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Having some spare cash and seeing the positive comments from Naked Trader, Rivaldo, Motley Fool,I mistakenly thought there should be a minimum 20% gain relatively quickly on the back of the results. A slight niggle were the comments posted by Le-Barone which I took ,on balance, to be those of a disgruntled ex-employee. How wrong was I.
Then a delay in the results - OK I can just about understand that. The FD going got me very nervous and I should have got
out at that point. But all seemed positive until the latest announcement.
If it really is only a £3m historic balance sheet adjustment with no impact on cash or P&L then it could surely have been resolved by a sensible discussion between auditors and the Board and deadlines would have been met.
To bring in forensic accountants signals , to me, something far more systemic. We shall see.
But for the Board to allow a share suspension to happen suggests that they really should consider their positions.
For me a lesson hard learnt. There is no such thing as easy money.
Price holding up pretty well considering there have been double the amount of sells compared to buys. I just wonder how many will hold during suspension. An investigation could potentially take a very long time to clear up.
Very strange goings-on. It appears that not only is the delay only due to a transaction which occurred from 2013-2017, but that the outcome may actually be positive for BMS as it may result in the cancellation and release of a liability!
I suspect the share price reaction, though of course reflecting damage to trust, speculation on what's still to come out etc, is overdone as it relates to something so historic. Especially if - and at present that's a bif "if"! - the £3m is all that's involved. There may be a large bounce to come if so.
This doesn't reflect well on the previous CFO's ability and perhaps explains their departure.
I note that Paul Scott on St ockopedia agrees today and has written:
Extracts:
"Sky News (which seems to be the place to go for tip-offs of deals and scandals) reported yesterday that BMS “has been told by its auditor that its accounts will not be signed off before a deadline this week”, and is “plunged into crisis” by this, which would see its shares suspended. Although I would say that late accounts are quite commonplace these days, with the effects of the pandemic still being felt by understaffed auditors.
More worryingly, Sky says that auditors BDO are unhappy about unspecified elements of the accounts, and that FRP Advisory (a restructuring/insolvency/investigations) firm had been brought in. That sounds a lot more serious than just a slight delay to signing off the numbers.
Trading update – this all sounds fine, no changes apparently, and 33% increased divi (yield is a useful 4.3%)....
...Accounts investigation – this doesn’t look material, at c.$3m, and is historic from 2013-17.
It confirms Sky’s report that FRP Advisory to assist the investigation (that won’t come cheap).....
The accounting problems seem odd considering they’re historic, and only $3m. Why get in expensive advisers, and suspend the shares, over an issue that is small? I wonder if fraud might be involved? (EDIT: this point is also mentioned by M48 in the comments below. I should emphasise we’re only speculating here, not making any accusations).
Shareholders have this week to decide whether to bail out ahead of temporary suspension, or to sit tight (and maybe even buy more, if it plunges). Based on what we’ve been told so far, this issue doesn’t look significant or material, so personally I’d be inclined to ignore it. But as always in this type of situation, we never know what else might come out of the woodwork. Overall though, Braemar looks a good, sound business, so I’d be inclined to give it the benefit of the doubt over a small, historic accounting problem."
How when I haven't or don't intend to buy or sell any shares....
The allegations you make are very serious......
What a load of rubbish! I've also spoken to them this morning and nothing of the sort!
Letting CFOs go never a good sign. This week will be difficult.
Letting CFOs never a good sign. This week will be bad.
What's the usual process now? Think they have 2 months from deadline date to submit accounts to company house before being struck off?
Auditor unable to sign off its accounts. This does not look good
Https://www.fool.co.uk/2023/06/11/3-penny-stocks-paying-rising-passive-income/
"Riding the wave of global trade
Near the top of my buy list right now is leading international shipbroker Braemar (LSE: BMS).
A shipbroker acts as a specialist intermediary between shipowners and charterers that need to transport cargo. And Braemar operates across all time zones and major shipping hubs, including Shanghai, Singapore, Mumbai, and Sao Paulo.
As well as chartering though, the firm provides expert advice in investment and risk management. So its offerings are well diversified, making its income less cyclical.
In a trading update back in March, the company announced it had achieved record revenue and profitability for the financial year ended 28 February. The shipbroker expects underlying profit of at least £20m from revenue of £150m.
That would put the stock on a bargain price-to-earnings (P/E) multiple of about six. The shares offer a dividend yield of 4.1%. The payout is healthily covered three times by anticipated earnings.
One risk worth considering is that the shipping sector will need decarbonising, which will cost billions. But Braemar also runs a carbon offsetting brokerage service, so looks very well positioned."
Le -Barone -for record never worked at bms -as from previous comments/ statements your knowledge it seems via third party conversations and you like to over state ie like 24 mnths non compete -6 mnth yes then it starts to get questionable - yes go through the other deals .I am sure Bms will answer your concerns - i will stick to the shares moving towards 400 regards
Le - Barone you may well have knowledge of the broking industry but i am not sure you have in depth knowledge of shipbroking-your statement re recent poor acquisitions i total disagree- from my point of view they were good deals and are familiar with the brokers and they will produce good income in the future -i maintain that the share will improve upwards towards 400 - yes i do have in depth knowledge of shipbroking and was a director / partner of a very successful shipbroking shop regards
Sigh :o))
No, I do not work for any of BMS's corporate brokers. I have no relation or connection to BMS. I am a purely independent stock market investor and have been so for over 20 years - as you'd know if you clicked on my name and looked at my posts. And you can deduce my views on BMS from my various posts.
Now we've established that, please answer my questions.
Looking at your history, you've posted 45 times in total on this LSE bulletin board since 2022. Every single post has been on BMS.
Can you confirm whether you've ever had any connection to BMS? Why is it you've never posted on any other company if not? Even if you do not have a direct connection, do you work for a competitor or other company in the same industry?
There you go again!
As I said, just click on my poster name and you'll see a multi-year record of postings on a huge range of companies, including those where I've sold my shares. It'll take you 5 seconds if that. If you must make such absurd statements about me (or anyone), then you just make yourself look ridiculous :o))
Yes agree with your comments - LE -BARONE has agenda -doesn’t like any other opinion other than his-regards
BMS were indeed promoted to the FTSE Small Cap Index last week as per FTSE Russell's announcement.
Changes take effect from 19th June, so it'll be interesting to see if there's any increased buying interest up to and after that date.
OT : Le Barone may or may not be correct over time as regards BMS, but the tone and nature of his posts completely invalidates any opinions he might give. Any poster who has to resort to insulting someone who merely has a different opinion is more than likely to have an agenda of one sort or another. Perhaps he might take just a few seconds to look at my posting history over the last 20 years or so to revise his views. But I don't expect him to, as that would show his posts up for what they are......
Fully aware pound/ dollar -this point has been made by bms management -and doesn’t change my view that the share price will rise as said to around 400 -and expect dividends to rise as well
In my previous shop we were able to serious income even when dollar was 1.40/45 and the market today is far stronger and likely tobe for next 2/ 3 yrs the S&P across all markets are at record levels and N/B order book are now into 2026/27 and LNG even further out-not sure your knowledge of the market or shipbroking is upto speed and the the income that can be made even if the dollar was 1.45 regards regards
Le-Barone - the market is looking good for BMS and see no reason for the shares to fall and it is far more likely that the price will move toward the 400 level. -regards
The next FTSE indexes review takes place tomorrow (Wednesday), with changes taking effect from 19th June.
It looks like BMS will be promoted to the Small Cap index, which should prompt some tracker index buying in advance of and after the promotion:
Http://www.stockchallenge.co.uk/ftse.php
Last night's fortnightly update from the Naked Trader revealed he's just bought into BMS:
"One not on the podcast is Braemar where I have bought a few.
Markets are always wary of shipping cos as they are cyclical but I couldn't quite resist what looks like a nice bargain here.
A statement is due soon, but we already know the figures which were kindly recently produced.
And they look good. There's also a decent dividend.
Fly in the ointment? Well, it's possible 325 is the ceiling as they don't like going above
there. Then again a breakout could be quite a powerful signal.
Any other downside? Could the outlook statement coming take some shine off? Who knows but the share look well supported and potential as a nice tuckaway with a yield too."
Https://www.nakedtrader.co.uk/
"The company stated that it expected to report revenue for the year of not less than £150m (2022: £101.3m), with underlying operating profit of not less than £20m (2022: £10.1m).
Cash generation had also been strong, expected to be in a net cash positive position of circa £6.9m at the end of the financial year (2022: net debt of £9.3m).
Trading in the first few weeks of the financial year started well and the board looks forward to the rest of the year with confidence.
The Equity
There are 32,924,877 shares in issue.
The Braemar Shipping Services ESOP is the largest holder with 12.03% of the equity.
Other large holders include Hargreaves Lansdown Asset Management (7.78%), Chelverton Asset Management (5.85%), Horizon Kinetics Asset Management (4.85%), Barclays Bank (Private Banking) (4.00%), Unicorn Asset Management (3.60%), and National Financial Services (2.72%).
There are three private holders of size – Quentin Soanes (3.91%), Magnus Halvorsen (3.39%) and CEO James Gundy (2.36%).
Broker’s View – 520p Valuation
Analyst Ian McInally at Cenkos Securities estimates that the year to end February 2023 will have seen sales increase to £150.5m (£101.3m), more than doubling adjusted pre-tax profits to £19.5m (£8.9m), lifting earnings up to 50.1p (45.6p) per share and easily covering a 12.0p (9.0p) dividend.
For the current year he is going for similar revenues at £150.5m, a slight lowering in profits to £17.3m, dropping earnings down to 42.4p but increasing the dividend to 13.0p per share.
The year to end February 2025 he has pencilled in an increase to £155.0m turnover, £18.5m profits, earnings of 45.3p and a very much healthier dividend of 14.9p per share.
The group which has a strong balance sheet, he suggests, will end up with £6.9m net cash for the end February 2023 year, then £13.3m this year and £18.2m next year.
Based upon his estimates McInally computes that the groups’ net assets will show through at £86.8m for the 2023 period, then £95.8m this year and £105.3m for next year.
At Edison Investment Research Andy Murphy has fairly similar estimates to Cenkos Securities.
He has a dividend discount model-based valuation for the group’s shares of 520p.
My View – On 5.8 Times Price-To-Earnings
The other quoted shipbroker is Clarkson (LON:CKN) which is valued ten times higher than Braemar, with its shares trading on 13 times current year earnings.
That compares to Braemar’s capitalisation of just £96m with its shares currently standing at 292.5p, which puts them out on a mere 5.8 times estimated historic earnings and yielding over 4.1%.
The shares, which were up to 350p in September last year, have tremendous investment appeal at the current levels.
I believe that the imminent announcement, of the group’s final results for 2023, will give a very positive showing of that year’s trading and a strong report on current prospects.
These shares are cheap an
Https://masterinvestor.co.uk/equities/braemar-strong-results-due-shortly/
"Braemar – Strong Results Due Shortly
By Mark Watson-Mitchell 17 May 2023
Did you know that there are only two publicly traded shipbroking companies quoted on the UK market and Braemar (LON:BMS) is my favourite.
Absolutely I make no apologies about returning to highlight the investment advantages of this undervalued group.
With some 16 offices across the globe the company operates on a 24/7 basis, covering all the shipping hubs in offering its customers opportunities in both established and emerging markets.
As a leading global shipbroker with offices in London, Singapore, Beijing, Geneva, Perth, Dubai, Athens, Mumbai, Aberdeen, Hamburg, Melbourne, Madrid, Palm Beach, Sao Paulo, Shanghai and Houston, the group is well-positioned to serve key industry players across different time zones and cultures.
It delivers expert advice in Chartering, Corporate Finance, Research and Analytics, Operations and Risk Management.
Its operations are diversified across Tankers, Dry Cargo, Sale & Purchase, Renewables, Financial and Offshore in order to generate a reliable, less cyclical income stream.
The £96m capitalised group claims that to achieve success in the volatile world of shipping, you need the highest level of expertise and years of practical experience.
And Braemar, with some 400 plus employees globally, offers just that to its clients.
Group Operations
The company’s operations are diversified across tankers, dry cargo, sale and purchase, renewables, financial and offshore.
It operates through three segments: Investment advisory, Chartering, and Risk advisory.
The Investment advisory segment provides investment consultancy, new build advisory, sales and purchase brokerage, asset valuation, recycling/end of life, and capital raising and corporate finance.
Its Chartering segment includes cost-saving solutions, creating and protecting deals, cross-desk collaboration, first-mover initiatives, and freight consultancy.
The Risk advisory segment includes derivatives brokerage, asset utilisation, loan restructuring, loan portfolio management, and carbon offsetting brokerage.
Sales Per Business And Region
On a sales per business basis Shipbroking accounted for £94.66m of the group’s 2022 turnover, some 93.4% of the group total, while Financial was £6.65m for the balance 6.6%.
On a sales per region basis the UK accounted for £54.52m (53.8%), Singapore £19.42m (19.2%), Australia £12.57m (12.4%), Germany £2.49m (2.5%), the US £0.97m (1.00%) with the Rest of the World handling £11.34m (11.2%).
Recent Trading Update
On 22nd March the group issued a Trading Update for the 2023 year’s results.
It announced that the business had achieved record revenue and record profitability for the year ended 28 February 2023 on a simplified business strategy."
Nice to see the share price bouncing almost 4% already today. The prelims are due in the next couple of weeks at the latest. We already know that:
- the results will show record revenue and profitability, with over £20m operating profit doubled from last year's £10.1m
- BMS will have a cash pile of around £7m
- trading since has the 28th Feb year end has gone well and the Board are confident for this year
- there will be a 12p dividend, i.e a yield of over 4% and a 33% rise over last year
"But come on, the share price drops from 320 to sub 280 and NOTHING from the management to explain / bolster confidence? bizzare. terrible board."
Does the board really need to put out an RNS when the share price has dropped 12% over a 3 month period? I don't think so. As Le-Barone creams over Clarkson then why didn't Clarkson board put out an RNS when their share price dropped 11.5% between March/April - is that another "terrible board"? - Or maybe its just the subsector they are both in has dropped about 18% over the past 3 months!!! Le-Barone if people want to by BMS or another stock its their money not yours so no need for you to worry.
LE -Baroness always interested in reading your comments - what does plastic results exactly mean as far as I am concern they were excellent results and the company looks in good shape for the future Regards