June 2019. 

Subsequent to the year-end, the sale of the Engineering Division completed for a maximum consideration of £2.6 million. See Note 11. The consideration will be satisfied by the issuance of a promissory note with a maturity date of 31 March 2026, the fair value less cost to sell is based on the net present value of the promissory note less legal and professional fees directly associated with the transaction and intercompany receivables which will be waived on completion of the transaction.

The major classes of assets and liabilities comprising the operations held for sale are as follows:

The major classes of assets and liabilities comprising the operations held for sale

As any potential ordinary shares would have the effect of increasing a loss per share, they have been treated as anti-dilutive in the current and prior year.

During the year the discontinued operations had net operating cash flows of £1.0 million (2020: £0.9 million). There were no cash outflows relating to financing or investing activities (2020: £nil).

Note 7 – Dividends

Amounts recognised as distributions to equity holders in the year:

The right to receive dividends on the shares held in the ESOP has been waived. The dividend saving through the waiver is £nil (2020: £87,000).

Braemar - Dividends

The distributable reserves of the Company at 28 February 2021 were £2.73 million (2020: £2.22 million).

Note 8 – Earnings per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, excluding 588,127 ordinary shares held by the Employee Share Ownership Plan (2020: 410,690 shares) which are treated as cancelled.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive ordinary shares. The Group has one class of dilutive ordinary shares, being those options granted to employees where the exercise price is less than the average market price of the Company’s ordinary shares during the year. The Group has other potential dilutive ordinary shares, including convertible loan notes, however these are not currently dilutive because the exercise price is less that the Group’s current share price.

Braemar - Total operations costs

The weighted average number of shares used in basic earnings per share is 31,366,379 (2020: 31,176,947).

The weighted average number of shares used in the diluted earnings per share is 37,914,547 (2020: 34,494,250) after adjusting for the effect of 6,548,168 (2020: 3,317,303) dilutive share options.

Note 9 – Investment in associate

On 29 October 2020 the Group subscribed for 1,000 ordinary shares in Zuma Labs Limited. Zuma Labs Limited is a private company incorporated in England and Wales and its registered address is Kemp House, 160 City Road, London, United Kingdom, EC1V 2NX. Zuma Labs Limited has one share class and each share carries one vote. At 28 February 2021 the Group’s shareholding was 1,000 shares, which equates to 9% of Zuma Lab Limited’s share capital and 9% of voting rights. The Group has representation on the board of Zuma Labs Limited and has a commitment to purchase further shares which will result in the Group owning more that 20% of Zuma Labs Limited’s share capital. Based on this the Group consider that they have the power to exercise significant influence for the year ended 28 February 2021.

The investment in Zuma Labs Limited has been accounted for using the equity method. The movement post acquisition is immaterial. 

On 21 June 2019 the Group recognised an investment in associate as a result of the divestment of the Offshore, Marine and Adjusting product lines in return for a significant shareholding in AqualisBraemar LOC ASA.

On completion, 14,865,621 ordinary shares in AqualisBraemar LOC ASA were issued to the Group. Warrants were also issued to the Group, the vesting of which was subject to performance conditions over a two-year period. On 16 July 2019 the Group acquired a further 4,375,000 shares through a private placement at a cost of £1.6 million. The Group’s then Executive Chairman was appointed to the Board of AqualisBraemar LOC ASA on completion of the transaction.

The Group are entitled to representation on the Board of AqualisBraemar LOC for as long as the Group’s shareholding remains more than 10.0%. Based on this the Group consider that they have the power to exercise significant influence for the year ended 28 February 2021.

During the year the Group reached an agreement with AqualisBraemar LOC ASA which specified a minimum number of warrants which would vest, regardless of the performance conditions over the two-year vesting period.

AqualisBraemar LOC ASA is listed on the Oslo Børs, its principal place of business is Oslo and its registered address is Olav Vs gate 6, 0161, Oslo, Norway. AqualisBraemar LOC ASA has one share class and each share carries one vote.

On 17 December 2020 the Group’s shareholding was diluted as a result of a rights issue, resulting in a gain of £0.8m. On 28 January 2021 the Group disposed of 9,600,000 shares in AqualisBraemar LOC ASA for a profit of £2.7 million. See Note 5.

At 28 February 2021 the Group’s shareholding was 9,640,621 ordinary shares, which equates to 10.42% of AqualisBraemar ASA’s share capital and 10.42% of voting rights.

The share price of AqualisBraemar LOC ASA on 28 February 2021 was NOK 7.85. The market value of the Group’s shareholding at 28 February 2021 was £6.3 million (NOK 75.7 million). The market value of the Group’s shareholding in the prior year at 29 February 2020 was £5.9 million (NOK 71.2 million). On 19 May 2021 the Group sold its entire remaining shareholding in AqualisBraemar LOC ASA. See Note 11.

The investment in AqualisBraemar LOC ASA has been accounted for using the equity method.

Braemar: Equity Method - AqualisBraemar LOC ASA investment

In the prior year purchase price allocation (“PPA”) exercise was carried out to compare the fair value of the Group’s share of identifiable net assets in AqualisBraemar LOC ASA to the fair value of the purchase price. The notional PPA exercise resulted in a bargain purchase of £0.8 million which increased the carrying value of the investment in associate to £6.2 million. The gain on bargain purchase arises as a result of the fair value of the identifiable net assets acquired through the notional PPA exercise being greater than the cost of acquisition of the investment in AqualisBraemar LOC ASA.

A reconciliation of the book value of the 9,600,000 shares disposed of to the profit on disposal is as follows:

Braemar - reconciliation of the book value

Management have reviewed the carrying value of the investment at 28 February 2021 and do not consider this to be impaired.

IAS 28 requires the most recent financial statements of an associate are used for accounting purposes, and that coterminous information should be used unless it is impractical to do so. AqualisBraemar LOC ASA have a year end of 31 December and for practical reasons AqualisBraemar LOC ASA full year accounts will be used for the purposes of the Group’s full year reporting at 28 February with adjustments made for any significant transactions and events. For the period to 28 February 2021, the Group has included its share of the AqualisBraemar LOC ASA results to 31 December 2020. There were no other significant transactions or events between 31 December 2020 and 28 February 2021. At 31 December 2020 AqualisBraemar LOC ASA had no contingent liabilities.

The summarised financial information of AqualisBraemar LOC ASA for the period ended 31 December 2020 is as follows. These figures are taken from the annual report of AqualisBraemar LOC ASA, adjusted for any fair value adjustments but before any intercompany eliminations.

Braemar - summarised financial information of AqualisBraemar LOC ASA

The share of loss in associate recognised during the year has been adjusted for the elimination of gains and losses on transactions with AqualisBraemar ASA LOC.

Zuma Labs Limited will prepare its first set of financial statements for the year ended 31 March 2021. The Group has not recognised any share of profit or loss in Zuma Labs Limited as the amount is considered to be trivial.

Braemar - Zuma Labs limited

The revolving credit facility expires in September 2022 and has been classified as short term on that basis. The Group holds no other bank borrowings with a contractual maturity of greater than one year from the Balance Sheet date and, as such, all bank borrowings are classified as short-term.

All revolving credit facilities are drawn within Braemar Shipping Services Plc and appear in the accounts of the Company. The revolving credit facility bears interest based on LIBOR and EURIBOR.

On 1 March 2019 the Group adopted IFRS 16 “Leases” and now recognises short-term and long-term lease liabilities on the Balance Sheet.

For all borrowings, the Directors consider that the fair value of the liability is equivalent to the carrying amount.

Note 11 – Events after the reporting date

Logistics Division

On 8 March 2021 the Group signed a non-binding term sheet with Vertom UCS Holdings BV with the possibility of forming a joint venture with Cory Brothers. It is intended that the two businesses will work more closely together in the year ended 28 February 2022, with certain profit-sharing arrangements to be put in place. Depending on the success of the profit-sharing arrangement, the Group may explore a full corporate joint venture in the future.

Discontinued Operations

On 31 March 2021 the Group completed the disposal of Wavespec for consideration of £2.6 million. The consideration will be satisfied by the issuance of a promissory note with a maturity date of 31 March 2026, which is currently expected to be retained by the Company. The disposal agreement contains an obligation for the Buyer to secure the note by providing a standby letter of credit issued by an international bank with an acceptable credit rating. The disposal agreement contains an obligation for the buyer to secure the promissory note by providing a standby letter of credit issued by an international bank with an acceptable credit rating. Should the buyer fail to deliver such a letter of credit, the Group can elect to receive a sum of cash of £0.5 million from the buyer with the balance of the note of £2.135 million remaining unsecured.

Investment in AqualisBraemar LOC ASA

On 19 May 2021 the Group sold its entire remaining shareholding in AqualisBraemar LOC ASA. 9,640,261 shares were sold at a price of NOK9.0. The net proceeds were £7.2 million and the carrying value of the shares was £3.3 million, resulting in a profit on disposal of £3.9 million. Following the sale, the Group’s interest in AqualisBraemar LOC ASA is limited to its holding of 6,523,977 performance-based warrants, of which one million are expected to vest shortly.

Extension of Revolving Credit Facility

On 25 May 2021 the Group completed an extension and amendment to the RCF. The RCF facility limit was reduced from £35.0 million to £30.0 million while the accordion limit was increased from £5.0 million to £10.0 million. The EBITDA to net debt covenant is set at 3.0x until January 2022, and 2.5x until the facility expires in September 2023.

Naves Loan Note and Deferred Consideration Rescheduling

A rescheduling of deferred consideration amounts owed by the Group in relation to its acquisition of Naves in 2017 was agreed in principle in March 2021. The documents for this agreement are in agreed form and will be executed immediately following the announcement of the preliminary results for the year and the parties are free from the close period restrictions. As a result, over £2.5 million (€2.9 million), which was previously due for repayment before the end of December 2022, will be deferred to be paid no earlier than September 2025. In addition, a further amount of approximately £0.65 million (€0.75 million) will be satisfied by the issue of new ordinary shares in the capital of the Company in three tranches between September 2021 and December 2022, thereby tying in the management and extending their commitment to the Group.

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